(formerly Fission Energy Ltd)
ABN 49 119 057 457
for the Year Ended
30 June 2016
Table of Contents
Highlights for the Year to 30 June 2016
Corporate Directory
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Information for Listed Public Companies
Tenement Schedule
3
4
5
8
13
14
15
16
17
18
30
31
34
35
* Cover Photo: Cuttings from drill hole through mineralised zone - Mt Thirsty Nickel-Cobalt-Manganese Oxide Project
ASX Code: CNJ
Page 2 of 35
Annual Report for Year Ending 30 June 2016
HIGHLIGHTS FOR THE YEAR TO 30 JUNE 2016
MT THIRSTY PROJECT (WA) (Conico 50%)
• The Mt Thirsty Joint Venture is currently reviewing options for the Mt Thirsty Cobalt
- Nickel Oxide Project in view of a forecast cobalt deficit due to surging demand for
high energy lithium-ion batteries in which cobalt is a significant component.
• A dedicated website has been established to show-case the Mt Thirsty Cobalt-Nickel
Oxide Project to potential partners and investors (www.mtthirstycobalt.com).
• Heritage agreement reached with native title holders enabling grant of Retention
Licence over E63/373.
• Open pit optimisation and further drilling planned to upgrade current JORC 2004
compliant resource to JORC 2012.
• Two new licences with potential for lithium – bearing pegmatites applied for adjacent
to existing Mt Thirsty tenements.
Corporate
• Discharge of most of the company’s debt through debt to equity conversion.
• Placements completed raising $977,000 before costs.
• The directors have also reviewed other possible base metal - gold exploration
opportunities in Western Australia.
E63/1267
Figure 1: Mt Thirsty Project Location
ASX Code: CNJ
Page 3 of 35
Annual Report for Year Ending 30 June 2016
CORPORATE DIRECTORY
DIRECTORS:
Gregory H Solomon LLB (Non-Executive)
Douglas H Solomon BJuris LLB (Hons) (Non-Executive)
Guy T Le Page B.A., B.Sc. (Hons).,M.B.A., F.FIN., MAusIMM (Non-Executive)
James B Richardson Dip, Fin Plan (Non-Executive)
COMPANY SECRETARY:
Aaron P Gates B.Com CA AGIA
REGISTERED OFFICE:
Level 15,
197 St Georges Terrace
Perth, Western Australia 6000
Tel +61 8 9282 5889
Fax +61 8 9282 5866
Email: mailroom@conico.com.au
Website: www.conico.com.au
SOLICITORS:
Solomon Brothers
Level 15,
197 St Georges Terrace
Perth, Western Australia 6000
AUDITORS:
Nexia Perth Audit Services Pty Ltd
Chartered Accountants
Level 3
88 William Street
Perth, Western Australia 6000
SHARE REGISTRY:
Advanced Share Registry Services
110 Stirling Highway
Nedlands, Western Australia 6009
STOCK EXCHANGE LISTING:
ASX Code: CNJ (ordinary shares)
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian
Securities Exchange Limited.
ASX Code: CNJ
Page 4 of 35
Annual Report for Year Ending 30 June 2016
REVIEW OF OPERATIONS
MT THIRSTY PROJECT, WA (Conico Ltd 50%, JV with Barra Resources Ltd)
The Mt Thirsty Cobalt Project is located 20km north-northwest of Norseman, Western Australia. Conico Ltd (ASX: CNJ)
is the Joint Venture manager.
The Project contains the Mt Thirsty Cobalt-Nickel (Co-Ni) Oxide Deposit that has the potential to emerge as a significant
cobalt producer. In addition to the Co-Ni Oxide Deposit, the Project also hosts nickel sulphide (Ni-S) mineralisation.
Demand for cobalt looks encouraging as the world becomes more dependent on rechargeable power sources.
Innovations with portable electronics and electric vehicle design are adding to this surging demand. However, the battery
industry is also competing with demand for cobalt from producers of superalloys, aircraft turbines and chemical
industries.
Demand is likely to escalate exponentially with battery production, however supply is uncertain due to:
• Over 60% of global supply coming from the politically unstable African countries such the Democratic Republic
of Congo, Central African Republic and Zambia.
• Cobalt is largely a by-product of copper and nickel mining and there are an increasing number of mine closures
and project deferments due to low commodity prices.
• With potential supply constraints and surging demand many commentators see pricing pressure as a likely
eventuality.
The undeveloped Mt Thirsty Cobalt Project has a significant JORC (2004) resource with a potential to have a long mine
life. It is close to all necessary infrastructure (rail, road, power, water, and sea port) and, being in a mining orientated
state, has the potential to attract a variety of interest. The Joint Venture partners are working collaboratively to exploit this
joint opportunity with a soon to be launched marketing initiative.
Figure 2: Global lithium-ion battery and materials demand forecast from EV sales, 2015-2030.
ASX Code: CNJ
Page 5 of 35
Annual Report for Year Ending 30 June 2016
ACTIVITIES
New Mt Thirsty Website
The Mt Thirsty Joint venture has commissioned a new website to show-case the Mt Thirsty Co-Ni Project to potential
partners and investors. The new website can be viewed at www.mtthirstycobalt.com.
Retention Licence
The Mt Thirsty Joint Venture partners have negotiated a heritage agreement with the Ngadju native title holders that has
facilitated the granting of a retention licence (R63/4) which replaces E63/373 and covers the Mt Thirsty Co-Ni deposit
and the Mt Thirsty nickel sulphide prospect.
Open Pit Optimisation and Resource Drilling
In order to increase confidence in the Mt Thirsty Co-Ni Oxide Resource further infill drilling is planned to convert some or
all of the Inferred Resource to the Indicated Resource category, allowing an upgraded resource estimate under the new
JORC 2012 code.
Prior to undertaking this drilling program a preliminary open pit optimisation study will be carried out to determine how
much of the current Inferred Resource area would be included in an optimum open pit shell so that infill drilling can be
appropriately targeted.
New Applications
Two new licences (refer Figure 3) has been applied for adjacent to the existing Joint Venture tenements. One of these
covers a short extension of the interpreted footwall contact north of E63/373 which is considered prospective for Ni
sulphides. Both applications have potential for lithium-bearing pegmatites that have been mapped by the GSWA in the
Mt Thirsty area.
No lithium minerals have been logged in the deep pegmatite intersections in previous Mt Thirsty Joint Venture nickel
sulphide drilling within E63/373. However these intersections are further to the east of the outcropping lithium bearing
pegmatites recorded by the GSWA.
Figure 3: Mt Thirsty Tenements over GSWA 1:100,000 Geology. New applications shown hatched in blue.
