Brockman Mining Limited Annual Report 2022

Plain-text annual report

Corporate Information ..................................................................................................................................................................2 Chairman’s Message .....................................................................................................................................................................3 Management Discussion and Analysis .........................................................................................................................................4 Directors and Management .......................................................................................................................................................15 Corporate Governance Report ..................................................................................................................................................17 Environmental, Social and Governance Report........................................................................................................................37 Directors’ Report ..........................................................................................................................................................................52 Independent Auditor’s Report ....................................................................................................................................................60 Consolidated Statement of Comprehensive Income ...............................................................................................................66 Consolidated Balance Sheet ......................................................................................................................................................67 Consolidated Statement of Changes in Equity .........................................................................................................................68 Consolidated Statement of Cash Flows .....................................................................................................................................69 Notes to the Consolidated Financial Information .....................................................................................................................70 Financial Summary .....................................................................................................................................................................105 ASX Additional Information .......................................................................................................................................................106 1 ANNUAL REPORT 2022CONTENTSBOARD OF DIRECTORS AUDITOR Non-executive Directors Kwai Sze Hoi (Chairman) Liu Zhengui (Vice Chairman) Ross Stewart Norgard Executive Directors Kwai Kwun, Lawrence Colin Paterson Chan Kam Kwan, Jason Independent non-executive Directors Yap Fat Suan, Henry Choi Yue Chun, Eugene David Rolf Welch COMPANY SECRETARY Chan Kam Kwan, Jason REGISTERED OFFICE (BERMUDA) Clarendon House 2 Church Street Hamilton HM11 Bermuda PRINCIPAL PLACE OF BUSINESS IN AUSTRALIA Level 2, 679 Murray Street West Perth WA 6005 Australia PRINCIPAL PLACE OF BUSINESS IN HONG KONG Unit 3903B, Far East Finance Centre 16 Harcourt Road Admiralty Hong Kong Ernst and Young Chartered Accountants 11 Mounts Bay Road Perth WA 6000 Australia PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE MUFG Fund Services (Bermuda) Limited 4th Floor North Cedar House 41 Cedar Avenue Hamilton HM 12 Bermuda BRANCH SHARE REGISTRARS AND TRANSFER OFFICE IN HONG KONG Tricor Secretaries Limited 17/F, Far East Finance Centre 16 Harcourt Road Hong Kong BRANCH SHARE REGISTRARS AND TRANSFER OFFICE IN AUSTRALIA Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace Perth WA 6000 PRINCIPAL BANKER Hang Seng Bank Limited Industrial and Commercial Bank of China (Asia) Limited Bank of Communications Westpac Banking Corporation WEBSITE www.brockmanmining.com www.irasia.com/listco/hk/brockmanmining STOCK CODE 159 Main Board of The Stock Exchange of Hong Kong Limited BCK Australian Securities Exchange CORPORATE INFORMATIONDear Shareholders, At last, I would like to thank our Brockman family for their continued efforts and hard work, and fellow In the past year, the Company has moved towards the shareholders for their unwavering trust and support ambitious goal of achieving iron ore production at the for the Company. Such work ethic and support have Marillana Project, which was an exciting, momentous proven to be pivotal for the Company’s success. step. As Mineral Resources Limited (“MinRes”) and H a n c o c k P r o s p e c t i n g P t y L t d ( “ H a n c o c k ” ) h a v e established a joint venture during the year, they will jointly invest in the development and construction of the Stanley Point Berth-3 at South West Creek, Port Hedland and the rail and port infrastructure. The logistics and Kwai Sze Hoi transportation bottleneck that has been thwarting and Chairman hindering the development of the Marillana Project will be fundamentally resolved, thereby unlocking the 21 September 2022 significant value contained at the mine. At the same time, the joint operation with MinRes on Ophthalmia will also benefit greatly from it. Currently, Brockman and MinRes, through their joint venture management committee and project manager, are constantly expediting all necessary works at the Marillana Project and within the infrastructure corridor to ensure that the project will be completed as planned and scheduled. 3 ANNUAL REPORT 2022CHAIRMAN’S MESSAGEOVERVIEW During the year, the Group continued to focus on the development of its iron ore tenements in Western A u s t r a l i a w h i c h a r e p r o g r e s s i n g s t e a d i l y t o w a r d s construction and production. Loss for the year before income tax from continuing operations was HK$31.9 million, compared to the previous year HK$28.3 million. The increase in the loss before tax was largely due The operating loss of HK$40.3 million (2021: HK$22.8 million) was higher by 77%, due to an increase in exploration and evaluation expenditure expensed which includes Group’s share of Joint Operation expenditure. IRON ORE OPERATIONS – WESTERN AUSTRALIA This segment of the business comprises the 50% owned to HK$14.0 million in the Group’s share of the Joint Marillana Iron Ore Project (“Marillana”), the Ophthalmia Operation expenditure (2021: HK$5.4 million additional Iron Ore Project (“Ophthalmia”) and other regional finance costs arising from the treatment of the loans exploration projects. advanced by Polaris to the Group in the previous years). The Group recorded a loss after tax from continuing joint venture for the year for this segment attributable operations of approximately HK$20.8 million (2021: to the Group was HK$12.6 million (2021: HK$15.1 million). HK$14.2 million). The increase in the loss after tax was Total expenditure associated with mineral exploration due to HK$14.0 million in the Group’s share of the for the year ended 30 June 2022 amounted to HK$17.7 The loss before income tax and share of losses of the Joint Operation expenditure (2021: HK$0.1 million) and million (2021: HK$5.5 million). partially the recognition of an income tax credit of HK$11.1 million (2021: HK$14.1 million). This income tax Total expenditure associated with mineral exploration credit was the result of the recognition of a deferred tax and evaluation for each of the projects in Western asset in respect of certain of the Group’s Australian tax Australia for the financial years is summarised as follows: losses. Project Marillana (1) Ophthalmia (2) Regional Exploration Year ended 30 June 2022 HK$’000 14,073 2,037 1,567 17,677 2021 HK$’000 2,582 1,490 1,422 5,494 (1) Includes HK$13.0 million of Joint Operation expenditure No development expenditure has been recognised in (2021: HK$0.1 million) the financial statements during the year ended 30 June (2) Includes HK$1.0 million of Joint Operation expenditure (2021: Nil) 2022 (2021: Nil). Total capital expenditure for each of the projects in Western Australia for the financial years is summarised as follows: 2022 HK$’000 Year ended 30 June 2021 HK$’000 Project Marillana Ophthalmia Additions to to mining Additions to Additions Additions to mining property, plant & exploration property, plant exploration equipment properties & equipment properties 51 — 51 — — — 19 — 19 — — — MANAGEMENT DISCUSSIONAND ANALYSISImpairment were no indicators of impairment present, refer to note As at 30 June 2022, the Group assessed whether any 17 of the consolidated financial statements. indicators of impairment exist and concluded there Figure 1: Project location map – Brockman tenements MARILLIANA PROJECT OVERVIEW The 50% owned Marillana is Brockman’s flagship iron ore project located within mining lease M47/1414 in the Hamersley Iron Province within the Pilbara region of Western Australia. It is located approximately 100 km north-west of the township of Newman (Figures 1 and 2). The project area covers 82 square km bordering the Hamersley Range, where extensive areas of supergene iron ore mineralisation, the source of hematite detrital mineralisation at Marillana, have developed within the dissected Brockman Iron Formation that caps the Range. 5 ANNUAL REPORT 2022Figure 2: Location of Marillana Project tenements Marillana Development Joint Operation Formation and scope On 22 April 2021 Brockman Iron and Polaris signed a n A m e n d e d a n d R e s t a t e d F J V A g r e e m e n t a n d Deed of Amendment and Restatement (collectively On 26 July 2018 Brockman Iron Pty Ltd (“Brockman the “Agreement”). Both Brockman Iron and Polaris Iron”) (a wholly-owned subsidiary of the Company) concluded that the Farm-in Obligations under the and Polaris Metals Pty Ltd (“Polaris”) (a wholly-owned Agreement have been satisfied and the parties shall subsidiary of Mineral Resources Limited (“MinRes”)) form the Joint Operation. As such, a 50% interest in entered into a Farm-in Joint Venture (“FJV”) Agreement the Marillana Project (“the Farm-in interest”) will be (see announcements dated 27 July 2018 on the HKEX transferred to Polaris and the Joint Operation will and ASX platforms) pursuant to which and subject to be established according to the terms of the FJV the terms and conditions therein, Polaris could farm-in Agreement. and earn a 50% interest in Marillana by satisfying certain Farm-in obligations. MANAGEMENT DISCUSSIONAND ANALYSISInitial development works On 1 February 2022, the Government of Western The in iti al development wor ks per the Indicative A u s t r a l i a a n n o u n c e d t h a t i t h a d g r a n t e d a p o r t Development Proposal from MinRes (as described in capacity allocation to the MinRes-Hancock Joint the 2021 Annual Report) are progressing. The Joint Venture, at Stanley Point Berth 3 in South West Creek. Operation has completed the Bauer drilling programme MinRes has advised that based on this allocation, for the purpose of obtaining bulk samples to support Marillana has available port capacity to meet the pilot plant testwork and, provide samples of tailings Joint Operation production requirements. The new iron to support co-disposal (dry-stacking) testwork and ore export facility at SP3 remains subject to various approvals. The testwork will also support process approvals and agreements to develop and operate, review and flow sheet design. A new mine design and along with a positive final investment decision by MinRes schedule, based on the preliminary process flowsheet and Hancock. assumptions, has been completed. Initial work commenced on the hydrological studies infrastructure solution to transport the ore from the which includes a major drilling program for installation of Marillana project to a port stockyard at Port Hedland water bores. It is anticipated that the drill program will and loading on to ships for export. The MinRes-Hancock commence in the Q1 FY23. Joint Venture Agreement will facilitate this solution for Under the FJV Agreement, MinRes is to provide the Flora and fauna surveys to refresh baseline data Marillana. were carried out, as well as continued monitoring MinRes continues to advance studies and preparation o f e c o l o g i c a l c o m m u n i t i e s , w e e d s a n d r e g i o n a l ( i n c l u d i n g m i s c e l l a n e o u s l i c e n c e a p p l i c a t i o n s , hydrological baseline data. environmental studies and permitting) for the haul road corridor from Marillana to the rail loading facility. Infrastructure O n 2 9 N o v e m b e r 2 0 2 1 , M i n R e s e n t e r e d i n t o a n Management committee agreement with Hancock and Roy Hill in which MinRes A management committee comprising a total of six and Hancock will jointly investigate the development of representatives (three from each of the Joint Operators) new iron ore export facility at the Port of Port Hedland’s has been established. Stanley Point 3 (“SP3”) in South West Creek. Roy Hill will provide rail haulage and port services to both MinRes The role of the management committee is to make and Hancock to help facilitate development and all strategic decisions relating to the conduct of operation of their projects (which includes Marillana). the activities undertaken by the Joint Operation including the consideration and approval of any work The development of the Project will be subject to: programmes and budgets in the management of the (a) A grant by the Pilbara Ports Authority (“PPA”) of a capacity allocation for the Project, and all Development funding Joint Operation. necessary approvals and agreements to develop The Joint Operators will respectively fund their capital and operate berth 3 in South West Creek and the cost commitments for the development of Marillana other associated supporting port infrastructure; with loans from MinRes. The initial loan to the Joint and Operation is expected to amount to A$676 million for the development of Marillana. Brockman shall repay (b) MinRes and Hancock each electing to take a its share of the debt financing from profits following positive final investment decision to proceed commencement of operations at Marillana. with the Project following the completing of a satisfactory expedited feasibility study. 7 ANNUAL REPORT 2022The Joint Operators’ capital commitments will fund the ore processing facilities and certain parts of non- process infrastructure. Certain parts of the non-process infrastructure may not be funded by the Joint Operators but will be provided by MinRes under build own operate life of mine service agreements. Manager Pursuant to the terms of the FJV Agreement, Polaris has agreed to act as the first manager of the Joint Operation. Loan Agreement As part of the FJV Agreement, Polaris has provided an interest-free, secured loan (in accordance with Deed of Cross Security signed by the Joint Operators) of A$10 million (the “Loan”) to Brockman Iron for working capital purposes. The loan will be repaid from the net revenue received by Brockman Iron from the sale of its share of Marillana ore sold and transported under the Mine to Ship Services Agreement. MINERAL RESOURCES AND ORE RESERVES B r o c k m a n r e p o r t s i t s M i n e r a l R e s o u r c e s a n d O r e Reserves on an annual basis, in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 Edition (the “JORC Code 2012”), unless otherwise noted. Mineral Resources are quoted inclusive of Ore Reserves. In 2018, B rockman updated its Marillan a M iner al Resources and Ore Reserves to the JORC 2012 Code (refer to announcement dated 25 May 2018). Mineral Resources and Ore Reserves were previously reported under the JORC 2004 Code and released to the market on 9 February 2010 and 9 September 2010 respectively by Brockman Resources Limited, now a wholly owned subsidiary of Brockman Mining Limited. Marillana has a Mineral Resource estimate of 1.51 billion tonnes (Bt) of Hematite Detrital Iron (DID) and Channel Iron (CID) mineralisation, comprising 169.5 million tonnes (Mt) of Measured Mineral Resources (DID), 1,046 Mt of Indicated Mineral Resources (DID and CID) and 291 Mt of Inferred Mineral Resources (DID and CID) (see Tables 1 and 2). Table 1: Detrital (beneficiation feed) Mineral Resource Summary (cut-off grade: 38% Fe) Mineralisation type Resource classification Tonnes (Mt) Grade (% Fe) Measured Indicated Inferred GRAND TOTAL Total tonnes may not add up, due to rounding 169.5 961.9 273 1,404.4 41.6 42.3 42.0 42.2 Table 2: CID Mineral Resource Summary (cut-off grade: 52% Fe) Resource classification Indicated Inferred TOTAL Tonnes (Mt) 84.2 17.7 101.9 Fe (%) 55.8 54.4 55.6 AI2O3 (%) 3.58 4.34 3.71 SiO2 (%) 5.0 6.6 5.3 P (%) 0.097 0.080 0.094 LOI (%) 9.76 9.30 9.68 The JORC 2012 Ore Reserve estimate is based on The base case optimisation was determined with cut-off the revised JORC 2012 Mineral Resource model, and grades of 38% Fe for DID and 52% Fe for CID within the incorporates a number of factors and assumptions as final pit and tenement boundary limits. outlined in the announcement of 25 May 2018. MANAGEMENT DISCUSSIONAND ANALYSISMetallurgical testwork results were used to estimate The Marillana project has total estimated Probable Ore the recoverable fraction from the DID ore component. Reserves of 967 Mt of DID plus 46 Mt of direct shipping Recoveries of final product and grades (of iron, silica, CID (Table 3). The total saleable product from the alumina and LOI) were estimated in the block model. Based upon dense media separation (“DMS”) testwork, it is expected that the final product has an average processed detrital iron ore feed (DID) is estimated at 404 Mt averaging 59.8% Fe, 6.1% SiO2, and 3.1% AI2O3 (Table 4). Life of mine strip ratio is 1.0:1 (tonnes of Waste versus grade of at least 60% Fe and 37.3% in mass recovery. tonnes of Ore). Table 3: Marillana Project – Ore Reserves * Reserve classification Probable Probable TOTAL * # ## Reserves are included within Resources cut-off grade 38% Fe cut-off grade 52% Fe Ore type Tonnes (Mt) DID# CID## 967 46 1,013 Table 4: Marillana Project – Ore Reserves final product Reserves Class Probable Probable Probable Ore Sale Tonnes Type CID Product DID Product Total Ore (Mt) 46 358 404 Fe (%) 55.5 60.3 59.8 SiO2 (%) 5.3 6.2 6.1 Al2O3 (%) 3.7 3.0 3.1 LOI (%) 9.7 2.5 3.3 The Marillana Ore Reserves are based solely on the Marillana represents one of the largest published M e a s u r e d a n d I n d i c a t e d M i n e r a l R e s o u r c e s . T h e hematite Ore Reserve positions in the Pilbara, outside Mineral Resources also include some 273Mt of Inferred the three major producers (BHP, Rio and FMG). The Mineral Resources (DID), comprising 201 Mt based on Detrital Ore is upgraded to a high-quality, sinter feed wide -spaced drilling to the north of the Indicated product via simple beneficiation, which is supported by Mineral Resource boundary and 72 Mt of previously low-cost mining, low waste ratios and large continuous Indicated Mineral Resources that was downgraded to ore zones. Inferred classification during the Projection Pursuit Multi- variate Transform (“PPMT”) process. Based on historical The Mineral Resource and Reserve estimation (see conversion of Inferred to Indicated Mineral Resources, it Tables 1 to 4) was prepared by Golder Associates Pty is anticipated that additional drilling may enable some Ltd and has been classified in accordance with the of the Inferred material to be upgraded to Indicated Australasian Code for Reporting of Exploration results, classification. Mineral Resources and Ore Reserves (JORC Code, 2012 Edition). 9 ANNUAL REPORT 2022OPHTHALMIA PROJECT OVERVIEW The 50% owned Ophthalmia iron ore project, located north of Newman in the East Pilbara region of Western Australia (see figures 1 and 3), is the most significant iron ore project for the Company outside of its flagship Marillana project. Since the discovery of significant occurrences of bedded hematite mineralisation by field reconnaissance mapping and surface sampling in August 2011, major exploration drilling programmes have been completed and JORC compliant Mineral Resources have been estimated and reported for the Sirius, Coondiner, and Kalgan Creek deposits. The total Mineral Resource at Ophthalmia is 341 Mt grading 59.3% Fe (Table 5). Figure 3: Location of Ophthalmia Prospects and Resources MANAGEMENT DISCUSSIONAND ANALYSISDevelopment programme of works whilst MinRes finalises arrangements As part of the Agreement with MinRes (refer to the for the new iron ore export facility at SP3 and to allow M a r i l l a n a s e c t i o n a b o v e ) , B r o c k m a n a n d P o l a r i s the parties to prioritise development of Marillana. have agreed to include Ophthalmia in the farm- The development cost for Ophthalmia is estimated in interest, such that Polaris will earn a 50% interest in to be A$114 million, which will be funded by the Joint the Ophthalmia project upon completion of its farm- Operators through a loan from MinRes. in obligations. On 8 December 2021, the Company received notification from Polaris that the farm-in Mineral Resources obligations had been satisfied and that the Ophthalmia Ophthalmia has a Mineral Resource estimate of 340.9 Joint Operation is now in operation. million tonnes of hematite mineralisation, comprising Since December 2021, Polaris continued a programme tonnes classified as Inferred Resources (see Table 5). of works including mine planning studies, transport corridor studies, environmental surveys and approvals. The resource estimate was classified in accordance with Polaris and Brockman have agreed to reduce the guidelines provided in the JORC Code 2012. Refer to 280 million tonnes of Indicated Resources and 61 million ASX Announcement dated 1 December 2014. Table 5: Ophthalmia DSO Mineral Resource Summary Deposit Class Kalgan Creek Coondiner (Pallas and Castor) Sirius Ophthalmia Project Indicated Inferred Sub Total Indicated Inferred Sub Total Indicated Inferred Sub Total Indicated Inferred Total Tonnes (Mt) 34.9 24.4 59.3 140.5 17.1 157.6 105.0 19.0 124.0 280.4 60.5 340.9 Fe (%) 59.3 59.5 59.4 58.5 58.1 58.4 60.4 60.2 60.3 59.3 59.3 59.3 30 June 2022 CaFe* (%) 62.7 63.2 62.9 62.0 61.5 62.0 63.7 63.4 63.6 62.7 62.8 62.7 SiO2 (%) 4.08 4.38 4.21 5.18 6.06 5.27 3.54 4.09 3.62 4.43 4.73 4.49 AI2O3 (%) 4.57 3.90 4.29 4.46 4.45 4.46 3.97 3.83 3.95 4.29 4.03 4.24 S (%) 0.009 0.007 0.009 0.007 0.008 0.007 0.007 0.009 0.007 0.007 0.008 0.007 P (%) 0.183 0.157 0.173 0.176 0.155 0.174 0.18 0.17 0.18 0.178 0.160 0.175 LOI (%) 5.49 5.81 5.63 5.71 5.47 5.68 5.22 5.14 5.20 5.50 5.50 5.50 * CaFe represents calcined Fe and is calculated by Brockman using the formula caFe = Fe%/((100-LOI)/100). Total tonnes may not add due to rounding. WEST PILBARA PROJECT Overview The West Pilbara project comprises four tenements centred around Duck Creek, located about 100 -130 km WNW of Paraburdoo in the West Pilbara region. (Refer to Figure 1). At Duck Creek, mineralisation comprises discrete mesas of channel iron deposits (CID) 15-30 m above the surrounding plains with stripping ratios expected to be very low for the targets identified. Seven mesas containing ore grade CID mineralisation have been identified from surface sampling, but only six have been drilled due to access limitations. Brockman has completed an Inferred Mineral Resource estimate of 21.6 Mt grading 55.9% Fe, for the channel iron deposit (CID) mineralisation at Duck Creek (E47/1725), as detailed in Table 6 below. The Mineral Resource estimate has been classified in accordance with the guidelines of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The Mineral Resource estimate is based on the results of 45 vertical RC holes drilled on sections varying from approximately 200 to 400 m apart along the long axis of each mesa, supported by surface sampling to confirm the lateral extent of mineralisation. 11 ANNUAL REPORT 2022Table 6: Duck Creek Mineral Resource estimate – (at a lower cut-off grade of 52% Fe) Mesa Classification 1 2 3 4 5 6 Inferred Inferred Inferred Inferred Inferred Inferred All Inferred Tonnes (Mt) 4.5 7.9 2.6 1.5 3.0 2.2 21.6 Fe (%) 55.5 55.56 55.84 55.31 56.08 58.17 55.91 AI2O3 (%) 2.86 2.97 4.41 3.58 4.16 3.22 3.35 SiO2 (%) 4.75 4.19 6.02 7.42 6.54 4.92 5.15 S (%) 0.025 0.058 0.021 0.015 0.020 0.016 0.034 P (%) 0.033 0.037 0.065 0.076 0.068 0.106 0.053 LOI (%) 11.71 11.79 8.85 9.12 8.35 7.62 10.35 Total tonnes may not add due to rounding. Mineral Resources and Ore Reserves The information in this report that relates to the Mineral R e s e r v e a n d M i n e r a l R e s o u r c e e s t i m a t e s o f t h e Marillana project was declared as part of a market announcement issued on 25 May 2018. The information in this report that relates to the Mineral Resource of Ophthalmia project was declared as part of a market announcement issued on 1 December 2014. The information in this report that relates to the Inferred Mineral Resource of West Pilbara Project was declared as part of a market announcement issued on 31 August 2020. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original announcements r e f e r r e d t o a b o v e . A l l m a t e r i a l a s s u m p t i o n s a n d 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 announcements. Mineral Resources and Ore Reserves Governance of Internal Controls Brockman ensures that the Mineral Resources and Ore Reserve estimates quoted are subject to governance arrangements and internal controls activated at a site level and at the corporate level. Internal and external r e v i e w o f M a r i l l a n a R e s o u r c e s a n d O r e R e s e r v e s estimation procedures and results are carried out through a technical review team which is comprised of highly competent and qualified professionals. These reviews have not identified any material issues. LIQUIDITY AND FINANCIAL RESOURCES The Group generally finances its short-term funding requirements with equity funding and borrowings. The Group’s ability to advance its iron ore project developments is reliant, among other things, on access to appropriate and timely funding. The current ratio as at 30 June 2022 is 1.83 (30 June 2021: 13.69). The gearing ratio of the Group (long-term debt over equity and long-term debt) is measured at 0.08 (30 June 2021: 0.08). During the year, the Group did not engage in the use of any financial instruments for hedging purposes, and there was no hedging instrument outstanding as at 30 June 2022. CAPITAL STRUCTURE At the end of the reporting period, the Company had 9,280,232,000 (2021: 9,279,232,000) shares on issue. PLEDGE OF ASSETS AND CONTINGENT LIABILITIES As at 30 June 2022 and 2021, the Group has a Deed of Cross Security for the loans advanced by Polaris to Brockman Iron pursuant to the terms of the Marillana Farm-in Joint Venture Agreement, (refer to note 23). As at 30 June 2022, the Company did not have any material contingent liabilities or financial guarantees (30 June 2021: Nil). MANAGEMENT DISCUSSIONAND ANALYSISRISK DISCLOSURE MARKET AND FINANCIAL RISKS The Group is exposed to various types of market and financial risks. (a) Commodities price risk The fair value of the Group’s mining exploration properties in Australia is exposed to fluctuations in expected future iron ore price. We have not used any commodity derivative instruments or futures for speculation or hedging p u r p o s e s . M a n a g e m e n t w i l l r e v i e w m a r k e t conditions from time to time and determine the best strategy to deal with the fluctuations of iron ore price as required. (b) Liquidity and funding risk The Company is exposed to liquidity risk through its financial liabilities and its obligations to make payment on its financial liabilities as and when they fall due. The Company maintains a balance in its approach to funding using debt and or equity raisings. The commencement of exploration and potential (e) Social and political risk The Group is exposed to other risks that include, but are not limited to, cyber-attack and natural disasters, that could have varying degrees of impact on the Group. Where available and appropriate to do so, the Board will seek to minimise exposure using insurance, while actively monitoring the Group’s ongoing exposure. (f) Interest rate risk Fair value interest rate risk that the value of a financial instrument will fluctuate because of changes in market interest rates. Cash flow interest rate risk that the future cash flow from a financial instrument will fluctuate because of changes in market interest rates. The Company’s policy is to manage its exposure to interest rate risk by holding cash in short term, fixed and variable rate deposits w i t h r e p u t a b l e h i g h c r e d i t q u a l i t y f i n a n c i a l institutions. The Company analyses its interest rate exposure and consideration is given to potential renewals of existing positions, alternative financing and or the mix of fixed or variable interest rates. STAFF AND REMUNERATION As at 30 June 2022, the Group employed 15 full time development of the iron ore projects will depend employees (30 June 2021: 15), of which 5 were in on whether the Group can secure the necessary Australia (includes 2 non-executive directors) (30 June funding. 2021: 5) and 10 in Hong Kong (includes 4 non-executive (c) Risk that the project will not be materialised This risk is largely driven by various factors such Remuneration Policy directors) (30 June 2021: 10). as commodity prices, government regulations, The Group’s compensation strategy is to promote a regulation related to prices, taxes, royalties, land pay-for-performance culture to reward employee tenure, viable infrastructure solutions, capital performance that will maximise shareholder value in raising ability etc. The Board will therefore closely the long term. The Group from time to time reviews monitor the development of the project. remuneration packages provided to its employees (d) Exchange rate risk to ensure that the total compensation is internally equitable, externally competitive and supports the The Group is exposed to exchange rate risk Group’s strategy. primarily in relation to our mineral tenements t h a t a r e d e n o m i n a t e d i n A u s t r a l i a n d o l l a r s . The remuneration policy and packages, including share Depreciation in the Australian dollar may adversely options for the Group’s employees, senior management affect our net asset value and earnings when the and directors are maintained at market levels and value of such assets is converted to Hong Kong are reviewed periodically by management and the dollars. During the year, no financial instrument remuneration and performance committee. was used for hedging purposes. At 30 June 2022 and 2021, the Group was not exposed to any significant exchange rate risk. 13 ANNUAL REPORT 2022ENVIRONMENTAL, SOCIAL, GOVERNANCE AND COMPLIANCE WITH RELEVANT LAWS AND REGULATIONS Environmental, Social and Governance As a responsible entity, the Group has endeavoured to comply with local laws and regulations in relation to waste disposal and environmental protection. At corporate level, the Group also encourages staff to save energy, minimise the use of natural resources and paper products. We operate effective and sustainable iron ore business, work actively through all areas of the business to minimise the actual and potential environmental impact of the Company’s activities, respect the rights of the traditional owners and value the indigenous cultural heritage associated with its operations. Furthermore, with no mining operations carried out during the year, disturbance to the environment is expected to be minimal. We will continue to ensure that in the future, we are accountable for our environmental footprint. The Board retains the overall responsibility for the G r o u p ’ s E n v i r o n m e n t a l , S o c i a l a n d G o v e r n a n c e management and is committed to operating in a manner that contributes to the sustainable development through efficient, balanced, long-term management, while showing due consideration for the well-being of people; protection of the environment and the need to work closely with the local communities and stakeholders. Compliance with Laws and Regulations During the year, the Group has complied with the relevant standards, laws and regulations that have a significant impact on our businesses. At the same time, the Group always maintains a safe working environment for staff in accordance with relevant safety policies. Relationship with Employees, Customers and Suppliers T h e G r o u p b e l i e v e s t h a t e m p l o y e e s a r e t h e most important asset for the Group’s sustainable development. We offer competitive remuneration packages and a high quality working environment for our employees. It is our custom to respect each other and ensure that fairness is applied to everyone. From time to time, we provide relevant on-the-job training to enhance employees’ professional knowledge. The Group also organises different leisure events and frequent group discussions for the participation of employees to enhance the working relationship of the employees and communications with management. We also strive to maintain good working relationships with our suppliers and customers. MANAGEMENT DISCUSSIONAND ANALYSISAs at the date of this report, the Company has the Mr. Ross Stewart Norgard following directors and senior management: Mr. Ross Stewart Norgard, aged 76. Mr. Norgard joined NON-EXECUTIVE DIRECTORS Mr. Kwai Sze Hoi Mr. Kwai Sze Hoi, aged 72. Mr. Kwai joined in June 2012. He is the Chairman of the Group. Mr. Kwai graduated from Anhui University in 1975. Mr. Kwai has more than 40 years’ experience in international shipping and port operation businesses and is a successful entrepreneur. In 1990, he founded Ocean Line Holdings Ltd (“Ocean Line”). Ocean Line wholly owns, operates and manages a fleet of total deadweight tonnage of more than 4 million metric tonnes, with routes running worldwide. Ocean Line also has investments in infrastructure and operates other shipping related businesses including p o r t s , t e r m i n a l s , w a r e h o u s e s , l o g i s t i c s , a n d c r e w manning etc. The diversified operations of Ocean Line put it in a highly competitive position globally. In addition, Ocean Line has investments in mining, real estate, financial services, securities, trading and hotel businesses. Mr. Kwai is also the chairman and an executive director of Ocean Line Port Development Limited (Stock code: 8502), which is listed on the GEM of the Hong Kong Stock Exchange Limited (the “SEHK”). Mr. Kwai is the father of Mr. Kwai Kwun, Lawrence, an Executive Director of the Company. Mr. Liu Zhengui as a Non-executive Director in August 2012. He is a chartered accountant and former managing director of KMG Hungerfords and its successor firms in Perth, Western Australia. For the past 30 years he has worked extensively in the fields of raising venture capital and the financial reorganisation of businesses. He has held numerous positions on industry committees including past chairman of the West Australian Professional Standards Committee of the Institute of Chartered A c c o u n t a n t s , a f o r m e r m e m b e r o f t h e N a t i o n a l Disciplinary Committee, a former member of Lionel Bowens National Corporations Law Reform Committee, a former chairman of the Duke of Edinburgh Award Scheme and a former member of the University of Western Australia’s Graduate School of Management (MBA programme). Mr. Norgard is also a director of Nearmap Limited (formerly known as Ipernica Limited) (Chairman since 1987) and was a director of Ammtec Limited from 1994 to November 2010. Prior to his present appointment as Non-executive Director of the Company, he was the non-executive Deputy Chairman of Brockman Resources Limited, a former Australian Securities Exchange (“ASX”) listed entity which is now a wholly owned subsidiary of Brockman Mining Limited. EXECUTIVE DIRECTORS Mr. Kwai Kwun, Lawrence Mr. Liu Zhengui, aged 75. Mr. Liu joined in April 2012, Mr. Kwai Kwun, Lawrence, aged 41, joined in March and became the Vice Chairman of the Group in June 2014. He is a member of the Executive Committee. He 2012. Mr. Liu Zhengui has over 40 years of experience has extensive experience in investment in international in corporate finance and capital management. He shipping, port operations and ship building, mining and holds a bachelor’s degree in management engineering finance. Mr. Kwai graduated from Harvard University from Hefei University of Technology. He is currently in the United States with a Bachelor of Mathematics degree. Mr. Kwai is the son of Mr. Kwai Sze Hoi, the Chairman of the Company. a director of Shandong School of Economics and S o c i a l D e v e l o p m e n t (山東社會經濟發展研究院) a n d is the chairman of Shandong Dongyin Investment Management Co., Ltd (山東東銀投資管理有限公司). He is also a financial consultant of the Shandong provincial government. During the period 2004 to 2009, Mr. Liu was the chairman of Bank of China Group Investment Limited (BOCGI). Prior to that, he served as the chief executive of Bank of China’s branches in three different provinces for 16 years. 