19 September 2018
ANNUAL REPORT (REVISED)
Cauldron Energy Limited (ASX: CXU) (Cauldron or the Company) wishes to
provide a revised copy of its Annual Report for the year ended 30 June 2018. The
revised report contains additional information in the form of a mineral resource
statement and competent person statement as required by the ASX Listing Rules.
The additional information is included at pages 5-7 of the revised Annual Report, a
copy of which is attached.
END
ABN 22 102 912 783
32 Harrogate Street, West
Leederville WA 6007
PO Box 1385, West
Leederville WA 6901
ASX code: CXU
329,289,708 shares
20,000,000 unlisted options
Board of Directors
Tony Sage
Non-Executive Chairman
Jess Oram
Executive Director &
Chief Executive Officer
Qiu Derong
Non-executive Director
Judy Li
Non-executive Director
Nicholas Sage
Non-executive Director
Chenchong Zhou
Non-executive Director
Management
Catherine Grant-Edwards
Company Secretary
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32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666
PO Box 1385, West Leederville WA 6901
Web: www.cauldronenergy.com.au
-
(ABN 22 102 912 783)
AND CONTROLLED ENTITIES
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2018
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Annual Report 2018
CONTENTS
CORPORATE DIRECTORY ______________________________________________________________________________________ 1
DIRECTORS’ REPORT _________________________________________________________________________________________ 2
AUDITOR’S INDEPENDENCE DECLARATION ______________________________________________________________________ 13
CORPORATE GOVERNANCE STATEMENT ________________________________________________________________________ 14
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ________________________________________________________ 15
CONSOLIDATED STATEMENT OF FINANCIAL POSITION _____________________________________________________________ 16
CONSOLIDATED STATEMENT OF CASH FLOWS ___________________________________________________________________ 17
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY _____________________________________________________________ 18
NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________________________ 19
DIRECTORS’ DECLARATION ___________________________________________________________________________________ 43
INDEPENDENT AUDITOR’S REPORT ____________________________________________________________________________ 44
ADDITIONAL SHAREHOLDER INFORMATION _____________________________________________________________________ 47
SCHEDULE OF MINERAL TENEMENTS __________________________________________________________________________ 49
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Annual Report 2018
CORPORATE DIRECTORY
NON-EXECUTIVE CHAIRMAN
Antony Sage
EXECUTIVE DIRECTOR AND CHIEF EXECUTIVE OFFICER
Jess Oram
NON-EXECUTIVE DIRECTORS
Qiu Derong
Judy Li
Nicholas Sage
Chenchong Zhou
COMPANY SECRETARY
Catherine Grant-Edwards
PRINCIPAL & REGISTERED OFFICE
32 Harrogate Street
West Leederville WA 6007
Telephone: (08) 6181 9796
Facsimile: (08) 9380 9666
Website: www.cauldronenergy.com.au
AUDITORS
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
SHARE REGISTRAR
Advanced Share Registry
110 Stirling Hwy
Nedlands WA 6009
Telephone: (08) 9389 8033
Facsimile: (08) 9262 3723
STOCK EXCHANGE LISTING
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Code: CXU
BANKERS
National Australia Bank
100 St Georges Terrace
Perth WA 6000
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Annual Report 2018
DIRECTORS’ REPORT
The directors of Cauldron Energy Limited (Cauldron) submit their report, together with the consolidated financial statements
comprising Cauldron and its controlled entities (together the Consolidated Entity) for the financial year ended 30 June 2018.
1.
INFORMATION ON DIRECTORS
The names and particulars of the directors of the Consolidated Entity during or since the end of the financial year are as
follows. Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
Antony Sage
Qualifications
Experience
Directorships of listed companies
held within the last 3 years
Non-Executive Chairman (Transitioned from role of Executive Chairman to Non-
Executive Chairman 1 January 2018)
B.Bus, FCPA, CA, FTIA
Mr Antony Sage has in excess of 30 years’ experience in the fields of corporate advisory
services, funds management and capital raising. Mr Antony Sage is based in Western
Australia and has been involved in the management and financing of listed mining and
exploration companies for the last 20 years. Mr Sage has operated in Argentina, Brazil,
Peru, Romania, Russia, Sierra Leone, Guinea, Cote d’Ivoire, Congo, South Africa,
Indonesia, China and Australia. Mr Sage is currently chairman of ASX-listed companies,
Cape Lambert Resources Ltd (which was AIM Company of the year in 2008), Fe Ltd, and
European Lithium Limited. Mr Antony Sage is also a Non-Executive Director of the
National Stock Exchange of Australia (NSX) listed International Petroleum Ltd. He is also
the sole owner of A League football club Perth Glory that plays in the National
competition in Australia.
Cape Lambert Resources Limited
Fe Limited
European Lithium Limited
Kupang Resources Limited*
Caeneus Limited
International Petroleum Limited**
* Company was delisted August 2015
** Listed on National Stock Exchange of Australia
December 2000 to present
August 2009 to present
September 2016 to present
September 2010 to August 2015
December 2010 to January 2016
January 2006 to present
Interest in Shares & Options
Fully Paid Ordinary Shares
5,894,600
Jess Oram
Qualifications
Experience
Executive Director and Chief Executive Officer (Appointed 1 January 2018)
BSc, AIG member
Mr Jess Oram was appointed as Chief Executive Officer and Executive Director
effective 1 January 2018. Since April 2014, Mr Oram has served the Company as
Exploration Manager. Mr Oram has over 25 years’ experience in mineral exploration in
a wide variety of geological terrains and resource commodities with an accomplished
track record in establishing and leading the exploration function of several companies.
In uranium, Mr Oram was Chief Exploration Geologist for Heathgate Resources Pty Ltd
where he was involved in mining feasibility studies of the Four Mine Uranium deposits
and ‘team leader’ of a group of geoscientists involved in the discovery of the
Pepegoona Uranium, Pannikan Uranium and Pannikan West Uranium deposits. Mr
Oram has a Bachelor of Science (BSc), Geology major from the University of
Queensland and is a member of the Australian Institute of Geoscientists (AIG).
Directorships of listed companies
held within the last 3 years
None
Interest in Shares & options
None
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Qiu Derong
Experience
Non-Executive Director
Mr Qiu is a highly experienced industrialist with more than 26 years’ experience in the
architecture, construction and real estate industries in China as well as over 18 years of
experience in the management of enterprises and projects throughout the country.
Mr Qiu has a MBA obtained from the Oxford Commercial College, a joint program
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Annual Report 2018
operated by Oxford University in China.
Directorships of listed companies
held within the last 3 years
None
Interest in Shares & options
Fully Paid Ordinary Shares
47,544,710
Judy Li
Experience
Non-Executive Director
Judy Li has over 9 years of extensive international trading experience in hazardous
chemical products. She has also been involved in international design works for global
corporates and government clients while working for Surbana that has been jointly
held by two giant Singapore companies—CapitaLand and Temasek Holdings.
Throughout her career, Judy has contributed to building tighter relationship between
corporates and governments. Judy earned her masters degree in art with Honors
Architecture from University of Edinburgh in the United Kingdom.
Directorships of listed companies
held within the last 3 years
None
Interest in Shares & options
None
Nicholas Sage
Experience
Non-Executive Director
Mr Nicholas Sage was appointed as a Non-Executive Director effective 20 February
2017. Mr Nicholas Sage is an experienced marketing and communications professional
with in excess of 25 years in various management and consulting roles. Mr Nicholas
Sage is based in Western Australia and currently consults to various companies and
has held various managements roles with Tourism Western Australia. He also runs his
management consulting business.
Directorships of listed companies
held within the last 3 years
Fe Limited
International Goldfields Limited
October 2016 to present
January 2018 to present
Interest in Shares & options
None
Chenchong Zhou
Non-Executive Director
Experience
Mr Zhou is an experienced financial analyst in the materials and energy sector. In his
career, Mr Zhou covers an extensive list of junior to mature mining companies and has
developed a good understanding of industry financing. Mr Zhou received his Bachelor
of Science in Economics degree from Wharton Business School in 2013.
Directorships of listed companies
held within the last 3 years
None
Interest in Shares & options
None
COMPANY SECRETARY
Ms Catherine Grant-Edwards has been Chief Financial Officer of Cauldron since July 2013, and its Company Secretary since
31 January 2014. Ms Grant-Edwards has a Bachelor of Commerce degree from the University of Western Australia,
majoring in Accounting and Finance. She commenced her career at Ernst & Young, where she qualified as an Accountant
with the Institute of Chartered Accountants Australia (ICAA) in 2007. Ms Grant-Edwards has over 15 years’ experience in
accounting and finance, and is a director of Bellatrix Corporate Pty Ltd (Bellatrix), a company that provides company
secretarial and accounting services to a number of ASX Listed companies.
Remuneration of key management personnel
Information about the remuneration of directors is set out in the remuneration report of this director’s report, on pages 8
to 11. The term key management personnel refers to those persons having authority and responsibility for planning,
directing and controlling the activities of the Consolidated Entity, directly or indirectly, including any director (executive or
otherwise) of the Consolidated Entity.
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Annual Report 2018
2.
PRINCIPAL ACTIVITIES AND SIGNIFICANT CHANGES IN NATURE OF ACTVITIES
The principal activity of the Consolidated Entity during the financial year was uranium exploration.
There were no significant changes in the nature of the Consolidated Entity’s principal activities during the financial year.
3.
OPERATING RESULTS
The profit of the Consolidated Entity after providing for income tax amounted to $173,299 (30 June 2017: $11,954,682
loss).
4.
REVIEW OF OPERATIONS
Cauldron is an Australian exploration company resulting from the merger of Scimitar Resources Limited and Jackson
Minerals Limited. Cauldron retains an experienced board of directors with proven success in the resources sector.
Cauldron controls uranium prospective tenements and a smaller gold prospective project within Western Australia. The
Company also has an interest in a large project with defined uranium mineralisation and prospects for copper and gold in
Argentina.
CORPORATE
The following significant transactions and events occurred during the financial year:
Board Changes
On 1 January 2018, Mr Jess Oram was appointed Executive Director and Chief Executive Officer. In addition, the Company
announced that Mr Tony Sage could no longer provide the services of Executive Chairman to the Company, so its
appointment of Mr Tony Sage as Executive Chairman ceased on 31 December 2017. Under the terms of the contract
between the Company and Okewood Pty Ltd it has agreed to appoint Mr Tony Sage as Non-Executive Chairman from 1
January 2018.
Annual General Meeting
The Company held its annual general meeting on 23 November 2017 (AGM). All resolutions put to shareholders were
passed.
CXU succeeds in Court of Appeal legal challenge from Forrest & Forrest Pty Ltd
The Company refers to its announcement made on:
▪
▪
29 August 2016 that the Supreme Court of Western Australia dismissed the application for judicial review by
Forrest & Forrest Pty Ltd (Forrest) of the decision of the Minister for Mines and Petroleum to progress the
Company’s application for E08/2385, E08/2386 and E08/2387 through the determination processes under the
Mining Act 1978 and Native Title Act 1993;
16 September 2016 that Forrest lodged an appeal against this decision in the Western Australian Supreme
Court, Court of Appeal.
During the year, the Court of Appeal handed down its unanimous decision in favour of the Company. The Court of Appeal
dismissed Forrest’s appeal and ordered Forrest to pay the Company’s legal costs of the appeal.
CHANGES IN CAPITAL STRUCTURE
Shares
There were no shares issued during the year.
Options
There were no options issued, exercised or lapsed during the year.
Escrowed shares
On 4 October 2017, 8,474,588 fully paid ordinary shares (Escrowed Shares) were released from escrow. The Escrowed
Shares, which were acquired by a series of investors via off market transfers, were subject to voluntary escrow provisions
for six months from 4 April 2017.
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Annual Report 2018
PROJECT INFORMATION
Cauldron has completed no field work at Yanrey Project since the announcement on 20 June 2017 of the ban of new
uranium mines in Western Australia by minister Bill Johnston. The policy heading for uranium exploration in Western
Australia remains unclear, and Cauldron is seeking advice from the Minister and the Department of Mines, Industry
Regulation and Safety (DMIRS).
