Globe Metals & Mining
Limited
(ABN 33 114 400 609)
And Controlled Entities
Annual Report
For the year ended
30 June 2018
For personal use only
CONTENTS
CHAIRPERSON’S ADDRESS
CORPORATE REVIEW & REVIEW OF OPERATIONS
1
2
DIRECTORS’ REPORT
5
REMUNERATION REPORT - AUDITED
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
ASX ADDITIONAL INFORMATION
8
14
15
16
17
18
19
47
48
53
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CORPORATE DIRECTORY
Directors
Ms Alice Wong, Non-Executive Chairperson
Mr Alistair Stephens, Deputy Chairperson, Managing Director and CEO
Mr William Hayden, Non-Executive Director
Mr Alex Ko, Non-Executive Director
Mr Bo Tan, Non-Executive Director
Company Secretary
Mr Michael Fry
Principal & Registered Office
137 Lake Street
Perth WA 6000
Telephone: (08) 9328 9368
Facsimile: (08) 6323 0418
ABN: 33 114 400 609
Auditors
Australia:
Ernst & Young
11 Mounts Bay Road
Perth WA 6000
Malawi:
Ernst & Young
Apex House
Kidney Crescent
Blantyre
Malawi
Share Registrar
Security Transfers Registrars Pty Ltd
770 Canning Highway
Applecross WA 6153
Telephone: (08) 9315 2333
Facsimile: (08) 9315 2233
Securities Exchange Listing
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Level 40
Central Park
152-158 St Georges’ Terrace
Perth WA 6000
Code: GBE
Bankers
Westpac
109 St Georges Terrace
Perth WA 6000
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Chairperson’s Address
On behalf of the Board of Globe Metals & Mining Limited (“Globe” or “the Group”), it is my pleasure to
present to you the 2018 Annual Report.
Consistent with the strategy outlined in my address in the 2017 Annual Report, the Group has maintained
momentum on cost reductions while advancing the development agreement for Kanyika, updating the
engineering studies and designs as part of a program aimed at finalising the technical components of a
Feasibility Study, and assessing a range of project financing options.
The negotiations for the Kanyika Development Agreement with the Government of Malawi are progressing
well with only a few areas requiring finalisation. The feasibility study, technical designs and development
plans are largely complete leaving the future focus firmly on project funding and off-take arrangements. As
a consequence of the demand and price outlook for niobium improving and financing opportunities gathering
momentum in recent times, the Board and management is optimistic in realising project financing and
development opportunities in the near term.
On a positive note for Kanyika, global steel demand is predicted to maintain strong growth driven by
infrastructure investment in developed and developing companies, according to latest reports by the World
Steel Association. Worldsteel forecasts that the growth in global steel demand will be 4.5% in 2019 in
emerging and developing economies (excluding China). And as demand for higher quality steels rises as a
proportion of all steel demand, the need for niobium is increasing at a faster rate than steel output. Industry
reports forecast that the usage of niobium in steel production should increase by about CAGR 12% over the
next decade. These combinations of growth and demand bode well for the price of niobium. As does the
new emerging market of niobium in new technologies like wind turbines, medical imaging, particle
accelerators, as well as an exciting development in the manufacture of batteries for electrical vehicles. In
October 2017, Toshiba announced that niobium would be a critical component of its next generation
SCiBTM rechargeable battery for electric vehicles; which it aims to have in production by fiscal year 2019, and
which will have much improved performance, longer-life, quicker charging, and improved safety.
In the coming year the Group will continue to be cost prudent, review and consider other cash generation
opportunities that are accretive to shareholder value, and maintain momentum on Kanyika development
opportunities.
In closing, I thank all shareholders, board of directors, and employees for their support of the Group in the
year past and I am looking forward to their continued support in the year to come.
Yours sincerely,
GLOBE METALS & MINING LIMITED
ALICE WONG
CHAIRPERSON
Globe Metals & Mining Limited & Controlled Entities Annual Report 2018
1
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Corporate Review
Finance
• Cash and cash equivalents at 30 June 2018 of $9.339 million.
Corporate
• During the year the Company undertook an unmarketable parcel buy-back. 226 shareholders holding
an aggregate of 3,806,689 shares did not elect to retain their shares. The shares were acquired by
the Company at a cost to the Company of $73k, resulting in the total number of shares on issue being
reduced from 469,729,062 to 465,922,373.
• As at the date of this report, shares on issue total 465,922,373.
• A total of 1,000,000 options over ordinary shares lapsed during the 2018 financial year.
• As at the date of this report, a total of 2,000,000 options are on issue; 1,000,000 exercisable at $0.20
on or before 30 June 2019; and 1,000,000 exercisable at $0.25 on or before 30 June 2020.
• 2 Substantial Shareholders control a total of 364,126,673 shares or 78.15% of the Company.
Company Focus
Consistent with the strategy outlined by the Chairperson in her Address in the 2017 Annual Report, the Group
has focussed its efforts in the 2018 financial year on the following:
• advancing its Kanyika Niobium Project towards production by progressing with its mining licence
application, that is only conditional on the finalisation of a Development Agreement and by seeking
out and assessing a range of financing options; and
• assessment of other project opportunities focussed on cash-flow generation.
Review of Operations
Globe Metals and Mining Limited (Globe) is an Australian registered public company and has been listed on
the ASX since December 2005 (ASX: GBE). The Company has an administration and operational centre in
Lilongwe, Malawi in support of its on-the-ground Project exploration activities that currently employs 4 staff.
The Malawi operations are supported from Globe’s corporate head office in Perth, Australia.
Globe’s Kanyika Niobium Project, which is located in central Malawi, has contains niobium and tantalum
mineralisation commodities that are key additives in steel manufacture and electronics.
Kanyika Niobium Project
Overview
Globe identified niobium and tantalum mineralisation in 2007 at Kanyika. Subsequent drilling confirmed the
mineralisation leading to an extensive exploration and metallurgical testwork program. A scoping study in
2008 and further drilling led to a feasibility study in 2012 and the release of a JORC (2004) Mineral Resource
Estimate in January 2013 (refer below).
During 2013, Globe commissioned metallurgical optimisation work, and subsequently in 2014 commissioned
a pilot plant to demonstrate and further optimise metallurgical processes.
Globe Metals & Mining Limited & Controlled Entities Annual Report 2018
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Product Marketing and Off-Take
Globe continues to explore avenues for KNP product off-take to complete the KNP definitive feasibility study.
In an effort to satisfy purchasers seeking high-purity niobium products – samples were prepared and
distributed.
Intellectual Property
Intellectual property (IP) developed as part of the KNP feasibility study and subsequent optimisation work
has been consolidated into provisional patent applications that were initially filed with IP Australia and
subsequently filed with African Regional Intellectual Property Organisation (ARIPO).
Development Agreement
The Kanyika Exclusive Prospecting Licence (EPL1088) was due for expiry at the end of December 2014. In
early December 2014, Globe applied for a Mining Licence. Globe received notification in June 2015 from
Malawi Ministry of Natural Resources, Energy & Mining (MMNREM) that its application for a Mining Lease,
currently registered as AML0026, has been approved subject to completion of a Development Agreement.
The Development Agreement negotiations are continuing in good faith with the Government of Malawi.
Government and Community Relations
The Kanyika Workplace Certificate was renewed by the Ministry of Labour. The Relocation Plan is with the
Ministry of Labour. A review of the Environmental Impact Assessment will be undertaken at the completion
of optimisation activities.
Project Development and Financing
During the year, the executive team examined opportunities for project enhancement, including
reconfiguration of project arrangements, and had advanced discussion with various regulators, stakeholders
and other parties regarding project development and financing.
Statement of Mineral Resources
On 11 July 2018, Globe published an updated Mineral Resource Estimate for the Kanyika Niobium Project
(KNP) calculated in accordance with 2012 JORC guidelines.
The resource calculated was unchanged from the previous Mineral Resource Estimate published on 7 January
2011, calculated in accordance with the 2004 JORC guidelines, and is as follows:
Category
Measured
Indicated
Inferred
Total
Size
(Mt)
5.3
47.0
16.0
68.3
Nb2O5 Grade
(ppm)
Ta2O5 Grade
(ppm)
U3O8 Grade
(ppm)
3,790
2,860
2,430
2,830
180
135
120
135
110
80
70
80
Table 1: Mineral Resource Estimate for Kanyika using a 1,500 ppm Nb2O5 cut-off grade
No additions or changes have been made to the above Mineral Resource Estimate since it was published on
11 July 2018.
Globe Metals & Mining Limited & Controlled Entities Annual Report 2018
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Exploration Results, Mineral Resource and Ore Reserve Estimation Governance Statement
Globe Metals and Mining Limited ensures that exploration results and Mineral Resource estimates are
subject to appropriate levels of governance, internal controls and external independent review. The
exploration results and Mineral Resource estimation of the Company’s projects are subject to appropriate
procedural controls and systematic internal and external technical review by competent and qualified
professionals on an as needed basis. These reviews have not identified any material issues undertaken as
part of a formal risk assessment. The Company periodically reviews the governance framework in line with
the business expectations.
Exploration results and Mineral Resource estimates referred to in this report were undertaken in accordance
with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC)
2012 Edition. Competent persons named by the Company are members of the Australian Institute of Mining
and Metallurgy and are qualified as competent persons as defined in the JORC Code.
Qualifying Statements
Competent Person: The contents of this report relating to Exploration Targets, Exploration Results, and Mineral Resources is based
on information compiled by Mr Alistair Stephens, Fellow of the Australasian Institute of Mining and Metallurgy, and by Mr Andrew
Bewsher, a Member of the Australian Institute of Geoscientists. Mr Stephens is a full-time employee of Globe Metals and Mining
Limited. Mr Brewsher is a full-time employee of BMGS Pty Ltd. Mr Stephens and Mr Brewsher both have sufficient experience that is
relevant to the style of mineralisation and 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 Resources
and Ore Reserves. Mr Stephens and Mr Brewsher have consented to the inclusion of the information in this report in the form and
context in which it appears.
Competent person: The information in this report relating metallurgical evaluation of Mineral resources is based on information
compiled by Dr Marc Steffens. Dr Steffens is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and is a
full-time employee of Spectra Project, professional metallurgical consultants. Dr Steffens has sufficient experience that is relevant to
the style of mineralisation and 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 Resources and Ore
Reserves. Dr Steffens consents to the inclusion in the report of matters based on his information in the form and context in which it
appears.
Forward Looking Statements
This report may include forward-looking statements. Forward-looking statements include, but are not limited to, statements
concerning Globe Metals & Mining Limited’s business plans and other statements that are not historical facts. When used in this
report, words such as could-plan-target-estimate-expect-intend-may-potential-should and similar expressions are forward-looking
statements. Any forward-looking statements have been prepared on the basis of a number of assumptions which may prove incorrect
and the current intentions, plans, expectations and beliefs about future events are subject to risks, uncertainties and other factors,
many of which are outside Globe Metals & Mining Limited’s control. Important factors that could cause actual results to differ
materially from the assumptions or expectations expressed or implied in this report include known and unknown risks. Because actual
results could differ materially to the assumptions made and the Company’s current intentions, plans, expectations and beliefs about
the future, you are urged to view all forward-looking statements with caution. This content should not be relied upon as a
recommendation or forecast by Globe Metals & Mining Limited. Content within this report should not be construed as either an offer
to sell or a solicitation of an offer to buy or sell shares in any jurisdiction.