15 ANNUAL REPORT 2022DIRECTORS AND MANAGEMENTMr. Chan Kam Kwan, Jason Mr. Choi Yue Chun, Eugene Mr. Chan Kam Kwan, Jason, aged 49, joined in January Mr. Choi Yue Chun, Eugene, aged 50, joined in June 2008. He is the Company Secretary and a member of 2014. He holds a Bachelor of Laws degree from the the Executive Committee. Mr. Chan graduated from the University of Hong Kong, and was admitted as a solicitor University of British Columbia in Canada with a Bachelor of the High Court of Hong Kong 1997. Currently Mr. Choi of Commerce Degree and he holds a certificate as a is a member of the Law Society of Hong Kong. He has Certified Public Accountant issued by the Washington over 20 years of experience in the legal field, specialising State Board of Accountancy in the United States of in corporate finance and compliance matters for listed America. He has extensive experience in corporate companies in Hong Kong. Mr. Choi is currently the senior finance. Mr. Chan is also an independent non-executive legal counsel of Rusal Global Management B.V. director of Canvest Environmental Protection Group Company Limited (Stock Code 1381) which is listed on Mr. David Rolf Welch the Main Board of the SEHK. Mr. Colin Paterson Mr. David Rolf Welch, aged 56, joined in 2019. He holds a Bachelor of Commerce degree from the University of Western Australia. Mr. Welch has held senior executive Chief Executive Officer of Australian Operations positions within ASX listed Aurizon Holdings Limited from M r . C o l i n P a t e r s o n , a g e d 6 1 , h a s o v e r 3 0 y e a r s ’ 2007 to 2017. These positions included Vice President Iron experience in the resources sector covering a diverse Ore, Vice President Market Development and Executive range of geological environments throughout Australia, Vice President Strategy and Business Development. He but principally in the Pilbara iron ore region as well has experience in strategy, business transformation and as gold and nickel exploration in the Archaean of performance, mergers and acquisitions and business Western Australia. He has extensive experience in development. Mr. Welch was previously the managing the technical supervision of exploration projects; director of The Millennium Group from 1998 to 2006 resource development, project generation and project and was a marketing manager of CSBP Limited (part evaluations. He was principal geologist with Asarco of the Wesfarmers conglomerate) from 1989 to 1994 in Australia Ltd and held a similar position with Mining the development of mining reagent and agriculture Project Investors Pty Ltd (subsequently MPI Mines products. Mr. Welch is also a non-executive director of Limited). Following which he was the founding director VRX Silica Limited (Stock code: VRX) which is listed on of Brockman Mining Australia Pty Ltd. the ASX. INDEPENDENT NON-EXECUTIVE DIRECTORS Mr. Yap Fat Suan, Henry SENIOR MANAGEMENT HONG KONG Mr. Hendrianto Tee Business Development Director Mr. Yap Fat Suan, Henry, aged 76, joined in January Mr. Hendrianto Tee, aged 55, joined in January 2009 2 0 1 4 . H e h o l d s a m a s t e r ’ s d e g r e e i n B u s i n e s s as the Chief Investment Officer after spending a large Administration from the University of Strathclyde, part of his career focusing on debt capital markets with Glasgow, in the United Kingdom. He is a fellow member several global financial institutions, among others Fleet of the Institute of Chartered Accountants in England and Wales and an associate member of the Hong Boston (now Bank of America Merrill Lynch) and UBS AG. In October 2014, Mr. Tee re-joined Brockman Mining Kong Institute of Certified Public Accountants. He has Limited as the Business Development Director overseeing extensive experience in finance and accounting. Mr. project funding and development. Prior to re-joining, Mr. Yap retired as managing director of Johnson Matthey Tee spent 3 years in investment and advisory activities Hong Kong Limited in June 2017 and prior to that he covering the resources sector in Australia, Canada and was the general manager of Sun Hung Kai China Indonesia. Mr. Tee graduated from Walsh University, USA, Development Limited. He is also an independent non- with a Bachelor of Arts Degree (Magna Cum Laude). executive director of Concord New Energy Group Limited (Stock code: 182) and Frontier Services Group Limited (Stock code: 500), which are listed on the Main Board of the SEHK. DIRECTORS AND MANAGEMENTCOMPLIANCE OF THE CODE ON CORPORATE GOVERNANCE PRACTICES The Company is listed on both the Australian Securities BOARD OF DIRECTORS T h e B o a r d i s r e s p o n s i b l e t o s h a r e h o l d e r s f o r t h e overall strategic direction of the Group, including establishing goals for management and monitoring Exchange (“ASX”) and the Stock Exchange of Hong the achievement of those goals with the objective of Kong Limited (“SEHK”). The Company’s Corporate enhancing the Company and shareholders’ value. The Governance policies have been formulated to ensure Board has delegated responsibility for the management that it is a responsible corporate citizen. Unless otherwise of the Company’s business and affairs to the Executive noted, the Company has compiled with all aspects Committee. The responsibilities reserved for the Board of the Corporate Governance Code (“Code”) as set of Directors are set out in the Board Charter, a copy of out in Appendix 14 of the Rules Governing the Listing which is available on the website of the Company. The of Securities on the SEHK (“the HK Listing Rules”) and Board Charter is reviewed periodically to ensure it is the ASX Corporate Governance Council’s ‘Corporate consistent with the existing rules and regulations. Governance Principles and Recommendations 4th Edition (“the CGPR 4th Edition”), (“the ASX Principles”) If a substantial shareholder or a director has a conflict of during the entire year ended 30 June 2022. The Board interest in a matter to be considered by the Board which will review the current practices at least annually and the Board has determined to be material, the matter will make appropriate changes if considered necessary. be dealt with by the Board at the duly convened Board meeting and Independent Non Executive Directors who, The exceptions to this are as follows: and whose close associates, have no material interest in the transaction should be present at the Board meeting. (i) Appendix 14 Code Provision C.2.1 of the HK Listing The Bye-Laws of the Company also stipulates that save Rules, states that the roles of Chairman and chief for the exceptions as provided therein, a Director shall executive should be separate and should not be abstain from voting on any Board resolution and not be performed by the same individual. The position counted in the quorum at meetings for approving any of Chief Executive Officer at the Group level has contract or arrangement in which such Director or any been vacant during the period. Nonetheless, Mr. of his close associates has a material interest. Colin Paterson, who serves as the Chief Executive Officer of Brockman Mining Australia Pty Ltd (a The Board is responsible for performing corporate wholly-owned subsidiary of the Company), is governance duties and has adopted the written terms responsible for the oversight of the core iron ore of reference within its Board Charter on its corporate business operation; and governance functions. The duties of the Board in respect of the corporate governance functions include: (ii) Appendix 14 Code Provision C.1.6 of the HK Listing Rules, states that non-executive Directors should (i) developing and reviewing the Company’s policies attend general meetings. During the year, due and practices on corporate governance; to Directors’ other commitments and schedule conflicts, not all of the non-executive Directors attended all of the general meetings. (ii) r e v i e w i n g a n d m o n i t o r i n g t h e t r a i n i n g a n d continuous professional development of Directors and senior management; 17 ANNUAL REPORT 2022CORPORATE GOVERNANCE REPORT(iii) reviewing and monitoring the Company’s policies under Rule 3.10 of the HK Listing Rules and Principle and practices on compliance with legal and 2.3 of the ASX Principles. The Directors consider all regulatory requirements; of the independent non-executive Directors to be independent under the independence criteria and (iv) developing, reviewing and monitoring the Code of all are capable of effectively exercising independent Conduct applicable to employees and Directors; judgment. and CHAIRMAN AND CHIEF EXECUTIVE OFFICER (v) reviewing the Company’s compliance with the The roles of the Chief Executive Officer and Chairman Code, CGPR 4th Edition and disclosures in the are separate and exercised by different individuals. The Corporate Governance Report. position of the chief executive officer at the Group level has been vacant during the year. Nonetheless, Mr. Colin During the year ended 30 June 2022 and up to the date Paterson, an executive Director, also serves as the Chief of this report, the Board has performed these Corporate Executive Officer of Brockman Mining Australia Pty Ltd Governance duties in accordance with its terms of (a wholly-owned subsidiary of the Company), and is reference. BOARD MEMBERSHIP responsible for the oversight of the core iron ore business operations. T h e B o a r d h a s b e e n s t r u c t u r e d f o r a n e f f e c t i v e Mr. Kwai Sze Hoi, the Chairman of the Board is primary composition, with a balance of skills, experience and responsible for the leadership of the Board, ensuring that commitment to adequately discharge its responsibilities (i) all significant policy issues are discussed by the Board and duties. During the year ended 30 June 2022, three in a timely and a constructive manner, (ii) all Directors of the nine Directors were independent. Whilst this is are properly briefed on issues arising at Board meetings; not a majority of Independent non-executive Directors, and (iii) the Directors receive accurate, timely and clear it is believed to be a suitable balance between the information. composition of executive and non-executive Directors, with a wide range of expertise and experience. Their T h e C h a i r m a n h a s i n t e r e s t s i n t h e s h a r e s o f t h e active participation in the Board and committee Company, and is not independent as he is a substantial meetings brought independent judgement on issues shareholder of the Company. The Board has determined relating to the Group’s strategy, performance and that his commercial experience is more beneficial m a n a g e m e n t p r o c e s s , t a k i n g i n t o a c c o u n t t h e t o s h a r e h o l d e r s a t t h i s s t a g e o f t h e C o m p a n y ’ s interests of all shareholders of the Company. Each of development than the independence requirement the independent non-executive Directors has made outlined in the ASX Principles. an annual confirmation stating compliance with the independence criteria set out in Rule 3.13 of the HK Listing Rules and Principle 2.4 of the ASX Principles. At least one of the independent non-executive Directors has the appropriate professional qualification or accounting or related financial management expertise CORPORATE GOVERNANCE REPORTDirectors in office during the year are as follows: Period in office Date of of Annual Report Attended/Eligible Attended/Eligible as at the date Board Meeting General Meeting Name of Director/role appointment (Years of service) to attend* to attend* Non-Executive Directors Kwai Sze Hoi, Chairman 15 June 2012 Liu Zhengui, Vice Chairman 27 April 2012 Ross Stewart Norgard 22 August 2012 Independent David Rolf Welch 15 October 2019 Non-Executive Directors Yap Fat Suan, Henry 8 January 2014 Choi Yue Chun, Eugene 12 June 2014 Executive Directors Kwai Kwun, Lawrence 13 March 2014 Colin Paterson 25 February 2015 Chan Kam Kwan, Jason, Company Secretary 2 January 2008 10 10 10 3 8 8 8 7 14 3/4 0/4 3/4 3/4 3/4 3/4 4/4 3/4 4/4 1/1 0/1 1/1 1/1 1/1 0/1 1/1 1/1 1/1 * Represents total number of Board and general meetings held during the year. Determination of eligibility has taken into account the respective Directors’ period in office. A total of 5 meetings were held during the year ended 30 June 2022. The brief biographical details of the Directors are stated under the section “Directors and Management”. 19 ANNUAL REPORT 2022BOARD MEETINGS Prior to each meeting of the Board (at least 3 days The Board conducts meetings on a regular basis before the meetings (including committee meetings)), as required by business needs. The Bye-Laws of the the Directors are provided with appropriate, complete Company allow Board meetings to be conducted by and reliable information to ensure timely consideration way of telephone or video-conference. Any resolutions t o e n a b l e t h e m t o m a k e i n f o r m e d d e c i s i o n s . I n can be passed by way of written resolutions circulated addition, a written procedure has been established to to and signed by all Directors from time to time when enable the Directors in discharging of their duties to necessary except for matters in which a substantial seek independent professional advice, in appropriate shareholder or a Director or their respective associates circumstances at a reasonable cost to be borne by the has a conflict of interest. The Board held 5 meetings Company. The Board is provided with the opportunity during the year ended 30 June 2022. to meet independently from Executive Directors as and The Company normally provides a reasonable notice independent access to senior management whenever when required. Each Director also has separate and period (at least 14 days’ notice) for every Board necessary. meeting to all the Directors to give them an opportunity to attend. If such notice is not possible, permission to waive is obtained from the Directors. The Board has established different sub-committees with members as at 30 June 2022 as follows: Health, Safety, Remuneration Environment & Risk Nomination & Performance Sustainability Management Executive Committee Audit Committee Committee Committee Committee Committee Member Member Member Member Member Member Chairman Member Member Member Non-Executive Directors Kwai Sze Hoi (Chairman) Liu Zhengui (Vice Chairman) Ross Stewart Norgard Executive Director Kwai Kwun Lawrence Colin Paterson Chan Kam Kwan Jason (Company Secretary) Independent Non-Executive Directors Yap Fat Suan Henry Choi Yue Chun Eugene David Rolf Welch Chairman Chairman Chairman Member Member Member Member Member Member Member Chairman Member CORPORATE GOVERNANCE REPORT BOARD SKILLS MATRIX The following table summarises the combination of skills and experience of the Board: Experience, skills & attributes Board Nomination Audit performance Sustainability Management Executive Health, Safety, Remuneration & Environment & Risk Total Non-Executive Directors Total Executive Directors Total Independent Non-Executive Directors Experience Corporate leadership Successful experience in CEO and/or other senior corporate leadership International experience Senior experience in multiple international locations Resources industry experience Relevant industry (resources, mining, exploration) experience Other Board level listed experience Membership of other listed entities (last 3 years) Knowledge and skills Finance and capital management Governance Risk and Compliance Gender Male Female 3 3 3 9 4 5 7 7 2 9 0 2 0 3 5 2 2 4 4 1 5 0 0 0 3 3 — 1 2 3 1 3 0 2 0 3 5 2 2 4 4 1 5 0 1 0 2 3 — 1 2 3 1 3 0 1 1 1 3 — 2 2 2 1 3 0 0 3 0 3 — 2 2 2 1 3 0 21 ANNUAL REPORT 2022 INDUCTION OF DIRECTORS CONTINUING PROFESSIONAL DEVELOPMENT Every newly appointed Director will receive an induction Each Director keeps abreast of his responsibilities package from the Company Secretary on the first as a Director of the Company and of the conduct, occasion of their appointment. The induction package business activities and development of the Company, is a comprehensive formal and tailored induction on the as well as the laws and regulations applicable to the responsibility and on-going obligations to be observed Company. Comprehensive inductions are completed by a Director pursuant to the Australian Corporations upon appointment, and the Company ensures suitable Act 2001, Hong Kong Companies Ordinance, Listing professional development is undertaken by Directors Rules and Securities and Futures Ordinance. In addition and members of senior management, with an objective this induction package includes materials describing the t o k e e p a b r e a s t o f t h e l i s t i n g r u l e s a m e n d m e n t s business of the Company, the latest published financial and refresh their knowledge and skills on corporate reports of the Company and documentation for the governance. The Directors provide, and the Company corporate governance practices adopted by the Board. maintains a record of all professional development Directors will be continuously updated on any major undertaken during the period. Mr. Chan Kam Kwan, developments of the listing rules and other applicable Jason, being an Executive Director and the Company regulatory requirements to ensure compliance and Secretary of the Company received no less than upkeeping of good corporate governance practices. 15 hours of relevant professional training during the APPOINTMENT AND RE-ELECTION OF DIRECTORS development materials during the year ended 30 June In accordance with the Bye-Laws of the Company and 2022. financial year. All Directors reviewed written professional to comply with relevant HK and ASX Listing Rules, every Director should be subject to retirement by rotation at least once every three years. Non-Executive Directors are appointed for a fixed term of 3 years. All Directors appointed to fill a casual vacancy should be subject to re-election by shareholders at the first annual general meeting (“AGM”) after their appointment and not less than one-third of the Directors should be subject to retirement and re-election every year. Upon appointment, each director and executive defined as a Key Management Personnel (“KMP”) has a written agreement outlining the terms of their appointment. In accordance with our Bye-Laws 87(1), at each AGM one-third of the Directors shall retire from office by rotation and each Director shall retire at least once every three years. Messrs. Kwai Kwun, Lawrence, David Rolf Welch, Ross Stewart Norgard and Mr. Liu Zhengui will retire and, being eligible, may offer themselves for re-election at the forthcoming AGM. No Directors’ service contract contains a provision requiring greater than one year’s notice or requires compensation greater than one year’s emoluments. NOMINATION COMMITTEE Role and function The Board has established a Nomination Committee which carries out its duties in accordance with the Terms of Reference and Nomination Policy, a copy of which is located on the Company’s website. The Committee’s primary functions are: • To identify suitable candidates for nomination to the Board, Board Committees and senior management; • Succession planning for the Board and senior management; • • The appointment and re-election of Directors; and Ensuring appropriate skills are available to the Board to discharge its duties and add value to the Company. CORPORATE GOVERNANCE REPORT• Is provided with sufficient resources to discharge its Composition and attendance duties and has access to independent professional The Committee consists of a majority of independent advice at the cost of the Company according to Directors and was comprised of the following members the Company’s policy, if considered necessary. during the year ended 30 June 2022: Name of member Independent Non-Executive Directors Yap Fat Suan Henry - Chairman Choi Yue Chun Eugene David Rolf Welch Non-Executive Directors Kwai Sze Hoi Liu Zhengui Meetings attended/ eligible to attend (*) 1/1 1/1 1/1 1/1 0/1 (*) Represents the total number of meetings held during the year ended 30 June 2022. NOMINATION POLICY (c) The Company Secretary provides the Board The Company has adopted a Nomination Policy which with the biographical details and details of the sets out below the nomination procedures and the relationship between the candidate and the criteria for nomination of Board or senior management company and/or Directors, directorships held, members. skills and experience, other positions which involve s i g n i f i c a n t t i m e c o m m i t m e n t a n d a n y o t h e r To ensure changes to the Board composition can be particulars required by law for any candidate for managed without undue disruption, a formal considered appointment to the Board; and transparent procedure is in place for selection, appointment and reappointment of Directors, as well (d) The Board develops a short list of candidates; as plans in place for orderly succession (if considered necessary), including periodical review of such plans. (e) In the case of the appointment of an additional NOMINATION PROCEDURES independent non-executive Director, the Board obtains all information in relation to the proposed Subject to the provisions in the Company’s Bye-laws, if Director to allow the Board to adequately address the Board recognises the need for an additional Director the independence of the Director; or member of senior management: (a) The Board determines the required skilled set, (f) The Board agrees on a preferred candidate; r e l e v a n t e x p e r t i s e a n d e x p e r i e n c e , h a v i n g (g) The Chairman of the Board approaches the preferred consideration of the current Board composition candidate to canvass interest, availability and terms of a n d s i z e a n d s h a r e h o l d e r s t r u c t u r e o f t h e appointment; and Company; (b) The Committee and/or Board identifies potential Board and the Company Secretary finalise a letter candidates, possibly with assistance from external of appointment for Board approval. (h) The Chairman of the Committee, Chairman of the agencies and/or advisors; 23 ANNUAL REPORT 2022In the case of the appointment of independent non- • Time commitment: Each Board member must executive Directors, appointments should be for specific have sufficient time available for the proper term and subject to re-election, the ASX Listing Rules, performance of his or her duties. Directors should the HK Listing Rules and the Companies Act 1981 of be sufficiently free of other commitments to be Bermuda. CRITERIA FOR SELECTION The selection criteria include but are not limited to the following: able to devote the time needed to prepare for meetings and participate in induction, training, appraisal and other Board associated activities. • I n d e p e n d e n c e : F o r t h e c a n d i d a t e w h o i s proposed as an independent non-executive • Business experience: The candidate should have d i r e c t o r , t h e c a n d i d a t e m u s t s a t i s f y a l l t h e significant experience from a senior role in an area independence requirements as set out in Rule 3.13 of business, public affairs or academia, relevant of the HK Listing Rules. The candidate must always to the Company. Awareness of the Group’s be aware of threats to their independence and focus industry would be an advantage but not a avoid any conflict of interest with the Company requirement in all cases. and must be able to represent and act in the best interests of the Company and its shareholders as a • Public Board experience: The candidate should whole have relevant expertise and experience earned as a Board member of a reputable listed company or To ensure that the existing policy continues to be from a senior position in his or her industry, public implemented in practice, the Company shall undertake affairs or academia. regular reviews and reassess this policy having regard t o t h e r e g u l a t o r y r e q u i r e m e n t , g o o d c o r p o r a t e • Diversity: The candidate should contribute to g o v e r n a n c e p r a c t i c e a n d t h e e x p e c t a t i o n s o f the Board being a diverse body, with diversity shareholders and other stakeholders of the Company. reflecting gender, age, cultural and educational background, ethnicity, professional experience, During the year ended 30 June 2022 and up to the date qualifications, skills and length of service. Given of this report, the Nomination Committee performed the the current composition of the Board, a female works as summarized below: candidate would be an advantage but not a requirement. (i) Reviewed and recommended for the Board’s approval the proposed resolution for re-election of • Standing: The candidate should be of the highest each retiring Director 2021 AGM; ethical character and have a strong reputation and standing, both personally and professionally. (ii) R e v i e w e d t h e s t r u c t u r e , s i z e , c o m p o s i t i o n and diversity of the Board and assessed the i n d e p e n d e n c e o f e a c h i n d e p e n d e n t n o n - executive director; and CORPORATE GOVERNANCE REPORTBOARD DIVERSITY POLICY improving employee retention, and being able to The Board has adopted a Board diversity policy setting access different perspectives. Diversity includes, without out the approach to achieve diversity on the Board. The limitation, different gender, age, ethnicity and cultural Company considers that diversity of Board members background. can be achieved through consideration of a number of aspects, including but not limited to, gender, age, Details are available on the Company’s website. cultural and educational background, professional experience, skills, knowledge and length of service. A l l B o a r d a p p o i n t m e n t s a r e b a s e d o n m e r i t a n d contribution, and candidates are considered against objective criteria, having due regard for the benefits of diversity on the Board. The Board considers that the current Board composition diverse and that it meets the criteria (except that there is no female representation on the Board). The Nomination Committee reviews the Policy on a regular basis and discusses any revisions that may be required, and recommends any such revisions to the Board for consideration and approval. Workplace diversity The Company and its subsidiaries are committed to wokplace diversity and recognise the benefits arising from employee and Board diversity, including having a broader pool of quality and talented employees Name of Director/role Non-Executive Directors Kwai Sze Hoi Liu Zhengui Independent Non-Executive Directors Yap Fat Suan, Henry, Chairman Choi Yue Chun, Eugene David Rolf Welch REMUNERATION AND PERFORMANCE COMMITTEE The Board has a Remuneration and Performance Committee to ensure that the Company is able to attract, retain, and motivate a high-calibre team which is essential to the success of the Company. The Committee carries out its duties in accordance with the Terms of Reference, a copy of which is located on the Company’s website. COMPOSITION AND ATTENDANCE The Committee consists of a majority of independent Directors and was comprised of the following members during the year ended 30 June 2022: Meetings attended/ eligible to attend (*) 1/1 0/1 1/1 1/1 1/1 (*) Represents the total number of meetings held during the year ended 30 June 2022. T h e p r i n c i p a l d u t i e s o f t h e R e m u n e r a t i o n a n d The Remuneration and Performance Committee is Performance Committee include, inter alia, reviewing provided with sufficient resources to discharge its duties a n d m a k i n g r e c o m m e n d a t i o n s t o t h e B o a r d o n and has access to independent professional advice at t h e C o m p a n y ’ s r e m u n e r a t i o n p o l i c y ; m a k i n g the cost of the Company according to the Company’s recommendations to the Board on the remuneration policy, if considered necessary. o f E x e c u t i v e a n d N o n - E x e c u t i v e D i r e c t o r s , a n d members of the senior management; reviewing and making recommendations to the Board in respect In addition to its remuneration duties, the Committee is also responsible for the annual performance review of of performance-based remuneration by reference the Board, Board Committees and individual Directors’ to corporate goals and objectives; and ensuring no performance. Director or any of his or her associates are involved in deciding his own remuneration. 25 ANNUAL REPORT 2022REMUNERATION AND PERFORMANCE EXECUTIVE COMPENSATION FRAMEWORK The terms of reference in respect of the Remuneration The Company aims to reward executives with a level and Performance Committee distinguishes the structure and mix of compensation commensurate with their of the Non-Executive Directors’ remuneration from that position and responsibilities within the Company. The of Executive Directors and senior executives. Remuneration and Performance Committee is assisted in the process by the use of independent salary data, if NON-EXECUTIVE DIRECTOR COMPENSATION applicable. The Board is determined to attract and retain high cal ibre Non-E xecutive Direc tors to work with the T h e e x e c u t i v e p a y a n d r e w a r d f r a m e w o r k h a s 2 Company, whilst at the same time preserving cash components: base pay and long-term incentives flow. Accordingly, the structure of the Non-Executive through participation in the 2012 Share Option Scheme. Directors’ remuneration allows for remuneration in the Details of the 2012 Share Option Scheme can be found form of share options, granted under the share option in the financial statements. scheme. Whilst this represents a departure from the Code and ASX Principles, the Committee believes it is PERFORMANCE REVIEW – EXECUTIVES appropriate for the size of the Company, and is satisfied S e n i o r e x e c u t i v e s ’ p e r f o r m a n c e i s r e v i e w e d o n by the fact that all Director participation under the an ongoing basis and evaluated annually by the share option scheme is approved by Shareholders and R e m u n e r a t i o n a n d P e r f o r m a n c e C o m m i t t e e . T h e the grant aligns with the long term performance of the evaluation is undertaken by each executive completing Company. The Company’s Bye-laws provide that the a q u e s t i o n n a i r e o n p e r f o r m a n c e i s s u e s o r e a c h Directors’ remuneration shall be determined by the executive having one-on-one interviews with the Company in a general meeting. The Company has fixed Chairman of the Committee. Performance evaluations a maximum sum of A$1 million in aggregate for Non- were completed during the period for senior executives. Executive Directors per annum, unless otherwise and approved by the Shareholders. Individual executives may meet with the Chairman of the Committee to discuss their responses. PERFORMANCE REVIEW OF THE BOARD B o a r d p e r f o r m a n c e a n d i n d i v i d u a l D i r e c t o r During the year ended 30 June 2022 and up to the p e r f o r m a n c e a r e r e v i e w e d o n a n o n g o i n g b a s i s date of this report, the Remuneration and Performance and evaluated annually by the Remuneration and Committee performed the works as summarised below: Performance Committee. Individual Directors may meet with the Chairman of the Committee to discuss their (i) Reviewed and made recommendations to the views towards their remuneration packages. Board on the existing policy and structure for the remuneration of all Directors and senior REMUNERATION OF EXECUTIVE DIRECTORS management, The Remuneration and Performance Committee is responsible for reviewing compensation arrangements (ii) Reviewed the existing remuneration packages of for Executive Directors, including the Chief Executive the Executive Directors and senior management, Officer (if any) and senior management team. The Company has adopted model (ii) as set out in code (iii) Reviewed the existing remuneration of the Non- provision E1.2.