ASX Code: CNJ
Page 6 of 35
Annual Report for Year Ending 30 June 2016
CORPORATE
Discharge of Debt
Conico has issued shares to settle outstanding debts totalling $733,497, which represents a large percentage of its long
outstanding debts by issuing securities in the Company, rather than paying the same in cash. These debts are owed to
its major shareholder for a loan ($131,810 being for a loan of $100,000 plus interest and the cost of supplying contract
geologists), to entities related to the directors for loans ($110,000), to its directors for directors’ fees ($419,687), and to
RM Corporate Pty Ltd for providing corporate advisory services to the Company ($72,000). These debts cover the period
from December 2012 up to 31 August 2015.
These debts were converted into equity at an issue price of 0.8 cents per share, being an 11% discount to the closing
price of the Company’s shares on 25 August 2015 (the last date on which its shares traded prior to the debt conversion
being announced).
The discharge of debt by issuing securities was approved by shareholders at a General Meeting that was convened on 8
December 2015.
Placements
During the year Conico successfully raised $977,000 before costs through three placements to investors in accordance
with section 708 of the Act.
A commission of 6% of the value of the funds raised is payable to financial services licencees in respect of a portion of
this placement raised by financial services licencees.
Mt Thirsty Project Summary
The Mt Thirsty Cobalt – Nickel - Manganese oxide project covering an area of 11.5km2 is located 20km north-northwest
of Norseman in the southern goldfields of Western Australia, a well endowed nickel terrain. Conico Ltd through its wholly
owned subsidiary Meteore Metals Pty Ltd owns 50% of the project in joint venture with Barra Resources Limited. The Mt
Thirsty deposit has the potential to emerge as a significant cobalt supplier. Recent metallurgical test work indicates that
high recoveries of cobalt together with some nickel can be achieved through low temperature agitated leaching in closed
tanks using SO2.
Mt Thirsty has a JORC (2004) compliant Indicated Resource of 16.6 million tonnes at 0.14% Cobalt, 0.60% Nickel and
0.98% Manganese and a JORC (2004) compliant Inferred Resource of 15.3 million tonnes at 0.11% Co, 0.51% Ni and
0.73% Mn over a length of 1.6 kilometres and a width of up to 850 metres (refer Mineral Resource Statement below).
As well as the Co-Ni oxide resource, the Mt Thirsty joint venture tenements have potential for nickel sulphide
mineralisation at greater depths within the same ultramafic sequence which hosts the near surface oxide deposit.
Intersections of nickel sulphides up to 6m down hole at 3.4% Ni were made by the joint venture in 2010 (refer ASX
announcement 19th May 2010: “High Grades Intersected at Mt Thirsty”, available to view on www.conico.com.au.).
ASX Code: CNJ
Page 7 of 35
Annual Report for Year Ending 30 June 2016
DIRECTORS’ REPORT
The directors present their report together with the consolidated financial statements of the Group comprising Conico Ltd
(the Company) and its controlled entity and the Group’s interest in a joint venture for the financial year ended 30 June
2016.
Directors
The names of directors in office at any time during or since the end of the year are:
Gregory H Solomon
Douglas H Solomon
Guy T Le Page
James B Richardson
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
Company Secretary
The following person held the position of Company Secretary at the end of the financial year:
Mr Aaron P Gates has worked for Conico Ltd for the past 8 years. He is a Chartered Accountant and Chartered
Secretary, has completed a Bachelor of Commerce (Curtin University) with majors in accounting and business law and
completed a Diploma of Corporate Governance. Prior to joining Conico he worked in public practice in audit and
corporate finance roles.
Principal Activities
The principal activity of the Group during the financial year ended 30th June 2016 was mineral exploration for cobalt,
nickel and manganese.
There were no significant changes in the nature of the activities of the Group during the year.
Operating Results
The loss of the Group after providing for income tax amounted to $54,113 (2015: $433,749).
Dividends Paid or Recommended
No dividends were paid or declared for payment during the year.
Review of Mineral Exploration Operations
A review of the operations of the Group during the year ended 30 June 2016 is set out in the Review of Operations on
Page 5.
Financial position
The net assets of the Group have increased by $1,581,333 from 30 June 2015 to $14,876,198 in 2016. This decrease
has largely resulted from the loss posted during the year.
Significant Changes in State of Affairs
In the opinion of the directors, other than disclosed elsewhere in this report, there were no significant changes in the
state of affairs of the Group that occurred during the year.
After Balance Date 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 Group, the results of those operations, or the state of affairs of the Group in
future financial years.
Future Developments, Prospects and Business Strategies
The Group proposes to continue with its exploration program as detailed in the Review of Operations.
Environmental Issues
The Group is the subject of environmental regulation with respect to mining exploration and will comply fully with all
requirements with respect to rehabilitation of exploration sites.
ASX Code: CNJ
Page 8 of 35
Annual Report for Year Ending 30 June 2016
Information on Directors
Gregory H Solomon
Executive Chairman
Qualifications
Experience
Interest in Shares and Options
Directorships held in other listed
entities
Douglas H Solomon
Qualifications
Experience
Interest in Shares and Options
Directorships held in other listed
entities
Guy T Le Page
Qualifications
Experience
LLB
Appointed chairman March 2006. Board member since March 2006. A
solicitor with more than 30 years of Australian and international experience in
a wide range of areas including mining law, commercial negotiation (including
numerous mining and exploration joint ventures) and corporate law. He is a
partner in the Western Australian legal firm, Solomon Brothers and has
previously held directorships of various public companies since 1984
including two mining/exploration companies.
23,105,469 Ordinary Shares
Eden Energy Ltd
Tasman Resources Ltd
Non-Executive
BJuris LLB (Hons)
Board member since 30 March 2006. A Barrister and Solicitor with more than
20 years’ experience in the areas of mining, corporate, commercial and
property law. He is a partner in the legal firm, Solomon Brothers.
21,586,875 Ordinary Shares
Eden Energy Ltd
Tasman Resources Ltd
Non-Executive
B.A., B.Sc. (Hons).,M.B.A., F.FIN., MAusIMM
Board member since 30 March 2006. Currently a corporate adviser
specialising in resources. He is actively involved in a range of corporate
initiatives from mergers and acquisitions, initial public offerings to valuations,
consulting and corporate advisory roles. He previously spent 10 years as an
exploration and mining geologist in Australia, Canada and the United States.
His experience spans gold and base metal exploration and mining geology
and he has acted as a consultant to private and public companies.
