B R O C K M A N M N N G L M T E D I I I I A N N U A L R E P O R T 2 0 2 3 Corporate Information ..................................................................................................................................................................2 Chairman’s Message .....................................................................................................................................................................3 Management Discussion and Analysis .........................................................................................................................................4 Directors and Management .......................................................................................................................................................16 Corporate Governance Report ..................................................................................................................................................18 Environmental, Social and Governance Report........................................................................................................................38 Directors’ Report ..........................................................................................................................................................................53 Independent Auditor’s Report ....................................................................................................................................................62 Consolidated Statement of Comprehensive Income ...............................................................................................................68 Consolidated Balance Sheet ......................................................................................................................................................69 Consolidated Statement of Changes in Equity .........................................................................................................................70 Consolidated Statement of Cash Flows .....................................................................................................................................71 Notes to the Consolidated Financial Information .....................................................................................................................72 Financial Summary ..................................................................................................................................................................... 109 ASX Additional Information ....................................................................................................................................................... 110 1 ANNUAL REPORT 2023CONTENTS BOARD OF DIRECTORS AUDITOR Non-executive Directors Kwai Sze Hoi (Chairman) Ross Stewart Norgard Executive Directors Chan Kam Kwan, Jason Kwai Kwun, Lawrence Colin Paterson 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 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 PRINCIPAL PLACE OF BUSINESS IN AUSTRALIA Computershare Investor Services Pty Ltd Level 17, 221 St Georges Terrace Perth WA 6000 Level 2, 679 Murray Street West Perth WA 6005 Australia PRINCIPAL BANKER Hang Seng Bank Limited PRINCIPAL PLACE OF BUSINESS IN HONG KONG Industrial and Commercial Bank of China (Asia) Limited Bank of Communications Westpac Banking Corporation Unit 3903B Far East Finance Centre 16 Harcourt Road Admiralty Hong Kong 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 INFORMATION Dear Shareholders, At last, I would like to thank our Brockman family for their continued efforts and hard work, and fellow During the year, the Company continued to move shareholders for their unwavering trust and support s t e a d i l y t o w a r d s t h e g o a l o f a c h i e v i n g i r o n o r e of the Company. Such work ethic and support have production at the Marillana Project (“Marillana”). proven to be pivotal for the Company’s success. T h e j o i n t v e n t u r e b e t w e e n M i n e r a l R e s o u r c e s Limited (“MinRes”) and Hancock Prospecting Pty Ltd (“Hancock”) has continued to progress towards an investment decision whereby, the parties will jointly invest in the development and construction of the Stanley Point Berth-3 at South West Creek, Port Hedland, Kwai Sze Hoi and the rail and port infrastructure. The final hurdle Chairman before achieving iron ore production at Marillana is to obtain the consent of the other land holders and 19 September 2023 native title owners in the infrastructure corridor. This will finally unlock the logistics and transportation bottleneck that has been delaying the development of Marillana and will allow the Company to move to realising the significant value. Concurrently, Brockman and MinRes, through their joint venture management committee and project manager, are completing all necessary works at Marillana to ensure that the project will be completed as planned and scheduled. These works have resulted in a simplified process plant design and improved expected outcomes for the project. 3 ANNUAL REPORT 2023CHAIRMAN’S MESSAGE FINANCIAL REVIEW For the year ended 30 June 2023, the Group recorded a l o s s a f t e r t a x f r o m c o n t i n u i n g o p e r a t i o n s o f approximately HK$56.6 million (2022: HK$20.8 million). The increase in the loss after tax was due to HK$47.4 million in the Group’s share of the Joint Operation expenditure (2022: HK$14.0 million) and partially offset A s a t 3 0 J u n e 2 0 2 3 , t h e G r o u p ’ s n e t a s s e t v a l u e amounted to HK$511.2 million (2022: HK$590.1 million) and cash at bank was HK$16.5 million (2022: HK$28.8 million). BUSINESS REVIEW IRON ORE OPERATIONS — WESTERN AUSTRALIA by the recognition of an income tax credit of HK$16.7 This segment of the business comprises the 50% owned million (2022: HK$11.1 million). This income tax credit was Marillana Iron Ore Project (Marillana), the Ophthalmia the result of the recognition of a deferred tax asset in Iron Ore Project (Ophthalmia) and other regional respect of certain of the Group’s Australian tax losses. exploration projects. The operating loss of HK$66.7 million (2022: HK$40.3 The loss before income tax and share of losses of the million) was higher by 66%, due to an increase in joint venture for the year for this segment attributable exploration and evaluation expenditure expensed which to the Group was HK$59.3 million (2022: HK$12.5 million). includes Group’s share of Joint Operation expenditure. Total expenditure associated with mineral exploration for the year ended 30 June 2023 amounted to HK$50.2 For the year ended 30 June 2023, the Group’s basic loss million (2022: HK$17.7 million). per share was HK$0.61 cents (2022: HK$0.22 cents) and the cash outflows from operating activities were HK$19.2 Total expenditure associated with mineral exploration million (2022: HK$20.2 million). and evaluation for each of the projects in Western Australia for the financial years is summarised as follows: Project Marillana (1) Ophthalmia (2) Regional Exploration Year ended 30 June 2023 HK$’000 47,197 1,208 1,802 50,207 2022 HK$’000 14,073 2,037 1,567 17,677 (1) Includes HK$46.6 million of Joint Operation expenditure No development expenditure has been recognised in (2022: HK$13.0 million). the financial statements during the year ended 30 June (2) Includes HK$0.8 million of Joint Operation expenditure (2022: HK$1.0 million). 2023 (2022: Nil). MANAGEMENT DISCUSSION AND ANALYSIS Total capital expenditure for each of the projects in Western Australia for the financial years is summarised as follows: Year ended 30 June 2023 HK$’000 2022 HK$’000 Additions to Additions Additions to property, plant & to mining property, plant Additions to mining equipment properties & equipment properties 4 — 4 — — — 51 — 51 — — — Project Marillana Ophthalmia Figure 1: Project location map — Brockman tenements MARILLIANA PROJECT OVERVIEW The 50% owned Marillana is Brockman’s flagship 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 2023 Figure 2: Location of Marillana Project tenements MANAGEMENT DISCUSSION AND ANALYSIS Marillana Development Joint Operation Formation and scope Physical testing of coarse tailings and thickening and rheology testwork for fine tailings has also been completed using samples generated from the pilot On 26 July 2018, Brockman Iron Pty Ltd (“Brockman p l a n t . T h e s e r e s u l t s p r o v i d e t h e d e t a i l e d d e s i g n Iron”) (a wholly-owned subsidiary of the Company) parameters for handling and storage of the dry and wet and Polaris Metals Pty Ltd (“Polaris”) (a wholly-owned tailings streams. subsidiary of Mineral Resources Limited (“MinRes”)) entered into a Farm-in Joint Venture (“FJV”) Agreement A programme of close spaced reverse circulation (“RC”) (see announcements dated 27 July 2018 on the SEHK drilling was completed during the year for a total of 216 and ASX platforms) pursuant to which and subject to drill holes for 12,040m, drilled across two areas of the the terms and conditions therein, Polaris could farm-in deposit. The purpose of the program was to inform the and earn a 50% interest in Marillana by satisfying certain optimum drill spacing for planned mineral resource infill Farm-in obligations. drilling. The results of the program have been received and modelling of results, des igned t o inform t he On 22 April 2021 Brockman Iron and Polaris signed optimum drill spacing for future Mineral Resource infill 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 drilling, is still in progress. Infill resource drilling for those Deed of Amendment and Restatement (collectively areas within the early years of the mine life is expected the “Agreement”). Both Brockman Iron and Polaris to commence in CY2024. concluded that the Farm-in Obligations under the Agreement have been satisfied and the parties shall Development of a water borefield comprising of 5 new form the Joint Operation. As such, a 50% interest in the production bores and an array of monitoring bores has Marillana Project (the Farm-in interest) will be transferred been established and the pump and infiltration testing to Polaris and the Joint Operation will be established was completed during the year. The results of the testing according to the terms of the FJV Agreement. will be incorporated into the groundwater model. A Initial development works passive seismic survey to assist in mapping the basement and improve accuracy of ground water modelling is The in iti al development wor ks per the Indicative scheduled for completion in FY2024. Development Proposal from MinRes (as described in the 2021 Annual Report) are progressing. The Joint Environmental surveys and development of management Operation continues to advance the metallurgical plans continued during the year to update and refresh testwork program to support the final flow sheet and the baseline data to support development of the process design. Results from three pilot plant test runs project. This work included flora and fauna surveys, were positive and consistently demonstrated that the stygofauna surveys, waste rock and soils analysis modified process flow sheet could provide enhanced and noise and greenhouse gas modelling. Water yields of over 45% whilst maintaining product quality and greenhouse gas management plans have been above 60.5% Fe. Pilot plant samples were representative prepared and continued monitoring of ecological of the first three years of ore supply and also the life communities, weeds and regional hydrological baseline of mine feed. The yield is a significant improvement data was also carried out during the year. over the average 37.3% yield used in the Ore Reserve estimate. Infrastructure Preliminary sinter testwork on product samples has agreement with Hancock and Roy Hill in which MinRes demonstrated that Marillana Fines can substitute for and Hancock will jointly investigate the development of other Australian fines products in a typical Chinese new iron ore export facility at the Port of Port Hedland’s coastal steel mill blend whilst maintaining good physical Stanley Point 3 (“SP3”) in South West Creek. Roy Hill and metallurgical properties and sinter performance. will provide services to both MinRes and Hancock for 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 development and operation of their projects (which includes Marillana), including rail haulage. 7 ANNUAL REPORT 2023 The development of the Project will be subject to: Development funding (a) A grant by the Pilbara Ports Authority (“PPA”) cost commitments for the development of Marillana of a capacity allocation for the Project, and all with loans from MinRes (the “Development Loan”). necessary approvals and agreements to develop Brockman Iron shall repay the Development Loan from and operate SP3 in South West Creek and the its share of net revenue following commencement of other associated supporting port infrastructure; operations at Marillana. The Joint Operators will respectively fund their capital and (b) MinRes and Hancock each electing to take a the ore processing facilities and certain parts of non- positive final investment decision to proceed process infrastructure. Certain parts of the non-process with the Project following the completing of a infrastructure may not be funded by the Joint Operators satisfactory expedited feasibility study. but will be provided by MinRes under build own operate The Joint Operators’ capital commitments will fund life of mine service agreements. On 1 February 2022, the Government of Western Australia announced that it had granted a port capacity Manager allocation to the MinRes-Hancock Joint Venture, at SP3 Pursuant to the terms of the FJV Agreement, Polaris in South West Creek. MinRes has advised that based on has agreed to act as the first manager of the Joint this allocation, Marillana has available port capacity Operation. to meet the Joint Operation production requirements. The new iron ore export facility at SP3 remains subject Loan Agreement to various approvals and agreements to develop and As part of the FJV Agreement, Polaris has provided an operate, along with a positive final investment decision interest-free, secured loan (in accordance with Deed by MinRes and Hancock. The MinRes-Hancock Joint of Cross Security signed by the Joint Operators) of A$10 Venture continues to advance the consents, approvals million (the “Loan”) to Brockman Iron for working capital and engineering studies required to support the final purposes. The loan will be repaid from the net revenue investment decision. received by Brockman Iron from the sale of its share of Under the FJV Agreement, MinRes is to provide the infrastructure solution to transport the 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. MinRes is additionally advancing studies and pre- development work for a haul road to transport ore to the rail loading facility on the Roy Hill railway. Management committee A management committee comprising a total of six representatives (three from each of the Joint Operators) has been established. The role of the management committee is to make all strategic decisions relating to the conduct of the activities undertaken by the Joint Operation including the consideration and approval of any work programme and budget in the management of the Joint Operation. the Marillana product sold. 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. MANAGEMENT DISCUSSION AND ANALYSIS Marillana has a Mineral Resource estimate of 1.51 billion (Mt) of Measured Mineral Resources (DID), 1,046 Mt of tonnes (Bt) of Hematite Detrital Iron (DID) and Channel Indicated Mineral Resources (DID and CID) and 291 Mt Iron (CID) mineralisation, comprising 169.5 million tonnes 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 alumina and LOI) were estimated in the block model. the revised JORC 2012 Mineral Resource model, and Based upon dense media separation (DMS) testwork, it is incorporates a number of factors and assumptions as expected that the final product has an average grade outlined in the announcement of 25 May 2018. of at least 60% Fe and 37.3% in mass recovery. The base case optimisation was determined with cut-off The Marillana project has total estimated Probable Ore grades of 38% Fe for DID and 52% Fe for CID within the Reserves of 967 Mt of DID plus 46 Mt of direct shipping final pit and tenement boundary limits. CID (Table 3). The total saleable product from the Metallurgical testwork results were used to estimate the recoverable fraction from the DID ore component. 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 Recoveries of final product and grades (of iron, silica, 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 9 ANNUAL REPORT 2023 The Marillana Ore Reserves are based solely on the The Mineral Resource and Reserve estimation (see 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 Tables 1 to 4) was prepared by Golder Associates Pty Mineral Resources also include some 273 Mt of Inferred Ltd and has been classified in accordance with the Mineral Resources (DID), comprising 201 Mt based on Australasian Code for Reporting of Exploration results, wide -spaced drilling to the north of the Indicated Mineral Resources and Ore Reserves (JORC Code, 2012 Mineral Resource boundary and 72 Mt of previously Edition). Indicated Mineral Resources that was downgraded to Inferred classification during the Projection Pursuit Multi- variate Transform (“PPMT”) process. Based on historical conversion of Inferred to Indicated Mineral Resources, it is anticipated that additional drilling may enable some of the Inferred material to be upgraded to Indicated classification. Marillana represents one of the largest published hematite Ore Reserve positions in the Pilbara, outside the three major producers (BHP, Rio and FMG). The Detrital Ore is upgraded to a high-quality, sinter feed product via simple beneficiation, which is supported by low-cost mining, low waste ratios and large continuous ore zones. Figure 3: Location of Ophthalmia Prospects and Resources OPHTHALMIA 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). MANAGEMENT DISCUSSION AND ANALYSIS Development a g r e e d t o r e d u c e t h e p r o g r a m m e o f w o r k s a t As part of the amended Agreement with MinRes (refer Ophthalmia whilst MinRes finalises arrangements for to the Marillana section above), Brockman and Polaris the new iron ore export facility at SP3 and to allow have agreed to include Ophthalmia in the farm- the parties to prioritise development of Marillana. in interest, such that Polaris will earn a 50% interest in The development cost for Ophthalmia is estimated the Ophthalmia project upon completion of its farm- to be A$114 million, which will be funded by the Joint in obligations. On 8 December 2021, the Company Operators through a loan from MinRes. received notification from Polaris that the farm-in obligations had been satisfied and that the Ophthalmia Mineral Resources Joint Operation was established. Ophthalmia has a Mineral Resource estimate of 340.9 million tonnes of hematite mineralisation, comprising Since December 2021, Polaris continued a programme 280 million tonnes of Indicated Resources and 61 million of works including mine planning studies, transport tonnes classified as Inferred Resources (see Table 5). corridor studies, environmental surveys and approvals planning. Polaris and Brockman have subsequently The resource estimate was classified in accordance with guidelines provided in the JORC Code 2012. Refer to 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 2023 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. B r o c k m a n h a s c o m p l e t e d a n I n f e r r e d M i n e r a l Resource estimate of 21.6 Mt grading 55.9% Fe, for 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 2023 Table 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 Total tonnes may not add due to rounding. 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 MINERAL RESOURCES AND ORE RESERVES The information in this report that relates to the Mineral ENVIRONMENTAL REVIEW The Company is very clear on the need to earn the respect and support of the community by operating in 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 a socially responsible manner, and by demonstrating a Marillana project was declared as part of a market tangible commitment to environmental sustainability. announcement issued on 25 May 2018. The Company’s projects are subject to environmental The information in this report that relates to the Mineral exploration and evaluation activities. The Company Resource of Ophthalmia project was declared as part believes that it has adequate systems in place for the of a market announcement issued on 1 December 2014. management of its requirements under those regulations regulations under statutory legislation in relation to its and is not aware of any breach of such requirements as The information in this report that relates to the Inferred they apply to the Company. 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 STATEMENT Brockman ensures that the Mineral Resources and Ore Reserve estimates quoted are subject to good governance arrangements and internal controls at a site and corporate levels. Internal and external review of Marillana Resources and Ore Reserves 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. MANAGEMENT DISCUSSION AND ANALYSIS LIQUIDITY, FINANCIAL RESOURCES, AND GEARING RATIO A t 3 0 J u n e 2 0 2 3 , t h e G r o u p h a d n e t a s s e t s o f HK$511,212,000 (2022: HK$590,137,000), and a closing m a r k e t c a p i t a l i s a t i o n o f H K $ 1 , 4 1 0 , 5 9 5 , 0 0 0 ( 2 0 2 2 : HK$2,505,662,000). The Group assessed whether any indicators of impairment exist and concluded there SIGNIFICANT INVESTMENTS HELD, MATERIAL ACQUISITIONS AND DISPOSAL OF SUBSIDIARIES, ASSOCIATES OR JOINT VENTURES AND FUTURE PLANS FOR MATERIAL INVESTMENTS OR CAPITAL ASSETS Save for those disclosed in the consolidated financial were no indicators of impairment present, refer to note statements, there were no other significant investments, 17 of the consolidated financial statements. held, nor were there material acquisitions or disposals of subsidiaries, associates or joint ventures and future plans As at 30 June 2023, the Group had HK$16,495,000 in for material investments or capital assets during the cash and cash equivalents (2022: HK$28,797,000). year. 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. RISK DISCLOSURE MARKET AND FINANCIAL RISKS The Company has adopted policies and procedures designed to manage and mitigate those risks wherever possible. The current ratio as at 30 June 2023 is 0.28 (2022: 1.83). The gearing ratio of the Group (long-term debt over equity and long-term debt) is measured at 0.101 (2022: 0.08). During the period, 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 2023 (2022: Nil). CAPITAL STRUCTURE At the end of the reporting period, the Company had The following is a summary of the Company’s financial risk management policies, the full details of which are provided in note 5 of the consolidated financial s t a t e m e n t s . D e t a i l s o f t h e G r o u p ’ s f i n a n c i a l r i s k exposures are provided as follows: (a) Commodity price 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 9,280,232,000 (2022: 9,280,232,000) shares on issue. instruments or futures for speculation or hedging PLEDGE OF ASSETS AND CONTINGENT LIABILITIES As at 30 June 2023 and 2022, 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 of the consolidated financial statements) and the right-of- use assets which are subject to lease (refer to note 19 of the consolidated financial statements). As at 30 June 2023, the Company did not have any material contingent liabilities or financial guarantees (note 29(d) of the consolidated financial statements) (2022: Nil). 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 the iron ore price as required. (b) Liquidity and funding 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 development of the iron ore projects will depend on whether the Group can secure the necessary funding. 13 ANNUAL REPORT 2023 (c) Risk that the project will not be materialised (g) Credit This risk is largely driven by various factors such Credit risk represents the loss that would be as commodity prices, government regulations, recognised if counterparties failed to perform as regulation related to prices, taxes, royalties, land contracted. The Company’s maximum exposure tenure, viable infrastructure solutions, capital to credit risk at reporting date in relation to each raising ability etc. The Board will therefore closely class of financial asset is the carrying amount monitor the development of the project. of those assets as indicated in the consolidated (d) Exchange rate statement of financial position. Credit risk is managed on a group basis and predominantly The Group is exposed to exchange rate risk arises from cash and cash equivalents deposited primarily in relation to our mineral tenements with banks and financial institutions. 