On the 26 July 2017, Cauldron withdrew a program of works (POW) submitted to DMIRS in February 2017 for a Field Leach
trial at Bennet Well. This FLT was to test the parameters of extraction of uranium by in-situ recovery (ISR) mining
methodology.
In Western Australia, Cauldron currently has one project area (Figure 1) covering more than 1,540 km2 in the northern part
of the state:
• Yanrey Project (Yanrey) in Western Australia comprises 15 granted exploration licences (1,548km2) and 4 applications
for exploration licences (626 km2). Yanrey is prospective for large sedimentary-hosted uranium deposits. The Bennet
Well Uranium Deposit is located within the Yanrey Project area.
• Bennet Well Uranium Project; design of a new field leach
trail is in progress; continued dialogue with the Department
of Mines, Industry Regulation and Safety seeking
clarification on the status of exploration for uranium in
Western Australia.
• Boolaloo Project; in August 2017, Cauldron relinquished
both tenements that formed the Boolaloo Project in
northern Western Australia because the tenement was
outside Cauldron’s exploration model and there was no
intention to outlay further funds for exploration on this
project.
• Project Generation; Cauldron
is actively seeking an
advanced exploration project that is capable of rapid
advancement in prospectivity value.
Figure 1: Map Location of Cauldron Projects
BENNET WELL (YANREY REGION)
The mineralisation at Bennet Well is a shallow accumulation of uranium hosted in unconsolidated sands (less than 100 m
downhole depth) in Cretaceous sedimentary units of the North Carnarvon Basin. Mineralisaton is secured under
exploration licence (the same group of licences that form the greater Yanrey Project)
No development work quantifying the ISR potential Bennet Well deposit was completed during the half year because of
uncertainty on Labor Government’s policy on uranium exploration following their election win in March 2017. The
Government has yet to clarify their policy on uranium exploration.
Cauldron intends to submit a POW to DMIRS for a potential FLT, when the policy on uranium exploration s clarified and if
the standard regulatory system applies. Cauldron is working with industry leader Inception Consulting Engineers to design
a new version field leach trial.
BENNET WELL MINERAL RESOURCE
A Mineral Resource (JORC 2012) for the mineralisation at Bennet Well was completed by Ravensgate Mining Industry
Consultants following new drilling completed during the reporting period ending 2016. The information on this Mineral
Resource was fully reported in ASX announcement dated 17 December 2015, including geological maps and cross sections,
supporting and explanatory statements and metadata as required under the reporting standards of JORC2012. No work on
the Mineral Resource has been completed since, and therefore remains unchanged for the current reporting period.
The mineralisation at Bennet Well is a shallow accumulation of uranium hosted in unconsolidated sands close to surface
(less than 100 m downhole depth) in Cretaceous sedimentary units of the Ashburton Embayment. The Bennet Well
deposit is comprised of four spatially separate deposits; namely Bennet Well East, Bennet Well Central, Bennet Well South
and Bennet Well Channel.
The Mineral Resource (JORC 2012) estimate is:
•
•
Inferred Resource: 16.9 Mt at 335 ppm eU3O8 for total contained uranium-oxide of 12.5 Mlb (5,670 t) at 150
ppm cut-off;
Indicated Resource: 21.9 Mt at 375 ppm eU3O8 for total contained uranium-oxide of 18.1 Mlb (8,230 t) at 150
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Annual Report 2018
•
ppm cut-off;
total combined Mineral Resource: 38.9 Mt at 360 ppm eU3O8, for total contained uranium-oxide of 30.9 Mlb
(13,990 t) at 150 ppm cut-off.
Table 1: Mineral Resource at various cut-off
Deposit
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Cutoff
(ppm eU3O8)
125
150
175
200
250
300
400
500
800
Deposit Mass (t)
39,207,000
38,871,000
36,205,000
34,205,000
26,484,000
19,310,000
10,157,000
6,494,000
1,206,000
Deposit Grade
(ppm eU3O8)
355
360
375
385
430
490
620
715
1175
Mass U3O8 (kg)
13,920,000
13,990,000
13,580,000
13,170,000
11,390,000
9,460,000
6,300,000
4,640,000
1,420,000
Mass U3O8
(lbs)
30,700,000
30,900,000
29,900,000
29,000,000
25,100,000
20,900,000
13,900,000
10,200,000
3,100,000
Deposit
Cutoff
Deposit Mass (t)
(ppm U3O8)
Deposit Grade
(ppm U3O8)
Mass U3O8
(kg)
Mass U3O8
(lbs)
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
125
150
175
200
250
300
400
500
800
22,028,000
21,939,000
21,732,000
20,916,000
17,404,000
13,044,000
7,421,000
4,496,000
353,000
375
375
380
385
415
465
560
635
910
8,260,000
8,230,000
8,260,000
8,050,000
7,220,000
6,070,000
4,160,000
2,850,000
320,000
18,200,000
18,100,000
18,200,000
17,800,000
15,900,000
13,400,000
9,200,000
6,300,000
700,000
Deposit
Cutoff
Deposit Mass (t)
(ppm U3O8)
Deposit Grade
(ppm U3O8)
Mass U3O8
(kg)
Mass U3O8
(lbs)
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
125
150
175
200
250
300
400
500
800
17,179,000
16,932,000
14,474,000
13,288,000
9,080,000
6,266,000
2,736,000
1,998,000
853,000
335
335
365
380
455
535
780
900
1285
5,750,000
5,670,000
5,280,000
5,050,000
4,130,000
3,350,000
2,130,000
1,800,000
1,100,000
12,700,000
12,500,000
11,600,000
11,100,000
9,100,000
7,400,000
4,700,000
4,000,000
2,400,000
Note: table shows rounded numbers therefore units may not convert nor sum exactly
YANREY PROJECT
The Yanrey Project comprises a collection of twelve exploration tenements in northwest Western Australia, one of which
secures the Bennet Well Uranium Deposit. The project is prospective of sandstone-style uranium mineralisation capable of
extraction by in-situ recovery mining techniques.
In the early part of the reporting period, Cauldron continued passive seismic surveying in areas distal to Bennet Well,
within the greater Yanrey Project region. New survey lines were completed in areas both to the north and south of the
Bennet Well Deposit. Results highlighted:
•
•
areas of shallow Cretaceous cover that can be de-prioritised form further work because they are not suitable for
acting as host to mineralisation of the style of Bennet Well
areas of complex basement morphology in southern tenement E08/1501, and northern tenement E08/1489
BOOLALOO PROJECT, WESTERN AUSTRALIA
The Boolaloo project (Boolaloo Project), held by Cauldron Energy, was a greenfields base metal (Cu, Pb, Zn) and gold
project located in the Ashburton Mineral Field, Western Australia. The Boolaloo Project was comprised of two exploration
licences, E08/2496 and E08/2638. The Boolaloo Project has not been extensively explored historically and was prospective
for structurally-hosted mineralisation located in fault jogs and cross cutting features, such as dolerite dykes and shears.
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The Company determined that the Boolaloo Project was outside the scope of its exploration strategy and both tenements
were surrendered outright on 17 August 2017.
PROJECT GENERATION
As a direct result of the current policy on uranium mining in Western Australia, field operations at the Yanrey Project have
been inactive. There has been considerable effort seeking advanced exploration projects in commodities other than
uranium, to diversify the company’s project portfolio. Projects reviewed are mostly in Africa (copper and uranium in
Namibia, copper in Democratic Republic of Congo, copper-cobalt in Namibia).
Cauldron is seeking high value advanced exploration projects capable of rapid improvement in value because of some
specific quality of the project. This improvement in value will be realised with judicious exploration activity aimed at
moving the project towards a decision to mine.
Project generation is advancing well, with many reviews derived from many leads established through a network built
from a near permanent presence in Africa. Given the quantity and type of projects available, it is predicted that a suitable
project for Cauldron will be sourced soon.
TENEMENT ADMINISTRATION: AUSTRALIA
Objection to Cauldron’s Applications for exploration licences 08/2666-2668
Cauldron lodged applications for Exploration Licences 08/2666-2668 (E08/2666-2668) on 5 December 2014. Forrest &
Forrest Pty Ltd lodged objections against E08/2666-2668 on 6 January 2015. The matters are proceeding through the
Warden’s Court process.
The Company will inform shareholders of any material developments.
Red Sky Stations Pty Ltd Objection to Tenement Application for E08/2899
Cauldron lodged an application for Exploration Licence 08/2899, on 1 February 2017. Red Sky Stations Pty Ltd lodged
Objection #501163 on 15 February 2017 against the tenement application. The matter is proceeding through the Warden’s
Court process.
The Company will inform shareholders of any material developments.
Cauldron’s E08/2385, E08/2386 and E08/2387 Tenement Applications Granted
During the year, the Court of Appeal handed down its unanimous decision in favour of the Company to dismiss Forrest’s
appeal against the grant of E08/2385, 2386 and 2387. These tenements were granted on 19 January 2018.
EXPLORATION ACTIVITES: ARGENTINA
In Argentina, Cauldron controls, through its wholly-owned subsidiary Cauldron Minerals Limited (“Cauldron Minerals”),
445 km2 of exploration licence at its most advanced and 100% owned project, Rio Colorado, in Catamarca. The project is
prospective for copper and silver of the globally significant stratabound sedimentary-hosted copper style of deposit. No
work was completed at the Rio Colorado project during the year. The Rio Colorada Project is currently in suspension and
no work is planned for the 2019 year.
In May 2017, Cauldron initiated an agreement to terminate the existing joint venture arrangement with Horatio Solis and
complete acquisition of 100% interest in the Rio Colorado Project. The transaction was completed during the December
2017 quarter.
Cauldron requested the Argentine government to outright surrender Mina Colorada, (file 393-S-2010) in Catamarca, on 10
August 2017. Government approval of this surrender has been received.
COMPETENT PERSON STATEMENT
The information in the report that relates to the Mineral Resource for the Bennet Well Uranium Deposit is based on
information compiled by Mr Jess Oram, Executive Director of Cauldron Energy and Mr Stephen Hyland, who is a Principal
Consultant of Ravensgate. Mr Oram is a Member of the Australasian Institute of Geoscientists and Mr Hyland is a Fellow of
the Australasian Institute of Mining and Metallurgy. Mr Oram has sufficient experience that is relevant to the style of
mineralisation, type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person
as defined in the 2012 edition of the Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore
Reserves (JORC Code 2012). Mr Oram and Mr Hyland consent to the inclusion in the report of the matters based on this
information in the form and context in which it appears.
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5.
BUSINESS STRATEGIES AND PROSPECTS FOR THE FORTHCOMING YEAR
The Company is involved in the mineral exploration industry on its retained tenements and interests. It is also
investigating projects for future acquisition.
6.
SIGNFICANT CHANGES IN STATE OF AFFAIRS
There have been no changes in the state of affairs of the Consolidated Entity other than those disclosed in the review of
operations.
7.
SUBSEQUENT EVENTS
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly
affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated
Entity in future financial years.
8.
ENVIRONMENTAL ISSUES
The Consolidated Entity is aware of its environmental obligations with regards to its exploration activities and ensures that
it complies with all regulations when carrying out any exploration work.
9.
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a
dividend to the date of this report.
10.
SHARES UNDER OPTION
Details of unissued shares under option as at the date of this report are:
Grant Date
Class of Shares
Exercise
Price
Number of
Options
Expiry Date
Listed /
Unlisted
24 November 2016
Ordinary
$0.08
20,000,000
31 December 2018
Unlisted
Option holders do not have any rights to participate in any issues of shares or other interests in the company or any other
entity.
No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of
any other body corporate.
During the year ended 30 June 2018 there no ordinary shares issued as a result of exercise of options (2017: nil).
11.