Globe Metals & Mining Limited & Controlled Entities Annual Report 2018
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DIRECTORS’ REPORT
FOR THE YEAR ENDED
30 JUNE 2018
The directors of Globe Metals & Mining Limited (‘Globe’ or ‘the Company’) hereby submit their report of the Company and its
controlled entities (‘the Group’) for the financial year ended 30 June 2018.
DIRECTORS
The names and particulars of the Directors of the Company during or since the end of the financial year are:
Alice Wong
Alistair Stephens
William Hayden
Bo Tan
Alex Ko
Non-Executive Chairperson
Deputy Chairperson, Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
COMPANY SECRETARY
Michael Fry was appointed Company Secretary of Globe on 1 February 2015. Michael holds a Bachelor of Commerce degree from
the University of Western Australia and has worked in accounting and advisory roles for over 20 years. Michael is currently a non-
executive director of VDM Group Ltd and Winmar Resources Limited.
PRINCIPAL ACTIVITIES
The principal activities of the Group during the financial year were to explore, develop and invest in the resource sector. The Group’s
major project is the Kanyika Niobium Project in Malawi.
There were no significant changes in the nature of the Group’s principal activities during the current year.
RESULTS
The consolidated loss after providing for income tax of the Group for the year ended 30 June 2018 amounted to $1.354 million (2017:
$1.651 million).
DIVIDENDS
No amounts have been paid or declared by way of dividend during or since the end of the financial year.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group proposes to continue its exploration program and investment activities across its mineral industry interests. Further
information in relation to likely developments and the impact on the operations of the Group has not been included in this report,
as the directors believe it would result in unreasonable prejudice to the Group.
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.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
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DIRECTORS’ REPORT
FOR THE YEAR ENDED
30 JUNE 2018
INFORMATION ON DIRECTORS
Alice Wong
Non-Executive Chairperson
Special Responsibilities
Member of Nomination and Remuneration Committee
Qualifications
B.Bus in Accounting and Finance
Ms Alice Wong commenced her career with Pricewaterhouse as an auditor for leading
international companies. Ms Wong subsequently worked in the investment banking industry
in Hong Kong where her career spanned across BNP Paribas Peregrine, ABN AMRO Rothschild,
and Morgan Stanley. In her investment banking career Ms Wong engaged in equity capital
markets including IPOs, share placements, rights issues, and bond issues for a vast range of
clients.
Ms Wong holds a Bachelor of Business Administration in Accounting and Finance from the
University of Hong Kong and is a member of the American Institute of Certified Public
Accountants (AICPA).
Interest in Shares and Options
245,983,611(1)
Directorships of other
ASX Listed Companies
Nil
(1) Ms Wong is the sole shareholder and Director of Apollo Metals Investment Co. Ltd which holds 245,983,611 shares in the
Company
Alistair Stephens
Deputy Chairperson, Managing Director and Chief Executive Officer
Qualifications
Experience
Masters of Business Administration
Bachelor of Science (Honours)
Graduate of the Australian Institute of Company Directors (GAICD)
Fellow of the Australasian Institute of Mining and Metallurgy
Mr Stephens is a qualified geologist with more than 30 years’ experience in the resources
industry, in a broad range of technical and corporate management, including corporate
governance, strategic development and delivery, technical program development, marketing,
shareholder communications and capital funding.
Mr Stephens held the position of Managing Director and Chief Executive Officer of Arafura
Resources Limited (ASX: ARU) between 2004 and 2009.
Mr. Stephens commenced his career in gold and copper exploration and development with
Newmont but orientated most of his career in mining, planning and processing operations in
gold with Normandy Poseidon and KCGM Pty Ltd and nickel with WMC Resources. He also
has marketing and commercial experience with Orica Ltd in explosives.
Interest in Shares and Options
1,000,000 20 cent options exercisable on or before 30 June 2019
1,000,000 25 cent options exercisable on or before 30 June 2020
Directorships of other
ASX Listed Companies
Nil
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DIRECTORS’ REPORT
FOR THE YEAR ENDED
30 JUNE 2018
William Hayden
Non-Executive Director
Special Responsibilities
Member of the Nomination and Remuneration Committee
Qualifications
Experience
Member of the Audit and Risk Committee
B Sc (Hons)
Mr Hayden is a geologist with over 37 years’ experience in the mineral exploration industry,
much of which has been in Africa, South America and the Asia-Pacific region. Mr Hayden was
the co-founder and President of Ivanhoe Nickel and Platinum Ltd (now Ivanhoe Mines Ltd), a
Canadian company which has assembled extensive mineral holdings in South Africa, and the
Democratic Republic of Congo. Since 1983 Mr Hayden has worked in a management capacity
with several exploration and mining companies both in Australia and overseas. Mr Hayden
was President of Ivanhoe Philippines Inc and GovEx Uranium Inc, and a former director of
Sunward Resources Ltd (TSX listed) and China Polymetallic Mining Ltd (HKSE listed). He is
currently a director of Asia Pacific Mining Limited, Trilogy Metals Inc (TSX listed), and Noble
Metals Ltd (ASX listed).
Interest in Shares and Options
476,923 Fully Paid Ordinary Shares
Directorships of other
ASX Listed Companies
Noble Metals Limited (ASX listed) (since March 2011)
Ivanhoe Mines Limited (TSX listed) (since March 2007)
Trilogy Metals Inc. (TSX listed) (since September 2010)
Bo Tan
Non-Executive Director
Special Responsibilities
Chairperson of Audit and Risk Committee
Qualification
Experience
BEcon - Renmin China, MBA - Thunderbird USA, M.A University of Connecticut
Mr Bo Tan, a Canadian national, has over 15 years’ experience as a senior manager and
director in financial planning, reporting, investment, capital structure and industrial research.
Mr Tan has worked for companies such as Bohai Industrial Investment Fund, Lehman Brothers
Asia and Macquarie Securities Asia, and across international markets in China, Hong Kong,
Canada and USA.
Interest in Shares and Options
Directorships of other
ASX Listed Companies
Nil
Nil
Alex Ko
Non-Executive Director
Special Responsibilities
Chairperson of the Nomination and Remuneration Committee
Qualifications
Experience
Member of the Audit and Risk Committee
Bachelor Business Administration
Mr Ko has over 30 years’ experience in finance and investment banking. He has been a
pioneer in the listing of Chinese equity offers through the Hong Kong exchange including
many high-profile government and private Chinese companies. He has held many
independent non-executive director roles with Hong Kong listed companies in the
transportation, electronics and environmental protection industries. He has strengths in
finance and corporate governance.
Mr Ko is currently a Director and CEO of CMBC International Holdings Limited, a non-
executive director of Petro-king Oilfield Services Limited, and a trustee of a not for profit
schooling academy in the USA.
Interest in Shares and Options
Directorships of other
ASX Listed Companies
Nil
Nil
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DIRECTORS’ REPORT
FOR THE YEAR ENDED
30 JUNE 2018
REMUNERATION REPORT - AUDITED
This remuneration report for the year ended 30 June 2018 outlines the remuneration arrangements of the Group in accordance with
the requirements of Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by Section
308(3C) of the Act.
The remuneration report details the remuneration arrangements for Key Management Personnel (KMP) who are defined as those
persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or
indirectly, including any director (whether executive or otherwise) of the parent.
For the purposes of this report, the term “executive” includes the Managing Director (MD), executive directors (where applicable)
and senior executives of the Group.
A.
Remuneration Governance
The Board of Directors has established a Committee for the purpose of reviewing and making recommendations with respect to the
remuneration practices of the Company.
The Committee comprises Mr Alex Ko (Chairperson), Mr Bill Hayden and Ms Alice Wong; all of whom are non-executive directors.
The Board of Directors has prepared and approved a charter as the basis on which the Committee will be constituted and operated.
The role of the Committee is to provide a mechanism for the determination, implementation and assessment of the remuneration
practices of the Company, including remuneration packages and incentive schemes for executive Directors and senior management,
and fees payable to Non-Executive Directors.
The Committee is primarily responsible for making recommendations to the Board on:
➢
the overarching executive remuneration framework;
➢
➢
➢
the operation of incentive plans (if any) which apply to the executive team, including key performance indicators and
performance hurdles;
the remuneration levels of executive directors and other KMP; and
the fees payable to non-executive directors.
The Committee’s objective is to ensure that remuneration policies and structures are fair and competitive, and aligned with the long-
term interests of the Group.
The Corporate Governance Statement provides further information on the role of the Remuneration Committee.
B.
Remuneration Policy
The remuneration policy of Globe Metals & Mining Limited and its Controlled Entities has been designed to align Director and
executive objectives with shareholder and business objectives by providing a fixed remuneration component which is assessed on an
annual basis in line with market rates and offering specific incentives, from time to time, that are based on share price and key
performance areas affecting the Group’s financial results.
The Board of Directors of Globe believes the remuneration policy is appropriate and effective in its ability to attract, retain and
motivate suitably qualified and experienced Directors and executives to run and manage the Group, as well as create goal congruence
between the Directors, executives and the Company’s shareholders.
C.
Remuneration Arrangements
All executives receive a base salary (which is based on factors such as length of service and experience) and superannuation (in
accordance with relevant legislation). Executive remuneration may also incorporate a component of performance based
remuneration.
The Board reviews executive packages annually by reference to the economic entity’s performance, executive performance and
comparable information from industry sectors and other listed companies in similar industries.
Non-executive directors are remunerated at market rates for comparable companies for time, commitment and responsibilities.
The Board determines payments to non-executive directors and reviews their remuneration annually, based on market practice,
duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can
be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting (currently $600,000).
The Board of Directors may exercise discretion in relation to approving incentives, bonuses and options.
All remuneration paid to Directors and executives is valued at the cost to the Company and expensed. Options are independently
valued by corporate advisers using the Black-Scholes method and Monte Carlo Model. Shares are valued at Market Value.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
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DIRECTORS’ REPORT
FOR THE YEAR ENDED
30 JUNE 2018
D.
Performance Based Remuneration
The Company believes that linking the remuneration of Directors and executives with performance will be effective in increasing
shareholder wealth.
From time to time, the Board of Directors may establish performance targets and a bonus system for the purposes of providing
directors and executives with short-term and long-term performance incentives. Such incentives are offered to increase goal
congruence between shareholders and directors and executives.
There are currently no incentive programs in place, apart from options which have previously been granted to the Managing Director
and CEO. The options were not based on a percentage of salary. The Board of Directors issued the options to the Managing Director
and CEO as an incentive.
E.
Performance Summary
The tables below set out summary information about Globe’s earnings and movements in shareholder wealth for the five years to
30 June 2018:
30 June 2018
$’000
30 June 2017
$’000
30 June 2016
$’000
30 June 2015
$’000
30 June 2014
$’000
Income
Comprehensive loss after tax
239
(1,354)
203
(1,651)
336
(6,883)
540
(3,280)
670
(4,656)
30 June 2018
$’000
$0.016
$0.014
30 June 2017
$’000
$0.022
$0.016
30 June 2016
$’000
$0.022
$0.022
($0.003)
($0.003)
($0.004)
($0.004)
($0.015)
($0.015)
30 June 2015
$’000
$0.035
$0.022
-
($0.007)
($0.007)
30 June 2014
$’000
$0.053
$0.035
-
($0.013)
($0.013)
Share price at start of year
Share price at end of year
Dividend
Basic loss per share
Diluted loss per share
F.