Interest in Shares and Options
21,852,510 Ordinary Shares
Directorships held in other listed
entities
Eden Energy Ltd
Tasman Resources Ltd
Soil Sub Technologies Ltd
Palace Resources Ltd
Red Sky Energy Ltd
AXG Mining Ltd
James B Richardson
Qualifications
Experience
Interest in Shares and Options
Directorships held in other listed
entities
Non-Executive
Dip, Fin Plan
Board member since 11 November 2008. Currently a corporate advisor where
he has been actively involved in a range of corporate activities, including the
development, documentation, negotiation and marketing of a number of
successful financial instruments for various companies encompassing various
sectors of the investment market. He has also been employed as a specialist
business development executive in some of the more successful national
financial services organisations. Additionally, he has extensive experience in
evaluating investment opportunities, structuring projects and negotiating
financial transactions to meet the expectations of the investment market.
34,000,000 Ordinary Shares
None
ASX Code: CNJ
Page 9 of 35
Annual Report for Year Ending 30 June 2016
Remuneration Report (Audited)
This report details the nature and amount of remuneration for each director of Conico Ltd, and for the executives
receiving the highest remuneration.
Remuneration Policy
The remuneration policy of Conico Ltd has been designed to align director and executive objectives with shareholder and
business objectives by providing a fixed remuneration component and offering specific long-term incentives based on
key performance areas affecting the company’s financial results. The board believes the remuneration policy to be
appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the
company, as well as create goal congruence between directors, executives and shareholders.
The board’s policy for determining the nature and amount of remuneration for board members and senior executives of
the company is as follows:
All executives receive a base salary (which is based on factors such as length of service and experience),
superannuation, fringe benefits and options. Executives are also entitled to participate in the employee share and option
arrangements. All directors and executives receive a superannuation guarantee contribution where required by the
government, which is currently 9.5%, and do not receive any other retirement benefits.
All remuneration paid to directors and executives is valued at the cost to the company and expensed. Options are valued
using the Black-Scholes methodology or an appropriate market based pricing valuation methodology. The board policy is
to remunerate non-executive directors at market rates for time, commitment and responsibilities. The Group does not
have a policy on directors hedging their shares.
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. Fees for non-executive directors are not linked to the performance of the
company. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in
the company and are able to participate in the employee option plan.
Details of Remuneration for Year Ended 30 June 2016
The remuneration for each director and each of the executive officers of the Group during the year was as follows:
Key Management Personnel Remuneration –
Key Management
Person
Short-term Benefits
Post-
employment
benefits
Other
long-term
benefits
Termination
Benefits
Share-based
payments
Total
Perfor-
mance
Related
Salary
and Fees
Cash
Non-
profit
share
cash
benefit
Super-
annuation
Other
Other
Equity Options
$
$
$
$
$
$
$
$
$
%
2016
Gregory H Solomon
46,875
Douglas H Solomon
15,000
Guy T Le Page
15,000
James B Richardson
15,000
Aaron P Gates
(i)
91,875
2015
Gregory H Solomon
75,000
Douglas H Solomon
24,000
Guy T Le Page
24,000
James B Richardson
24,000
Aaron P Gates
(i)
147,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,453
1,425
1,425
1,425
-
8,728
7,422
2,375
2,375
2,375
-
14,547
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
51,328
16,425
16,425
16,425
-
- 100,603
-
-
-
-
-
82,422
26,375
26,375
26,375
-
- 161,547
-
-
-
-
-
-
-
-
-
-
-
-
(i) - These management personnel are remunerated by Princebrook Pty Ltd under the Princebrook Management
Services Contract.
ASX Code: CNJ
Page 10 of 35
Annual Report for Year Ending 30 June 2016
Options issued as part of remuneration for the year ended 30 June 2016
No options were issued to directors and employees as part of their remuneration during the year and no shares were
issued upon the exercise of options granted as remuneration.
Directors Meetings
During the financial year, one meetings of directors were held. Attendances by each director were as follows:
Directors’ Meetings
Number eligible
to attend
Number
attended
Gregory H Solomon
Douglas H Solomon
Guy T Le Page
James B Richardson
1
1
1
1
Indemnifying Officers or Auditor
1
1
1
1
The company has arranged for an insurance policy to insure the directors against liabilities for costs and expenses
incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director of
the company, other than conduct involving a wilful breach of duty in relation to the company. The total premium payable
is approximately $11,045.
Proceedings on Behalf of Group
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to
which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those
proceedings. The Group was not a party to any such proceedings during the year.
Options
At the date of this report, the unissued ordinary shares of Conico Ltd under option are as follows:
Grant Date
12 July 2013
Various
Date of Expiry
Exercise Price
Number under Option
31 December 2016
30 November 2019
$0.08
$0.03
5,501,000
59,125,000
64,626,000
During the year ended 30 June 2016, no ordinary shares of Conico Ltd were issued on the exercise of options granted
under the Conico Ltd Employee Share Option Plan. No shares have been issued since that date.
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
any other body corporate.
Non-audit Services
The board of directors is satisfied that the provision of non-audit services during the year is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the
services disclosed below did not compromise the external auditor’s independence for the following reasons:
all non-audit services are reviewed and approved prior to commencement to ensure they do not adversely affect the
•
integrity and objectivity of the auditor; and
•
the nature of the services provided does not compromise the general principles relating to auditor independence in
accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical
Standards Board.
No fees for non-audit services were paid/payable to the external auditors during the year ended 30 June 2016.
ASX Code: CNJ
Page 11 of 35
Annual Report for Year Ending 30 June 2016
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2016 has been received and can be found on page
13.
Signed in accordance with a resolution of the Board of Directors.
Gregory H Solomon
Chairman
Dated this 27th day of September 2016
ASX Code: CNJ
Page 12 of 35
Auditor’s independence declaration under section 307C of the Corporations Act 2001
To the directors of Conico Ltd
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial
year ended 30 June 2016 there have been:
(i) no contraventions of the auditor’s independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the
audit.
Nexia Perth Audit Services Pty Ltd
TJ Spooner
Director
Perth, 27 September 2016
Annual Report for Year Ending 30 June 2016
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME FOR YEAR ENDED 30 JUNE 2016
Other Income
Debt forgiveness
Accounting and audit
Administrative expenses
Depreciation and amortisation
Interest Expense
Key management remuneration
Legal and other consultants
Management fees
Other expenses
Loss before income tax
Income tax benefit
Loss for the year
Other Comprehensive Income
Items that may be reclassified to profit or loss:
Revaluations of financial assets
Income tax relating to comprehensive income
Total other comprehensive income
Total Comprehensive Loss attributable to
members of the parent entity, net of tax
Note
2
4(d)
Consolidated
2016
$
2015
$
2,519
355,342
(18,054)
(69,860)
(2,095)
(764)
(100,603)
(100,091)
(117,446)
(3,061)
1,105
-
(27,157)
(25,132)
(2,550)
(19,504)
(161,547)
-
(194,670)
(4,294)
(54,113)
(433,749)
3
-
-
(54,113)
(433,749)
-
-
-
-
-
-
(54,113)
(433,749)
Basic/Diluted loss per share (cents per share)
6
(0.03)
(0.33)
The accompanying notes form part of these financial statements.
