H A N N A N S A N N U A L R E P O R T 2 0 22 | 1
ABOUT HANNANS LTD
Hannans Ltd (ASX:HNR) started as an exploration company with a focus on nickel, gold and lithium in Western Australia.
It now has the opportunity to recover high purity metals from spent and off specification lithium-ion batteries in Sweden,
Norway, Denmark and Finland. Hannans’ major shareholder is leading Australian specialty minerals company Neometals
Ltd. Since listing on the ASX in 2003 Hannans and its subsidiaries have at various times since listing signed agreements
with Vale Exploration, Rio Tinto Exploration, Anglo American, Boliden, Warwick Resources, Cullen Resources, Azure
Minerals, Neometals, Tasman Metals, Grängesberg Iron, Lovisagruvan, Element 25, and Critical Metals Ltd. Shareholders
at various times since listing have included Rio Tinto, Anglo American, OM Holdings, Craton Capital and BlackRock. For
more information, visit www.hannans.com and search for ‘Hannans’ on Twitter.
ANNUAL REPORT
FOR THE FINANCIAL YEAR ENDED
30 JUNE 2022
Corporate Directory ................................................................................................................................................1
Directors’ Report ......................................................................................................................................................2
Independence Declaration to the Directors of Hannans Ltd ............................................................... 21
Directors’ Declaration .......................................................................................................................................... 22
Independent Auditor’s Report to the Members of Hannans Ltd ....................................................... 23
Consolidated Statement of Profit and Loss and Other Comprehensive Income ......................... 28
Consolidated Statement of Financial Position ........................................................................................... 29
Consolidated Statement of Changes in Equity .......................................................................................... 30
Consolidated Statement of Cash Flows ........................................................................................................ 31
Notes to the Consolidated Financial Statements ..................................................................................... 32
CORPORATE DIRECTORY
BOARD OF DIRECTORS
PRINCIPAL OFFICE
SHARE REGISTRY
Level 12, 197 St Georges Terrace
Computershare
NON-EXECUTIVE CHAIRMAN
Perth, Western Australia 6000
Level 11, 172 St George’s Terrace
Mr Jonathan Murray
Perth, Western Australian 6000
REGISTERED OFFICE
Telephone 1300 787 272
EXECUTIVE DIRECTOR
Level 12, 197 St Georges Terrace
Website www.computershare.com.au
Mr Damian Hicks
Perth, Western Australia 6000
NON-EXECUTIVE DIRECTORS
POSTAL ADDRESS
AUDITORS
Ernst & Young
Mr Markus Bachmann
PO Box 1227
11 Mounts Bay Road
Mr Clay Gordon
Ms Amanda Scott
West Perth, Western Australia 6872
Perth, Western Australia 6000
CONTACT DETAILS
LAWYERS
COMPANY SECRETARY
Telephone +61 (8) 9324 3388
Steinepreis Paganin
Mr Ian Gregory
Email
info@hannans.com
Level 4, The Read Buildings
Website www.hannans.com
16 Milligan Street
ABN
52 099 862 129
Perth, Western Australia 6000
SOCIAL NETWORK SITES
Twitter @Hannans_Ltd
LinkedIn Hannans Ltd
H A N N A N S A N N U A L R E P O R T 2 0 22 | 1
DIRECTORS’ REPORT
CHAIRMAN’S LETTER
The Directors of Hannans Ltd (Hannans or the Company) submit their annual financial report of the Group being the
Company and its controlled entities for the financial year ended 30 June 2022.
Dear Shareholders,
The year ended 30 June 2022 was a transformational year for Hannans Ltd.
The Company announced multiple transactions that if successfully completed would see it transition from Western
Australian minerals exploration company to European lithium-ion battery recycling company.
This change in nature and scale of the Company’s activities resulted in ASX suspending the Company from trading until such
time as the relevant transactions and changes were approved by shareholders at a general meeting. At the time of writing
this meeting is scheduled to be held in October 2022.
The change in strategy could not have been made possible without the support of major shareholder Neometals Ltd and
this is acknowledged. Neometals are the licensor of the underlying technology that has enabled Hannans to enter the
European LiB recycling industry.
Whilst due diligence and compliance has been ongoing over several months Hannans has continued to explore its Western
Australian mineral exploration projects. These activities have been managed by a team of dedicated directors and
consultants. While a world class economic discovery has alluded the team their diligent work gave Hannans shareholders
exposure to a potential discovery. The Board will seek to identify and attract high quality partners to continue exploration on
Hannans’ projects.
After the end of the financial year the current Board completed a Board and executive management succession process to
ensure that the Company had the requisite skills and experience to implement the proposed European LiB recycling strategy.
On the assumption that shareholders approve the transaction and change, and that ASX approves the re-admission to
trading several long serving Hannans directors will retire from the Board late 2022. I would like to take this opportunity to
acknowledge the long term dedication and commitment to Hannans by directors Amanda Scott, Markus Bachmann, Clay
Gordon and company secretary Ian Gregory.
The Board acknowledges that Hannans has been suspended from trading for a significant amount of time however we feel it
has been in the best interests of Hannans shareholders to complete satisfactory due diligence, complete the transactions
and build a strong foundation for a bright new future.
As a Board we are grateful for the faith shown in us by shareholders to lead the Company and create value. We hand over to
the new Board to leads the Company in a new direction.
Yours sincerely,
Jonathan Murray
Non-Executive Chairman
2 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
DIRECTORS’ REPORT
EUROPEAN LITHIUM-ION BATTERY (LIB) RECYCLING
LiBs are energy storage devices comprising several metals including nickel, cobalt, lithium, and manganese (and others). Demand for lithium-
ion batteries to power electric vehicles and energy storage has seen significant growth in the last decade and is forecast to continue. If not
handled correctly, LiB can explode, are flammable and toxic and are not suitable for long term storage at end-of-life or for disposal in landfill.
LiB recycling involves shredding, sorting, and refining to make the batteries safe and to recover valuable metals for reuse.
ACN 630 589 507 Pty Ltd (ACN 630) (a wholly owned Australian subsidiary of ASX listed Neometals Ltd) has developed a proprietary,
sustainable process for the recovery of valuable constituents from cell production scrap and end-of-life LiBs. The process targets the recovery
of valuable materials from consumer electronic batteries (devices with lithium cobalt oxide cathodes), and nickel
rich electric vehicle and
stationary storage battery chemistries (lithium
nickel-manganese
cobalt cathode).
‐
ACN 630 is the owner and head licensor of the patent applications and associated know-how that underpins this process (the Technology).
‐
‐
The Technology has been the subject of five years of research and development by Neometals, including bench and pilot trials, feasibility
studies and engineering. This has culminated in a recycling commercialisation joint venture (“Primobius GmbH”) between Neometals and
large privately owned German engineering firm SMS Group GmbH (SMS). The Technology has been substantially de-risked.
The transactions entered by Hannans give it the license to commercialise the technology in Norway, Sweden, Denmark, Finland, the UK,
Ireland, Italy and South-eastern Europe.
Hannans shareholders are therefore poised to benefit from long-term ongoing research and development investment into the Technology.
Hannans believes these attributes significantly increase the potential for the commercialisation strategy to be successfully executed. The
Technology enables battery cell manufacturers to close the loop, deliver safe, responsible, and cost-effective products and eliminate waste.
A summary of the Company’s LiB Recycling activities throughout the year are as follows:
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
∂
Signed Memorandum of Understanding (MoU) with Critical Metals Ltd (Critical Metals) to commercialise lithium-ion battery
recycling technology in Norway, Sweden, Denmark, and Finland (Nordic region).
Signed (and subsequently terminated) a Memorandum of Agreement (MoA) with Greenhouse Investments Ltd (Greenhouse) to
complete exclusive due diligence on an opportunity to recycle LiBs in the UK and Ireland.
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
∂
Nordic region – satisfied all conditions precedent to the MoU announced in the 1st Quarter.
New business (LiB recycling and energy storage) – commenced search for rapid growth opportunities in Europe.