No Hedging Contracts
The Company does not permit executives to enter into contracts to hedge their exposure to options or performance rights to shares
granted as part of their remuneration package.
G.
Securities Trading Policy
The Board has in place a Securities Trading Policy to ensure that:
➢ any dealings in securities by the Directors, employees and contractors comply with legal and regulatory obligations
(including the prohibition against insider trading); and
the Company maintains market confidence in the integrity of dealings in its securities.
➢
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DIRECTORS’ REPORT
FOR THE YEAR ENDED
30 JUNE 2018
H. Details of Remuneration
Compensation of key management personnel for the year ended 30 June 2018
2018
SHORT-TERM BENEFITS
Salary &
Fees
Termination
Payment
Annual
Leave
POST
EMPLOY-
MENT
Super-
annuation
SHARE-
BASED
PAYMENT
Options
TOTAL
$
SHARE-
BASED
PAYMENT
as a %
of TOTAL
Directors
Alice Wong – Chairperson
Alistair Stephens - Managing Director & CEO
William Hayden - Non-Executive Director
Bo Tan - Non-Executive Director
Alex Ko - Non-Executive Director
Total remuneration directors 2018
Specified Executives
Michael Fry – Finance Manager
Total remuneration specified executives 2018
Total key management personnel 2018
80,000
385,000
52,968
58,000
57,000
632,968
-
264,000
264,000
896,968
-
-
-
-
-
-
-
-
-
-
4,442
-
-
-
4,442
-
-
4,442
-
20,049
5,032
-
-
25,081
-
-
-
25,081
-
-
-
-
-
-
-
-
-
80,000
409,491
58,000
58,000
57,000
662,491
264,000
264,000
926,491
-
0%
0%
0%
0%
0%
0%
0%
0%
-
Compensation of key management personnel for the year ended 30 June 2017
2017
SHORT-TERM BENEFITS
Salary &
Fees
Termination
Payment
Annual
Leave
POST
EMPLOY-
MENT
Super-
annuation
SHARE-
BASED
PAYMENT
Options
TOTAL
$
SHARE-
BASED
PAYMENT
as a %
of TOTAL
Directors
Alice Wong – Chairperson
Alistair Stephens - Managing Director & CEO
William Hayden - Non-Executive Director
Bo Tan - Non-Executive Director
Alex Ko - Non-Executive Director
Total remuneration directors 2017
Specified Executives
Michael Fry – Finance Manager
Total remuneration specified executives 2017
Total key management personnel 2017
80,000
385,000
52,968
58,000
57,000
632,968
-
254,000
254,000
886,968
-
-
-
-
-
-
-
-
-
-
11,846
-
-
-
11,846
-
-
11,846
-
19,616
5,032
-
-
24,648
-
-
-
24,648
-
-
-
-
-
-
-
-
-
80,000
416,462
58,000
58,000
57,000
669,462
254,000
254,000
923,462
-
0%
0%
0%
0%
0%
0%
0%
0%
-
No remuneration consultants have been engaged during the year ended 30 June 2018.
Compensation options granted to key management personnel during the year ended 30 June 2018
There were no options granted to key management personnel during the year ended 30 June 2018.
Compensation options granted to key management personnel during the year ended 30 June 2017
There were no options granted to key management personnel during the year ended 30 June 2017.
Options awarded, vested, lapsed during the year
The table below discloses the number of options granted, vested or lapsed during the year. Share options do not carry any voting or
dividend rights and can only be exercised once the vesting conditions have been met, until their expiry date.
2018
Financial
year
awarded
Number of
options
Award date
Fair value
per option
at award
date
Vesting date Exercise
Expiry date
price
Number
lapsed
during the
year
Number
vested
during the
year
Alistair
Stephens
2014
2014
2014
1,000,000
1,000,000
1,000,000
1 July 2013
1 July 2013
1 July 2013
-
-
-
1 July 2014
1 July 2016
1 July 2017
$0.15
$0.20
$0.25
30 June 2018
30 June 2019
30 June 2020
1,000,000
-
-
- 1,000,000
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
10
For personal use only
DIRECTORS’ REPORT
FOR THE YEAR ENDED
30 JUNE 2018
Option Holdings of Directors and Key Management Personnel
The numbers of options over ordinary shares in the company granted under the executive short-term incentive scheme that were
held during the financial year by each director and the key management personnel of the group, including their personally related
parties, are set out below:
2018
Alice Wong
Alistair Stephens
William Hayden
Bo Tan
Alex Ko
Michael Fry
2017
Alice Wong
Alistair Stephens
William Hayden
Bo Tan
Alex Ko
Michael Fry
Balance at
beginning
-
3,000,000
-
-
-
-
3,000,000
Balance at
beginning
-
4,000,000
-
-
-
-
4,000,000
Granted as
Remuneration
Exercised
(Lapsed)
Exercisable Not Exercisable
Balance at 30
June 2018
-
2,000,000
-
-
-
-
-
(1,000,000)
-
-
-
-
-
2,000,000
-
-
-
-
(1,000,000)
2,000,000
2,000,000
-
-
-
-
-
-
-
Granted as
Remuneration
Exercised
(Lapsed)
Exercisable Not Exercisable
Balance at 30
June 2017
-
3,000,000
-
-
-
-
-
(1,000,000)
-
-
-
-
-
2,000,000
-
-
-
-
(1,000,000)
3,000,000
2,000,000
-
1,000,000
-
-
-
-
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Shareholdings of Director and Key Management Personnel in Listed Fully Paid Ordinary Shares
The number of shares in the Company that were held during the financial year by each Director and the key management personnel
of the Group, including their personally related parties, are set out below.
There were no shares granted during the reporting period as compensation.
Balance at
30 June 2018
245,983,611
-
76,923
-
-
-
246,060,534
Balance at
30 June 2017
245,983,611
-
76,923
-
-
-
246,060,534
2018
Alice Wong
Alistair Stephens
William Hayden
Bo Tan
Alex Ko
Michael Fry
2017
Balance at
beginning
245,983,611
-
76,923
-
-
-
246,060,534
Granted as
Remuneration
On Exercise of
Options
Bought & (Sold)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Granted as
Remuneration
On Exercise of
Options
Bought & (Sold)
Alice Wong
Alistair Stephens
William Hayden
Bo Tan
Alex Ko
Michael Fry
-
-
-
-
-
-
-
Voting and comments made at the Company’s 2017 Annual General Meeting (AGM)
-
-
-
-
-
-
-
I.
Balance at
beginning
245,983,611
-
76,923
-
-
-
246,060,534
-
-
-
-
-
-
-
Under the ‘two strikes’ legislation which came into effect on 1 July 2011, if at least 25% of the eligible votes cast on the adoption of
the remuneration report of the Company at two consecutive annual general meetings are against the adoption of the remuneration
report, the Company must put to the shareholders a ‘spill resolution’. If the spill resolution is passed, the Company must hold another
general meeting of the Company’s shareholders (“spill meeting”) within 90 days of passing of the resolution.
At the Company’s 2017 AGM, a resolution to adopt the prior year remuneration report was put to a shareholder vote pursuant to
the requirements of Section 250R92) of the Corporations Act 2001. Key Management Personnel, and their Closely Related Party(s),
were excluded from voting on the resolution. 99.45% of votes were cast against adoption of the resolution reflecting a second
successive strike, and hence, a spill resolution was put to shareholders at the Company’s 2017 AGM. The spill resolution was passed
at the Company’s 2017 AGM resulting in a requirement to call a spill meeting.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
11
For personal use only
DIRECTORS’ REPORT
FOR THE YEAR ENDED
30 JUNE 2018
A spill meeting was held on 17 January 2018 at which all directorships were vacated as required, with the exception of the Managing
Director, and resolutions were put to shareholders appoint persons as directors as per the notice of meeting. The shareholders of
the Company voted to return all of the directors who had been required to vacate office and no new directors were appointed. Given
that the spill meeting resulted in all existing Directors being re-elected and no new Directors nominating, and in the absence of any
feedback being received from shareholders despite request from the Company, the Board has taken no further action.
No comments were made on the remuneration report at the 2017 AGM or at the 2018 Spill Meeting.
J.
Contractual Arrangements
Non-Executive Directors
Non-executive directors’ fees at the date of this report are as follows:
Alice Wong
Chairperson of the Board $80,000 per annum
William Hayden
Non-Executive Director $50,000 per annum
Member of the Nomination and Remuneration Committee $4,000 per annum
Member of the Audit and Risk Committee $4,000 per annum
Bo Tan
Alex Ko
Non-Executive Director $50,000 per annum
Chairperson of the Audit and Risk Committee $8,000 per annum
Non-Executive Director $50,000 per annum
Chairperson of the Nomination and Remuneration Committee $7,000 per annum
Executive Management
Remuneration and other terms of employment for executive management are formalised in services agreements as set out below:
Name
Title
Start date
Current Agreement Commenced
Term of Agreement
Details:
Name
Title
Start date
Current Agreement Commenced
Term of Agreement
Details:
Alistair Stephens
Deputy Chairperson, Managing Director and CEO
1 May 2013
1 August 2013
Agreement continues until terminated in accordance with employment contract
Base salary of $385,000 p.a. exclusive of superannuation
Termination requires 5 weeks’ notice or the payment of 5 weeks ’salary in lieu of such notice.
Eligible to participate in performance-based remuneration.
Michael Fry
Finance Manager and Company Secretary
2 February 2015
1 November 2016
Agreement continues until terminated in accordance with employment contract
Fees of $264,000 p.a.
Termination requires three months’ notice
This is the end of the audited remuneration report.
MEETINGS OF DIRECTORS
Directors
Alice Wong
Alistair Stephens
William Hayden
Bo Tan
Alex Ko
Directors Meetings
Audit and Risk Committee
Meetings
Nomination and Remuneration
Committee Meetings
Number
Eligible to
Attend
3
3
3
3
3
Number
Attended
3
3
3
2
2
Number
Eligible to
Attend
-
-
1
1
1
Number
Attended
-
-
1
1
1
Number
Eligible to
Attend
-
-
-
-
-
Number
Attended
-
-
-
-
-
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
12
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DIRECTORS’ REPORT
FOR THE YEAR ENDED
30 JUNE 2018
INDEMNIFYING OFFICERS OR AUDITOR
The Group has agreed to indemnify all the directors and executive officers for any costs or expenses that may be incurred in defending
civil and criminal proceedings that may be brought against them in their capacity as directors and officers for which they may be held
personally liable.
The Group agreed to pay an annual insurance premium of $26,000 in respect of directors’ and officers’ liability and legal expenses,
for directors, officers and employees of the Company.
To the extent permitted by law, the Group has agreed to indemnify its auditors, Ernst & Young as part of the terms of its engagement
letter against any claims by third parties arising from the audit (for an unspecified amount). No payments were made during the year
ended 30 June 2018 or subsequently.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is a party, for the purposes of taking responsibility on behalf of
the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
AUDITOR
Non-Audit Services
No non-audit services were provided by Ernst & Young during the year or the prior year.
Details of the amounts paid or payable to the Ernst & Young for the provision of audit services are set out in note 20 to the financial
Statements.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporations (Rounding in financial/Directors’ report) Instrument 2016/191.
Therefore, amounts in the directors’ report have been rounded off to the nearest thousand dollars, or in certain cases, to the
nearest dollar.
AUDITORS INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on page 14.
Signed in accordance with a resolution of the Board of Directors.