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 . Depreciation in the Australian dollar may adversely affect our net asset value and earnings when the STAFF AND REMUNERATION As at 30 June 2023, the Group employed 14 full time value of such assets is converted to Hong Kong employees (2022: 15), of which 5 were in Australia (2022: dollars. During the year, no financial instrument 5) and 9 in Hong Kong (2022: 10). was used for hedging purposes. (e) Social and political 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 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. Remuneration Policy The Group’s compensation strategy is to promote a pay-for-performance culture to reward employee performance that will maximise shareholder value in the long term. The Group from time to time reviews remuneration packages provided to its employees to ensure that the total compensation is internally equitable, externally competitive and supports the Group’s strategy. The remuneration policy and packages, including share options of the Group’s employees, senior management and directors are maintained at market levels and are reviewed periodically by the management and the remuneration and performance committee. We provide training to our employees to improve the skills and professional knowledge they need for our projects and their personal development, including a n i n i t i a l t r a i n i n g i n d u c t i o n o n w o r k s a f e t y a n d environmental protection upon entering the Group, and prior to each exploration activity. ENVIRONMENTAL, SOCIAL, GOVERNANCE AND COMPLIANCE WITH RELEVANT LAWS AND REGULATIONS Environmental, Social and Governance The Company has a robust, comprehensive system of governance. The Company views this as essential to the ongoing operation of the Company, and balancing the interests of the Company’s various stakeholders, including shareholders, suppliers, Governments, and the various communities in which the Company operates. MANAGEMENT DISCUSSION AND ANALYSIS T h e G r o u p ’ s p e r f o r m a n c e i s r e p o r t e d a n n u a l l y Relationship with Employees and Suppliers a n d r e v i e w e d b y t h e B o a r d , A u d i t , a n d R i s k The Group believes that human resources are the Management Committees. Details are outlined in most important asset for the Group’s sustainable the Risk Management and Internal Control section in development. We offer competitive remuneration the Corporate Governance Report included in the packages and a high quality working environment for Company’s published 2023 Annual Report. our employees. It is our custom to respect each other and ensure that fairness is applied to everyone. From The Board retains the overall responsibility for the time to time, we provide relevant on-the-job training 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 to enhance employees’ professional knowledge. management and is committed to operating in a The Group also organises different leisure events and manner that contributes to the sustainable development frequent group discussions for the participation of through efficient, balanced, long-term management, employees to enhance the working relationship of the while showing due consideration for the well-being employees and communications with management. We of people; protection of the environment; and the also strive to maintain good working relationships with need to work closely with the local communities and our suppliers. stakeholders. Health and Safety The Group recognises its responsibility for minimising Safety is one of the Group’s main priorities, and every the impact of its activities on, and protecting the effort is made to safeguard the health and wellbeing environment. The Group is committed to developing of the Group’s employees, together with the people and implementing sound practices in environmental in the communities in which the Group operates. The design and management and actively operates to: Group aims to go beyond what is expected to meet local health and safety legislation. The Group’s Code of • Work within the legal permitting framework and Conduct clearly communicates its commitment towards operate in accordance with our environmental protecting employee health and safety including management systems, conflict resolution and fair dealing. • Identify, monitor, measure, evaluate and minimize Future Developments our impact on the surrounding environment, The Group is principally engaged in the acquisition, exploration and development of iron ore projects in • Give environmental aspects due consideration in the Pilbara region of Western Australia. The Group’s all phases of the Group’s projects, from exploration objective is to focus on the development of its iron ore through to development, operation, production projects in Western Australia which are advancing to the and final closure, and construction phase. The Group operates with long-term business strategy to operate responsibly considering • A c t s y s t e m i c a l l y t o i m p r o v e t h e p l a n n i n g , the interests of all stakeholders including its employees execution and monitoring of its environmental and contractors. It aims to produce positive financial performance. outcomes through (i) The Group and MinRes continuing to advance the Marillana and Ophthalmia projects (ii) T h e C o m p a n y ’ s 2 0 2 3 E n v i r o n m e n t a l , S o c i a l a n d Attention to the Company’s Corporate Governance Governance Report is available on the Company’s and Social responsibilities, including a focus on ongoing website at www.brockmanmining.com. safety and environmental compliance, and ongoing positive interaction with the communities within which it Compliance with Laws and Regulations operates. During the year, the Group has complied with the relevant standards, laws and regulations that have a significant impact on our business. At the same time, the Group always maintains a safe working environment for employees in accordance with relevant safety policies. 15 ANNUAL REPORT 2023 As at the date of this report, the Company has the following directors and senior management: EXECUTIVE DIRECTORS Mr. Kwai Kwun, Lawrence NON-EXECUTIVE DIRECTORS Mr. Kwai Sze Hoi Mr. Kwai Kwun, Lawrence, aged 42, joined in March 2014. He is a member of the Executive Committee. He has extensive experience in investment in international Mr. Kwai Sze Hoi, aged 73, joined in June 2012. He is the shipping, port operations and ship building, mining and Chairman of the Group. Mr. Kwai graduated from Anhui finance. Mr Kwai graduated from Harvard University University in 1975. Mr. Kwai has more than 40 years’ in the United States with a Bachelor of Mathematics experience in international shipping and port operation degree. Mr Kwai is the son of Mr. Kwai Sze Hoi, the businesses and is a successful entrepreneur. In 1990, Chairman of the Company. he founded Ocean Line Holdings Ltd (“Ocean Line”). Ocean Line wholly-owns, operates and manages a fleet Mr Chan Kam Kwan, Jason of total deadweight tonnage of more than 4 million Mr. Chan Kam Kwan, Jason, aged 50, joined in January metric tonnes, with routes running worldwide. Ocean 2008. He is the Company Secretary and a member of Line also has investments in infrastructure and operates the Executive Committee. Mr. Chan graduated from the other shipping related businesses including ports, University of British Columbia in Canada with a Bachelor terminals, warehouses, logistics, and crew manning etc. of Commerce Degree and he holds a certificate as a The diversified operations of Ocean Line put it in a highly Certified Public Accountant issued by the Washington competitive position globally. In addition, Ocean Line State Board of Accountancy in the United States has investments in mining, real estate, financial services, of America. Mr. Chan has extensive experience in securities, trading and hotel businesses. Mr. Kwai is also corporate finance. Mr Chan is also an independent non- the chairman and an executive director of Ocean Line executive director of Canvest Environmental Protection Port Development Limited (Stock code: 8502), which Group Company Limited (Stock Code: 1381) which is is listed on the GEM of the Hong Kong Stock Exchange listed on the Main Board of SEHK. Limited (the “SEHK”). Mr Kwai is the father of Mr. Kwai Kwun, Lawrence, an Executive Director of the Company. Mr. Colin Paterson Mr. Ross Stewart Norgard Chief Executive Officer of Australian Operations M r . C o l i n P a t e r s o n , a g e d 6 2 , h a s o v e r 3 0 y e a r s ’ Mr. Ross Stewart Norgard, aged 77, joined in August experience in the resources sector covering a diverse 2 0 1 2 . H e i s a c h a r t e r e d a c c o u n t a n t a n d f o r m e r range of geological environments throughout Australia, m a n a g i n g d i r e c t o r o f K M G H u n g e r f o r d s a n d i t s but principally in the Pilbara iron ore region as well successor firms in Perth, Western Australia. For the past as gold and nickel exploration in the Archaean of 30 years he has worked extensively in the fields of Western Australia. He has extensive experience in raising venture capital and the financial specializing of the technical supervision of exploration projects; businesses. He has held numerous positions on industry resource development, project generation and project committees including past chairman of the West evaluations. He was principal geologist with Asarco Australian Professional Standards Committee of the Australia Ltd and held a similar position with Mining Institute of Chartered Accountants, a former member of the National Disciplinary Committee, a former Project Investors Pty Ltd (subsequently MPI Mines Limited). Following which he was the founding director member of Lionel Bowens National Corporations Law of Brockman Mining Australia Pty Ltd. 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 was a director of Nearmap Limited (formerly known as Ipernica Limited from 1987 to 2022 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. DIRECTORS AND MANAGEMENT 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 77, joined in January Mr. Hendrianto Tee, aged 56, 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 Boston (now Bank of America Merrill Lynch) and UBS and Wales and an associate member of the Hong 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. Mr. Choi Yue Chun, Eugene Mr. Choi Yue Chun, Eugene, aged 51, joined in June 2014. He holds a Bachelor of Laws degree from the University of Hong Kong, and was admitted as a solicitor of the High Court of Hong Kong 1997. Currently Mr. Choi is a member of the Law Society of Hong Kong. He has over 20 years of experience in the legal field, specializing in corporate finance and compliance matters for listed companies in Hong Kong. Mr Choi is currently the senior legal counsel of Rural Global Management B.V. Mr. David Rolf Welch Mr. David Rolf Welch, aged 57, joined in October 2019. He holds a Bachelor of Commerce degree from the University of Western Australia. Mr Welch has held senior executive positions within ASX listed Aurizon Holdings Limited from 2007 to 2017. These positions included Vice President Iron Ore, Vice President Market Development and Executive Vice President Strategy and Business Development. He has experience in strategy, business t r a n s f o r m a t i o n a n d p e r f o r m a n c e , m e r g e r s a n d acquisitions and business development. Mr Welch was previously the managing director of The Millennium Group from 1998 to 2006 and was a marketing manager of CSBP Limited (part of the Wesfarmers conglomerate) from 1989 to 1994 in the development of mining reagent and agriculture products. Mr. Welch is also a non- executive director of VRX Silica Limited (Stock code: VRX) which is listed on the ASX. 17 ANNUAL REPORT 2023 The Company is committed to maintaining a high standard of Corporate Governance within a framework with an emphasis on the principles of transparency, accountability and independence. The Board of D i r e c t o r s o f t h e C o m p a n y ( t h e “ B o a r d ” ) b e l i e v e that good corporate governance is essential to the success of the Company and to the enhancement of shareholder value. CORPORATE GOVERNANCE CODE The Company is listed on both the Australian Securities BOARD PROCESS Board membership 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 composition, with a balance of skills, experience and commitment to adequately discharge its responsibilities and duties. During the year ended 30 June 2023, three of the eight directors were independent. Whilst this is not a majority of Independent non-executive directors, it is believed to be a suitable balance between the composition of executive and non-executive directors with a wide range of expertise and experience. Their Exchange (“ASX”) and the Stock Exchange of Hong active participation in the Board and Committee Kong Limited (“SEHK”). Unless otherwise noted, the meetings brought independent judgement on issues C o m p a n y h a s c o m p i l e d w i t h a l l a s p e c t s o f t h e relating to the Group’s strategy, performance and Corporate Governance Code (“Code”) as set out 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 in Appendix 14 of the Rules Governing the Listing of interests of all shareholders of the Company. Each of Securities on the SEHK (“the SEHK Listing Rules”) and the independent non-executive directors has made the ASX Corporate Governance Council’s Corporate an annual confirmation stating compliance with the Governance Principles and Recommendations 4th independence criteria set out in Rule 3.13 of the SEHK Edition (“the CGPR 4th Edition”), (“the ASX Principles” Listing Rules and Principle 2.4 of the ASX Principles. At “the ASX Listing Rules”) during the entire year ended 30 least one of the independent non-executive directors June 2023. The Board will review the current practices has the appropriate professional qualification or at least annually and make appropriate changes if accounting or related financial management expertise considered necessary. The exception to this is as follows: under Rule 3.10 of the HK Listing Rules and Principle 2.3 of the ASX Principles. The directors consider all of the independent non-executive directors to be independent under the independence criteria and (i) Appendix 14 Code Provision C.2.1 of the HK Listing all are capable of effectively exercising independent Rules, states that the roles of Chairman and chief judgment. executive should be separate and should not be performed by the same individual. The position Board meetings of Chief Executive Officer at the Group level has The Board meets regularly to discuss the overall strategy been vacant during the year. Nonetheless, Mr. as well as the operation and financial performance of Colin Paterson, who serves as the Chief Executive the Group, and review and approve the Group’s annual Officer of Brockman Mining Australia Pty Ltd (a and interim results and other ad-hoc matters. The Bye- wholly-owned subsidiary of the Company), is Laws of the Company allow Board meetings to be responsible for the oversight of the core iron ore conducted by way of telephone or video-conference. business operation. THE BOARD 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 the achievement of those goals with the objective of enhancing the Company and shareholders’ value. The Board has delegated responsibility for the day- to-day management of the Company’s business and affairs to the Executive Committee. The responsibilities reserved for the Board of Directors are set out in the Board Charter, a copy of which is available on the website of the Company. The Board Charter is reviewed periodically to ensure it is consistent with the existing rules and regulations. A n y r e s o l u t i o n c a n b e p a s s e d b y w a y o f w r i t t e n resolution circulated to and signed by all directors from time to time when necessary except for matters in which a substantial shareholder or a director or their respective associates has a conflict of interest. The Board held six meetings during the year ended 30 June 2023. Regular board meetings each year are scheduled in advance to facilitate maximum attendance of directors. The Company normally provides a reasonable notice period (at least 14 days’ notice) for every Board 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. CORPORATE GOVERNANCE REPORT Every director is entitled to have access to board papers According to current board practice, if a substantial and related materials and has access to the advice shareholder or a director has a conflict of interest in a and services of the Company Secretary. The Board and matter to be considered by the Board and the Board each director also have separate and independent has determined the matter to be material, the matter access to the Company’s management. Directors will will be dealt with by the Board at the duly convened continuously be updated on major developments in B o a r d m e e t i n g a n d I n d e p e n d e n t n o n - e x e c u t i v e the Listing Rules of SEHK and ASX and other applicable directors who, and whose close associates, have no regulatory requirements to ensure compliance and material interest in the transaction should be present upkeep of good corporate governance practices. at the Board meeting. The Bye-Laws of the Company In addition, as part of the mechanism to encourage also stipulate that save for the exceptions as provided independent views and input from directors, a written therein, a director shall abstain from voting on any procedure has been established and reviewed annually Board resolution and not be counted in the quorum at to enable directors, in discharge of their duties, to seek meetings for approving any contract or arrangement in external independent professional advice in appropriate which such director or any of his close associates has a circumstances at a reasonable cost to be borne by the material interest. Company. The Board has established different committees with members as at 30 June 2023 is 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 Member Chairman Non-Executive Directors Kwai Sze Hoi (Chairman) Ross Stewart Norgard Executive Director Chan Kam Kwan Jason (Company Secretary) Kwai Kwun Lawrence Colin Paterson 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 19 ANNUAL REPORT 2023 Directors in office during the year and up to the date of this report, unless otherwise indicated, were as follows: Name of Director/role Date of Annual Report attended/Eligible attended/Eligible appointment (Years of service) to attend* to attend* Period in office as at the date of Board Meetings General Meetings Non-Executive Directors Kwai Sze Hoi, Chairman 15 June 2012 Liu Zhengui, (retired 27 April 2012 13 December 2022) Ross Stewart Norgard 22 August 2012 Independent Non-Executive David Rolf Welch 15 October 2019 Directors Yap Fat Suan, Henry 8 January 2014 Choi Yue Chun, Eugene 12 June 2014 Executive Directors Chan Kam Kwan, Jason, 2 January 2008 Company Secretary Kwai Kwun Lawrence 13 March 2014 Colin Paterson 25 February 2015 11 10 11 4 9 9 15 9 8 4/5 0/1 5/5 5/5 5/5 5/5 5/5 4/5 5/5 1/1 0/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 * Represents total number of Board and general meetings The brief biographical details of the Directors are held during the year. Determination of eligibility has taken stated under the section “Directors and Management”. into account the respective Directors’ period in office. A The Chairman, Mr, Kwai Sze Hoi is the father of Mr. total of six meetings were held during the year ended 30 K w a i K w a n , L a w r e n c e , a n e x e c u t i v e d i r e c t o r o f June 2023. the Company. Also, the Chairman, is a substantial shareholder of the Company, with shares held partially with Ocean Line Holdings Ltd., a company held 60% by Mr Kwai Sze Hoi and 40% Ms Cheung Wai Fung (Mr. Kwai’s spouse). Save as disclosed above, there are no other financial, business, family or other material or relevant relationships among members of the Board. CORPORATE GOVERNANCE REPORT BOARD SKILLS MATRIX The following table summarises the combination of skills and experience of the Board: Remuneration & Experience, skills & attributes Board Nomination Audit performance Sustainability Risk Executive 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 yrs) Knowledge and skills Finance and capital management Governance Risk and Compliance Gender Male Female 2 3 3 8 3 5 6 6 2 8 — 1 — 3 4 1 2 3 3 1 4 — — — 3 3 — 1 2 3 1 3 — 1 — 3 4 1 2 3 3 1 4 — 1 — 2 3 — 1 2 3 1 3 — 1 1 1 3 — 2 2 2 1 3 — — 3 — 3 — 2 2 2 1 3 — 21 ANNUAL REPORT 2023 CHAIRMAN AND CHIEF EXECUTIVE OFFICER Code provision C.2.1 of the Corporate Governance Code stipulates that the roles of the chairman and chief executive should be separate and should not be performed by the same individual. The position of chief executive officer at the Group level has been vacant during the year. Nonetheless, Mr. Colin Paterson, an executive director of the Company, also serves as the Chief Executive Officer of Brockman Mining Australia Pty Ltd (a wholly-owned subsidiary of the Company), and is responsible for the oversight of the core iron ore business operations. Mr. Kwai Sze Hoi, the Chairman of the Board is primary responsible for the leadership of the Board, ensuring that (i) all significant policy issues are discussed by the Board in a timely and constructive manner, (ii) all directors are properly briefed on issues arising at Board meetings; and (iii) the directors receive accurate, timely and clear information. 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 Company, and is not independent as he is a substantial shareholder of the Company. The Board has determined that his commercial experience is more beneficial 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 development than the independence requirement outlined in the ASX Principles and the SEHK Listing Rules. APPOINTMENT AND RE-ELECTION OF DIRECTORS The terms of reference of the Nomination Committee i n c l u d e t h e n o m i n a t i o n p r o c e d u r e s p e c i f y i n g t h e p r o c e s s a n d c r i t e r i a f o r t h e s e l e c t i o n a n d recommendation of candidates for directorship of the Company. E v e r y n e w l y a p p o i n t e d d i r e c t o r w i l l r e c e i v e a n induction package from the Company Secretary on their initial appointment. The induction package is a comprehensive, formal and tailored induction on the responsibility and on-going obligations to be observed by a director pursuant to the Australian Corporations Act 2001, Hong Kong Companies Ordinance, the Listing Rules and Securities and Futures Ordinance. In addition, this induction package includes materials briefly describing the business of the Company, the latest published financial reports of the Company and documentation for the corporate governance practices adopted by the Board. Directors will be continuously updated on any major developments of the Listing Rules and other applicable regulatory requirements to ensure compliance and upkeeping of good corporate governance. In accordance with the Bye-Laws of the Company and to comply with relevant SEHK 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 has a written agreement outlining the terms of their appointment. No directors’ service contract contains a provision requiring greater than one year’s notice or requires compensation greater than one year’s emoluments. In considering the appointment or re-appointment of directors, in addition to the diversity criteria set out in the paragraphs “Board Diversity Policy”, the Board, with the assistance and recommendation from the Nomination Committee, will also take into account a number of factors, including, but not limited to, the structure, size and composition of the Board, the candidate’s qualifications and their ability to devote sufficient time as and when required to discharge their responsibilities as a director and to make a positive contribution to the development of the Company’s strategy, policies and performance. CORPORATE GOVERNANCE REPORT DIRECTORS’ CONTINUOUS PROFESSIONAL DEVELOPMENT For continuous professional development, in addition to directors’ attendance at meetings and review of papers and circulars sent by the management of the Company, directors participated in the activities including the following: Participation in Continuous Professional Development Activities Reading relevant material relating to the latest development of the Listing Rules, other Attending training applicable regulatory sessions including but requirements and not limited to, briefing, directors duties and seminars, conference responsibilities forums and workshops ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ (iv) developing, reviewing and monitoring the Code of Conduct applicable to employees and Directors; and (v) reviewing the Company’s compliance with the Code, CGPR 4th Edition and disclosure in the Corporate Governance Report. During the year ended 30 June 2023 and up to the date of this report, the Board has performed these Corporate Governance duties in accordance with its terms of reference of the Board Charter. Non-Executive Directors Kwai Sze Hoi (Chairman) Ross Stewart Norgard Executive Directors Chan Kam Kwan Jason (Company Secretary) Kwai Kwun Lawrence Colin Paterson Independent Non-Executive Directors Yap Fat Suan Henry Choi Yue Chun Eugene David Rolf Welch CORPORATE GOVERNANCE FUNCTION The Board is responsible for performing corporate governance duties and has adopted the written terms of reference on its corporate governance functions. The duties of the Board in respect of the corporate governance functions include: (i) developing and reviewing the Company’s policies and practices on corporate governance; (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; (iii) reviewing and monitoring the Company’s policies and practices on compliance with legal and regulatory requirements; 23 ANNUAL REPORT 2023 COMPANY SECRETARY The Company Secretary is responsible and accountable directly to the Board and for ensuring that Board 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 also directly responsible for the Group’s compliance with the continuing obligations of the Listing Rules and The Code on Takeovers and Mergers and Share Repurchases, and, including publication and dissemination of Company information. Draft minutes of each Board meeting are circulated to all Directors for their comment before being tabled at the following Board meeting for approval. All minutes are kept by the Company Secretary and are open for inspection at a reasonable time on reasonable notice by any director. 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 Company Secretary of the Company, has undertaken no less than 15 hours of professional training to update his skills and knowledge and hence has complied with the relevant training requirement under rule 3.29 of the Listing Rules and 2.6 of the ASX Principles during the year ended 30 June 2023. Language of meetings BOARD COMMITTEES T h e B o a r d h a s e s t a b l i s h e d v a r i o u s c o m m i t t e e s , including a Nomination Committee, Remuneration a n d P e r f o r m a n c e C o m m i t t e e , A u d i t C o m m i t t e e , Risk Management Committee and a Health, Safety, E n v i r o n m e n t a n d S u s t a i n a b i l i t y C o m m i t t e e i n accordance with the Listing Rules and ASX Principles, each of which has its specific written terms of reference. Copies of minutes of all meetings and resolutions of the committees, which are kept by the Company Secretary, are circulated to all Board members and committees are required to report back to the Board on their decisions and recommendations where appropriate. The procedures and arrangements for a Board meeting, as mentioned in the section “Board Meetings” of this report, have been adopted for the committee meetings as far as practicable. NOMINATION COMMITTEE The Board has 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; All key corporate and shareholder documents are pr epar ed in both English an d Chinese. 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 Chinese. • • 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 The Committee consists of a majority of independent duties and has access to independent professional Directors and was comprised of the following members advice at the cost of the Company according to during the year ended 30 June 2023: the Company’s policy if considered necessary. 