(c) of the Corporate Governance Code, Executive Director’s (including the Independent under which the Remuneration and Performance Non-Executive Director’s), and Committee makes recommendation to the Board on the remuneration packages of individual executive (iv) Assessed the performance of Executive Directors Directors and senior management. The Committee and recommended for the Board’s approval the assesses the appropriateness of the nature and amount renewal of appointment letters setting out the of remuneration of Directors and senior managers on remuneration of Directors. a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. CORPORATE GOVERNANCE REPORTREMUNERATION OF DIRECTORS AND SENIOR statements. The emoluments (includes share-based MANAGEMENT compensation) of the Directors and members of the For details of the remuneration of each Director in senior management by band for the year ended 30 the financial year, refer to the notes to the financial June 2022 is set out below: Number of members 2022 * Number of members 2021 * 6 3 1 1 11 6 4 1 — 11 Draft and final versions of minutes of meetings are sent to all committee members for their comment and records, within a reasonable time after the meeting. Full minutes of audit committee meetings are kept by the Company Secretary. Composition, expertise and attendance The Committee consists of a majority of Independent Directors, none of whom have been employed as previous or current auditors of the Company. HK$0 to HK$1,000,000 HK$1,000,001 – HK$2,000,000 HK$2,000,001 – HK$3,000,000 HK$3,000,001 – HK$4,000,000 * All Directors and senior management AUDIT COMMITTEE Role and function The Board has established an Audit Committee to carry out its oversight of the Company’s financial reporting system and internal control procedures. The Committee carries out its duties in accordance with the Terms of Reference, a copy of which is located on the Company’s website. T h e A u d i t C o m m i t t e e i s p r o v i d e d w i t h s u f f i c i e n t resources to discharge its duties and has access to independent professional advice at the cost of the C o m p a n y a c c o r d i n g t o t h e C o m p a n y ’ s p o l i c y i f considered necessary. 27 ANNUAL REPORT 2022The composition and expertise of the Committee was as follows during the year ended 30 June 2022: Name of Director/role Expertise Meetings attended/ eligible to attend (*) Independent Non-Executive Yap Fat Suan, Henry, Fellow of the Institute of Chartered Accountants in 2/2 Directors Chairman England and Wales and an associate member of the Hong Kong Institute of Certified Public Accountants. Choi Yue Chun, Eugene Graduated from the University of Hong Kong with a 2/2 Bachelor of Laws degree, admitted as a solicitor of the High Court of Hong Kong in 1997 and member of the Law Society of Hong Kong. David Rolf Welch Graduated from the University of Western Australia with 2/2 a Bachelor of Commence degree, he has held senior executive positions including Vice President of Strategy and Business Development for Aurizon Holdings Limited. (*) Represents the total number of meetings held during the year ended 30 June 2022. RESPONSIBILITIES OF THE COMMITTEE (d) to monitor the integrity of financial statements The primary responsibilities of the Audit Committee are, of the Company and the Company’s annual inter alia, report and accounts, half-yearly report and, if prepared for publication, quarterly reports, and to (a) to consider and make recommendations to the review significant financial reporting judgements Board on the appointment, reappointment and contained in them; removal of the external auditor (and to approve the remuneration and terms of engagement of the (e) to evaluate the adequacy of the Company’s external auditor) and any questions of resignation accounting control system by reviewing written or dismissal of that auditor; reports from the external auditors, and monitor management’s responses and actions to correct (b) to review and monitor the external auditor’s independence any noted deficiencies; and objectivity and the effectiveness of the audit process in accordance with applicable standards. (f) to review the adequacy and effectiveness of the The Committee should discuss with the auditor Company’s financial controls, and unless expressly the nature and scope of the audit and reporting addressed by a separate Board risk management obligations before the audit commences; committee, or by the Board itself, to review the Company’s internal control and risk management (c) to develop and implement policy on the engagement systems through active communication with of an external auditor or to supply non-audit management and the external auditors; services. For this purpose, “external auditor” shall include any entity that is under common control, (g) to discuss with management the system of internal ownership or management of the audit firm, control and risk management and ensure that or any entity that a reasonable and informed management has discharged its duty to have third party having knowledge of all relevant effective systems. This discussion should include information would reasonably conclude as part the adequacy of resources, staff qualifications of the audit firm nationally or internationally. The and experience, training programmes and budget Committee should report to the Board, identifying of the Company’s accounting and financial any matters in respect of which it considers that reporting function; action or improvement is needed and making recommendations as to the steps to be taken; CORPORATE GOVERNANCE REPORT(h) to consider any findings of major investigations During the year ended 30 June 2022 and up to the date of risk management and internal control matters of this report, the Committee performed the works as as delegated by the Board or on its own initiative summarised below: and management’s response to these findings; (i) reviewed and approved the scope and fees (i) where an internal audit function exists, to ensure proposed by the external auditor, co-ordination between the internal and external auditors, and to ensure that the internal audit (ii) reviewed the reports of findings/independent f u n c t i o n i s a d e q u a t e l y r e s o u r c e d a n d h a s review report from the external auditor and appropriate standing within the Company, and management’s response in relation to the final to review and monitor the effectiveness of the audit for the year ended 30 June 2021, interim internal audit function; r e s u l t s r e v i e w f o r t h e s i x m o n t h s e n d e d 3 1 December 2021, and (j) where an internal audit function exists, to assess the performance and objectivity of the internal (iii) reviewed and recommended for the Board’s audit function and to make recommendations approval the financial report of the Group for for the appointment and dismissal of the Head of the year ended 30 June 2021, for the six months Internal Audit; ended 31 December 2021 together with the relevant management representation letters and (k) to review the Group’s financial and accounting announcements. policies and practices; DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL (l) to review the external auditor’s management STATEMENTS letter, any material queries raised by the auditor The financial statements of the Company for the to management in respect of the accounting year ended 30 June 2022 have been reviewed by records, financial accounts or systems of control the Board and the Audit Committee and audited by and management’s response; the external auditor, Ernst and Young Australia. The Directors acknowledge their responsibility for preparing (m) to ensure that the Board provides a timely response to the consolidated financial statements of the Company the issues raised in the external auditor’s management and presenting a balanced, clear and comprehensive letter; assessment of the Group’s performance and prospects. (n) to review arrangements which employees of T h e D i r e c t o r s e n s u r e t h a t t h e p r e p a r a t i o n o f t h e the Company can use, in confidence, to raise consolidated financial statements of the Company concerns about possible improprieties in financial are in accordance with statutory requirements and reporting, internal control or other matters. The audit applicable accounting standards and have selected committee should ensure that proper arrangements s u i t a b l e a c c o u n t i n g p o l i c i e s a n d a p p l i e d t h e n are in place for fair and independent investigation consistently, and made judgments and estimates that of these matters and for appropriate follow-up are prudent and reasonable and have ensured that action; the consolidated financial statements are prepared on a going concern basis. The Directors also ensure the (o) to act as the key representative body for overseeing publication of the financial statements of the Company the issuer’s relations with the external auditor; and in a timely manner. (p) report to the Board on matters in the Corporate The report of the auditor of the Company about their Governance Code and ASX Principles. reporting responsibilities on the financial statements of the Company is set out in the Independent Auditor’s Report. 29 ANNUAL REPORT 2022AUDITORS’ REMUNERATION carries out all the general powers of management and The remuneration paid to the Group’s external auditors control of the activities of the Group as vested in the during the year ended 30 June 2022 is set out in the Board, save for those matters which are reserved for the Directors’ Report on pages 58 to 59. Board’s decision and approval pursuant to the written terms of reference of the Executive Committee (a copy Ernst and Young Australia, the auditor of the Company, of which is located on the Company’s website). The is a non-Hong Kong audit firm which has obtained members include the Executive Directors and certain approval from the Financial Reporting Counsel as senior management appointed by the Board from time a recognised public interest entity (“PIE”) auditor to to time. The Executive Committee meets whenever it is conduct PIE engagement of the Company. necessary to carry out its obligations. EXECUTIVE COMMITTEE The Board has constituted the Executive Committee and delegated the responsibility of the day-to-day HEALTH, SAFETY, ENVIRONMENT AND SUSTAINABILITY COMMITTEE Role and function management and has empowered the Executive The Board has established a Committee to oversee the Committee to implement policies and strategies, for the health, safety, environmental and sustainability activities business activities and operations, internal control and of the Company. The Committee carries out its duties administration of the Group. The Executive Committee in accordance with the Terms of Reference, a copy of which is located on the Company’s website. COMPOSITION AND ATTENDANCE The Committee consists of a majority of independent Directors and was comprised of the following members during the year ended 30 June 2022: Name of Director/role Independent Non-Executive Directors Choi Yue Chun, Eugene, Chairman Yap Fat Suan, Henry Non-Executive Director Ross Stewart Norgard Meetings attended/ eligible to attend (*) 1/1 1/1 1/1 (*) Represents the total number of meetings held during the year ended 30 June 2022. RESPONSIBILITIES OF THE COMMITTEE The principal duties of the Committee are: (c) regularly reviewing community, environmental, health and safety response compliance issues and incidents to determine, on behalf of the Board, (a) rev iewing and monitoring the sustainability, whether the Company is taking all necessary environmental, safety and health policies and action in respect of those matters and that the activities of the Company; Company has been duly diligent in carrying out its responsibilities and activities in that regard; (b) e n c o u r a g i n g , s u p p o r t i n g a n d c o u n s e l l i n g management in developing short and long term (d) ensuring that the Company monitors trends and policies and standards to ensure that the principles reviews current and emerging issues in the field of set out in the sustainability, environmental, health sustainability, environment, health and safety, and and safety policies are being adhered to and evaluates their impact on the Company; and achieved; (e) reviewing and making recommendations to the Board with respect to environmental aspects of expansions, acquisitions and dispositions with material environmental implications. CORPORATE GOVERNANCE REPORTDuring the year ended 30 June 2022 and up to the date of this report, the Health, Safety, Environment and Sustainability Committee performed the works as summarised below: i) Reviewed and recommend to the Board issues that have emerged that may materially impact the Company, ii) Reviewed incident outcomes and compliance issues. Name of Director/role Executive Director Colin Paterson (Chairman) Non-Executive Director Ross Stewart Norgard Independent Non-Executive Director Choi Yue Chun, Eugene RISK MANAGEMENT COMMITTEE Role and function The Board has established a Committee to oversee risk management and internal control of the processes by which risk is considered for both ongoing operations a n d p r o s p e c t i v e a c t i o n s o f t h e C o m p a n y . T h e Committee carries out its duties in accordance with the Terms of Reference, a copy of which is located on the Company’s website. Composition and attendance T h e C o m m i t t e e w a s c o m p r i s e d o f t h e f o l l o w i n g members during the year ended 30 June 2022: Meetings attended/ eligible to attend (*) 1/1 1/1 1/1 (*) Represents the total number of meetings held during the year ended 30 June 2022. Whilst the risk management committee was not chaired The Risk Management Committee will meet periodically by an independent director and it does not comprise to review and ensure that the Company has in place of a majority of independent Directors, the committee processes to assess and manage specific and general was mainly composed of non-executive Directors business risks and appropriate mitigation procedures and an independent non-executive Director who do where applicable. not participate in the daily operation of the Group. The Company considers that objectivity can still be During the year ended 30 June 2022 and up to the maintained with such arrangements. RESPONSIBILITIES OF THE COMMITTEE date of this report, the Risk Management Committee performed the works as summarised below: R i s k m a n a g e m e n t e n c o m p a s s e s a l l a r e a s o f (i) Reviewed and recommended of the Board’s the Company’s activities. Once a business risk is annual review the Group’s risk management and i d e n t i f i e d , t h e r i s k m a n a g e m e n t p r o c e s s e s a n d internal control systems. systems implemented by the Company are aimed at providing the necessary framework to enable the business risk to be managed. Management has the key role of identifying risks and enabling processes for risk management. Senior management are required to report risks identified to the Risk Management Committee or Chief Executive Officer. INTERNAL CONTROL AND RISK MANAGEMENT Role and function The Board has overall responsibility for the Group’s system of internal control and for the assessment and management of risk. The Board has conducted a review of and is satisfied with the effectiveness of the system of internal control of the Group. 31 ANNUAL REPORT 2022The Executive Directors also discuss the audit plan with REVIEW PERIOD the Audit Committee and the external auditors. The The Board also reviews at least annually the adequacy audit plan is reassessed during the year as needed to of resources, qualifications and experience of staff ensure that adequate resources are deployed and of the Group’s accounting and financial reporting the plan’s objectives are met. In addition, regular function, and their training programmes and budget. consultation is undertaken with the Group’s external auditors so they are aware of the significant factors For the year ended 30 June 2022, the Board, through which may affect their respective scope of work. the Audit, and Risk Management Committees, has Reports from the external auditors on relevant financial conducted a Group wide review of its risk management reporting matter are presented to the Audit Committee, and internal control systems for the assessment on the and, as appropriate, to the Board. adequacy of resources, qualifications and experience o f s t a f f o f t h e C o m p a n y ’ s a c c o u n t i n g , i n t e r n a l The Group’s risk management and internal control audit, financial reporting functions, and their training systems are designed to provide reasonable, but not programmes and budget. absolute, assurance against material misstatement or loss; to manage rather than eliminate the risk of REPORTING system failure; and to assist in the achievement of the The Executive Directors of the Company report directly Group’s agreed objectives and goals. They have a key to the Board and the Audit Committee, and monitor role in the management of risks that are significant to the existence and effectiveness of the controls in the the fulfilment of business objectives. In addition, they Group’s business operations. should provide a basis for the maintenance of proper accounting records and assist in the compliance with For risk management, the Board, the Risk Management relevant laws and regulations. Committee, and management have reviewed the G r o u p ’ s f i n a n c i a l , o p e r a t i o n a l , c o m p l i a n c e a n d Systems and procedures are put in place to identify, strategic aspects and identified certain risk areas. evaluate and monitor the risks of the business activities. Annual assessment is performed by the Company Certain types of risks and internal control weaknesses and presented to the Audit and Risk Management have been identified and the relevant measures C o m m i t t e e s o n t h e e f f e c t i v e n e s s o f t h e r i s k implemented to mitigate these risks are disclosed under management and internal control systems, who then the section “Management Discussion and Analysis”. will put forward the results and findings to the Board for review on the effectiveness of the risk management and For the year ended 30 June 2022, the risk management internal control systems. and internal control systems have been considered effective and adequate and no significant deficiency INTERNAL AUDIT FUNCTION were noted. The Company has outsourced its internal audit function and has engaged an independent management CONFIRMATION OF COMPLIANCE consultancy company to assess the internal control Although the Company is not required to comply with measures of the Group on a yearly basis. The conclusion Section 295A of the Australian Corporations Act 2001 i s t h a t t h e r e w a s n o s i g n i f i c a n t w e a k n e s s i n t h e (being a company incorporated in Bermuda), the Board Company’s internal control and risk management requires the Executive Director to state in writing to the systems. Board that: CORPORATE GOVERNANCE REPORTThe financial records of the Company have been properly maintained and the financial statements comply with the appropriate accounting standards and give a true and fair view of the Company’s financial position, and that the opinion has been based on the basis of a sound system of risk management and internal control which is operating effectively. MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS The Company has adopted a Securities Trading Policy COMPANY SECRETARY ROLE AND FUNCTION The Company Secretary is responsible and accountable d i r e c t l y t o t h e B o a r d a n d e n s u r i n g t h a t B o a r d procedures are followed and that the activities of the Board are carried out efficiently and effectively. T h e C o m p a n y S e c r e t a r y a s s i s t s t h e C h a i r m a n t o prepare agendas and Board papers for meetings and disseminates such documents to the Directors and Board Committees in a timely manner. The Company Secretary is responsible for ensuring that the Board is which applies, inter alia, to all Directors and Key fully briefed on all legislative, regulatory and corporate Management Personnel. The Securities Trading Policy governance developments when making decisions. The complies with the ASX Listing Rules and the Model Code Company Secretary is also directly responsible for the for Securities Transactions by Directors of Listed Issuers Group’s compliance with the continuing obligations (the “Model Code”) as set out in Appendix 10 of the HK of the Listing Rules and The Code on Takeovers and Listing Rules. A copy of the Company’s Securities Trading Mergers and Share Repurchases, including publication Policy is available on the website of the Company. and dissemination of the Company’s reports, financial All Directors have confirmed, following a specific per the Listing Rules. Also, timely dissemination of enquiry by the Company, that they have complied with announcements and information relating to the Group the required standard as set out in the Model Code to the market and ensuring that appropriate notification throughout the year ended 30 June 2022. is made when there are any dealings by Directors in the statements and interim reports within the period as securities of the Group. CODE OF CONDUCT The Company has adopted a Code of Conduct, the The Company Secretary also advises the Directors on purpose of the Code is to guide and enhance the their obligations in respect of disclosure of interests conduct and behaviour of the Directors, executives and i n s e c u r i t i e s , c o n n e c t e d t r a n s a c t i o n s a n d i n s i d e employees in performing their daily roles. The Code of i n f o r m a t i o n a n d e n s u r e s t h a t t h e s t a n d a r d s a n d Conduct encourages and fosters a culture of integrity disclosures required by the Listing Rules are observed. and responsible valued employer, business partner and corporate citizen, in all our relationships. This Code of Draft minutes of each Board meeting are circulated to Conduct sets out the principles and standards which all Directors for their comment before being tabled at the Board, executives and employees are encouraged the following Board meeting for approval. All minutes to strive towards with each other, shareholders, other are kept by the Company Secretary and are open for stakeholders and the broader community. Details are inspection at any reasonable time on reasonable notice available on the Company’s website. by any Director. 33 ANNUAL REPORT 2022The biographical details of Mr Chan Kam Kwan, Jason Directors and executives in possession of potential is set out in the Biographies of Directors and Senior inside information and or inside information are required Management. PROFESSIONAL DEVELOPMENT to take reasonable measures to ensure that proper safeguards are in place to preserve strict confidentiality of inside information and to ensure that its recipients D u r i n g t h e y e a r , M r C h a n K a m K w a n J a s o n , t h e recognise their obligations to maintain confidential. Company Secretary of the Company, has undertaken T h e p o l i c y s h a l l b e u p d a t e d a n d r e v i s e d a s a n d no less than 15 hours of professional training to update when necessary in light of changes in circumstances his skills and knowledge and hence has complied with and changes in the SEHK and ASX Listing Rules, the the relevant training requirement under rule 3.29 of the Securities and Futures Ordinance, relevant statutory and Listing Rules and 2.6 of the ASX Principles during the year regulatory requirements from time to time. ended 30 June 2022. LANGUAGE OF MEETINGS All key corporate and shareholder documents are prepared in both English and Mandarin. All Board meetings are conducted in English and all Directors are capable of communicating in English and are able to contribute to discussions and can discharge their obligations accordingly. Shareholder meetings are conducted bi-lingually, in English and Cantonese. CONTINUOUS DISCLOSURE The Directors are committed to keeping the market A copy of the Communications Strategy and Continuous Disclosure policy is available on the Company’s website. COMMUNICATION WITH SHAREHOLDERS COMMUNICATION STRATEGY The Board is committed in providing clear and full performance information of the Group to shareholders and have established a communications strategy, a copy of which can be found on the Company’s website. The strategy is designed to promote effective c o m m u n i c a t i o n w i t h s h a r e h o l d e r s t h r o u g h o u t t h e y e a r a n d e n c o u r a g e e f f e c t i v e p a r t i c i p a t i o n at general meetings. In addition to the circulars, fully informed of material developments to ensure notices and financial reports sent to shareholders, compliance with the ASX, and the HK Listing Rules. The additional information of the Group is also available to Directors have observed the disclosure requirements shareholders on the Company’s website. of the ASX and the HK Listing Rules, and to ensure accountability at a senior management level for As well as ensuring timely and appropriate access to compliance. A copy of the Communications Strategy information for all investors via announcements to the and Continuous Disclosure Policy can be found on the ASX and SEHK, the Company will also ensure that all Company’s website. relevant documents are released on the website of the Company for the purpose of both stakeholders DISCLOSURE OF INSIDE INFORMATION and shareholders. Copies of all corporate governance T h e B o a r d h a s a C o m m u n i c a t i o n s S t r a t e g y a n d policies, charters and terms of references are available Continuous Disclosure policy that includes inside information and the procedures and internal controls on the website of the Company. for handling and dissemination of inside information. ANNUAL GENERAL AND SPECIAL MEETINGS The policy sets out guidelines and procedures to the Shareholders are encouraged to attend the AGM for Directors of the Company and executives of the Group which at least 20 clear business days’ notice is given. to ensure inside information of the Group is to be The Chairman and Directors are available to answer disseminated to the public on an equal basis and in a questions on the Group’s business at the meeting and timely manner. the external auditor also attends and is available to answer questions from security holders relevant to the audit. CORPORATE GOVERNANCE REPORTIn accordance with the Bye-Laws of the Company, PROCEDURES FOR DIRECTING SHAREHOLDERS’ ENQUIRIES a minimum of 14 days’ notice is required for every TO THE BOARD shareholder meeting and all shareholders shall have S h a r e h o l d e r s e n q u i r i e s c a n b e d i r e c t e d t o statutory rights to call for special general meetings inquiry@brockmanmining.com or by writing to the and put forward agenda items for consideration in the Company Secretary’s office, whose contact details are general meetings. All resolutions at the general meeting as follows: are decided by a poll which is conducted by the Group’s branch share register in Hong Kong. Separate Unit 3903B, Far East Finance Centre, 16 Harcourt Road, resolutions are proposed at the general meetings for Admiralty, Hong Kong. each substantial issue, including the re-election of retiring Directors. For the year ended 30 June 2022, The enquiries would then be assessed and considered (if the Company has reviewed the effectiveness of the appropriate) to put to the Board. Shareholders may also communication strategy policy and has concluded that make enquiries with the Board at the general meetings the policy is working effectively. of the Company. SHAREHOLDERS RIGHTS HOW SHAREHOLDERS CAN CONVENE A SPECIAL GENERAL MEETING Subject to Section 74 of the Companies Act 1981 of Bermuda (the “Act”) and the Bye-Law 58 of the Company, the Board may call special general meetings, and members holding at the date of deposit of the requisition not less than one-tenth of the paid up capital of the Company carrying the right of voting at general meetings for the Company shall at all times have the right, by written requisition to the Board or the Company Secretary of the Company, to require a special general meeting to be called by the Board for the transaction of any business specified in such requisition; and such meeting shall be held within two months after the deposit of such requisition. If within 21 days of such deposit the Board fails to proceed to convene such meeting the requisitionists themselves may do so in PROCEDURES FOR PUTTING FORWARD PROPOSALS AT A GENERAL MEETING Any number of shareholders representing not less than 5% of the total voting rights of the Company on the date of the requisition or not less than 100 shareholders of the Company are entitled to put forward a proposal for consideration at a general meeting of the Company. Shareholders should follow the procedures as set out in Section 79 of the Act for putting forward such proposals. PROVISION OF INFORMATION IN RESPECT OF AND BY DIRECTORS U p d a t e d i n f o r m a t i o n t o t h e c h a n g e i n o t h e r Directorships of the Directors of the Company are available on our website and in the 2022 Annual Report. CONSTITUTIONAL DOCUMENTS There was no significant change in the memorandum accordance with the provisions of Section 74(3) of the a n d a r t i c l e s o f a s s o c i a t i o n a n d t h e B y e - L a w s o f Act. the Company during the year. The memorandum and articles of association and the Bye-Laws of the Company are available on the Company’s website. 35 ANNUAL REPORT 2022DIVIDEND POLICY The Company has adopted a dividend policy, pursuant to which the Company may distribute dividends to the shareholders of the Company by way of cash or shares. Any distribution of dividends shall be in accordance with the Hong Kong Laws, the bye-laws of the Company, the Bermuda Companies Act 1981 (as amended from time to time) and any other applicable laws, rules and regulations. The recommendation of payment of any dividend is subject to the absolute discretion of the Board, and any declaration of dividend will be subject to the approval of shareholders. In proposing any dividend payout, the Board shall also take into account, inter alia: • T h e G r o u p ’ s a c t u a l a n d e x p e c t e d f i n a n c i a l • • performance; Shareholders’ interests; Retained earnings, distributable reserves and contributed surplus of the Company and each of the other members of the Group; • Liquidity position and future commitments at the time of declaration of dividend; • • • Taxation considerations; Statutory and regulatory restrictions; General business conditions and strategies; • General economic conditions, business cycle of the Group’s business and other internal or external factors that may have an impact on the business or financial performance and position of the Company; and • Other factors that the Board deems appropriate. The dividend policy will be reviewed from time to time and there is no assurance that a dividend will be proposed or declared in any specific periods. CORPORATE GOVERNANCE ENHANCEMENT Enhancing corporate governance is not simply a matter of applying and complying with the Code • The level of the Group’s debt to equity ratio, return Governance Code and ASX Principles but also about on equity and financial covenants to which the promoting and developing an ethical and healthy Group is subject to; corporate culture. The Board will continue to review and, where appropriate, improve our current practices • • Possible effects on the Group’s credit worthiness; on the basis of our experience, regulatory changes and developments. Any views and suggestions from our Any restrictions on payment of dividends or other shareholders to promote and improve our transparency covenants on the Group’s financial ratios that may are also welcome. be imposed by the Group’s financial creditors; • The Group’s expected working capital requirements and future expansion plans; CORPORATE GOVERNANCE REPORTThe Directors are pleased to present the Environmental, Social and Governance (“ESG”) Report for the year ended 30 June 2022 in compliance with the applicable code provision of the Environmental, Social and Governance Reporting Guide as set out in Appendix 27 of the Rules Governing the Listing of Securities on the SEHK. REPORTING SCOPE With the delay in development of the Marillana Project and no mining activities undertaken during the year, the scope of the report covers all operations of the Group, mainly the head office in Hong Kong and its subsidiaries in Western Australia. The report presents information relevant to the ESG management approach for the financial year from 1 July 2021 to 30 June 2022 (the “Reporting Period”). The ESG Report has been prepared in accordance with the principles of materiality, quantitative approach and consistency recommended by the Hong Kong Stock Exchange. The Group’s performance is required annually and reviewed by the Risk Management Committee and Board, details of which are outlined in our “Internal Control and Risk Management” section contained in the Corporate Governance Statement included in the Company’s published 2022 Annual Report. It is recommended that the ESG report to be read together with the 2022 Annual Report, in particular the Corporate Governance Statement and the Directors’ Report. This ESG report can be accessed from the Sustainability section of the Company’s website and on the HKEx’s website. The compilation of the report follows the principles as suggested by the ESG reporting guidelines: Materiality Opinions of stakeholders were gathered from internal and external stakeholders engagement and we have reviewed and determined the material ESG aspects to the Group. Balance To provide an unbiased assessment of the Group and report not only the progress of sustainability development, but also the future plans. Quantitative Quantitative key performance indicators are used to monitor the sustainability progress and results of target implementation. Consistency Unless otherwise stated, the ESG report adopted consistent methodology. 