ALISTAIR STEPHENS
MANAGING DIRECTOR
Dated this 28th day of September 2018
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
13
For personal use only
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s Independence Declaration to the Directors of Globe Metals &
Mining Limited
As lead auditor for the audit of Globe Metals & Mining Limited for the financial year ended 30 June 2018, I
declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Globe Metals & Mining Limited and the entities it controlled during the
financial year.
Ernst & Young
T G Dachs
Partner
28 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TD:KG:GLOBE:008
For personal use only
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED
30 JUNE 2018
Interest income
Foreign exchange gain / (loss)
Other Income
Employee benefits expenses
Compliance and regulatory expenses
Occupancy expenses
Directors fees
Depreciation expense
Exploration expenditure written off
Business Development
Travel expenses
Administrative expenses
Other expenses
Loss before income tax
Income tax expense
Loss for the period
Other comprehensive loss after tax
Items that may be reclassified to profit or loss
Changes in the fair value of available-for-sale financial assets
Other comprehensive loss for the period, net of tax
Notes
5
12
30 June
2018
$’000
239
(30)
-
(642)
(103)
(57)
(262)
(17)
-
-
(35)
(351)
(96)
(1,354)
-
30 June
2017
$’000
195
6
2
(690)
(159)
(75)
(263)
(90)
(5)
(17)
(21)
(408)
(126)
(1,651)
-
(1,354)
(1,651)
22
22
-
-
Total comprehensive loss for the period
(1,332)
(1,651)
Loss per share attributable to ordinary equity holders of the
company
Basic and diluted loss per share
26
Cents
(0.29)
Cents
(0.35)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
accompanying notes.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
15
For personal use only
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
30 JUNE 2018
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration and evaluation expenditure
Available-for-sale financial assets
Plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Financial Assets Reserve
Accumulated losses
TOTAL EQUITY
Note
30 June 2018
$’000
30 June 2017
$’000
8
9
10
12
11
13
14
15
16
9,339
69
119
9,527
27,660
56
188
27,904
37,431
245
638
883
883
11,347
49
126
11,522
27,103
34
203
27,340
38,862
320
590
910
910
36,548
37,952
80,753
22
(44,227)
80,825
-
(42,873)
36,548
37,952
The above consolidated statement of financial position should be read in conjunction with accompanying notes.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
16
For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
30 JUNE 2018
Consolidated
Balance at 1 July 2016
Loss for period
Other comprehensive loss for the period
Total comprehensive loss for the period
Balance at 30 June 2017
Loss for period
Other comprehensive income for the period
Total comprehensive loss for the period
Share Buy-back
Balance at 30 June 2018
Contributed
equity
$’000
Accumulated
losses
$’000
Financial
Assets Reserve
$’000
Total
$’000
80,825
-
-
-
80,825
-
-
-
(72)
80,753
(41,222)
(1,651)
-
(1,651)
(42,873)
(1,354)
-
(1,354)
-
(44,227)
-
-
-
-
-
-
22
22
-
22
39,603
(1,651)
-
(1,651)
37,952
(1,354)
22
(1,322)
(72)
36,548
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
17
For personal use only
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED
30 JUNE 2018
Note
30 June 2018
$’000
30 June 2017
$’000
Cash Flows from Operating Activities
Payments to suppliers and employees (inclusive of value added taxes)
Payments for business development activities
Interest received
Net cash used in operating activities
25(a)
Cash Flows From Investing Activities
Sale of plant & equipment
Purchase of plant & equipment
Payments for exploration and evaluation
Net cash used in investing activities
Cash Flows From Financing activities
Payments for share buy-back
Net cash used in financing activities
Net decrease in cash held
Cash and cash equivalents at beginning of financial year
Effects of exchange rate changes on cash
Cash and cash equivalents at end of financial year
8
(1,598)
-
239
(1,359)
-
(2)
(545)
(547)
(72)
(72)
(1,978)
11,347
(30)
9,339
(1,921)
(17)
183
(1,755)
26
(16)
(159)
(149)
-
-
(1,904)
13,245
6
11,347
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
18
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial report of Globe Metals & Mining Limited for the year ended 30 June 2018 was authorised for issue in accordance with
a resolution of directors on 28 September 2018.
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. This financial report includes the consolidated financial
statements and notes of Globe Metals & Mining Limited (‘Globe’ or ‘the Company’) and its controlled entities (‘Consolidated Entity’
or ‘Group’). Globe is a for-profit entity.
a.
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards,
Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB)
and the Corporations Act 2001, as appropriate for profit-oriented entities.
(i) Compliance with IFRS
The financial report of Globe Metals & Mining Limited and controlled entities complies with Australian Accounting Standards,
which include Australian equivalents to International Financial Reporting Standards (‘AIFRS’). Compliance with AIFRS ensures
that the financial report, comprising the financial statements and notes thereto, also complies with International Financial
Reporting Standards (‘IFRS’) as issued by International Accounting Standards Board (IASB).
(ii) New and amended standards adopted by the group
None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning
1 July 2017 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future
periods.
(iii) Historical Cost Convention
The financial report has been prepared under the historical cost convention, with the exception of available-for-sale financial
assets which is measured at fair value.
(iv) Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in
note 3.
b.
Principles of Consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 30 June 2017. Control
is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has:
► Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
► Exposure, or rights, to variable returns from its involvement with the investee
► The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group
has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in
assessing whether it has power over an investee, including:
► The contractual arrangement(s) with the other vote holders of the investee
► Rights arising from other contractual arrangements
► The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and
ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed
of during the year are included in the consolidated financial statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
19
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling
interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group
assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated
In full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest
and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised
at fair value.
c.
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the board of directors.
d.
Foreign Currency Translation
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in
which that entity operates, currently being the Australian Dollar for each of the entities. The consolidated financial statements are
presented in Australian dollars which is the Company’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. Foreign currency monetary items are translated at the year-end exchange rate. 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 the fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit and loss for the period, except where
deferred in equity as a qualifying cash flow or net investment hedge.
e.
Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
reliably measured.
Interest income is recognised as the interest accrues at an effective interest rate.
f.
Reserves
The AFS reserve represents the gains and losses of available-for-sale financial assets.
g.
Income Tax
Current Tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax
loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date.
Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred Tax
Deferred tax is accounted for using the liability method in respect of temporary differences arising from differences between the
carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the
extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused
tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences
giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which
affects neither taxable income nor accounting profit. Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the manner in which the Consolidated Entity expects, at the reporting date,
to recover or settle the carrying amount of its assets and liabilities.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
20
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Current and Deferred Taxation
Current and deferred tax is recognised as an expense or income in the Statement of Comprehensive Income, except when it relates
to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises
from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or
excess.
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 Company will derive sufficient future assessable income
to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
h.
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal
ownership, are transferred to entities in the Group are classified as finance leases.
Finance leases are capitalised, recording an asset and a liability equal to the present value of the minimum lease payments, including
any guaranteed residual values.
Leased assets are depreciated on a diminishing value basis over their estimated useful lives where it is likely that the Group will
obtain ownership of the asset or over the term of the lease.
Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses
in the periods in which they are incurred.
Impairment
Financial Assets
i.
(i)
The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial
assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is
objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss
event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial
assets that can be reliably estimated. In the case of equity investments classified as available-for-sale, a significant or prolonged
decline in the fair value of the security below its cost is considered an indicator that the assets are impaired.
For loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s
original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss.
If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss – measured as the difference
between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in
profit or loss – is removed from equity and recognised in profit or loss.
Exploration and Evaluation Assets
(ii)
Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exists:
-
the term of the exploration licence in the specific area of interest has expired during the reporting period or will expire in the
near future, and is not expected to be renewed;
substantive expenditure on further exploration for and evaluation of mineral resources in the specific area are not budgeted nor
planned;
-
- exploration for and evaluation of mineral resources in the specific area of interest have not led to the discovery of commercially
viable quantities of mineral resources and the decision was made to discontinue such activities in the specific area of interest;
or
sufficient data exists to indicate that, although a development in the specific area of interest is likely to proceed, the carrying
amount of the exploration and evaluation assets is unlikely to be recovered in full from successful development or by sale.
-
Where a potential impairment is indicated, an assessment is performed for each cash generating unit (“CGU”) which is no larger
than the area of interest. An impairment loss is recognised if the carrying amount of the CGU exceeds its estimated recoverable
amount.
Non-financial Assets Other Than Exploration and Evaluation Assets
(iii)
The carrying amounts of the Consolidated Entity’s non-financial assets, are reviewed at each reporting date to determine whether
there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. The
recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
21
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
j.
Cash and Cash Equivalents
Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand and short-term deposits with
an original maturity of three months or less.
For the purposes of the Statement Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net
of outstanding bank overdrafts.
k.
Term Deposits
Term deposits in the statement of financial position comprise of term deposits held by the bank which have a maturity of between
three and six months.
l.
Exploration and Evaluation Assets
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and evaluation assets on an
area of interest basis. Costs incurred before the Consolidated Entity has obtained the legal rights to explore an area are recognised
in the statement of comprehensive income.
Exploration and evaluation assets are only recognised if the rights of interest are current and either:
-
-
the expenditures are expected to be recouped through successful development and exploitation of the area of interest; or
activities in the area of interest have not, at the reporting 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 in relation to, the area
of interest are continuing.
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.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable,
exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from
exploration and evaluation expenditure to mining property and development assets within property, plant and equipment and
depreciated over the life of the mine.
m.
Investments and Other Financial Assets
Classification
The group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and
receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on the purpose for which
the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case
of assets classified as held-to-maturity, re-evaluates this designation at the end of each reporting date.
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period
which are classified as non-current assets. Loans and receivables are included in trade and other receivables (note 9) in the balance
sheet.
(ii) Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated
in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures
or management intends to dispose of the investment within 12 months of the end of the reporting period. Investments are
designated as available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends
to hold them for the medium to long term.
Financial assets – reclassification
The group may choose to reclassify a non-derivative trading financial asset out of the held for trading category if the financial asset
is no longer held for the purpose of selling it in the near term. Financial assets other than loans and receivables are permitted to be
reclassified out of the held for trading category only in rare circumstances arising from a single event that is unusual and highly
unlikely to recur in the near term. In addition, the group may choose to reclassify financial assets that would meet the definition of
loans and receivables out of the held for trading or available-for-sale categories if the group has the intention and ability to hold
these financial assets for the foreseeable future or until maturity at the date of reclassification.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
22
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortised cost as
applicable, and no reversals of fair value gains or losses recorded before reclassification date are subsequently made. Effective
interest rates for financial assets reclassified to loans and receivables and held-to-maturity categories are determined at the
reclassification date. Further increases in estimates of cash flows adjust effective interest rates prospectively.
Recognition and de-recognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the group commits to purchase
or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or
have been transferred and the group has transferred substantially all the risks and rewards of ownership. When securities classified
as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to
profit or loss as gains and losses from investment securities.
Measurement
At initial recognition, the group 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 that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at fair value through profit or loss are expensed in profit or loss. Loans and receivables and held-to-maturity
investments are subsequently carried at amortised cost using the effective interest method.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains
or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in
profit or loss within other income or other expenses in the period in which they arise. Dividend income from financial assets at fair
value through profit or loss is recognised in profit or loss as part of revenue from continuing operations when the group’s right to
receive payments is established. Interest income from these financial assets is included in the net gains/(losses).
Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed
between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount
of the security. The translation differences related to changes in the amortised cost are recognised in profit or loss, and other
changes in carrying amount are recognised in other comprehensive income. Changes in the fair value of other monetary and non-
monetary securities classified as available-for-sale are recognised in other comprehensive income.
Details on how the fair value of financial instruments is determined are disclosed in note 2.
n.
Plant and Equipment
Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.
The depreciable amount of all Motor vehicle and Leasehold assets are depreciated on a straight-line basis over their useful lives.
Plant and equipment, Furniture and fittings and Software assets are depreciated using the diminishing value method. The
depreciation rates used for each class of depreciable assets vary from 3% to 40% with the average rate being 30%.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of
comprehensive income.
o.
Trade and Other Receivables
Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less an allowance for any uncollectible amounts.
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when
identified. An allowance for impairment is raised when there is objective evidence that the Group will not be able to collect the
debt.
p.
Trade and Other Payables
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of consideration to be paid in the future
for goods and services received, whether or not billed to the Consolidated Entity.
Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense
on an accrual basis.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
23
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
q.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) where, as a result of a past event, it is
probable that an outlay 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.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement
is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is
presented in the statement of comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the
liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
r.
Employee Benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled
within 12 months after the end of the period in which the employees render the related service are recognised in respect of
employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities
are settled. The liability for annual leave is recognised in the provision for employee benefits. All other short-term employee benefit
obligations are presented as payables.
Other long-term employee benefit obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the period
in which the employees render the related service is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period
using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period
on high quality corporate bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer
settlement for at least twelve months after the reporting date, regardless of when the actual settlement is expected to occur.
Retirement benefit obligations
All employees of the group are entitled to benefits from the group’s superannuation plan on retirement, disability or death or can
direct the group to make contributions to a defined contribution plan of their choice.
Contributions to superannuation funds are recognised as an expense as they become payable. Prepaid contributions are recognised
as an asset to the extent that a cash refund or a reduction in the future payments is available.
Equity Settled Compensation
The Group provides benefits to employees (including directors) of the Group in the form of share-based payment transactions,
whereby employees render services in exchange for shares or rights over shares (“equity-settled transaction”).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they
are granted. The fair value is determined by a valuation by using a Black-Scholes option pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the
performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award
(“vesting date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to
which the vesting period has expired and (ii) the number of awards that, in the opinion of the directors of the Company, will
ultimately vest. This opinion is formed based on the best available information at reporting date. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value
at grant date.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as
measured at the date of modification.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
24
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated
as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the
original award, as described in the previous paragraph.
s.
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.
Where any group company purchases the company’s equity instruments, for example as the result of a share buy-back or a share-
based payment plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is
deducted from equity attributable to the owners as treasury shares until the shares are cancelled or reissued.
Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental
transaction costs and the related income tax effects, is included in equity attributable to the owners.
t.
Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing:
-
- by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
the profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares
ordinary shares issued during the year and excluding treasury shares
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
-
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
- weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive
potential ordinary shares.
u.
Goods and Services Tax and other Value Added Taxes
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST) and other Value Added Taxes
(VAT), except where the amount of GST or VAT incurred is not recoverable from the applicable taxation authority. In these
circumstances, the GST and VAT are recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST and VAT.
The net amount of GST or VAT recoverable from, or payable to, the taxation authority is included as a current asset or liability in the
statement of financial position.
Cash flows are included in the Statement of Cash Flow on a gross basis. The GST and VAT components of cash flows arising from
investing and financing activities which are recoverable from, or payable to, the taxation authorities are classified as operating cash
flows.
v.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in financial/Directors’ report) Instrument 2016/191.
Therefore, amounts in the directors’ report have been rounded off to the nearest thousand dollars, or in certain cases, to the
nearest dollar.
w.
Parent entity financial information
The financial information for the parent entity, Globe Metals and Mining Limited, disclosed in note 28 has been prepared on the
same basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
(i)
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of Globe
Metals and Mining Limited.
x.
New accounting standards and interpretations
The Group applied all new and amended Australian Accounting Standards and Interpretations, which are effective for annual periods
beginning on 1 July 2017. Although these new standards and amendments applied for the first time in 2018, they did not have a
material impact on the annual consolidated financial statements of the Group.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
25
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
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 effective and have
not been adopted by the Group for the annual reporting period ended 30 June 2018 are outlined in the table below. The Company
has decided not to early adopt any of the new and amended pronouncement.
Application
date of
standard
Application
date for the
Group
1 January
2018
1 July 2018
Impact on the
Group’s
Financial
Statements
A review has
been
undertaken by
management.
The standard is
not expected to
have any
material impact
on the group.
Reference
Title
Summary
AASB 9
Financial
Instruments
AASB 9 (December 2014) is a new standard which
replaces AASB 139. This new version supersedes
AASB 9 issued in December 2009 (as amended)
and AASB 9 (issued in December 2010) and
includes a model for classification and
measurement, a single, forward-looking
‘expected loss’ impairment model and a
substantially-reformed approach to hedge
accounting.
The Standard is available for early adoption. The
own credit changes can be early adopted in
isolation without otherwise changing the
accounting for financial instruments.
Classification and measurement
AASB 9 includes requirements for a simpler
approach for classification and measurement of
financial assets compared with the requirements
of AASB 139.
The main changes are described below.
Financial assets
a.
Financial assets that are debt instruments will
be classified based on (1) the objective of
the entity's business model for managing the
financial assets; (2) the characteristics of the
contractual cash flows.
b. Allows an irrevocable election on initial
recognition to present gains and losses on
investments in equity instruments that are not
held for trading in other comprehensive
income. Dividends in respect of these
investments that are a return on investment
can be recognised in profit or loss and there
is no impairment or recycling on disposal of
the instrument.
Financial assets can be designated and
measured at fair value through profit or loss
at initial recognition if doing so eliminates or
significantly reduces a measurement or
recognition inconsistency that would arise
from measuring assets or liabilities, or
recognising the gains and losses on them, on
different bases.
c.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
26
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
Reference
Title
Summary
Application
date of
standard
Application
date for the
Group
Impact on the
Group’s Financial
Statements
Financial liabilities
Changes introduced by AASB 9 in respect of
financial liabilities are limited to the measurement of
liabilities designated at fair value through profit or
loss (FVPL) using the fair value option.
Where the fair value option is used for financial
liabilities, the change in fair value is to be
accounted for as follows:
►
►
The change attributable to changes in
credit risk are presented in other
comprehensive income (OCI)
The remaining change is presented in
profit or loss
AASB 9 also removes the volatility in profit or loss
that was caused by changes in the credit risk of
liabilities elected to be measured at fair value. This
change in accounting means that gains or losses
attributable to changes in the entity’s own credit
risk would be recognised in OCI. These amounts
recognised in OCI are not recycled to profit or loss if
the liability is ever repurchased at a discount.
Impairment
The final version of AASB 9 introduces a new
expected-loss impairment model that will require
more timely recognition of expected credit losses.
Specifically, the new Standard requires entities to
account for expected credit losses from when
financial instruments are first recognised and to
recognise full lifetime expected losses on a more
timely basis.
Hedge accounting
Amendments to AASB 9 (December 2009 & 2010
editions and AASB 2013-9) issued in December 2013
included the new hedge accounting requirements,
including changes to hedge effectiveness testing,
treatment of hedging costs, risk components that
can be hedged and disclosures.
Consequential amendments were also made to
other standards as a result of AASB 9, introduced by
AASB 2009-11 and superseded by AASB 2010-7,
AASB 2010-10 and AASB 2014-1 – Part E.
AASB 2014-7 incorporates the consequential
amendments arising from the issuance of AASB 9 in
Dec 2014.
AASB 2014-8 limits the application of the existing
versions of AASB 9 (AASB 9 (December 2009) and
AASB 9 (December 2010)) from 1 February 2015 and
applies to annual reporting periods beginning on
after 1 January 2015.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
27
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
Reference
Title
Summary
Application
date of
standard
Application
date for the
Group
Impact on the
Group’s Financial
Statements
AASB 15
Revenue from
Contracts with
Customers
AASB 15 Revenue from Contracts with Customers
replaces the existing revenue recognition standards
AASB 111 Construction Contracts, AASB 118
Revenue and related Interpretations (Interpretation
13 Customer Loyalty Programmes, Interpretation 15
Agreements for the Construction of Real Estate,
Interpretation 18 Transfers of Assets from Customers,
Interpretation 131 Revenue—Barter Transactions
Involving Advertising Services and
Interpretation 1042 Subscriber Acquisition Costs in
the Telecommunications Industry).
AASB 15 incorporates the requirements of IFRS 15
Revenue from Contracts with Customers issued by
the International Accounting Standards Board
(IASB) and developed jointly with the US Financial
Accounting Standards Board (FASB).
1 January
2018
1 July 2018
Based on Group’s
current
operations, this is
not expected to
have an impact
on the Group as
the Group does
not earn any
revenue from
customer
contracts
Step 2: Identify the performance
Step 1: Identify the contract(s) with a
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to
AASB 15 specifies the accounting treatment for
revenue arising from contracts with customers
(except for contracts within the scope of other
accounting standards such as leases or financial
instruments). The core principle of AASB 15 is that an
entity recognises revenue to depict the transfer of
promised goods or services to customers in an
amount that reflects the consideration to which the
entity expects to be entitled in exchange for those
goods or services. An entity recognises revenue in
accordance with that core principle by applying
the following steps:
(a)
customer
(b)
obligations in the contract
(c)
(d)
the performance obligations in the contract
(e)
the entity satisfies a performance obligation
AASB 2015-8 amended the AASB 15 effective date
so it is now effective for annual reporting periods
commencing on or after 1 January 2018. Early
application is permitted.
AASB 2014-5 incorporates the consequential
amendments to a number Australian Accounting
Standards (including Interpretations) arising from
the issuance of AASB 15.
AASB 2016-3 Amendments to Australian Accounting
Standards – Clarifications to AASB 15 amends AASB
15 to clarify the requirements on identifying
performance obligations, principal versus agent
considerations and the timing of recognising
revenue from granting a licence and provides
further practical expedients on transition to AASB
15.
Step 5: Recognise revenue when (or as)
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
28
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
Reference
Title
Summary
Application
date of
standard
Application
date for the
Group
Impact on the
Group’s Financial
Statements
AASB 16
Leases
The key features of AASB 16 are as follows:
1 January
2019
1 July 2019
Lessee accounting
Based on initial
assessment, the
group will be
required to
recognize
additional right of
use assets and
corresponding
liabilities in the
statement of
financial position
for the Group’s
current operating
leases. In
addition,
operating lease
expense will be
replaced with
amortization of
the right of use
asset and interest
expense. This
impact is
however not
expected to be
material.
1 January
2019
1 July 2019
The Group is in
the process of
assessing the
impact of this
interpretation.
• Lessees are required to recognise assets
and liabilities for all leases with a term of
more than 12 months, unless the
underlying asset is of low value.
• A lessee measures right-of-use assets
similarly to other non-financial assets and
lease liabilities similarly to other financial
liabilities.
• Assets and liabilities arising from a lease
are initially measured on a present value
basis. The measurement includes non-
cancellable lease payments (including
inflation-linked payments), and also
includes payments to be made in
optional periods if the lessee is
reasonably certain to exercise an option
to extend the lease, or not to exercise an
option to terminate the lease.