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 Meetings attended/ eligible to attend (*) 1/1 1/1 1/1 1/1 (*) Represents the total number of meetings held during the Board, which can effectively exercise independent year ended 30 June 2023. judgement. NOMINATION POLICY NOMINATION PROCEDURES The Company has adopted a nomination policy which Subject to the provisions in the Company’s Bye-laws, if sets out the nomination procedures and the criteria for the Board recognises the need for an additional director nomination of directors or executives. The objectives or executive: of the nomination policy is to ensure changes to the Board composition can be managed without undue (a) The Board determines the required skilled set, disruption, that a formal, considered and transparent relevant expertise and experience, having regard procedure is in place for the selection, appointment to the current Board composition and size and and reappointment of directors, as well as plans are in shareholder structure of the Company; place for orderly succession (if considered necessary), i n c l u d i n g p e r i o d i c a l r e v i e w o f s u c h p l a n s . T h e (b) The Committee and/or Board identifies potential appointment of a new director or any re-appointment candidates, possibly with assistance from external of directors is a matter for decision by the Board upon agencies and/or advisors; the recommendation of the proposed candidate by the Nomination Committee. To ensure that the existing (c) The Company Secretary provides the Board policy continues to be implemented in practice, the with the biographical details and details of the Company shall undertake regular reviews and reassess relationship between the candidate and the this policy having regard to the regulatory requirement, company and/or Directors, directorships held, g o o d c o r p o r a t e g o v e r n a n c e p r a c t i c e a n d t h e skills and experience, other positions which involve expectations of shareholders and other stakeholders of a significant time commitment and any other the Company. particulars required by law for any candidate for appointment to the Board; A b a l a n c e d c o m p o s i t i o n o f e x e c u t i v e a n d n o n - executive directors (including independent non- (d) The Board develops a short list of candidates; executive directors) shall be included in the Board so that there is a strong independent element on the (e) In the case of the appointment of an additional independent non-executive Director, the Board obtains all information in relation to the proposed Director to allow the Board to adequately address the independence of the Director; 25 ANNUAL REPORT 2023 (f) The Board agrees on a preferred candidate; • Standing: The candidate should be of the highest ethical character and have a strong reputation (g) The Chairman of the Board approaches the and standing, both personally and professionally. p r e f e r r e d c a n d i d a t e t o c a n v a s s i n t e r e s t , availability and terms of appointment; and • T i m e c o m m i t m e n t : T h e c a n d i d a t e m u s t have sufficient time available for the proper (h) The Chairman of the Committee, Chairman of the p e r f o r m a n c e o f t h e i r d u t i e s a n d s h o u l d b e Board and the Company Secretary finalise a letter sufficiently free of other commitments to be of appointment for Board approval. able to devote the time needed to prepare for meetings and participate in induction, training, In the case of the appointment of independent non- appraisal and other Board associated activities. e x e c u t i v e d i r e c t o r s , a p p o i n t m e n t s s h o u l d b e f o r a specific term. All terms of appointments of non- • Independence: For a candidate who is proposed executive directors (including independent non- as an independent non-executive director, the executive directors) of the Company are subject to candidate must satisfy all the independence the relevant provisions of the Bye-Laws or any other requirements as set out in Rule 3.13 of the HK applicable laws whereby the directors, shall vacate or Listing Rules. The candidate must always be aware retire from their office but eligible for re-election. of threats to independence and avoid any conflict CRITERIA FOR SELECTION of interest with the Company. The candidate must be able to represent and act in the best interests The selection criteria include but are not limited to the of the Company and its shareholders as a whole. following: • Business experience: The candidate should have this report, the Nomination Committee performed the During the year ended 30 June 2023 and up to date of significant experience from a senior role in an area work as summarised below: of business, public affairs or academia, relevant to the Company. Awareness of the Group’s focus (i) Reviewed and recommended for the Board’s industry would be an advantage but is not a approval the proposed resolution for re-election of requirement in all cases. each retiring Director at the 2022 AGM; • Public Board experience: The candidate should (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 have relevant expertise and experience earned as and diversity of the Board and assessed the a Board member of a reputable listed company or 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 - from a senior position in his or her industry, public executive director; and affairs or academia. • Diversity: The candidate should contribute to approval the renewal of appointment of the the Board being a diverse body, with diversity proposed re-appointing executive director and reflecting gender, age, cultural and educational n o n - e x e c u t i v e d i r e c t o r s ( i n d e p e n d e n t n o n - (iii) reviewed and recommended for the Board’s background, ethnicity, professional experience, executive directors). qualifications, skills and length of service. CORPORATE GOVERNANCE REPORT BOARD DIVERSITY POLICY Workplace diversity The Board has adopted a Board diversity policy which The Company and its subsidiaries are committed to sets out the objectives and principles regarding board workplace diversity and recognise the benefits arising diversity for the purpose of achieving the Company’s from employee and Board diversity, including having strategic objectives of balanced diversity at the Board a broader pool of quality and talented employees, as far as practicable. The Company considers that improving employee retention, and being able to diversity of Board members can be achieved through access different perspectives. Diversity includes, consideration of a number of aspects, including but without limitation, gender, age, ethnicity and cultural not limited to, gender, age, cultural and educational background. background, professional experience, skills, knowledge and length of service. All Board appointments are As of 30 June 2023, the ratio of the number of male based on merit and contribution, and candidates to female employees is approximately 86% to 14% are considered against objective criteria, having due ( 2 0 2 2 : 8 7 % t o 1 3 % ) . T h e G r o u p r e c o g n i s e s , a n d regard to the benefits of diversity on the Board. endeavours to protect the rights of its employees and is committed to providing equal opportunities. The The proportion of female Board representation is a Group engages in transparent and fair recruitment measurable objective of the Company assessing the practices, and fair remuneration and disciplinary implementation of the diversity policy. The Board decisions without regard to gender, age, family position recognises the importance and benefits of gender or ethnic background. Further information about the d i v e r s i t y a n d i s c o m m i t t e d t o i m p r o v i n g g e n d e r composition of the Group’s workforce can be found diversity. The Nomination Committee will use best in the 2023 Environmental, Social and Governance endeavors to identify and recommend suitable female Report separately released on the Company website candidates to the Board. The Company will appoint at www.brockmanmining.com. least one female director no later than 31 December 2024. The current eight directors are from diverse and complementary backgrounds, including management, exploration, legal, mergers and acquisitions, accounting and finance management. The valuable experience and expertise they bring to our business is critical for the long term growth of the Group. During the year, the Board conducted an annual review of the implementation and effectiveness of the Board diversity policy and is satisfied that the Board diversity policy has been properly implemented and is effective. 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. The Committee consists of a majority of independent Directors and was compromised of the following members during the year ended 30 June 2023: Name of Director/role Non-Executive Directors Kwai Sze Hoi Independent Non-Executive Directors Yap Fat Suan, Henry, Chairman Choi Yue Chun, Eugene David Rolf Welch (*) Represents the total number of meetings held during the year ended 30 June 2023. Meetings attended/ eligible to attend (*) 2/2 2/2 2/2 2/2 27 ANNUAL REPORT 2023 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 remuneration shall be determined by the Company in Performance Committee include, inter alia, reviewing a general meeting. The Company has fixed a maximum 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 sum of A$1 million in aggregate for non-executive 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 directors per annum, unless otherwise and approved by recommendations to the Board on the remuneration of the Shareholders. executive and non-executive directors, and executives; reviewing and making recommendations to the Board Performance review of the Board in respect of performance-based remuneration by Board performance and individual director performance reference to corporate goals and objectives resolved; are reviewed on an ongoing basis and evaluated and ensuring no director or any of their associates a n n u a l l y b y t h e 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 is involved in deciding their own remuneration. In Committee. Individual directors may meet with the addition to its remuneration duties, the Committee is Chairman of the Committee to discuss their views also responsible for the annual performance review of towards their remuneration packages. the Board, Board Committees and individual directors’ performance. Remuneration of Executive Directors The Remuneration and Performance Committee is The Remuneration and Performance Committee is responsible for reviewing compensation arrangements provided with sufficient resources to discharge its duties for the executive directors, including the chief executive and has access to independent professional advice at officer (if any) and the executives. The Company has the cost of the Company according to the Company’s adopted model (ii) as set out in code provision E1.2.(c) policy if considered necessary. of the Corporate Governance Code, under which the Remuneration and Performance Committee makes REMUNERATION AND PERFORMANCE recommendations to the Board on the remuneration The terms of reference in respect of the Remuneration p a c k a g e s o f i n d i v i d u a l e x e c u t i v e d i r e c t o r s a n d and Performance Committee distinguishes the structure executives. The Committee assesses the appropriateness of the non-executive directors’ remuneration from that of the nature and amount of remuneration of directors of executive directors and senior executives. and executives on a periodic basis by reference to Non-Executive Director Compensation objective of ensuring maximum stakeholder benefit The Board is determined to attract and retain high from the retention of a high quality Board and executive relevant employment market conditions with the overall c a l i b r e n o n - e x e c u t i v e d i r e c t o r s t o w o r k w i t h t h e team. Company, whilst at the same time preserving cash flow. Accordingly, the structure of the non-executive Executive compensation framework directors’ remuneration allows for remuneration in The Company aims to reward executives with a level the form of share options, granted under the share and mix of compensation commensurate with their option scheme. Whilst this represents a departure from position and responsibilities within the Company. The the Code and Principles, the Committee believes it is Remuneration and Performance Committee is assisted appropriate for the size of the Company, and is satisfied in the process by the use of independent salary data, if that all director participation in the share option applicable. The executive pay and reward framework scheme is approved by Shareholders and the grant has 2 components: base pay and long-term incentives aligns with the long term performance of the Company. through participation in the 2012 Share Option Scheme. The Company’s Bye-laws provide that the directors’ Details of the 2012 Share Option Scheme can be found in the financial statements. CORPORATE GOVERNANCE REPORT Performance Review — Executives (iii) Reviewed the existing remuneration of the Non- Th executives’ performance is reviewed on an ongoing Executive Directors (including the Independent basis and evaluated annually by the Remuneration and Non-Executive Directors), Performance Committee. This evaluation is undertaken by each executive completing a questionnaire on their (iv) R e v i e w a n d r e c o m m e n d e d f o r t h e B o a r d ’ s performance or each executive having a one-to-one approval the remuneration and the renewal interview with the Chairman of the Committee. of proposed re-appointing executive directors a n d n o n - e x e c u t i v e d i r e c t o r s ( i n c l u d i n g t h e In addition to the meetings, the Remuneration and independent non-executive directors), and Performance Committee also dealt with matters by way of circular resolution during the year ended 30 June (v) Reviewed and made recommendations to the 2023. Board on the cancellation of share options as a result of the retirement of a non-executive director. During the year ended 30 June 2023 and up to the date of this report, the Remuneration and Performance Remuneration of Directors and executives Committee performed the work summarised below: The remuneration payable to directors will depend on their respective contractual terms under their (i) Reviewed and made recommendations to the employment contracts or appointment letters as Board on the existing policy and structure for approved by the Board on the recommendation of the the remuneration of all Directors and senior Remuneration and Performance Committee. Details management, of the directors remuneration are set out in Note 14 to the consolidated financial statements. The emoluments (ii) Reviewed the existing remuneration packages of (in the prior year, includes share-based compensation) the Executive Directors and senior management, of the directors and executives by band for the year ended 30 June 2023 is set out below: 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 Number of members 2023 * Number of members 2022 * 6 3 1 — 10 6 3 1 1 11 * All Directors and executives AUDIT COMMITTEE The Board has 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. The Committee consists of a majority of Independent directors, and is provided with sufficient resources to discharge its duties and has access to independent professional advice at the cost of t he Comp an y according to the Company’s policy if considered n e c e s s a r y . D r a f t a n d f i n a l v e r s i o n s o f m i n u t e s o f meetings are sent to all committee members for their comment, within a reasonable time after the meeting. Full minutes of Audit Committee meetings are kept by the Company Secretary. 29 ANNUAL REPORT 2023 The composition and expertise of the Committee was as follows during the year ended 30 June 2023: Name of Director/role Expertise Independent Non-Executive Yap Fat Suan, Henry, Fellow of the Institute of Chartered Accountants in 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 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 Meetings attended/ eligible to attend (*) 2/2 2/2 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 2023. The primary responsibilities of the Audit Committee are, (c) t o d e v e l o p a n d i m p l e m e n t p o l i c y o n t h e inter alia, engagement of an external auditor or to supply non-audit services. For this purpose, “external (a) to consider and make recommendations to the auditor” shall include any entity that is under Board on the appointment, reappointment and common control, ownership or management of removal of the external auditor (and to approve the audit firm, or any entity that a reasonable the remuneration and terms of engagement of the and informed third party having knowledge external auditor) and any questions of resignation of all relevant information would reasonably or dismissal of that auditor; conclude as part of the audit firm nationally or internationally. The Committee should report to the (b) to review and monitor the external auditor’s Board, identifying any matters in respect of which i n d e p e n d e n c e a n d o b j e c t i v i t y a n d t h e it considers that action or improvement is needed effectiveness of the audit process in accordance and making recommendations as to the steps to with applicable standards. The Committee should be taken; discuss with the auditor the nature and scope of the audit and reporting obligations before the (d) to monitor the integrity of financial statements audit commences; of the Company and the Company’s annual report and accounts, half-yearly report and, if prepared for publication, quarterly reports, and to review significant financial reporting judgements contained in them; CORPORATE GOVERNANCE REPORT (e) to evaluate the adequacy of the Company’s (l) to review the external auditor’s management accounting control system by reviewing written letter, any material queries raised by the auditor reports from the external auditors, and monitor to management in respect of the accounting management’s responses and actions to correct records, financial accounts or systems of control any noted deficiencies; and management’s response; (f) to review the adequacy and effectiveness of the (m) t o e n s u r e t h a t t h e B o a r d p r o v i d e s a t i m e l y Company’s financial controls, and unless expressly response to the issues raised in the external addressed by a separate Board risk committee, auditor’s management letter; or by the Board itself, to review the Company’s internal control and risk management systems (n) t o r e v i e w a r r a n g e m e n t s e m p l o y e e s o f t h e through active communication with management C o m p a n y c a n u s e , i n c o n f i d e n c e , t o r a i s e and the external auditors; c o n c e r n s a b o u t p o s s i b l e i m p r o p r i e t i e s i n financial reporting, internal control or other (g) to discuss with management the system of internal matters. The Audit Committee should ensure that control and risk management and ensure that proper arrangements are in place for fair and management has discharged its duty to have independent investigation of these matters and effective systems. This discussion should include for appropriate follow-up action; the adequacy of resources, staff qualifications and experience, training programmes and budget (o) t o a c t a s t h e k e y r e p r e s e n t a t i v e b o d y f o r of the Company’s accounting and financial overseeing the issuer’s relations with the external reporting function; auditor; and (h) to consider any findings of major investigations (p) R e p o r t t o t h e B o a r d o n t h e m a t t e r s i n t h e of risk management and internal control matters Corporate Governance Code and ASX Principles. as delegated by the Board or on its own initiative and management’s response to these findings; During the year ended 30 June 2023 and up to the date of this report, the Committee performed the work as (i) where an internal audit function exists, to ensure summarised below: co-ordination between the internal and external auditors, and to ensure that the internal audit (i) reviewed and approved the scope and fees 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 proposed by the external auditor, appropriate standing within the Company, and to review and monitor the effectiveness of the (ii) reviewed the reports of findings/independent internal audit function; review report from the external auditor and management’s response in relation to the final (j) where an internal audit function exists, to assess audit for the year ended 30 June 2022, interim the performance and objectivity of the internal 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 audit function and to make recommendations December 2022, for the appointment and dismissal of the Head of Internal Audit; (iii) Reviewed and recommended for the Board’s approval the Quarterly Activities Reports of the (k) to review the Group’s financial and accounting Group for the year ended 30 June, and policies and practices; (iv) Reviewed and recommended for the Board’s approval the financial report of the Group for the year ended 30 June 2022, for the six months ended 31 December 2022 together with the relevant management representation letters and announcements. 31 ANNUAL REPORT 2023 Accountability and Audit Financial Reporting AUDITORS’ REMUNERATION The remuneration paid to the Group’s external auditors The directors acknowledge their responsibility for during the year ended 30 June 2023 is set out in the preparing, with the support of management, the Directors’ Report on page 61 and note 36 of the consolidated financial statements of the Group. The consolidated financial statements. directors of the Company consider it appropriate to prepare the consolidated financial statements on a Ernst and Young Australia, the auditor of the Company, going concern basis. However, there remains material is a non-Hong Kong audit firm which has obtained uncertainty as to whether the Group can raise sufficient approval from the Accounting and Financial Reporting funds (refer to Note 2(a) of the consolidated financial Counsel as a recognised public interest entity (“PIE”) statements), which may cast significant doubt about auditor to conduct PIE engagement of the Company. the Group’s ability to continue as a going concern. The consolidated financial statements for the year ended 30 EXECUTIVE COMMITTEE June 2023 have been prepared in accordance with the The Board has constituted the Executive Committee International Financial Reporting Standards Board (the and delegated the responsibility of the day-to-day “IASB”) and the disclosure requirements of the Hong management and has empowered the Executive Kong Companies Ordinance. The directors believe that Committee to implement policies and strategies, for the they have selected suitable accounting policies and business activities and operations, internal control and applied them consistently and made judgments and administration of the Group. The Executive Committee estimates that are prudent and reasonable and have carries out all the general powers of management and ensured that the consolidated financial statements control of the activities of the Group as vested in the are prepared on a going concern basis. The reporting Board, save for those matters which are reserved for the responsibilities of the Company’s external auditor, Ernst Board’s decision and approval. The members include and Young, are set out in the Independent Auditor’s the executive directors and executives appointed by report on pages 62 to 67. the Board from time to time. The Executive Committee m e e t s w h e n e v e r i t i s n e c e s s a r y t o c a r r y o u t i t s Confirmation of compliance obligations. Although the Company is not required to comply with Section 295A of the Australian Corporations Act 2001 HEALTH, SAFETY, ENVIRONMENT AND SUSTAINABILITY (being a company incorporated in Bermuda), the Board COMMITTEE requires an executive director to state in writing to the The Board has established a Committee to oversee the Board that: health, safety, environment and sustainability activities of the Company. The Committee carries out its duties “The financial records of the Company have been in accordance with the Terms of Reference, a copy of properly maintained and the financial statements which is located on the Company’s website. comply with the appropriate accounting standards and give a true and fair view of the Company’s financial position and performance, and that the opinion has been based on a sound system of risk management and internal control which is operating effectively”. CORPORATE GOVERNANCE REPORT The Committee consists of a majority of independent directors and was comprised of the following members during the year ended 30 June 2023: Name of Director/role Meetings attended/ eligible to attend (*) Independent Non-Executive Directors Choi Yue Chun, Eugene, Chairman Non-Executive Director Yap Fat Suan, Henry Ross Stewart Norgard 1/1 1/1 1/1 (*) Represents the total number of meetings held during the year ended 30 June 2023. The principal duties of the Committee are: (e) reviewing and making recommendations to the (a) rev iewing and monitoring the sustainability, expansions, acquisitions and dispositions with environmental, safety and health policies and material environmental implications. Board with respect to environmental aspects of activities of the Company; (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 date of this report, the Health, Safety, Environment management in developing short and long term and Sustainability Committee performed the work as During the year ended 30 June 2023 and up to the policies and standards to ensure that the principles summarised below: set out in the sustainability, environmental, health and safety policies are being adhered to and i) Reviewed and recommended to the Board issues achieved; that have emerged that may materially impact (c) regularly reviewing community, environmental, health and safety response compliance issues and ii) Reviewed incident outcomes and compliance the Company, incidents to determine, on behalf of the Board, issues. whether the Company is taking all necessary action in respect of those matters and that the RISK MANAGEMENT COMMITTEE Company has been duly diligent in carrying out its The Board has established a Committee to oversee responsibilities and activities in that regard; risk and the management and internal control of the processes by which risk is considered for both ongoing (d) ensuring that the Company monitors trends and operations and prospective actions of the Company. reviews current and emerging issues in the field of The Committee carries out its duties in accordance with sustainability, environment, health and safety, and the Terms of Reference, a copy of which is located on evaluates their impact on the Company; and the Company’s website. The Committee was comprised of the following members during the year ended 30 June 2023: Name of Director/role Meetings attended/ eligible to attend (*) Executive Director Non-Executive Director Colin Paterson (Chairman) Ross Stewart Norgard Independent Non-Executive Director Choi Yue Chun, Eugene 1/1 1/1 1/1 (*) Represents the total number of meetings held during the year ended 30 June 2023. 