ASX Code: CNJ
Page 14 of 35
Annual Report for Year Ending 30 June 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Exploration and evaluation
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Non-interest bearing liabilities
Interest bearing liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these financial statements.
Note
Consolidated
2016
$
2015
$
7
8
9
10
13
21
14
15
16
17
397,789
66,212
464,001
16,352
10,236
26,588
11,325
13,420
14,768,889
14,727,743
14,780,214
14,741,163
15,244,215
14,767,751
93,017
1,022,886
-
-
100,000
100,000
93,017
1,222,886
275,000
275,000
250,000
250,000
368,017
1,472,886
14,876,198
13,294,865
18,434,903
16,799,457
477,450
477,450
(4,036,155)
(3,982,042)
14,876,198
13,294,865
ASX Code: CNJ
Page 15 of 35
Annual Report for Year Ending 30 June 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2016
Consolidated Group
Ordinary
Share Capital
Option
Reserve
Retained
Earnings
Total
$
$
$
$
Balance at 30 June 2014
16,799,457
477,450
(3,548,293) 13,728,614
Net loss for the year
Other comprehensive Income
-
-
-
-
(433,749)
(433,749)
-
-
Balance at 30 June 2015
16,799,457
477,450
(3,982,042) 13,294,865
Net loss for the year
Shares issued
Other comprehensive Income
-
1,635,446
-
-
-
-
(54,113)
(54,113)
- 1,635,446
-
-
Balance at 30 June 2016
18,434,903
477,450
(4,036,155) 14,876,198
The accompanying notes form part of these financial statements.
ASX Code: CNJ
Page 16 of 35
Annual Report for Year Ending 30 June 2016
CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 30 JUNE 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Note
Consolidated
2016
$
2015
$
1,257
1,966
(484,605)
(49,666)
417
228
Net cash provided by (used in) operating activities
22
(482,931)
(47,472)
CASH FLOWS FROM INVESTING ACTIVITIES
Exploration and evaluation expenditure
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Proceeds from share issues
Net cash provided by (used in) financing activities
Net increase / (decrease) in cash held
Cash at beginning of financial year
Cash at end of financial year
7
The accompanying notes form part of these financial statements.
(37,581)
(37,581)
(31,414)
(31,414)
-
60,000
901,949
901,949
381,437
16,352
397,789
-
60,000
(18,886)
35,238
16,352
ASX Code: CNJ
Page 17 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001. The financial report of Conico Limited and
controlled entities complies with all International Financial Reporting Standards (IFRS) in their entirety.
The financial report covers the consolidated group of Conico Ltd (formerly Fission Energy Ltd) and controlled entities
as at and for the year ended 30 June 2016. Conico Ltd is a listed public company, incorporated and domiciled in
Australia. The Group is a for-profit entity and primarily is involved in mineral exploration for cobalt, nickel and
manganese.
The following is a summary of the material accounting policies adopted by the group in the preparation of the financial
report. The accounting policies have been consistently applied, unless otherwise stated.
Basis of Preparation
The accounting policies set out below have been consistently applied to all years presented.
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified by the
revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of
accounting has been applied. These consolidated financial statements are presented in Australian dollars, which is
the Group’s functional currency.
Going Concern
These financial statements have been prepared on a going concern basis, which contemplates continuity of normal
business activities the realisation of assets and extinguishment of liabilities in the ordinary course of business.
The Group has reported a net loss for the year of $54,113 (2015: $433,749) and a cash outflow from operating
activities of $482,931 (2015: $47,472).
The directors are confident that the Group, subject to being able to raise further capital, will be able to continue its
operations as a going concern. Without such capital, the net loss for the year and the cash outflow from operating
activities indicate the existence of a material uncertainty which may cast significant doubt about the Group’s ability to
continue as a going concern. The directors also carefully manage discretionary expenditure in line with the Group’s
cash flow.
The continuing applicability of the going concern basis of accounting is dependent upon the Group’s ability to source
additional finance. Unless additional finance is received the Group may need to realise assets and settle liabilities
other than in the normal course of business and at amounts which could differ from the amounts at which they are
stated in these financial statements.
Accounting Policies
a.
Principles of Consolidation
A controlled entity is any entity Conico Ltd 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. A
list of controlled entities is contained in Note 12 to the financial statements. All controlled entities have a June
financial year-end.
All inter-company balances and transactions between entities in the consolidated group, including any
unrealised profits or losses, have been eliminated on consolidation. Accounting policies of controlled entities
have been changed where necessary to ensure consistencies with those policies applied by the parent entity.
b.
Interests in a Joint Operation
The consolidated financial statements include the assets that the Group controls and the liabilities that it incurs
in the course of pursuing the joint operation and the expenses that the Group incurs and its share of the
income that it earns from the joint operation. Details of the Group’s interests are shown at Note 11.
c.
Income Tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable
or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by
the balance sheet date.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be
credited directly to equity, in which case the deferred tax is adjusted directly against equity.
ASX Code: CNJ
Page 18 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
c.
Income Tax continued
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets are recognised for unused tax losses, tax credits and deductible temporary differences, to
the extent that it is probable that future tax profits will be available against which they can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the group will derive
sufficient future assessable income to enable the benefit to be realised.
The R&D tax offset is recognised upon receipt.
d.
Employee benefits
Short-term benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided.
Obligations for contributions for defined contribution plans are recognised as an employee benefits expense in
the profit and loss in the periods in which related services are rendered by employees.
e.
Property, Plant and Equipment
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of
the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected
net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net
cash flows have been discounted to their present values in determining recoverable amounts.
The depreciation rates used for each class of depreciable assets are:
Plant and equipment
15.00–50.00%
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are recognised in profit or loss.
f.
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 where right of tenure is current and 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.
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.
Costs of site restoration are provided over the life of the facility from when exploration commences and are
included in the costs of that stage. Any changes in the estimates for the costs are accounted on a prospective
basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the
restoration due to community expectations and future legislation.
g.
Impairment of Non-financial Assets
At each reporting date, the Group reviews the carrying values of its non-financial / tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and
value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its
recoverable amount is expensed to the income statement. Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
ASX Code: CNJ
Page 19 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
h.
Cash and cash equivalents
Cash comprises current deposits with banks.
i.
Equity-settled compensation
The company operates a number of share-based compensation plans. These include both a share option
arrangement and an employee share scheme. The bonus element over the exercise price of the employee
services rendered in exchange for the grant of shares and options is recognised as an expense in the income
statement. The total amount to be expensed over the vesting period is determined by reference to the fair
value of the shares of the options granted, with a corresponding increase in equity.
j.
Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured
as set out below.
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 stated at amortised cost using the effective interest rate method.