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
∂
∂
∂
Announced major transaction enabling expansion of Hannans LiB recycling activities into major European electric vehicle (EV)
markets including the UK, Ireland, Italy and South-eastern Europe, with due diligence and documentation ongoing with Greenhouse.
Completed technical tour of Primobius GmbH LiB recycling demonstration plant in Hilchenbach, Germany which is based on same
Technology being commercialised by Hannans. [Note Mercedes-Benz AG announced it will establish a battery recycling plant with
Primobius. 1]
Supported successful lodgement by third party of pre-qualification documentation for LiB recycling tender – outcome of process
anticipated late 2022.
Completed face-to-face meetings held with technology providers and investors in Norway, Sweden, Finland, and Germany.
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
∂
∂
Completed due diligence on proposed expansion into the UK, Ireland, Italy and South-eastern Europe, and renegotiated acquisition
agreement with Greenhouse.
Liaised with stakeholders to obtain required consents and approvals required to settle the improved acquisition agreement.
Advanced documentation to enable shareholders to vote on the acquisition agreement, raise capital and recommence trading on
ASX.
1 Source: https://group.mercedes-benz.com/company/news/recycling-factory-kuppenheim.html
H A N N A N S A N N U A L R E P O R T 2 0 22 | 3
DIRECTORS’ REPORT
WESTERN AUSTRALIA MINERALS EXPLORATION
Hannans was incorporated on 11 March 2002 in Torbay, Albany. Its founding directors were William (Bill) Hicks, Dr Ernest Dechow, and
Damian Hicks. Hannans listed on ASX on 5 December 2003. Since incorporation, the Company has focused on making a world class
economic minerals discovery. Most of the exploration was undertaken in the Goldfields, Pilbara and Gascoyne regions of Western Australia
and was focused on nickel sulphide, gold, iron, and manganese. For a period, the Company explored the Fennoscandian Shield in Sweden
for copper-gold, gold and iron. Currently, Hannans’ mineral exploration activities are focussed on greenfields nickel exploration at
Forrestania and Fraser Range and nickel-copper and copper-gold exploration in the East Gascoyne region of Western Australia.
A summary of the Company’s mineral exploration activities throughout the year are as follows:
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
∂
∂
∂
∂
Forrestania (Nickel) – completed diamond drill testing and reporting of geophysical nickel targets.
Moogie (Copper-Gold & Nickel-Copper) – identified coincident geophysical and geochemical anomalies at Breccia, Minni Ritchi and
Ghallangee prospects.
Fraser Range (Nickel-Copper) – increased holdings of prospective tenure.
New business (Nickel) – continued search for attractive nickel sulphide exploration projects in Western Australia.
Southern Cross (Gold & Nickel) – elected not to exercise option to acquire project.
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
∂
∂
∂
Moogie (Copper-Gold & Nickel-Copper) – monitored arrival of contractor to complete helicopter-borne (electromagnetic)
geophysical survey over four priority targets.
Fraser Range (Nickel-Copper) – reviewed historical data covering new tenure and completed preparations for ground
(electromagnetic) geophysical surveys.
Forrestania (Nickel) – completed preparations for ground electromagnetic (EM) geophysical surveys and geochemical sampling of
nickel prospects within the Western Ultramafic Belt.
New business (Nickel) – continued search for attractive nickel sulphide exploration projects in Western Australia.
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
∂
∂
∂
Moogie (Copper-Gold, Nickel-Copper & Gold) – completed airborne and ground EM surveys.
Forrestania (Nickel) – completed preparations for ground geophysics and soil geochemistry within Western Ultramafic Belt.
Fraser Range (Nickel-Copper) – completed preparations for geochemical, geophysical, and geological reconnaissance programmes.
New business (Nickel, Copper, Lithium) – continued project generation activities for high-grade nickel, lithium and copper
opportunities in Western Australia.
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
∂
∂
Moogie (Copper-Gold, Nickel-Copper & Gold) – continued regional soil geochemistry and rock chip sampling over specific targets,
assays and interpretation pending. Obtained government approval to drill test targets, commenced heritage approval process.
Forrestania (Nickel) – commenced soil geochemistry utilising UltraFine+TM analysis technique, assays and interpretation pending.
Fraser Range (Nickel-Copper) – completed acquisition and interpretation of multiclient and open file airborne electromagnetic (EM)
data.
ANNUAL RESOURCE STATEMENTS
Hannans through the joint operation with Classic Minerals Ltd holds a 20% interest in the following JORC resources for the year ended
30 June 2021 and 30 June 2022 at the
Forrestania Gold Project 2.
Indicated
Inferred
Competent Person’s Statements – Forrestania Gold Project
Prospect
Tonnes
The information contained in the JORC Compliant Resource Table relates
to information compiled or reviewed by Edward S. K. Fry, a Competent
person who is a member of the Australasian Institute of Mining and
Metallurgy (AusIMM). Mr Fry is a consultant exploration geologist with
BGM Investments Pty Ltd and consults to Classic Minerals Ltd. Mr Fry has
sufficient experience that is relevant to the styles of mineralisation and
the types of deposit under consideration, and to the activities undertaken
to qualify as a Competent Person as defined in the 2012 edition of the ‘JORC Australian code for reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Mr Fry consents to the inclusion in this report of the
matters based on information in the form and context in which it appears.
Lady
Magdalene
Lady Ada
TOTAL
Grade
(Au g/t)
Ounces
(Au)
Tonnes
Grade
(Au g/t)
Ounces
(Au)
257,300
2.01
16,600
1,090,800
1.23
43,100
–
–
–
5,922,700
1.32
251,350
257,300
2.01
16,600
7,013,500
1.3
294,450
Table 1. JORC Compliant Indicated and Inferred Mineral Resource Table.
2 Refer to Classic Minerals Ltd (ASX: CLZ) ASX announcement on 21 January 2020 for further information.
4 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
DIRECTORS’ REPORT
CORPORATE ACTIVTIES
Throughout the year Hannans completed several Western Australian mineral exploration transactions, elected to change the scale and nature
of its activities by entering the European lithium-ion battery recycling industry, raised capital, managed a Board and executive management
succession process and continues to seek to re-comply with the ASX Listing Rules.
A summary of the Company’s corporate activities throughout the year are as follows:
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
Lodged Annual Report 2021 and Corporate Governance Statement.
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
Raised $5.5M by way of a fully underwritten rights issue at a price of 2.5 cps.
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
∂
Sought ASX, regulatory and shareholder approvals, and commenced due diligence for major transaction enabling expansion of
Hannans LiB recycling activities into major European electric vehicle (EV) markets.
Commenced preparing documentation for a general meeting of shareholders to be held 4th Quarter 2021/2022 to vote on the major
transaction, the change in scale and nature of Hannans primary activity to LiB recycling and other required resolutions.
Quarter 1
(Jul – Sep 2021)
Quarter 2
(Oct – Dec 2021)
Quarter 3
(Jan – Mar 2022)
Quarter 4
(Apr – Jun 2022)
∂
Continued the process to obtain shareholder approval for Greenhouse agreement, complete the capital raising and recommence
trading on ASX.
Figure 1. Hannans track record since listing on ASX of exploration expenditure, cash at bank and market capitalisation as at 30 June.
Health & Safety
Environmental, Social & Governance
No Hannans directors, employees, consultants, or contractors
suffered any lost time incidents while completing work for the
Company during the year.
Hannans embraces its responsibility to operate sustainably and to
do no harm. The Company’s culture drives its attitude towards
ESG and all directors and employees acknowledge that
employing sustainable practices are good for society and good
for business. Hannans aims to make a positive contribution to the
communities that it participates in, and the Hannans Team always
aims to leave a positive impact on the people they engage with.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 5
DIRECTORS’ REPORT
DIRECTORS
The names and particulars of the Directors of the Company during the financial year and until the date of the report are:
Mr Jonathan Murray, Non-Executive Chairman
(Appointed 29 November 2016,
previously appointed Non-Executive Director on 22 January 2010)
Mr Damian Hicks, Executive Director
(Appointed on 29 November 2016,
previously appointed Managing Director on 11 March 2002)
Mr Murray is a partner at law firm
Steinepreis Paganin, based in Perth,
Western Australia. He has over 20 years
experience advising on numerous
initial public offers and secondary
market capital raisings, public and
private M&A transactions, corporate
governance and strategy. Mr Murray
graduated from Murdoch University in
1996 with a Bachelor of Laws and
Commerce (majoring in Accounting). He is also a member of
FINSIA (formerly the Securities Institute of Australia).