33 ANNUAL REPORT 2023 Whilst the risk management committee was not chaired Systems and procedures are put in place to identify, by an independent director and it does not comprise evaluate and monitor the risks of different activities. of a majority of independent directors, the committee Annual assessment is performed by the Company and was mainly composed of non-executive directors presented to the Risk Management Committee on and an independent non-executive director who do the effectiveness of the risk management and internal not participate in the daily operations of the Group. control systems. For the year ended 30 June 2023, the The Company considers that objectivity can still be risk management and internal control systems have maintained with such arrangements. been considered effective and adequate and no deficiency was noted. Risk management and internal control T h e B o a r d o v e r s e e s m a n a g e m e n t i n t h e d e s i g n , A discussion of the policies and procedures on the implementation and monitoring of the risk management m a n a g e m e n t o f e a c h o f t h e m a j o r t y p e s o f r i s k and internal control systems and has the responsibility which the Group manages is included in Note 5 to to review annually the effectiveness of the Group’s risk the consolidated financial statements and in the management and internal control systems covering Management Discussion and Analysis on pages 13 to 14. all material controls, including financial, operational, compliance and environmental, social and governance During the year ended 30 June 2023 and up to the related controls. For the year ended 30 June 2023, date of this report, the Risk Management Committee the Board, through the Audit, and Risk Management performed the work as summarised below: Committees, has conducted a Group wide review of its risk management and internal control systems for the (i) Reviewed and recommended for the Board’s assessment on the adequacy of resources, qualifications annual review the Group’s risk management and and experience of staff of the Company’s accounting, internal control systems. internal audit, financial reporting functions, and their training programmes and budget. Internal audit function The Company has outsourced its internal audit function The Group’s risk management and internal control and has engaged an independent management systems are designed to provide reasonable, but not consultancy company to assess the internal control absolute, assurance against material misstatement or measures of the Group on a yearly basis. For the year loss; to manage rather than completely eliminate the ended 30 June 2023, it was concluded that there were risk of system failure; and to assist in the achievement of no significant weakness in the Company’s internal the Group’s agreed objectives and goals. They have a control and risk management systems. key role in the management of risks that are significant to the fulfilment of business objectives. In addition, they The Company’s corporate governance and control should provide a basis for the maintenance of proper functions were reviewed in 2023. These will be reviewed accounting records and assist in the compliance with again in 2024, and periodically thereafter. relevant laws and regulations. CORPORATE GOVERNANCE REPORT MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS AND RELEVANT EMPLOYEES The Company has adopted a Securities Trading Policy CONTINUOUS DISCLOSURE The directors are committed to keeping the market fully informed of material developments to ensure compliance with the ASX, and SEHK Listing Rules. The which applies, inter alia, to all directors. The Securities directors have observed the disclosure requirements of Trading Policy complies with the ASX Listing Rules and the ASX and SEHK Listing Rules. the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in DISCLOSURE OF INSIDE INFORMATION Appendix 10 of the SEHK Listing Rules. All directors have The Board has a policy for Communications Strategy confirmed, following a specific inquiry by the Company, and Continuous Disclosure policy that includes inside that they have complied with the required standard as information and the procedures and internal controls set out in the Model Code throughout the year ended for handling and dissemination of inside information. 30 June 2023. The policy sets out guidelines and procedures to the directors of the Company and executives of the Group The Company has adopted the same Securities Trading to ensure inside information of the Group is to be Policy to Relevant Employees to regulate dealings in disseminated to the public on an equal basis and in a securities of the Company by certain employees of the timely manner. Company or any of its subsidiaries who are considered to be likely in possession of inside information in relation Directors and executives in possession of potential inside to the Company or its securities. The Securities Trading information and or inside information, are required Policy complies with ASX Listing Principles and the Model to take reasonable measures to ensure that proper Code for security transactions as set out in Appendix 10 safeguards are in place to preserve strict confidentiality of the SEHK Listing Rules. of inside information and to ensure that its recipients recognise their obligations to maintain confidentiality. A copy of the Company’s Securities Trading Policy is 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 available on the website of the Company. when necessary in light of changes in circumstances CODE OF CONDUCT and changes in the Listing Rules, the Securities and Futures Ordinance, relevant statutory and regulatory The Company has adopted a Code of Conduct, the requirements from time to time. purpose of the Code is to guide and enhance the conduct and behaviour of the directors, executives and Details of the Company’s policy for Communication employees in performing their daily roles. The Code of Strategy and Continuous Disclosure Policy is available Conduct encourages and fosters a culture of integrity on the Company’s website. and responsible valued employer, business partner and corporate citizen, in all our relationships. This Code of Conduct sets out the principles and standards which the Board, executives and employees are encouraged to strive towards with each other, shareholders, other stakeholders and the broader community. Details are available on the Company’s website. 35 ANNUAL REPORT 2023 COMMUNICATION WITH SHAREHOLDERS T h e B o a r d r e c o g n i s e s t h e i m p o r t a n c e o f g o o d communication with shareholders. Information in relation to the Group is disseminated to shareholders in a timely manner through a number of formal channels, which include interim and annual reports, announcements and circulars. Such published documents, together with the latest corporate information and news, are also made available on the website of the Company. F o r t h e y e a r e n d e d 3 0 J u n e 2 0 2 3 t h e C o m p a n y c o n d u c t e d a r e v i e w o f t h e e f f e c t i v e n e s s o f t h e Communication Strategy and Continuous Disclosure Policy. Having considered the multiple channels of communication and engagement in place as detailed a b o v e a n d i n t h e C o m m u n i c a t i o n S t r a t e g y a n d Continuous Disclosure policy, the Board is satisfied t h a t t h e s h a r e h o l d e r s ’ C o m m u n i c a t i o n S t r a t e g y and Continuous Disclosure Policy has been properly implemented and is effective. The Company’s Annual General Meeting (“AGM”) is a valuable forum for the Board to communicate directly SHAREHOLDERS RIGHTS HOW SHAREHOLDERS CAN CONVENE A SPECIAL GENERAL with shareholders for which at least 21 clear business MEETING days’ notice is given. The Chairman of each of the Audit, Subject to Section 74 of the Companies Act 1981 Risk Management, Remuneration and Performance, of Bermuda (the “Act”) and the Bye-Law 58 of the Nomination, and Health, Safety, Environment and Company, the Board may, whenever it thinks fit, call Sustainability Committees or in their absence, another special general meetings. Members holding at the date member of the respective committees or failing that of deposit of the requisition not less than one-tenth of their respective duly appointed delegate, are also the paid up capital of the Company and carrying the available to answer questions at the AGM. The external right to vote at general meetings of the Company shall auditor is also in attendance and available to answer at all times have the right, by written requisition to the questions from shareholders relevant to the external Board or the Company Secretary of the Company, to audit. require a special general meeting to be called by the Board for the transaction of any business specified in In accordance with the Bye-Laws of the Company, such requisition; and such meeting shall be held within a minimum of 14 days’ notice is required for every two months after the deposit of such requisition. If within shareholder meeting and all shareholders shall have 21 days of such deposit the Board fails to proceed to statutory rights to call for special general meetings convene such meeting the requisitioner may do so and put forward agenda items for consideration in themself in accordance with the provisions of Section the general meetings. All resolutions at the general 74(3) of the Act. meeting are decided by a poll which is conducted by the Group’s branch share register in Hong Kong. The poll PROCEDURES FOR DIRECTING SHAREHOLDERS’ ENQUIRIES results are published in the manner prescribed under the TO THE BOARD requirements of the SEHK Listing Rules. 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 During the year, the 2022 AGM of the Company was Company Secretary’s office, whose contact details are inquiry@brockmanmining.com or by writing to the held on 13 December 2022. The attendance records of the directors at the general meeting are set out in as follows: the section headed “Board Meetings” of this report. Unit 3903B, Far East Finance Centre, 16 Harcourt Road, Separate resolutions are proposed at general meetings Admiralty, Hong Kong. for each substantial issue, including the re-election of retiring directors. The enquiries would then be assessed and considered (if appropriate) to put to the Board. Shareholders may also make enquiries of the Board at the general meetings of the Company. CORPORATE GOVERNANCE REPORT PROCEDURES FOR PUTTING FORWARD PROPOSALS AT A • Any restrictions on payment of dividends or other GENERAL MEETING covenants on the Group’s financial ratios that may Any number of shareholders representing not less than be imposed by the Group’s financial creditors; 5% of the total voting rights of the Company on the date of the requisition or not less than 100 shareholders • The Group’s expected working capital requirements of the Company are entitled to put forward a proposal and future expansion plans; for consideration at a general meeting of the Company. Shareholders should follow the procedures as set out • Liquidity position and future commitments at the in Section 79 of the Act for the putting forward of such time of declaration of dividend; proposals. CONSTITUTIONAL DOCUMENTS On the 13 December 2022, the Company resolved by special resolution to adopt the Amended and Restated Bye-Laws. The Amended and Restated Bye-Laws of the Company are available on the Company’s website. DIVIDEND POLICY The Board 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. • • • 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. 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 CORPORATE GOVERNANCE ENHANCEMENT Enhancing corporate governance is not simply a Board shall also take into account, inter alia: matter of applying and complying with the Corporate • 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 promoting and developing an ethical and healthy Governance Code and ASX Principles but also about performance; Shareholders’ interests; Retained earnings, distributable reserves and • • corporate culture. The Board will continue to review and, where appropriate, improve our current practices on the basis of our experience, regulatory changes and developments. Any views and suggestions from our shareholders to promote and improve our transparency contributed surplus of the Company and each of are also welcome. the other members of the Group; • The level of the Group’s debt to equity ratio, return Brockman Mining Limited on equity and financial covenants to which the Kwai Sze Hoi Group is subject to; Chairman On behalf of the Board • Possible effects on the Group’s credit worthiness; Hong Kong, 19 September 2023 37 ANNUAL REPORT 2023 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 permitting framework and operates in accordance with our environmental management systems, • Identify, monitor, measure, evaluate and minimise our impact on the surrounding environment, • Give environmental aspects due consideration in all phases of the Group’s projects, from exploration to development, 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. ABOUT THIS REPORT The Directors are pleased to present the Environmental, Social and Governance Report (“Report” “ESG”) for the year ended 30 June 2023, in compliance with a ppl ic abl e 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. T h e C o m p a n y h a s a r o b u s t a n d c o m p r e h e n s i v e system of governance that is essential to the ongoing sound operation of the Company, and balancing the interests of the Company’s shareholders, suppliers, governments, and the various communities (collectively the “stakeholders”) in which the Group operates. SCOPE AND PERFORMANCE 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 2022 to 30 June 2023 (the “Reporting Period”). This Report has been prepared in accordance with the principles of materiality, quantitative approach, balance and consistency, and complies with the mandatory disclosures requirement and the “comply or explain” provisions. The Group’s performance is reviewed annually and reviewed by the Board and Risk Management Committee, details of which are outlined in our “Risk Management and Internal Control” section in the Corporate Governance Statement of the Company’s published 2023 Annual Report. This Report can be accessed from the Sustainability section of the Company’s website www.brockmanmining.com. Statement of the Board of Directors The Board retains the overall responsibility for the G r o u p ’ s E S G m a n a g e m e n t a n d i s c o m m i t t e d t o o p e r a t i n g i n a m a n n e r t h a t c o n t r i b u t e s t o t h e sustainable development of mineral resources through efficient, balanced, and long-term management while demonstrating consideration for the wellbeing of our people; and protection of the environment. ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 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 from time to time. MATERIALITY ASSESSMENT The Group defines material stakeholder groups as these who have frequent connections, significant financial and operational influence and form a long term and strategic relationship with the Group. Stakeholder Engagement Stakeholder and shareholder opinions are crucial for the continuous improvement of the Group’s ESG performance, and the Board recognises the importance of good communication with stakeholders. Information in relation to the Group is disseminated to shareholders in a timely manner through a number of formal channels, which include interim and annual reports, announcements, and circulars. Such published documents together with updated corporate information and news are made available on the Company’s website under the sections Investors and Announcements respectively. 39 ANNUAL REPORT 2023 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 AND GOVERNANCE REPORT A. 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 and management considers that the emissions and waste generated by any exploration activity would have an 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 from office use. Relevant KPls are as shown below: Target of net decrease 2023 2022 i) Purchased electricity consumption Target not fully realised 19,522 kWh 18,770 kWh ii) Scope 1 GHG Emissions Not applicable Not applicable Not applicable iii) Scope 2 GHG Emissions Met iv) Scope 3 GHG Emissions Not applicable 8,685.58 kg CO2 Not applicable 11,049.84 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 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 249.10 m2. GHG intensity by floor area amounts to 34.87 kg CO2-e/m2 (2022: 44.36 kg CO2-e/m2). 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 emissions that occur outside the Company such activities have commenced. as emissions from business travel of employees and paper waste disposed of at landfill, upstream and downstream emissions from the supply chain etc., which is not significant to the Group as our development and production activities have not commenced. The Company has practically achieved its emission target for the year, and has i m p l e m e n t e d t h e f o l l o w i n g c o n t i n u e d measures to reduce our emissions in relation to office activities: * Emissions for Nitrogen Oxides (NOx), Sulphur • Reduction of unnecessary business trips Oxides (SOx) and Respirable suspended particulars (RSP) are not disclosed as the amount is insignificant. and board meetings organised via electronic communications. • Encouraged employees to switch off lights and air conditioning. • Procure only electrical appliances with “Grade1” or equivalent energy labels if needed to increase energy efficiency. 41 ANNUAL REPORT 2023 During the reporting period, the Company We encourage our office employees to 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 switch off idle lights, air conditioners and (domestic and overseas) and all board other office equipment, and we remind our meetings were conducted via electronic employees to print and photocopy on both communications. sides of paper if printing is unavoidable. We also encourage our employees to bring During the reporting period, no material 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 hazardous or non-hazardous waste was of takeaway and beverages and hence generated as our operations are office reduce the use of plastic disposable utensils. based in nature. Waste generated comprises The Group encourages its employees to 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 choose public transportation and carpool obsolete computer and printing equipment. to reduce car driving and thus the impact 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 on the environment and transportation. recycled. Non-hazardous waste such as The Group does not own any vehicles and general domestic refuse and printing paper we therefore do not directly produce any from office operations were considered greenhouse and hazardous gases from cars minimal. A further detailed reporting on used. mine waste will be available when mine and process development activities have Our offices are required to maintain in-door commenced. A.2 USE OF RESOURCES temperature at 24 degree Celsius to ensure efficient use of air conditioning. The Group is committed to promoting an As stated above, the Group endeavours environmentally conscious work environment to target a net decrease in emissions for and has focused on measures to minimise the upcoming year. Purchased electricity waste and electricity consumption, initiate contributes to the majority of our emissions; paper and cartridge recycling and promote hence a target of net decrease in yearly electronic communications and storage. We energy consumption is set. promote recycling of office equipment and reduce domestic waste as much as possible. The Group promotes initiatives to mitigate 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 T o r e d u c e c o n s u m p t i o n o f p a p e r , t h e energy-efficient products by comparing Group prefers using electronic means to Energy Labels issued by the Electrical and d i s s e m i n a t e i n f o r m a t i o n v i a e l e c t r o n i c Mechanical Services Department (EMSD)/ devices and electronic communication Energy Rating Labels issued by the Australian systems. During the year, the Company have Federal Government. As waste electrical implemented savings in printing and mailing and electronic equipment (WEEE) poses costs by recommending to Shareholders the severe harm to the environment, the Group election of electronic means of receiving e n c o u r a g e s a l l e m p l o y e e s t o u s e t h e corporate communications. WEEE donation or recycling programs. All employees are responsible and accountable f o r o p e r a t i n g i n a n e n v i r o n m e n t a l l y responsible manner. The total purchased electricity for the year ended to 19,522 kWh and the electricity usage intensity by floor area amounted to approximately 78.37 kWh/m². The Group’s existing business operation 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 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 (including bottled water). ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 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 Brockman is proposing to clear up to 3,785 consumption because it is not feasible to ha of vegetation to mine and transport ore obtain water withdrawal and discharge to Port Hedland by a land infrastructure data as commercial office leases in Hong 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 - Kong and Australia are not billed separately term cleared footprint will be around 60 ha by the building management for the water which represents the final open pit void. All supply and discharge. Although data on other disturbances will be rehabilitated to water usage was not quantifiable, the Group the satisfaction of the Western Australian maintains best endeavours to conserve the Environmental Protection Authority (EPA), environment by requiring our employees to Department of Environment and W ater report immediately damage to any water (DEW) and Department of Mines, Industry, facilities and prompt water awareness. Resources and Safety (DMIRS). There is no issue in sourcing water that is fit Brockman has previously engaged Ecologia for purpose whereas the Group considers 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 its water consumption level is reasonable Prel i minary Docu mentati on req uired t o at the current operational level. The Group assess the project under the Environmental targets to have a net decrease in water Protection and Biodiversity Conservation and electricity consumption next year by Act 1999 (Cth). Most key environmental implementing the measures as discussed 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 above. adhere to our proposed plan in the event 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 Due to the nature of the business, there is endeavour to mitigate any environmental no applicable data of packaging material 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 as our operation does not involve the use of schedule when the project commercialises. any packaging material. Prior to the commencement of our mine A.3 THE ENVIRONMENT AND NATURAL RESOURCES development, environmental approvals for 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 mining or exploration activities are required principles of being a good corporate and to be sought in accordance with the Mining environmental citizen, and takes careful Act 1978 and the following approvals are 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 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 , responsibility and sustainability issues when Industry Regulation and Safety (DMIRS): choosing its vendors. The Group aims to minimise its environmental footprint and 1. P r o g r a m m e o f w o r k — s u b m i s s i o n its disturbance to natural resources. We anticipate that fines residue storage and waste rock management, water use and discharge, and land management and rehabilitation would be the most important has to include details of mechanised equipment and potential disruption to the ground during exploration or prospecting for minerals. areas of concern once in production and the 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 Group shall closely monitor these aspects, in compliance with its regulatory approvals obtained with key State and Commonwealth Governments that have been received proposed mining operation or any changes to be incurred are required to be disclosed. for the Marillana project. Each year, the 3. Mine closure plans — such plan must be Company undertakes an annual compliance review and provides a report to the Office of Environmental Protection Authority to declare its compliance status as required. 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. 43 ANNUAL REPORT 2023 Environmental compliance During the year ended 30 June 2023, there 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 were no environmental permit or approval integral to the Group’s operations. The Group breaches. All approval and permit levels implements environmental management were complied. 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 assess and identify potential environmental A.4 Climate Change risks; conduct; monitoring; and report the Significant changes in the pattern of rainfall performance results to mitigate the impact 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 of our operations on the environment. The over the past 40 years. Most of the state, Group strives to promote the efficient use especially the northwest, has experienced of resources and reduction and prevention a trend towards a wetter climate. This poses of pollution. As a responsible Group we a certain risk for the mining industry. The seek to meet, and where possible exceed, southwestern part of the state has become the regulatory requirements governing our drier, with a 15% reduction in rainfall since environmental performance. the mid-1970s. The Group complies with all applicable Waste rock and tailings that are created e n v i r o n m e n t a l l a w s , r e g u l a t i o n s , a n d during the mining and ore refining process standards. The main laws are set out in can release toxins into the environment if the Mining Act 1978 and other relevant not stored or disposed of properly. In many e n v i r o n m e n t a l r e g u l a t i o n s s u c h a s t h e cases, waste rock and tailings are left out Environmental Protection Act 1986, the in the open where they are exposed, and Environmental Protection and Biodiversity toxins can be washed into water systems Conservation Act 1999, the Environmental by rainfall, or can leach into the soil. To Protection (Clearing of Native Vegetation) mitigate such risk, a detailed mine plan Regulations 2004, the Rights in Water and with enhanced tailings and erosion control Irrigation Act 1914 and the Native Title Act structure will serve as part of the mine’s 1993. water management plan. A number of management plans are in The most likely source of impact to the place to provide a framework for the Group surface water environment from discharge to effectively manage its environmental is from unplanned flooding or spillages at impact and responsibilities. The plans are the sewage treatment facility. However, reviewed regularly and include the following: safeguards are in place to minimise this risk, • • • Safety management plans, Waste management plans, and Environmental monitoring plans. The principal environmental incidents that could potentially occur at the Group’s exploration sites include hydrocarbon spills; including: • Alarms and flashing beacons to warn of failure of mechanical components (pump and blower); • Alarms to warn of high water levels in the balance tank or irrigation tanks; and the destruction of local wildlife habitats; • An emergency overflow between the water substance levels exceeding permits limits; and other incidents that negatively impact the environment. Any environment balance tank and the waste water treatment plant. 