• AASB 16 contains disclosure requirements
for lessees.
Lessor accounting
• AASB 16 substantially carries forward the
lessor accounting requirements in AASB
117. Accordingly, a lessor continues to
classify its leases as operating leases or
finance leases, and to account for those
two types of leases differently.
• AASB 16 also requires enhanced
disclosures to be provided by lessors that
will improve information disclosed about
a lessor’s risk exposure, particularly to
residual value risk.
AASB 16 supersedes:
(a) AASB 117 Leases
(b) Interpretation 4 Determining whether an
Arrangement contains a Lease
(c) SIC-15 Operating Leases—Incentives
(d) SIC-27 Evaluating the Substance of Transactions
Involving the Legal Form of a Lease
The new standard will be effective for annual
periods beginning on or after 1 January 2019. Early
application is permitted, provided the new revenue
standard, AASB 15 Revenue from Contracts with
Customers, has been applied, or is applied at the
same date as AASB 16.
The Interpretation clarifies the application of the
recognition and
measurement criteria in AASB 112 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.
Uncertainty
over Income
Tax
Treatments
AASB
Interpretatio
n 23 and
relevant
amending
standards
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
29
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
2. FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise of cash. The Group also has other financial instruments such as trade and
other debtors and creditors, which arise directly from its operations, and available for sale financial assets.
The main risks arising from the Group’s financial instruments and the Group’s policies for managing these risks are summarised
below:
Interest Rate Risk
The Group does not have short or long-term cash deposits or debt, and therefore this risk is minimal. An analysis by maturities is
provided in (i) below.
Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group 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 risk on financial assets of the Group is reflected in those assets' carrying amount net of any provisions for impairment.
The Group currently holds majority of its cash and cash equivalents with National Australia Bank with a credit rating of Aa3. The
Group believes the credit risk exposure is negligible given the strong credit rating of the counterparty.
Foreign currency risk
The Group is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and services in currencies
other than the Group’s functional currency. The majority of expenses incurred are in AUD and therefore risk is not significant.
Monetary assets and liabilities of the Group denominated in foreign currencies are not material to the Group.
Concentration risk
The parent entity is exposed to concentration risk due to 94% of its cash and cash equivalents being held within the one financial
institution – National Australia Bank. The Group manages this risk through monitoring of the credit rating of the institution.
Liquidity risk
The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate short-term cash facilities are
maintained. At the end of the year the group held deposits at call of $9,338,603 (2017: $11,347,390) which are expected to readily
generate cash inflows for managing liquidity risk.
Interest rate risk exposures
(i)
The Group’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and
financial liabilities is set out in the following table:
2018
Financial Assets
Cash at bank
Trade & other receivables
Available for sale financial assets
Other assets
Weighted Average Interest Rate
Financial Liabilities
Trade & other creditors
Weighted Average Interest Rate
Net financial assets / (liabilities)
Floating
interest
rate
$’000
9,339
-
-
-
9,339
2.61%
-
-
-
-
9,339
1 year or
less
Fixed interest maturing in
Over 1
year less
than 5
$’000
More
than 5
years
$’000
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Non-Interest
bearing
Total
$’000
$’000
-
-
-
-
-
-
-
-
-
-
-
69
56
56
172
-
(245)
(245)
9,339
69
56
56
9,511
-
(245)
(245)
(73)
9,266
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
30
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
2017
Financial Assets
Cash at bank
Trade & other receivables
Available for sale financial assets
Other assets
Weighted Average Interest Rate
Financial Liabilities
Trade & other creditors
Weighted Average Interest Rate
Net financial assets / (liabilities)
Sensitivity analysis
Floating
interest
rate
$’000
11,347
-
-
-
11,347
2.25%
-
-
-
-
11,346
1 year or
less
Fixed interest maturing in
Over 1
year less
than 5
$’000
More
than 5
years
$’000
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Non-Interest
bearing
Total
$’000
$’000
-
-
-
-
-
-
-
-
-
-
-
49
34
34
118
-
(320)
(320)
-
(202)
11,347
49
34
34
11,464
-
(320)
(320)
-
11,144
The Group has performed a sensitivity analysis in relation to interest income and movements in interest rates on financial assets
and liabilities. The analysis highlights the effect on the current year’s pre-tax loss which would have resulted from movement in
interest rates with all other variables remaining constant.
Change in loss
- increase in interest rate by 0.5%
- decrease in interest rate by 0.5%
Consolidated
2018
$’000
(47)
47
2017
$’000
(35)
35
Fair value hierarchy
All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, based on
the lowest level input that is significant to the fair value measurement as a whole, as follows:
➢
➢
➢
Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurements is
unobservable
For all asset and liabilities that are recognised at fair value on recurring basis, the group determines whether transfers have
occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each reporting period.
The available-for-sale financial assets are level one in the fair value hierarchy.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
31
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires management to make judgements and estimates relating to the carrying
amounts of certain assets and liabilities. Actual results may differ from the estimates made. Estimates and assumptions are
reviewed on an ongoing basis.
The key estimates and assumptions tat have a significant risk of causing a material adjustment to the carrying amounts of certain
assets and liabilities within the next accounting period are:
Exploration and evaluation expenditure
(i)
The Group’s accounting policy for exploration and evaluation expenditure results in expenditure being capitalised for an area of
interest where it is considered likely to be recoverable by future exploitation or sale or where the activities have not reached a
stage which permits a reasonable assessment of the existence of reserves. This policy requires management to make certain
estimates as to future events and circumstances, in particular whether an economically viable extraction operation can be
established. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised
the expenditure under the policy, a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised
amount will be written off to profit and loss. Refer to note 12 for details of the judgement applied in the current period in relation
to exploration and evaluation expenditure.
Income taxes
(ii)
Judgement is required in assessing whether deferred tax assets and liabilities are recognised on the statement of financial
position. Deferred tax assets, including those arising from temporary differences, are recognised only when it is considered more
likely than not that they will be recovered, which is dependent on the generation of future assessable income of a nature and of
an amount sufficient to enable the benefits to be utilised. Refer to note 7 for details of the judgement applied in the current
period in relation to income taxes.
Tax provisions
(iii)
Judgement is required in calculating tax provisions relating to potential tax obligations in foreign jurisdictions where the
legislation and case law is not established. Tax provisions are recognised when it is considered more likely than not that an
amount will be payable. Refer to note 14 for details of the judgement applied in the current period in relation to tax provisions.
4. 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 to make decisions about resources to be allocated to the segments and assess their performance.
The consolidated entity has two reportable segments which are based on the stage of development of its projects, which are
broadly in either of two groups: those in the exploration phase or those in the evaluation stage. Unallocated results, assets and
liabilities represent corporate amounts that are not core to the reportable segments.
Prior period information may be restated to reflect the current composition of reportable segments.
Activity by segment
Africa-Kanyika
The Africa-Kanyika segment includes the Kanyika Niobium project in Malawi which is host to a 2012 JORC compliant Mineral
Resource Estimate of 68.3Mt @ 2,830ppm Nb2O5 (niobium pentoxide) and 135ppm Ta5O5 (tantalum pentoxide) at a 1,500 ppm
Nb2O5 cut-off.
The Kanyika Niobium project is currently at the evaluation stage.
Africa-Exploration
The Africa-Exploration segment includes the following projects, all of which are in the exploration stage:
Chiziro Graphite project in Malawi
-
- Machinga Niobium-Tantalum project in Malawi
-
Salambidwe REE project in Malawi
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
32
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
4. SEGMENT INFORMATION (CONTINUED)
2018
(i) Segment performance
year ended 30 June 2018
Revenue
Segment revenue
Segment loss
Reconciliation of segment result to group net loss before
tax
Other income
Other corporate expenses
Net loss before tax from continuing operations
(ii) Segment assets
as at 30 June 2018
Exploration expenditure
Plant and equipment
Other assets
Total Segment Assets
Reconciliation of segment assets to group assets
Other corporate assets
Total group assets
(iii) Segment liabilities
as at 30 June 2018
Trade Creditors and Accruals
Provisions
Total Segment liabilities
Reconciliation of segment liabilities to group liabilities
Trade Creditors and Accruals
Provisions
Total group liabilities
Africa-Kanyika
Africa-
Exploration
$’000
$’000
Total
$’000
-
-
-
-
-
-
(1,015)
(705)
(1,720)
27,660
25
103
27,788
-
136
33
169
44
413
457
81
140
221
239
127
(1,354)
27,660
161
136
27,957
9,474
37,431
125
553
678
120
85
883
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
33
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
4. SEGMENT INFORMATION (CONTINUED)
2017
(i) Segment performance
year ended 30 June 2017
Revenue
Segment revenue
Segment loss
Reconciliation of segment result to group net loss before
tax
Other income
Other corporate expenses
Net loss before tax from continuing operations
(ii) Segment assets
as at 30 June 2017
Exploration expenditure
Plant and equipment
Other assets
Total Segment Assets
Reconciliation of segment assets to group assets
Other corporate assets
Total group assets
(iii) Segment liabilities
as at 30 June 2017
Trade Creditors and Accruals
Provisions
Total Segment liabilities
Reconciliation of segment liabilities to group liabilities
Trade Creditors and Accruals
Provisions
Total group liabilities
Africa-Kanyika
Africa-
Exploration
$’000
$’000
Total
$’000
-
-
-
-
-
-
(846)
(601)
(1,447)
27,103
29
98
27,230
-
137
15
152
48
377
425
116
136
252
195
(399)
(1,651)
27,103
166
113
27,382
11,480
38,862
164
513
677
156
77
910
The Group operated in several geographical segments, being Australia and Africa, and in one industry, minerals mining and
exploration.
Geographical Information
Total non-current assets of:
Australia
Africa
Total
Consolidated
2018
$’000
83
27,821
27,904
2017
$’000
71
27,269
27,340
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
34
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
5. INCOME
Interest income
- Interest received and receivable
6. EXPENSES
Loss from operations before income tax has been determined after the following
specific expenses/(income):
Write-off of exploration assets(a)
Operating lease expenses
Superannuation expenses
Depreciation
Foreign exchange loss
Redundancy costs/termination benefits
Finance Costs
- Bank Charges
(a)Refer to note 12 for details
Consolidated
2017
$’000
195
195
5
59
55
90
(6)
35
4
4
2018
$’000
239
239
-
47
44
17
30
-
4
4
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
35
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
7. INCOME TAX EXPENSE
a.
b.
c.
d.
The components of tax expense comprise:
Current tax
Deferred tax
Deferred income tax/(revenue)
Deferred income tax/(revenue) included in tax expense comprises:
Increase in deferred tax assets
Increase in deferred tax liabilities
Consolidated
2018
$’000
2017
$’000
-
-
-
-
-
-
-
-
The prima facie tax benefit on loss from ordinary activities before income
tax is reconciled to the income tax as follows:
Loss before income tax
1,354
1,651
Prima facie tax benefit on loss from
ordinary activities before income tax at 27.5%
(2017: 27.5%)
Share based payments
Adjust for tax effect of:
-
- Non-deductible tenement expenditure
- Other non-deductible expenses
-
Capital raising costs
- Deferred tax assets not recognised
373
-
-
-
373
(373)
-
454
-
-
(31)
420
(420)
-
The tax benefits of the above deferred tax assets will only be obtained if:
(a)
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits to
be utilised;
the Group continues to comply with the conditions for deductibility imposed by law; and
no changes in income tax legislation adversely affect the Group in utilising the benefits.