During the past 3 years Mr Murray has also served as a director
of the following other listed companies:
∂ Errawarra Resources Ltd – listed on 11 December 2020
(appointed 2 February 2012, resigned 2 November 2020,
re-appointed 22 June 2021)
∂ Vietnam Industrial Investments Limited
(appointed 19 January 2016, resigned 15 May 2020)
∂ Peak Resources Limited (appointed 22 February 2011,
resigned 8 March 2021)
Mr Hicks was a founding Director of
Hannans Ltd in 2002 and was appointed
to the position of Managing Director on
5 April 2007 and appointed as Executive
Director on 29 November 2016. Mr Hicks
is also Executive Director of the Group’s
subsidiary companies.
Mr Hicks graduated from the University
of Western Australia with a Bachelor of
Commerce (Accounting and Finance) in
1992 and was admitted as a Barrister and Solicitor of the
Supreme Court of Western Australia in 1999. He holds a
Graduate Diploma in Applied Finance & Investment from
FINSIA, a Graduate Diploma in Company Secretarial Practice
from Chartered Secretaries Australia and is a Graduate of the
Australian Institute of Company Directors course.
During the past 3 years Mr Hicks has also served as a director
of the following other listed companies:
∂ Errawarra Resources Ltd – listed on 11 December 2020
(appointed 2 February 2012, resigned 1 April 2021)
Mr Markus Bachmann, Non-Executive Director
(Appointed 2 August 2012)
Mr Clay Gordon, Non-Executive Director
(Appointed 5 October 2016)
Mr Markus Bachmann holds a Master
(MA) in Business and Economics (cum
laude) from the University of Berne,
Switzerland. Markus started his career
in the corporate finance department of
the Credit Suisse Group, before joining
the SBC Brinson Asset Management
in 1997.
Emerging Markets
Moving to South Africa in 2000 he
joined Coronation Fund Managers in
Cape Town, South Africa, as a senior manager for various retail
products and institutional mandates.
team
Markus co-funded Craton Capital in 2003 whereas he is the
manager of the Craton Capital Precious Metals Fund and the
Global Resources Fund since their inception. Over the past 20
years and under his management, his funds received a number
of prestigious industry awards. Markus accumulated over 25
years of experience in global equity markets, precious metals
and raw materials.
During the past 3 years Mr Bachmann has also served as a
director of the following other listed companies:
∂ Errawarra Resources Ltd – listed on 11 December 2020
(appointed 2 February 2012, resigned 30 June 2021)
management
Mr Clay Gordon was appointed a
director of Hannans in 2016. Mr Gordon
obtained a Bachelor of Applied Science
(Geology) and a Master of Science
(Mineral Economics) and has more than
25 years’ experience in senior roles
(operational,
and
large and small
corporate) within
resource companies active in a range of
commodities within Australia, Africa and
South East Asia. He was founding Non-Executive Director of
ASX listed Phoenix Gold Limited, founding Managing Director
of ASX listed Primary Gold Limited and is currently the Group
Geologist of a private mining investment company, Adaman
Resources Pty Ltd. Mr Gordon was also founder and CEO of
Mining Assets Pty Ltd, a private company involved in the
assessment and marketing of mineral projects. He is a Member
of the Australasian Institute of Mining and Metallurgy and the
Australian Institute of Geoscientists.
During the past 3 years Mr Gordon did not serve as a director
of any other listed companies.
6 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
DIRECTORS’ REPORT
DIRECTORS (cont’d)
COMPANY SECRETARY
Ms Amanda Scott
(Appointed Non-Executive Director on 29 November 2016)
Mr Ian Gregory
(Appointed 5 April 2007)
Ms Scott was appointed a director of
Hannans
in 2016 and was previously
Exploration Manager of Hannans Ltd. Ms
Scott played an
the
development of the Company’s nickel, gold,
iron and manganese portfolio and
is
credited with the discovery of high grade
iron mineralisation at the Jigalong Project in
the East Pilbara region on Western Australia.
integral role
in
Ms Scott holds a Bachelor of Science (Geology) from Victoria
University of Wellington, and is a Member of the Australian Institute
of Mining & Metallurgy.
In 2016, Ms Scott created Scandinavian-based consultancy Scott
Geological AB providing geological and exploration services to a
number of clients from around the world.
During the past 3 years Ms Scott did not serve as a director of any
other listed companies.
and
is a professional well-
Mr Gregory
connected Director
Company
Secretary with over 30 years’ experience in
the provision of company secretarial and
business administration services
in a
variety of industries, including exploration,
mining, mineral processing, oil and gas,
banking and insurance.
Mr Gregory holds a Bachelor of Business
degree from Curtin University and is a
Fellow of the Governance Institute of Australia, the Financial
Services Institute of Australia and a Member of the Australian
Institute of Company Directors.
Mr Gregory currently consults on company secretarial and
governance matters to a number of listed and unlisted companies
and is a past Chairman of the Western Australian Branch Council of
Governance Institute of Australia. He has also served on the
National Council of GIA.
DIRECTORS’ RELEVANT INTEREST IN SHARES AND OPTIONS
At the date of this report the following table sets out the current Directors’ relevant interests in shares and options of Hannans Ltd.
Director
Damian Hicks
Jonathan Murray
Markus Bachmann(i)
Clay Gordon
Amanda Scott
Current holding
Ordinary
Shares
8,155,880
24,839,436
98,825,948
9,808,159
4,760,001
Options over
Ordinary Shares
105,000,000
18,500,000
18,500,000
18,500,000
18,500,000
DIRECTORS MEETINGS
The following tables set information in relation to Board meetings held during the financial year.
Board Member
Held while Director
Attended
Board Meetings
Damian Hicks
Jonathan Murray
Markus Bachmann
Clay Gordon
Amanda Scott
3
3
3
3
3
3
3
3
2
3
Circular
Resolutions
Passed
6
6
6
7
7
Total
9
9
9
9
10
H A N N A N S A N N U A L R E P O R T 2 0 22 | 7
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The remuneration report is set out under the following main headings:
A.
B.
C.
D.
E.
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share–based compensation
Additional information
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.
A. Principles used to determine the nature and amount of remuneration
The whole Board forms the Remuneration Committee. The remuneration policy has been designed to align director and executive
objectives with shareholder and business objectives by providing a fixed remuneration component with the flexibility to offer specific long
term incentives based on key performance areas affecting the Group’s financial results. The Board believes the remuneration policy to be
appropriate and effective in its ability to attract and retain the best directors and executives to manage the Group.
The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives is as follows:
∂
∂
∂
∂
∂
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed
by the Board. All executives receive a base salary (which is based on factors such as length of service and experience) and
superannuation. The Board reviews executive packages annually and determines policy recommendations by reference to executive
performance and comparable information from industry sectors and other listed companies in similar industries.
The Board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract and
retain the highest calibre of executives and reward them for performance that results in long term growth in shareholder wealth.
The Executive Director and executives receive a superannuation guarantee contribution required by the government where
applicable, which is currently 10.0% of base salary and do not receive any other retirement benefits.
All remuneration paid to directors and executives is valued at the cost to the Group and expensed. Options are valued using the
Black–Scholes methodology where relevant.