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 , 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 remedied and monitored by the Group implemented, to ensure floodwaters do not and, where appropriate, reported to the adversely impact waste water facilities. responsible authorities. ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT B. 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 d o c u m e n t e d i n i t s C o d e o f C o n d u c t (“Code”), which provides clear guidance o n t h e c o n d u c t a n d b e h a v i o u r o f a l l employees, including the Board and senior management. The Code is designed to encourage and foster a culture of integrity a n d r e s p o n s i b i l i t y w i t h t h e f o c u s o n strengthening the Group’s reputation as a valued employer, joint operator partner, and good corporate citizen. Specifically, the Code provides guidance on the following aspects: • C o m p l i a n c e t o l a w s , r u l e s a n d regulations, Conflicts, Fair dealing, Knowledge and information security (including handling of confidential information and disclose and securities trading), Health, safety and environment, Employment practices, and W h i s t l e b l o w i n g a n d m i s c o n d u c t reporting. • • • • • • Recruitment and promotion The Group recognises, and endeavours t o p r o t e c t , t h e r i g h t s o f i t s e m p l o y e e s a n d i s c o m m i t t e d t o p r o v i d i n g e q u a l o p p o r t u n i t i e s . T h e G r o u p e n g a g e s i n transparent and fair recruitment practices a n d f a i r r e m u n e r a t i o n a n d d i s c i p l i n a r y decisions without regard to gender, age, family position, or ethnic background. The remuneration provided for our employees is a basic salary component and other long- term incentives (where appropriate). The Group determines employee remuneration based on qualifications and experience. The Group provides employees with retirement benefits and healthcare benefits (where appropriate). We motivate employees by promotion and salary increments based on results of regular performance appraisals. Apart from offering employees’ competitive salary packages, the Group also provides annual bonuses and the grant of share options to eligible employees as incentives to retain our employees. Compensation and dismissal Employees dismissal is based on the Hong Kong Employment Ordinance or relevant local laws and regulations in Hong Kong and Australia, as well as the requirements stipulated in the employment contracts. T h e G r o u p i s c o m m i t t e d t o r e s p o n s i b l e c o r p o r a t e g o v e r n a n c e , i n c l u d i n g t h e implementation of measures to encourage e m p l o y e e s a n d r e p r e s e n t a t i v e s o f t h e Group to identify and report in good faith any concerns relating to serious misconduct which is, or potentially could be: • A criminal offence (including theft, drug use/sale, violence or threatened 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), • • • A breach of a legal obligation, Dishonest, fraudulent, or corrupt, 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 public, the environment or the financial system, 45 ANNUAL REPORT 2023 • In breach of any of the Group policies, Diversity or The Company’s recognition of the benefits of diversity where people from different • Designed to conceal business records 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 or other evidence related to any of the backgrounds can bring fresh ideas and factors above. Working hours, rest periods and benefits perceptions which make the workplace more efficient and it is reinforced in the Diversity Policy, a copy of which is available 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 in the corporate governance section of adopted to facilitate work-life balance. the Company’s website. This policy outlines In addition to all rest days and statutory specific diversity initiatives designed to holidays as specified in local laws and facilitate equal employment opportunities regulations, employees are entitled to paid and requires the Company to set out specific annual, maternity, paternity, marriage and diversity initiatives and targets with the aim compassionate leave. Employees are also of reporting the progress towards the metrics entitled to benefits such as medical benefits, in the annual report. post-employment benefits subject to the Group’s human resources management These key metrics include: 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 Group 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 t h e r e s p e c t i v e l a w s o f H o n g K o n g a n d Australia. The Group has a Whistleblower Policy that enables an employee to raise concerns about practices and procedures • 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 Company; • • • • Proportion of women in the workplace; P r o p o r t i o n o f w o m e n i n s e n i o r management; Parental leave return rates; and Employee turnover. in their workplace. It enables employees to The following metrics shows the comparison report concerns of fraud, illegal, immoral, to historical data. The historical data is as 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 follows: malpractice in a way that will not be seen as being disloyal to colleagues. 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 2023 2022 2021 2020 2019 0 14% 7% N/A 7% 0 13% 7% N/A 0% 0 15% 8% N/A 0% 0 15% 8% N/A 0% 0 15% 8% 100% 15% ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 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 In Hong Kong, the Group’s employment achieve diversity and will endeavour to regulations are governed by the Employment 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 Ordinance, the Minimum Wage Ordinance, mix of experience, perspective and skills as well as the Employees’ Compensation a p p r o p r i a t e f o r t h e G r o u p , i n c l u d i n g O r d i n a n c e a n d M a n d a t o r y P r o v i d e n t appropriate technical and commercial skills F u n d S c h e m e O r d i n a n c e . I n A u s t r a l i a , relevant to the mining industry. Total workforce: 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+ The Fair Work Act 2009 (Cth) governs the employment of the majority of Australian employees, supplemented by other federal, state and territory legislative instruments pertaining to areas such as work, health and safety and non-discrimination. 2023 14 2022 15 Australia Hong Kong Australia Hong Kong 3 1 — 1 5 4 1 1 2 2 1 4 5 3 1 — 9 8 1 2 3 4 3 6 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 Australia Hong Kong By geographical location By gender By age group 0% Male 10% 31-50 0% 10% 0% 0% Female Male Female 0% 50+ 10% 0% 31-50 0% 0% 50+ 0% 47 ANNUAL REPORT 2023 During the year, the Group was not aware • Respect the rights of the traditional of any material breaches of the relevant laws and regulations relating to the Group’s compensation and dismissal, recruitment and promotion, working hours, rest periods, equal 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. opportunity, diversity, anti-discrimination We will implement systems and ensure that and other benefits and welfare and had not resources are allocated to implement and received any substantial complaints from monitor these commitments and its legal any individual or authority, nor has it paid obligations. Our employees, contractors or was liable to pay any penalty due to and joint operator partner will be updated employment breaches. B.2 HEALTH AND SAFETY on the Company’s progress towards these goals. The policy and the system that support it will be routinely measured to ensure the 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 delivery of our commitments and system 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 improvements made where the need arises. business in Western Australia that benefits its employees, contractors, suppliers, joint The Group shall observe our Operational o p e r a t o r p a r t n e r a n d t h e c o m m u n i t y . Health and Safety (“OHS”) Policy for all our We will achieve this through the effective activities and our Company’s health and implementation and proactive management safety objectives are summarised as follows: 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 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 • Achieve “Zero Harm” to people, the environment and to the communities in which we operate. The Group goes above what is expected to comply with local health c o m m u n i t y a n d t h e w o r k p l a c e environment; and safety legislation. The Group’s Code of • 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 Conduct clearly communicates its attitudes a n d c o m m i t m e n t t o w a r d s p r o t e c t i n g e m p l o y e e h e a l t h a n d s a f e t y i n c l u d i n g conflict resolution and fair dealings. To operate an effective and sustainable iron ore segment, the Company will: 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; • Eliminate or manage circumstances which may lead to injury, property damage and business interruption; and • Focus on the elimination and management • Achieve health and safety performance of workplace hazards and risks. consistent with the OHS Policy. • Act ethically and responsibly in all its These objectives will be achieved by: interactions. • Promote a culture which focuses its employees, contractors, suppliers and joint operator partner in workplace health and safety as the responsibility • Providing employees and contractors w i t h t h e n e c e s s a r y t r a i n i n g a n d resources to assist them to perform their tasks safely and effectively; of all those who work in its business. • Establishing and enforcing accountabilities • Provide a workplace free from bullying for employees and contractors regarding health and safety policy, objectives and or discrimination and offering equal performance; opportunity to all employees. • Work actively through all areas of its regulations and statutory obligations; • Complying with all applicable laws, business to minimise the actual and potential environmental impact of the Company’s activities. ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT • Demonstrating effective leadership B.3 DEVELOPMENT AND TRAINING a n d m a n a g e m e n t o f h e a l t h a n d T h e G r o u p i s c o m m i t t e d t o f o s t e r i n g a safety through risk assessment and the c u l t u r e o f c o n t i n u o u s l e a r n i n g i n o u r development and implementation organisation. We subsidise our employees of safe operational procedures and f o r t h e i r c o n t i n u i n g e d u c a t i o n , a n d communication in health and safety encourage employees to participate in issues. various workshops and seminars according to their respective areas of interest and job During the year, the Group had no work- description. related fatality and injury resulting in lost days and in each of the past three years (2022: Types of training to include: Nil) and the Group was not aware of any material breaches of the relevant laws and regulations relating to the Group providing a safe working environment and protecting employees from occupational hazards. By employment type: Directors Senior management By gender: Male Female • • • Compliance and regulatory; Job specific training; Comprehensive safety induction for all newly hired employees; During the reporting period the percentage of trained employees and average hours of training received: Percentage of Average hours of training trained employees received during the year 2023 2022 2023 2022 57% 43% 86% 14% 60% 40% 87% 13% 173 27 184 16 183 27 194 16 B.4 LABOUR STANDARDS Preventing and addressing the Group’s own involvement in the use of child or forced D u r i n g t h e y e a r , t h e G r o u p h a s n o t employed any person under the age of 18 and incurrence of child labour is not a labour in any of its operating segments is significant risk factor. central to our current and future sustainability. The Group strictly prohibits the employment of child labour and forced labour and complies with all relevant laws and regulations. Prior to on-boarding of new employees, checks are conducted to ensure the candidate is of legal age of employment. 49 ANNUAL REPORT 2023 B.5 RESPONSIBLE SUPPLY CHAIN MANAGEMENT T h e G r o u p h a s e s t a b l i s h e d s o u n d 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 procurement procedures and requirement human rights and respect cultures, customs, for vendors. Upon selection of new vendors, and values in all dealings with people, t h e G r o u p w i l l e v a l u a t e t h e v e n d o r s ’ places, and companies involved in our performance, reliability and pricing. As activities. The Group strives to implement part of our internal control on procurement environmentally and socially responsible p r o c e d u r e s , a t l e a s t 2 q u o t a t i o n s w i l l supply chain practices by working closely b e o b t a i n e d f o r e a c h p r o c u r e m e n t with all stakeholders including suppliers, local engagement. Also, consideration of previous community, and the respective authorities. performance of the vendor, in terms of creditability and compliance with local regulations are det ermining facto rs f o r supplier selection. Sustainable, fair-trade and 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 Hong Kong Australia Total Number of suppliers 2023 2022 17 43 60 15 42 57 The Group engages external parties in its day- B.6 PRODUCT RESPONSIBILITY to-day operations including environment, T h e C o m p a n y w i l l e n s u r e a l l r e q u i r e d process consultants, laboratories services, documentation will be implemented prior drilling services and professional services. to shipment of iron ore. Sinter testwork has To assist in maintaining a transparent supply provided positive results and confirmation of chain, the Group only procures goods and our product quality and the Group will strive services from suppliers and contractors whose to maintain the product’s quality upon future trade, employment practices and company delivery of ore. values are aligned to the Group. Independent internal control consultants no complaints from customers nor product are engaged yearly to perform reviews on 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. Compliance is actively monitored procedures will be duly implemented upon by procurement that identifies and reports future delivery of iron ore product. Given that production has yet to commence, any issues to the senior management. Any necessary action will be dealt with in a timely manner. ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT The Company upholds the confidentiality and responsibility within the Group. 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 Whistleblower Policy provides for protected 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 ’ disclosure, how to report Inappropriate information. Confidentiality agreements Conduct, confidentiality, and Whistleblower are put in place to protect any leakage of protections. The stakeholders may wish first information and the Company’s position on to discuss the alleged violation informally data security and privacy, including: with their manager in order to determine serious misconduct has occurred. This is • 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 an opportunity to clarify the incident, ask 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 questions, and at all times, it is expected otherwise specifically agreed, that the discussions will remain confidential. Where a stakeholder believes that internal • Destruction of documents containing reporting is not appropriate, the Company 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 encourages the stakeholder to report his carried out reliably. or her concern to Brockman’s Company Secretary and the Board. The Board will The Company manages data protection a s s e s s t h e s i t u a t i o n a n d , i f n e c e s s a r y , and privacy as part of its IT processes and will communicate the reports of alleged has several policies to manage IT related risks violations to the Group’s legal advisor. The including off-site backup. Given the nature Company Whistleblower policy is periodically of our business, our operating segments do reviewed by the Board. not involve the use of intellectual property rights owned by other parties. Nevertheless, There were no matters relating to Inappropriate the Group has set out the treatment of Conduct and corrupt practices brought against handling and protecting intellectual rights in the Group or its employees during the year our Code of Conduct. (2022: Nil). During the year, the Group was not aware of The Company has adopted a Securities any material breaches of the relevant laws Trading Policy which applies, inter-alia, to and regulations relating to the Group health all Directors and executives. The Securities and safety, advertising, labelling and privacy Trading Policy complies with ASX Listing matters relating products and services. B.7 ANTI-CORRUPTION Principles and the Mode Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 The Company is committed to responsible of the SEHK Listing Rules. All directors have C o r p o r a t e G o v e r n a n c e , i n c l u d i n g confirmed, following a specific inquiry by the t h e i m p l e m e n t a t i o n o f g u i d e l i n e s a n d Company, that they have complied with the m e a s u r e s t o e n c o u r a g e e m p l o y e e s required standard as set out in the Model a n d r e p r e s e n t a t i v e s o f t h e C o m p a n y Code throughout the year ended 30 June to identify and report in good faith any 2023. concerns relating to serious misconduct which is, or potentially could be a criminal During the year ended 30 June 2023, reading o f f e n c e , a b r e a c h o f l e g a l o b l i g a t i o n , material regarding “Update on Listing Rules dishonest, fraudulent, or corrupt, a breach and Corporate Governance Code and Anti- of the Company’s policies (collectively, Corporation” was circulated to all directors Inappropriate Conduct). Brockman takes of the Company. a zero tolerance approach to corruption and bribery and is committed to acting professionally, fairly and with integrity in all our business dealings. Accordingly, the Board have endorsed a Whistleblower Policy to encourage and foster a culture of integrity 51 ANNUAL REPORT 2023 A copy of the Code of Conduct, Securities The Group’s Sustainability Policy seeks to T r a d i n g a n d W h i s t l e b l o w e r P o l i c i e s a r e ensure it is a constructive partner to advance available in corporate governance section t h e s o c i a l , e c o n o m i c a n d i n s t i t u t i o n a l of the Company’s website. B.8 COMMUNITY INVESTMENT development of the communities in which it operates. The Group fully acknowledges the rights, cultures, customs, and values of The Company is transparent on the need people affected by the development and to earn the respect and support of the exploitation of mineral resources. communities in which it is located and also by demonstrating a tangible level of Brockman maintains its community focus on commitment to environmental sustainability. health and sports, and has sponsored charity 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 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 purpose of raising employees’ awareness on environments (Hong Kong and Australia). health while giving back to the community. While compliance with these regulatory environments are the basis of the Group’s environmental management, the Group is committed to the principle of developing and implementing appropriate practices and will actively work to: • Protect the environment surrounding its projects; and • 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 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 p r o j e c t s , f r o m e x p l o r a t i o n , development, operation and final closure, and • A c t s y s t e m i c a l l y t o i m p r o v e t h e planning, execution, and monitoring of its environmental performance; and • Respect the rights of the traditional 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 culture heritage. The Group is committed to operating in a way which contributes to the sustainable d e v e l o p m e n t o f m i n e r a l r e s o u r c e s t h r o u g h e f f i c i e n t , b a l a n c e d a n d l o n g - t e r m m a n a g e m e n t , w h i l e s h o w i n g d u e consideration for the wellbeing of people, protection of the environment and the development of local economies. ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT The Directors present their report together with the The Group’s results and business review, including future audited consolidated financial statements of the developments, financial performance analysis, principal Company for the year ended 30 June 2023 and the risks and uncertainties facing the Group, environmental Independent Auditor’s Report there on. policies and performance, compliance, with relevant REGISTRATION AND LISTING The Company was registered in Bermuda in accordance with Section 14 of the Companies Act 1981 on 1 February 2002. The Company’s shares were listed on the Main Board of the Stock Exchange Hong Kong Limited (“SEHK”) on 5 July 1985 and the Australian Securities Exchange Limited (“ASX”) on 11 January 2011. 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. RESERVES Movements in the reserves of the Group during the year are set out in consolidated statement of changes in equity on page 70. The Company had no reserves available for cash distribution and or distribution in specie as at 30 June 2023 (2022: Nil). PROPERTY, PLANT AND EQUIPMENT Details of the movements in property, plant and equipment are set out in Note 18 to the consolidated financial statements. RESULTS AND REVIEW OF OPERATIONS The results of the Company for the year ended 30 June 2023 are set out in the consolidated financial statements on pages 68 to 71 of the Annual Report. laws and regulations that have significant impact on the Company and key relationships with stakeholders, in accordance with Schedule 5 of the Hong Kong Companies Ordinance (Chapter 622 of the laws of Hong Kong), are set out in the Management Discussion and Analysis set out on page 4 to 15 of this Annual Report. The Group’s environment, social and governance policies, relationships with its key stakeholders, and the Environmental, Social and Governance Report on pages 38 to 52 of this Annual Report to be separately released on the website of the SEHK and the website of the Company in the sustainability section under Environmental, Social and Governance Report. This discussion forms part of this directors’ report. 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 109. This summary does not form part of the audited financial statements. FINAL DIVIDEND The Board does not recommend the payment of a 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 • • performance; Shareholders’ interests; Retained earnings, distributable reserves and contributed surplus of the Company and each of the other members of the Group; 53 ANNUAL REPORT 2023DIRECTORS’ REPORT • The level of the Group’s debt to equity ratio, return Executive Directors: on equity and financial covenants to which the Colin Paterson Group is subject to; Chan Kam Kwan, Jason (Company Secretary) • • Possible effects on the Group’s credit worthiness; Kwai Kwun, Lawrence Independent Non-executive Directors: Any restrictions on payment of dividends or other Yap Fat Suan, Henry covenants on the Group’s financial ratios that may Choi Yue Chun, Eugene be imposed by the Group’s financial creditors; David Rolf Welch • The Group’s expected working capital requirements Pursuant to code provision B.2.2 of the Corporate and future expansion plans; Governance Code contained in Appendix 14 to the Rules Governing the Listing of Securities on the SEHK, • Liquidity position and future commitments at the every director, including those appointed for a specific time of declaration of dividend; term, should be subject to retirement by rotation at Taxation considerations; least once every three years. Accordingly, clause 84(1) of the Company’s Bye-laws Messrs. Colin Paterson, Yap Fat Suan, Henry and Choi Yue Chun, Eugene shall retire Statutory and regulatory restrictions; and, being eligible, offer themselves for re-election at the forthcoming annual general meeting. General business conditions and strategies; • • • CONFIRMATION OF INDEPENDENCE All the independent non-execut ive directo rs are appointed for a specific term and will be subject to retirement by rotation and re-election in accordance with the SEHK 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 SEHK Listing Rules. DIRECTORS’ AND KEY MANAGEMENT’S BIOGRAPHIES Biographical details of the directors of the Company and the key management of the Group are set out on pages 16 to 17 of the 2023 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. • 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. DISTRIBUTABLE RESERVES As at 30 June 2023, the Company has no reserve available for distribution to the shareholders. 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. 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) (Retired 13 December 2022) Ross Stewart Norgard DIRECTORS’ REPORT REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL The directors’ fees are subject to shareholders’ approval DIRECTORS’ MEETINGS The details of directors attendance at board and committee meetings is included in the Corporate at general meetings. Other emoluments are determined Governance Report on pages 20 to 33. DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES AND DEBENTURES As at 30 June 2023, the interests and short positions of the directors and chief executive and their respective associates in the share capital, and 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 Issues were as follows: by the Company’s board of directors with reference to directors’ duties, responsibilities and performance and the results of the Group. The Board is responsible f o r d e t e r m i n i n g , w i t h r e c o m m e n d a t i o n f r o m t h e Remuneration and Performance Committee of the Company, the compensation arrangements for the chairman, directors and key management personnel (“KMP”). For the purposes of this Annual Report, KMP of the Company are defined as those persons having authority and responsibility for planning, directing, and controlling the major activities of the Group, including any Director (whether Executive or otherwise) of the Company. Remuneration policy The Board recognises that the Company’s performance depends upon the quality of its directors and executives. To achieve its financial and operating activities, the Company must attract, motivate and retain highly skilled directors and executives. The Company embodies the following principles in its remuneration framework: • Provides competitive rewards to attract high calibre directors and executives, • Structures remuneration at a level that reflects the directors’ duties, accountabilities and it is competitive within Hong Kong and Australia, • Benchmarks remuneration against appropriate industry groups. D e t a i l s o f t h e D i r e c t o r s ’ r e m u n e r a t i o n a n d k e y management personnel are set in Note 14 and 32(c) to the consolidated financial statements. 