INDEMNITY AND INSURANCE PREMIUMS FOR DIRECTORS AND OFFICERS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001 every Officer or agent of
the Consolidated Entity shall be indemnified out of the property of the Consolidated Entity against any liability incurred by
him in his capacity as Officer, auditor or agent of the Consolidated Entity or any related corporation in respect of any act or
omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal. The contracts of
insurance contain confidentiality provisions that preclude disclosure of the premiums paid, the nature of the liability
covered by the policies, the limit of liability and the name of the insurer.
12.
MEETINGS OF DIRECTORS
The following table sets out the number of directors’ meetings held during the year and the number of meetings attended
by each director (while they were a director).
Director
Antony Sage
Jess Oram
Qiu Derong
Judy Li
Nicholas Sage
Chenchong Zhou
Eligible to Attend
Attended
1
-
1
1
1
1
1
-
1
1
1
1
The Consolidated Entity does not have a formally constituted audit committee or remuneration committee as the board
considers that the Consolidated Entity’s size and type of operation do not warrant such committees.
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Annual Report 2018
13.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2018 has been received and is included on page 13 of
the annual report.
14.
REMUNERATION REPORT (AUDITED)
This remuneration report, which forms part of the directors’ report, sets out information about the remuneration of
Cauldron’s directors for the financial year ended 30 June 2018.
KEY MANAGEMENT PERSONNEL
Key Management Personnel includes:
▪
▪
▪
▪
▪
▪
Antony Sage (Non-executive Chairman) (Transitioned from role of Executive Chairman to Non-Executive
Chairman 1 January 2018)
Jess Oram (Chief Executive Officer and Executive Director) (Appointed 1 January 2018)
Qiu Derong (Non-executive Director)
Judy Li (Non-executive Director)
Nicholas Sage (Non-executive Director)
Chenchong Zhou (Non-executive Director)
The named persons held their positions for the duration of the financial year and up to the date of this report, unless
otherwise indicated.
REMUNERATION POLICY
The remuneration policy of Cauldron has been designed to align director objectives with shareholder and business
objectives by providing a fixed remuneration component which is assessed on an annual basis in line with market rates.
The board believes the remuneration policy to be appropriate and effective in its ability to attract and retain appropriately
skilled directors to run and manage the Consolidated Entity, as well as create goal congruence between directors and
shareholders.
During the year, the Company did not have a separately established remuneration committee. The Board is responsible for
determining and reviewing remuneration arrangements for the executive and non-executive directors. The Board assesses
the appropriateness of the nature and amount of remuneration of such officers on a yearly basis by reference to relevant
employment market conditions with the overall objective of ensuring maximum stakeholder benefit from retention of a
high quality board. Due to the size of the business, a remuneration consultant is not engaged in making this assessment.
The board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The executive director determines payments to the non-executive directors and reviews
their remuneration annually, based on market practice, duties and accountability. The maximum aggregate amount of
fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting.
Shareholders approved the maximum total aggregate fixed sum per annum to paid to non-executive directors be set at
$750,000 at the 2015 Annual General Meeting. Fees for non-executive directors are not linked to the performance of the
Consolidated Entity. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold
shares in the Consolidated Entity.
REMUNERATION REPORT AT 2017 AGM
The 2017 remuneration report received positive shareholder support at the 2017 Annual General Meeting whereby of the
proxies received 99.7% voted in favour of the adoption of the remuneration report.
COMPANY PERFORMANCE, SHAREHOLDER WEALTH AND DIRECTORS AND EXECUTIVES’ REMUNERATION
Below is a table summarizing key performance and shareholder wealth statistics for the Consolidated Entity over the last
five financial years.
Financial Year
Earnings/(loss) per share
(cents)
Share Price
(cents)
30 June 2014
30 June 2015
30 June 2016
30 June 2017
30 June 2018
Profit/(loss) after tax
$
(3,944,234)
(6,712,800)
(3,978,324)
(11,954,682)
173,299
(2.30)
(2.91)
(1.49)
(3.83)
0.05
36.0
11.0
6.6
3.4
3.0
The remuneration policy has been tailored to increase goal congruence between shareholders and directors. This has
been achieved by the issue of options to select directors to encourage the alignment of personal and shareholder interest.
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Annual Report 2018
Key Management Personnel (KMP) remuneration for the years ended 30 June 2018 and 30 June 2017:
30 JUNE 2018
SHORT-TERM BENEFITS
POST EMPLOYMENT
SHARE-BASED
PAYMENTS
OPTIONS
TOTAL
Remuneration
share based
payment
Other
Non-
Monetary
Super-
annuation
Retirement
Benefits
$
$
%
Salary,
Fees &
Leave
180,000
203,000
36,000
36,000
36,000
36,000
83,634
610,634
Directors
Antony Sage (i)
Jess Oram (ii)
Qiu Derong (iii)
Judy Li (iv)
Nicholas Sage (v)
Chenchong Zhou (vi)
Other KMP
Catherine Grant-
Edwards (vii)
TOTAL
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,285
-
-
-
-
6,333
25,618
-
-
-
-
-
-
-
-
30 JUNE 2017
SHORT-TERM BENEFITS
POST EMPLOYMENT
SHARE-BASED
PAYMENTS
OPTIONS
Salary,
Fees &
Leave
240,000
36,000
36,000
12,964
5,903
12,194
23,143
366,204
193,000
200,000
393,000
759,204
Directors
Anthony Sage (i)
Qiu Derong (iii)
Judy Li (iv)
Nicholas Sage (v)
Chenchong Zhou (vi)
Xinyi Zhang
Mark Gwynne
Other KMP
Jess Oram (ii)
Catherine Grant-
Edwards (vii)
TOTAL
Other
Non-
Monetary
Super-
annuation
Retirement
Benefits
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,355
19,000
37,355
37,355
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
180,000
222,285
36,000
36,000
36,000
36,000
89,967
636,252
-
-
-
-
-
-
-
-
TOTAL
Remuneration
share based
payment
$
%
240,000
36,000
36,000
12,964
5,903
12,194
23,143
366,204
211,355
219,000
430,355
796,559
-
-
-
-
-
-
-
-
-
-
-
-
(i)
(ii)
In his capacity as Executive Chairman, Mr Antony Sage was previously entitled to a fee of $240,000 per
annum. Effective 1 January 2018, upon transition to his role as Non-Executive Chairman, Mr Antony Sage is
entitled to a fee of $120,000 per annum. The Company has entered into a consulting agreement with
Okewood Pty Ltd (Okewood), a company controlled by Mr Antony Sage, for the provision of these services.
Mr Jess Oram is an employee of Cauldron. In his capacity as Exploration Manager until 31 December 2017, Mr
Jess Oram was entitled to $193,000 per annum plus superannuation. Effective 1 January 2018, upon his
appointment as Chief Executive Officer and Executive Director of the Company, Mr Jess Oram is entitled to
$213,000 plus superannuation. In addition, Mr Jess Oram is entitled to a bonus of up to $26,100 (inclusive of
superannuation) subject to achieving either:
(a) KPI 1 and KPI 2 and KPI 3; or
(b) KPI 4,
whereby, KPIs are defined as follows:
KPI 1: Secure title to the core exploration ground at Bennet Well
KPI 2: Complete either of the following:
-
-
KPI 3: Reduce cost of non-core projects
KPI 4: WAP of CXU shares traded on ASX over 10 days being equal to or exceeding $0.20.
The performance based remuneration bonus was not achieved in the year ended 30 June 2018.
Secure an exploration project, that may or may not be offshore; or
Commence the FLT at Bennet Well, and raising of funding
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Annual Report 2018
A portion of Mr Oram’s salary amounting to $40,671 was recharged to related entity Fe Limited during the
year (2017: $2,087). A portion of Mr Oram’s salary amounting to $4,058 was recharged to related entity Cape
Lambert Resources Ltd during the year (2017: nil).
(iii)
(iv)
(v)
(vi)
(vii)
In his capacity as Non-Executive Director, Mr Qiu Derong is entitled to a fee of $36,000 per annum. The
Company has entered into a consulting agreement for the provision of these services. Amounts included in
this table represent accrued fees.
In her capacity as Non-Executive Director, Ms Judy Li is entitled to a fee of $36,000 per annum. The Company
has entered into a consulting agreement for the provision of these services.
In his capacity as Non-Executive Director, Mr Nicholas Sage is entitled to a fee of $36,000 per annum from
date of his appointment 20 February 2017. The Company has entered into a consulting agreement with
Pembury Nominees Pty Ltd (Pembury), a company controlled by Mr Nicholas Sage, for the provision of these
services.
In his capacity as Non-Executive Director, Mr Chenchong Zhou is entitled to a fee of $36,000 per annum from
the date of his appointment 2 May 2017. A consulting agreement for the provision of services is yet to be
executed. Amounts included in this table represent accrued fees.
Ms Catherine Grant-Edwards was an employee and disclosed as a KMP of the Company until 31 October 2017.
Since 1 November 2017, Bellatrix Corporate Pty Ltd (Bellatrix) has been engaged via a consultancy agreement
to provide company secretarial and accounting services. Ms Grant-Edwards is a director of Bellatrix.
ADDITIONAL DISCLOSURE RELATING TO OPTION HOLDINGS AND SHARE HOLDINGS
OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL
There were no options held by key management personnel during the year ended 30 June 2018.
VALUE OF OPTIONS AWARDED, EXERCISED AND LAPSED DURING THE YEAR
There were no remuneration options granted, exercised or lapsed during the year ended 30 June 2018 (30 June 2017: nil).
SHARES ISSUED ON EXERCISE OF OPTIONS
There were no options exercised during the year ended 30 June 2018 (30 June 2017: nil).
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
30 JUNE 2018
Directors
Antony Sage
Qiu Derong
Other KMP
Catherine Grant-Edwards (i)
30 JUNE 2017
Directors
Antony Sage
Qiu Derong
Mark Gwynne (i)
Other KMP
Catherine Grant-Edwards
Balance
1 July 2017
Issued
Received on
exercise of
options
Net Change
Other
Balance
30 June 2018
5,894,600
47,544,710
8,888
53,448,198
-
-
-
-
Balance
1 July 2016
Issued
Received on
exercise of
options
5,894,600
47,544,710
100,000
8,888
53,548,198
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,894,600
47,544,710
(8,888)
(8,888)
-
53,439,310
Net Change
Other
Balance
30 June 2017
-
-
(100,000)
5,894,600
47,544,710
-
-
(100,000)
8,888
53,448,198
(i)
(ii)
Upon cessation as an employee of the Company, Ms Grant-Edwards held 8,888 shares.
At the date of his resignation, Mr Mark Gwynne held 100,000 shares.
11
Annual Report 2018
LOANS WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
There were no loans made to Cauldron Energy by directors and entities related to them during the year ended 30 June
2018 or 30 June 2017.
OTHER TRANSACTIONS AND BALANCES WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
Details and terms and conditions of other transactions with key management personnel and their related parties (other
than payments to directors as remuneration disclosed above):
Director related entities
Fe Limited
Fe Limited
Cape Lambert Resources Limited
Cape Lambert Resources Limited
Okewood Pty Ltd
Okewood Pty Ltd
Services to
related parties
Purchases
from related
parties
2018
2017
2018
2017
2018
2017
40,671
2,087
4,058
-
-
-
-
-
188,179
219,288
32,821
30,623
Amounts
owed by
related
parties*
40,671
-
-
-
-
-
Amounts owed
to related
parties*
-
-
13,176
4,928
-
-
* Amounts are classified as trade receivables and trade payables, respectively.
Mr Antony Sage is a director of Cape Lambert Resources Limited and Okewood Pty Ltd. Messrs Antony Sage and Nicholas
Sage are directors of Fe Limited.
End of Audited Remuneration Report.
15.
NON AUDIT SERVICES
There were no non-audit services were provided by the Company’s auditor BDO (WA) Pty Ltd.
This report of the Directors, incorporating the Remuneration Report is signed in accordance with a resolution of the Board
of Directors.