37 ANNUAL REPORT 2022ENVIRONMENTAL, SOCIAL ANDGOVERNANCE REPORTSTAKEHOLDERS ENGAGEMENT AND MATERIALITY ASSESSMENT Amongst various environmental and social issues based on the ESG Reporting Guide within the scope of sustainability, the following is the list of issues that are considered to be material and relevant to the Group. The Group defines material stakeholder groups as those who have frequent connections, significant financial and operational influence and form a long term and strategic relationship with the Group. Aspects and KPIs relevant to this report’s disclosure are set out as follows: Stakeholders Material issues KPI Engagement channels Investors and shareholders Business operations General disclosure Financial reports and announcements Regulators Compliance with laws and General disclosure on On-going compliance regulations aspects A1, B1, B2, B4, B6, review B7 Disclosure Shareholder meetings Environmental Aspects A1-A4 and On-going communications relevant KPIs Anti-corruption KPI B7.1-3 Training for directors and Labour standards KPI B4.1-2 management Yearly review and monitoring of latest regulatory updates Product Responsibility General disclosure Framework of product Suppliers Supply chain management KPI B5.1-4 quality assurance will be developed prior to the delivery of first ore Review of suppliers and procurement procedures Employees Remuneration and labour KPI B1.1-2 Yearly review standards Training and development KPI B3.1-2 Training for directors and management Occupational health & KPI B2.1-3 safety Community Charity work KPI B8.1-2 Support charity organisations ENVIRONMENTAL, SOCIAL ANDGOVERNANCE REPORTStatement of the Board of Directors The Board retains the overall responsibility for the Group’s ESG management and is committed to operating in a manner that contributes to the sustainable development of mineral resources through efficient, balanced protection of the environment while demonstrating consideration for the wellbeing of our people. The Group is focused on the need to work closely with the local communities and the importance of earning the respect and support of the communities. The Group recognises its responsibility for minimising the impact of its activities on, and protecting, the environment. The Group is committed to developing and implementing practices in environmental design and management and actively operates to: • • • Work within the legal frameworks, Identify, monitor, measure, evaluate and minimise our impact on the environment, Give environmental aspects due consideration in all phases of the Group’s projects, from exploration to development, eventual operation and final closure, and • Act systematically to improve the planning, execution and monitoring of its environmental performance. Looking forward to the future, the Board will also perform timely review of the Group’s strategic planning and performance. The Board also sets out ESG goals and targets based on relevant KPIs and reviews the results on a yearly basis. We strive to provide a supportive environment and incorporate ESG initiatives into our strategy to reduce the Group’s carbon footprint. 39 ANNUAL REPORT 2022A. ENVIRONMENTAL A.1 EMISSIONS During the year, the Group was at minimal spend and retained office space to continue the advancement of the joint operation with MinRes. Mining development is yet to commence a n d m a n a g e m e n t c o n s i d e r s t h a t t h e emissions and waste generated by any e x p l o r a t i o n a c t i v i t y w o u l d h a v e a n insignificant impact on the environment due to the minimal activities undertaken. Hence, there are no relevant laws and regulations applicable to these activities. Greenhouse Gas emissions (“GHG Emissions”) f o r t h e r e p o r t i n g p e r i o d a r e m a i n l y generated from general direct electricity consumption for office use and indirect emissions resulted from business trips. During t h e y e a r , d u e t o t h e c o n t i n u e d g l o b a l pandemic, business travel was minimised. Going forward, business travel and physical management meetings will be minimised and be substituted with online meetings. Relevant KPls are as shown below: Target of net decrease 2022 2021 i) Purchased electricity consumption Met ii) GHG intensity (by floor area) Met iii) Scope 1 GHG Emissions Not applicable iv) Scope 2 GHG Emissions Met v) Scope 3 GHG Emissions Not applicable 18,770 kWh 22,527 kWh 75.35 kg CO2-e/m2 Not applicable 132.05 kg CO2-e/m2 Not applicable 11,049.84 kg CO2 Not applicable 18,082.29 kg CO2 Not applicable Note: Scope 1 emissions come from direct GHG emissions from combustion of fuels in stationary or mobile s o u r c e s ( e x c l u d i n g e l e c t r i c a l e q u i p m e n t ) t o generate electricity, which is not applicable in our case as our development and production activities have yet to commence. S c o p e 2 e m i s s i o n s c o m e f r o m i n d i r e c t G H G e m i s s i o n s f r o m t h e g e n e r a t i o n o f p u r c h a s e d electricity. Scope 3 emissions include other indirect GHG emissions that occur outside the Company such as emissions from business travel of employees and paper waste disposed of at landfill, upstream T h e s c o p e d u r i n g t h e r e p o r t i n g p e r i o d covered a gross floor area of 249.1m2. The Group continues to operate at minimal s p e n d a n d t a r g e t s a n e t d e c r e a s e i n emissions prior to the commencement of any future developmental activities. Due to the very low emissions of the Group based on current activities, actual emissions are not currently measured or quantified. Emissions w i l l b e m e a s u r e d o n c e d e v e l o p m e n t activities have commenced. The Company has met its net decrease in emission target for the year, and has implemented the following measures to reduce our emissions in relation to office and downstream emissions from the supply chain activities: etc., which is not significant to the Group as our development and production activities have not • Reduction of unnecessary business trips commenced. * Emissions for Nitrogen Oxides (NOx), Sulphur and board meetings organised via electronic communications. Oxides (SOx) and Respirable suspended • Encouraged employees to switch off particulars (RSP) are not disclosed as the lights and air conditioning. amount is insignificant. • Procure only electrical appliances with “Grade1” or equivalent energy labels if needed to increase energy efficiency. ENVIRONMENTAL, SOCIAL ANDGOVERNANCE REPORTDuring the reporting period, the Company Our offices are required to maintain in-door i n c u r r e d n o u n n e c e s s a r y b u s i n e s s t r i p s temperature at 24 degree Celsius to ensure (domestic and overseas) and all board efficient use of air conditioning. meetings were conducted via electronic communications. As stated in the above paragraph, the Group targets to maintain a net decrease in During the reporting period, no material emissions for the upcoming year. Purchased hazardous or non-hazardous waste was electricity contributes to the majority of our generated as our operations are office emissions; hence a target of net decrease in based in nature. Waste generated comprises yearly energy consumption is set. p r i n t e r t o n e r c a r t r i d g e s , b a t t e r i e s a n d obsolete computer and printing equipment. The Group promotes initiatives to mitigate T h e s e w e r e p r o p e r l y d i s p o s e d o f a n d e n v i r o n m e n t a l i m p a c t s b y c h o o s i n g recycled. Non-hazardous waste such as energy-efficient products by comparing general domestic refuse and printing paper Energy Labels issued by the Electrical and from office operations were considered Mechanical Services Department (EMSD)/ minimal. A further detailed reporting on mine Energy Rating Labels issued by the Australian waste will be available when development Federal Government. As waste electrical activities have commenced. A.2 USE OF RESOURCES and electronic equipment (WEEE) poses severe harm to the environment, the Group encourages all employees to use the WEEE The Group is committed to promoting an donation or recycling programs. environmentally conscious work environment and has focused on measures to minimise All employees are responsible and accountable waste and electricity consumption, initiate for operating in an environmentally responsible paper and cartridge recycling and promote manner. electronic communications and storage. We promote recycling of office equipment and The total purchased electricity for the year reduce domestic waste as much as possible. ended to 18,770kWh and the electricity usage intensity by floor area amounted to To reduce consumption of paper, the Group approximately 75.35kWh/m². prefers using electronic means to disseminate information via electronic devices and The Group’s existing business operation electronic communication systems. d o e s n o t r e q u i r e a n y s i g n i f i c a n t w a t e r c o n s u m p t i o n , w a t e r u s a g e a n d a n y We encourage our office employees to c o n s u m p t i o n r e l a t e s t o d r i n k i n g w a t e r switch off idle lights, air conditioners and (including bottled water). other office equipment, and we remind our employees to print and photocopy on both T h e r e i s n o a p p l i c a b l e d a t a o f w a t e r sides of paper if printing is unavoidable. consumption because it is not feasible to We also encourage our employees to bring obtain water withdrawal and discharge data t h e i r o w n l u n c h a n d r e d u c e p u r c h a s e as an individual occupant of commercial of takeaway and beverages and hence office leases for the Hong Kong and Australia reduce the use of plastic disposable utensils. offices were water supply and discharge The Group encourages its employees to are not billed separately by the respective choose public transportation and carpool building management. Although data on to reduce car driving and thus the impact water usage was not quantifiable, the Group on the environment and transportation. maintains best endeavours to conserve the The Group does not own any vehicles and environment by requiring our employees to we therefore do not directly produce any report immediately damage to any water greenhouse and hazardous gases from cars facilities and prompt water awareness. used. 41 ANNUAL REPORT 2022There is no issue in sourcing water that is fit Brockman has previously engaged Ecologia for purpose whereas the Group considers its E n v i r o n m e n t ( E c o l o g i a ) t o p r e p a r e t h e water consumption level is reasonable at the Prel i minary Docu mentati on req uired t o current operation level. The Group targets to assess the project under the Environmental have a net decrease in water and electricity Protection and Biodiversity Conservation consumption next year by implementing the Act 1999 (Cth). Most key environmental measures as discussed above. a p p r o v a l s a r e i n p l a c e a n d w e s h a l l adhere to our proposed plan in the event Due to the nature of the business, there is o f c o m m e n c e m e n t o f e a r l y w o r k s . W e no applicable data of packaging material endeavour to mitigate any environmental as our operation does not involve the use of d i s t u r b a n c e a n d a p p l y o u r m o n i t o r i n g any packaging material. schedule when the project commercialises. A.3 THE ENVIRONMENT AND NATURAL RESOURCES Prior to the commencement of our mine T h e C o m p a n y i s c o m m i t t e d t o t h e development, environmental approvals for principles of being a good corporate and mining or exploration activities are required environmental citizen, and takes careful to be sought in accordance with the Mining c o n s i d e r a t i o n o f e n v i r o n m e n t a l , s o c i a l Act 1978 and the following approvals are responsibility and sustainability issues when r e q u i r e d b y t h e D e p a r t m e n t o f M i n e s , choosing its vendors. The Group aims to Industry Regulation and Safety (DMIRS): minimise its environmental footprint and its disturbance to natural resources. We 1. Programme of work – submission has anticipate that fines residue storage and waste rock management, water use and discharge, and land management and rehabilitation would be the most important areas of concern once in production and the t o i n c l u d e d e t a i l s o f m e c h a n i s e d equipment and potential disruption to the ground during exploration or prospecting for minerals. Group shall closely monitor these aspects, 2. M i n i n g p r o p o s a l s – d e t a i l s o f t h e in compliance with its regulatory approvals obtained with key State and Commonwealth Governments that have been received for the Marillana project. Each year, the proposed mining operation or any changes to be incurred are required to be disclosed. Company undertakes an annual compliance 3. Mine closure plans – such plan must be review and provides a report to the Office of Environmental Protection Authority to declare its compliance status as required. Brockman is proposing to clear up to 3,785 included together with any submission o n m i n i n g p r o p o s a l s , c o v e r i n g a l l aspects of mine decommissioning and rehabilitation. ha of vegetation to mine and transport ore A number of management plans are in to Port Hedland by a land infrastructure place to provide a framework for the Group s o l u t i o n . A f t e r r e h a b i l i t a t i o n , t h e l o n g - to effectively manage its environmental term cleared footprint will be around 60 ha impact and responsibilities. The plans are which represents the final open pit void. All reviewed regularly and include the following: other disturbances will be rehabilitated to the satisfaction of the Western Australian Environmental Protection Authority (EPA), Dep artment of Environment and Water (DEW) and Department of Mines, Industry, Resources and Safety (DMIRS). • • • Safety management plans, Waste management plans, and Environmental monitoring plans. ENVIRONMENTAL, SOCIAL ANDGOVERNANCE REPORTThe principal environmental incidents that A.4 CLIMATE CHANGE could potentially occur at the Group’s Significant changes in the pattern of rainfall exploration sites include hydrocarbon spills; o v e r W e s t e r n A u s t r a l i a h a v e o c c u r r e d the destruction of local wildlife habitats; over the past 40 years. Most of the state, water substance levels exceeding permits especially the northwest, has experienced limits; and other incidents that negatively a trend towards a wetter climate. This poses impact the environment. Any environment a certain risk for the mining industry. The i n c i d e n t s a r e r e p o r t e d , i n v e s t i g a t e d , southwestern part of the state has become remedied and monitored by the Group drier, with a 15% reduction in rainfall since and, where appropriate, reported to the the mid-1970s. responsible authorities. Environmental compliance Waste rock and tailings that are created during the mining and ore refining process E n s u r i n g e n v i r o n m e n t a l c o m p l i a n c e i s can release toxins into the environment if integral to the Group’s operations. The Group not stored or disposed of properly. In many implements environmental management cases, waste rock and tailings are left out s y s t e m s a n d p r a c t i c e s , f r o m w h i c h w e in the open where they are exposed, and assess and identify potential environmental toxins can be washed into water systems risks; conduct; monitoring; and report the by rainfall, or can leach into the soil. To performance results to mitigate the impact mitigate such risk, a detailed mine plan of our operations on the environment. The with enhanced tailings and erosion control Group strives to promote the efficient use structure will serve as part of the mine’s of resources and reduction and prevention water management plan. of pollution. As a responsible Group we seek to meet, and where possible exceed, The most likely source of impact to the the regulatory requirements governing our surface water environment from discharge environmental performance. The Group is from unplanned flooding or spillages at complies with all applicable environmental the sewage treatment facility. However, laws, regulations, and standards. The main safeguards are in place to minimise this risk, laws are set out in the Mining Act 1978 and including: other relevant environmental regulations such as the Environmental Protection Act • Alarms and flashing beacons to warn 1986, the Environmental Protection and Biodiversity Conservation Act 1999, the Environmental Protection (Clearing of Native of failure of mechanical components (pump and blower); Vegetation) Regulations 2004, the Rights in • Alarms to warn of high water levels in Water and Irrigation Act 1914 and the Native the balance tank or irrigation tanks; Title Act 1993. and I n t h e y e a r e n d e d 3 0 J u n e 2 0 2 2 , t h e r e • An emergency overflow between the were no environmental permit or approvals breaches. All approval and permit levels were complied. balance tank and the waste water treatment plant. I n a d d i t i o n , f l o o d p r o t e c t i o n w i l l b e implemented, to ensure floodwaters do not adversely impact waste water facilities. 43 ANNUAL REPORT 2022B. SOCIAL B.1 EMPLOYMENT AND LABOUR PRACTICES EMPLOYMENT T h e G r o u p ’ s e m p l o y m e n t p o l i c i e s a r e documented in its Code of Conduct (Code), w h i c h p r o v i d e s c l e a r g u i d a n c e o n t h e conduct and behaviour of all employees, including the Board and senior management. The Code is designed to encourage and foster a culture of integrity and responsibility with the focus on strengthening the Group’s r e p u t a t i o n a s a v a l u e d e m p l o y e r , j o i n t o p e r a t o r p a r t n e r , a n d g o o d c o r p o r a t e citizen. Specifically, the Code provides guidance on the following aspects: • Compliance to applicable governmental laws, rules and regulations, • • • • • • Conflicts of interest, Fair dealing, Knowledge and information security (including handling of confidential information and disclose and securities trading), Health, safety and environment, Employment practices, and Whistleblowing and misconduct reporting. Recruitment The Group recognises, and endeavours to protect, the rights of its employees and is committed to providing equal opportunities. The Group engages in transparent and fair recruitment practices and fair remuneration and disciplinary decisions without regard to gender, age, or ethnic background. All employees have entered into a written e m p l o y m e n t c o n t r a c t t h a t o u t l i n e s conditions of employment which includes job title, job duties, working hours, holidays, remuneration, termination process and benefits agreed by both parties. Promotion, compensation and dismissal We motivate employees by promotion and salary increments based on results of regular performance appraisals. Staff dismissal is based on the Hong Kong Employment O r d i n a n c e o r r e l e v a n t l o c a l l a w s a n d regulations, as well as the requirements stipulated in the employment contracts. Apart from offering employees’ competitive salary packages, the Group also provides annual bonuses and employee share options to eligible employees as incentives to retain our staff. Working hours, rest periods and benefits A f i v e - d a y w o r k w e e k a r r a n g e m e n t i s adopted to facilitate work-life balance. In addition to all rest days and statutory holidays as specified in local laws and regulations, employees are entitled to paid annual, maternity, paternity, marriage and compassionate leave. Employees are also entitled to benefits such as medical benefits, MPF scheme contributions and other benefits subject to the Group’s human resources management policy. Equal opportunity, diversity and anti- discrimination A l l D i r e c t o r s , s e n i o r m a n a g e m e n t a n d employees of the Company are expected to conduct themselves with integrity, openness, honesty and fairness, and in the best interests of the Company. The Group invests time and resources to fulfil its obligations under the respective laws of Hong Kong and Western Australia. The Group has a Whistleblower Policy that enables an employee to raise concerns about practices and procedures in their workplace. It enables employees to report concerns of fraud, illegal, immoral, i l l e g i t i m a t e p r a c t i c e s , m i s c o n d u c t , o r malpractice in a way that will not be seen as being disloyal to colleagues. ENVIRONMENTAL, SOCIAL ANDGOVERNANCE REPORTDuring the reporting period the Group had The Company’s recognition of the benefits not received any substantiated complaint of diversity where people from different from any individual or authority, nor has g e n d e r , a g e , e t h n i c i t y a n d c u l t u r a l it paid or was liable to pay any penalty backgrounds can bring fresh ideas and because of any employment breach. The perceptions which make the workplace Group is committed to responsible corporate more efficient is reinforced in the Diversity governance, including the implementation P o l i c y , a c o p y o f w h i c h i s a v a i l a b l e i n of measures to encourage employees and the corporate governance section of the representatives of the Group to identify and Company’s website. This policy outlines report in good faith any concerns relating specific diversity initiatives designed to to serious misconduct which is, or potentially facilitate equal employment opportunities could be: and requires the Company to set out specific diversity initiatives and targets with the aim • A criminal offence (including theft, of reporting the progress towards the metrics drug use/sale, violence or threatened in the annual report. v i o l e n c e a n d c r i m i n a l d a m a g e t o property), These key metrics include: A breach of a legal obligation, • P r o p o r t i o n o f w o m e n a p p o i n t e d a s N o n - E x e c u t i v e D i r e c t o r s o f t h e Dishonest, fraudulent, or corrupt, Company; • • • A s e r i o u s r i s k t o t h e h e a l t h o f a n individual, the general public, the environment or the financial system, • B r e a c h o f t h e G r o u p ’ s C o d e o f Conduct or other policies, or • Designed to conceal business records • • • • Proportion of women in the workplace; Proportion of women in senior management; Parental leave return rates; and Employee turnover. or other evidence related to any of the The following metrics shows the comparison factors above. to historical data. The historical data is as follows: Proportion of women appointed as Non-Executive Directors Proportion of women in the workplace Proportion of women in senior management Parental leave return rates Employee turnover 2022 2021 2020 2019 2018 0 13% 7% N/A 0% 0 15% 8% N/A 0% 0 15% 8% N/A 0% 0 15% 8% 100% 15% 0 18% 38% N/A 53% T h e B o a r d i s c o n t i n u a l l y l o o k i n g t o O u r h u m a n r e s o u r c e s f u n c t i o n e n s u r e s achieve diversity and will endeavour to that the Company is free from any form a p p o i n t i n d i v i d u a l s w h o w i l l p r o v i d e a of discrimination on the grounds of age, mix of experience, perspective and skills gender, religion, marital status, family status, appropriate for the Company, including appropriate technical and commercial skills relevant to the mining industry. s e x u a l o r i e n t a t i o n , d i s a b i l i t y , r a c e a n d nationality. We are committed to creating a culture of equality, respect, diversity and mutual support. 45 ANNUAL REPORT 2022In Hong Kong, the Group’s employment During the year, the Group was not aware regulations are governed by the Employment of any material breaches of the relevant Ordinance, the Minimum Wage Ordinance, laws and regulations relating to the Group’s as well as the Employees’ Compensation compensation and dismissal, recruitment and Ordinance and Mandatory Provident Fund promotion, working hours, rest periods, equal Scheme Ordinance. In Australia, The Fair opportunity, diversity, anti-discrimination and Work Act 2009 (Cth) (the “FW Act”) governs other benefits and welfare. the employment of the majority of Australian employees, supplemented by other federal, Further to the above statement, during the state and territory legislative instruments year, there were no fines or sanctions were pertaining to areas such as work, health and imposed on us due to non-compliance with safety and non-discrimination. the relevant laws and regulations. Performance Data Summary Workforce demographics: TOTAL WORKFORCE By nature of work Corporate directors Corporate Services Project Development Exploration Total By gender Male Female By employee category Directors (Executive) Directors (Non-Executive) Management By age group 31-50 50+ 15 Australia Hong Kong 3 1 – 1 5 4 1 1 2 2 1 4 6 3 1 – 10 9 1 2 4 4 6 4 EMPLOYEE TURNOVER RATE ANALYSIS Australia Hong Kong By geographical location By gender By age group 0% Male 0% 31-50 0% 0% Female 0% 50+ 0% ENVIRONMENTAL, SOCIAL ANDGOVERNANCE REPORTB.2 HEALTH AND SAFETY The Group shall observe our Operational T h e C o m p a n y i s c o m m i t t e d t o t h e Health and Safety (OHS) Policy for all our d e v e l o p m e n t o f a s u s t a i n a b l e i r o n o r e activities and our Company’s health and business in Western Australia that benefits its safety objectives are summarised as follows: employees, contractors, suppliers, partners and the community. We will achieve this through the effective implementation and proactive management • A c h i e v e “ Z e r o H a r m ” t o p e o p l e , the community and the workplace environment; o f o u r c o m m i t m e n t s a n d o b l i g a t i o n s • S u p p o r t , e n c o u r a g e a n d p r o m o t e t o w o r k p l a c e h e a l t h a n d s a f e t y , t h e environment and to the communities in which we operate. efforts to achieve industry-leading o c c u p a t i o n a l h e a l t h a n d s a f e t y performance; To operate an effective and sustainable iron • Eliminate or manage circumstances ore business, the Company will: • Focus on the elimination and management which may lead to injury, property damage and business interruption; and of workplace hazards and risks. • Achieve health and safety performance consistent with the OHS Policy. • Act ethically and responsibly in all its interactions. B r o c k m a n w i l l e m p l o y t h e f o l l o w i n g principles: • Promote a culture which focuses its e m p l o y e e s , c o n t r a c t o r s , s u p p l i e r s • Everyone has a responsibility for health and partners in workplace health and safety as the responsibility of all those and safety. who work in its business. • Hazards should be identified and their • Provide a workplace free from bullying or discrimination and offering equal opportunity to all employees. • Work actively through all areas of its business to minimise the actual and potential environmental impact of the • • risks eliminated or controlled. Every task can be done safely. Health and safety standards will not b e l i m i t e d t o o n l y m i n i m u m l e g a l requirements. Company’s activities. These objectives will be achieved by: • Respect the rights of the traditional • Providing employees and contractors o w n e r s a n d v a l u e t h e i n d i g e n o u s cultural heritage associated with its operations. with the necessary responsibility training and resources to assist them to perform their tasks safely and effectively; We will implement systems and ensure that • Establishing and enforcing accountabilities resources are allocated to implement and monitor these commitments and its legal obligations. Our employees, contractors and partners will be updated on the Company’s for employees and contractors regarding health and safety policy, objectives and performance; progress towards these goals. The policy and • Complying with all applicable laws, the system that support it will be routinely measured to ensure the delivery of our commitments and system improvements made where the need arises. regulations and statutory obligations; 47 ANNUAL REPORT 2022• Demonstrating effective leadership • Increased inventory of hand sanitiser a n d m a n a g e m e n t o f h e a l t h a n d safety through risk assessment and the and hygiene supplies, development and implementation • I n c r e a s e d f o c u s o n c l e a n i n g a n d of safe operational procedures and communication in health and safety sanitation, issues. • Avoid business travel unless necessary. During the reporting period, the Group had B.3 DEVELOPMENT AND TRAINING no work-related fatality and injury resulting in Employees are the most important asset lost days and in each of the past three years of the Company and are the guarantee (2021: Nil) and the Group was not aware o f s u c c e s s f u l b u s i n e s s , t h e r e f o r e , t h e of any material breaches of the relevant Company is eager to provide them with laws and regulations relating to the Group relevant training and encourage them to providing a safe working environment and fully utilise their potential. We subsidise our protecting employees from occupational employees for their continuing education, hazards. COVID-19 Pandemic and encourage employees to participate in various workshops and seminars according to their respective areas of interest and job T h e C O V I D - 1 9 p a n d e m i c h a s h a d description. a s i g n i f i c a n t i m p a c t o n i n d i v i d u a l s , communities, and business globally. The Types of training to include: G r o u p ’ s C O V I D - 1 9 r e s p o n s e p r o t o c o l s reinforce, and operate concurrently with, public health advice. They include: Social distancing protocols, • • • • • Compliance and regulatory; Job specific training; Comprehensive safety induction for all Flexible and remote working plans for newly hired employees; employees, During the reporting period the percentage of trained employees and average hours of training received: Percentage of trained Average hours of training employees received during the year 60% 40% 87% 13% 183 27 194 16 By employment type: Directors Senior management By gender: Male Female B.4 LABOUR STANDARDS Prior to on-boarding of any new employees, All our labour-related policies and practices t h o r o u g h b a c k g r o u n d c h e c k s a r e comply with the Employment Ordinance, and relevant local labour laws in Hong Kong conducted to ensure the candidate is fit and proper for the role. If any candidates and Australia. Furthermore, the Group strictly were found to be child labourers, their prohibits the employment of child labour and employment contract would be immediately forced labour, and complies with all relevant terminated. laws and regulations. ENVIRONMENTAL, SOCIAL ANDGOVERNANCE REPORTDuring the year, we did not employ child The Group has established sound procurement labour or forced labour and did not receive procedures and requirement for vendors. any complaints or reporting of child labour Upon selection of new vendors, the Group will or forced labour. B.5 SUPPLY CHAIN MANAGEMENT evaluate the vendors’ performance, reliability and pricing, but also the environmental attributes such as impact to the environment T h e G r o u p i s c o m m i t t e d t o u p h o l d i n g and energy saving functionalities. As part of our human rights and respect cultures, customs, internal control on procurement procedures, and values in all dealings with people, at least 2 quotations will be obtained for each places, and companies involved in our procurement engagement. Also, consideration activities. The Group strives to implement of previous performance of the vendor, in environmentally and socially responsible terms of creditability and compliance with supply chain practices by working closely local regulations are determining factors for with all stakeholders including suppliers, local supplier selection. Sustainable, fair-trade and community, and the respective authorities. environmentally friendly products are preferred and procurement decisions are not solely based on price. During the reporting period, the number of suppliers by geographical breakdown is as follows: By geographical region Number of suppliers Hong Kong Australia Total 15 42 57 The Group engages external parties in its day- B.6 PRODUCT RESPONSIBILITY to-day operations including environment, The Company will ensure all required documentation process consultants, laboratories services, will be implemented prior to shipment of iron ore. drilling services and professional services. Sinter testwork conducted has provided positive To assist in maintaining a transparent supply results and confirmation of our product quality and chain, the Group only procures goods and the Group will strive to maintain the product’s quality services from suppliers and contractors upon future delivery of ore. whose trade, employment practices and company values are aligned to the Group. Given that production has yet to commence, Independent internal control consultants are engaged yearly to perform reviews on no complaints from customers nor product recalls have been received for the reporting whether internal control processes are being p e r i o d . Q u a l i t y a s s u r a n c e a n d r e c a l l observed. Sample checks on the procurement procedures will be duly implemented upon cycle are performed and findings, together future delivery of iron ore products. with other internal control related issues are compiled into a report tabled to the Board for review. Compliance is actively monitored by procurement that identifies and reports any issues to the senior management team via regularly meetings. Any necessary action will be dealt with in a timely manner. 