The Board policy is to remunerate non–executive directors at market rates for comparable companies for time, commitment and
responsibilities. The Board determines payments to the non–executive directors and reviews the remuneration annually, based on
market practice, duties and accountability. Independent external advice is sought when required. No independent external advise
was sought during the year. 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. The approved maximum aggregate amount that may be paid to Non-
Executive Directors as remuneration for each financial year is set at $250,000 which may be divided among the Non-Executive
Directors in the manner determined by the Board and Company from time to time. Fees for Non–Executive Directors are not linked
to the performance of the Company. The 2021 remuneration report was approved at the last Annual General Meeting held on 26
November 2021.
The remuneration policy has been tailored to increase the direct positive relationship between shareholders’ investment objectives and
directors and executive performance. The Company facilitates this through the issue of options from time to time to the directors and
executives to encourage the alignment of personal and shareholder interests. The Company believes this policy will be effective in
increasing shareholder wealth. The Company currently has no performance based remuneration component built into director and
executive remuneration packages.
The Board does not consider earnings during the current and previous financial years when determining, and in relation to, the nature and
amount of directors’ remuneration. Refer below for a summary of the Group’s earnings and the Company’s market performance for the
past 5 years.
Summary of 5 Years earnings and market performance as at 30 June
Profit/(Loss) ($)
Share price (c)
Market capitalisation
(Undiluted) ($)
2022
2021
2020
2019
2018
(3,695,128)
(1,550,464)
(1,900,520)
(2,085,563)
(1,379,271)
2.1
0.5
0.5
1.0
1.4
54,731,701
11,799,886
9,939,773
19,879,545
27,724,264
8 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (cont’d)
B. Details of remuneration
Details of remuneration of the Directors and key management personnel (as defined in AASB 124 Related Party Disclosures) of Hannans are
set out in the table below.
The key management personnel of Hannans and the Group are listed on pages 6 and 7.
Given the size and nature of operations of Hannans, there are no other employees who are required to have their remuneration disclosed in
accordance with the Corporations Act 2001.
Short Term
Post-employment
Equity
Salary
& fees
Other
benefits
(i)
D&O(ii)
insurance
Superan-
nuation
Other
benefits
Options
(iii)
Long
term
benefits
Other
benefits
$
$
$
$
$
$
$
$
Value
options as
proportion of
remuneration
%
Total
$
2022
Directors
D Hicks (iv)
J Murray
M Bachmann
C Gordon
A Scott
Total
2021
Directors
D Hicks
J Murray
M Bachmann
C Gordon
A Scott
Total
276,600
33,151
3,502
27,660
24,000
24,000
21,818
24,000
–
–
–
–
3,502
3,502
3,502
3,502
–
–
2,182
–
–
–
–
–
–
742,978
106,140
106,140
106,140
106,140
370,418
33,151
17,510
29,842
– 1,167,538
240,000
18,462
2,590
22,800
24,000
24,000
24,000
24,000
–
–
–
–
2,589
2,589
2,589
2,589
–
–
2,280
–
336,000
18,462
12,946
25,080
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 1,083,891
–
–
–
–
133,642
133,642
133,642
133,642
68.5%
79.4%
79.4%
79.4%
79.4%
– 1,618,459
72.1%
–
–
–
–
–
–
283,852
26,589
26,589
28,869
26,589
392,488
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
(i) Short Term Other benefits include annual leave of $8,898 (2021:
$18,462) and long service leave of $24,253 (2021: nil) for Mr Damian
Hicks.
(ii) For accounting purposes Directors & Officers Indemnity Insurance is
required to be recorded as remuneration. No director receives any cash
benefits, simply the benefit of the insurance coverage for the financial
year.
(iii) The amounts included were issued under Hannans’ Director Equity
Option Plan approved by shareholders in October 2019. The amounts
are non-cash items that are subject to vesting conditions. Refer to
Section D for more information.
(iv) In accordance with Mr Hicks’ agreement, his annual salary increased to
$264,600 starting 1 July 2021 and the unpaid 2021 annual increment of
5% of $12,000 was paid in the current financial year.
C.
Service agreements – Executive Director
Mr Hicks was appointed a Director of Hannans on 11 March 2002 and commenced employment with Hannans Ltd on 3 December 2003.
He entered into an employment agreement as Managing Director of the Company on 21 December 2009. On 29 November 2016,
Mr Hicks was appointed as the Executive Director of the Group. The Board resolved from 1 July 2017 to increase his fees to $198,000 per
annum for executive services and $20,000 per annum for services related specifically to his role as a director of the Board.
On 1 July 2019, Mr Hicks’ entered into an executive employment agreement with the Company with his salary increased to $240,000 per
annum. The remuneration package includes statutory superannuation entitlements, a remuneration increase of not less than 5% per annum
and provision of leave in accordance to the National Employment Standards. In accordance with his agreement, the annual increment of
5% since 1 July 2019 was paid in the current financial year. Mr Hicks’ salary starting 1 July 2022 is $277,830.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 9
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (cont’d)
C.
Service agreements (cont’d)
Executive Director (cont’d)
Remuneration and other terms of employment for the executive is formalised in an employment agreement. The executive is employed
on a rolling basis with no specified fixed terms. Major provisions of the agreements relating to the executive are set out below.
Name
Engagement
By HANNANS
By Employee
Termination Notice Period
Termination
payments*
Director | D Hicks
Employee
6 months
3 months
3 months
*
Termination payments (other than for gross misconduct) are calculated on current remuneration at date of termination and are inclusive of the notice
period.
Non-Executive Directors
Remuneration and other terms of employment for the Non-executive Directors are formalised in service agreements. The Non-executive
directors are employed on a rolling basis with no specified fixed terms. They are remunerated on a fixed remuneration basis, exclusive of
superannuation. On 1 July 2019 the Non-Executive Directors fees were set at $24,000 per annum for each Non-executive Director.
Major provisions of the agreements relating to the Non-Executive directors are set out below.
Name
Non-Executive Directors
J Murray
M Bachmann
C Gordon
A Scott
Termination Notice Period
By HANNANS
By Director
1 month
1 month
1 month
1 month
Immediate
Immediate
Immediate
Immediate
Termination
payments*
Notice period
Notice period
Notice period
Notice period
*
Termination payments (other than for gross misconduct) are calculated on current remuneration at date of termination and are inclusive of the notice
period.
Share–based compensation
D.
If approved by shareholders, options are issued to directors and executives as part of their remuneration. The options are not based on
performance criteria, but are issued to align the interests of directors, executives and shareholders. A total of 165,000,000 options were
issued to the directors and executives during the year.
Option series
(O17-T1) 26 Nov 2021(i)
(O17-T2) 26 Nov 2021(ii)
(O17-T3) 26 Nov 2021(iii)
Number
Grant date
Expiry date
55,000,000
26 November 2021
25 November 2025
55,000,000
26 November 2021
25 November 2025
55,000,000
26 November 2021
25 November 2025
Exercise price
(cents)
6.1
(ii)
(iii)
The vesting condition and exercise price of the options are as follows:
(i) Vesting condition: Continuous service as a Director until 25 November 2022.
(ii) Vesting condition: Continuous service as a Director until 25 November 2023.
Exercise price:
Calculated at the volume weighted average price (VWAP) for the five (5) trading days before and five (5) trading
days after 26 November 2022 PLUS a premium of 50%.
(iii) Vesting condition: Continuous service as a Director until 25 November 2024.
Exercise price:
Calculated at the VWAP for the five (5) trading days before and five (5) trading days after 26 November 2023 PLUS
a premium of 50%.
10 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
DIRECTORS’ REPORT
D.
Share–based compensation (cont’d)
As at 30 June 2022, 193,000,000 options (2021: 28,000,000) were held by Directors and Non-Executives.
Issued
in
Finan-
cial
year
Options
issued
during
the year
No.
No of
options
No.
Issue
date
Fair
value
per
options
at issue
date
Vesting
date(i)
Exercise
price
Expiry
date
Vested
during
the year
Expired/
Exercised
during
the year
No.
No.