Mr Antony Sage
Non-Executive Chairman
PERTH
28 August 2018
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Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF CAULDRON ENERGY
LIMITED
As lead auditor of Cauldron Energy Limited for the year ended 30 June 2018, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Cauldron Energy Limited and the entities it controlled during the
period.
Phillip Murdoch
Director
BDO Audit (WA) Pty Ltd
Perth, 28 August 2018
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BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
Annual Report 2018
CORPORATE GOVERNANCE STATEMENT
In March 2014, the ASX Corporate Governance Council released a third edition of the ASX Corporate Governance Council’s
Principles and Recommendations (ASX Principles).
The Company’s Corporate Governance Statement for the year ended 30 June 2018 (which reports against these ASX Principles)
may be accessed from the Company’s website at www.cauldronenergy.com.au.
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Annual Report 2018
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Note
3(a)
3(b)
22
7
4
5
Revenue
Other income
Administration expenses
Employee benefits expenses
Directors fees
Share based payments
Compliance and regulatory expenses
Consultancy expenses
Legal fees
Occupancy expenses
Travel expenses
Exploration expenditure
Net fair value gain/(loss) on financial assets through profit
and loss
Depreciation
Realised foreign exchange loss
Impairment losses
Profit/(loss) before income tax expense
Income tax expense
Profit/(loss) for the year
Other comprehensive income, net of income tax
Items that will not be reclassified subsequently
to profit or loss:
-
Items that may be reclassified subsequently to profit or
loss:
Exchange differences arising on translation of foreign
operations
Other comprehensive loss for the year
after income tax
Total comprehensive income/(loss) attributable to
members of the Company
2018
$
2017
$
23,733
701,552
(67,930)
(339,081)
(311,806)
-
(151,984)
(281,583)
(121,388)
(133,725)
(72,155)
(142,339)
1,294,355
(8,420)
(179)
(215,751)
36,682
18,188
(123,412)
(378,241)
(366,204)
(78,125)
(221,109)
(184,355)
(203,221)
(134,818)
(25,809)
(39,457)
(342,684)
(97,340)
(575)
(9,814,202)
173,299
(11,954,682)
-
-
173,299
(11,954,682)
-
-
(67,060)
(25,862)
(67,060)
(25,862)
106,239
(11,980,544)
Earnings/(loss) per share for the year attributable to the
members of Cauldron Energy Ltd
Basic earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
16
16
0.05
0.05
(3.83)
(3.83)
The above consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
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Annual Report 2018
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit or loss
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Exploration and evaluation expenditure
Property, plant and equipment
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
20(b)
6
7
9
10
11
12
13
14
15
2018
$
2017
$
1,950,436
418,188
2,715,310
3,294,806
56,949
1,539,175
5,083,934
4,890,930
-
3,391
3,391
-
11,884
11,884
5,087,325
4,902,814
654,361
51,522
569,056
58,555
705,883
627,611
705,883
627,611
4,381,442
4,275,203
55,675,919
4,222,887
(55,517,364)
55,675,919
4,289,947
(55,690,663)
4,381,442
4,275,203
The above consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
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Annual Report 2018
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Note
2018
$
2017
$
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
(1,452,786)
23,733
(1,663,949)
36,682
Net cash used in operating activities
20(a)
(1,429,053)
(1,627,267)
Cash Flows from Investing Activities
Payments for exploration and evaluation
R&D Tax Incentive received
Payments for plant and equipment
Acquisition of equity investments
Proceeds from sales of equity investments
Funding provided to Caudillo Resources SA
(617,735)
-
-
(172,641)
904,178
(26,930)
(1,225,029)
946,102
(10,761)
(989,245)
273,183
(32,572)
Net cash from/(used in) investing activities
86,872
(1,038,322)
Cash Flows from Financing Activities
Proceeds from issue of shares and options, net of
transaction costs
Net cash from financing activities
Net (decrease)/increase in cash held
Effects of exchange rate changes on cash
Cash and cash equivalents at beginning of financial year
-
-
(1,342,181)
(2,189)
3,294,806
3,154,308
3,154,308
488,719
(2,269)
2,808,356
Cash and cash equivalents at end of financial year
1,950,436
3,294,806
The above consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
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Annual Report 2018
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR YEAR ENDED 30 JUNE 2018
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Balance at 1 July 2017
Profit attributable to members of the parent entity
Other comprehensive loss
Total comprehensive income for the year
Transaction with owners, directly in equity
Balance at 30 June 2018
Balance at 1 July 2016
Loss attributable to members of the parent entity
Other comprehensive loss
Total comprehensive loss for the year
Transaction with owners, directly in equity
Shares issued during the year, net of costs
Share based payments expense recognised for value of
options issued/vested during the year
Balance at 30 June 2017
Issued Capital
Accumulated
Losses
Share Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Total
$
$
$
$
$
55,675,919
(55,690,663)
5,808,481
(1,518,534)
4,275,203
-
-
-
-
173,299
-
173,299
-
-
-
-
-
-
(67,060)
(67,060)
173,299
(67,060)
106,239
-
-
55,675,919
(55,517,364)
5,808,481
(1,585,594)
4,381,442
Issued Capital
Accumulated
Losses
Share Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Total
$
$
$
$
$
52,443,486
(43,735,981)
5,808,481
(1,492,672)
13,023,314
-
-
-
(11,954,682)
-
(11,954,682)
3,232,433
-
-
-
-
-
-
-
-
-
(11,954,682)
(25,862)
(25,862)
(25,862)
(11,980,544)
-
-
3,232,433
-
55,675,919
(55,690,663)
5,808,481
(1,518,534)
4,275,203
The above consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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Annual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Preparation
The financial report covers Cauldron Energy Limited (“Cauldron”) and its controlled entities (“the Consolidated Entity”)
for the year ended 30 June 2018 and was authorised for issue in accordance with a resolution of the directors on 28
August 2018.
Cauldron is a public listed company, incorporated and domiciled in Australia.
Cauldron is a for-profit entity for the purposes of preparing these financial statements.
The financial report is a general purpose financial report that has been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the
Australian Accounting Standards Board. The financial report has been prepared on an accruals basis and is based on
historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial
assets and financial liabilities.
The financial report is presented in Australian dollars.
b. Compliance with IFRS
The financial report complies with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
c. Application of New and Revised Accounting Standards
New accounting standards adopted in the current period
The Company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. Adoption of these
standards and interpretations did not have any effect on the statements of financial position or performance of the
Company. The Company has not elected to early adopt any new standards or amendments.
The following relevant standards and interpretations have been applied for the first time for the year ended 30 June
2018:
Reference
Title
Summary
This Standard makes amendments to AASB 112 Income Taxes to
clarify the accounting for deferred tax assets for unrealized losses
on debt instruments measured at fair value.
AASB 2016-1
Amendments to
Australian
Accounting
Standards –
Recognition of
Deferred Tax Assets
for Unrealised
Losses
Application
date of
standard
1 January
2017
Application
date for CXU
1 July 2017
AASB 2016-2
AASB 2017-2
Amendments to
Australian
Accounting
Standards –
Disclosure
Initiative:
Amendments to
AASB 107
The amendments to AASB 107 Statement of Cash Flows are part
of the IASB’s Disclosure Initiative and help users of financial
statements better understand changes in an entity’s debt. The
amendments require entities to provide disclosures about
changes in their liabilities arising from financing activities,
including both changes arising from cash flows and non-cash
changes (such as foreign exchange gains or losses). Refer to note
7 for reconciliation.
Amendments to
Australian
Accounting
Standards – Further
Annual
Improvements
This Standard clarifies the scope of AASB 12 Disclosure of Interests
in Other Entities by specifying that the disclosure requirements
apply to an entity’s interests in other entities that are classified as
held for sale or discontinued operations in accordance with AASB
5 Non-current Assets Held for Sale and Discontinued Operations.
1 January
2017
1 July 2017
1 January
2017
1 July 2017
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Reference
Title
Summary
2014-2016 Cycle
Application
date of
standard
Application
date for CXU
New accounting standards and interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Company for the annual reporting period ended 30 June 2018. The Company’s
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
Company, are set out below.
Application
date of
standard
Application
date for CXU
1 January 2018 1 July 2018
Reference
Title
Summary
AASB 9, and
relevant
amending
standards
Financial
Instruments
AASB 9 replaces AASB 139 Financial Instruments: Recognition and
Measurement.
Except for certain trade receivables, an entity 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.
Debt instruments are subsequently measured at fair value
through profit or loss (FVTPL), amortised cost, or fair value
through other comprehensive income (FVOCI), on the basis of
their contractual cash flows and the business model under which
the debt instruments are held.
There is a fair value option (FVO) that allows financial assets on
initial recognition to be designated as FVTPL if that eliminates or
significantly reduces an accounting mismatch.
Equity instruments are generally measured at FVTPL. However,
entities have an irrevocable option on an instrument-by-
instrument basis to present changes in the fair value of non-
trading instruments in other comprehensive income (OCI) without
subsequent reclassification to profit or loss.
For financial liabilities designated as FVTPL using the FVO, the
amount of change in the fair value of such financial liabilities that
is attributable to changes in credit risk must be presented in OCI.
The remainder of the change in fair value is presented in profit or
loss, unless presentation in OCI of the fair value change in respect
of the liability’s credit risk would create or enlarge an accounting
mismatch in profit or loss.
All other AASB 139 classification and measurement requirements
for financial liabilities have been carried forward into AASB 9,
including the embedded derivative separation rules and the
criteria for using the FVO.
The incurred credit loss model in AASB 139 has been replaced
with an expected credit loss model in AASB 9.
The requirements for hedge accounting have been amended to
more closely align hedge accounting with risk management,
establish a more principle-based approach to hedge accounting
and address inconsistencies in the hedge accounting model in
AASB 139.
Based on the Company’s initial assessment, there will be no
significant change from the current measurement of the
Company’s financial instruments and classification of its financial
instruments at fair value through profit and loss.
AASB 2016-5
Amendments
to Australian
This Standard amends AASB 2 Share-based Payment, clarifying
how to account for certain types of share-based payment
1 January 2018 1 July 2018
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Reference
Title
Summary
Application
date of
standard
Application
date for CXU
Accounting
Standards –
Classification
and
Measurement
of Share-based
Payment
Transactions
Interpretation
23
Uncertainty
over Income
Tax
Treatments
transactions. The amendments provide requirements on the
accounting for:
-
The effects of vesting and non-vesting conditions on the
measurement of cash-settled share-based payments
Share-based payment transactions with a net settlement
feature for withholding tax obligations
A modification to the terms and conditions of a share-based
payment that changes the classification of the transaction
from cash-settled to equity-settled.
-
-
Based on the Company’s initial assessment, there will be no
significant change from the current measurement of the
Company’s share-based payment transactions
The Interpretation clarifies the application of the recognition and
measurement criteria in AASB 12 Income Taxes when there is
uncertainty over income tax treatments. The Interpretation
specifically addresses the following:
- Whether an entity considers uncertain tax treatments
separately
The assumptions an entity makes about the examination of
tax treatments by taxation authorities
How an entity determines taxable profit (tax loss), tax bases,
unused tax losses, unused tax credits and tax rates
How an entity considers changes in facts and circumstances.
-
-
-
1 January 2019 1 July 2019
AASB 15
Revenue from
Contracts with
Customers
The AASB has issued a new standard for the recognition of
revenue. This will replace AASB 118 which covers revenue arising
from the sale of goods and the rendering of services and AASB
111 which covers construction contracts.
1 January 2019 1 July 2019
AASB 16
Leases
The new standard is based on the principle that revenue is
recognised when control of a good or service transfers to a
customer.
The standard permits either a full retrospective or a modified
retrospective approach for the adoption.
The Consolidated Entity does not expect a significant effect on the
financial statements resulting from the change of this standard
however the Consolidated Entity is in the process of evaluating
the impact of the new revenue standard. The changes in the
Consolidated Entity’s accounting policies from the adoption of
AASB 15 will be applied from 1 July 2018.