Compound financial instruments
Compound financial instruments issued by the Company comprise convertible notes that can be converted to
share capital at the option of the holder, and the number of shares to be issued varies with changes in their
fair value.
The liability component of a compound financial instrument is recognised initially at the fair value of a similar
liability that does not have an equity conversion option. The derivative component is recognised initially at the
difference between the fair value of the compound financial instrument as a whole and the fair value of the
liability component. Any directly attributable transaction costs are allocated to the liability and derivative
components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at
amortised cost using the effective interest method. The derivative component of a compound financial
instrument is remeasured at each reporting date and changes in fair value are taken to profit or loss.
Interest, dividends, losses and gains relating to the financial liability are recognised in profit or loss. On
conversion, the financial liability is reclassified to equity, no gain or loss is recognised on conversion.
Impairment
At each reporting date, the Group assesses at a specific asset level whether there is objective evidence that a
financial instrument has been impaired. Impairment losses are recognised in the income statement.
k.
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
l.
Revenue
Revenue from the sale of goods is recognised upon delivery of goods to customers. Interest revenue is
recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
m.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
n.
New accounting standards and interpretations
A number of new and revised standards became effective for the first time to annual periods beginning on or
after 1 July 2015. The more significant standard is AASB 2015-4 Amendments to Australian Accounting
Standards – Financial Reporting Requirements for Australian Groups with a Foreign Parent, which amends
AASB 128 Investments in Associates and Joint Ventures.
The adoption of this amendment has not had a material impact on the Group.
ASX Code: CNJ
Page 20 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
o.
Segment reporting
Segment results that are reported to the Group’s board of directors (the chief operating decision maker)
include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
p.
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
are recognised as a deduction from equity.
q.
New accounting standards and interpretations not yet adopted
A number of new standards and amendments to standards are effective for annual periods beginning after 1
July 2016, and have not been applied in preparing these consolidated financial statements. The Group does
not plan to adopt these standards early.
r.
Key estimates – Exploration and Evaluation
The Group’s policy for exploration and evaluation is discussed in Note 1(f). The application of this policy
requires management to make certain assumptions as to future events and circumstances. Any such estimates
and assumptions may change as new information becomes available. At the date of this report the Group has
sufficient reason to believe:
•
•
•
•
exploration in specific areas is ongoing and the entity has not decided to discontinue such activities; and
no specific sufficient data exists that indicates that the carrying amount of the exploration and evaluation
asset is unlikely to be recovered.
substantive expenditure on further exploration and evaluation in specific areas has been budgeted;
rights to explore in specific areas, once expired, will be renewed;
The consolidated financial statements were authorised for issue on 27 September 2016 by the board of directors.
NOTE 2: OTHER INCOME
—
interest received
—
sale of goods / services
Total Revenue
2016
$
2015
$
417
2,102
2,519
229
876
1,105
NOTE 3: INCOME TAX BENEFIT
a.
The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows:
Prima facie tax payable on loss from ordinary activities before income
tax at 30% (2015: 30%)
(16,234)
(130,125)
Tax effect of:
—
—
Current year temporary differences not recognised
Current year tax losses not recognised
Income tax expense / (benefit)
(309,406)
89,510
325,640
40,615
-
-
ASX Code: CNJ
Page 21 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
NOTE 3: INCOME TAX EXPENSE CONTINUED
b.
Components of deferred tax
Unrecognised deferred tax asset - losses
Unrecognised deferred tax asset – provisions and accruals
2016
$
2015
$
2,122,058
1,796,418
95,203
364,167
Unrecognised deferred tax liabilities – exploration and evaluation
(1,022,819)
(1,010,475)
Unrecognised deferred tax liabilities – capital raising costs
Net Unrecognised deferred tax assets
(238,461)
(233,265)
955,981
916,845
Deferred tax assets have not been brought to account as it is not probable within the immediate future that tax profits will
be available against which deductible temporary differences and tax losses can be utilised. The benefit of the tax losses
will only be obtained if the Group complies with conditions imposed by the tax legislation in Australia.
NOTE 4: KEY MANAGEMENT PERSONNEL COMPENSATION
a.
Names and positions held of key management personnel in office at any time during the financial year:
Key Management Person
Position
Gregory H Solomon
Executive Chairman
Douglas H Solomon
Non-Executive Director
Guy T Le Page
Non-Executive Director
James B Richardson
Non-Executive Director
Aaron P Gates
Company Secretary/CFO
Key management personnel remuneration is included in the Remuneration Report of the Directors’ Report.
b.
Options and Rights Holdings
Number of Options Held by Key Management Personnel
Balance
1.7.2015
Granted as
Compen-
sation
Options
Exercised
Net Change
Other*
Balance
30.6.2016
Total
Vested
30.6.2016
Total Exer-
cisable
30.6.2016
Total Unexer-
cisable
30.6.2016
Gregory H Solomon
Douglas H Solomon
Guy T Le Page
James B Richardson
Aaron P Gates
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
-
* Net Change Other refers to options purchased, sold or lapsed during the financial year.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
c.
Shareholdings
Number of Shares held by Key Management Personnel
Gregory H Solomon
Douglas H Solomon
Guy T Le Page
James B Richardson
Aaron P Gates
Total
Balance
30.6.2015
Received as
Compen-
sation
Options
Exercised
Net Change
Other*
Balance
30.6.2016
500,000
350,000
13,715,279
16,158,888
-
30,724,167
-
-
-
-
-
-
-
-
-
-
-
-
22,605,469
23,105,469
21,236,875
21,586,875
8,137,231
21,852,510
17,901,112
34,060,000
-
-
69,880,687 100,604,854
*Net Change Other refers to options purchased, sold or lapsed during the financial year.
ASX Code: CNJ
Page 22 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
NOTE 4: KEY MANAGEMENT PERSONNEL COMPENSATION CONTINUED
d.
Remuneration
Refer to disclosures contained in the Remuneration Report section of the
Directors’ Report. The totals of remuneration paid to key management
personnel of the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share based payments
Total
NOTE 5: AUDITOR’S REMUNERATION
Remuneration of the auditor for:
2016
$
2015
$
91,875
147,000
8,728
14,547
-
-
-
-
-
-
100,603
161,547
—
auditing or reviewing the financial report
17,775
17,400
NOTE 6: LOSS PER SHARE
a.
Reconciliation of loss to profit or loss
Profit/(loss)
Loss used to calculate basic EPS
b.
Weighted average number of ordinary shares outstanding during the
year used in calculating basic EPS
The share options on issue are not potentially dilutive shares.