(b)
(c)
Deferred tax assets /(liabilities) comprise:
Interest receivable
Plant & Equipment
Trade & other payables
Provision
Other assets
Tax losses available for offset against future taxable income
Net deferred tax assets
Deferred tax assets not recognised
-
3
178
7,923
8,104
(8,104)
-
65
177
7,055
7,297
(7,297)
-
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
36
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
8. CASH AND CASH EQUIVALENTS AND TERM DEPOSITS
Cash at bank
Consolidated
2018
$’000
9,339
9,339
2017
$’000
11,347
11,347
The Group’s exposure to interest rate risk and credit risk is discussed in note 2. The maximum exposure to credit risk at the end
of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above.
9. TRADE AND OTHER RECEIVABLES
Current
GST Receivable
VAT Receivable
Other Tax Receivable
Consolidated
2018
$’000
15
35
19
69
2017
$’000
14
16
19
49
Due to the short-term nature of the current receivables, their carrying amount is assumed to approximate their fair value. The
group’s impairment and other accounting policies for trade and other receivables are outlined in note 1(h).
Information about the group’s exposure to credit risk, foreign exchange and interest rate risk is provided in note 2. The maximum
exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial asset mentioned above.
10. OTHER ASSETS
Current
Prepayments
Accrued Interest
Security Deposits
Other
Consolidated
2018
$’000
63
12
35
9
119
2017
$’000
71
11
34
10
126
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
37
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
11. PLANT AND EQUIPMENT
Year ended 30 June 2018
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2018
Cost
Accumulated depreciation
Net book value
Year ended 30 June 2017
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2017
Cost
Accumulated depreciation
Net book value
Plant &
Equipment
$’000
Other
$’000
132
2
-
(12)
122
664
(542)
122
197
15
(24)
(56)
132
662
(530)
132
71
-
-
(5)
66
149
(83)
66
104
1
-
(34)
71
149
(78)
71
Total
$’000
203
2
-
(17)
188
813
(625)
188
301
16
(24)
(90)
203
811
(608)
203
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
38
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
12. EXPLORATION AND EVALUATION EXPENDITURE
Non-Current
Costs carried forward in respect of areas of interest in:
Exploration and evaluation phases – at cost
Exploration and evaluation expenditure total
comprising:
Kanyika Niobium Project
Total exploration and evaluation phases – at cost
Opening balance
Exploration expenditure capitalised during the year
Write-off of Chiziro project
At reporting date
Consolidated
2018
$’000
2017
$’000
27,660
27,660
27,660
27,660
27,103
557
-
27,660
27,103
27,103
27,103
27,103
26,918
190
(5)
27,103
Kanyika Niobium Project
The Directors have considered the requirements of AASB 6: Exploration for and Evaluation of Mineral Resources, and have reviewed
the carrying value of exploration and evaluation expenditures that relate to the Kanyika Niobium Project. Based on the review, the
directors consider the carrying value of the Kanyika Niobium Project is supported by the anticipated future value. Furthermore, there
are no indications that the carrying value of the Kanyika Niobium Project was impaired at 30 June 2018.
Chiziro Graphite Project
The carrying value of the Chiziro Graphite Project was written down to nil at 30 June 2017 following an assessment of the
recoverable amount of the Chiziro Graphite Project
Other
The value of the Group’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.
no significant changes in laws and regulations that greatly impact the company’s ability to maintain tenure.
The Group’s exploration properties may be subjected to claim(s) under native title, or contain sacred sites, or sites of significance to
indigenous people. As a result, exploration properties or areas within the tenements may be subject to exploration restrictions,
mining restrictions and/or claims for compensation. At this time, it is not possible to quantify whether such claims exist, or the
quantum of such claims.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
39
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
13. TRADE AND OTHER PAYABLES
Current
Trade creditors
Other creditors and accruals
Consolidated
2018
$’000
10
235
245
Non-interest bearing liabilities are stated at cost and are predominantly settled within 30 days.
Due to the fact that trade and other payables are current, their current value approximates fair value.
14. PROVISIONS
Current
Employee benefit provisions
Provision for Foreign Tax (i)
(i) Movement in Provision for Foreign Tax is comprised as follows
Opening Balance
Add: additional provision raised during the year
Less: Amount previously provided for replaced by assessment
Less: Foreign currency exchange adjustment
Consolidated
2018
$’000
2017
$’000
85
553
638
513
23
-
17
553
The Provision for Foreign Tax is based upon assessments received for value-added tax, non-residents tax and withholding tax
from the Malawi Revenue Authority. The provision has been estimated by the Company by considering advice from their tax
experts and by estimating the expected outcome of the assessments based on the potential success of the claims. The
Company is currently defending all of these claims.
15. CONTRIBUTED EQUITY
Consolidated
2018
2017
$’000
Number
$’000
Number
Fully paid ordinary shares
80,753
80,753
465,922,373
465,922,373
80,825
80,825
469,729,062
469,729,062
2017
$’000
38
282
320
77
513
590
687
1
(145)
(30)
513
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
40
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
15. CONTRIBUTED EQUITY (CONTINUED)
(a) Movements in fully paid ordinary shares on issue are as follows:
Consolidated
2018
2017
$’000
Number
$’000
Number
Fully paid ordinary shares at beginning of
reporting period
80,825
469,729,062
80,825
469,729,062
Shares bought back
(72)
(3,806,689)
-
-
Balance at the end of reporting period
80,753
465,922,373
80,825
469,729,062
(b) Management of Share Capital
The Directors primary objectivity is to maintain a capital structure that ensures the lowest cost of capital available to the Group.
At reporting date, the Group has no external borrowings.
The Group is not subject to any externally imposed capital requirements.
Unmarketable Parcel Share Buy-Back
An unmarketable parcel share buy-back program for holders of parcels of Globe shares with a market value of less than $500 was
completed on 27 March 2018. Under the program, the Company bought-back the shareholdings of holders of unmarketable
parcels who did not elect to retain their shares, resulting in the Company buying back 3,806,689 shares at a total cost of $72k ,
representing a Buy-Back price of 1.9 cents per share.
Capital Risk Management
The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it
can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce
the cost of capital.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends, return capital to
shareholders, issue/buy-back shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value
adding relative to the current parent entity’s share price at the time of investment. The consolidated entity is not currently
pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to maximise
synergies.
The capital risk management policy remains unchanged from the 30 June 2017 annual report.
(c)
Terms of Ordinary Shares
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares
held and in proportion to the amount paid up on the shares held. The fully paid ordinary shares have no par value.
At shareholders meetings each ordinary share is entitled to one vote in proportion to the paid up amount of the share when a
poll is called, otherwise each shareholder has one vote on a show of hands.
At the end of reporting period, there are 465,922,373 shares on issue.
(d)
Terms of Options
At the end of reporting period, there were 2,000,000 options over unissued shares as follows:
1,000,000 unlisted options, exercisable at $0.20 on or before 30 June 2019.
1,000,000 unlisted options, exercisable at $0.25 on or before 30 June 2020.
-
-
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
41
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
16. ACCUMULATED LOSSES
(a) Accumulated losses
Accumulated losses at the beginning of the financial period
Net loss attributable to members
Accumulated losses at the end of the financial period
17. INTERESTS IN CONTROLLED ENTITIES
Consolidated
2018
$’000
2017
$’000
(42,873)
(1,354)
(44,227)
(41,222)
(1,651)
(42,873)
Controlled entities consolidated
The consolidated financial statements incorporate the assets, liabilities and the results of the following subsidiaries in accordance
with the accounting policy described in note 1(a):
Name
Country of
Incorporation
Principal Activities
Class of
Shares
Equity Holding *
Globe Metals & Mining UK Corporation
Globe Uranium (Argentina) S.A.
Globe Metals & Mining (Africa) Limited
Globe Metals & Mining Mozambique Limitada Mozambique Dormant
Globe Metals & Mining (Exploration) Limited Malawi
Globe Metals & Mining Investment
Appium Limited
Hong Kong
Hong Kong
* Percentage of voting power is in proportion to ownership.
Dormant
Dormant
Holds Kanyika Project
Ordinary
Ordinary
Ordinary
Ordinary
Holder of exploration tenements Ordinary
Ordinary
Dormant
Ordinary
Holder of IP patents
UK
Argentina
Malawi
2018
100%
100%
100%
100%
100%
100%
100%
2017
-
100%
100%
100%
100%
100%
100%
18. DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES
No dividends were paid during the year. No recommendation for payment of dividends has been made.
19. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Details of key management personnel
The following persons were key management personnel of Globe Metals & Mining Limited during the financial year:
Alice Wong
Alistair Stephens
William Hayden
Bo Tan
Alex Ko
Michael Fry
Non-Executive Chairperson
Managing Director and CEO
Non-Executive Director
Non-Executive Director
Non-Executive Director
Finance Manager and Company Secretary
Short term employee benefits
Post-employment
Consolidated
2018
$’000
901
25
926
2017
$’000
898
25
923
Detailed remuneration disclosures are provided in the remuneration report on pages 8 to 12.
(b) Loans to key management personnel
There were no outstanding unsecured loans to Key management personnel at 30 June 2018 (2017: Nil).
(c) Other transactions with key management personnel
There were no other transactions with Key Management Personnel as at 30 June 2018 (2017: Nil).
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
42
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
20. AUDITORS’ REMUNERATION
Ernst & Young
- Audit and reviewing of financial reports
Network firms of Ernst & Young
- Audit and review of financial reports
21. CONTINGENT LIABILITIES
Consolidated
2018
$’000
2017
$’000
55
28
83
50
28
78
In the opinion of the directors there were no contingent liabilities at 30 June 2018 (30 June 2017: nil), and the interval between
30 June 2018 and the date of this report.
22. COMMITMENTS
(a) Exploration commitments
In order to maintain current rights of tenure to mining tenements, the Group has the following exploration expenditure
requirements up until expiry of leases. These obligations, which are subject to renegotiation upon expiry of the leases, are not
provided for in the financial statements and are payable:
Not longer than one year
Longer than one year, but not longer than five years
Longer than five years
Consolidated
2018
$’000
211
194
-
405
2017
$’000
616
-
616
If the Group decides to relinquish certain leases and/or does not meet these obligations, assets recognised in the statement of
financial position may require review to determine the appropriateness of carrying values. The sale, transfer or farm-out of
exploration rights to third parties will reduce or extinguish these obligations.
22. COMMITMENTS (CONTINUED)
(b) Operating lease expenditure commitments
Not longer than one year
Longer than one year, but not longer than five years
Longer than five years
Consolidated
2018
$’000
71
24
-
95
2017
$’000
132
64
-
196
Operating lease expenses relate to the leases for office and staff accommodation in Malawi and Office accommodation in Perth.
The Company’s corporate head office relocated in January 2017 at 137 Lake Street in Northbridge. The agreement is for a 3 year
lease.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
43
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
23. RELATED PARTY DISCLOSURES
Parent entity
(a)
The ultimate parent entity of the Group is Globe Metals & Mining Limited.
Key management personnel
(b)
Disclosures relating to key management personnel are set out in note 19.
(c) Other related party transactions:
Nil.
24. EVENTS SUBSEQUENT TO REPORTING DATE
No other matters or circumstances have arisen since the end of the financial period which have 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.