AASB 16 eliminates the operating and finance lease classifications
for lessees currently accounted for under AASB 117 Leases. It
instead requires an entity to bring most leases into its statement
of financial position in a similar way to how existing finance leases
are treated under AASB 117. An entity will be required to
recognise a lease liability and a right of use asset in its statement
of financial position for most leases.
There are some optional exemptions for leases with a period of 12
months or less and for low value leases.
Lessor accounting remains largely unchanged from AASB 117.
The Consolidated Entity does not expect a significant effect on the
financial statements resulting from the change of this standard
however the Consolidated Entity is in the process of evaluating
the impact of the new leases standard. The changes in the
Group's accounting policies from the adoption of AASB 16 will be
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Reference
Title
Summary
applied from 1 July 2019 onwards.
Application
date of
standard
Application
date for CXU
The Company is in the process of determining the impact of the above on its financial statements. The Company has
not elected to early adopt any new Standards or Interpretations.
d. Principles of Consolidation
(i)
Subsidiaries
Subsidiaries are all entities over which the group has control. The group controls an entity when the group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the group. They are deconsolidated from the date that control ceases. A list of controlled entities is
contained in note 19 to the financial statements.
All inter-group balances and transactions between entities in the Consolidated Entity, including any unrealised profits or
losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary
to ensure consistency with those adopted by the Parent Entity.
(ii)
Joint arrangements
Under AASB 11, Joint Arrangements investments in joint arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal
structure of the joint arrangement.
Joint operations
Cauldron Energy Limited recognises its direct right to the assets, liabilities, revenues and expenses of joint operations
and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated in
the financial statements under the appropriate headings.
Joint ventures
Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the
consolidated statement of financial position.
e.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Consolidated Entity’s companies is measured using the currency of the primary
economic environment in which that company operates. The consolidated financial statements are presented in
Australian dollars which is the parent entity’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of
exchange ruling at the reporting date. Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange
rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of profit or loss and
other comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent
that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the statement of
profit or loss and other comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Consolidated
Entity’s presentation currency are translated as follows:
-
assets and liabilities are translated at year-end exchange rates prevailing at the end of the reporting period;
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-
-
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Consolidated Entity’s
foreign currency translation reserve in the statement of financial position. These differences are recognised in the
statement of profit or loss and other comprehensive income in the period in which the operation is disposed.
f. Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
(i)
(ii)
where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the
cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from
investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as
operating cash flows.
g.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets)
are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year
as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss
when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised
from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting
period. Their measurement also reflects the manner in which management expects to recover or settle the carrying
amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set-off exists, 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 where
it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will
occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or
settled.
Tax consolidation
Cauldron Energy Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group
under tax consolidation legislation. Each entity in the Consolidated Entity recognises its own current and deferred tax
assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax
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liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are
immediately transferred to the head entity. The Group notified the Australian Taxation Office that it had formed an
income tax consolidated group to apply from 1 July 2009.
h. Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments. Cash
equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are
subject to an insignificant risk of changes in value and have an original maturity of three months or less.
i.
Financial Instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the Consolidated Entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the Consolidated Entity commits
itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified
‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at either fair value, amortised cost using the effective interest rate
method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between
knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In
other circumstances, valuation techniques are adopted.
Amortised cost is calculated as:
▪
▪
▪
▪
the amount at which the financial asset or financial liability is measured at initial recognition;
less principal repayments;
plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised
and the maturity amount calculated using the effective interest method; and
less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential
recognition of an income or expense in profit or loss.
The Consolidated Entity does not designate any interests in subsidiaries, associates or joint venture entities as being
subject to the requirements of accounting standards specifically applicable to financial instruments.
The Consolidated Entity has the following financial instruments:
Financial Assets at Fair Value through Profit or Loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of
short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an
accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key
management personnel on a fair value basis in accordance with a documented risk management or investment strategy.
Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to mature within 12
months after the end of the reporting period. (All other loans and receivables are classified as non-current assets.)
Debt and equity instruments
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Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the
contractual arrangement.
Impairment
At the end of each reporting period, the Consolidated Entity assesses whether there is objective evidence that a financial
instrument has been impaired.
Derecognition of financial assets
Financial assets are derecognised when the contractual rights to the cash flows from the asset expire, or it transfers the
financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Consolidated
Entity neither transfers nor retains substantially all the risks or rewards of ownership and continues to control the
transferred asset, the Consolidated Entity recognises its retained interest in the asset and an associated liability for
amounts it may have to pay. If the Consolidated Entity retains substantially all the risk and rewards to ownership of a
transferred financial asset, the Consolidated Entity continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
j.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that
takes a substantial period of time to get ready for its intended use or sale) are capitalised as part of the cost of that
asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing of funds.
k.
Property, Plant and Equipment
Plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is
directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase
consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as
at the date of acquisition.
Depreciation is provided on plant and equipment. Depreciation is calculated on a diminishing value basis so as to write
off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. The
estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment
Office furniture and equipment
Motor vehicle
2017
33.3%
33.3%
33.3%
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses
are included in the statement of profit or loss and other comprehensive income. When revalued assets are sold,
amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.
l.
Exploration and Evaluation Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of
interest. These costs are only carried forward to the extent that they are expected to be recouped through the
successful development of the area or where activities in the area have not yet reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision
to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are
amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
m.
Impairment of Assets
The Consolidated Entity periodically reviews the carrying amounts of its assets to determine whether there is any
indication that those assets may be impaired. If any such indication exists, the recoverable amount of the asset is
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estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Consolidated Entity estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for
impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is
not subsequently reversed.
n. R&D Tax Incentive
Refundable tax incentives are accounted for as government grants under AASB 120 Accounting for Government Grants
and Disclosure of Government Assistance because the directors consider this policy to provide more relevant information
to meet the economic decision-making needs of users, and to make the financial statements more reliable. The
Consolidated Entity has determined that these incentives are akin to government grants because they are not
conditional upon earning taxable income.
o.
Trade and Other Payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services
received by the Consolidated Entity during the reporting period which remains unpaid. The balance is recognised as a
current liability with the amount being normally paid within 30 days of recognition of the liability.
p. Revenue Recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is
probable that the economic benefits will flow to the Consolidated Entity and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is recognised:
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the
rate inherent in the instrument.
Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement. All
revenue is stated net of the amount of goods and services tax (GST).
q. Provisions and Employee Benefits
Provisions are recognised when the Consolidated Entity has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are measures at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the reporting date. The discount rate used to determine the present value reflects current
assessments of the time value of money and the risks specific to the liability. The increase in the provision resulting from
the passage of time is recognised in finance costs.
Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of exploration
activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and
the amount of the provision can be measured reliably. The estimated future obligation includes the costs of removing
facilities, abandoning sites and restoring the affected areas.
Employee leave benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled wholly within
12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are
measured at the amounts expected to be paid when the liabilities are settled.
r.
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
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s.
Share based payments
Equity-settled share based payments are measured at fair value at the date of grant. Fair value is measured by use of
the Black-Scholes options pricing model. The expected life used in the model has been adjusted, based on
management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Consolidated Entity’s estimate of shares that will eventually vest.
For cash-settled share-based payments, a liability equal to the portion of the goods and services received is recognised
at the current fair value determined at each reporting date.
t.
Critical accounting judgements, estimates and assumptions
The Consolidated Entity makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to carrying amounts of assets and liabilities within the next financial year are discussed
below.
Share based payment transactions
The Consolidated Entity measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value of options is determined by an internal valuation using
Black-Scholes option pricing model, while the fair value of shares is determined based on the market bid price at date of
issue.
Exploration and evaluation costs
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These
costs are carried forward in respect of an area that has not at balance date reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in
or relating to, the area of interest are continuing.
Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted
environmental legislation, and the directors understanding thereof. At the current stage of the Consolidated Entity’s
development and its current environmental impact the directors believe such treatment is reasonable and appropriate.
Income taxes
The Consolidated Entity is subject to income taxes in Australia and jurisdictions where it has foreign operations.
Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions
and calculations undertaken during the ordinary course of business for which the ultimate tax determination is
uncertain. The Consolidated Entity estimates its tax liabilities based on the Consolidated Entity’s understanding of the
tax laws in the relevant jurisdictions. Where the final tax outcome of these matters is different from the amounts that
were initially recorded, such difference will impact the current and deferred income tax assets and liabilities in the
period in which such determination is made.
In addition, the Consolidated Entity has recognised deferred tax assets relating to carried forward tax losses to the
extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority
and the same subsidiary against which the unused tax losses can be utilised. However, utilisation of the tax losses also
depends on the ability of the entity to satisfy certain tests at the time the losses are recouped.
u. Comparative Figures
Comparative figures have been adjusted to conform to changes in presentation for the current financial year.
v. Operating Segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenues
and incur expenses (including revenues and expenses relating to transactions with other components of the same
entity), whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions
about resources to be allocated to the segment and assess their performance and for which discrete financial
information is available. This includes start-up operations which are yet to earn revenues.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Operating segments have been identified based on the information provided to the chief operating decision makers –
being the board of directors.
Information about other business activities and operating segments that do not meet the quantitative criteria set out in
AASB 8 “Operating Segments” are combined and disclosed in a separate category called “other.”
2.
SEGMENT INFORMATION
The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and used by
the board of directors (chief operating decision makers) in assessing performance and determining the allocation of
resources. During the year, the Consolidated Entity operated in one business segment (for primary reporting) being mineral
exploration and principally in two geographical segments (for secondary reporting) being Australia and Argentina.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the board of directors as the chief decision maker with respect to
operating segments are determined in accordance with accounting policies that are consistent to those adopted in the
annual financial statements of the Consolidated Entity.
Inter-segment transactions
Inter-segment loans payable and receivable are initially recognised as the consideration received net of transaction costs. If
inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on
market interest rates. This policy represents a departure from that applied to the statutory financial statements.
Segment assets
Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible
assets have not been allocated to operating segments.
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of
the segment. Borrowings and tax liabilities are generally considered to relate to the Consolidated Entity as a whole and are
not allocated to specific segments. Segment liabilities include trade and other payables and certain direct borrowings.
Other items
The following items of revenue, expense, assets and liabilities are not allocated to the Mineral Exploration segment as they
are not considered part of the core operations of that segment:
administration and other operating expenses not directly related to uranium exploration
interest income
interest expense
convertible loan notes
subscription funds
loans to other entities
held for trading investments
-
-
-
-
-
-
-
-
Mineral exploration
2017
2018
$
$
Other
Total
2018
$
2017
$
2018
$
2017
$
Interest received
Other
Gain on disposal of financial assets
Total segment revenue and other
income
-
-
-
-
-
-
-
-
23,733
93,263
608,289
36,682
8,175
10,012
23,733
93,263
608,289
36,682
8,175
10,012
725,285
54,869
725,285
54,869
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Segment net operating profit/ (loss)
after tax
Segment net operating profit/ (loss)
after tax includes the following
significant items:
Share based payments expense
Net fair value gain/(loss) on financial
assets
Impairment of loans and receivables
Impairment of exploration assets
Impairment of plant and equipment
Depreciation
Employee benefits expense
Directors fees
Consultancy expenses
Legal fees
Tenement expenditure
Other expenses
Mineral exploration
2017
2018
$
$
Other
Total
2018
$
2017
$
2018
$
2017
$
(354,417)
(9,914,673)
529,716
(2,040,009)
173,299
(11,954,682)
-
-
-
(78,125)
-
(78,125)
-
-
(205,659)
-
(8,420)
-
-
-
-
(142,338)
-
-
-
(9,589,592)
(188,284)
(97,340)
-
-
-
-
(39,457)
-
1,294,355
(10,092)
-
-
-
(339,081)
(311,806)
(281,583)
(121,388)
-
(425,974)
(342,684)
(36,326)
-
-
-
(378,241)
(366,204)
(184,355)
(203,221)
-
(505,722)
1,294,355
(10,092)
(205,659)
-
(8,420)
(339,081)
(311,806)
(281,583)
(121,388)
(142,338)
(425,974)
(342,684)
(36,326)
(9,589,592)
(188,284)
(97,340)
(378,241)
(366,204)
(184,355)
(203,221)
(39,457)
(505,722)
Segment assets
3,392
11,884
5,083,933
4,890,930
5,087,325
4,902,813
Segment assets include:
Financial assets
Other assets
-
3,392
3,392
-
11,884
11,884
2,715,310
2,368,623
5,083,933
1,539,175
3,351,755
4,890,930
2,715,310
2,372,015
5,087,325
1,539,175
3,363,639
4,902,814
Segment liabilities
(23,335)
(130,519)
(682,548)
(497,092)
(705,883)
(627,611)
Segment information by geographical region
The analysis of the location of total assets is as follows:
Australia
Argentina
3.