Directors
D Hicks
2022
35,000,000
35,000,000
26 Nov 21
2.1 cents
25 Nov 22
6.1 cents
25 Nov 25
2022
35,000,000
35,000,000
26 Nov 21
1.9 cents
25 Nov 23
(ii)
25 Nov 25
2022
35,000,000
35,000,000
26 Nov 21
1.5 cents
25 Nov 24
(iii)
25 Nov 25
J Murray
2018
2018
–
–
–
27 Oct 17
1.0 cents
27 Oct 18
1.8 cents
27 Oct 21
3,500,000
27 Oct 17
1.2 cents
27 Oct 19
1.5 cents
27 Oct 22
2022
5,000,000
5,000,000
26 Nov 21
2.1 cents
25 Nov 22
6.1 cents
25 Nov 25
2022
5,000,000
5,000,000
26 Nov 21
1.9 cents
25 Nov 23
(ii)
25 Nov 25
2022
5,000,000
5,000,000
26 Nov 21
1.5 cents
25 Nov 24
(iii)
25 Nov 25
M Bachmann
2018
2018
–
–
–
27 Oct 17
1.0 cents
27 Oct 18
1.8 cents
27 Oct 21
3,500,000
27 Oct 17
1.2 cents
27 Oct 19
1.5 cents
27 Oct 22
2022
5,000,000
5,000,000
26 Nov 21
2.1 cents
25 Nov 22
6.1 cents
25 Nov 25
2022
5,000,000
5,000,000
26 Nov 21
1.9 cents
25 Nov 23
(ii)
25 Nov 25
2022
5,000,000
5,000,000
26 Nov 21
1.5 cents
25 Nov 24
(iii)
25 Nov 25
C Gordon
2018
2018
–
–
–
27 Oct 17
1.0 cents
27 Oct 18
1.8 cents
27 Oct 21
3,500,000
27 Oct 17
1.2 cents
27 Oct 19
1.5 cents
27 Oct 22
2022
5,000,000
5,000,000
26 Nov 21
2.1 cents
25 Nov 22
6.1 cents
25 Nov 25
2022
5,000,000
5,000,000
26 Nov 21
1.9 cents
25 Nov 23
(ii)
25 Nov 25
2022
5,000,000
5,000,000
26 Nov 21
1.5 cents
25 Nov 24
(iii)
25 Nov 25
A Scott
2018
2018
–
–
–
27 Oct 17
1.0 cents
27 Oct 18
1.8 cents
27 Oct 21
3,500,000
27 Oct 17
1.2 cents
27 Oct 19
1.5 cents
27 Oct 22
2022
5,000,000
5,000,000
26 Nov 21
2.1 cents
25 Nov 22
6.1 cents
25 Nov 25
2022
5,000,000
5,000,000
26 Nov 21
1.9 cents
25 Nov 23
(ii)
25 Nov 25
2022
5,000,000
5,000,000
26 Nov 21
1.5 cents
25 Nov 24
(iii)
25 Nov 25
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,500,000
–
–
–
–
3,500,000
–
–
–
–
3,500,000
–
–
–
–
3,500,000
–
–
–
–
(i) The unlisted options become vested on the vesting date upon continuous service as a Director. No other vesting condition applies.
(ii) The volume weighted average price (VWAP) for the five (5) trading days before and five (5) trading days after the 1st anniversary of the approval by
shareholders PLUS a premium of 50%.
(iii) The VWAP for the five (5) trading days before and five (5) trading days after the 2nd anniversary of the approval by shareholders PLUS a premium of 50%.
Values of options over ordinary shares granted and exercised for directors and other key management personnel as part of compensation
during the year ended 30 June 2022 are set out below:
Directors
D Hicks
J Murray
M Bachmann
C Gordon
A Scott
TOTAL
No options issued to directors and key management personnel expired during the year.
Value of options during the year
Granted
$
1,942,500
277,500
277,500
277,500
277,500
Exercised
$
–
35,630
35,630
35,630
35,630
3,052,500
142,520
H A N N A N S A N N U A L R E P O R T 2 0 22 | 11
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (cont’d)
E. Additional information
Performance income as a proportion of total compensation
No performance based bonuses have been paid to directors or executives during the financial year.
Key management personnel (KMP) equity holdings
Fully paid ordinary shares of Hannans Ltd
Balance at
1 July
Granted as
remuneration
Received on
exercise of
options Net other change
Balance at
30 June
Key management personnel
No.
No.
No.
No.
No.
2022
Damian Hicks
Jonathan Murray
Markus Bachmann
Clay Gordon
Amanda Scott
Options of Hannans Ltd
Key management personnel
2022
Damian Hicks
Jonathan Murray(i)
Markus Bachmann
Clay Gordon
Amanda Scott
7,461,763
19,523,313
85,952,405
5,771,294
1,260,001
119,968,776
–
–
–
–
–
–
–
3,500,000
3,500,000
3,500,000
3,500,000
694,117
1,816,123
8,878,146
536,865
(3,500,000)
8,155,880
24,839,436
98,330,551
9,808,159
1,260,001
14,000,000
8,425,251
142,394,027
Balance
at
1 July
No.
Granted as
remune-
ration
Options
exercised
Net other
change
Balance at
30 June
Exercisable
Not
exercisable
Vested at 30 June
No.
No.
No.
No.
No.
No.
–
105,000,000
–
7,000,000
15,000,000
(3,500,000)
7,000,000
15,000,000
(3,500,000)
7,000,000
15,000,000
(3,500,000)
7,000,000
15,000,000
(3,500,000)
–
–
–
–
–
105,000,000
–
105,000,000
18,500,000
3,500,000
15,000,000
18,500,000
3,500,000
15,000,000
18,500,000
3,500,000
15,000,000
18,500,000
3,500,000
15,000,000
28,000,000 165,000,000
(14,000,000)
– 179,000,000
14,000,000 165,000,000
(i) Mr Murray holds 840,000 in trust for unrelated third parties.
The options include those held directly, indirectly and beneficially by KMP.
Loans to KMP and their related parties
Critical Metals Ltd (CM1), of which Mr Damian Hicks, Mr Jonathan Murray and Mr Markus Bachmann are the Directors, was provided with
a short term loan facility of $200,000 at an interest rate of 12.5% per annum. The loan is unsecured. CM1 has drawn down $200,000 on
the loan facility. The fair value of the loan was based on net present value with no expected future cash flows. As there is a significant
uncertainty as to the repayment of this loan, the fair value of the loan amount was nil as at 30 June 2022. Refer to notes 10 and 25(c) for
further information.
12 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (cont’d)
E.
Additional information (cont’d)
Other transactions and balances with KMP and their related parties
Director transactions
Steinepreis Paganin, of which Mr Jonathan Murray is a partner, provided legal services amounting to $213,073 (2021: $15,136) to the Group
during the year. Mr Murray’s director’s fees are also paid to Steinepreis Paganin. At 30 June 2022 $8,229 was owed to Steinepreis Paganin
(2021: $433).
Corporate Board Services Pty Ltd (CBS), of which Mr Damian Hicks is a director, provided accounting and compliance services amounting to
$185,515 (2021: $150,000) to the Group during the year. At 30 June 2022 $39,067 was owed to CBS (2021: Nil).
Scott Geological AB, of which Ms Amanda Scott is a director, provided geological services amounting to $14,213 (2021: $5,825) to the Group
during the year. Ms Scott’s director’s fees are also paid to Scott Geological. At 30 June 2022 there was no amount outstanding owed to Scott
Geological AB (2021: Nil).
Advance Geological Pty Ltd, of which Mr Clay Gordon is a director, provided geological services amounting to $81,095 (2021: $14,888) to
the Group during the year. Mr Gordon’s director’s fees are paid directly to him. At 30 June 2022 $27,818 (2021: nil) was owed to Advance
Geological.
Transaction with Critical Metals Ltd (CM1)
Mr Damian Hicks, Mr Jonathan Murray and Mr Markus Bachmann are the Directors of Critical Metals Ltd (CM1). On 26 November 2021,
shareholders approved the Company entering into an agreement with CM1 and its wholly owned subsidiary, LiB Recycling Pty Ltd (together
referred to as Critical Metals) to commercialise the lithium-ion battery technology (Technology) in Norway, Sweden, Denmark, and Finland
(Agreement). Under the Agreement, Hannans will manage and fund all tasks and activities in the territories through to a final investment
decision (FID) with respect to the construction of each plant for the processing or recycling of feedstock batteries using the Technology.