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at bank
Reconciliation of cash
Cash at the end of the financial year as shown in the consolidated statement of
cash flows is reconciled to items in the balance sheet as follows:
Cash and cash equivalents
NOTE 8: TRADE AND OTHER RECEIVABLES
Other receivables
(54,113)
(433,749)
(54,113)
(433,749)
212,739,446 132,431,258
397,789
397,789
16,352
16,352
397,789
397,789
16,352
16,352
66,212
66,212
10,236
10,236
ASX Code: CNJ
Page 23 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
NOTE 9: PROPERTY, PLANT AND EQUIPMENT
Equipment:
At cost
Accumulated depreciation
Total Plant and Equipment
a.
Movements in Carrying Amounts
2016
$
2015
$
50,786
51,685
(39,461)
(38,265)
11,325
13,420
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end
of the current financial year.
Opening balance
Depreciation expense
Written-off during the year
Closing balance
b.
Impairment losses
13,420
(2,095)
-
16,187
(2,550)
(217)
11,325
13,420
The total impairment loss recognised in the consolidated statement of profit or loss and other comprehensive income
during the current year amounted to $Nil (2015: Nil).
NOTE 10: EXPLORATION AND EVALUATION
Balance at the beginning of the financial year
Expenditure incurred during the year
Balance at the end on the financial year
2016
$
2015
$
14,727,743 14,696,329
41,146
31,414
14,768,889 14,727,743
Recoverability of the carrying amount of exploration assets is dependent on the successful exploration and sale of the
minerals. Capitalised costs amounting to $37,581 (2015: $31,414) have been included in cash flows from investing
activities in the statement of cash flows for the consolidated entity.
NOTE 11: JOINT OPERATION
A controlled entity, Meteore Metals Pty Ltd, has a 50% interest in the Mt Thirsty Joint Venture, whose principal activity
is the exploration and the development of the Mt Thirsty nickel, cobalt and manganese project. The consolidated
financial statements include the assets that the Group controls and the liabilities that it incurs in the course of pursuing
the joint operation and the expenses that the Group incurs and its share of the income that it earns from the joint
operation.
Share of joint operation results and financial position:
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Total Liabilities
Revenue
Expenses
Profit / (Loss) before income tax
Income tax expense
Profit / (Loss) after income tax
2016
$
2015
$
9,506
10,655
2,317,597
2,276,484
2,327,103
2,287,139
8,681
33,681
-
15,437
15,437
-
(13,280)
(4,482)
(13,280)
(4,482)
-
-
(13,280)
(4,482)
ASX Code: CNJ
Page 24 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
NOTE 12: CONTROLLED ENTITIES
Controlled Entities Consolidated
Meteore Metals Pty Ltd
* Percentage of voting power is in proportion to ownership
Country of
Incorporation
Australia
Percentage Owned (%)*
2016
100
2015
100
NOTE 13: TRADE AND OTHER PAYABLES
Trade payables
Sundry payables and accrued expenses
2016
$
2015
$
47,874
58,997
45,143
963,889
93,017
1,022,886
NOTE 14: INTEREST BEARING LIABILITIES
Interest bearing liabilities related to $100,000 payable by the Company to Tasman Resources Ltd pursuant to a
convertible note deed made 30 April 2013 between the Company and Tasman Resources Ltd. The loan bears interest
at the rate of nine per cent (9%) per annum on the amount outstanding from time to time, which interest is payable in
cash monthly in arrears. This convertible note was satisfied by the issue of shares during the year.
NOTE 15: PROVISIONS
NON-CURRENT
Other
2016
$
2015
$
275,000
250,000
275,000
250,000
This mainly relates to a provision of $250,000 that has been recognised in relation to the Group’s 50% share of the
liability to pay the original owners of the Mt Thirsty project $500,000 upon the commencement of mining on the
tenements. The directors believe this will not become due for at least a couple of years. This amount has not been
recorded at present value as a timeframe for discounting is not determinable.
NOTE 16: ISSUED CAPITAL
295,243,387 (2015: 132,431,258) ordinary shares
18,434,903
16,799,457
2016
$
2015
$
2015
2016
No.
No.
2016
$
2015
$
a.
Ordinary shares
At the beginning of reporting period
132,431,258
132,431,258
16,799,457
16,799,457
Shares issued during the year
162,812,129
-
1,635,446
-
At reporting date
295,243,387
132,431,258
18,434,903
16,799,457
Ordinary shares participate in dividends and in the proceeds of winding up in proportion to the number of shares held.
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands. The Company has no authorised share capital or par value. All issued
shares are fully paid.
ASX Code: CNJ
Page 25 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
NOTE 16: ISSUED CAPITAL CONTINUED
b.
Options
At the beginning of reporting period
Issued during the year
Options lapsed during the year
At reporting date
c.
Capital Management
2016
2015
5,501,000
6,501,000
59,125,000
-
-
(1,000,000)
64,626,000
5,501,000
Management controls the working capital of the Company in order to maximise the return to shareholders and
ensure that the Company can fund its operations and continue as a going concern. Management effectively
manages the Company’s capital by assessing the Company’s financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These responses include the management of expenditure
and debt levels, distributions to shareholders and share and option issues. There have been no changes in the
strategy adopted by management to control the capital of the Company since the prior year.
NOTE 17: RESERVES
a.
Option Reserve
The option reserve records items recognised as expenses on valuation of share options.
b.
Financial Asset Reserve
The financial asset reserve records revaluations of non-current assets. Under certain circumstances dividends
can be declared from this reserve.
NOTE 18: PARENT COMPANY INFORMATION
a.
Parent Entity
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Reserves
Option reserve
Total reserves
Financial performance
Profit / (Loss) for the year
Other comprehensive income
Total comprehensive loss
Contingent Liabilities and Commitments
2016
$
2015
$
446,897
12,914
14,103,560 14,068,621
14,550,457 14,081,535
84,337
1,206,631
-
-
84,337
1,206,631
18,434,903 16,799,457
(4,446,232)
(4,402,003)
477,450
477,450
477,450
477,450
(44,229)
(427,965)
-
-
(44,229)
(427,965)
The Directors are not aware of any contingent liabilities or capital commitments as at 30 June 2016.
Guarantees in respect of the debts of its subsidiaries
There are no parent entity guarantees in respect of the debts of its subsidiary at year end.
ASX Code: CNJ
Page 26 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
NOTE 19: CAPITAL AND LEASING COMMITMENTS
a.
Capital Expenditure Commitments
Payable:
—
—
not later than 12 months
greater than12 months
2016
$
2015
$
-
-
-
-
-
-
b.
Exploration Expenditure Commitments
In order to maintain current rights of tenure to exploration tenements, the company is required to perform
minimum exploration work to meet the requirements specified by various State governments. It is anticipated
that expenditure commitments for the twelve months will be tenement rentals of $5,000 (2015: $1,000) and
exploration expenditure of $94,000 (2015: $40,000).
NOTE 20: SHARE-BASED PAYMENTS
No share-based payment arrangements existed at 30 June 2016.