REVENUE AND OTHER INCOME
(a) Revenue
Interest received
(b) Other Income
Gain on disposal of financial assets at fair value through profit or loss
Other
4.
IMPAIRMENT LOSSES
Impairment of exploration and evaluation expenditure (a)
Impairment of plant and equipment (b)
Impairment of loans and other receivables
Reversal of previously impaired loans and receivables
29
2018
$
2017
$
5,075,278
12,047
5,087,325
4,883,431
19,382
4,902,813
2018
$
2017
$
23,733
23,733
608,289
93,263
701,552
36,682
36,682
10,012
8,176
18,188
2018
$
2017
$
205,659
-
26,750
(16,658)
215,751
9,589,592
188,284
36,326
-
9,814,202
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(a) The Consolidated Entity has assessed the carrying amount of the exploration and evaluation expenditure in accordance with
AASB 6 Exploration for and Evaluation of Mineral Resources and has recognised an impairment expense of $205,659 during
the year (30 June 2017: $9,589,592). The majority of the 2017 impairment expense recognised is attributable to an
impairment trigger event, being the 20 June 2017 announced implementation of a ban on uranium mining on all future
mining leases by the McGowan Government of Western Australia (Uranium Mining Ban). As a result of this, the Company
wrote down its Western Australian Yanrey projects (including Bennet Well) to nil. The Company similarly impaired its
exploration and evaluation expenditure in the 2018 year.
The carrying value of the Consolidated Entity’s interest in exploration expenditure is dependent upon:
-
-
-
the continuance of the Consolidated Entity’s rights to tenure of the areas of interest;
the results of future exploration; and
the recoupment of costs through successful development and exploitation of the areas of interest, or
alternatively, by their sale.
(b)
In light of the Uranium Mining Ban, the Consolidated Entity has recorded an impairment expense of $188,284 in the year
ended 30 June 2017 in relation to the plant and equipment located at the Bennet Well camp.
5.
INCOME TAX EXPENSE
(a)
The components of tax expense comprise:
Current tax benefit / (expense)
Deferred tax benefit / (expense)
2018
$
2017
$
-
-
-
-
-
-
(b)
The prima facie tax expense/(benefit) on profit/(loss) from ordinary activities
before income tax is reconciled to the income tax as follows:
Profit/(loss) before tax
173,299
(11,954,682)
Prima facie tax expense/(benefit) on loss from ordinary activities before income
tax at 30% (2017: 30%)
51,990
(3,586,405)
Add tax effect of:
Non-deductible expenses
Tax losses utilised
Current year tax losses not recognised
Less tax effect of:
Under/(over) provision for prior year
Total income tax (income)/expense attributable to entity
(c)
Recognised deferred tax balances
Deferred tax balances have been recognised in respect of the following:
Deferred tax assets
Annual Leave
Investments
Other receivables
Other accruals
Loan receivable
Capital raising costs
Tax losses
Deferred tax liabilities
Exploration
Net recognised deferred tax assets/(liabilities)
30
4,411
(56,401)
-
26,241
-
3,560,164
-
-
-
-
15,456
1,720,754
-
55,218
412,515
32,337
(2,236,280)
-
-
-
-
17,566
1,839,950
17,011
46,527
404,490
38,303
(2,363,847)
-
-
-
-
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Annual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(d) Unrecognised deferred tax balances
The Consolidated Entity has $12,129,468 gross tax losses arising in Australia that are available indefinitely for offset
against future profit of the Company in which the losses arose.
6.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
R&D Tax Incentive receivable
Provision for non-recovery of trade receivables (a)
Prepayments
(a) Provision for non-recovery of trade receivables
Movements:
Opening balance at beginning of the year
Impairment of receivable
Adjustment to provision for doubtful debts
Recovery of previously impaired receivable
2018
$
2017
$
129,395
316,454
(40,045)
12,384
418,188
100,557
-
(56,703)
13,095
56,949
2018
$
2017
$
(56,703)
-
-
16,658
(40,045)
(52,950)
(3,753)
-
-
(56,703)
A provision for impairment is recognised when there is objective evidence that an individual receivable is impaired.
Credit risk
The Consolidated Entity has no significant concentration of credit risk with respect to any single counterparty or group
of counterparties.
The following table details the Group’s trade and other receivables exposure to credit risk with ageing analysis.
Amounts are considered ‘past due’ when the debt has not been settled, with the terms and conditions agreed
between the Consolidated Entity and the counter party to the transaction. Receivables that are past due are assessed
for impairment is ascertaining solvency of the debtors and are provided for where there are specific circumstances
indicating that the debt may not be fully recoverable by the Group.
2018
Trade receivables
2017
Trade receivables
7.
FINANCIAL ASSETS
Gross amount
Past due and
impaired
Within initial
trade terms
129,395
40,045
89,350
100,557
56,703
43,874
Financial assets
Financial assets at fair value through profit or loss (listed investments)
Financial assets at fair value through profit or loss (unlisted investments)
2018
$
2017
$
2,710,281
5,029
2,715,310
1,539,175
-
1,539,175
Financial assets comprise investments in the ordinary issued capital of various entities. There are no fixed returns or fixed
maturity dates attached to these investments. The fair value of listed investments is calculated with reference to current
market prices at balance date.
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Annual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
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Movements:
Opening balance at beginning of the year
Acquisition of equity securities (non-cash)
Acquisition of equity securities (cash)
Disposal of equity securities
Fair value gain/(loss) through profit or loss
8.
LOAN RECEIVABLES
Non-current
Caudillo Resources SA (a)
Provision for non-recovery (a)
2018
$
2017
$
1,539,175
5,029
172,641
(295,890)
1,294,355
2,715,310
1,103,046
52,740
989,245
(263,172)
(342,684)
1,539,175
2018
$
2017
$
1,406,771
(1,406,771)
-
1,401,819
(1,401,819)
-
a)
The Consolidated Entity’s wholly owned subsidiary Jakaranda Minerals Limited (“Jakaranda”) previously provided a draw-
down facility (“First Loan”) up to $650,000 to Caudillo Resources SA (“Caudillo”), which is included in this balance. The
First Loan and interest (LIBOR + 2%) was required to be repaid in cash by 21 February 2013, or Jakaranda may elect to
convert the First Loan into an 80% interest in the issued capital of Caudillo. At 30 June 2014, this draw-down facility had
been utilised. The Consolidated Entity intends to elect to convert the First Loan into an 80% equity interest in Caudillo,
and the execution of this is currently in the process of being completed.
The Consolidated Entity agreed to provide further draw-down facilities from Jakaranda to Caudillo for $650,000 and
$150,000 respectively (“Second Loan” and “Third Loan”). The Second Loan and Third Loan and interest (LIBOR + 2%) is
repayable, at the election of Caudillo, by way of:
(i)
(ii)
cash; or
subject to Caudillo and Jakaranda obtaining all necessary shareholder and regulatory approvals, the
issue to the Jakaranda of fully paid ordinary shares in the capital of Caudillo based on a deemed issue
price per Caudillo share of $100 (Argentinean pesos).
Until such time as the First Loan, Second Loan and Third Loan are repaid or converted to an equity interest in Caudillo the
Consolidated Entity has conservatively provided for the non-recovery of the loans in full. As a result of this, an impairment
expense of $4,952 (30 June 2017: $25,037) has been recognised in the Statement of Profit or Loss and Other
Comprehensive Income.
9.
EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure
Exploration and evaluation expenditure – provision for impairment
Movements:
Carrying value at beginning of year
Exploration expenditure incurred
Impairment of exploration expenditure
Foreign exchange movements
R&D Tax Incentive
Carrying value at end of year
2018
$
2017
$
9,217,435
(9,217,435)
-
8,713,087
(8,713,087)
-
-
522,113
(205,659)
-
(316,454)
-
9,227,557
1,308,137
(9,589,592)
-
(946,102)
-
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
10.
PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Movements:
Carrying value at beginning of year
Additions
Depreciation expense
Impairment expense (refer note 4(b))
Foreign currency differences arising from translating functional currency to
presentation currency
Carrying value at end of year
11.
TRADE AND OTHER PAYABLES
Current
Trade payables
Other payables and accruals
Trade payables are non interest bearing and are normally settled on 30 day terms.
12.
PROVISIONS
Current
Employee benefits
13.
ISSUED CAPITAL
2018
$
2017
$
36,973
(33,582)
3,391
45,866
(33,982)
11,884
2018
$
2017
$
11,884
-
(8,420)
-
(73)
3,391
286,850
10,761
(97,340)
(188,284)
(103)
11,884
2018
$
2017
$
467,089
187,272
654,361
403,339
165,717
569,056
2018
$
2017
$
51,522
51,522
58,555
58,555
2018
$
2017
$
Ordinary shares issued and fully paid
55,675,919
55,675,919
2018
No.
2018
$
2017
No.
2017
$
Issued and fully paid up ordinary shares
Opening balance
Shares issued (a)
Shares issued (b)
Shares issued (c)
Share issue costs
329,289,708
-
-
-
-
329,289,708
55,675,919
-
-
-
-
55,675,919
288,002,620
31,250,000
8,474,588
1,562,500
-
329,289,708
52,443,486
2,500,000
670,240
78,125
(15,932)
55,675,919
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Annual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Shares issued pursuant to placement agreements
(a)
(b)
In September 2016, Cauldron entered into a placement agreement with a new Chinese investor Yidi Tao for
31,250,000 fully paid ordinary shares at an issue price of $0.08 per share for a total of $2,500,000 (Tao Placement).
The shares were issued following receipt of Shareholder approval at the AGM.
The Tao Placement Agreement included an offer of 20 million unlisted options exercisable at $0.08 on or before 31
December 2018.
As previously announced 6 July 2016, Cauldron advised it had received judgment in its favour in respect of its claims
against Guangzhou City Investment Management Co. Ltd (Guangzhou City). The judgment debt due and payable to
the Company was for $1 million plus interest (Judgment Debt). On 5 July 2016, the Company recovered $508,455
(before costs) of the Judgement Debt.
As announced 9 December 2016, the Company advised it sought to enforce payment of the outstanding balance of the
Judgment Debt in accordance with the powers afforded by the Civil Judgments Enforcement Act. On 8 December
2016, Cauldron issued 8,474,588 shares (Guangzhou Shares) to Guangzhou City, in full satisfaction of the Company’s
obligations pursuant to a placement agreement (Guangzhou City Placement Agreement). In accordance with court
orders (Orders) obtained by the Company, upon issue of the Guangzhou Shares to Guangzhou City, an immediate
holding lock was placed over the Guangzhou Shares, and receiver (Mr Kim Wallman of HLB Mann Judd (Insolvency WA)
(Receiver)) was appointed over the Guangzhou Shares.
The Receiver exercised his power for the purpose of realising a portion of the outstanding balance of the Judgment
Debt. On 4 April 2017, the Receiver completed the sale of the Guangzhou Shares to investors who have agreed to a
six-month escrow period in respect of the Guangzhou Shares, recovering $161,785 of the outstanding balance (before
Receiver costs) from the sale of Guangzhou Shares by the Receiver.