Refer to the Notice of Annual General Meeting dated 25 October 2021 for further information.
Expenses of $10,850 (2021: nil) were recharged by CM1 to the Group during the year. Expenses of $8,884 (2021: $2,256) were recharged to
CM1 by the Group during the year. At 30 June 2022 $9,181 (2021: $2,474) was owed by CM1.
End of Remuneration Report
H A N N A N S A N N U A L R E P O R T 2 0 22 | 13
DIRECTORS’ REPORT
PROJECTS
The Projects are constituted by the following tenements:
Tenement
Interest
Tenement
Interest
Tenement
Interest
Tenement Number
% Note
Tenement Number
% Note
Tenement Number
% Note
Project: Forrestania
Project: Forrestania
Project: Fraser Range
E77/2207-I
E77/2219-I
E77/2220-I
E77/2239-I
P77/4290
P77/4291
E77/2546
P77/4534
100
100
100
100
100
100
100
100
1,2
E77/2460
100
3
E28/3167
1,2
Project: Moogie
1,2
E09/2373
1,2
E09/2374
1,2
E09/2417
1,2
E09/2460
E09/2461
1
1
100
100
100
100
100
1
1
1
1
1
E28/3168
E63/2020
E63/2021
E63/2022
E63/2023
E63/2024
E63/2025
E63/2026
E63/2143
100
100
100
100
100
100
100
100
100
100
3
3
1
1
1
1
1
1
1
1
NOTE:
1
2
3
Reed Exploration Pty Ltd (REX) is a wholly owned subsidiary of Hannans Ltd. REX is the registered holder of the tenements.
REX holds a 100% interest in all minerals excluding gold. REX holds a 20% free-carried interest in the gold rights.
Hannans LiB Pty Ltd (previously known as HR Forrestania Pty Ltd) (HLB) is a wholly owned subsidiary of Hannans Ltd. HLB is the
registered holder of the tenements.
TENEMENTS UNDER APPLICATION
Applications for tenements have been submitted are as follows:
Tenement Number
Project: Forrestania
E77/2711
Tenement Number
Project: Moogie
E09/2640
E09/2662
E09/2697
CORPORATE STRUCTURE
The corporate structure of Hannans group is as follows:
Hannans Ltd
(ASX: HNR)
Hannans LiB Pty Ltd
(previously known as HR Forrestania Pty Ltd
(100%)
HR Equities Pty Ltd
Reed Exploration Pty Ltd
(100%)
(100%)
14 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
CAPITAL
Hannans Ltd issued capital is as follows:
Ordinary Fully Paid Shares
At the date of this report, the number of ordinary fully paid shares are:
Ordinary fully paid shares at 30 June 2022
Ordinary fully paid shares at the date of this report
DIRECTORS’ REPORT
Number of shares
2,606,271,476
2,606,271,476
At a general meeting of shareholders:
(a)
(b)
on a show of hands, each person who is a member or sole proxy has one vote; and
on a poll, each shareholder is entitled to one vote for each fully paid share.
Shares Under Option
At the date of this report there are a total of 10 unlisted option holders holding 241,500,000 unissued ordinary shares in respect of which
options are outstanding. The unlisted options do not carry voting rights at a general meeting of shareholders.
Balance at the beginning of the year
Movements of share options during the year
Exercised on 27 October 2021 exercisable at 1.8 cents
Expired on 30 October 2021 exercisable at 1.2 cents
Expired on 30 October 2021 exercisable at 1.7 cents
Issued on 26 November 2021 exercisable at 6.1 cents, expiring 25 November 2025
Issued on 26 November 2021 exercisable at VWAP* for five (5) trading days before and five (5) trading days
after the 1st anniversary of the approval by shareholders PLUS a premium of 50%,
expiring 25 November 2025
Issued on 26 November 2021 exercisable at VWAP* for five (5) trading days before and five (5) trading days
after the 2nd anniversary of the approval by shareholders PLUS a premium of 50%,
expiring 25 November 2025
Balance at 30 June 2022
Total number of options outstanding at the date of this report
* VWAP = Volume Weighted Average Price
Substantial Shareholders
Hannans Ltd has the following substantial shareholders as at 19 September 2022:
Number of options
129,500,000
(28,000,000)
(10,000,000)
(15,000,000)
55,000,000
55,000,000
55,000,000
241,500,000
241,500,000
Name
Number of shares
Percentage of issued capital
Neometals Investments Pty Ltd
845,086,264
32.43%
Range of Shares as at 19 September 2022
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 9,999,999
Total
Total Holders
142
196
178
2,445
1,672
4,633
Units
33,093
656,734
1,524,137
109,210,419
2,494,847,093
2,606,271,476
% Issued Capital
0.00%
0.03%
0.06%
4.19%
95.72%
100.00%
H A N N A N S A N N U A L R E P O R T 2 0 22 | 15
DIRECTORS’ REPORT
CAPITAL (cont’d)
Unmarketable Parcels as at 19 September 2022
Minimum $500.00 parcel at $0.021 per unit
23,810
Minimum parcel size
Holders
1,250
Units
14,413,526
Top 20 holders of Ordinary Shares as at 19 September 2022
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Neometals Investments Pty Ltd
Citicorp Nominees Pty Limited
MCA Nominees Pty Ltd
Equity & Royalty Investments Ltd
Anglo American Exploration
Mossisberg Pty Ltd
Acacia Inevstments Pty Ltd
BNP Paribas Noms Pty Ltd
Mrs Andrea Rae Murray
BNP Paribas Nominees Pty Ltd
Mr Simon Charles McCreed
Mr Ross Edward Itzstein
CS Fourth Nominees Pty Limited
Superhero Securities Limited
Mr Geoffrey Alby Langbecker
Mr William Scott Rankin
Ms Simone Anne Milasas
Rattler Racing Pty Ltd
DJH Ventures Pty Ltd
Mr Mark Dimasi + Mrs Julianne Dimasi
Units
845,086,264
193,352,594
84,601,689
60,705,177
60,000,000
27,500,000
26,240,944
25,954,929
23,823,825
19,632,529
16,700,000
15,103,594
11,088,344
10,922,831
10,150,145
8,699,489
8,629,675
7,750,000
7,651,163
7,558,140
% of Issued
Capital
32.43%
7.42%
3.25%
2.33%
2.30%
1.06%
1.01%
1.00%
0.91%
0.75%
0.64%
0.58%
0.43%
0.42%
0.39%
0.33%
0.33%
0.30%
0.29%
0.29%
Total of Top 20 holders of ORDINARY SHARES
1,471,151,332
56.46%
On-market buy back
There is no current on-market buy-back.
16 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
DIRECTORS’ REPORT
PRINCIPAL ACTIVITIES
The principal activities of the Group during the year were the exploration and evaluation of tenements and implementation of the proposed
European LiB recycling strategy.
FINANCIAL REVIEW
The Group began the financial year with cash reserves of $1,013,733.
During the year total exploration expenditure expensed by the Group amounted to $731,359 (2021: $1,324,932). The exploration
expenditures relate to non-JORC compliant mineral resource projects and this has been expensed in accordance with the Group’s accounting
policy. Administrative expenditure incurred amounted to $2,213,635 (2021: $579,376). This has resulted in an operating loss after income tax
for the year ended 30 June 2022 of $3,695,128 (2021: $1,550,464 loss).
As at 30 June 2022 cash and cash equivalents totalled $4,030,952.