49 ANNUAL REPORT 2022The Company upholds the confidentiality Training and circulation of news from the r e g a r d i n g c u s t o m e r s ’ , p r o s p e c t i v e Independent Commission Against Corruption c u s t o m e r s ’ o r b u s i n e s s c o u n t e r p a r t s ’ ( I C A C ) h a s a l s o b e e n p r o v i d e d f o r information. Confidentiality agreements employees and directors to discourage any are put in place to protect any leakage form of corruption. of information and set out the Company’s p o s i t i o n o n d a t a s e c u r i t y a n d p r i v a c y , Brockman takes a zero tolerance approach including: to corruption and bribery and is committed to acting professionally, fairly and with • W o r k r e l a t e d d o c u m e n t s a r e t h e integrity in all our business dealings. Our p r o p e r t y o f t h e C o m p a n y u n l e s s whistle blower policy encourages employees otherwise specifically agreed, t o r e p o r t o n a n y i n c i d e n c e s o f f r a u d , misappropriation of funds or corruption, • Destruction of documents containing while the reporters’ privacy is completely c o n f i d e n t i a l i n f o r m a t i o n m u s t b e protected. carried out reliably. The Company manages data protection support and assist the Group to promote and privacy as part of its IT processes and a culture of ethical corporate behaviour, has several policies to manage IT related risks thereby providing an environment in which The whistleblower policy is designed to including off-site backup. stakeholders (internal and external) are able to report any issue they genuinely believe G i v e n t h e n a t u r e o f o u r b u s i n e s s , o u r breaches the Group’s Code of Conduct, or o p e r a t i o n s d o n o t i n v o l v e t h e u s e o f any other reportable conduct. intellectual property rights owned by other parties. Nevertheless, the Group has set out A c o p y o f t h e C o d e o f C o n d u c t a n d the treatment of handling and protecting Whistleblower Policy is available in the intellectual property in our Code of Conduct. c o r p o r a t e g o v e r n a n c e s e c t i o n o f t h e Company’s website. During the year, the Group was not aware of any material breaches of the relevant laws Stakeholders may wish first to discuss the and regulations relating to the Group health a l l e g e d v i o l a t i o n i n f o r m a l l y w i t h t h e i r and safety, advertising, labelling and privacy manager in order to determine whether matters relating products and services. B.7 ANTI-CORRUPTION serious misconduct has occurred. This is an opportunity to clarify the incident, ask questions and at all times, it is expected that The Company has established rules against these discussions will remain confidential. b r i b e r y o r c o r r u p t i o n , w h i c h p r o h i b i t Where a stakeholder believes that internal employees from accepting gifts from other reporting is not appropriate, the Company people in a business relationship. To ensure encourages the stakeholder to report his effective implementation, every employee or her concern to Brockman’s Company has been trained in relation to these rules. S e c r e t a r y a n d d i r e c t l y t o t h e A u d i t F u r t h e r m o r e , t h e C o m p a n y h a s s e t u p Committee. The Audit Committee will assess a whistle blower policy, and Brockman the situation and, if deemed necessary, encourages stakeholders to pursue and will communicate the reports of alleged report any misconduct, fraudulent or corrupt violations to the Group’s legal advisors. practices, breaches of rules, coercion or harassment. Active channels are in place for During the reporting period, there were no employees to report directly in the event of incidents or legal cases noted regarding any any potential source of bribery/corruption in corrupt practices brought against the Group any business execution. or its employees. ENVIRONMENTAL, SOCIAL ANDGOVERNANCE REPORTB.8 COMMUNITY INVESTMENT The Group is committed to operating in a The Company is transparent on the need way which contributes to the sustainable to earn the respect and support of the development of mineral resources through communities in which it is located and efficient and long-term management, while also by demonstrating a tangible level of showing due consideration for the wellbeing commitment to environmental sustainability. of people, protection of the environment and the communities in which we operate. T h e G r o u p o p e r a t e s i n t w o r e g u l a t o r y environments (Hong Kong and Australia). T h e G r o u p ’ s S u s t a i n a b i l i t y P o l i c y s e e k s While compliance with these regulatory t o e n s u r e i t i s a c o n s t r u c t i v e p a r t n e r environments is the basis of the Group’s t o a d v a n c e t h e s o c i a l , e c o n o m i c a n d environmental management, the Group is institutional development of the communities committed to the principle of developing in which it operates. The Group carries and implementing appropriate practices out its activities regarding the interests of and will actively work to: any affected traditional owners and other stakeholders. The Group fully acknowledges • Minimise the actual and potential the rights, cultures, customs, and values of environmental impact of the Group’s people affected by the development and activities; and exploitation of mineral resources. • G i v e e n v i r o n m e n t a l a s p e c t s d u e Brockman maintains its community focus on c o n s i d e r a t i o n i n a l l p h a s e s o f o u r health and sports, and has sponsored charity p r o j e c t s , f r o m e x p l o r a t i o n a n d r u n s / m a r a t h o n s f o r e m p l o y e e s , f o r t h e evaluation, development and final purpose of raising employees’ awareness on closure, and health while giving back to the community. Due to the impact of COVID-19, marathons • Respect the rights of the traditional a n d c h a r i t y w a l k s w e r e c a n c e l l e d ( o r o w n e r s a n d v a l u e t h e i n d i g e n o u s reduced) and we will continue to sponsor our culture heritage. employees to take part in these meaningful activities. 51 ANNUAL REPORT 2022The Directors present their report together with the audited consolidated financial statements of the FINAL DIVIDEND Company for the year ended 30 June 2022. The Board does not recommend the payment of a PRINCIPAL ACTIVITIES AND GEOGRAPHICAL ANALYSIS OF OPERATIONS The Company is an investment holding company. The principal activities of the Company and its subsidiaries (“Group”) are exploration and development of iron ore mining projects in Western Australia. An analysis of the performance of the Group for the year by operating segments and detailed activities of each of the Company’s subsidiaries are set out in Notes 7 and 35 to the consolidated financial statements. There were no significant changes in the nature of the Group’s principal activities during the year. RESULTS AND APPROPRIATIONS The results of the Group for the year ended 30 June 2022 are set out in the consolidated statement of comprehensive income on page 66. dividend. DIVIDEND POLICY The Company has adopted a dividend policy, pursuant to which the Company may distribute dividends to the shareholders of the Company by way of cash or shares. Any distribution of dividends shall be in accordance with the Hong Kong Laws, the bye-laws of the Company, the Bermuda Companies Act 1981 (as amended from time to time) and any other applicable laws, rules and regulations. The recommendation of payment of any dividend is subject to the absolute discretion of the Board, and any declaration of dividend will be subject to the approval of shareholders. In proposing any dividend payout, the Board shall also take into account, inter alia: • T h e G r o u p ’ s a c t u a l a n d e x p e c t e d f i n a n c i a l RESERVES Movements in the reserves of the Group during the year are set out in consolidated statement of changes in equity on page 68. • • PROPERTY, PLANT AND EQUIPMENT Details of the movements in property, plant and equipment are set out in Note 18 to the consolidated financial statements. REVIEW OF OPERATIONS It is recommended that the consolidated financial statements be read in conjunction with the 30 June 2022 annual report and any public announcements made by the Company during the period. Further detailed business review as required by Schedule 5 of the Hong Kong Companies Ordinance, including a description of the principal risks and uncertainties facing the Group and an indication of likely future development in the Group’s business, can be found in the Management Discussion and Analysis set out on pages 4 to 14 of this Annual Report. The Group’s environment, social and governance policies, relationships with its key stakeholders, and compliance with relevant laws and regulations which have a significant impact on the Group are set out in the Environmental, Social and Governance Report on pages 37 to 51 of this Annual Report. This discussion forms part of this directors’ report. performance; Shareholders’ interests; Retained earnings, distributable reserves and contributed surplus of the Company and each of the other members of the Group; • The level of the Group’s debt to equity ratio, return on equity and financial covenants to which the Group is subject to; • • Possible effects on the Group’s credit worthiness; Any restrictions on payment of dividends or other covenants on the Group’s financial ratios that may be imposed by the Group’s financial creditors; • The Group’s expected working capital requirements and future expansion plans; • Liquidity position and future commitments at the time of declaration of dividend; • • • Taxation considerations; Statutory and regulatory restrictions; General business conditions and strategies; DIRECTORS’ REPORT• General economic conditions, business cycle of Pursuant to code provision B.2.2 of the Corporate the Group’s business and other internal or external Governance Code contained in Appendix 14 to the factors that may have an impact on the business Rules Governing the Listing of Securities on the Stock or financial performance and position of the Exchange, every director, including those appointed Company; and for a specific term, should be subject to retirement by rotation at least once every three years. Accordingly, • Other factors that the Board deems appropriate. Clauses 87(1) of the Company’s Bye-laws Messrs Kwai Kwun, Lawrence, David Rolf Welch, Ross Stewart The dividend policy will be reviewed from time to Norgard and Liu Zhengui will retire and, being eligible, time and there is no assurance that a dividend will be may offer themselves for re-election at the forthcoming proposed or declared in any specific periods. annual general meeting. DISTRIBUTABLE RESERVES As at 30 June 2022, the Company has no reserve CONFIRMATION OF INDEPENDENCE All the independent non-execut ive directo rs are available for distribution to the shareholders. appointed for a specific term and will be subject to PRE-EMPTIVE RIGHTS There are no provisions for pre-emptive rights under the Company’s Bye-laws, or the laws in Bermuda, which would oblige the Company to offer new shares on a pro-rata basis to existing shareholders. FINANCIAL SUMMARY A summary of the results and from the audited financial statements assets and liabilities of the Group for the last five financial years as extracted is set out on page 105. This summary does not form part of the audited financial statements. DIRECTORS The Directors of the Company during the year and up to the date of this report were: Non-executive Directors: Kwai Sze Hoi (Chairman) Liu Zhengui (Vice Chairman) Ross Stewart Norgard Executive Directors: Colin Paterson Kwai Kwun, Lawrence Chan Kam Kwan, Jason (Company Secretary) Independent Non-executive Directors: Yap Fat Suan, Henry Choi Yue Chun, Eugene David Rolf Welch retirement by rotation and re-election in accordance with the HK Listing Rules and the Bye-Laws of the Company. The Company has received from each of the Independent Non-executive Directors, an annual confirmation of their independence pursuant to Rule 3.13 of the HK Listing Rules. DIRECTORS’ AND SENIOR MANAGEMENT’S BIOGRAPHIES Biographical details of the directors of the Company and the senior management of the Group are set out on pages 15 to 16 of the 2022 Annual Report. DIRECTOR’S SERVICE CONTRACT No director proposed for re-election at the forthcoming annual general meeting has a service contract with the Company which is not determinable by the Company within one year without payment of compensation, other than statutory compensation. DIRECTORS’ REMUNERATION The directors’ fees are subject to shareholders’ approval at general meetings. Other emoluments are determined by the Company’s board of directors with reference to directors’ duties, responsibilities and performance and the results of the Group. 53 ANNUAL REPORT 2022REMUNERATION POLICY The Board recognises that the Company’s performance depends upon the quality of its directors. To achieve its financial and operating activities, the Company must attract, motivate and retain highly skilled directors. The Company embodies the following principles in its remuneration framework • • Provides competitive rewards to directors, Structures remuneration at a level that reflects the directors’ duties, accountabilities and is competitive, • Benchmarks remuneration against appropriate industry groups. Details of the Directors’ remuneration are set in Note 14 to the consolidated financial statements. DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES AND DEBENTURES As at 30 June 2022, the interests and short positions of the directors and chief executive and their respective associates in the share capital, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the S e c u r i t i e s a n d F u t u r e s O r d i n a n c e ( t h e “ S F O ” ) a s recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or otherwise required to be notified to the Company and the SEHK, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) were as follows: Long positions of ordinary shares of HK$0.10 each of the Company Number of issued ordinary shares held Number of options outstanding Percentage of the issued share capital of the Company Name of director Capacity Mr Kwai Sze Hoi Jointly (Note) Interests of controlled corporation (Note) Beneficial owner Interest of spouse 60,720,000 2,426,960,137 206,072,000 24,496,000 — — — — Mr Liu Zhengui Beneficial owner — 1,500,000 Mr Ross Norgard Beneficial owner 64,569,834 1,500,000 Interests of controlled 178,484,166 — corporation Mr Colin Paterson Beneficial owner 22,073,004 15,000,000 Interest of spouse Mr Kwai Kwun Lawrence Beneficial owner 13,625,442 63,408,412 — — Mr Chan Kam Kwan Jason Beneficial owner — 10,000,000 Mr Yap Fat Suan Henry Beneficial owner 400,000 1,500,000 Mr Choi Yue Chun Eugene Beneficial owner Mr David Rolf Welch Beneficial owner — — 1,500,000 1,500,000 Note: 0.65% 26.15% 2.22% 0.26% 0.02% 0.71% 1.92% 0.40% 0.15% 0.68% 0.11% 0.02% 0.02% 0.02% The 2,426,960,137 shares were held by Ocean Line Holdings Ltd., a company held 60% by Mr. Kwai Sze Hoi and 40% by Ms Cheung Wai Fung (Mr Kwai’s spouse). In addition, Mr. Kwai and Ms Cheung have a joint direct interest in 60,720,000 shares of the Company. DIRECTORS’ REPORTSave as disclosed above, as at 30 June 2022, none of the Directors and Chief Executive, nor their associates had registered an interest or short position in the shares, underlying shares or debentures of the Company or any of its associated corporations that was required to be recorded pursuant to section 352 of the SFO, or as otherwise notified to the Company and the SEHK pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers. SHARE OPTIONS The share option scheme (the “Share Option Scheme”) of the Company was adopted by the Company pursuant to the resolution of the shareholders at the AGM dated 13 November 2012. The binomial option pricing model is a generally accepted method of valuing options. The measurement dates used in the valuation calculations were the dates on which the options were granted. The values of share options calculated using the binomial model are subject to certain fundamental limitations, due to the subjective nature of and uncertainty relating to a number of assumptions of the expected future performance input to the model, and certain inherent limitations of the model itself. The value of an option varies with different variables of certain subjective assumptions. Any change to the variables used may materially affect the estimation of the fair value of an option. The particulars of the Share Option Scheme are set out in Note 25 to the consolidated financial statements and details of the options outstanding as at 30 June 2022 includes the estimated values of the share options (using the binomial option pricing model), date of grant, exercise period and the exercise price of the options outstanding at the beginning and end of year which have been granted to Qualified Persons under the Share Option Scheme are as follows: Exercised Lapsed Granted Option type 2021A 2021A 2021A 2021A 2021A 2021A 2021B 2021A 2021B Non-Executive Directors Liu Zhengui Ross Stewart Norgard Choi Yue Chun Eugene Yap Fat Suan Henry David Rolf Welch Executive Directors Chan Kam Kwan Jason Colin Paterson Sub-total Employees Employees Sub-total GRAND TOTAL Weighted average exercise price Maximum entitlement of each participant Outstanding as at 1 July 2021 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 10,000,000 15,000,000 32,500,000 71,000,000 2,000,000 73,000,000 105,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 10,000,000 15,000,000 32,500,000 71,000,000 2,000,000 73,000,000 105,500,000 — — — — — — — — 1,000,000 — 1,000,000 1,000,000 0.23 0.21 Outstanding as at 30 June 2022 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 10,000,000 15,000,000 32,500,000 70,000,000 2,000,000 72,000,000 104,500,000 0.23 — — — — — — — — — — — — — — — — — — — — — — — — — — As at 30 June 2022, the Company had 104,500,000 share options outstanding under the Scheme. Should they be fully exercised, the Company will receive HK$23,653,000 (before issue expenses). The fair value of these unexercised options measured in accordance with the Group’s accounting policy note 25 to the consolidated financial statements amounted to HK$7,545,000. The total number of securities available for issue under the share option scheme amounts to 465,448,213 as at the date of the annual report, representing 5.02% of the issued share capital outstanding. Saved as disclosed above, at no time during the year were rights to acquire benefits by means of acquisition of shares in or debentures of the Company granted to any of the directors or their respective spouses or minor children, or where any such rights exercised by them; or was the Company, its holding company, or any of its subsidiaries or fellow subsidiaries a party to any arrangement to enable the directors to acquire such rights in any other body corporate. 55 ANNUAL REPORT 2022DIRECTORS’ RIGHTS TO ACQUIRE SHARES OR DEBENTURES Other than as disclosed in the section “Directors MANAGEMENT CONTRACTS N o c o n t r a c t s c o n c e r n i n g t h e m a n a g e m e n t a n d administration of the whole or any substantial part of the and Chief Executives’ interests and short positions in business of the Company were entered into or existed shares and underlying shares and debentures”, at no during the year. RELATED PARTY TRANSACTIONS Significant related party transactions entered into by the Group during the year ended 30 June 2022 are disclosed in Note 32 to the consolidated financial statements. The related party transactions did not constitute connected transactions or are exempted connected transactions under the Listing Rules. SUBSTANTIAL SHAREHOLDERS’ AND OTHER PERSONS INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES A s a t 3 0 J u n e 2 0 2 2 , t h e r e g i s t e r o f s u b s t a n t i a l shareholders maintained by the Company pursuant to Section 336 of the SFO shows that the following shareholders had notified the Company of relevant interests and short positions of 5% or more of the share capital and share option of the Company: time during the period was the Company, its holding company, or any of its subsidiaries or fellow subsidiaries, a party to any arrangements to enable the Directors of the Company and their associates to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. DIRECTORS’ INTERESTS IN COMPETING BUSINESS None of the Directors has any interests in any competing business to the Group. DIRECTORS’/CONTROLLING SHAREHOLDERS’ MATERIAL INTERESTS IN TRANSACTIONS, ARRANGEMENTS AND CONTRACTS THAT ARE SIGNIFICANT IN RELATION TO THE GROUP’S BUSINESS Details of the related party transactions for the year are set out in Note 32 to the consolidated financial s t a t e m e n t s . O t h e r t h a n a s d i s c l o s e d t h e r e i n , n o director, a related party of a director, nor a controlling shareholder of the Company had a material interest, e i t h e r d i r e c t l y o r i n d i r e c t l y , i n a n y t r a n s a c t i o n s , arrangements or contracts of significance to the business of the Group to which the Company, the holding Company of the Company, or any of the Company’s subsidiaries or fellow subsidiaries was a party during the year. DIRECTORS’ REPORTLong positions of ordinary shares and underlying shares of HK$0.10 each of the Company Name of shareholder Nature of interest Number of shares or underlying shares Percentage of the issued share capital of the Company Ocean Line Holdings Ltd (“Ocean Line”) (Note 1) Beneficial owner 2,426,960,137 Kwai Sze Hoi (Note 1) Interest held by controlled corporations 2,426,960,137 Interest held jointly with another person 60,720,000 Beneficial owner Interest of spouse 206,072,000 24,496,000 Cheung Wai Fung (Note 1) Interest held by controlled corporations 2,426,960,137 Interest held jointly with another person Beneficial owner Interest of spouse Equity Valley Investments Limited Beneficial owner 60,720,000 24,496,000 206,072,000 515,574,276 The XSS Group Limited (Note 2) Interest held by controlled corporations 515,574,276 Cheung Sze Wai, Catherine (Note 2) Interest held by controlled corporations 515,574,276 Interest of spouse 50,000,000 Luk Kin Peter Joseph (Note 2) Interest held by controlled corporations 515,574,276 Beneficial owner 50,000,000 26.15% 26.15% 0.65% 2.22% 0.26% 26.15% 0.65% 0.26% 2.22% 5.56% 5.56% 5.56% 0.54% 5.56% 0.54% KQ Resources Limited Beneficial owner 1,301,270,318 14.02% Notes: 1. Ocean Line is owned 60% by Mr Kwai Sze Hoi and 40% by Ms Cheung Wai Fung (Mr Kwai’s spouse). In addition, Mr Kwai and Ms Cheung have a joint direct interest in 60,720,000 shares. 2. 515,574,276 shares were held by Equity Valley Investments Limited. Equity Valley Investments Limited is wholly-owned by The XSS Group Limited, of which 50%, 20% and 30% of its issued share capital were held by Mr Luk Kin Peter Joseph, Ms Cheung Sze Wai, Catherine (Mr Luk’s spouse) and Ms Chong Yee Kwan (Mr Luk’s mother) respectively. In addition, Mr Luk was granted a total of 50,000,000 options. Save as disclosed above, as at 30 June 2022, no person, other than the directors of the Company, whose interests are set out in the section “Directors’ and Chief Executives’ interests and short positions in shares and underlying shares and debentures’, had registered an interest or short position in the shares or underlying shares of the Company that was required to be recorded pursuant to section 336 of the SFO. 57 ANNUAL REPORT 2022SHARE CAPITAL, SHARE OPTIONS, WARRANTS AND CONVERTIBLE BONDS Details of movements in the Company’s share capital PROVISION OF INFORMATION IN RESPECT OF ANY DIRECTOR Updated information in relation to the change in other and share options during the year are set out in notes 24 directorships of the Directors is as set out below: and 25 to the consolidated financial statements. Details of the other equity–linked agreements are independent non-executive Director of 1957 & Co. including in the section “Share Options”. (Hospitality) Limited (Stock Code: 8495) in August 2022. M r . C h a n K a m K w a n J a s o n h a d r e s i g n e d a s a n PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES During the year, neither the Company nor any of its CORPORATE GOVERNANCE The Company is committed to maintain a high standard of corporate governance practices. Information on subsidiaries purchased, sold or redeemed any of the the corporate governance practices adopted by the listed securities of the Company. Company is set out in the Corporate Governance Report on pages 17 to 36 of the annual report. PERMITTED INDEMNITY PROVISION Pursuant to the Bye-Laws of the Company, the Directors shall be indemnified and secured harmless out of the EVENTS AFTER THE REPORTING PERIOD Details of the significant events of the Group after assets and profits of the Company against all losses and the reporting period are set out in note 37 to the liabilities etc which they may incur or sustain by reason consolidated financial statements. of the execution of their duties, provided that this indemnity shall not extend to any matter in respect of any fraud or dishonesty which may attach to any of the directors. The Company has also arranged appropriate directors and officers insurance coverage for the directors and officers of the Group. MAJOR CUSTOMERS AND SUPPLIERS The aggregate operating and administrative expenses attributable to the Group’s five largest suppliers were less than 18% of total operating and administrative expenses (include exploration and evaluation expenses and excluding share of joint operation expenditure) for the year. At no time during the year did any Director, or associate of a Director, or any shareholder of the Company, (which, to the best knowledge of the Directors owned more than 5% of the Company’s share capital), had any beneficial interest in the Group’s five largest customers and suppliers. CONTRACT OF SIGNIFICANCE No contracts of significance in relation to the Group’s business in which the Company, any of its subsidiaries or SUFFICIENCY OF PUBLIC FLOAT As at the date of this report, based on information that is publicly available to the Company and within the knowledge of the Directors, there was sufficient public float of the Company’s securities as required under the HK Listing Rules. AUDIT AND NON-AUDIT SERVICES The Company may decide to employ the auditors on assignments additional to their statutory audit duties, where the auditor’s expertise and experience with the Company and the Group are important. The Board of Directors has considered the position and, in accordance with the advice received from the Audit Committee, it is satisfied that the provision of non- audit services did not compromise the auditor for the following reasons: • All non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity of the auditor; and fellow subsidiaries, or its parent company was a party • None of the services undermine the general and in which a director of the Company had a material principles relating to auditor independence as interest, whether directly or indirectly, subsisted during or set out in Professional Statement F1, including at the end of the year. reviewing and auditing the auditors own work, acting in a management or a decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and rewards. DIRECTORS’ REPORTDuring the year, the following fees were paid or payable for audit and non-audit services provided by Ernst and Young. Remuneration of Ernst and Young (Australia) for: – auditing or reviewing accounts – tax compliance – other non-audit services Remuneration of Ernst and Young (other than) Australia for: – auditing or reviewing accounts 2022 HK$’000 2021 HK$’000 1,038 113 – 1,151 65 65 1,216 1,109 116 273 1,498 54 54 1,552 RE-APPOINTMENT OF AUDITOR The consolidated financial statements for the financial year ended 30 June 2022 have been audited by Ernst and Young Australia who retire and, being eligible, offer themselves for re-appointment at the forthcoming annual general meeting of the Company. Ernst and Young, Australia, the auditor of the Company, is a non-Hong Kong audit firm which has obtained approval from the Financial Reporting Council as a recognised public interest entity (“PIE”) auditor to conduct PIE engagement of the Company. By order of the Board Kwai Sze Hoi Chairman Hong Kong, 21 September 2022 59 ANNUAL REPORT 2022Independent auditor’s report to the shareholders of Brockman Mining Limited (incorporated in Bermuda with limited liability) OPINION We have audited the consolidated financial statements of Brockman Mining Limited (the “Company”) and its subsidiaries (together the “Group”) set out on pages 66 to 104, which comprise the consolidated balance sheet as at 30 June 2022, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 30 June 2022 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance. BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing issued by the International Auditing and Assurance Standards Board (“ISAs”). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (including Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. MATERIAL UNCERTAINTY RELATED TO GOING CONCERN We draw attention to Note 2(a) in the consolidated financial statements, which describes the principal conditions that raise doubt about the Group’s ability to continue as a going concern. These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, and 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 consolidated financial statements 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 consolidated financial statements. 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 consolidated financial statements. INDEPENDENT AUDITOR’S REPORT1. Carrying value of capitalised mining exploration properties Why significant How our audit addressed the key audit matter At 30 June 2022 the Group held capitalised We considered and challenged the Group’s assessment as mining exploration properties in Australia to whether there were impairment indicators present that of HK$733,677,000, representing 96% of the required the capitalised mining exploration properties to be Group’s total assets. tested for impairment as at 30 June 2022. The carrying value of mining exploration ► In performing our procedures, we: properties is assessed for impairment by the Group when facts and circumstances indicate ► Considered whether the Group’s right to explore t h a t t h e s e p r o p e r t i e s m a y e x c e e d t h e i r was current, which included obtaining and assessing recoverable amount. supporting documentation such as license agreements The determination as to whether there are ► Considered the Group’s intention to carry out significant any facts and circumstances to require a ongoing exploration and evaluation activities in the mining exploration property to be assessed for relevant areas of interest which included reviewing the impairment, involves a number of judgments Group’s approved cashflow forecast and enquiring including whether the Group has tenure, will of senior management and the directors as to their be able to perform ongoing expenditure and intentions and the strategy of the Group whether there is sufficient information for a decision to be made that the area of interest ► Assessed whether exploration and evaluation data is not commercially viable. The directors did exists to indicate that the carrying value of mining not identify any impairment indicators. exploration properties is unlikely to be recovered through Given the significance of the capitalised mi ni ng exploration properties relative to ► Assessed the adequacy of the disclosures in Note 4(a) the Group’s total assets and the degree of and 17 of the consolidated financial statements. development or sale judgement involved in assessing whether any indicators of impairment exist, we consider this a key audit matter. Refer to Note 4(a) and 17 in the consolidated financial statements for capitalised mining exploration property balances and related disclosures. 