55 ANNUAL REPORT 2023 Number of issued ordinary shares held Number of options outstanding Percentage of the issued share capital of the Company Long positions of ordinary shares of HK$0.10 each 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 Ross Norgard Beneficial owner 64,569,834 1,500,000 Interests of controlled 181,696,505 — corporation Mr Colin Paterson Beneficial owner 22,073,004 15,000,000 Mr Kwai Kwun Lawrence Beneficial owner Interest of spouse 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% 0.71% 1.96% 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. Save as disclosed above, as at 30 June 2023, none of the Directors and Chief Executive, nor their associates had registered an interest or short position in any 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 as set out in Appendix 10 of the SEHK Listing Rules. 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 option pricing 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. DIRECTORS’ REPORT 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 2023 includes the estimated values of the share options (using the binomial option pricing model), date of grant, vesting period, exercise period and the exercise price of the options outstanding at the beginning and end of the year which have been granted to Qualified Persons under the Share Option Scheme are as follows: Maximum entitlement of each participant Option type Outstanding as at 1 July 2022 2021A 1,500,000 1,500,000 Non-Executive Directors Liu Zhengui Ross Stewart Norgard 2021A 1,500,000 1,500,000 Choi Yue Chun Eugene 2021A 1,500,000 1,500,000 Yap Fat Suan Henry 2021A 1,500,000 1,500,000 David Rolf Welch 2021A 1,500,000 1,500,000 Executive Directors Chan Kam Kwan Jason 2021A 10,000,000 10,000,000 Colin Paterson 2021B 15,000,000 15,000,000 Sub-total Employees Employees 32,500,000 71,000,000 32,500,000 70,000,000 2021A 2021B 2,000,000 2,000,000 Sub-total GRAND TOTAL Weighted average exercise price 73,000,000 105,500,000 72,000,000 104,500,000 0.23 Exercised Lapsed Forfeited Cancelled Granted — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,500,000 — — — — — — 1,500,000 — — 1,500,000 1,500,000 0.21 — — — — — — — — — — — — — Outstanding as at 30 June 2023 Date of grant of share options — 29 June 2021 1,500,000 29 June 2021 1,500,000 29 June 2021 1,500,000 29 June 2021 1,500,000 29 June 2021 10,000,000 29 June 2021 15,000,000 29 June 2021 31,000,000 70,000,000 14 May 2021 2,000,000 14 May 2021 72,000,000 103,000,000 0.23 Vesting period of share options Exercise period of share options Exercise price (HK$) Closing price immediately before the date of grant (HK$) 29 June 2021- 1 January 2022 29 June 2021- 1 January 2022 29 June 2021- 1 January 2022 29 June 2021- 1 January 2022 29 June 2021- 1 January 2022 29 June 2021- 1 January 2022 29 June 2021- 1 January 2022 14 May 2021- 1 January 2022 14 May 2021- 1 January 2022 1 January 2022- 31 December 2024 1 January 2022- 31 December 2024 1 January 2022- 31 December 2024 1 January 2022- 31 December 2024 1 January 2022- 31 December 2024 1 January 2022- 31 December 2024 1 January 2022- 12 May 2024 1 January 2022- 31 December 2024 1 January 2022- 12 May 2024 0.213 0.213 0.213 0.213 0.213 0.213 0.295 0.213 0.295 0.210 0.210 0.210 0.210 0.210 0.210 0.210 0.207 0.207 As at 30 June 2023, the Company had 103,000,000 share options outstanding under the Share Option Scheme which represented approximately 1.11% of the weighted average number of the Company’s shares in issue during the year. Should the 103,000,000 share options be fully exercised, the Company will receive HK$23,333,000 (before issue expenses). The fair value of these unexercised options measured in accordance with the Group’s accounting policy note 3(v) and 25 to the consolidated financial statements amounted to HK$7,545,000. The number of share options available for grant under the Share Option Scheme was 465,448,223 at the beginning of the year, and was nil at the end of the year as the Share Option Scheme expired in August 2022. During the year, no directors, chief executive or substantial shareholder of the Company were granted or to be granted options in excess of the 1% individual limit. At no time, a related party or other participants of the Company were granted or to be granted options in any 12 month period exceeding 0.1% of the issued share capital. Until the new share option scheme is implemented no new share options will be granted, however existing unexercised share options will continue until they are exercised, cancelled, forfeited or expired. Saved as disclosed above, at no time during the year were rights to acquire benefits by means of the 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. 57 ANNUAL REPORT 2023 DIRECTORS’ RIGHTS TO ACQUIRE SHARES OR DEBENTURES Other than as disclosed in the section “Directors and MANAGEMENT CONTRACTS No contracts concerning the management and or administration of the whole or any substantial part of the Chief Executives’ interest and short positions in shares business of the Company were entered into or existed and underlying shares and debentures”, at no time during the year ended 30 June 2023. RELATED PARTY TRANSACTIONS Significant related party transactions entered into by the Group during the year ended 30 June 2023 are disclosed in Note 32 to the consolidated financial statements. The related party transactions do not constitute a connected transaction and are exempt connected transaction under the SEHK listing rules. SUBSTANTIAL SHAREHOLDERS’ AND OTHER PERSONS INTEREST AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES To the best of directors’ knowledge, as at 30 June 2023 the register of substantial 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: during the year 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 had any interests in any business which competes or is likely to compete, directly or indirectly, with the business of 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 statements. Other than as disclosed therein, no director nor a connected entity of a director, a related party of a director, nor a controlling shareholder of the Company, had a material interest, either directly or indirectly, in any transactions, 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’ REPORT Long 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 held a total of 50,000,000 options. The details of the share options outstanding during the year are separately disclosed in the section “Share Options” and Note 25 to the consolidated financial statements. Save as disclosed above, as at 30 June 2023, no person, other than the directors and chief executive 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. 59 ANNUAL REPORT 2023 SHARE CAPITAL, SHARE OPTIONS, WARRANTS AND CONVERTIBLE BONDS Details of movements in the Company’s share capital and share options during the year are set out in notes 24 and 25 to the consolidated financial statements. During the year, the Company has not issued any debentures. PURCHASE, REDEMPTION OR SALE OF COMPANY’S LISTED SECURITIES During the year, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the listed securities of the Company. PERMITTED INDEMNITY PROVISION Pursuant to the Bye-Laws of the Company, the Directors shall be indemnified and secured harmless out of the assets and profits of the Company against all losses and liabilities etc which they may incur or sustain by reason 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 20% 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), have any beneficial interest in the Group’s five largest customers and suppliers. PENSION SCHEME ARRANGEMENTS E m p l o y e r s i n H o n g K o n g a r e o b l i g e d u n d e r t h e The contributions are charged to the consolidated statement of profit or loss, represent the contribution payable to employees funds during the year. CONTRACT OF SIGNIFICANCE No contracts of significance in relation to the Group’s business in which the Company, any of its subsidiaries or fellow subsidiaries, or its parent company was a party and in which a director of the Company had a material interest, whether directly or indirectly, subsisted during or at the end of the year. PROVISION OF INFORMATION IN RESPECT OF ANY DIRECTOR Pursuant to Rule 13.51(B)(1) of the SEHK Listing Rules the changes of directors’ information of the Company is set out below: • Mr. Liu Zhengui retired as non-executive director of the Company on 13 December 2022. • Mr. Chan Kam Kwan, Jason had resigned as an independent non-executive director of 1957&Co. (Hospitality) Limited (Stock Code: 8495) on 19 August 2022. Save as disclosed above, upon specific enquiry made by the Company and following confirmations from directors, there are no other changes in the information of the directors required to be disclosed pursuant to Rule 13.51(B)(1) of the SEHK Listing Rules since the Company’s last published annual report. CORPORATE GOVERNANCE The Company is committed to maintain a high standard of corporate governance practices. During the year ended 30 June 2023, the Company has complied with Code provisions of the Corporate Governance Code as set out in Part 2 of Appendix of the 14 of the SEHK Listing Rules, except for the following: (i) Code Provision C.2.1, states that the roles of Chairman and Chief Executive should not be performed by the same individual. The position of chief executive officer at the Group level has been vacant during the year. Nevertheless, Mandatory Provident Fund Scheme Ordinance to Mr. Colin Paterson, an executive director of the contribute for its employees 5% of the employees’ Company, also serves as the chief executive r e l e v a n t i n c o m e t o a m a x i m u m o f H K $ 1 , 5 0 0 p e r Officer of Brockman Mining Australia Pty Ltd (a month. Employers in Australia are obligated to make wholly-owned subsidiary of the Company), and is superannuation contributions for eligible employees responsible for the oversight of the core iron ore 10.50% (from 1 July 2023 the contribution rate increased to 11.0%) on gross earnings to a maximum quarterly superannuation payment of A$6,323 (approximately HK$33,230) per quarter. No forfeited contribution is available to reduce the contribution payable in the future. business segment. Information on the corporate governance practices adopted by the Company is set out in the Corporate Governance Report on pages 18 to 37 of the annual report. DIRECTORS’ REPORT EVENTS AFTER THE REPORTING PERIOD Details of the significant events of the Group after AUDIT AND NON-AUDIT SERVICES The Company may decide to employ the auditor on the reporting period are set out in note 39 to the assignments additional to their statutory audit duties, consolidated financial statements. SUFFICIENCY OF PUBLIC FLOAT Based on information that is publicly available to the Company and within the knowledge of the directors as at the date of this Annual Report, the Company has maintained sufficient public float as required under the SEHK Listing Rules. 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, 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 • None of the services undermine the general principles relating to auditor independence as set out in Professional Statement F1, including reviewing or 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. During 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 of any statutory financial reports covering the Group — tax compliance — tax advice Remuneration of Ernst and Young (other than) Australia for: — fees for auditing and review of any statutory financial reports covering the Group 2023 HK$’000 2022 HK$’000 1,018 210 392 1,620 60 60 1,680 1,038 113 — 1,151 65 65 1,216 RE-APPOINTMENT OF AUDITOR The consolidated financial statements for the financial year ended 30 June 2023 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 Accounting and 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, 19 September 2023 61 ANNUAL REPORT 2023 Independent 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 68 to 108, which comprise the consolidated balance sheet as at 30 June 2023, 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 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 2023 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 REPORT 1. Carrying value of capitalised mining exploration properties Why significant How our audit addressed the key audit matter At 30 June 2023 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$705,842,000, representing 97% of the required the capitalised mining exploration properties to be Group’s total assets. tested for impairment as at 30 June 2023. 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 17 of the Group’s total assets and the degree 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 17 in the consolidated financial statements for capitalised mining exploration property balances and related disclosures. 63 ANNUAL REPORT 2023 2. Recognition of deferred tax asset Why significant How our audit addressed the key audit matter At 30 June 2023, the Group: We assessed the Group’s decision to carry the DTA at 30 June 2023 and the methodology for determining the amount of the ► Recognised a deferred tax asset (“DTA”) DTA to be carried forward for compliance with IFRS. of HK$109,795,000 in its consolidated balance sheet for certain of its Australian Our audit procedures included the following: carry forward tax losses. This DTA was fully offset against the deferred tax liability ► We assessed the amount of the Group’s available (“DTL”) in the consolidated balance carry forward tax losses and the impact of any known sheet. or potential limitations on the availability of the carry forward tax losses. This work included consultation with ► Did not recognise a DTA in respect of our tax specialists. tax losses amounting to approximately HK$831,909,000 as the utilisation of these ► We obtained and considered correspondence: tax losses is subject to the satisfaction o f t h e l o s s r e c o u p m e n t r u l e s i n t h e ► 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 relevant tax jurisdiction as well as other authorities. uncertainties which mean that their availability for utilisation or realisation is ► Between the Group and external tax advisors. not considered probable. Under IFRS, DTAs for available carry forward tax the consolidated financial statements. ► We assessed the adequacy of the related disclosures in 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 2023, we consider this a key audit matter. Refer to Notes 4(c), 13 and 26 in the consolidated financial statements for deferred tax balances and related disclosures. INDEPENDENT AUDITOR’S REPORT 3. Measurement of Polaris and substantial shareholder loans Why significant How our audit addressed the key audit matter At 30 June 2023, the carrying amount of the Our audit procedures included the following: Group’s loans payable to Polaris Metals Pty Ltd (“Polaris”) and a substantial shareholder ► We assessed whether the extinguishment of the previous ( “ s h a r e h o l d e r ” ) t o t a l l e d H K $ 6 4 , 6 1 7 , 0 0 0 , shareholder loan had been appropriately accounted for representing 30% of the Group’s total liabilities. in accordance with IFRS 9 Financial Instruments (“IFRS 9”). The Polaris loan was advanced to the Group, ► We assessed whether the new shareholder loan had pursuant to the Farm-in and Joint Venture been appropriately recognised and measured in Agreement (“FJV”) between Brockman Iron accordance with IFRS 9. Pty Ltd (“Brockman Iron”) and Polaris. The loan is secured and bears no interest. timing of the expected Polaris loan repayments. This Under the terms of the FJV Agreement, the included reading correspondence between the Group repayment terms of this loan varies dependent and Polaris to assess the intentions of both parties. ► We evaluated the Group’s assessment regarding the upon a number of conditions relating to the Marillana Project. The Group determined that ► With the assistance of our EY Banking and Capital Market the timing of the loan repayments did not specialists, we assessed the market rate of interest used need to be adjusted in the current year and by the Group in its determination of the amortised cost hence no remeasurement was necessary. calculation for the new shareholder loan. On 23 February 2023, an existing shareholder ► We obtained and reviewed management’s calculation loan was extinguished and replaced by a new of the amortised cost and classification of both loans in loan of US$3.3 million (HK$25,740,000). This new accordance with the requirements of IFRS 9. loan is unsecured, bears interest at 17% per annum and is repayable on 31 October 2024. ► We assessed the adequacy of the related disclosures in the consolidated financial statements. Given the significant degree of judgement involved in: • The Group’s assessment of the likely amount and timing of repayments for the Polaris loan; • The accounting for the extinguishment of the previous shareholder loan; and • the determination of an appropriate market rate of interest used for the calculation of amortised cost for the new shareholder loan; 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. 65 ANNUAL REPORT 2023 OTHER 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 19 September 2023 67 ANNUAL REPORT 2023 Other income Administrative expenses Exploration and evaluation expenses Operating loss Finance income Finance costs Finance costs, net Share of loss of joint ventures Loss before income tax Income tax benefit Loss for the year Other comprehensive loss Item that may be reclassified to profit or loss Exchange differences arising from translation of foreign operations Other comprehensive loss for the year Total comprehensive loss for the year Loss for the period attributable to equity holders of the Company Total comprehensive loss 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 2023 HK$’000 48 (16,563) (50,207) (66,722) 221 (6,616) (6,395) (130) (73,247) 16,691 (56,556) (22,368) (22,368) (78,924) (56,556) 2022 HK$’000 97 (22,747) (17,677) (40,327) 13,211 (4,613) 8,598 (136) (31,865) 11,051 (20,814) (41,360) (41,360) (62,174) (20,814) (78,924) (62,714) HK cents HK cents (0.61) (0.61) (0.22) (0.22) Note 10 11 11 12 30 13 15 15 The notes on pages 72 to 108 form an integral part of these consolidated financial statements. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 30 June 2023 Non-current assets Mining exploration properties Property, plant and equipment Right-of-use assets Interest in joint venture Other non-current assets Current assets Other receivables, deposits and prepayments Cash and cash equivalents Total assets Equity Share capital Reserves Accumulated losses Total equity Non-current liabilities Deferred income tax liability Borrowings Lease liabilities Current liabilities Trade and other payables Lease liabilities Provisions Total liabilities Total equity and liabilities Note 17 18 18,19 30 21 20 24 34 26 23 19 22 19 27 As at 30 June 2023 HK$’000 2022 HK$’000 705,842 733,677 144 654 630 119 177 801 651 123 707,389 735,429 925 16,495 17,420 724,809 999 28,797 29,796 765,225 928,023 3,798,584 928,023 3,820,953 (4,215,395) (4,158,839) 511,212 590,137 86,369 64,617 718 151,704 60,583 396 914 61,893 213,597 724,809 106,949 51,309 563 158,821 14,504 619 1,144 16,267 175,088 765,225 The consolidated financial statements on pages 68 to 108 were approved by the Board of Directors on 19 September 2023 and were signed on its behalf. Kwai Kwun, Lawrence Director Chan Kam Kwan, Jason Director The notes on page 72 to 108 form an integral part of these consolidated financial statements. 69 ANNUAL REPORT 2023CONSOLIDATED BALANCE SHEETAs at 30 June 2023 Notes Balance at 1 July 2021 Loss for the year Other comprehensive loss Exchange differences arising on translation of foreign operations Total comprehensive loss for the year Transactions with equity holders Issuance of shares Exercise of options Share based compensation Total transactions with equity 24 25 holders Balance at 30 June 2022 Notes Balance at 1 July 2022 Loss for the year Other comprehensive loss Exchange differences arising on translation of foreign operations 34 Total comprehensive loss for the year Transactions with equity holders Balance at 30 June 2023 Share-based Share capital HK$’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$’000 645,702 (20,814) — — 100 — — — — — 113 — 100 928,023 113 4,468,737 — — — — 6,396 6,396 92,506 Share-based (41,360) — (41,360) (41,360) (20,814) (62,174) — — — — — — 100 113 6,396 — (740,290) — (4,158,839) 6,609 590,137 Share capital HK$’000 928,023 — Share compensation Translation Accumulated premium HK$’000 4,468,737 — reserve HK$’000 92,506 — reserve HK$’000 (740,290) — losses HK$’000 (4,158,839) (56,556) Total HK$’000 590,137 (56,556) — — — — — — (22,368) — (22,368) (22,368) (56,556) (78,924) — 928,023 — 4,468,737 — 92,506 — (762,658) — (4,215,395) — 511,213 The notes on pages 72 to 108 form an integral part of these consolidated financial statements. CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the year ended 30 June 2023 Note 11,18 11,18,19 25 12 12 30(b) 18 30(b) Cash flows from operating activities Loss before tax Adjustments for: Depreciation of property, plant and equipment Depreciation of right-of-use assets Share-based payment expense Finance costs Finance income Share of loss of joint venture Movements in provisions Other non-cash income and expenses Working capital adjustments: — (Decrease)/increase in trade receivables & prepayments — Increase in trade and other payables Net cash flows used in operating activities Cash flows from investing activities Purchase of property, plant and equipment Investment in joint venture Interest received Net cash flows from/(used in) investing activities Cash flows from financing activities Proceeds from borrowings Proceeds from issuance of ordinary shares Payment of principal portion of lease liabilities Interest on lease payments Proceeds received on settlement of non-recourse loan shares Net cash flows from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of the year Effects of foreign exchange rate changes Cash and cash equivalents at end of the year 20 Cash used for exploration and evaluation activities included in Year ended 30 June 2023 HK$’000 2022 HK$’000 (73,247) (31,865) 30 533 — 6,616 — 130 (230) (216) 74 47,068 (19,242) (4) (133) 219 82 8,187 — (438) (144) — 7,605 (11,555) 28,797 (747) 16,495 30 678 6,396 4,482 (13,197) 136 (314) 135 (34) 13,381 (20,173) (51) (130) 16 (165) — 215 (671) (131) 5,737 5,150 (15,188) 45,667 (1,682) 28,797 operating activities (2,800) (3,640) ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances Non-pledged time deposits with original maturity of less than three months when acquired Cash and cash equivalents as stated in the statement of cash 12,577 28,797 3,918 — flows 20 16,495 28,797 The notes on pages 72 to 108 form an integral part of these consolidated financial statements. 71 ANNUAL REPORT 2023CONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended 30 June 2023 1. GENERAL INFORMATION Brockman Mining Limited (the “Company”) and its subsidiaries (collectively, the “Group”) principally engage in the acquisition, exploration and development of iron ore projects in Australia. The Company is a public company incorporated in Bermuda as an exempted company with limited liability and its shares are listed on The Stock Exchange of Hong Kong Limited (the “SEHK”) and Australian Securities Exchange (the “ASX”). The address of its registered office is Clarendon House, 2 Church Street, Hamilton HM11, Bermuda. These consolidated financial statements are presented in Hong Kong dollars (HK$), 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 2023 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 2023, the Group recorded a net loss before tax of HK$73,247,000 (2022: HK$31,865,000) and had operating cash outflows of HK$19,242,000 (2022: HK$20,173,000). The Group also had net current liabilities of HK$44,473,000 (2022: net current assets of HK$13,529,000 refer to note 22). 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 (including the Group’s share of the joint operation expenses) of the Group’s iron ore exploration projects and corporate overhead costs. As at 30 June 2023, the Group’s cash and cash equivalents amounted to HK$16,495,000 (2022: HK$28,797,000). 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$189,192,000). The project loan agreement is expected to be executed by the first half of FY24. 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) On 23 February 2023, the substantial shareholder agreed to replace the existing loan and interest of HK$17,457,000 (refer to note 23) with a new loan for US$3,300,000 (approximately HK$25,740,000). Extending the repayment date of the replacement loan from the substantial shareholder amounting to HK$27,328,000, to 31 October 2024. This loan bears interest at 17% per annum. (iii) On 23 February 2023, the directors of the Company secured agreement for an increased standby loan facility from its substantial shareholder amounting to US$1,800,000 (HK$14,040,000 approx.). If drawn down, the loan will be unsecured, bear interest at 17% and be repayable on 31 October 2024. As at 30 June 2023, the facility of US$1,800,000 (approx. HK$14,040,000) is undrawn. This standby loan facility replaced the standby loan facility of HK$10,000,000 previously in place. 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 to meet its financial obligations as and when they fall due within the next twelve months from the date of approval of these consolidated financial statements. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 2. BASIS OF PREPARATION (Continued) (a) Going concern basis (Continued) 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 prepare the Group’s consolidated financial statements on a going concern basis. 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 2022. 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 2023, 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 were 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 Levis, 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 of Financial Statements. The amendments were effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively. The amendments did not 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 was effective for annual reporting periods beginning on or after 1 January 2022 and was 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 applied the amendment. The amendments did not have a material impact on the Group. 73 ANNUAL REPORT 2023 3. 