Shares issued to consultant
(c)
Following receipt of shareholder approval at the Company’s annual general meeting on 24 November 2016, the
Company issued 1,562,500 fully paid ordinary shares to a consultant (Consultant Shares) as consideration for investor
relations and marketing support services. This share issue constitutes an equity-settled share based payment
transaction and have been valued in reference to the market price of the shares on date of grant, being $0.05 per
share, on the basis of the value of the services provided.
Terms and Conditions
Holders of ordinary shares are entitled to dividends as declared from time to time and are entitled to one vote per share
at shareholder meetings. In the event of winding up of the Consolidated Entity, ordinary shareholders rank after all other
shareholders and creditors and are fully entitled to any proceeds of liquidation.
Capital risk management
Capital managed by the Board includes shareholder equity, which was $55,675,919 at 30 June 2018 (2017: $55,675,919).
The Consolidated Entity’s objectives when managing capital are to safeguard its ability to continue as a going concern, so
that it may continue to provide returns to shareholders and benefits to other stakeholders. The Company’s capital
includes ordinary share capital and financial liabilities, supported by financial assets.
Due to the nature of the Consolidated Entity’s activities, being mineral exploration, it does not have ready access to credit
facilities, with the primary source of funding being equity raisings. Accordingly, the objective of the Consolidated Entity’s
capital risk management is to balance the current working capital position against the requirements of the Consolidated
Entity to meet exploration programmes and corporate overheads.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
14.
RESERVES
Reserves
Share based payment reserve (a)
Foreign currency translation reserve (b)
(a)
Share based payment reserve
Reserve balance at beginning of year
Reserve balance at end of year
2018
$
2017
$
5,808,481
(1,585,594)
4,222,887
5,808,481
(1,518,534)
4,289,947
2018
$
2017
$
5,808,481
5,808,481
5,808,481
5,808,481
The share based payment reserve arises on the grant of share options to employees, directors and consultants (share
based payments) and to record the issue, exercise and lapsing of listed options.
(b)
Foreign currency translation reserve
Reserve balance at beginning of the year
Foreign currency exchange differences arising on translation
of foreign operations
Reserve balance at end of year
2018
$
2017
$
(1,518,534)
(1,492,672)
(67,060)
(1,585,594)
(25,862)
(1,518,534)
Exchange differences relating to the translation from the functional currencies of the Consolidated Entity’s foreign
controlled entities into Australian dollars are recognised directly in the foreign currency translation reserve.
15.
ACCUMULATED LOSSES
Balance at beginning of year
Profit/(loss) for the year
Balance at end of year
16.
EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share
Continuing operations
Diluted earnings/(loss) per share
Continuing operations
Profit/(loss) used in calculation of basic earnings/(loss) per share
Continuing operations
Profit/(loss) used in calculation of diluted earnings/(loss) per share
Continuing operations
Weighted average number of ordinary shares outstanding during the year used
in the calculation of:
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
35
2018
$
2017
$
(55,690,663)
173,299
(55,517,364)
(43,735,981)
(11,954,682)
(55,690,663)
2018
Cents per share
2017
Cents per share
0.05
0.05
(3.83)
(3.83)
$
$
173,299
(11,954,682)
173,299
(11,954,682)
No.
No.
329,289,708
312,403,557
349,289,708
312,403,557
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
17.
COMMITMENTS
Office Rental Commitments
The Consolidated Entity entered into a sub-lease for office premises for a period of 8 years terminating on 31 March 2020.
Total office rental commitments for the Consolidated Entity are:
Within one year
Between one and five years
Longer than five years
18.
CONTINGENT ASSETS AND LIABILITIES
The Consolidated Entity has no contingent liabilities or assets at the year end.
19.
CONTROLLED ENTITIES
Details of Cauldron Energy Limited’s subsidiaries are:
Name
Country of
Incorporation
Date/Company of
Incorporation
Shares
2018
$
2017
$
132,056
99,042
-
231,098
132,056
231,098
-
363,154
Ownership
Interest
Investment Carrying
Amount
2018
%
2017
%
2018
$
2017
$
Australia
Ronin Energy Ltd
Australia
Cauldron Minerals Ltd
Australia
Jakaranda Minerals Ltd
Raven Minerals Ltd
Australia
Cauldron Energy (Bermuda) Limited Bermuda
Cauldron Energy (SL) Limited
Sierra Leone
24 April 2006
24 April 2006
24 April 2006
24 April 2006
2 February 2012
12 March 2012
Ord
Ord
Ord
Ord
Ord
Ord
100
100
100
100
100
100
100
100
100
100
100
100
5
1
1
5
1
1
14
5
1
1
5
1
1
14
20.
CASH FLOW INFORMATION
2018
$
2017
$
(a)
Reconciliation of cash flows from operating activities with profit/(loss) from
ordinary activities after income tax
Profit/(loss) from ordinary activities after income tax
173,299
(11,954,682)
Non-cash flows in operating loss:
Depreciation
Equity settled share based payments
Net fair value (gain)/loss on investments
Realised (gain)/loss on disposal of financial assets
Impairment losses
Changes in assets and liabilities:
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Net cash outflows from operating activities
(b)
Reconciliation of cash and cash equivalents
8,420
-
(1,294,355)
(608,289)
232,409
(55,672)
122,168
(7,033)
(1,429,053)
97,340
78,125
342,684
(10,012)
9,814,202
(38,863)
52,728
(8,789)
(1,627,267)
For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and
investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of
the financial year as shown in the cash flow statement is reconciled to the related items in the statement of financial
position as follows:
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Cash at bank
Cash and cash equivalents
21.
FINANCIAL RISK MANAGEMENT
Financial risk management
2018
$
2017
$
1,950,436
1,950,436
3,294,806
3,294,806
The Consolidated Entity’s financial instruments consist mainly of deposits with banks, accounts receivable, loan receivables,
accounts payable, convertible loan notes and shares in listed companies.
The Consolidated Entity does not speculate in the trading of derivative instruments.
The totals for each category of financial instruments, measured in accordance with AASB 139 are as follows:
Financial Assets
Cash and cash equivalents
Financial assets at fair value through profit or loss (listed investments)
Financial assets at fair value through profit or loss (unlisted investments)
Trade and other receivables
Financial Liabilities
Trade and other payables
Financial risk management policies
2018
$
2017
$
1,950,436
2,710,281
5,029
418,188
5,083,933
3,294,806
1,539,175
-
56,949
4,890,930
654,362
654,362
569,057
569,057
The Consolidated Entity’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit rate
risk and liquidity risk.
The Consolidated Entity’s overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Consolidated Entity. The Consolidated Entity uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the
case of interest rate, foreign exchange and other price risks and aging analysis for credit risk. Risk management is carried out
by the Board and they provide written principles for overall risk management.
Financial risk exposures and management
The main risks arising from the Consolidated Entity’s financial instruments are credit risk, liquidity risk and market risk
consisting of interest rate risk, foreign currency risk and equity price risk.
(a) Foreign currency risk
The Consolidated Entity undertakes certain transactions denominated in foreign currencies, hence exposures to exchange
rate fluctuations arise. Given the few transactions the Board does not consider there to be a need for policies to hedge
against foreign currency risk. The Consolidated Entity’s has no significant exposure to foreign currency risk as at the
reporting date.
(b)
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period
whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.
Cash and cash equivalents on deposit at variable rates expose the Consolidated Entity to cash flow interest rate risk. The
Consolidated Entity is exposed to movements in market interest rates on short term deposits. The policy is to monitor the
interest rate yield curve out to 120 days to ensure a balance is maintained between the liquidity of cash assets and the
interest rate return.
37
Annual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
The effect on loss and equity as a result of changes in the interest rate:
Change in loss:
Increase in interest rate by 200 basis points
Decrease in interest rate by 200 basis points
2018
Change
$
2017
Change
$
39,009
(39,009)
65,896
(65,896)
The above interest rate sensitivity analysis has been performed on the assumption that all other variables remain
unchanged.
(c) Price risk
The Consolidated Entity is exposed to equity securities price risk. This arises from investments held by the Consolidated
Entity and classified on the statement of financial position as current financial assets at fair value through profit or loss. The
Consolidated Entity is not exposed to commodity price risk.
To manage its price risk arising from investments in equity securities, the Consolidated Entity diversifies its portfolio which is
done in accordance with the limits set by the Consolidated Entity.
The majority of the Consolidated Entity’s equity investments are publicly traded and are included on the ASX 200 Index.
The table below summarises the impact of increases/decreases of the index on the Consolidated Entity’s post tax profit for
the year and on equity. The analysis is based on the assumption that the equity indexes had increased/decreased by 20%
(2017 – 10%) with all other variables held constant and all the Consolidated Entity’s equity instruments moved according to
the historical correlation with the index.
Index
ASX listed
(d) Credit risk
Impact on Post-Tax Profit/(Loss)
2018
$
2017
$
542,056
153,918
Credit risk is managed on a consolidated basis. Credit risk arises from cash and cash equivalents and credit exposures to
wholesale and retail customers and suppliers. The Consolidated Entity has adopted the policy of only dealing with credit
worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the
risk of financial loss from defaults.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit
ratings:
Financial assets
Cash and cash equivalents (AA)
Trade and other receivables
(e) Liquidity risk
2018
$
2017
$
1,950,436
418,188
2,368,623
3,294,806
56,949
3,351,755
The Consolidated Entity manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and
actual cash flows and matching the maturity profiles of financial assets and liabilities.
Financial instrument composition and maturity analysis
The table below reflects the undiscounted contractual settlement terms for financial instruments of a fixed period of
maturity, as well as management’s expectations of the settlement period for all other financial instruments.
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Annual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2018
Financial assets
Cash
Held for trading investments
Receivables and loans
Financial Liabilities
Trade and other payables
2017
Financial assets
Cash
Held for trading investments
Receivables and loans
Financial Liabilities
Trade and other payables
(f) Fair value estimation
Within 1
Year
$
1,950,436
2,715,310
418,188
5,083,934
654,362
654,362
Within 1
Year
$
3,294,806
1,539,175
56,949
4,890,930
569,057
569,057
1 to 5 Years
Over 5 Years
$
$
-
-
-
-
-
-
-
-
-
-
-
-
1 to 5 Years
Over 5 Years
$
$
-
-
-
-
-
-
-
-
-
-
-
-
2018
Total
$
1,950,436
2,715,310
418,188
5,083,934
654,362
654,362
2017
Total
$
3,294,806
1,539,175
56,949
4,890,930
569,057
569,057
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure
purposes. The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial
statements approximates their fair values as the carrying value less impairment provision of trade receivables and payables
are assumed to approximate their fair values due to their short-term nature.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified
using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value
hierarchy consists of the following levels:
-
-
-
quoted prices in active markets for identical assets or liabilities (Level 1);
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3)
Level 1
$
Level 2
$
Level 3
$
Total
$
2,710,281
Level 1
$
Level 2
$
-
-
-
2,710,281
Level 3
$
Total
$
-
1,539,175
2018
Financial assets:
Financial assets at fair value through profit or loss:
Held for trading investments
2017
Financial assets:
Financial assets at fair value through profit or loss:
Held for trading investments
1,539,175
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Annual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
22.
SHARE BASED PAYMENTS
Total costs arising from share based payment transactions recognised as expense during the year were as follows:
Options issued to employees and consultants
Options issued to directors
Shares issued to consultant (refer note 13(c))
2018
$
2017
$
-
-
-
-
-
-
78,125
78,125
(a) Summary of movements in options granted as share based payments
There were no share based payment options granted, exercised or expired during the year end 30 June 2018.
23.
OTHER UNLISTED OPTIONS
The following refers to unlisted options issued by the Company, other than those issue as share based payment
transactions.
Options granted, expired, lapsed or exercised during the year
There were no unlisted options granted, lapsed or exercised during the year ended 30 June 2018.