61 ANNUAL REPORT 20222. Recognition of deferred tax asset Why significant How our audit addressed the key audit matter At 30 June 2022, the Group recognised a We assessed the Group’s decision to carry the DTA at 30 June deferred tax asset (“DTA”) of HK$111,350,000 2022 and the methodology for determining the amount of the in its consolidated balance sheet for certain of DTA to be carried forward for compliance with IFRS. its Australian carry forward tax losses. This DTA was fully offset against the deferred tax liability Our audit procedures included the following: (“DTL”) in the consolidated balance sheet. This DTA has continued to be carried forward tax losses and the impact of any known or potential at 30 June 2022, together with an income limitations on the availability of the carry forward tax tax benefit of HK$10,227,000 recorded in the losses. This work included consultation with our tax ► We assessed the amount of the Group’s carry forward consolidated profit or loss arising from further specialists Australian tax losses incurred and offset against the DTL at that date, resulting in a net DTL at 30 ► We obtained and considered correspondence: June 2022 of HK$106,949,000 after accounting for the impact of exchange differences during ► B e t w e e n t h e G r o u p a n d t h e A u s t r a l i a n t a x the year. authorities The Group’s exploration activities in Australia ► Between the Group and external tax advisors have generated significant carry forward tax losses. Australian tax laws covering the ► We assessed the adequacy of the related disclosures in availability and recoupment of these carry the consolidated financial statements. forward tax losses are complex. Under IFRS, DTAs for available carry forward tax losses are only recognised when their recovery is considered probable. This consideration of carry forward tax loss recognition is reassessed at each reporting period. Given the significant degree of judgement involved in management’s assessment as to the ongoing availability and probability of recoverability of the DTA as at 30 June 2022, we consider this a key audit matter. R e f e r t o N o t e s 4 ( c ) , 1 3 a n d 2 6 i n t h e consolidated financial statements for deferred tax balances and related disclosures. INDEPENDENT AUDITOR’S REPORT3. Measurement of Polaris loans Why significant How our audit addressed the key audit matter At 30 June 2022 the Group has recognised the Our audit procedures included the following: two tranches of the loan payable to Polaris Metals Pty Ltd (“Polaris”) of HK$34,517,000 in ► We assessed whether the funding from Polaris was the consolidated balance sheet, representing appropriately recognised and measured in accordance 20% of the Group’s total liabilities. with IFRS 9 Financial Instruments (“IFRS 9”) T h e s e l o a n t r a n c h e s t o t a l l e d A $ 5 m i l l i o n ► We considered and challenged the Group’s assessment each and were advanced to the Group in regarding the revised timing of the expected loan November 2019 and May 2021 respectively, repayments. This included review of correspondence pursuant to the Farm-in and Joint Venture between the Group and Polaris to assess the likely Agreement (“FJV”) between Brockman Iron intention of both parties Pty Ltd (“Brockman Iron”) and Polaris. The loans are secured and bear no interest. of the amortised cost and classification of each tranche Under the terms of the FJV Agreement, the of this loan in accordance with the requirements of IFRS repayment terms of this loans vary dependent 9, including the remeasurement for the loans ► We obtained and reviewed management’s calculation upon a number of conditions relating to the Marillana Project. The Group’s expectation ► We assessed the adequacy of the related disclosures in regarding the timing of the loan repayments the consolidated financial statements. w a s r e v i s e d d u r i n g t h e c u r r e n t f i n a n c i a l year. This change in the timing of the loan repayments led to a remeasurement of both loan tranches with a gain of HK$13,197,000 being recognised in consolidated profit or loss for the year ended 30 June 2022. Given the significant degree of judgement involved in the Group’s assessment of the timing of the revised loan repayments used in the remeasurement of these loan tranches, we consider this a key audit matter. Refer to Notes 4(b) and 23 in the consolidated financial statements for the loan balances and related disclosures. 63 ANNUAL REPORT 2022OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT The directors of the Company are responsible for the other information. The other information comprises the information included in the Annual Report, other than the consolidated financial statements and our auditor’s report thereon. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements 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 CONSOLIDATED FINANCIAL STATEMENTS The directors of the Company are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS issued by the IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the directors of the Company are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors of the Company either intend to liquidate the Group or to cease operations or has no realistic alternative but to do so. The directors of the Company are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group’s financial reporting process. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Our report is made solely to you, as a body, in accordance with section 90 of the Bermuda Companies Act 1981, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs 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 these consolidated financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the consolidated financial statements, 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 INDEPENDENT AUDITOR’S REPORT► 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 consolidated financial statements 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 consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent 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 consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Audit Committee 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 Audit Committee 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, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period 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. The engagement partner on the audit resulting in this independent auditor’s report is Pierre Dreyer. Ernst & Young Chartered Accountants Perth, Western Australia 21 September 2022 65 ANNUAL REPORT 2022Other income Administrative expenses Exploration and evaluation expenses Operating loss Finance income Finance costs Finance income, net Share of loss of joint ventures Loss before income tax Income tax benefit Loss for the year Other comprehensive (loss)/income Item that may be reclassified to profit or loss Exchange differences arising from translation of foreign operations Other comprehensive (loss)/income for the year Total comprehensive (loss)/income for the year Loss for the period attributable to equity holders of the Company Total comprehensive (loss)/income attributable to equity holders of the Company Loss per share attributable to the equity holders of the Company during the year Basic loss per share Diluted loss per share Year ended 30 June 2022 HK$’000 97 (22,747) (17,677) (40,327) 13,211 (4,613) 8,598 (136) (31,865) 11,051 (20,814) (41,360) (41,360) (62,174) (20,814) 2021 HK$’000 162 (17,507) (5,494) (22,839) 88 (5,428) (5,340) (139) (28,318) 14,146 (14,172) 56,632 56,632 42,460 (14,172) (62,714) 42,460 HK cents HK cents (0.22) (0.22) (0.15) (0.15) Note 10 11 11 12 30 13 15 15 The notes on pages 70 to 104 form an integral part of these consolidated financial statements. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 30 June 2022Non-current assets Mining exploration properties Property, plant and equipment Right-of-use assets Interest in joint venture Other non-current assets Current assets Other receivables, deposits and prepayments Cash and cash equivalents Total assets Equity Share capital Reserves Accumulated losses Total equity Non-current liabilities Deferred income tax liability Borrowings Lease liabilities Current liabilities Trade and other payables Lease liabilities Provisions Total liabilities Total equity and liabilities Note 17 18 18,19 30 21 20 24 34 26 23 19 22 19 27 As at 30 June 2022 HK$’000 2021 HK$’000 733,677 784,933 177 801 651 123 167 1,538 703 132 735,429 787,473 999 28,797 29,796 765,225 1,033 45,667 46,700 834,173 928,023 3,820,953 927,923 3,855,804 (4,158,839) (4,138,025) 590,137 645,702 106,949 51,309 563 158,821 14,504 619 1,144 16,267 175,088 765,225 126,706 57,245 1,111 185,062 1,123 828 1,458 3,409 188,471 834,173 The consolidated financial statements on pages 66 to 104 were approved by the Board of Directors on 21 September 2022 and were signed on its behalf. Kwai Kwun, Lawrence Director Chan Kam Kwan, Jason Director The notes on page 70 to 104 form an integral part of these consolidated financial statements. 67 ANNUAL REPORT 2022CONSOLIDATED BALANCE SHEETAs at 30 June 2022Notes Balance at 1 July 2020 Loss for the year Other comprehensive loss Exchange differences arising on translation of foreign operations Total comprehensive loss for the year Transactions with equity holders Share based compensation Total transactions with equity 25 holders Balance at 30 June 2021 Notes Balance at 1 July 2021 Loss for the year Other comprehensive loss Exchange differences arising on translation of foreign operations Total comprehensive income/(loss) for the year Transactions with equity holders Issuance of shares Exercise of options Share-based compensation Total transactions with equity 24 25 holders Balance at 30 June 2022 Share-based Share capital HK$’000 927,923 — Share compensation Translation Accumulated premium HK$’000 4,468,624 — reserve HK$’000 84,961 — reserve HK$’000 (755,562) — losses HK$’000 (4,123,853) (14,172) Total HK$’000 602,093 (14,172) — — — — — — — 927,923 — 4,468,624 — — 1,149 1,149 86,110 Share-based 56,632 — 56,632 56,632 (14,172) 42,460 — — 1,149 — (698,930) — (4,138,025) 1,149 645,702 Share capital HK$’000 927,923 — Share compensation Translation Accumulated premium HK$’000 4,468,624 — reserve HK$’000 86,110 — reserve HK$’000 (698,930) — losses HK$’000 (4,138,025) (20,814) Total HK$’000 645,702 (20,814) — — 100 — — — — — 113 — 100 928,023 113 4,468,737 — — — — 6,396 6,396 92,506 (41,360) — (41,360) (41,360) (20,814) (62,174) — — — — — — 100 113 6,396 — (740,290) — (4,158,839) 6,609 590,137 The notes on pages 70 to 104 form an integral part of these consolidated financial statements. CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the year ended 30 June 2022Cash flows from operating activities Loss before tax Adjustments for: Depreciation of property, plant and equipment Depreciation of right-of-use assets Share-based payment expense Finance costs Finance income Share of loss of joint venture Movements in provisions Other non-cash income and expenses Working capital adjustments: — (Decrease)/increase in trade receivables & prepayments — Increase in trade and other payables Net cash flows used in operating activities Cash flows from investing activities Purchase of property, plant and equipment Investment in joint venture Interest received Net cash flows (used in)/from investing activities Cash flows from financing activities Proceeds from borrowings Proceeds from issuance of ordinary shares Payment of principal portion of lease liabilities Interest on lease payments Proceeds received on settlement of non-recourse loan shares Net cash flows from/(used in) financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Effects of foreign exchange rate changes Cash and cash equivalents at end of the year Cash used for exploration and evaluation activities included in operating activities ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances Non-pledged time deposits with original maturity of less than three months when acquired Cash and cash equivalents as stated in the statement of cash flows Note 11 11,18 25 12 12 30 18 30(b) 20 20 Year ended 30 June 2022 HK$’000 2021 HK$’000 (31,865) (28,318) 30 678 6,396 4,482 (13,197) 136 (314) 135 (34) 13,381 (20,173) (51) (130) 16 (165) — 215 (671) (131) 5,737 5,150 (15,188) 45,667 (1,682) 28,797 (3,640) 28,797 — 28,797 48 478 1,149 5,220 — 138 395 207 548 294 (19,841) (19) (198) 106 (111) 29,142 — (369) (208) — 28,565 8,613 34,919 2,135 45,667 (5,400) 35,172 10,495 45,667 The notes on pages 70 to 104 form an integral part of these consolidated financial statements. 69 ANNUAL REPORT 2022CONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended 30 June 20221. GENERAL INFORMATION Brockman Mining Limited (the “Company”) and its subsidiaries (collectively, the “Group”) principally engage in the acquisition, exploration and development of iron ore projects in Australia. The Company is a public company incorporated in Bermuda as an exempted company with limited liability and its shares are listed on The Stock Exchange of Hong Kong Limited (the “SEHK”) and Australian Securities Exchange (the “ASX”). The address of its registered office is Clarendon House, 2 Church Street, Hamilton HM11, Bermuda. These consolidated financial statements are presented in Hong Kong dollars (HK$), and all values are rounded to the nearest thousand (HK$’000), except where otherwise indicated. 2. BASIS OF PREPARATION The consolidated financial statements of Brockman Mining Limited for the year ended 30 June 2022 have been prepared in accordance with all applicable International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The consolidated financial statements have been prepared under the historical cost convention. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4. (a) Going concern basis For the year ended 30 June 2022, the Group recorded a net loss before tax of HK$31,865,000 (2021: HK$28,318,000) and had operating cash outflows of HK$20,173,000 (2021: HK$19,841,000). The Group did not record any revenue during the year and the loss before tax for the period was primarily attributable to the exploration and evaluation of the Company’s iron ore exploration projects and corporate overhead costs. As at 30 June 2022, the Group’s cash and cash equivalents amounted to HK$28,797,000 (2021: HK$45,667,000). On 22 April 2021, Brockman Iron Pty Ltd (a wholly-owned subsidiary of the Company) (“Brockman Iron”) and Polaris Metals Pty Ltd (“Polaris”) established the Joint Operation. Following the establishment of the Joint Operation, Polaris (or its related party) agreed to provide the Joint Operation with funding by way of a project loan sufficient to allow the Joint Operation to fund the initial development costs and the forecast capital costs for development. The Joint Operators have agreed to initial development works that will be funded by Polaris with the cost estimated to be circa A$36,000,000 (~HK$202,082,000). The project loan agreement is expected to be executed by the first half of FY23. The loans from Polaris of A$10,000,000 have been released from the escrow account pursuant to the Farm-in and Joint Venture (“FJV”) Agreement. Under the terms of the FJV Agreement these loans are to be repaid from net revenue received by Brockman Iron from the sale of its share of product produced and sold from the Joint Operation. The repayment of these loans to Polaris must be in priority to all other payments from Net Revenue received by Brockman Iron from the sale of its percentage share of product sold from the Project. The Group has taken a number of measures to improve its liquidity position, including, but not limited to, the following: (i) (ii) Extending the repayment date of the existing loans of HK$16,792,000 from the substantial shareholder to 31 October 2023. These loans bear interest at 12% per annum, On 19 September 2018, the Group secured a standby loan facility from its substantial shareholder amounting to HK$10,000,000. If drawn down, the loan will be unsecured, bear interest at 12% per annum and be repayable on 31 October 2023. As at 30 June 2022, the facility of HK$10,000,000 is undrawn. The directors have reviewed the Group’s cash flow projections which cover a period of not less than twelve months from the date of approval of the consolidated financial statements. They are of the opinion that, taking into account the above- mentioned measures, the Group will have sufficient financial resources to satisfy its future working capital requirements and its financial obligations as and when they fall due within the next twelve months from the date of approval of these consolidated financial statements. The directors believe that the Group can continue to access debt and equity funding to meet medium term working capital requirements and has a history of securing such funding as required in the past to support their belief. In the event that funding of an amount necessary to meet the future budgeted operational and investing activities of the Group is unavailable, the directors would undertake steps to curtail these operating and investment activities. Accordingly, the directors of the Company consider that it is appropriate to the Group’s consolidated financial statements on a going concern basis. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION2. BASIS OF PREPARATION (Continued) (a) Going concern basis (Continued) Notwithstanding the above, there remains material uncertainty as to whether the Group can raise sufficient funds as outlined above, which may cast significant doubt about the Group’s ability to continue as a going concern and, therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in these consolidated financial statements. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of the Group’s assets or to the amounts and classification of liabilities which might be necessary should the Group not continue as a going concern. 3. PRINCIPAL ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (a) Changes in accounting policy and disclosures New standards, interpretations and amendments adopted by the Group The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after 1 July 2021. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. Several amendments and interpretations apply for the first time in 2022, but do not have a significant impact on the consolidated financial statements of the Group and, hence, have not been disclosed. The nature and effect of these changes as a result of the adoption of the standards that have an immaterial impact on the consolidated financial statements are described below. Reference to the Conceptual Framework — Amendments to IFRS 3 In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations — Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Preparation of the Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements. The Board added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately. At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements. The Group is currently assessing the impact of these amendments. The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively. The amendments are not expected to have a material impact on the Group. Property, Plant and Equipment: Proceeds before Intended Use — Amendments to IAS 16 In May 2020, the IASB issued Property, Plant and Equipment — Proceeds before Intended Use, which prohibits entities deducting from the cost of an item of property, plant and equipment, any proceeds from selling items, and the costs of producing those items, in profit or loss. The amendment is effective for annual reporting periods beginning on or after 1 January 2022 and must be applied retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The amendments are not expected to have a material impact on the Group. 71 ANNUAL REPORT 20223. PRINCIPAL ACCOUNTING POLICIES (Continued) (a) Changes in accounting policy and disclosures (Continued) New standards, interpretations and amendments adopted by the Group (Continued) Onerous Contracts — Costs of Fulfilling a Contract — Amendments to IAS 37 In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making. The amendments apply a “directly related cost approach”. The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract. The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The Group will apply these amendments to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting period in which it first applies the amendments. The Group is currently assessing the impact of these amendments. IFRS 1 First-time Adoption of International Financial Reporting Standards — Subsidiary as a first-time adopter As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued an amendment to IFRS 1 First- time Adoption of International Financial Reporting Standards. The amendment permits a subsidiary that elects to apply paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by the parent, based on the parent’s date of transition to IFRS. This amendment is also applied to an associate or joint venture that elects to apply paragraph D16(a) of IFRS 1. The amendment is effective for annual reporting periods beginning on or after 1 January 2022. The amendments are not expected to have a material impact on the Group. IFRS 9 Financial Instruments — Fees in the “10 per cent” test for derecognition of financial liabilities As part of its 2018-2020 annual improvements to IFRS standards, the IASB issued an amendment to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is effective for annual reporting periods beginning on or after 1 January 2022. The Group will apply the amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendments are not expected to have a material impact on the Group. Standards issued but not yet effective 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. Amendments to IAS 1: Classification of Liabilities as Current or Non-Current In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify: • • • • What is meant by a right to defer settlement That a right to defer must exist at the end of the reporting period That classification is unaffected by the likelihood that an entity will exercise its deferral right That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification. The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and must be applied retrospectively. The Group is currently assessing the impact the amendments will have on current practice. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION3. PRINCIPAL ACCOUNTING POLICIES (Continued) (a) Changes in accounting policy and disclosures (Continued) Standards issued but not yet effective (Continued) Definition of Accounting Estimates — Amendments to IAS 8 In February 2021, the IASB issued amendments to IAS 8, in which it introduced a definition of “accounting estimates”. The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates. The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Earlier application is permitted as long as this fact is disclosed. The amendments are not expected to have a material impact on the Group. Disclosure of Accounting Policies — Amendments to IAS 1 and IFRS Practice Statement 2 In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their “significant” accounting policies with a requirement to disclose their “material” accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023 with earlier application permitted. Since the amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the definition of material accounting policy information, an effective date for these amendments is not necessary. The Group is currently assessing the impact of the amendments to determine the impact they will have on the Group’s accounting policy disclosures. Deferred Tax related to Assets and Liabilities arising from a Single Transaction — Amendments to IAS 12 In May 2021, the Board issued amendments to IAS 12, which narrow the scope of the initial recognition exception under IAS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences. The amendments clarify that where payments that settle a liability are deductible for tax purposes, it is a matter of judgement (having considered the applicable tax law) whether such deductions are attributable for tax purposes to the liability recognised in the financial statements (and interest expense) or to the related asset component (and interest expense). This judgement is important in determining whether any temporary differences exist on initial recognition of the asset and liability. Under the amendments, the initial recognition exception does not apply to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. It only applies if the recognition of a lease asset and lease liability (or decommissioning liability and decommissioning asset component) give rise to taxable and deductible temporary differences that are not equal. Effective for annual reporting periods beginning on or after 1 January 2023 and the Group is currently assessing the impact of the amendments to determine the impact they will have on the Group’s accounting policy disclosures. (b) Subsidiaries Subsidiaries are all entities (including structured 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 over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies. (i) Changes in ownership interests in subsidiaries without change of control Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions with equity holders of the Group. The difference between fair value of any consideration paid and the relevant share acquired of the carrying amount of net assets of the subsidiary is recorded in equity. Gains or losses on disposal of non-controlling interests are also recorded in equity. 73 ANNUAL REPORT 20223. PRINCIPAL ACCOUNTING POLICIES (Continued) (b) Subsidiaries (Continued) (ii) Disposal of subsidiaries If the Group loses control over a subsidiary, it derecognises (i) the assets and liabilities of the subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative translation differences recorded in equity; and recognises (i) the fair value of the consideration received, (ii) the fair value of any investment retained and (iii) any resulting surplus or deficit in profit or loss. It means the amounts previously recognised in other comprehensive income are reclassified to profit or loss or transferred to another category of equity or specified/permitted by applicable IFRS. (c) Joint arrangements The Group undertakes a number of business activities through joint arrangements. A joint arrangement is an arrangement over which two or more parties have joint control. Joint control is the contractually agreed sharing of control over an arrangement which exists only when the decisions about the relevant activities (being those that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control. The Group’s joint arrangements are of two types: (i) Joint operations A joint operation is a type of joint arrangement in which the parties with joint control of the arrangement have rights to the assets and obligations for the liabilities relating to the arrangement. In relation to its interests in joint operations, the financial statements of the Group includes: • • • • Assets, including its share of any liabilities incurred jointly Liabilities, including its share of any liabilities incurred jointly Revenue from the sale of its share of the output arising from the joint operation Expenses, including its share of any expenses incurred jointly. All such amounts are measured in accordance with the terms of each arrangement which are in proportion to the Group’s interest in each asset and liability, income and expense of the relevant joint operation. (ii) Joint Ventures A joint venture is a type of joint arrangement in which the parties with joint control of the arrangement have rights to the net assets of the arrangement. A separate vehicle (not the parties) will have the rights to the assets and obligations for the liabilities, relating to the arrangement. Joint ventures are accounted for using the equity method. Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses and movements in other comprehensive income. When the Group’s share of losses in joint ventures equals or exceeds its interests in the joint ventures (which includes any long-term interests that, in substance, form part of the Group’s net investment in the joint ventures), the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures. Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group. (d) (e) Segment reporting Operating segments are reported in a manner consistent with internal reports provided to Chief Operating Decision Maker, which comprise the executive directors of the Company who are responsible for allocating resources and assessing performance of the operating segments. Foreign currency translation (i) Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in Hong Kong dollars, which is the Company’s functional and the Group’s presentation currency. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION3. PRINCIPAL ACCOUNTING POLICIES (Continued) (e) Foreign currency translation (Continued) Transactions and balances (ii) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. 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 the profit and loss. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the profit and loss. (iii) Group companies 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 balance sheet presented are translated at the closing rate at the date of that balance sheet; income and expenses for each statement of comprehensive income are translated at average exchange rate (unless this average 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 rates on the dates of the transactions); and — all resulting currency translation differences are recognised in other comprehensive income. — for the purpose of the consolidated statements of cash flows, the cash flows of overseas subsidiaries are translated into Hong Kong dollars at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of overseas subsidiaries which arise throughout the year are translated into Hong Kong dollars at the weighted average exchange rates for the year. (iv) Disposal of foreign operation and partial disposal On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign operation, a disposal involving loss of control over a subsidiary that includes a foreign operation), all of the currency translation differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss. In the case of a partial disposal that does not result in the Group losing control over a subsidiary that includes a foreign operation, the proportionate share of accumulated currency translation differences is re-attributed to non- controlling interests and is not recognised in profit and loss. For all other partial disposals (that is, reductions in the Group’s ownership interest in joint ventures that do not result in the Group losing joint control) the proportionate share of the accumulated exchange difference is reclassified to profit and loss. (f) Mining exploration properties Mining exploration properties are stated in the balance sheet at cost less subsequent accumulated amortisation and any accumulated impairment losses. Mining exploration properties are amortised using the units of production method based on the proven and probable mineral reserves and starts when commercial production commences. Mining exploration properties acquired in a business combination are identified and recognised as intangible assets separately from goodwill where they satisfy the definition of an intangible asset and their fair values can be measured reliably. The cost of such intangible assets is their fair value at the acquisition date. Impairment reviews of mining exploration properties are undertaken if events or changes in circumstances indicate a potential impairment. The carrying value of mining exploration properties is compared to the recoverable amount, which is the higher of value-in-use and the fair value less costs of disposal. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Mining exploration properties that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. (g) Property, plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. 75 ANNUAL REPORT 20223. PRINCIPAL ACCOUNTING POLICIES (Continued) (g) Property, plant and equipment (Continued) Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Company recognises such parts as individual assets with specific useful lives and depreciates them accordingly. Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as follows: Plant, furniture, fixtures and equipment 12.5% — 25% per annum Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end. An item of property, plant and equipment including any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement is recognised in the profit and loss in the year the asset is derecognised and determined as is the difference between the net sales proceeds and the carrying amount of the relevant asset. Impairment of non-financial assets Assets that are subject to impairment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the cash generating unit carrying amount exceeds its recoverable amount. The recoverable amount is the higher of a cash generating unit’s fair value less costs of disposal and value-in-use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating unit). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. Financial assets i) Classification and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortised cost or at fair value through profit or loss. (h) (i) The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15. In order for a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows. While financial assets classified and measured at fair value through other comprehensive income and held within a business model with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not held within the aforementioned business models are classified and measured at fair value through profit or loss. At 30 June 2022, the group does not have any financial assets classified and measured at fair value through other comprehensive income (2021: Nil). ii) Subsequent measurement Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with net changes in fair value recognised in the profit and loss. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION3. PRINCIPAL ACCOUNTING POLICIES (Continued) (i) Financial assets (Continued) iii) Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. iv) Impairment of financial assets Simplified approach For trade receivables and contract assets that do not contain a significant financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. j) Financial liabilities i) Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans, borrowings and payables, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans, borrowings and payables, net of directly attributable transactions costs. The Group’s financial liabilities include trade and other payables, and other borrowings. The subsequent measurement of financial liabilities depends on their classification as follows: ii) Financial liabilities at amortised cost (loans and borrowings) After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost, using the EIR method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in the statement of profit or loss. Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in the statement of profit or loss. (k) Other receivables Other receivables are amounts due from transactions outside the ordinary course of business. If collection of other receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets. Other receivables are recognised initially at fair value and subsequently measured at amortised cost using the EIR method, less provision for impairment. (l) Cash and cash equivalents For the purpose of the consolidated statement of cash flows, cash and cash equivalents include cash in hand and deposits, and have a short maturity of generally within three months when acquired. For the purpose of the balance sheet, cash and cash equivalents comprise cash on hand and at banks, including term deposits with a maturity of three months or less. 77 ANNUAL REPORT 20223. PRINCIPAL ACCOUNTING POLICIES (Continued) (m) Related parties A party is considered to be related to the Group if: (a) The party is a person or a close member of that person’s family and that person i. Has control or joint control over the Group; ii. Has significant influence over the Group; or iii. Is a member of the key management personnel of the Group or of a parent of the Group; Or (b) The party is an entity where any of the following conditions applies: i. The entity and the Group are members of the same group; ii. One entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity); iii. The entity and the Group are joint ventures of the same third party; iv. One entity is a joint venture of a third entity and the other entity is an associate of the third entity; v. The entity is controlled or jointly controlled by a person identified in (a); vi. vii. A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity) and The entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the parent of the Group. (n) (o) (p) (q) Share capital Ordinary shares are classified as equity, incremental costs directly attributable to the issue of new shares or options are shown in equity as deduction, net of tax, from the proceeds. Trade and other payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the EIR method. Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; and difference between the proceeds (net of transaction costs) and the redemption value is recognised in the profit and loss over the period of the borrowing using the EIR method. Fees paid on the settlement of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs capitalised. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION3. PRINCIPAL ACCOUNTING POLICIES (Continued) (r) Current and deferred income tax Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is recognised outside profit or loss, either in other comprehensive income or directly in equity. All wholly-owned Australian subsidiaries of the Company form a tax consolidated group under Australian tax law and are taxed as a single entity. Brockman Mining Holdings (Australia) Pty Ltd (“BMHA”), a wholly-owned subsidiary of the Company, is the head entity of the Australian tax consolidated group. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates 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 recognised, 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. The initial recognition exception is not applied to deferred income tax related to assets and liabilities arising from a single transaction (i.e. leases). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary difference can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. (s) Employee benefits (i) Short-term obligations Salaries, annual bonuses, annual leave entitlement and the cost of non-monetary benefits expected to be settled within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables. (ii) Other long term employee benefit obligations The liability for long service leave which is not expected to be settled within 12 months after the end of the period in which the employees render the related service is recognised in the provision for employee benefits and measured as the present value of the expected future payments to be made in respect of services provided by employees up to the end of a reporting period. Consideration is given to expected future wages and salary levels, experience of employee departures and periods of services. Expected future payments are discounted using market yields at the end of the reporting period on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when the actual settlement is expected to occur. (iii) Pension obligations The Group participates in various defined contribution schemes. The schemes are generally funded through payments to insurance companies, trustee-administrated funds or the relevant government authorities. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to the employee services in the current and prior periods. Payments to state-managed retirement benefit and Mandatory Provident Fund retirement schemes are charged as expenses when employees have rendered services entitling them to the contributions. 79 ANNUAL REPORT 20223. PRINCIPAL ACCOUNTING POLICIES (Continued) (s) Employee benefits (Continued) (iii) Pension obligations (Continued) For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available. (t) Share-based payments (i) Equity-settled share-based payment transactions The Group operates equity-settled, share-based compensation plans, under which the entity receives services from directors, employees or consultants as consideration for equity instruments (share options) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The fair value is determined by an external valuer using a binomial model, further details of which are given in note 25 to the financial statements. The cost of equity settled transactions is recognised in employee benefit expense, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognised for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge or credit to the statement of profit or loss for a period represents the movement in the cumulative expense recognised as at the beginning and end of that period. The total amount to be expensed is determined by reference to the fair value of the option granted: — including any market performance conditions (for example, an entity’s share price); — — excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and remaining as an employee of the entity over a specified time period); and including the impact of any non-vesting conditions (for example, the requirement for employees to save or holding shares for a specified period of time). When the options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee as measured at the date of modification. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share unless they are antidilutive. (ii) Share-based payment transactions among group entities The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent entity accounts. (u) Provisions A provision is recognised when a present obligation (legal and constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation. When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting period of the future expenditure expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in profit and loss. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION3. PRINCIPAL ACCOUNTING POLICIES (Continued) (v) Revenue recognition Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. (w) Interest income Interest income is recognised on an accrual basis using the EIR method by applying the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset. (x) Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the costs, which it is intended to compensate, are expensed. (y) Exploration and evaluation costs Except for acquisition costs for mining exploration properties which are capitalised, the Group has a policy of expensing all exploration and evaluation expenditure, in the financial year in which it incurred, unless its recoupment out of revenue to be derived from the successful development of the prospect, or from sale of that prospect, is assured beyond reasonable doubt. (z) Consumption tax (Goods and Services Tax and Value-added Tax) Revenues, expenses and assets are recognised net of the amount of consumption tax except: — where the consumption tax incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the consumption tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and — receivables and payables are stated with the amount of consumption tax included. The net amount of consumption tax recoverable from, or payable to, the taxation authority is included as part of the receivables or payables in the balance sheet. Cash flows are included in the consolidated statement of cash flows on a gross basis and the consumption tax component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of consumption tax recoverable from, or payable to, the taxation authority. (aa) Leases The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Group as a leasee The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. At inception or on reassessment of a contract that contains a lease component and non-lease components, the Group adopts the practical expedient not to separate non-lease components and to account for the lease component and the associated non-lease components (e.g., property management services for leases of properties) as a single lease component. Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of the right-of-use asset includes the amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date, less any lease incentives received, any initial direct costs incurred by the lessee, and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of 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. 81 ANNUAL REPORT 20223. PRINCIPAL ACCOUNTING POLICIES (Continued) (aa) Leases (Continued) 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 incentives receivable, variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date, 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 the 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 an expense in the period on which the event or condition that triggers that 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 the 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. Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term commercial office leases (i.e., those 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 to commercial office leases that are considered of low value (i.e., less than HK$30,000). 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. 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amounts of the assets or liabilities affected in the future. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (a) Impairment of mining exploration properties in Australia Mining exploration properties are reviewed for impairment whenever events or changes in circumstances indicate that an impairment may exist. The Group performs an assessment of impairment indicators to determine when facts and circumstances suggest that the carrying amount of mining exploration properties may exceed its recoverable amount. The assessment of whether there are any impairment indicators in respect of a mining exploration property involves a number of judgments. These include whether the Group has the right to explore in the specific area of interest, whether ongoing expenditure is planned or budgeted and whether there is sufficient information for a decision to be made that the area of interest is not commercially viable. As at 30 June 2022, the carrying amount of the mining exploration properties is HK$733,677,000 (2021: HK$784,933,000). There is no impairment loss recognised for the year ended 30 June 2022 (2021: Nil) as no facts and circumstances suggest that the mining exploration properties may be impaired. See Note 17 for further consideration by the Group. (b) Measurement of Polaris loans Estimating the market interest rate Judgement is required to determine the market interest rate used to account for the Polaris loans. The Polaris loans were initially recognised at fair value and subsequently measured at amortised cost using a market interest rate of 12% which the directors believe best reflects the Group’s market interest rate for a borrowing of this quantum and terms. Estimating the repayment dates and amounts The date of repayment for the Polaris loans will depend on the date of commencement of operations and it is expected that full repayment will be made within two — three months of this date. The remeasurement of the loans from Polaris in the current year arose from changes to the estimated loan repayment dates. As at 30 June 2022, the carrying amount of these borrowings is HK$34,517,000 (2021: HK$41,679,000). NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued) (c) Income taxes Deferred tax assets are recognised for unused tax losses and other deductible temporary differences to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised based upon the likely timing and the level of future taxable profits, together with future tax planning strategies and changes in factors which provide confirmation of the existence and ability to utilise tax losses. At 30 June 2022, the Group’s total tax losses were HK$1,228,000,000 (2021: HK$1,215,000,000). The Group did not recognise a deferred income tax asset in respect of tax losses amounting to approximately HK$860,000,000 (2021: HK$869,000,000) as the utilisation of these tax losses is subject to the satisfaction of the loss recoupment rules in the relevant tax jurisdiction as well as other uncertainties which mean that their realisation is not considered probable. The unrecognised tax losses relate to overseas subsidiaries that have a history of losses, do not expire, and may not be used to offset taxable or other income elsewhere in the Group. The Group has determined that these losses are not expected to be available for utilisation when taxable temporary differences are expected to reverse. On this basis, the Group has determined that it cannot recognise deferred tax assets on these unrecognised tax losses carried forward. Further work continues in respect of assessing whether these unrecognised tax losses may become available. (d) (e) Lease term of contracts with renewal options The Group has a lease contract that includes an extension option. The Group applies judgement in evaluating whether or not to exercise the extension option. That is, it considers all relevant factors that create an economic incentive for it to exercise the extension. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to extend. The Group includes the renewal period as part of the lease term. Leases — Estimating the incremental borrowing rate If or when the lessee cannot readily determine the interest rate implicit in a lease, it uses an incremental borrowing rate (“IBR”) to measure lease liabilities. The IBR is the rate of interest that the lessee 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 it needs to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). 5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Financial risk factors The Group’s activities expose it to a variety of financial risks and management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. The Group does not and is prohibited from entering into derivative contracts for speculative purposes. i) Capital risk management The Group manages its capital to ensure that entities in the Group will be able to continue as going concern while maximising the return to shareholders through the optimisation of the debt and equity balances. The directors of the Company consider that the capital structure of the Group consists of long-term debt and lease liabilities, and equity attributable to equity holders of the Company comprising issued capital and reserves. The directors of the Company review the capital structure by considering the cost of capital and the risks associated with each class of capital. Based on recommendations of the directors, the Group will balance its overall capital structure through new share issues as well as the issue of the new debt or the repayment of existing debt. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the years ended 30 June 2022 and 2021. The Group monitors capital using a gearing ratio, which is long-term debt over equity and long-term debt. The gearing ratios at 30 June 2022 and 2021 were as follows: Long-term debt and lease liabilities Total equity Total capital Gearing ratio 2022 HK$’000 51,872 590,137 642,009 8.08% 2021 HK$’000 58,356 645,702 704,058 8.28% 83 ANNUAL REPORT 20225. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) Financial risk factors (Continued) i) Capital risk management (Continued) A decrease in the Group’s net debt and hence the Group’s gearing rate from 8.28% to 8.08% at 30 June 2022 compared with the 30 June 2021. (ii) Liquidity risk The Group’s primary cash requirements have been for the payment for working capital and exploration and evaluation activities. The Group generally finances its short term funding requirements with equity funding and loans from shareholders. The following table details the Group’s remaining contractual maturity for its financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group could be required to pay. The table includes both interest and principal cash flows. Within 1 year of demand HK$’000 1 to 2 years HK$’000 2 — 3 years HK$’000 Later than 3 years & no later than 5 years HK$’000 Total undiscounted cash flows HK$’000 Carrying amount at year ended date HK$’000 30 June 2022 Non-derivative financial liabilities: Trade and other payables Lease liabilities Borrowings 30 June 2021 Non-derivative financial liabilities: Trade and other payables Lease liabilities Borrowings 14,504 626 — 15,130 1,123 828 — 1,951 — 420 18,556 18,976 — 499 15,472 15,971 — 249 — 249 — — 55,788 55,788 — 314 55,708 56,022 — 441 — 441 14,504 1,295 74,344 90,143 1,123 2,082 71,180 74,385 14,504 1,182 51,309 66,995 1,123 1,939 57,245 60,307 (iii) (iv) (v) The date of repayment for the loans from Polaris will depend on the date of commencement of operations and it is expected that full repayment will be made within two — three months of this date. Fair value estimation The fair value of the Group’s financial assets, including other receivables, deposits, amounts due from related parties, and cash and cash equivalents; and the Group’s financial liabilities, including trade and other payables, amounts due to related parties are approximate to their carrying amounts due to their short-term maturities. The fair value of non-current borrowings is disclosed in note 23. Exchange rate risk The Group is exposed to exchange rate risk primarily in relation to our mineral tenements that are denominated in Australian dollars. Depreciation of the Australian dollar may adversely affect our net asset value and earnings when the value of such assets is converted to Hong Kong dollars. During the year, no financial instrument was used for hedging purposes. As at 30 June 2022 and 2021, the Group was not exposed to any significant exchange rate risk. Credit risk The Group’s maximum exposure to credit risk which could cause a financial loss to the Group due to failure to discharge an obligation by the counterparties arises from the carrying amount of the trade receivables, other receivables and deposits, amount due from a related party, cash and cash equivalents and restricted cash as stated in the consolidated balance sheet. Management reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for expected credit losses by assessing the credit quality of the counterparties by taking into account its financial position, past experience and other factors. In this regard, the directors of the Company consider that the credit risk of the Group is reduced. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) Financial risk factors (Continued) (v) Credit risk (Continued) The credit risk on cash and cash equivalents is limited for both the Group and the Company because counterparties are mainly the banks with high credit-rating of AA+ assigned by international credit-rating agencies. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due. The Group and the Company have no concentration of credit risk, with exposure spread over a number of counterparties. (vi) Interest rate risk Fair value interest rate risk that the value of a financial instrument will fluctuate because of changes in market interest rates. Cash flow interest rate risk that the future cash flow from a financial instrument will fluctuate because of changes in market interest rates. The Company’s policy is to manage its exposure to interest rate risk by holding cash in short term, fixed and variable rate deposits with reputable high credit quality financial institutions. The Company analyses its interest rate exposure and consideration is given to potential renewals of existing positions, alternative financing and or the mix of fixed or variable interest rates. As at 30 June 2022 and 2021, the Group was not exposed to any significant interest rate risk. 6. REVENUE There was no revenue during the year ended 30 June 2022 (2021: nil). 7. SEGMENT INFORMATION Operating segments are reported in a manner consistent with internal reports provided to Chief Operating Decision Maker, being the executive directors of the Company who are responsible for allocating resources and assessing performance of the operating segments. The executive directors consider the performance of the Group from a business perspective. The Group’s reportable operating segment is as follows: Mineral tenements in Australia — tenement acquisition, exploration and towards future development of iron ore projects in Western Australia Others primarily relate to the provision of corporate services for investment holding companies. These activities are excluded from the reportable operating segments and are presented to reconcile to the totals included in the Group’s consolidated statement of comprehensive income and consolidated balance sheet. Executive directors assess and review the performance of the operating segments based on segment results which is calculated as loss before income tax less share of profit/(losses) of joint ventures. Segment assets reported to executive directors of the Company are measured in a manner consistent with that in the consolidated balance sheet. 85 ANNUAL REPORT 20227. SEGMENT INFORMATION (Continued) (a) The following is an analysis of the Group’s results by business segment: For the year ended 30 June 2022: Segments results Share of loss of joint ventures Loss before income tax Other information: Depreciation of property, plant, equipment and right-of-use asset Exploration and evaluation expenses Share based payment expense Income tax benefit For the year ended 30 June 2021: Segments results Share of loss of joint ventures Loss before income tax Other information: Depreciation of property, plant, equipment and right-of-use assets Exploration and evaluation expenses Share based payment expenses Income tax benefit Mineral tenements in Australia HK$’000 Others HK$’000 (12,463) (19,266) (352) (17,677) — 11,051 (356) — (6,396) — (14,943) (13,236) (377) (5,494) — 14,146 (149) — (1,149) — Total HK$’000 (31,729) (136) (31,865) (708) (17,677) (6,396) 11,051 (28,179) (139) (28,318) (526) (5,494) (1,149) 14,146 (b) The following is an analysis of the Group’s total assets by business segment as at 30 June 2022: As at 30 June 2022: Segment assets Total segment assets include: Interest in joint ventures Property, plant and equipment Right-of-use assets As at 30 June 2021: Segment assets Total segment assets include: Interests in joint ventures Property, plant & equipment Right-of-use assets Mineral tenements in Australia HK$’000 Others HK$’000 Total HK$’000 758,848 6,377 765,225 651 174 623 — 3 178 651 177 801 823,358 10,815 834,173 703 162 1,006 — 5 532 703 167 1,538 (c) Geographical information The mineral tenements are located in Australia, and, the following is an analysis of the carrying amounts of the Group’s mining exploration properties, property plant and equipment, right-of-use assets and interests in joint ventures analysed by geographical area in which the assets are located: Hong Kong Australia 2022 HK$’000 181 735,125 2021 HK$’000 537 786,804 NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION8. EMPLOYEE BENEFIT EXPENSE Salaries and other benefits Post-employment benefits Share-based compensation 2022 HK$’000 11,630 587 6,396 18,613 2021 HK$’000 11,917 575 1,149 13,641 9. FIVE HIGHEST PAID EMPLOYEES Of the five individuals who received the highest emoluments in the Group for the year, three (2021: three) are the directors of the Company whose emoluments are disclosed in Note 14. The emoluments of the remaining two (2021: two) highest paid employees who are neither a director nor chief executive officer of the Company are as follows: Salaries and other benefits Post-employment benefits Share-based compensation The emoluments of the remaining individuals fell within the following bands: HK$1,000,000 — HK$2,000,000 HK$2,000,001 — HK$3,000,000 HK$3,000,001 — HK$4,000,000 2022 HK$’000 2,834 179 937 3,950 Number of individuals 2022 — 1 1 2 2021 HK$’000 2,900 176 244 3,320 2021 2 — — 2 During the prior year, share options were granted to the highest paid non-director employees in respect to their services to the Group, further details of which are included in the disclosures in note 25 to the consolidated financial statements. The fair value of such options, which has been recognised in the statement of profit or loss over the vesting period, was determined as at the date of grant and the amount included in the financial statements for the current year is included in the above highest paid non- director employees’ remuneration disclosures. 10. OTHER INCOME Government grant (Note a) 2022 HK$’000 97 97 2021 HK$’000 162 162 Note a: During 30 June 2022, there was a government grant, provided by the Hong Kong Government to retain employees due to the implications caused by COVID-19 (HK$97,000), (30 June 2021: HK$162,000). 87 ANNUAL REPORT 202211. LOSS BEFORE TAX The Group’s loss before tax from continuing operations is arrived at after charging: Depreciation of property, plant and equipment Depreciation of right-of-use assets Lease payments not included in the measurement of lease liabilities Auditor’s remuneration: Audit services Non-audit services Staff costs (including directors emoluments (note 14)) Equity-settled share option expense Exploration and evaluation expenses (excluding staff costs and rental expenses) 12. FINANCE INCOME, NET An analysis of finance income, net is as follows: Finance income Interest income on bank deposits Remeasurement of the loans from Polaris Finance costs Interest on lease liabilities Interest on borrowings Finance income, net 2022 HK$’000 30 678 — 1,103 113 12,217 6,396 16,271 2022 HK$’000 14 13,197 (131) (4,482) 8,598 2021 HK$’000 48 478 198 1,163 389 12,492 1,149 4,033 2021 HK$’000 88 — (208) (5,220) (5,340) 13. INCOME TAX BENEFIT No provision for Hong Kong Profits tax or overseas income tax has been made in the consolidated financial statements as the Group has no assessable profit for the year (2021: Nil). The applicable corporate income tax rate is 30% (2021: 30%) for subsidiaries in Australia and Hong Kong 16.50% (2021: 16.50%). The income tax on the Group’s loss before income tax differs from the theoretical amount that would arise using the enacted tax rate of the consolidated entities as follows: Loss before income tax Tax calculated at the applicable domestic tax rate of respective companies (note a) Expenses not deductible for tax purposes Deferred tax assets recognised Tax losses for which no deferred income tax asset was recognised Income tax benefit Note a: The weighted average applicable tax rate was 22% (2021: 23%). 2022 HK$’000 (31,865) (6,959) 1,096 (7,311) 2,123 (11,051) 2021 HK$’000 (28,319) (6,709) 856 (10,041) 1,748 (14,146) NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION14. BENEFITS AND INTERESTS OF DIRECTORS (a) Directors’ emoluments Directors’ remuneration for the year, disclosed pursuant to the Listing Rules, section 383(1)(a), (b), (c) and (f) of the Hong Kong Companies Ordinance and Part 2 of the Companies (Disclosure of Information amount Benefits of Directors) Regulation. The remuneration of every director for the year ended 30 June 2022 is set out below: Name Kwai Sze Hoi Chan Kam Kwan, Jason Kwai Kwun, Lawrence Liu Zhengui Yap Far Suan, Henry Choi Yue Chun, Eugene David Rolf Welch Ross Stewart Norgard Colin Paterson Total Fees HK$’000 Salary HK$’000 Discretionary bonuses HK$’000 Housing allowance HK$’000 Share based payment expense HK$’000 Retirement benefit scheme HK$’000 — — — 240 228 228 227 227 — 1,150 — 123 1,083 — — — — — 2,328 3,534 — — — — — — — — — — — 960 — — — — — — — 960 — 777 — 117 117 117 117 117 716 2,078 — 50 50 — — — — — 133 233 The remuneration of every director for the year ended 30 June 2021 is set out below: Name Kwai Sze Hoi Chan Kam Kwan, Jason Kwai Kwun, Lawrence Liu Zhengui Yap Far Suan, Henry Choi Yue Chun, Eugene David Rolf Welch Ross Stewart Norgard Colin Paterson Total Fees HK$’000 Salary HK$’000 Discretionary bonuses HK$’000 Housing allowance HK$’000 Share based payment expense HK$’000 Retirement benefit scheme HK$’000 — — — 240 228 228 229 229 — 1,154 — 40 1,000 — — — — — 2,395 3,435 — — — — — — — — — — — 960 — — — — — — — 960 — 8 — 1 1 1 1 1 8 21 — 50 50 — — — — — 124 224 Total HK$’000 — 1,910 1,133 357 345 345 344 344 3,177 7,955 Total HK$’000 — 1,058 1,050 241 229 229 230 230 2,527 5,794 During the prior year, certain directors were granted options, under the share option scheme of the Company, further details of which are set out in note 25 to the financial statements. The fair value of such options, which has been recognised in the statement of profit or loss over the vesting period, was determined as at the date of grant and the amount included in the financial statements for the current year is included in the above directors’ and chief executives’ remuneration disclosures. There was no arrangement under which a director or the chief executive waived or agreed to waive any remuneration during the year. (b) Directors’ retirement benefits No retirement benefits were paid to or receivable by any directors in respect of their other services in connection with the management of the affairs of the Company or its subsidiaries (2021: Nil). (c) Directors’ termination benefits No payment was made to directors as compensation for early termination of their appointment during the year (2021: Nil). (d) Consideration provided to third parties for making available directors’ services No payment was made to any former employer of directors for making available the services of them as a director of the Company (2021: Nil). 89 ANNUAL REPORT 202214. BENEFITS AND INTERESTS OF DIRECTORS (Continued) (e) (f) (g) Information about loans, quasi-loans and other dealings in favour of directors, controlled bodies corporate by and connected entities with such directors As at 30 June 2022, there were no loans, quasi-loans and other dealings in favour of directors, controlled bodies corporate by and connected entities with such directors during the year (2021: Nil). Directors’ material interests in transactions, arrangements or contracts No significant transactions, arrangements or contracts in relation to the Company’s business to which the Company was a party and in which a director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year (2021: Nil). Remuneration paid or receivable in respect of accepting office as director There was no remuneration paid or receivable in respect of accepting office as director and other emoluments paid or receivable in respect of director’s other services in connection with the management of the affairs of the Company or its subsidiary undertaking during the year (2021: Nil). 15. LOSS PER SHARE Basic loss per share is calculated by dividing the loss attributable to the equity holders of the Company by the weighted average number of ordinary shares on issue during the period. Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding and to assume conversion of all dilutive potential ordinary shares. Loss for the period attributable to the equity holders of the Company (HK$’000) Weighted average number of ordinary shares for the purpose of 2022 2021 (20,814) (14,172) calculating the loss per share (thousands) 9,279,410 9,279,232 Effects of dilution from: — share options (thousands) 104,500 195,000 Weighted average number of ordinary shares adjusted for the effect of dilution (thousands) 9,383,732(*) 9,334,133(*) Loss per share attributable to the equity holders of the Company: Basic (HK cents) Diluted (HK cents) (0.22) (0.22)(*) (0.15) (0.15)(*) Note (*): Because the diluted loss per share amount is decreased when taking share options into account, the share options had an anti-dilutive effect on the basic loss per share for the year and were ignored in the calculation of diluted loss per share. Therefore, the diluted loss per share amounts are based on the loss for the year of HK$20,814,000 (2021: HK$14,172,000), and the weighted average number of ordinary shares 9,383,732,000 (2021: 9,334,133,000) on issue during the year that are considered in the calculation of basic loss per share. 16. DIVIDEND No dividend was paid or proposed during the year ended 30 June 2022, nor has any dividend been proposed since the balance sheet date (2021: Nil). NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION17. MINING EXPLORATION PROPERTIES Balance as at 1 July 2020 Recoupment of benefit Exchange differences Balance as at 30 June 2021 Other Exchange differences Balance as at 30 June 2022 Mining exploration properties in Australia HK$’000 731,048 (14,763) 68,648 784,933 6,051 (57,307) 733,677 At 30 June 2022 the Group held capitalised mining exploration properties in Australia of HK$733,677,000 (2021: $784,933,000), representing 96% (2021: 94%) of the Group’s total assets. The determination as to whether there are any indicators to require a mining exploration property to be assessed for impairment, involves a number of judgments including whether the Group has tenure, will be able 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, (refer to note 30(a)). The Group performed an assessment of the impairment indicators at 30 June 2022 in accordance with IFRS 6, taking into account the following factors: 1. 2. 3. 4. 5. 6. The Group still has the right to explore the tenements. To date there have been no adverse findings reported or identified from technical studies undertaken that would affect the advancement of Marillana. Substantial further expenditure is forecast for Marillana at 30 June 2022 and beyond, to continue to advance development of Marillana. Under the FJV Agreement, MinRes is to provide the infrastructure solution to transport ore from the Marillana project to a port stockyard at Port Hedland and loading on to ships for export. The MinRes-Hancock joint venture agreement will facilitate this solution for Marillana. In recent years, the iron ore price has increased to levels not seen since 2014 and at 30 June 2022 the price was above A$176 per tonne or US$122 per dry metric tonne (at an exchange rate of US$0.69). At 30 June 2022, the Group’s market capitalisation was HK$2,505,662,000 (30 June 2021: HK$2,041,000,000), well in excess of the net assets HK$590,137,000 (30 June 2021: HK$645,702,000). 