NOTE 21: RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions no
more favourable than those available to other parties unless otherwise stated.
Transactions with related parties:
Key Management Personnel
Management fees and administration fees paid to Princebrook Pty Ltd, a company in
which Mr GH Solomon and Mr DH Solomon have an interest. At 30 June 2016 $12,000
(2015: $502,898) was included in Trade and Other Payables owing to Princebrook Pty Ltd.
117,446
194,670
2016
$
2015
$
Management fees and administration fees forgiven by Princebrook Pty Ltd, a company in
which Mr G Solomon and Mr D Solomon have an interest.
355,342
Legal and professional fees payable to Solomon Brothers, a firm of which Mr GH Solomon
and Mr DH Solomon are partners. At 30 June 2016 nothing (2015: $39,229) was included
in Trade and Other Payables as owing to Solomon Brothers.
Corporate advisory fees paid to RM Corporate Finance Pty Ltd, a company in which Mr G
T Le Page and Mr J B Richardson have an interest.
Placement fees paid to RM Corporate Finance Pty Ltd, a company in which Mr G T Le
Page and Mr J B Richardson have an interest.
Placement fees paid to RM Capital Pty Ltd, a company in which Mr G T Le Page and Mr J
B Richardson have an interest.
Interest free unsecured loan payable on demand from R M Capital Pty Ltd, a company in
which Mr G T Le Page and Mr J B Richardson have an interest.
Interest free unsecured loan payable on demand from BT Global Pty Ltd, a company in
which Mr G T Le Page and Mr J B Richardson have an interest.
Interest free unsecured loan payable on demand from March Bells Pty Ltd, a company in
which Mr D H Solomon has an interest.
Interest free unsecured loan payable on demand from Arkenstone Pty Ltd, a company in
which Mr G H Solomon has an interest.
Amount included in Trade and Other Payables as owing to Mr Gregory H Solomon for
unpaid directors fees and superannuation.
Amount included in Trade and Other Payables as owing to Mr Douglas H Solomon for
unpaid directors fees and superannuation.
-
-
-
-
-
21,466
81,000
36,000
22,620
-
-
-
-
20,000
25,000
27,500
27,500
9,516
212,156
3,045
67,890
ASX Code: CNJ
Page 27 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
NOTE 21: RELATED PARTY TRANSACTIONS CONTINUED
Amount included in Trade and Other Payables as owing to Mr Guy T Le Page for unpaid
directors fees and superannuation.
Amount included in Trade and Other Payables as owing to Mr James B Richardson for
unpaid directors fees and superannuation.
Associated Companies
2016
$
2015
$
3,045
67,890
3,045
67,890
Reimbursement to Tasman Resources Ltd (which has a 14.05% interest in the Company)
for employee costs on a hourly basis, in relation to Tasman staff utilised by the Company
3,668
4,076
Convertible loan from Tasman Resources Ltd (which has a 14.05% interest in the
Company), interest accruing at 9%. Interest accrued as at 30 June 2015 was $19,504.
-
100,000
NOTE 22: CASH FLOW INFORMATION
a. Reconciliation of Cash Flow from Operations with Loss after Income Tax
Loss after income tax
Non-cash flows in profit
Depreciation
Debt forgiveness
Changes in assets and liabilities, net of non-cash payments
(Increase)/decrease in trade and term receivables
Increase/(decrease) in trade payables and accruals
Cash flow used in operations
(54,113)
(433,749)
2,095
(355,342)
2,550
217
(55,976)
(986)
(19,595)
384,496
(482,931)
(47,472)
NOTE 23: SEGMENT REPORTING
The Group operates predominately in one geographical segment and one business segment, being mineral exploration
and development in Western Australia. Operating segments are identified based on internal reports reviewed by the
chief operating decision maker/s.
NOTE 24: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Directors are not aware of any contingent assets or contingent liabilities as at 30 June 2016.
NOTE 25: EVENTS AFTER THE BALANCE SHEET 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 Group, the results of those operations, or the state of affairs of the Group in
future financial years.
NOTE 26: FINANCIAL INSTRUMENTS
a.
Financial Risk Exposures and Management
The main risks the company is exposed to through its financial instruments are interest rate risk, liquidity risk
and credit risk.
i.
Interest Rate Risk
Interest rate risk is managed by investing cash with major institutions in both cash on deposit and term
deposit accounts. At 30 June 2016, the effect on the loss and equity as a result of a 2% increase in the
interest rate, with all other variables remaining constant would be a decrease in loss by $7,940 (2015:
$330) and an increase in equity by $7,940 (2015: $330). The effect on the loss and equity as a result of a
2% decrease in the interest rate, with all other variables remaining constant, would be a increase in loss
by $7,940 (2015: $330) and a decrease in equity by $7,940 (2015: $330).
ASX Code: CNJ
Page 28 of 35
Annual Report for Year Ending 30 June 2016
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
NOTE 26: FINANCIAL INSTRUMENTS CONTINUED
ii.
Liquidity Risk
The Company manages liquidity risk by monitoring forecast cash flows and ensuring that adequate
funding is maintained. The Company’s operations require it to raise capital on an on-going basis to fund
its planned exploration program and to commercialise its tenement assets. If the company does not raise
capital in the short term, it can continue as a going concern by reducing planned but not committed
exploration expenditure until funding is available and/or entering into joint venture arrangements where
exploration is funded by the joint venture partner. All financial liabilities and assets are expected to be
realised and settled within 6 months.
iii.
Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in a
financial loss to the company. The company has adopted a 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 maximum exposure to credit risk, excluding the value of any collateral or other security, at balance
date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those
assets, as disclosed in the balance sheet and notes to the financial statements.
The Company does not have any material credit risk exposure to any single receivable or group of
receivables under financial instruments entered into by the company.
b.
Financial Instruments
i.
Net Fair Values
The aggregate net fair values of the financial assets and financial liabilities, at the balance date, are
approximated by their carrying value.
ii.