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 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 were effective for annual reporting periods beginning on or after 1 January 2022. The Group applied 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 applied the amendments. The amendments did not 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 clarified 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 applied the amendment. The amendment was effective for annual reporting periods beginning on or after 1 January 2022. The Group applied amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applied the amendment. The amendments did not 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. Definition of Accounting Estimates — Amendments to IAS 8 The amendments to IAS 8 clarify the distinction between changes in accounting estimates, and changes in accounting policies and the correction of errors. They also clarify how entities use measurement techniques and inputs to develop accounting estimates. The amendments have no material impact on the Group. Disclosures of Accounting Policies — Amendments to IAS 1 and IFRS Practice Statement 2 The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide 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 Group is currently revisiting their accounting policy information disclosures to ensure consistency with the amended requirements. (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. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 3. 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. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. 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) Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses. 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. 75 ANNUAL REPORT 2023 3. PRINCIPAL ACCOUNTING POLICIES (Continued) (d) Segment reporting (Continued) The Company aggregates two or more operating segments when they have similar economic characteristics, and the segments are similar in each of the following respects: • • Geographical location, and National regulatory environment. Operating segments that do not meet the quantitative criteria as prescribed by IFRS 8 Operating Segments are reported separately. An operating segment that does not meet the quantitative criteria is still reported separately where information about the segment would be useful to users of the consolidated financial statements. Information about other business activities and operating segments that are below the quantitative criteria are combined and disclosed in a separate category for “other”. (e) 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. (ii) Transactions and balances 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); — all resulting currency translation differences are recognised in other comprehensive income; and — 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. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 3. PRINCIPAL ACCOUNTING POLICIES (Continued) (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. 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. (h) Impairment of non-financial assets Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than inventories, deferred tax assets and financial assets), the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s or cash generating unit’s value in use and its fair value less costs of disposal. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating unit). An impairment loss is recognised only if the carrying amount of an amount of an asset exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to the statement of profit or loss in the period in which it arises in those expense categories consistent with the function of the impaired asset. An assessment is made at the end of each reporting period as to whether there is an indication that previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/ amortisation) had no impairment loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to the statement of profit or loss in the period in which it arises. 77 ANNUAL REPORT 2023 3. PRINCIPAL ACCOUNTING POLICIES (Continued) (i) 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. 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 2023, the group does not have any financial assets classified and measured at fair value through other comprehensive income (2022: 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. iii) iv) 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. 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. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 3. PRINCIPAL ACCOUNTING POLICIES (Continued) (j) Financial liabilities (Continued) ii) Financial liabilities at amortised cost (loans and borrowings) (Continued) 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) Fair value measurement The Group measures its financial assets and liabilities at fair value upon initial recognition. Fair value is the price that would be received to sell an asset or paid to transfer a liability in orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the consolidate financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement is observable, either directly or indirectly. Level 3 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. (l) 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. (m) Cash and cash equivalents For the purpose of the consolidated statement of cash flows, cash and cash equivalents include cash on hand and deposits, and have a short maturity of generally within three months when acquired. Restricted cash is not available for use by the Company and is therefore not considered highly liquid. 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, which are not restricted as to use. 79 ANNUAL REPORT 2023 3. PRINCIPAL ACCOUNTING POLICIES (Continued) (n) 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. (o) 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. The amounts are unsecured and are usually paid within 30 days of recognition. Other payables include the Group’s share of the joint operation expenditure of HK$59,965,000 (2022: HK$13,552,000), payable to Mineral Resources Limited, refer to note 2(a) and 30(a). (p) Earnings per share Basic earnings per share (“EPS”) is calculated as net profit/loss attributable to members of the parent divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted EPS is calculated as net profit/loss attributable to members of the parent, adjusted for: • • • Costs of servicing equity (other than dividends); The after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares. The result is then divided by the weighted average number of ordinary shares and dilutive potential ordinary shares adjusted for any bonus element. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 3. PRINCIPAL ACCOUNTING POLICIES (Continued) (q) 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. (r) (s) (t) 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. There were no borrowing costs eligible for capitalisation during the year (2022: Nil). Issued capital Issued and paid up capital is recognised at the fair value of the consideration received by the Company. 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 and current tax liabilities and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future periods in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. 81 ANNUAL REPORT 2023 3. PRINCIPAL ACCOUNTING POLICIES (Continued) (u) 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. 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. (v) 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). NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 3. PRINCIPAL ACCOUNTING POLICIES (Continued) (v) Share-based payments (Continued) (i) Equity-settled share-based payment transactions (Continued) 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. (w) 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. (x) (y) (z) 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. 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. 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. (aa) 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. (ab) 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. 83 ANNUAL REPORT 2023 3. PRINCIPAL ACCOUNTING POLICIES (Continued) (ab) Consumption tax (Goods and Services Tax and Value-added Tax) (Continued) 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. (ac) 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 lessee 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. 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 lease payments or a change in the assessment to purchase the underlying asset (e.g., a change to future lease payment resulting from a change in an index rate). Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases (i.e., 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 to the leases of low value assets recognition to 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. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 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 could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future. Judgements In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the consolidated financial statements. (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 2023, the carrying amount of the mining exploration properties is HK$705,842,000 (2022: HK$733,677,000). There is no impairment loss recognised for the year ended 30 June 2023 (2022: Nil) as no facts and circumstances suggest that the mining exploration properties may be impaired. See Note 17 for further consideration by the Group. Estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. (b) Measurement of Polaris and substantial shareholder loans Estimating the market interest rate The previous loan from its substantial shareholder was repaid on 23 February 2023 and a new loan from the substantial shareholder was subsequently advanced on the same day. Judgement was required to determine the market interest rates used to account for the Polaris and the substantial shareholder loans. The Polaris and substantial shareholder loans were initially recognised as fair value and subsequently measured at amortised cost using market interest rate of 12% (2022: 12%) and 17% (previous loan: 12%) respectively, which the directors believe best reflects the Group’s market interest rate for borrowings of these amounts 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. As at 30 June 2023, the carrying amount of these borrowings is HK$64,617,000 (2022: HK$34,517,000). (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 2023, the Group’s total tax losses were HK$1,196,521,000 (2022: HK$1,228,000,000). The Group did not recognise a deferred income tax asset in respect of tax losses amounting to approximately HK$831,909,000 (2022: HK$860,000,000) 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 of HK$289,099,000 (2022: HK$277,400,000) that relate to the Company are indefinitely for offsetting against future taxable profits of the companies in which the losses arose. Deferred tax assets have not been recognised in respect of these losses as it is not considered probable that taxable profits will be available against these losses can be utilised. 85 ANNUAL REPORT 2023 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued) Judgements (Continued) (c) Income taxes (Continued) The unrecognised tax losses of HK$542,810,000 (2022: HK$582,600,000) that relate to overseas subsidiaries 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. 5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Financial risk factors The Group’s activities expose it to a variety of financial risks: market risk (including exchange rate risk), credit risk, liquidity risk and interest rate risk. Risk management is carried out by the Executive Committee with guidance from the Risk Management Committee under policies approved by the Board. The Board also provides regular guidance for all for overall risk management. Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and agrees policies for managing each of the risks identified below. 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 2023 and 2022. 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 2023 and 2022 were as follows: Long-term debt and lease liabilities Total equity Total capital Gearing ratio 2023 HK$’000 65,335 511,212 641,882 10.17% 2022 HK$’000 51,872 590,137 642,009 8.08% An increase in the Group’s long-term debt and hence the Group’s gearing ratio increased from 8.08% to 10.17% at 30 June 2023 compared with the 30 June 2022. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) Financial risk factors (Continued) (ii) Liquidity risk The Group’s primary cash requirements have been for the payment for working capital and exploration and evaluation activities. The Group generally finances its short term funding requirements with equity funding and loans from shareholders. The following table details the Group’s remaining contractual maturity for its financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group could be required to pay. The table includes both interest and principal cash flows. Within 1 year of demand HK$’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 2023 Non-derivative financial liabilities: Trade and other payables Lease liabilities Borrowings 30 June 2022 Non-derivative financial liabilities: Trade and other payables Lease liabilities Borrowings 60,583 396 — 60,979 14,504 626 — 15,130 — 427 37,289 37,716 — 420 18,556 18,976 — 481 55,788 56,269 — — — — 60,583 1,305 93,504 155,392 60,583 1,114 64,617 126,314 — 249 — 249 — — 55,788 55,788 14,504 1,295 74,344 90,143 14,504 1,182 51,309 66,995 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. Management and the Board monitor the Group’s liquidity reserve on the basis of expected future cashflows. The information is prepared by management and reviewed by the Board includes annual cashflow budgets. (iii) 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. (iv) Exchange rate risk During the year, no financial instrument was used for hedging purposes. As at 30 June 2023 and 2022, the Group was not exposed to any significant exchange rate risk. (v) 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. The Group trades only recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification on an ongoing basis and the Group’s exposure to bad debts is not significant. For transactions that are not denominated in the functional currency of the relevant operating unit, the Group does not offer credit terms without the specific approval of management. In this regard, the directors of the Company consider that the credit risk of the Group is reduced. 87 ANNUAL REPORT 2023 5. 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 2023 and 2022, the Group was not exposed to any significant interest rate risk. 6. REVENUE There was no revenue during the year ended 30 June 2023 (2022: Nil). 7. SEGMENT INFORMATION Identification of reportable segments The Group has identified its operating segments based on internal reports that are used by the 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 future development of iron ore projects in Western Australia. Other - 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. Accounting policies The accounting policies used by the Group in reporting segments internally are the same as those contained in note 1(d) to the consolidated financial statements. Segment assets reported to executive directors of the Company are measured in a manner consistent with that in the consolidated balance sheet. Discrete financial information about each of these operating segments is reported to the Board (the Chief Operating Decision Maker) on at least a monthly basis. 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. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 7. SEGMENT INFORMATION (Continued) (a) The following is an analysis of the Group’s results by business segment: For the year ended 30 June 2023: 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 Income tax benefit 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 assets Exploration and evaluation expenses Share based payment expenses Income tax benefit Mineral tenements in Australia HK$’000 Other HK$’000 (59,319) (13,798) (382) (50,207) 16,691 (181) — — (12,463) (19,266) (352) (17,677) — 11,051 (356) — (6,396) — Total HK$’000 (73,117) (130) (73,247) (563) (50,207) 16,691 (31,729) (136) (31,865) (708) (17,677) (6,396) 11,051 (b) The following is an analysis of the Group’s total assets by business segment as at 30 June 2023: As at 30 June 2023: Segment assets Total segment assets include: Interest in joint ventures Property, plant and equipment Right-of-use assets As at 30 June 2022: Segment assets Total segment assets include: Interests in joint ventures Property, plant & equipment Right-of-use assets Mineral tenements in Australia HK$’000 Other HK$’000 Total HK$’000 717,003 7,806 724,809 630 144 654 — — — 630 144 654 758,848 6,377 765,225 651 174 623 — 3 178 651 177 801 (c) Geographical information The mineral tenements are located in Australia, and, the following is an analysis of the carrying amounts of the Group’s mining exploration properties, property plant and equipment, right-of-use assets and interests in joint ventures analysed by geographical area in which the assets are located: Hong Kong Australia 2023 HK$’000 — 707,270 2022 HK$’000 181 735,125 89 ANNUAL REPORT 2023 8. EMPLOYEE BENEFIT EXPENSE Salaries and other benefits Post-employment benefits Share-based compensation 2023 HK$’000 11,087 601 — 11,688 2022 HK$’000 11,630 587 6,396 18,613 9. FIVE HIGHEST PAID EMPLOYEES Of the five individuals who received the highest emoluments in the Group for the year, three (2022: three) are the directors of the Company whose emoluments are disclosed in Note 14. The emoluments of the remaining two (2022: two) highest paid employees who are neither a director nor chief executive officer of the Company are as follows: Salaries and other benefits Post-employment benefits Share-based compensation 2023 HK$’000 2,757 176 — 2,933 2022 HK$’000 2,834 179 937 3,950 The number of non director highest paid employees whose remuneration fell within the following bands presented in Hong Kong dollars, is as follows: HK$1,000,000 — HK$2,000,000 HK$2,000,001 — HK$3,000,000 HK$3,000,001 — HK$4,000,000 Number of individuals 2023 2 — — 2 2022 — 1 1 2 During the prior years, share options were granted to the highest paid non-director employees in respect to their services to the Group, further details of which are included in note 25. The fair value of such options, which has been recognised in the statement of profit or loss over the vesting period, was determined as at the date of grant and the amount included in the financial statements is included in the above highest paid non-director employees’ remuneration disclosures in the prior year. 10. OTHER INCOME Government grant (Note a) 2023 HK$’000 48 48 2022 HK$’000 97 97 Note a: During 30 June 2023, there was a government grant, provided by the Hong Kong Government to retain employees due to the implications caused by COVID-19 (HK$48,000), (2022: HK$97,000). NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 11. LOSS BEFORE TAX The Group’s loss before tax from continuing operations is arrived at after charging: Depreciation of property, plant and equipment Depreciation of right-of-use assets Auditor’s remuneration: Audit services Non-audit services Staff costs (including directors emoluments (note 14)) Equity-settled share option expense Exploration and evaluation expenses (excluding staff costs and rental expenses) 12. FINANCE COSTS, NET An analysis of finance costs, net is as follows: Finance income Interest income on bank deposits Remeasurement of the loans from Polaris Finance costs Interest on lease liabilities Interest on borrowings Finance costs, net 2023 HK$’000 30 533 1,078 602 11,688 — 48,997 2023 HK$’000 221 — (144) (6,472) (6,395) 2022 HK$’000 30 678 1,103 113 12,217 6,396 16,271 2022 HK$’000 14 13,197 (131) (4,482) 8,598 13. INCOME TAX BENEFIT No provision for Hong Kong Profits tax or overseas income tax has been made in the consolidated financial statements as the Group has no assessable profit for the year (2022: Nil). The applicable corporate income tax rate is 30% (2022: 30%) for subsidiaries in Australia and Hong Kong 16.50% (2022: 16.50%). The income tax on the Group’s loss before income tax differs from the theoretical amount that would arise using the enacted tax rate of the consolidated entities as follows: Loss before income tax Tax calculated at the applicable domestic tax rate of respective companies (note a) Expenses not deductible for tax purposes Deferred tax assets recognised Tax losses for which no deferred income tax asset was recognised Income tax benefit Note a: The weighted average applicable tax rate was 28% (2022: 22%). 2023 HK$’000 (73,247) (18,800) 74 (242) 2,277 (16,691) 2022 HK$’000 (31,865) (6,959) 1,096 (7,311) 2,123 (11,051) 91 ANNUAL REPORT 2023 14. BENEFITS AND INTERESTS OF DIRECTORS (a) Directors’ emoluments Directors’ remuneration for the year, disclosed pursuant to the Listing Rules, section 383(1)(a), (b), (c) and (f) of the Hong Kong Companies Ordinance and Part 2 of the Companies (Disclosure of Information amount Benefits of Directors) Regulation. The remuneration of every director for the year ended 30 June 2023 is set out below: Name Kwai Sze Hoi Chan Kam Kwan, Jason Kwai Kwun, Lawrence Liu Zhengui Yap Far Suan, Henry Choi Yue Chun, Eugene David Rolf Welch Ross Stewart Norgard Colin Paterson Total Fees HK$’000 Salary HK$’000 Discretionary bonuses HK$’000 Housing allowance HK$’000 Share based payment expense HK$’000 Retirement benefit scheme HK$’000 — — — 108 228 228 229 229 — 1,022 — 1,070 1,210 — — — — — 2,018 4,298 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 54 61 — — — — — 133 248 The remuneration of every director for the year ended 30 June 2022 is set out below: Name Kwai Sze Hoi Chan Kam Kwan, Jason Kwai Kwun, Lawrence Liu Zhengui Yap Far Suan, Henry Choi Yue Chun, Eugene David Rolf Welch Ross Stewart Norgard Colin Paterson Total Fees HK$’000 Salary HK$’000 Discretionary bonuses HK$’000 Housing allowance HK$’000 Share based payment expense HK$’000 Retirement benefit scheme HK$’000 — — — 240 228 228 227 227 — 1,150 — 363 1,083 — — — — — 2,328 3,774 — — — — — — — — — — — 720 — — — — — — — 720 — 777 — 117 117 117 117 117 716 2,078 — 50 50 — — — — — 133 233 Total HK$’000 — 1,124 1,271 108 228 228 229 229 2,151 5,568 Total HK$’000 — 1,910 1,133 357 345 345 344 344 3,177 7,955 In the prior years, 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. The executive directors remuneration shown above is for the provision of services in connection with the management of the affairs of the Company and Group. The non-executive directors and independent non-executive directors remuneration shown above are for their services as directors of the Company. There was no arrangement under which a director or the chief executive waived or agreed to waive any remuneration during the year. No director proposed for re-election at the 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 normal statutory compensation. (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 (2022: Nil). (c) Directors’ termination benefits No payment was made to directors as compensation for early termination of their appointment during the year (2022: Nil). NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 14. BENEFITS AND INTERESTS OF DIRECTORS (Continued) (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 (2022: Nil). (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 2023, 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 (2022: 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 (2022: 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 (2022: 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 year. Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding during the year (adjusted for the effects of dilutive options). There have been no post balance sheet movements impacting the diluted earnings per share. Loss for the period attributable to the equity holders of the Company (HK$’000) Weighted average number of ordinary shares for the purpose of 2023 2022 (56,556) (20,814) calculating the loss per share (thousands) 9,280,232 9,279,410 Effects of dilution from: — share options (thousands) 103,000 104,500 Weighted average number of ordinary shares adjusted for the effect of dilution (thousands) 9,485,910(*) 9,383,732(*) Loss per share attributable to the equity holders of the Company: Basic (HK cents) Diluted (HK cents) (0.61) (0.61)(*) (0.22) (0.22)(*) 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$56,556,000 (2022: HK$20,814,000), and the weighted average number of ordinary shares 9,280,232,000 (2022: 9,279,410,000) on issue during the year that are considered in the calculation of basic loss per share. 16. DIVIDEND No dividend was paid or proposed during the year ended 30 June 2023, nor has any dividend been proposed since the balance sheet date (2022: Nil). 93 ANNUAL REPORT 2023 17. MINING EXPLORATION PROPERTIES Balance as at 1 July 2021 Other Exchange differences Balance as at 30 June 2022 Exchange differences Balance as at 30 June 2023 Mining exploration properties in Australia HK$’000 784,933 6,051 (57,307) 733,677 (27,835) 705,842 At 30 June 2023 the Group held capitalised mining exploration properties in Australia of HK$705,842,000 (2022: HK$733,677,000), representing 97% (2022: 96%) 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 2023 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 2023 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 Operation 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 2023 the price was above A$178 per tonne (2022: A$176 per tonne) or US$114 per dry metric tonne (2022: US$122 per dry metric tonne) (at an exchange rate of US$0.66 (2022: US$0.69)). At 30 June 2023, the Group’s market capitalisation was HK$1,410,595,000 (2022: HK$2,505,662,000), in excess of the net assets HK$511,212,000 (2022: HK$590,137,000). 7. The Group’s Mineral Resource estimate has not changed since September 2018. As a result of considering these factors, the directors did not identify any impairment indicators. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 18. PROPERTY, PLANT, EQUIPMENT AND RIGHT-OF-USE ASSETS For the year ended 30 June 2023 1 July 2022 Additions Reassessment of lease term Depreciation Exchange differences At 30 June 2023 Cost Accumulated depreciation Net book amount For the year ended 30 June 2022 1 July 2021 Additions Depreciation Exchange differences At 30 June 2022 Cost Accumulated depreciation Net book amount Plant, furniture, fixtures and equipment HK$’000 Right-of-use asset HK$’000 Total HK$’000 177 4 — (30) (7) 144 4,959 (4,815) 144 167 51 (30) (11) 177 4,955 (4,778) 177 801 980 (575) (533) (19) 654 2,307 (1,653) 654 1,538 — (678) (59) 801 1,902 (1,101) 801 978 984 (575) (563) (26) 798 7,266 (6,468) 798 1,705 51 (708) (70) 978 6,857 (5,879) 978 There was no depreciation expense (2022: Nil) included in cost of sales and depreciation of HK$563,000 (2022: HK$708,000) was included in administration expenses. 