Options on issue at 30 June 2018
The outstanding balance of options at 30 June 2018 is represented by:
-
20,000,000 unlisted options with an exercise price of $0.08 and an expiry date of on or before 31 December 2018.
24.
PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Option Premium Reserve
Total equity
Financial Performance
Profit/(loss) for the year
Total comprehensive income/(loss)
Loans to Controlled Entities
2018
$
2017
$
2,356,280
2,727,586
5,083,866
702,424
-
702,424
3,332,507
1,555,647
4,888,154
612,951
-
612,951
55,675,919
(57,102,957)
5,808,480
4,381,442
55,675,919
(57,209,196)
5,808,480
4,275,203
173,299
106,239
(11,954,682)
(11,980,544)
Loans are provided by the Parent Entity to its controlled entities for their respective operating activities. Amounts receivable
from controlled entities are non-interest bearing with no fixed term of repayment. The eventual recovery of the loan will be
dependent upon the successful commercial application of these projects or the sale to third parties. Details of loans
provided are listed below:
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Annual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Subsidiaries
Ronin Energy Ltd
Cauldron Minerals Ltd
Jakaranda Minerals Ltd
Raven Minerals Ltd
Total value of loans provided to subsidiaries
Commitments
2018
$
2017
$
23,329
8,805,567
1405,055
25,775
10,259,726
23,329
8,652,665
1,378,312
25,775
10,080,081
The commitments of the Parent Entity are consistent with the Consolidated Entity (refer to note 17).
Contingent Liabilities and Assets
The contingent liabilities and assets of the Parent Entity are consistent with the Consolidated Entity (refer to note 18).
25.
RELATED PARTY INFORMATION
Balances between the company and its subsidiaries which are related parties of the company, have been eliminated on
consolidation and are not disclosed in this note. Details of percentage of ordinary shares held in subsidiaries are disclosed in
note 19 to the financial statements.
Note 19 provides information about the Group’s structure including the details of the subsidiaries and the holding
company. The following table provides the total amount of transactions and outstanding balances that have been entered
into with related parties for the relevant year.
Sales and Purchases between Related Parties
Director related entities
Fe Limited
Fe Limited
Cape Lambert Resources Limited
Cape Lambert Resources Limited
Okewood Pty Ltd
Okewood Pty Ltd
Sales to
related parties
Purchases
from related
parties
Amounts
owed by
related
parties*
Amounts owed
to related
parties*
2018
2017
2018
2017
2018
2017
40,671
2,087
4,058
-
-
-
-
-
188,179
219,288
32,821
30,623
40,671
-
-
-
-
-
-
-
13,176
4,928
-
-
* Amounts are classified as trade receivables and trade payables, respectively.
Mr Antony Sage is a director of Cape Lambert Resources Limited and Okewood Pty Ltd. Messrs Antony Sage and Nicholas
Sage are directors of Fe Limited.
Sales to and purchases from director related entities are for the reimbursement of employee, consultancy, occupancy costs
and other costs.
Loans between Related Parties
There were no loan made to Cauldron Energy by directors and entities related to them during the year ended 30 June 2018
and 30 June 2017.
The ultimate parent
The ultimate parent of the Group is Cauldron Energy Limited which is based in and listed in Australia.
Terms and conditions of transactions with related parties other than KMP
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There
have been no guarantees provided or received for any related party receivables or payables. For the year ended 30 June
2018, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2017: nil).
41
Annual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
This assessment is undertaken each financial year through examining the financial position of the related party and the
market in which the related party operates.
Financial Assets
At 30 June 2018, Cauldron held 28,153,112 shares in Fe Limited (ASX: FEL) (2017: 25,828,112) with a market value of
$675,675 (2017: $619,875). Messrs Antony Sage and Nicholas Sage are directors of FEL.
At 30 June 2018, Cauldron held 8,144,910 shares in European Lithium Limited (ASX: EUR) (2017: 8,944,910) with a market
value of $1,710,431 (2017: $393,576). The movement during the year includes the exercise of 1,111,111 options at an
exercise price of $0.05 each for $55,556. Mr Antony Sage is a director of EUR.
At 30 June 2018, Cauldron held 10,416,667 shares in Cape Lambert Resources Ltd (ASX: CFE) (2017: 17,416,667) with a
market value of $312,500 (2017: $505,083.34). Mr Antony Sage is a director of CFE.
Significant shareholders
Qiu Derong holds a significant interest of 14.44% in the issued capital of Cauldron Energy at 30 June 2018 (30 June 2017:
14.44%). Mr Qiu Derong is a director of Cauldron.
Cape Lambert, via its wholly owned subsidiary Dempsey Resources Pty Ltd (Dempsey), holds a significant interest of 15.93%
(30 June 2017: 15.93%) in the issued capital of Cauldron at 30 June 2018. Mr Antony Sage is a director of Cape Lambert.
Compensation of Key Management Personnel of the Group
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each
member of the Consolidated Entity’s key management personnel (“KMP”) for the year ended 30 June 2018.
The totals of remuneration paid to KMP of the Consolidated Entity during the year are as follows:
Short-term employee benefits
Post employment benefits
Share based payments
26.
REMUNERATION OF AUDITORS
Paid or payable to BDO (WA) Pty Ltd for:
-
-
Audit or review of the Consolidated Entity financial report
Audit of Form 5 tenement expenditure report
Remuneration of the auditors of subsidiary for:
-
Audit or review of the financial report
Remuneration of the BDO (WA) Pty Ltd for:
-
Non-audit services
2018
$
2017
$
610,634
25,618
-
546,285
759,204
37,355
-
796,559
2018
$
2017
$
36,280
1,020
9,838
-
47,138
34,280
-
11,019
-
45,299
27.
EVENTS SUBSEQUENT TO REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly
affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated
Entity in future financial years.
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Annual Report 2018
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Cauldron Energy Limited, I state that:
1.
In the opinion of the directors:
a)
the financial statements and notes of Cauldron Energy Limited for the financial year ended 30 June 2018 are in
accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of its financial position as at 30 June 2018 and its performance for the year
ended on that date of the Consolidated Entity; and
(ii) complying with Accounting Standards (including the Australian Accounting
Interpretations), the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 1(b);
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable;
b)
c)
2.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with
section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
On behalf of the board
Mr Antony Sage
Non-Executive Chairman
PERTH
28 August 2018
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Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
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INDEPENDENT AUDITOR'S REPORT
To the members of Cauldron Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Cauldron Energy Limited(the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2018, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
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Valuation of Investments
Key audit matter
How the matter was addressed in our audit
The Group holds investments in listed entities
classified as financial assets at fair value through
profit or loss, as disclosed in Note 7 of the
financial report.
In accordance with Australian Accounting
Standards, the investments are required to be
carried at their fair value at reporting date, and
any changes from their carrying value are
reflected in profit and loss.
We considered this to be a key audit matter
because of the significance of the investment
balance, representing 53% of total assets of the
Group.
Refer to Note 7 and Note 13 for disclosures on the
Financial Assets measured at fair value.
Our audit procedures included, but were not
limited to the following:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Re-calculating the valuation of the
investments held at reporting date
based on closing market prices;
Agreeing the closing balance of shares
held to supporting documentation;
Re-calculating the realised gains on
investments sold during the period;
Rec-calculating the unrealised gains or
loss on investments held at reporting
date; and
Assessing the adequacy of the Group’s
disclosures in Note 7 and Note 13 of the
financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2018, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
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In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 12 of the directors’ report for the
year ended 30 June 2018.
In our opinion, the Remuneration Report of Cauldron Energy Limited, for the year ended 30 June 2018,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Phillip Murdoch
Director
Perth, 28 August 2018
Annual Report 2018
Shareholding
ADDITIONAL SHAREHOLDER INFORMATION
The distribution of members and their holdings of equity securities in the Company as at 3 August 2018 were as follows:
Number Held
1-1,000
1,001 - 5,000
5,001 -10,000
10,001 -100,000
100,001 and over
TOTAL
Class of Equity Securities
Fully Paid Ordinary Shares
Number of shareholders
84,333
1,132,924
2,094,358
12,877,577
313,100,516
329,289,708
186
432
261
366
112
1,357
There are 1,357 shareholders holding a total of 329,289,708 shares.
There are 966 shareholders holding less than a marketable parcel of shares.
Substantial Shareholders
The names of the substantial shareholders listed in the Company’s register as at 3 August 2018:
Shareholder
Dempsey Resources Pty Ltd
Joseph Energy (Hong Kong) Limited
Mr Derong Qiu
Starry World Investment Ltd
Sky Shiner Investment Limited
Yidi Tao
Options
Details of unissued shares under option as at the date of this report are:
Number
52,470,036
41,205,500
47,544,710
33,898,318
31,400,000
31,250,000
Grant Date
Class of
Shares
Exercise
Price
Number of
Options
Expiry Date
Listed /
Unlisted
24 November 2016
Ordinary
$0.08
20,000,000
31 December 2018
Unlisted
Option holders do not have any rights to participate in any issues of shares or other interests in the company or any other
entity.
No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of
any other body corporate.
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Annual Report 2018
Voting Rights
Ordinary Shares
ADDITIONAL SHAREHOLDER INFORMATION
In accordance with the Company’s Constitution, on a show of hands every member present in person or by proxy or attorney or duly
authorised representative has one vote. On a poll every member present in person or by proxy or attorney or duly authorised
representative has one vote for every fully paid ordinary share held.
Options
Holders of options do not have a right to vote.
Restricted Securities
The Company has no shares on issue subject to escrow.
Twenty Largest Shareholders
The names of the twenty largest ordinary fully paid shareholders in the Company as at 3 August 2018 are as follows:
Shareholder
Number
% Held of
Ordinary Capital
Issued
52,470,036
41,205,500
38,098,239
33,898,318
31,400,000
31,250,000
10,534,545
9,446,471
4,172,864
3,805,639
26,200
343,000
3,436,439
3,457,804
3,304,977
3,300,000
2,726,257
2,594,600
2,017,450
1,931,663
1,824,011
1,653,668
1,562,500
280,654,542
15.93
12.51
11.57
10.29
9.54
9.49
3.2
2.87
1.27
1.16
0.01
0.1
1.04
1.05
1
1
0.83
0.79
0.61
0.59
0.55
0.5
0.47
85.23
JOSEPH ENERGY (HONG KONG) LIMITED
STARRY WORLD INVESTMENT LTD
SKY SHINER INVESTMENT LIMITED
1 DEMPSEY RESOURCES PTY LTD
2
3 MR DERONG QIU
4
5
6 YIDI TAO
7 PERSHING AUSTRALIA NOMINEES PTY LTD
8 MR DERONG QIU
9
10 GROUP # 69962
SYSTEMATIC NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
11 J P MORGAN NOMINEES AUSTRALIA LIMITED
12 LANOTI PTY LTD
13 OKEWOOD PTY LTD
14 MR YUANRONG LUO
15 ANTONY WILLIAM PAUL SAGE + LUCY FERNANDES SAGE
16 CANIFARE PTY LIMITED
17 SAMS WATCHMAKER JEWELLER PTY LTD
18 CITICORP NOMINEES PTY LIMITED
19 M & K KORKIDAS PTY LTD
20 NUVEEN (SHANGHAI) ASSET MANAGEMENT CO LTD
48
Annual Report 2018
SCHEDULE OF MINERAL TENEMENTS
AS AT 3 AUGUST 2018
Tenement reference
Project & Location
Interest
E08/1489
E08/1490
E08/1493
E08/1501
E08/2017
E08/2081
E08/2205
E08/2385
E08/2386
E08/2387
E08/2478
E08/2479
E08/2480
E08/2665
E08/2774
393/2010
140/2007
141/2007
142/2007
143/2007
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
144/2007-581/2009
Rio Colorado Project - Catamarca, Argentina
176/1997
232/2007
270/1995
271/1995
43/2007
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
l
y
n
o
e
s
u
l
a
n
o
s
r
e
p
r
o
F
49