Interest Rate Risk
The company’s exposure to interest rate risk and effective weighted average interest rates on classes of
financial assets and financial liabilities, is as follows:
Weighted Average
Effective Interest
Rate
2016
2015
Floating Interest Rate Non Interest Bearing
Total
2016
$
2015
$
2016
$
2015
$
2016
$
2015
$
Financial Assets:
Cash and cash equivalents
0.95%
1.5%
397,789
16,352
-
- 397,789
16,352
Trade and other receivables
-
-
-
-
66,212
10,236
66,212
10,236
Total Financial Assets
0.95%
1.5%
397,789
16,352
66,212
10,236 464,001
26,588
Financial Liabilities:
Non-interest bearing
liabilities
Interest bearing liabilities
Trade and sundry payables
Total Financial Liabilities
-
-
-
-
-
9.0%
-
9.0%
-
-
-
-
-
-
-
-
- 100,000
-
-
- 100,000
- 100,000
93,017 1,022,886
93,017 1,022,886
93,017 1,122,886
93,017 1,222,886
NOTE 27: COMPANY DETAILS
The registered office of the company is:
The principal place of business is:
Conico Limited
Level 15,
Conico Limited
Level 15,
197 St Georges Terrace
Perth Western Australia 6000
197 St Georges Terrace
Perth Western Australia 6000
ASX Code: CNJ
Page 29 of 35
Annual Report for Year Ending 30 June 2016
DIRECTORS’ DECLARATION
In the opinion of the directors of Conico Ltd (the “Company”):
a.
the financial statements and notes set out on pages 14 to 29, and the Remuneration disclosures that are contained
in pages 10 to 11 of the Remuneration Report in the Directors’ Report, are in accordance with the Corporations Act
2001, including:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2016 and of its performance, for
the financial year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001; and
(iii)
complying with International Financial Reporting Standards as disclosed in Note 1.
the remuneration disclosures that are contained in pages 10 to 11 of the Remuneration Report in the Directors’
Report comply with Australian Accounting Standard AASB 124 Related Party Disclosures and
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.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Non-Executive Chairman and Chief Financial Officer for the financial year ended 30 June 2016.
This declaration is made in accordance with a resolution of the Board of Directors.
Gregory H Solomon
Chairman
Dated this 27th day of September 2016
ASX Code: CNJ
Page 30 of 35
Independent auditor’s report to the members of Conico Ltd
Report on the financial report
We have audited the accompanying financial report of Conico Ltd, which comprises the
consolidated statement of financial position as at 30 June 2016, and 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 ended on that date, a summary of
significant accounting policies, other explanatory notes and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ responsibility for the financial report
The directors of the company are responsible for the preparation and fair presentation of the
financial report in accordance with the Australian Accounting Standards and the Corporations Act
2001. This responsibility includes establishing and maintaining internal control relevant to the
preparation and fair presentation of the financial report that is free from material misstatement,
whether due to fraud or error; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state
that the financial report, comprising the financial statements and notes, complies with International
Financial Reporting Standards as issued by the International Accounting Standards Board.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the
audit to obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial report, whether due
to fraud or error. In making those risk assessments, we consider internal controls relevant to the
entity’s preparation and fair presentation of the financial report in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors,
as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of Conico Ltd, would be in the same terms if given to the
directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Conico Ltd is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June
2016 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001.
(b) the financial report also complies with International Financial Reporting Standards as
disclosed in Note 1.
Emphasis of Matter
Without modifying our opinion, we draw attention to Note 1 to the Financial Report, which indicates
that the Group will require further funding in the next twelve months from the date of this report to
fund its planned exploration and evaluation projects and operating costs. These conditions, along
with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may
cast significant doubt about the Group’s ability to continue as a going concern and therefore the
Group may be unable to realise its assets and discharge its liabilities in the normal course of
business.
Report on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended
30 June 2016. 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.
Opinion
In our opinion, the remuneration report of Conico Ltd for the year ended 30 June 2016 complies
with Section 300A of the Corporations Act 2001.
Nexia Perth Audit Services Pty Ltd
TJ Spooner
Director
Perth, 27 September 2016
Annual Report for Year Ending 30 June 2016
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
1. Shareholding as at 31 August 2016
a. Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Number of
Shareholders
24
66
142
418
216
866
b.
c.
The number of shareholdings held in less than marketable parcels at 31 August 2016 is 289.
The names and relevant interests of the substantial shareholders listed in the holding company’s register as at 31
August 2016 are:
Shareholder
Tasman Resources Ltd
J Richardson
G T Le Page
d. Voting Rights
Number of Ordinary shares
25,000,000
16,158,888
13,715,279
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or
by proxy has one vote on a show of hands.
e
20 Largest Shareholders — Ordinary Shares
Name
1.
Tasman Resources Ltd
2 March Bells Pty Ltd
3
4.
5.
6.
Arkenstone Pty Ltd
Tasman Resources Ltd
Tadea Pty Ltd
Tadea Pty Ltd
7. Redcode Pty Ltd
8. Guy Le Page & Dina Le Page
9. GT Le Page & Associates Pty Ltd
10. Peto Pty Ltd <1953 Superfund A/c>
11. Gasmere Pty Limited
12. RM Corporate Finance Pty Ltd>
13. Prosperion Wealth Management Pty Ltd
14. Mr David Newman & Ms Anastasia Apostolou
4,875,000
15. Guy Touzeau Le Page
16. Arkenstone Pty Ltd
17. Flourish Super Pty Ltd
18. Merriwa Street Pty Ltd
19. Mr Matthew Torenius & Mr Oliver Torenius
20. Mr Harry Hatch
4,500,008
3,837,500
3,779,257
3,600,000
3,500,000
3,465,734
ASX Code: CNJ
Page 34 of 35
175,879,663
59.470%
Number
Shares Held
% of Issued
Capital
25,000,000
20,728,125
17,015,625
16,476,285
15,250,000
13,750,000
7,500,000
6,214,194
6,138,308
5,225,739
5,123,888
5,000,000
4,900,000
8.453%
7.009%
5.754%
5.571%
5.156%
4.649%
2.536%
2.101%
2.076%
1.767%
1.732%
1.691%
1.657%
1.648%
1.522%
1.298%
1.278%
1.217%
1.183%
1.172%
Annual Report for Year Ending 30 June 2016
2.
Unquoted Securities – Options as at 31 August 2016
Holder Name
Date of Expiry
Exercise Price
Tasman Resources Ltd
31 December 2016
Various
30 November 2019
$0.08
$0.03
Number on
issue
Number of
holders
5,501,000
58,625,000
64,126,000
1
26
27
TENEMENT SCHEDULE
Table 1 lists further details on the tenements.
Table 1: Conico Tenement Schedule
State
Licence
Type
WA
WA
WA
WA
WA
WA
WA
EL
ELA
ELA
PA
EL
MLA
R
Number
E63/1778
EA63/1779
EA63/1790
PA/2045
E63/1267
MLA63/527*
R63/4
Interest
%
100
100
50
50
50
50
50
Locality
Scadden East
Mt Burdett
Mt Thirsty
Mt Thirsty
Mt Thirsty
Mt Thirsty
Mt Thirsty
* - This application covers the same area as R63/4.
Location
Approximately 70 km NNE of Esperance
Approximately 50 km NE of Esperance
Approximately 20 km NW of Norseman
Approximately 20 km NW of Norseman
Approximately 20 km NW of Norseman
Approximately 20 km NW of Norseman
Approximately 20 km NW of Norseman
ASX Code: CNJ
Page 35 of 35