19. LEASES The Group as a lessee The Group has a lease contract for commercial office space. There are several lease contracts that include extension and variable lease payments, which are further discussed below. Generally, the Group is restricted from assigning and subleasing the leased assets outside of the Group. (a) Right-of-use assets The carrying amount of the Group’s right-of-use assets and the movements during the year are as follows: Opening balance Additions Reassessment of lease term Depreciation charge Exchange difference 2023 HK$’000 801 980 (575) (533) (19) 654 2022 HK$’000 1,538 — — (678) (59) 801 95 ANNUAL REPORT 2023 19. LEASES (Continued) The Group as a lessee (Continued) (b) Lease liabilities The carrying amount of lease liabilities and the movements during the year are as follows: Opening balance New leases Reassessment of lease term Accretion of interest recognised during the year Payments Exchange difference Analysed into: Current portion Non-current portion Refer to note 5(ii) the maturity analysis of lease liabilities. (c) The amounts recognised in profit or loss in relation to leases are as follows: Interest on lease liabilities Depreciation charge of right-of-use assets Total amount recognised in profit or loss 20. CASH AND CASH EQUIVALENTS Cash and cash equivalents Time deposits The balance of cash and cash equivalents is denominated in the following currencies: HK$ A$ US$ 2023 HK$’000 1,182 980 (575) 144 (582) (35) 1,114 2023 HK$’000 396 718 2023 HK$’000 144 533 677 2023 HK$’000 12,577 3,918 16,495 2023 HK$’000 1,435 9,500 5,560 16,495 2022 HK$’000 1,939 — — 131 (802) (86) 1,182 2022 HK$’000 619 563 2022 HK$’000 131 678 809 2022 HK$’000 28,797 — 28,797 2022 HK$’000 5,272 23,519 6 28,797 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 are deposited with creditworthy banks (AA+) with no recent history of default. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 21. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS Other receivables and deposits Prepayments 2023 HK$’000 52 873 925 2022 HK$’000 21 978 999 The financial assets included in the above balances relate to receivables for which there were no recent history of default and past due amounts. 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 2023 HK$’000 60,583 60,583 2022 HK$’000 14,504 14,504 Trade and other payables include the Group’s share of the joint operation expenditure of HK$59,965,000 (2022: HK$13,552,000), payable to Mineral Resources Limited refer to note 2(a) and 30(a). 23. BORROWINGS Non-current Loans from Polaris Loan from a substantial shareholder 2023 HK$’000 37,289 27,328 64,617 2022 HK$’000 34,517 16,792 51,309 On 23 February 2023, the substantial shareholder agreed to replace the existing loan and interest of HK$17,457,000 with a new loan for US$3,300,000 (approximately HK$25,740,000). As at 30 June 2023, the new borrowings are unsecured, bore interest at 17% (2022: 12%) per annum and are repayable on 31 October 2024 (2022: 31 October 2023). On 23 February 2023, the directors of the Company secured agreement for an increased standby loan facility from its substantial shareholder amounting to US$1,800,000 (approximately HK$14,040,000). If drawn down, the loan will be unsecured, bear interest at 17% and be repayable on 31 October 2024. As at 30 June 2023, the facility remains undrawn. This standby loan facility replaced the standby loan facility of HK$10,000,000 previously in place. 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. 97 ANNUAL REPORT 2023 24. SHARE CAPITAL Ordinary shares of HK$0.1 each Authorised As at 30 June 2023 and 30 June 2022 Issued and fully paid As at 30 June 2023 and 30 June 2022 Number of shares ’000 Share capital HK$’000 20,000,000 2,000,000 9,280,232 928,023 For the year ended 30 June 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 consolidated the financial statements. 25. 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 was to provide incentives and rewards to selected participants for their contribution to the Group. 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 it expired on August 2022. The Company is finalising a new share option scheme; prior to the implementation of the new scheme it will be subject to regulatory and shareholder approval. From 1 July 2022 to the expiry of the 2012 Share Option Scheme, 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 2012 Share Option Scheme within any 12 month period is limited to 1% of the shares of the Company in issue at any time. Any further grant of share options in excess of this limit was subject to shareholders’ approval in a general meeting. Until the new share option scheme is implemented no new share options will be granted, however, existing unexercised share options will continue until they are exercised, cancelled, forfeited, or expired. 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. In addition, any share options granted to a substantial shareholder, or an independent non-executive director of the Company or to any of their associates, 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, were subject to shareholders’ approval in advance in a general meeting. 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$1.00 in total by the grantee. The exercise period of the share options granted was determinable by the directors, and commenced after a vesting period and ended on a date which was not later than three years from the date of offer of the share options. The exercise price of share options is determinable by the directors, but may not be less than the higher of (i) the Stock Exchange of Hong Kong Limited (“Stock Exchange”) closing price of the Company’s shares on the date of offer of the share options; and (ii) the average Stock Exchange closing price of the Company’s shares for the five trading days immediately preceding the date of offer. Share options do not confer rights on the holders to dividends or to vote at shareholders’ meetings. The fair value of the employee services received in exchange for the grant of the share options is recognised as an expense, with a corresponding adjustment to employee share-based compensation reserve, over the vesting period. At the end of each reporting period, the Company revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision to original estimate, if any, in the consolidated statement of comprehensive income, with a corresponding adjustment to equity. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 25. SHARE OPTION SCHEME (Continued) Share option scheme of the Company (Continued) Details of specific categories of options are as follows: Option type Date of grant Number of share options granted Fair value at the grant date (HK$’000) Closing price immediately before the date of grant (HK$) Vesting period Exercise period Exercise price (HK$) 2021A 29 June 2021 17,500,000 1,378,000 0.210 29 June 2021— 1 January 2022 — 14 May 2021 71,000,000 5,339,000 0.207 14 May 2021 — 1 January 2022 — 1 January 2022 31 December 2024 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 The Company has applied IFRS 2 Share-based Payment when accounting for the fair value of equity-settled share options granted, was estimated at the date of grant using the binomial option pricing model, prepared by an independent valuer, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used: 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 expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome and the risk-free rate referenced to the yield of Hong Kong Exchange Funds Notes. The fair value of share options calculated using the binomial option pricing 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. No other feature of the options granted was incorporated into the measurement of fair value. For the year ended 30 June 2023, the Company did not recognise an expense (2022: HK$6,396,000) in relation to the share options granted by the Company as the share options are fully vested. 99 ANNUAL REPORT 2023 25. SHARE OPTION SCHEME (Continued) Share option scheme of the Company (Continued) Below are the particulars of the outstanding options at the beginning and at the end of the year which have been granted to Qualified persons under the Share Option Scheme are as follows: Option type 2021A 2021A 2021A 2021A 2021A 2021A 2021B 2021A 2021B Non-Executive Directors Liu Zhengui Ross Stewart Norgard Choi Yue Chun Eugene Yap Fat Suan Henry David Rolf Welch Executive Directors Chan Kam Kwan Jason Colin Paterson Sub-total Employees Employees Sub-total GRAND TOTAL Weighted average exercise price Maximum entitlement of each participant Outstanding as at 1 July 2022 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 10,000,000 15,000,000 32,500,000 71,000,000 2,000,000 73,000,000 105,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 10,000,000 15,000,000 32,500,000 70,000,000 2,000,000 72,000,000 104,500,000 0.23 Exercised Lapsed Forfeited Cancelled Granted Outstanding as at 30 June 2023 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,500,000 — — — — — — 1,500,000 — — 1,500,000 1,500,000 — — — — — — 1,500,000 1,500,000 1,500,000 1,500,000 10,000,000 — 15,000,000 — 31,000,000 — 70,000,000 — 2,000,000 — — 72,000,000 — 103,000,000 0.21 — 0.23 Movements in the number of share options outstanding and their related weighted average exercise prices are as follows: 2023 2022 Average exercise price in HK$ per share option 0.23 — — 0.21 0.23 Number of share options (thousands) 104,500 — — 1,500 103,000 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 At 1 July Granted Exercised Lapsed/cancelled/forfeited At 30 June As at 30 June 2023, 103,000,000 (2022: 104,500,000) share options were outstanding with a weighted average exercise price of HK$0.23 per option (2022: HK$0.23 per option). As at 30 June 2023, the weighted average of the remaining contractual life of the outstanding share options was 0.9 and 1.5 years (2022: 1.9 and 2.5 years). No share options were exercised during the year (2022: 1,000,000 were exercised at an exercise price of HK$0.21 and a weighted average closing price of the shares immediately before their exercise was HK$0.25 on the SEHK) and there were no ordinary shares issued of the Company (2022: 1,000,000) and no new share capital (2022: HK$100,000) (before issue expenses) was issued. During the year, no share options were granted, expired, lapsed, or forfeited (2022: Nil), and there were 1,500,000 share options cancelled at an exercise price of HK$0.21 (2022: Nil). The cancellation of the 1,500,000 share options is due to the retirement of Mr. Liu Zhengui on 13 December 2022. At the end of the reporting period, the Company had 103,000,000 (2022: 104,500,000) 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 103,000,000 (2022: 104,500,000) additional ordinary shares of the Company and additional share capital of HK$10,300,000 (before issue expense) (2022: $10,450,000). NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 25. SHARE OPTION SCHEME (Continued) Share option scheme of the Company (Continued) During the year, no director, chief executive or substantial shareholder of the Company was granted, or to be granted options in excess of the 1% individual limits. At no time, a related party or other participants was granted, or to be granted options in any 12 month period exceeding 0.1% of the issued share capital. An amount of HK$1.00 or A$1.00 was payable on each application or acceptance of the options in respect of the Hong Kong and Australia schemes. As at 30 June 2023, there were no payments or calls made or maybe made or loans. At the date of approval of these financial statements, the Company had 103,000,000 share options outstanding under the share scheme, which represented approximately 1.11% (weighted average number of the shares on issue) of the Company’s shares on issue as at that date. 26. DEFERRED INCOME TAX The following is the deferred income tax movement recognised by the Group: At 1 July 2021 Deferred tax associated with the Polaris loans Deferred tax assets recognised Exchange differences At 30 June 2022 Deferred tax assets recognised Exchange differences At 30 June 2023 HK$’000 (126,706) 2,916 7,311 9,019 (106,949) 16,717 3,863 (86,369) 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 difference arising on mining exploration properties of HK$211,753,000 (2022: HK$220,103,000) in Australia predominantly offset by deferred tax assets of HK$109,795,000 (2022: HK$111,350,000) arising from available tax losses whose realisation is considered probable and the other deferred tax assets. At 30 June 2023, the Group’s total tax losses were HK$1,196,521,000 (2022: HK$1,228,000,000) and have no expiry date. The Group did not recognise a deferred income tax asset in respect of tax losses amounting to approximately HK$831,909,000 (2022: HK$860,000,000) as the utilisation of these tax losses is subject to the satisfaction of the loss recoupment rules in the relevant tax jurisdiction as well as other uncertainties which mean that their availability for utilisation or realisation is not considered probable. 27. PROVISIONS Current Employee benefits 2023 HK$’000 2022 HK$’000 914 1,144 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. 101 ANNUAL REPORT 2023 28. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (a) Major non-cash transactions During the year, there were additions to right-of-use assets and lease liabilities of HK$980,000 (2022: Nil) and HK$980,000 (2022: Nil) respectively, in respect of lease arrangements for commercial office. (b) Changes in liabilities from financing activities At 1 July 2022 Changes from financing activities New leases Reassessment of lease term Accretion of the loans from Polaris Interest expense on loan from substantial shareholder Interest expense on leases Exchange difference At 30 June 2023 At 1 July 2021 Changes from financing activities Accretion of the loans from Polaris Remeasurement of the loans from Polaris Interest expense on loans from substantial shareholder Interest expense on leases Exchange difference At 30 June 2022 Borrowings HK$’000 51,309 8,187 — — 4,123 2,349 — (1,351) 64,617 Borrowings HK$’000 57,245 — 3,179 (7,191) 1,320 — (3,244) 51,309 Lease liabilities HK$’000 1,182 (582) 980 (575) — — 144 (35) 1,114 Lease liabilities HK$’000 1,939 (802) — — — 131 (86) 1,182 29. COMMITMENTS AND CONTINGENT LIABILITIES (a) Capital commitments As at 30 June 2023, the Group did not have any capital commitments (2022: Nil). (b) Exploration expenditure commitments Due to the nature of the Group’s operations in exploring and evaluating areas of interest, it is very difficult to accurately forecast the nature or amount of future expenditure, although it will be necessary to incur expenditure to retain present interests in mineral tenements. Expenditure commitments on mineral tenure for the Group can be reduced by selective relinquishment of exploration tenure. As at 30 June 2023, the Group is required to meet or exceed a minimum level of exploration expenditure of A$1,259,400, equivalent to approximately HK$6,551,000 (2022: A$1,257,000 equivalent to approximately HK$6,779,000), over the next year. Obligations are subject to change upon expiry of the existing exploration tenure or on application for a new tenure. (c) Joint Venture commitments As at 30 June 2023 there were no joint venture commitments (2022: Nil). (d) Contingent liabilities As at 30 June 2023 the Group had no contingent liabilities (2022: Nil). NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 30. 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$150,000 respectively in exploration and development of the tenements in return for a 50% interest in the tenements. Polaris will contribute 50% of costs and capital expenditure going forward and Polaris has been appointed as operator of the joint operation. The Group does not record any expenditure made by the farmee on its account. It also does not recognise any gain or loss on its exploration and evaluation farm-out. Particulars of the Group’s material joint operation are as follows: Name of joint operation Marillana Joint Operation Ownership interest 50% Principal activities Development and operation of the Note (a) Ophthalmia Joint Operation 50% Note (b) Marillana iron ore project Development and operation of the Ophthalmia iron ore project Note (a): On the 22 April 2021 an unincorporated joint operation was formed with Polaris Metals Pty Ltd in Australia which is seeking to develop the Marillana iron ore project. Note (b): On the 30 November 2021 an unincorporated joint operation was formed with Polaris Metals Pty Ltd in Australia which is seeking to develop the Ophthalmia iron ore project. (b) Joint ventures At 1 July 2022 Contributions to the joint venture Share of loss of joint venture Exchange differences At 30 June 2023 2023 HK$’000 651 133 (130) (24) 630 2022 HK$’000 703 130 (136) (46) 651 The following illustrates the aggregate financial information of the Group’s joint ventures that are not individually material: Share of the joint venturers loss for the year Aggregate carrying amount of the Group’s investments in the joint venture Details of the Group’s interest in the joint ventures is as follows: 2023 HK$’000 (130) 2022 HK$’000 (136) 630 651 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. 103 ANNUAL REPORT 2023 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 5% (2022: 5%) of the employees’ relevant income to a maximum of HK$1,500 per month 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 10.5% (2022: 10%) of the employees’ base salary. The total cost is charged to administration expense of approximately HK$601,000 (2022: HK$587,000) represents contributions to these schemes by the Group in respect of the current year. 32. RELATED PARTY DISCLOSURES (a) Material related party transactions Except as disclosed within these consolidated financial statements, the Group has no material related party transactions during the year (2022: Nil). (b) Related party balances The details of the loans from a substantial shareholder are disclosed in Note 23. (c) Compensation of key management personnel The remuneration of directors and other members of key management during the year were as follows: Salaries and other benefits Post-employment benefits Share-based compensation expenses 2023 HK$’000 7,000 307 — 7,307 2022 HK$’000 7,324 293 2,973 10,590 Further details of directors’ emoluments are included in note 14 to the consolidated financial statements. The remuneration of key management personnel (“KMP”) is determined by the Remuneration and Performance Committee having a regard to the position, experience, qualification and performance of the individuals and market trends. 33. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS The Group measures financial instruments at fair value at each reporting date. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. The carrying values of the loans materially approximates their fair values and were determined using Level 3 unobservable inputs. The carrying values of the loans are as follows: Financial liabilities Loans from Polaris Loan from a substantial shareholder Carrying amounts 2023 HK$’000 37,289 27,328 64,617 2022 HK$’000 34,517 16,792 51,309 Management has assessed that the carrying value of cash and cash equivalents, trade receivables, payables, financial assets included in prepayments, other receivables and other current assets, financial liabilities included in trade and other payables are reasonably approximate to their fair values largely due to short term maturities of these instruments. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 33. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (Continued) At each reporting date, the Group analyses the movements in the values of financial instruments and determines the major inputs applied in the valuation (refer to Note 4(b)). The valuation process and results are discussed with the audit committee twice a year for interim and annual financial reporting. The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The fair value of other borrowings have been calculated by discounting the expected future cash flows using rates currently available for instruments with similar terms, credit risk and maturity. 34. RESERVES The amounts of the Group’s reserves and the movements there in for the current and prior years are presented in the consolidated statement of changes in equity on page 70 of the consolidated financial statements. Share based compensation reserve Translation reserve 2023 HK$’000 92,506 (762,658) (670,152) 2022 HK$’000 92,506 (740,290) (647,784) Translation reserve This reserve is used to record exchange differences arising from the translation of the consolidated financial statements of foreign subsidiaries. Share based compensation reserve This reserve is used for the fair value of the employee services received in exchange for the grant of the share options over the vesting period. 105 ANNUAL REPORT 2023 35. SUBSIDIARIES The following is a list of the principal subsidiaries as at 30 June 2023 and 30 June 2022: 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$1 each 100 100 Investment holding 100 100 Investment holding 100 100 Investment holding 100 100 Exploration & evaluation 100 100 Exploration & evaluation 100 100 Exploration & evaluation 100 100 Exploration & evaluation 100 100 Rail infrastructure 100 100 Port infrastructure 100 100 Exploration & evaluation 100 100 Investment holding 36. REMUNERATION OF AUDITORS The Auditor of Brockman Mining Limited is Ernst and Young: Ernst and Young (Australia) — Fees for audit and review of any statutory financial reports covering the group — Fees for other services: — Tax compliance — Tax advice Ernst and Young (other than Australia) — Fees for audit and review of any statutory financial reports covering the Group 2023 HK$’000 2022 HK$’000 1,018 210 392 1,620 60 60 1,680 1,038 113 — 1,151 65 65 1,216 NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION 37. BALANCE SHEET AND RESERVE MOVEMENT OF THE COMPANY As at 30 June Non-current assets Property, plant and equipment Right-of-use asset Current assets Other receivables, deposits and prepayments Amounts due from subsidiaries Cash and cash equivalents Total assets Equity and liabilities Share capital Reserves Total equity Non-current liabilities Borrowings Current liabilities Trade and other payables Amount due to subsidiaries Total liabilities Total equity and liabilities Note (a) 2023 HK$’000 — — — 644 728,288 6,069 735,001 735,001 928,023 (467,389) 460,634 27,328 27,328 114 246,925 247,039 274,367 735,001 2022 HK$’000 3 178 181 742 757,004 3,859 761,605 761,786 928,023 (430,523) 497,500 16,792 16,792 562 246,932 247,494 264,286 761,786 The balance sheet of the Company was approved by the Board of Directors on 19 September 2023 and was signed on its behalf. Kwai Kwun, Lawrence Director Chan Kam Kwan, Jason Director 107 ANNUAL REPORT 2023 37. BALANCE SHEET AND RESERVE MOVEMENT OF THE COMPANY (Continued) Note (a) Reserves movement in the Company Balance at 1 July 2021 Comprehensive income: Loss for the year Exercise of options Share-based compensation (Note 25) At 30 June 2022 Comprehensive income: Loss for the year Balance at 30 June 2023 Share premium HK$’000 4,468,624 Share-based compensation reserve HK$’000 86,110 Accumulated losses HK$’000 (4,919,679) — 113 — 4,468,737 — 4,468,737 — — 6,396 92,506 — 92,506 (72,087) — — (4,991,766) (36,866) (5,028,632) Total HK$’000 (364,945) (72,087) 113 6,396 (430,523) (36,866) (467,389) 38. STATEMENT OF CASHFLOWS FOR THE COMPANY Cash flows from operating activities Loss before tax Adjustments for: Depreciation of property, plant and equipment Depreciation of right-of-use assets Share-based payment expense Finance costs Finance income Foreign currency translation Working capital adjustments: — Increase/(decrease) in trade receivables & prepayments — Increase/(decrease) in trade and other payables — Increase/(decrease) in amounts due (from) subsidiaries Net cash flows used in operating activities Investing activities Interest received Net cash flows from investing activities Financing activities Proceeds from borrowings Proceeds from issuance of ordinary shares Payment of principal portion of lease liabilities Interest on lease payments Net cash flows from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 39. EVENTS OCCURRING AFTER BALANCE SHEET DATE There are no significant events which have occurred after the balance sheet date. Year ended 30 June 2023 HK$’000 2022 HK$’000 (36,866) (72,087) 3 178 — 2,349 (75) 105,286 99 (250) (76,578) (5,854) 75 75 8,187 — (198) — 7,989 2,210 3,859 6,069 2 354 6,396 1,341 (2) 216,342 13 122 (157,373) (4,892) 3 3 — 213 (375) (21) (183) (5,072) 8,931 3,859 NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION RESULTS Revenue Loss before income tax Income tax benefit Profit/(loss) for the year from continuing operations Profit/(loss) for the year Attribute to: Equity holders of the Company Earnings/(loss) per share (HK cents) — Basic — Diluted ASSETS AND LIABILITIES Total assets Total liabilities Total equity 2023 HK$’000 Note a — (73,247) 16,691 (56,556) (56,556) 2022 HK$’000 2021 HK$’000 2020 HK$’000 2019 HK$’000 — (31,865) 11,051 (20,814) (20,814) — (28,318) 14,146 (14,172) (14,172) — (22,606) 1,590 (21,016) (21,016) — (25,785) 93,373 67,588 67,588 (56,556) (20,814) (14,172) (21,016) 67,588 (0.61) (0.61) (0.22) (0.22) (0.15) (0.15) (0.23) (0.23) 0.74 0.73 2023 HK$’000 724,809 (213,597) 511,212 511,212 2022 HK$’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 Note a: The financial figures above were extracted from the consolidated financial statements. 109 ANNUAL REPORT 2023FINANCIAL SUMMARY A. DISTRIBUTION OF SHAREHOLDINGS AS AT 19 SEPTEMBER 2023 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 803 167 122 709 324 2,125 Size of holding 189,535 382,245 986,984 28,422,174 9,250,251,193 9,280,232,131 Unlisted options @ HK$0.213 Unlisted options @ HK$0.295 Holders Size of holding Holders Size of holding 9 86,000,000 3 17,000,000 Minimum A$500.00 parcel cannot be calculated due to no price. Unquoted Securities As at 15 September 2023, unlisted options amounted to a total of 103,000,000 units. Among these options, 86,000,000 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 19 SEPTEMBER 2023 Name 1 OceanLine Holdings Ltd/Kwai Sze Hoi 2 China Vered Securities Ltd 3 Industrial & Commercial Bank of China 4 Equity Valley Investments 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 The Hong Kong and Shanghai Banking Corporation Limited 12 Cornerstone Pacific Limited 13 Longfellow Nominees Pty Ltd/Ross Norgard 14 BNP Paribas 15 Barwick Investments Ltd 16 Guoyuan Securities Brokerage (Hong Kong) 17 Futu Securities International 18 Luk Fook Securities (HK) Ltd 19 Zhang Li 20 ICBC (Asia) Securities Ltd * ∆ ∆ * * ∆ ∆ ∆ ∆ ∆ ∆ * * ∆ * ∆ ∆ ∆ * ∆ Number of shares 1,944,763,275 764,904,972 523,812,834 515,484,276 486,485,462 437,646,208 427,308,521 409,668,032 330,227,592 290,655,403 277,327,612 250,000,000 246,266,339 183,049,496 174,668,000 137,593,600 102,618,664 90,000,000 80,000,000 76,720,560 % 20.96% 8.24% 5.64% 5.55% 5.24% 4.72% 4.60% 4.41% 3.56% 3.13% 2.99% 2.69% 2.65% 1.97% 1.88% 1.48% 1.11% 0.97% 0.86% 0.83% 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”) (“∆”). 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 INFORMATION C. 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 on page 59. 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. 111 ANNUAL REPORT 2023 F. TENEMENT SCHEDULE — AS AT 15 SEPTEMBER 2023 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 Punda Spring 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 East Pilbara East 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 47/5004 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 Granted Granted Application 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