7. The Group’s Mineral Resource estimate has not changed since September 2018. As a result of considering these factors, the directors did not identify any impairment indicators. 91 ANNUAL REPORT 202218. PROPERTY, PLANT, EQUIPMENT AND RIGHT-OF-USE ASSETS For the year ended 30 June 2022 1 July 2021 Additions Depreciation Exchange differences At 30 June 2022 Cost Accumulated depreciation Net book amount For the year ended 30 June 2021 1 July 2020 Additions Depreciation Exchange differences At 30 June 2021 Cost Accumulated depreciation Net book amount Plant, furniture, fixtures and equipment HK$’000 Right-of-use asset HK$’000 167 51 (30) (11) 177 4,955 (4,778) 177 181 19 (48) 15 167 4,904 (4,737) 167 1,538 — (678) (59) 801 1,902 (1,101) 801 1,226 676 (478) 114 1,538 1,902 (364) 1,538 Total HK$’000 1,705 51 (708) (70) 978 6,857 (5,879) 978 1,407 695 (526) 129 1,705 6,806 (5,101) 1,705 There was no depreciation expense (2021: Nil) included in cost of sales and depreciation of HK$708,000 (2021: HK$526,000) was included in administration expenses. 19. LEASES The Group as a lessee The Group has lease contracts for commercial office space. There are several lease contracts that include extension and variable lease payments, which are further discussed below. Generally, the Group is restricted from assigning and subleasing the leased assets outside of the Group. (a) Right-of-use assets The carrying amount of the Group’s right-of-use assets and the movements during the year are as follows: Opening balance Additions Depreciation charge Exchange difference 2022 HK$’000 1,538 — (678) (59) 801 2021 HK$’000 1,226 676 (478) 114 1,538 NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION19. LEASES (Continued) The Group as a lessee (Continued) (b) Lease liabilities The carrying amount of lease liabilities and the movements during the year are as follows: Opening balance New leases Accretion of interest recognised during the year Payments Exchange difference Analysed into: Current portion Non-current portion 2022 HK$’000 1,939 — 131 (802) (86) 1,182 2022 HK$’000 619 563 2021 HK$’000 1,493 676 208 (577) 139 1,939 2021 HK$’000 828 1,111 Refer to note 5(ii) the maturity analysis of lease liabilities in accordance with Appendix 16(22) of the Listing Rules as appropriate. (c) The amounts recognised in profit or loss in relation to leases is as follows: Interest on lease liabilities Depreciation charge of right-of-use assets Expense relating to short-term leases (included in administrative expenses) Total amount recognised in profit or loss 20. CASH AND CASH EQUIVALENTS Cash and cash equivalents The balance of cash and cash equivalents is denominated in the following currencies: HK$ A$ US$ 2022 HK$’000 131 678 — 809 2022 HK$’000 28,797 28,797 2022 HK$’000 5,272 23,519 6 28,797 2021 HK$’000 208 478 198 884 2021 HK$’000 45,667 45,667 2021 HK$’000 9,142 36,346 179 45,667 Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term time 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 time deposit rates. The bank balances and pledged deposits are deposited with creditworthy banks (AA+) with no recent history of default. 93 ANNUAL REPORT 202221. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS Other receivables and deposits Prepayments 2022 HK$’000 21 978 999 2021 HK$’000 28 1,005 1,033 The financial assets included in the above balances relate to receivables for which there was no recent history of credit loss. 22. TRADE AND OTHER PAYABLES Trade payables of the Group principally represent amounts outstanding to suppliers. The normal credit period is between 30 days and 90 days. Trade and other payables 2022 HK$’000 14,504 14,504 2021 HK$’000 1,123 1,123 Trade and other payables include the Group’s share of the joint operation expenditure of HK$13,552,000 (30 June 2021: Nil), payable to Mineral Resources Limited refer to note 2(a) and 30(a). 23. BORROWINGS Non-current Loans from Polaris Loans from a substantial shareholder 2022 HK$’000 34,517 16,792 51,309 2021 HK$’000 41,774 15,471 57,245 As at 30 June 2022, the borrowings from a substantial shareholder were unsecured, bore interest at 12% (2021: 12%) per annum and were repayable on 31 October 2023 (2021: 31 October 2022). On 18 November 2019 and 4 May 2021, Polaris advanced the first and second tranche of the loans (total advanced A$10,000,000) to Brockman Iron pursuant to the terms of the Farm-in Joint Venture Agreement over the Marillana Iron Ore Project. The loans are secured (per a Deed of Cross Security), carried at amortised cost and are repayable to Polaris from net revenue received by Brockman Iron from the sale of its percentage share of product sold from the joint operation. 24. SHARE CAPITAL Ordinary shares of HK$0.1 each Authorised As at 30 June 2022 and 30 June 2021 Issued and fully paid As at 30 June 2020 and 30 June 2021 Issue of shares (Note a) As at 30 June 2022 Number of shares ’000 Share capital HK$’000 20,000,000 2,000,000 9,279,232 1,000 9,280,232 927,923 100 928,023 Note a: On 28 April 2022 1,000,000 share options were exercised by employees of the Group. Details of the Company’s share option scheme and the share option issue under the scheme are included in the note 25 to the financial statements. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION25. SHARE OPTION SCHEME Share option scheme of the Company The 2012 share option scheme (the “2012 Share Option Scheme”) of the Company was adopted by the Company pursuant to the approval by shareholders at the Annual General Meeting on 13 November 2012. The 2012 Share Option Scheme replaced the previous share option scheme which expired in August 2012. Its primary purpose is to provide incentives or rewards to selected participants for their contribution to the Group and eligible participants of the scheme 2021A and 2021B include the Company’s directors, including independent non-executive directors and other employees of the Group. The 2012 Share Option Scheme is valid and effective for a period of ten years from the date of its adoption and will expire in August 2022. The maximum number of unexercised share options currently permitted to be granted under the Scheme is an amount equivalent, upon their exercise, to 10% of the shares of the Company on issue at any time. The maximum number of shares issuable under share options to each eligible participant in the Scheme within any 12 month period is limited to 1% of the shares of the Company on issue at any time. Any further grant of share options in excess of this limit is subject to shareholders’ approval in a general meeting. In addition, any share options granted to a substantial shareholder, an independent non-executive director of the Company, in excess of 0.1% of the shares of the Company in issue at any time or with an aggregate value (based on the price of the Company’s shares at the date of grant) in excess of HK$5 million, within any 12-month period, are subject to shareholders’ approval in advance in a general meeting. Share options granted to a director, chief executive or substantial shareholder of the Company, or to any of their associates, are subject to approval in advance by the independent non-executive directors. The offer of a grant of share options may be accepted within 28 days from the date of offer, upon payment of a nominal consideration of HK$1.00 or A$1.00 in total by the grantee. The exercise period of the share options granted is determinable by the directors, and commences after a vesting period and ends on a date which is not later than three years from the date of offer of the share options. The exercise price of share options is determinable by the directors, but may not be less than the higher of (i) the Stock Exchange closing price of the Company’s shares on the date of offer of the share options; and (ii) the average Stock Exchange closing price of the Company’s shares for the five trading days immediately preceding the date of offer. Share options do not confer rights on the holders to dividends or to vote at shareholders’ meetings. The fair value of the employee services received in exchange for the grant of the share options is recognised as an expense, with a corresponding adjustment to employee share-based compensation reserve, over the vesting period. At the end of each reporting period, the Company revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision to original estimate, if any, in the consolidated statement of comprehensive income, with a corresponding adjustment to equity. Details of specific categories of options are as follows: Option type Date of grant Number of share options granted Fair value at the grant date (HK$’000) 2021A 29 June 2021 17,500,000 1,378,000 Closing price immediately before the date of grant (HK$) Vesting period Exercise period Exercise price (HK$) 0.210 29 June 2021 — 1 January 2022 1 January 2022 — 31 December 2024 14 May 2021 71,000,000 5,339,000 0.207 14 May 2021 — 1 January 2022 — 2021B 29 June 2021 15,000,000 723,000 0.210 1 January 2022 29 June 2021 — 1 January 2022 14 May 2021 2,000,000 105,000 0.207 14 May 2021 — 1 January 2022 105,500,000 7,545,000 31 December 2024 1 January 2022 — 12 May 2024 1 January 2022 — 12 May 2024 0.213 0.213 0.295 0.295 95 ANNUAL REPORT 202225. SHARE OPTION SCHEME (Continued) The fair value of all the share options were calculated using the Binomial model prepared by an independent valuer. The inputs into the model were as follows: Exercise price Expected volatility Expected option life Annual risk-free rate Expected dividend yield Weighted average share price (per share) HK$0.213 - HK$0.295 51% - 53% 2.9 - 3.5 years 0.272% - 0.416% 0% HK$0.207 The expected life of the options is based on the historical data over the past three years and is not necessarily indicative of the exercise patterns that may occur. The volatility measured at grant date is referenced to the historical volatility of shares of the Company. The values of share options calculated using the binomial model are subject to certain fundamental limitations, due to the subjective nature of and uncertainty relating to a number of assumptions of the expected future performance input to the model, and certain inherent limitations of the model itself. The value of an option varies with different variable of certain subjective assumptions. Any change to the variables used may materially affect the estimation of the fair value of an option. No other feature of the options granted was incorporated into the measurement of fair value. For the year ended 30 June 2022, the Company recognised the total expense of HK$6,396,000 (2021: HK$1,149,000). Movements in the number of share options outstanding and their related weighted average exercise prices are as follows: 2022 2021 Average exercise price in HK$ per share option 0.23 — 0.21 — 0.23 Number of share options (thousands) 105,500 — 1,000 — 104,500 Average exercise price in HK$ per share option 0.13 0.23 — 0.13 0.23 Number of share options (thousands) 90,000 105,500 — 90,000 105,500 At 1 July Granted Exercised Lapsed At 30 June As at 30 June 2022, 104,500,000 (2021: 105,500,000) share options were outstanding with a weighted average exercise price of HK$0.23 (2021: HK$0.23), 105,500,000 share options were vested (2021: Nil) and 1,000,000 options were exercised (2021: Nil) As at 30 June 2022, the weighted average of the remaining contractual life of the outstanding share options was 1.9 and 2.5 years (30 June 2021: 2.9 and 3.5 years). The 1,000,000 share options exercised during the year (2021: Nil) with a weighted average exercise price of HK$0.21 (2021: Nil) and the weighted average closing price of the shares immediately before their exercise was HK$0.25 per share (2021: No share options were exercised) resulted in the issue of 1,000,000 ordinary shares of the Company (2021: Nil) and new share capital HK$100,000 (2021: Nil) (before issue expenses) was issued, as further detailed in note 24 to the consolidated financial statements. No share options expired, lapsed, fortfeited, or cancelled during the year (2021: 90,000,000 share options expired/lapsed of which 75,000,000 share options with an exercise price of HK$0.124 and 15,000,000 share options with an exercise price of HK$0.162). During the year, there were no share options granted (2021: 105,500,000 at an average exercise price of HK$0.23). At the end of the reporting period, the Company had 104,500,000 (2021: 105,500,000) share options outstanding. The exercise in full of the outstanding share options would, under the present capital structure of the Company, result in the issue of 104,500,000 (2021: 105,500,000) additional ordinary shares of the Company and additional share capital of HK$10,450,000 (before issue expense) (2021: $10,550,000). An amount of HK$1.00 or A$1.00 was payable on each application or acceptance of the options in respect of the Hong Kong and Australia schemes. Payments or calls for the subscription of the 1,000,000 options exercised were payable immediately. There were no loans for such purposes. At the date of approval of these financial statements, the Company had 104,500,000 share options outstanding under the scheme, which represented approximately 1.13% of the Company’s shares in issue as at that date. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION26. DEFERRED INCOME TAX LIABILITY The following is the deferred income tax movement recognised by the Group: At 1 July 2020 Deferred tax associated with the Polaris loans Deferred tax assets recognised Exchange differences At 30 June 2021 Deferred tax associated with the Polaris loans Deferred tax assets recognised Exchange differences At 30 June 2022 HK$’000 (128,850) 4,429 10,041 (12,326) (126,706) 2,916 7,311 9,019 (106,949) All deferred tax liabilities are expected to be settled more than 12 months after the balance sheet date. The deferred tax liabilities compromise the taxable temporary differences arising on mining exploration properties of HK$220,103,000 (HK$235,480,000) in Australia predominantly offset by deferred tax assets of HK$111,350,000 (2021: HK$106,954,000) arising from available tax losses whose realisation is considered probable and the other deferred tax assets. At 30 June 2022, the Group’s total tax losses were HK$1,228,000,000 (2021: HK$1,214,000,000) and have no expiry date. The Group did not recognise a deferred income tax asset in respect of tax losses amounting to approximately HK$860,000,000 (2021: HK$869,000,000) as the utilisation of these tax losses is subject to the satisfaction of the loss recoupment rules in the relevant tax jurisdiction as well as other uncertainties which mean that their availability for utilisation or realisation is not considered probable. 27. PROVISIONS Current Employee benefits 2022 HK$’000 2021 HK$’000 1,144 1,458 Provisions for annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. The current provision includes amounts for vested long service leave for which the Group does not have an unconditional right to defer settlement, regardless of when the actual settlement is expected to occur. However, based on past experience, the Group does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. 28. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (a) Major non-cash transactions During the year, there were no additions to right-of-use assets and lease liabilities, in respect of lease arrangements for commercial office (2021: HK$676,000). 97 ANNUAL REPORT 202228. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (Continued) (b) Changes in liabilities from financing activities At 1 July 2021 Changes from financing activities New leases Accretion of the loans from Polaris Remeasurements of the loans from Polaris Interest expense on loans from substantial shareholder Interest expense on leases Exchange difference At 30 June 2022 At 1 July 2020 Changes from financing activities New leases Accretion of the loans from Polaris Recoupment of benefit on recognition of Polaris loan Interest expense on loans from substantial shareholder Interest expense on leases Exchange difference At 30 June 2021 Borrowings HK$’000 57,245 — — 3,179 (7,191) 1,320 — (3,244) 51,309 Borrowings HK$’000 35,393 29,142 — 3,900 (14,763) 1,320 — 2,253 57,245 Lease liabilities HK$’000 1,939 (802) — — — — 131 (86) 1,182 Lease liabilities HK$’000 1,493 (577) 676 — — — 208 139 1,939 29. COMMITMENTS AND CONTINGENT LIABILITIES (a) Capital commitments As at 30 June 2022, the Group did not have any capital commitments (2021: Nil). (b) Exploration expenditure commitments As at 30 June 2022, the Group is required to meet or exceed a minimum level of exploration expenditure of A$1,257,000, equivalent to approximately HK$6,799,000 (2021: A$1,237,000 equivalent to approximately HK$7,212,000), over the next year. Obligations are subject to change upon expiry of the existing exploration leases or on application for a new lease. (c) Joint Venture commitments As at 30 June 2022 there were no joint venture commitments (2021: Nil). (d) Contingent liabilities As at 30 June 2022 the Group had no contingent liabilities (2021: Nil). NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION30. JOINT ARRANGEMENTS (a) Joint operations and farm-out arrangements The Group entered into an agreement with Polaris to share costs and risks associated with exploration activities on the Marillana and Ophthalmia tenements in the East Pilbara of Western Australia. Polaris was required to meet certain farm-in obligations including minimum expenditure of A$250,000 and A$150,000 respectively in exploration and development of the tenements in return for a 50% interest in the tenements. Polaris will contribute 50% of costs and capital expenditure going forward and Polaris has been appointed as operator of the joint operation. The Group does not record any expenditure made by the farmee on its account. It also does not recognise any gain or loss on its exploration and evaluation farm-out. Particulars of the Group’s material joint operation are as follows: Name of joint operation Marillana Joint Operation Ownership interest 50% Principal activities Development and operation of the Note (a) Ophthalmia Joint Operation 50% Note (b) Marillana iron ore project Development and operation of the Ophthalmia iron ore project Note (a): On the 22 April 2021 an unincorporated joint operation was formed with Polaris Metals Pty Ltd in Australia which is seeking to develop the Marillana iron ore project. Note (b): On the 30 November 2021 an unincorporated joint operation was formed with Polaris Metals Pty Ltd in Australia which is seeking to develop the Ophthalmia iron ore project. (b) Joint ventures At 1 July 2021 Contributions to the joint venture Share of loss of joint venture Exchange differences At 30 June 2022 2022 HK$’000 703 130 (136) (46) 651 2021 HK$’000 644 138 (139) 60 703 The following illustrates the aggregate financial information of the Group’s joint ventures that are not individually material: Share of the joint venturers loss for the year Aggregate carrying amount of the Group’s investments in the joint venture Details of the Group’s interest in the joint ventures is as follows: 2022 HK$’000 (136) 2021 HK$’000 (139) 651 703 Name of joint venture NWIOA Ops. Pty Ltd (Note (c) Ownership interest 37% Principal activities Port and related infrastructure Note (c): NWIOA Ops. Pty Ltd is a joint venture incorporated in Australia which is seeking to develop port and related infrastructure on behalf of the North West Iron Ore Alliance (“NWIOA”) members. Management considers the interest in this joint arrangement is not individually material to the Group. 99 ANNUAL REPORT 2022 31. RETIREMENT BENEFITS SCHEMES The Group operates a defined contribution retirement benefits scheme (the “MPF Scheme”) under the Mandatory Provident Fund Scheme Ordinance for its employees in Hong Kong. The Group contributes at least 5% (2021: 5%) of the employees’ basis salaries to the MPF scheme. The assets of the MPF scheme are held separately from those of the Group in an independently administered fund. The employees of the Group subsidiaries in Australia are entitled to superannuation that is a defined contribution plan under which the Group contributes 10% (2021: 9.5%) of base salary. The total cost is charged to administration expense of approximately HK$587,000 (2021: HK$575,000) represents contributions to these schemes by the Group in respect of the current year. 32. RELATED PARTY DISCLOSURES (a) Material related party transactions Except as disclosed within these consolidated financial statements, the Group has no material related party transactions during the year (2021: Nil). (b) Related party balances The details of the loans from a substantial shareholder are disclosed in Note 23. (c) Compensation of key management personnel The remuneration of directors and other members of key management during the year were as follows: Salaries and other benefits Post-employment benefits Share-based compensation expenses 2022 HK$’000 8,478 411 3,015 11,904 2021 HK$’000 8,450 402 267 9,119 Further details of directors’ emoluments are included in note 14 to the consolidated financial statements. The remuneration of directors and key executives is determined by the remuneration and performance committee having regard to the performance of individuals and market trends. 33. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS The following liabilities of the Group are measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities that the entity can access at the measurement date. Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION33. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (Continued) The carrying values of the loans appropriate their fair values and were determined using Level 3 unobservable inputs. The carrying values of the loans are as follows: Financial liabilities Loans from Polaris Loans from a substantial shareholder Carrying amounts 2022 HK$’000 34,517 16,792 51,309 2021 HK$’000 41,774 15,471 57,245 Management has assessed that the carrying value of cash and cash equivalents, trade receivables, payables, financial assets included in prepayments, other receivables and other current assets, financial liabilities included in trade and other payables are reasonably approximate to their fair values largely due to short term maturities of these instruments. At each reporting date, the Group analyses the movements in the values of financial instruments and determines the major inputs applied in the valuation (refer to Note 4(b)). The valuation process and results are discussed with the audit committee twice a year for interim and annual financial reporting. The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The fair value of other borrowings have been calculated by discounting the expected future cash flows using rates currently available for instruments with similar terms, credit risk and maturity. 34. RESERVES The amounts of the Group’s reserves and the movements there in for the current and prior years are presented in the consolidated statement of changes in equity on page 68 of the consolidated financial statements. 101 ANNUAL REPORT 202235. SUBSIDIARIES The following is a list of the principal subsidiaries as at 30 June 2022 and 30 June 2021: Name of subsidiary Place of incorporation Place of operation Particular of issued share capital Ownership interest held by the Company Principal activities Subsidiaries directly held by the Company: Brockman Mining (Management) Limited Hong Kong Hong Kong Wah Nam Iron Ore Limited BVI Hong Kong Subsidiaries indirectly held by the Company: Brockman Mining Australia Pty Ltd Australia Australia Brockman Iron Pty Ltd Australia Australia Brockman Exploration Pty Ltd Australia Australia Brockman East Pty Ltd Australia Australia Yilgarn Mining (WA) Pty Ltd Australia Australia Brockman Infrastructure Pty Ltd Australia Australia Brockman Ports Pty Ltd Australia Australia Brockman Maverick Pty Ltd Australia Australia Brockman Holdings (Australia) Pty Ltd Australia Australia 1 Ordinary share of HK$1 1 Ordinary share of US$1 145,053,151 Ordinary shares of A$1 each 1 Ordinary share of A$1 1 Ordinary share of A$1 1 Ordinary share of A$1 841,001 Ordinary shares of A$1 1 Ordinary share of A$1 76 Ordinary shares of A$1 each 2 Ordinary shares of A$1 12 Ordinary shares of A$1 each 100 100 Investment holding 100 100 Investment holding 100 100 Investment holding 100 100 Exploration & evaluation 100 100 Exploration & evaluation 100 100 Exploration & evaluation 100 100 Exploration & evaluation 100 100 Rail infrastructure 100 100 Port infrastructure 100 100 Exploration & evaluation 100 100 Investment holding NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION36. BALANCE SHEET AND RESERVE MOVEMENT OF THE COMPANY As at 30 June Non-current assets Property, plant and equipment Right-of-use asset Current assets Other receivables, deposits and prepayments Amounts due from subsidiaries Cash and cash equivalents Total assets Equity and liabilities Share capital Reserves Total equity Non-current liabilities Borrowings Current liabilities Trade and other payables Amount due to subsidiaries Total liabilities Total equity and liabilities Note (a) 2022 HK$’000 3 178 181 742 757,004 3,859 761,605 761,786 928,023 (430,523) 497,500 16,792 16,792 562 246,932 247,494 264,286 761,786 2021 HK$’000 5 532 537 755 815,982 8,931 825,668 826,205 927,923 (364,945) 562,978 15,472 15,472 815 246,960 247,755 263,227 826,205 The balance sheet of the Company was approved by the Board of Directors on 21 September 2022 and was signed on its behalf. Kwai Kwun, Lawrence Director Chan Kam Kwan, Jason Director 103 ANNUAL REPORT 202236. BALANCE SHEET AND RESERVE MOVEMENT OF THE COMPANY (Continued) Note (a) Reserves movement in the Company Balance at 1 July 2020 Comprehensive income: Profit for the year Share-based compensation (Note 25) At 30 June 2021 Comprehensive income: Loss for the year Exercise of options Share-based compensation (Note 25) Balance at 30 June 2022 Share premium HK$’000 4,468,624 Share-based compensation reserve HK$’000 84,961 Accumulated losses HK$’000 (4,983,909) — — 4,468,624 — 113 — 4,468,737 — 1,149 86,110 — — 6,396 92,506 64,230 — (4,919,679) (72,087) — — (4,991,766) Total HK$’000 (430,324) 64,230 1,149 (364,945) (72,087) 113 6,396 (430,523) 37. STATEMENT OF CASHFLOWS FOR THE COMPANY Cash flows from operating activities (Loss)/profit before tax Adjustments for: Depreciation of property, plant and equipment Depreciation of right-of-use assets Share-based payment expense Finance costs Finance income Foreign currency translation Working capital adjustments: — Increase/(decrease) in trade receivables & prepayments — Increase/(decrease) in trade and other payables — Increase/(decrease) in amounts due (from) subsidiaries Net cash flows used in operating activities Investing activities Interest received Net cash flows from investing activities Financing activities Proceeds from issuance of ordinary shares Payment of principal portion of lease liabilities Interest on lease payments Net cash flows (used in) financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 38. EVENTS OCCURRING AFTER BALANCE SHEET DATE There are no significant events which have occurred after the balance sheet date. Year ended 30 June 2022 HK$’000 2021 HK$’000 (72,087) 64,230 2 354 6,396 1,341 (2) 216,342 13 122 (157,373) (4,892) 3 3 213 (375) (21) (183) (5,072) 8,931 3,859 4 145 1,149 1,381 (13) (257,595) (20) (49) 187,675 (3,093) 13 13 — (104) (61) (165) (3,245) 12,176 8,931 NOTES TO THE CONSOLIDATED FINANCIAL INFORMATIONRESULTS Revenue Loss before income tax Income tax benefit Profit/(loss) for the year from 2022 HK$’000 Note a — (31,865) 11,051 2021 HK$’000 2020 HK$’000 2019 HK$’000 2018 HK$’000 — (28,318) 14,146 — (22,606) 1,590 — (25,785) 93,373 — (49,059) — continuing operations (20,814) (14,172) (21,016) 67,588 (49,059) Profit/(loss) for the year from discontinued operations Profit/(loss) for the year Attribute to: Equity holders of the Company Earnings/(loss) per share (HK cents) — Basic — Diluted ASSETS AND LIABILITIES Total assets Total liabilities Total equity — (20,814) — (14,172) — (21,016) — 67,588 157,145 108,086 (20,814) (14,172) (21,016) 67,588 108,086 (0.22) (0.22) (0.15) (0.15) (0.23) (0.23) 0.74 0.73 1.27 1.27 2022 HK$’000 765,225 (175,088) 590,137 590,137 2021 HK$’000 834,173 (188,471) 645,702 645,702 2020 HK$’000 769,720 (167,627) 602,093 602,093 2019 HK$’000 780,474 (148,504) 631,970 631,970 2018 HK$’000 838,197 (253,472) 584,725 584,725 Note a: The financial figures above were extracted from the consolidated financial statements. 105 ANNUAL REPORT 2022FINANCIAL SUMMARYA. DISTRIBUTION OF SHAREHOLDINGS AS AT 16 SEPTEMBER 2022 Additional information in accordance with the listing requirements of the Australian Securities Exchange Limited are as follows: Category 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over TOTAL Ordinary shares Holders 804 166 129 739 327 2,165 Size of holding 190,388 380,787 1,045,512 29,901,692 9,248,713,752 9,280,232,131 Unlisted options @ HK$0.213 Unlisted options @ HK$0.295 Holders Size of holding Holders Size of holding 10 87,500,000 3 17,000,000 Minimum A$500.00 parcel cannot be calculated due to no price. Unquoted Securities As at 20 September 2022, unlisted options amounted to a total of 104,500,000 units. Among these options, 87,500,000 options have an exercise price of HK$0.213 an expiry date of 31 December 2024 and 17,000,000 options have an exercise price of HK$0.295 an expiry date of 12 May 2024. B. TWENTY LARGEST SECURITY HOLDERS AS AT 16 SEPTEMBER 2022 Name 1 Ocean Line Holdings Ltd/Kwai Sze Hoi 2 China Vered Securities Ltd 3 The Hong Kong and Shanghai Banking Corporation Limited 4 Equity Valley Investment Ltd 5 KQ Resources Ltd 6 Everbright Securities Investment 7 UBS Securities Hong Kong Ltd 8 Yunfeng Securities Ltd 9 Global Mastermind Securities Ltd 10 Citibank N.A 11 Cornerstone Pacific Limited 12 Longfellow Nominees Pty Ltd/Ross Norgard 13 BNP Paribas Securities Services 14 Barwick Investments Ltd 15 Guoyuan Securities Brokerage (Hong Kong) 16 BDS Bank (Hong Kong) Ltd 17 Futu Securities International 18 Luk Fook Securities (HK) Ltd 19 ICBC (Asia) Securities Ltd 20 Zhang Li * Δ ∆ * * ∆ ∆ ∆ ∆ ∆ * * ∆ * ∆ Δ ∆ ∆ ∆ * Number of shares 1,937,743,902 764,904,972 689,914,154 499,972,276 486,485,462 437,671,208 427,308,521 425,580,032 330,227,592 271,428,561 250,000,000 243,054,000 183,225,496 174,668,000 137,589,000 135,263,480 96,370,664 90,000,000 82,140,560 80,000,000 % 20.88% 8.24% 7.43% 5.39% 5.24% 4.71% 4.60% 4.58% 3.55% 2.92% 2.69% 2.62% 1.97% 1.88% 1.48% 1.45% 1.03% 0.96% 0.88% 0.86% The number of shares stated herein are extracted and sorted from the register of shareholders (“*”) and the participant report from the Central Clearing and Settlement System of the Hong Kong Stock Exchange (“CCASS”) (“Δ”). As the Company does not have information in relation to the ultimate beneficial owners of the shares held by the participants of the CCASS, the numbers herein may not reflect the actual number of shares beneficially owned by each of the shareholders. ASX ADDITIONAL INFORMATIONC. SUBSTANTIAL SHAREHOLDERS Name of shareholder Capacity Number of shares or underlying shares Percentage of the issued share capital of the Company Ocean Line Holdings Ltd (Note 1) Beneficial owner 2,426,960,137 Kwai Sze Hoi (Note 1) Interest held by controlled corporations 2,426,960,137 Beneficial owner 206,072,000 Interest held jointly with another person 60,720,000 Interest of spouse 24,496,000 Cheung Wai Fung (Note 1) Interest held by controlled corporations 2,426,960,137 Interest held jointly with another person 60,720,000 Interest of spouse Beneficial owner Equity Valley Investments Limited Beneficial owner 206,072,000 24,496,000 515,574,276 The XSS Group Ltd (Note 2) Interest held by controlled corporations 515,574,276 Cheung Sze Wai, Catherine Interest held by controlled corporations 515,574,276 (Note 2) Interest of spouse 50,000,000 Luk Kin Peter Joseph (Note 2) Interest held by controlled corporations 515,574,276 Beneficial owner 50,000,000 26.15% 26.15% 2.22% 0.65% 0.26% 26.15% 0.65% 2.22% 0.26% 5.56% 5.56% 5.56% 0.54% 5.56% 0.54% KQ Resources Limited Beneficial owner 1,301,270,316 14.02% Notes: Please refer to Notes 1 and 2 under section headed: Substantial shareholders’ and other persons interests and short positions in shares and underlying shares on page 56 to 57. D. VOTING RIGHTS The voting rights attaching to each class of equity securities are set out below: a) Ordinary shares Each shareholder present in person or by proxy, attorney or representative in a meeting shall have one vote on a poll for each share held. b) Options No voting rights. E. STOCK EXCHANGE LISTING Quotation has been granted for all the ordinary shares of the Company on all member Exchanges of the ASX Limited. 107 ANNUAL REPORT 2022 F. TENEMENT SCHEDULE – AS AT 16 SEPTEMBER 2022 Project Duck Creek Duck Creek East Juna Downs Madala Bore Marillana Marillana Marillana Marillana Marillana Mindy Ophthalmia Ophthalmia Ophthalmia Ophthalmia Ophthalmia Ophthalmia Ophthalmia Ophthalmia Punda Spring Tom Price Location West Pilbara West Pilbara West Pilbara West Pilbara East Pilbara East Pilbara East Pilbara East Pilbara East Pilbara West Pilbara East Pilbara East Pilbara East Pilbara East Pilbara East Pilbara East Pilbara East Pilbara East Pilbara West Pilbara West Pilbara Tenement Tenement type E E E E L M E E E E E E E E R R R E E E number 47/1725 47/2994 47/3364 47/3285 45/0238 47/1414 47/3170 47/3532 47/4293 47/3585 47/1598 47/2280 47/2291 47/3549 47/0013 47/0015 47/0016 47/4240 47/3575 47/3565 Commodity Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Iron Ore Status Granted Granted Granted Granted Application Granted Granted Granted Application Granted Granted Granted Granted Granted Granted Granted Granted Application Granted Granted Interest held 100% 100% 100% 100% 50% 50% 50% 50% 100% 100% 50% 50% 50% 50% 50% 50% 50% 50% 100% 100% ASX ADDITIONAL INFORMATION

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