Summary of 5 Year Financial Information as at 30 June
2022
2021
2020
2019
2018
Cash and cash equivalents ($)
4,030,952
1,013,733
855,949
2,686,790
4,082,079
Net assets/equity ($)
6,296,651
3,199,959
3,157,778
4,989,155
6,788,307
Exploration expenditure expensed ($)
(731,359)
(1,324,932)
(1,254,103)
(766,344)
(505,967)
Exploration and evaluation expenditure
capitalised/(written-off) ($)
–
(16,000)
–
(404,000)
(28,000)
No of shares on issue
No of options on issue
Share price ($)
2,606,271,476
2,359,977,192
1,987,954,539
1,987,954,539
1,980,304,538
241,500,000
129,500,000
108,655,848
117,172,512
125,022,513
0.021
0.005
0.005
0.010
0.014
Market capitalisation (Undiluted) ($)
54,731,701
11,799,886
9,939,773
19,879,545
27,724,264
Summary of Share Price Movement for year ended 30 June 2022
Highest
Lowest
Latest
Price (cents)
Date
5.7
0.6
2.1
17-31 Jan 2022
14, 19, 20-23, 27 Jul,
2 Aug, 1 Sep 2021
19 September 2022
CORPORATE GOVERNANCE STATEMENT
The Company is committed to high standards of corporate governance designed to enable the Company to meet its performance objectives
and better manage its risks.
The Company has adopted a comprehensive governance framework in the form of a formal corporate governance charter together with
associated policies, protocols and related instruments (together Charter).
The Company’s Charter is based on a template which has been professionally verified to be complementary to and in alignment with the
ASX Corporate Governance Council Principles and Recommendations 4th Edition 2019 (ASX CGCPR) in all material respects. The Charter
also substantially addresses the suggestions of good corporate governance mentioned in the ‘Commentary’ sections of the ASX CGCPR.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 17
DIRECTORS’ REPORT
CORPORATE GOVERNANCE STATEMENT (cont’d)
The Board is responsible for the overall corporate governance of the Group. The Board has governance oversight of all matters relating to
the strategic direction, corporate governance, policies, practices, management and operations of the Group with the aim of delivering value
to its Shareholders and respecting the legitimate interest of its other valued stakeholders, including employees, suppliers and joint venture
partners.
Under ASX Listing Rule 4.10.3, the Company is required to provide in its annual report details of where shareholders can obtain a copy of its
corporate governance statement, disclosing the extent to which the Company has followed the ASX Corporate Governance Council Principles
and Recommendations in the reporting period. The corporate governance statement is published on the Company’s website:
https://www.hannans.com/corporate-governance.php
ANNOUNCEMENTS
ASX Announcements for the year and to the date of this report
Date
Announcement Title
Date
Announcement Title
13/07/2021
Forrestania Nickel Project Update
30/07/2021
4th Quarter Activities Report
8/11/2021
8/11/2021
Change of Directors' Interest Notice x 5
Appendix 2A
30/07/2021
4th Quarter Cashflow Report
12/11/2021
Change of Director's Interest Notice
2/08/2021
Southern Cross Gold & Nickel Project Update
23/11/2021
LiB Recycling in the Nordic Region (Updated)
2/09/2021
Moogie Nickel-Copper Update
26/11/2021
AGM Results
6/09/2021
Trading Halt
26/11/2021
AGM Presentation
8/09/2021
Suspension from Official Quotation
30/11/2021
Binding Agreement to Recycle Lithium Batteries
9/09/2021
Reinstatement to Official Quotation
6/12/2021
Change of Directors' Interest Notice x 5
9/09/2021
LiB Recycling in the Nordics Presentation
6/12/2021
Notification regarding unquoted securities - HNR
9/09/2021
Lithium-ion Battery Recycling in the Nordics
6/12/2021
Updated Capital Structure
10/09/2021
Change in substantial holding from NMT
7/12/2021
Notification of cessation–of securities - HNR
20/09/2021
Response to ASX Price Query
20/09/2021
Trading Halt
19/01/2022
Trading Halt
19/01/2022
Pause in Trading
20/09/2021
24/09/2021
24/09/2021
Pause in Trading
Appendix 4G & Corporate Governance Statement
2021 Annual Report
27/09/2021
Trading Halt
21/01/2022
Suspension from Official Quotation
25/01/2022
Extension to Voluntary Suspension
31/01/2022
2nd Quarter Activities Report
31/01/2022
2nd Quarter Cashflow Report
29/09/2021
Suspension from Official Quotation
1/02/2022
Reinstatement to Official Quotation
4/10/2021
Reinstatement to Official Quotation
1/02/2022
Expansion to Major European EV Markets
4/10/2021
Expansion of LiB Recycling in Europe
1/02/2022
Response to ASX Price Query
8/10/2021
LiB Recycling in Europe
3/02/2022
Lithium Battery Recycling Expansion Presentation
11/10/2021
Proposed issue–of securities - HNR
17/02/2022 Moogie Nickel-Copper-PGE Project Update
11/10/2021
Rights Issue Offer Document
10/03/2022
Forrestania Gold Update
11/10/2021
Cleansing Notice
11/03/2022
Half Year Financial Report
11/10/2021
11/10/2021
12/10/2021
Fully Underwritten $5.5M Rights Issue
Trading Halt
Neometals Commit $1.8M to Rights Issue
5/04/2022
Moogie Ni-Cu-PGE Project Update
11/04/2022
Update on Battery Recycling and Recompliance
29/04/2022
3rd Quarter Activities Report
18/10/2021
Date of AGM and Director Nomination
29/04/2022
3rd Quarter Cashflow Report
20/10/2021
Rights Issue Open
3/06/2022
Suspension from Official Quotation
25/10/2021
Notice of Annual General Meeting
3/06/2022
Pause in Trading
27/10/2021
01/11/2021
1/11/2021
Rights Issue Closing Date
Application for quotation of securities - HNR
Updated Capital Structure
1/11/2021
1st Quarter Activities Report
19/07/2022
Extension of Suspension
28/07/2022
Improved Acquisition Agreement
29/07/2022
4th Quarter Activities Report
29/07/2022
4th Quarter Cashflow Report
1/11/2021
1st Quarter Cashflow Report
2/09/2022
Updated Transaction Timetable
3/11/2021
Rights Issue Closed
12/09/2022
Board Succession
5/11/2021
Lithium Battery Recycling in the Nordic Region
18 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
DIRECTORS’ REPORT
COMPLIANCE
Significant Changes in State of Affairs
Other than those disclosed in this annual report no significant changes in the state of affairs of the Group occurred during the financial
year.
Significant Events after the Balance Date
The following 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 state of affairs of the Group in future financial years:
(a)
Revised Agreement with Greenhouse Investments Ltd and Capital Raising
On 28 July 2022, the Company announced that it executed a revised agreement with Greenhouse Investments Ltd (Greenhouse) to
acquire 100% of the non-exclusive rights to commercialise a lithium battery (LiB) recycling technology (Technology) in the United
Kingdom and Ireland (Non-Exclusive Territories) and the sole and exclusive rights to commercialise the Technology in Italy and
South Eastern Europe (Exclusive Territories). Under the original binding heads of agreement between Hannans and Greenhouse,
the licences for the Non-Exclusive Territories were to be sub-licensed to Hannans, while in the Exclusive Territories, Hannans would
receive a right to fund new lithium battery recycling plants in those jurisdictions, in consideration for project equity (to be negotiated
on a case-by-case basis). Under the revised agreement, all Greenhouse licences (for the Exclusive Territories and Non-Exclusive
Territories) will be novated to Hannans and Hannans will directly hold a 100% interest in the licences. This new arrangement presents
as a stronger outcome for Hannans shareholders and removes the complexity and risks associated with sub-licenses and the right
to fund. Hannans needs to raise up to $2m at 2.0 cents per share to fund the activities in the new territories. The agreement with
Greenhouse is subject to satisfaction of conditions, including obtaining shareholder approval, entry into a substantive agreement,
and re-comply with ASX’s requirement for admission and quotation.
(b)
Board Succession
On 12 September 2022, the Company announced details of the Board succession plan to align the Board’s skills matrix with its
planned future business activities.
Mr Jonathan Murray will continue as Chairman of the Board.