25. RECONCILIATION OF LOSS AFTER INCOME TAX TO
NET CASH OUTFLOW FROM OPERATING ACTIVITIES
(a) Reconciliation of cash flow used in operations
with loss after tax
-
Loss after income tax
Non-cash flows in loss from operations
-
-
-
Impairment of exploration assets
Depreciation
Net loss on disposal of fixed assets
Changes in assets and liabilities
-
-
Decrease in receivables and other current assets
Increase in trade and other payables
Consolidated
2018
$’000
2017
$’000
(1,354)
(1,651)
-
17
-
(167)
145
-
90
(4)
(32)
(166)
Net cash outflows from operating activities
(1,359)
(1,755)
(b) Non-cash investing and financing activities
There were no non-cash investing and financing activities during the year.
26. LOSS PER SHARE
(a)
Loss used in the calculation of basic and diluted loss
per share
(b) Weighted average number of ordinary shares
outstanding during the period used in the calculation
of basic and diluted loss per share:
Consolidated
2018
$’000
2017
$’000
(1,354)
(1,651)
Number of
Shares
Number of
Shares
468,738,280
469,729,062
Options on issue have not been included in the Earning per Share calculation as they are anti-dilutive.
Note the total number of options as at 30 June 2018 is 2,000,000 (2017:3,000,000).
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
44
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
27. SHARE BASED PAYMENTS
Options (a)
Consolidated
2018
$’000
-
-
2017
$’000
-
-
There are options issued to employees as part of their compensation under the company’s employee share option policies.
Options are independently valued by corporate advisers using the Black-Scholes method. Options were granted subject to the
attainment of performance and/or employment continuity criteria. All options vested two years before expiry.
(a) Movements in options on issue 2018:
Grant Date
2/07/2013
2/07/2013
2/07/2013
Expiry Date
30/06/2018
30/06/2019
30/06/2020
Exercise
Price
$0.150
$0.200
$0.250
Weighted average exercise price
(b) Movements in options on issue 2017:
Balance at
start of the
year
Number
1,000,000
1,000,000
1,000,000
3,000,000
$0.200
Granted
during the
year
Number
-
-
-
-
-
Exercised
during the
year
Number
-
-
-
-
-
Lapsed
during the
year
Number
(1,000,000)
-
-
(1,000,000)
$0.150
Balance at
30 June
2018
-
1,000,000
1,000,000
2,000,000
$0.225
Vested and
exercisable at
end of the
year
Number
-
1,000,000
1,000,000
2,000,000
$0.225
Grant Date
2/07/2013
2/07/2013
2/07/2013
2/07/2013
Expiry Date
30/06/2017
30/06/2018
30/06/2019
30/06/2020
Exercise
Price
$0.100
$0.150
$0.200
$0.250
Weighted average exercise price
Balance at
start of the
year
Number
1,000,000
1,000,000
1,000,000
1,000,000
4,000,000
$0.175
Granted
during the
year
Number
-
-
-
-
-
-
Exercised
during the
year
Number
-
-
-
-
-
-
Lapsed
during the
year
Number
(1,000,000)
-
-
-
(1,000,000)
$0.100
Balance at
30 June
2017
-
1,000,000
1,000,000
1,000,000
4,000,000
$0.200
Vested and
exercisable at
end of the
year
Number
-
1,000,000
1,000,000
-
3,000,000
$0.175
27. SHARE BASED PAYMENTS (CONTINUED)
Compensation options granted during the year ended 30 June 2018
There were no compensation options granted during the year ended 30 June 2018.
Compensation options granted during the year ended 30 June 2017
There were no compensation options granted during the year ended 30 June 2017.
Options Cancelled/Lapsed
1,000,000 options lapsed during the reporting period ended 30 June 2018 (2017: 1,000,000).
Options Exercised
No options were exercised during the reporting period ended 30 June 2018 (2017: Nil).
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
28. PARENT ENTITY INFORMATION
Statement of comprehensive income
Profit after income tax
Other comprehensive income
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Financial assets reserve
Accumulated losses
Total equity
Parent
2018
$'000
568
22
590
9,230
34,595
182
182
34,413
80,753
22
(46,362)
34,413
2017
$'000
101
-
101
11,252
34,100
209
209
33,891
80,825
-
(46,934)
33,891
Guarantees entered into by the parent entity
The parent entity had no guarantees as of 30 June 2018 or 30 June 2017.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2018 or 30 June 2017.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2018 or 30 June 2017.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for the
following:
-
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Globe Metals & Mining Limited & Controlled Entities Annual Financial Report 2018
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DIRECTORS’ DECLARATION
In the directors’ opinion:
a)
the financial statements and notes set out on pages 15 to 46 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards and the Corporations Regulations 2001, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018 and of its performance for the
financial year ended on that date, and
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.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the
Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
ALISTAIR STEPHENS
MANAGING DIRECTOR
Dated 28th day of September 2018
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Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of Globe Metals & Mining
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Globe Metals & Mining Limited (the Company) and its subsidiaries
(collectively 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, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then ended, notes
to the financial statements, including a summary of significant accounting policies, and the directors'
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2018
and of its consolidated financial performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
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 auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the
Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
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1. Carrying value of capitalised exploration and evaluation
Why significant
How our audit addressed the key audit matter
The carrying value of exploration and evaluation assets is
subjective as it is based on the Group’s ability, and
intention, to continue to explore the asset. The carrying
value is also impacted by the results of exploration work.
This creates a risk that the amounts stated in the
consolidated financial statements may not be recoverable.
Refer to note 12 – Exploration and evaluation assets to the
consolidated financial statements for the amounts held on
the consolidated statement of financial position by the
Group as at 30 June 2018 and related disclosure.
We evaluated the Group’s assessment of the carrying value
of exploration and evaluation assets. In obtaining sufficient
audit evidence, we:
• Considered the Group’s right to explore in the relevant
exploration area which included obtaining and assessing
supporting documentation such as license agreements
• Considered the Group’s intention to carry out
exploration and evaluation activity in the relevant
exploration area which included assessment of the
Group’s cash-flow forecast models, as well as enquiries
with senior management and Directors as to the
intentions and strategy of the Group
• Examined the Group’s analysis of the commercial
viability of results relating to exploration and evaluation
activities carried out in the relevant licensed area to
determine if anything has come to our attention that
indicates they are not viable
• Assessed the ability to finance any planned future
exploration and evaluation activity.
2. Provision for foreign tax
Why significant
How our audit addressed the key audit matter
The Group is subject to the tax laws of both Australia and
Malawi. As disclosed in note 14 to the consolidated financial
statements, the Group recognised a provision for foreign tax
based upon assessments received, which the Group is
currently disputing. In determining the amount of the
provision recognised, the Group has taken into account legal
precedent and the advice of external experts. This is an area
of significant judgment as detailed in note 3(iii) of the
consolidated financial statements.
We evaluated the provision for foreign tax and assessed
correspondence from tax authorities and external tax
advisors.
We assessed the adequacy of the taxation provisions by
considering factors such as the risk profile of each matter.
We evaluated the judgments made in relation to the
likelihood of litigation from tax authorities by comparing the
Group's assessment against our own independent views
which are based on our perception of risk. We involved our
tax specialists in performing these procedures.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2018 Annual Report, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
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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.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
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Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the audit of the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 8 to 12 of the directors' report for the year
ended 30 June 2018.
In our opinion, the Remuneration Report of Globe Metals & Mining Limited for the year ended 30 June
2018, complies with section 300A of the Corporations Act 2001.
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Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Ernst & Young
T G Dachs
Partner
Perth
28 September 2018
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ASX ADDITIONAL INFORMATION
Additional information required by the ASX and not shown elsewhere in this report is as follows.
Shareholding as at 26 September 2018
Total fully paid ordinary shares on issue
465,922,373
The distribution of members and their holdings of fully paid ordinary shares in the Company were as follows:
No. Securities Held
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
> 100,001
Total no. holders
No. holders of less than a marketable parcel
Percentage of the 20 largest holders
Substantial shareholders as at 26 September 2018
APOLLO METALS INVESTMENT CO. LTD
AO-ZHONG INTERNATIONAL MINERALS PTY LTD
20 Largest holders of securities at 26 September 2018
Fully Paid Shares
No. Holders
56
21
24
286
155
542
333
88.74%
No. Shares
245,983,611
118,143,062
The names of the twenty largest ordinary fully paid shareholders as at 26 September 2018 are as follows:
APOLLO METALS INVESTMENT CO. LTD
AO-ZHONG INTERNATIONAL MINERALS PTY LTD
CITICORP NOMINEES PTY LIMITED
JP MORGAN NOMINEES AUSTRALIA
BALLARD, ANDREW CHARLES
Names
1)
2)
3)
4)
5) HSBC CUSTODY NOMINEES
6) M&K KORKIDAS PTY LTD
7)
8) OTTA, PETER HUBERT
9) GOENG INVESTMENTS PTY LTD
10) BOONYN INVESTMENTS
11) LUCAS, JACQUES HUGHES
12) TKOCZ, MARK ANDREW
13) ULRICH, RICHARD & ULRICH, WENDY
14) SHULTZ, MICHAEL
15) BURON, PAUL
16) DANG, VU QUANG MINH DANG
17) ZDUNIC, NIKOLA
18) NATIONAL NOMINEES LIMITED
19) MILLER, ROSS JAMES
20) SEARL, COLIN ROBERT & SEARL, CYNDA
Globe Metals & Mining Limited
No. Shares
245,983,611
118,143,062
14,401,586
7,655,003
3,460,000
2,890,600
2,548,882
2,388,785
2,358,697
1,810,000
1,500,000
1,500,000
1,263,000
1,200,000
1,176,470
1,160,316
1,088,133
1,012,700
1,000,000
967,586
413,508,431
%
52.79
25.36
%
52.79
25.36
3.09
1.64
0.74
0.62
0.55
0.51
0.51
0.39
0.32
0.32
0.27
0.26
0.25
0.25
0.23
0.22
0.21
0.21
88.74
53
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ASX ADDITIONAL INFORMATION
Unlisted options as at 26 September 2018
Details of unlisted option holders are as follows:
Class of unlisted options
Options exercisable at $0.20 on or before 30 June 2019
Holders of more than 20% of this class
Alistair James Stephens
Options exercisable at $0.25 on or before 30 June 2020
Holders of more than 20% of this class
Alistair James Stephens
Voting rights
No. Options
1,000,000
1,000,000
1,000,000
1,000,000
The Constitution of the company makes the following provision for voting at general meetings:
On a show of hands, every ordinary shareholder present in person, or by proxy, attorney or representative has one vote. On a poll,
every shareholder present in person, or by proxy, attorney or representative has one vote for any share held by the shareholder, but
in respect of partly paid shares, shall only have a fraction of a vote for each partly paid share. The fraction must be equivalent to the
proportion which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited).
Restricted securities
There are no restricted securities or securities subject to voluntary escrow.
Mineral Tenement Schedule as at 26 September 2018
Project
Location
Status
Tenement
Globe’s interest
Kanyika Niobium (i)
Kanyika Exploration
Malawi
Malawi
Granted
Granted
AML0026
EPL0421/15
100%
100%
(i)
AML = Application for Mining Lease; lodged with Malawi Ministry of Natural Resources, Energy & Mining on 5 December 2014
covering in part the area previously covered by EPL1088/05 has been approved subject to the completion of a Development
Agreement.
Note: EPL: Exclusive Prospecting Licence (Malawi)
Globe Metals & Mining Limited
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