Hannans’ largest shareholder Neometals Ltd has nominated Mr Andrew Umbers to be non-executive director, and Mr Umbers has
provided his consent to be a director. Mr Umbers has over 35 years of experience in Investment Banking and resides in London, UK.
He was a Director at Barclays De Zoete Wedd, Managing Director at Credit Suisse, CEO at Evolution plc and a Director of European
Equities of Credit Suisse. Mr Umbers has been responsible for advising on the listing and financing of approximately 100 companies
on European stock markets. He was formerly Chairman of Leeds United Football Club and is Founder and Managing Partner of
Oakwell Sports, the leading sports and sports technology commercial, strategic and financial adviser in Europe.
Hannans’ proposed second largest shareholder Greenhouse has nominated Mr Mark Sumich to be non-executive director, and Mr
Sumich has provided his consent to be a director. Mr Sumich has 30 years of corporate and commercial experience, as an
entrepreneur, business consultant, corporate lawyer and corporate finance executive and resides in Perth, Australia. He has held
Chair and Managing Director roles in ASX-listed companies in the IT, technology, and resources sectors, raised over A$100m in C-
level roles, co-founded two ASX-listed entities (Globe Metals & Mining Ltd and DMC Mining Ltd) and has significant international
business experience in Europe, Africa and China.
Mr Sumich was previously employed by Clayton Utz and Price Waterhouse Coopers, has a law degree (Hons) from the University of
Western Australia, a Master of Business Administration from the London Business School and holds a Graduate Diploma in Applied
Finance & Investment from FINSIA.
Mr Umbers and Mr Sumich will only join the Board of Directors if shareholders approve the Greenhouse Transaction, and Hannans
recommences trading on ASX.
The existing Board and management will focus their efforts on communicating the change in scale and nature of Hannans activities
to Hannans shareholders, completing the capital raise and ensuring the recommencement of trading on ASX.
Likely developments and Expected Results
The Group expects to maintain the present status and level of operations and hence there are no likely developments in the Group’s
operations.
Environmental Regulation and Performance
The Group is subject to significant environmental regulation in respect to its exploration activities.
The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it’s aware of and is in
compliance with all environmental legislation. The Directors of the Group are not aware of any breach of environmental legislation for the
year under review.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 19
DIRECTORS’ REPORT
COMPLIANCE (cont’d)
Share options
During the year ended 30 June 2022, 28,000,000 shares were issued upon the exercise of options.
As at the date of this report, there were 241,500,000 options on issue to purchase ordinary shares at a range of exercise prices (241,500,000
at the reporting date). Refer to the remuneration report for further details of the options outstanding.
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate.
Insurance of Directors and Officers
During or since the end of the financial year, the Company has paid premiums insuring all the Directors of Hannans Ltd against costs incurred
in defending conduct involving:
(a)
(b)
a wilful breach of duty, and
a contravention of sections 182 or 183 of the Corporations Act 2001,
as permitted by section 199B of the Corporations Act 2001.
The total amount of insurance contract premiums paid was $17,510 (2021: $12,946).
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the terms of its audit
engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to
indemnify Ernst & Young during or since the financial year.
Dividends
No dividends were paid or declared during the financial year and no recommendation for payment of dividends has been made.
Non–Audit Services
During the year Ernst & Young, the Group auditor, did not perform other non-audit services in addition to its statutory duties.
Auditor’s independence declaration
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included on page 21.
Signed in accordance with a resolution of the Directors made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the Directors
Damian Hicks
Executive Director
Perth, Australia this 23rd day of September 2022
20 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
INDEPENDENCE DECLARATION TO THE DIRECTORS OF
HANNANS LTD
H A N N A N S A N N U A L R E P O R T 2 0 22 | 21
DIRECTORS’ DECLARATION
The Directors declare that:
(a)
(b)
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable;
in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001,
including compliance with Australian Accounting Standards and International Financial Reporting Standards as disclosed in note 2 to
the financial report and giving a true and fair view of the financial position and performance of the Group for the financial year ended
30 June 2022; and
(c)
the Directors have been given the declarations required by s.295A of the Corporations Act 2001 for the financial year ended
30 June 2022.
Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
Damian Hicks
Executive Director
Perth, Australia this 23rd day of September 2022
22 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
HANNANS LTD
H A N N A N S A N N U A L R E P O R T 2 0 22 | 23
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
HANNANS LTD
24 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
HANNANS LTD
H A N N A N S A N N U A L R E P O R T 2 0 22 | 25
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
HANNANS LTD
26 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
HANNANS LTD
H A N N A N S A N N U A L R E P O R T 2 0 22 | 27
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND
OTHER COMPREHENSIVE INCOME
for the financial year ended 30 June 2022
Interest
Other income
Loss on sale of listed securities
Employee and contractors expenses
Depreciation expense
Consultants expenses
Occupancy expenses
Marketing expenses
LiB recycling project expenses
Exploration and evaluation expenses
Note
5(a)
5(b)
5(c)
5(d)
5(e)
5(f)
Write off of exploration and evaluation expenses
14
Fair value changes in financial assets designated at fair value through P&L
10,11
Other expenses
2022
$
1,545
–
–
(1,512,947)
(4,318)
(470,431)
(9,548)
(6,782)
(413,550)
(731,359)
–
(338,129)
(209,609)
2021
$
621
125,000
(486)
(238,308)
(3,882)
(210,089)
(750)
(5,520)
–
(1,324,932)
(16,000)
244,709
(120,827)
Loss from continuing operations before income tax expense
(3,695,128)
(1,550,464)
Income tax benefit/(expense)
6
–
–
Loss from continuing operations attributable
to members of the parent entity
Other comprehensive loss for the year
Total other comprehensive loss for the year
(3,695,128)
(1,550,464)
–
–
–
–
Total comprehensive loss for the year
(3,695,128)
(1,550,464)
Net loss attributable to the parent entity
(3,695,128)
(1,550,464)
Total comprehensive loss attributable to the parent entity
(3,695,128)
(1,550,464)
Loss per share:
Basic (cents per share)
Diluted (cents per share)
The accompanying notes form part of the financial statements.
20
20
(0.15)
(0.15)
(0.07)
(0.07)
28 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2022
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets at fair value through profit and loss
Total current assets
Non–current assets
Other receivables
Property, plant and equipment
Other financial assets at fair value through profit and loss
Exploration and evaluation expenditure
Total non–current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Provisions
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of the financial statements.
Note
2022
$
2021
$
27(a)
4,030,952
1,013,733
10
11
12
13
11
14
15
16
17
18
19
144,132
140,331
90,849
65,000
4,315,415
1,169,582
30,000
15,088
115,001
2,240,000
30,000
19,406
328,460
2,240,000
2,400,089
2,617,866
6,715,504
3,787,448
378,317
40,536
418,853
418,853
580,104
7,385
587,489
587,489
6,296,651
3,199,959
48,067,444
42,433,949
1,506,938
655,948
(43,277,731)
(39,889,938)
6,296,651
3,199,959
H A N N A N S A N N U A L R E P O R T 2 0 22 | 29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the financial year ended 30 June 2022
Attributable to equity holders
Note
Ordinary Shares
$
Option Reserves
$
Accumulated
Losses
$
Total
Equity
$
Balance as at 1 July 2021
42,433,949
655,948
(39,889,938)
3,199,959
Loss for the year
Other comprehensive loss
for the period
Total comprehensive loss
for the period
Transactions with owners
Issue of shares
Share based payments
Exercise/Lapse of options
Share issue expense
Total transactions with owners
17
18
17,18
17
–
–
–
5,457,357
–
504,000
(327,862)
5,633,495
–
–
–
–
1,158,325
(307,335)
–
(3,695,128)
(3,695,128)
–
–
(3,695,128)
(3,695,128)
–
–
307,335
–
5,457,357
1,158,325
504,000
(327,862)
6,791,820
850,990
307,335
Balance as at 30 June 2022
48,067,444
1,506,938
(43,277,731)
6,296,651
Balance as at 1 July 2020
40,872,810
1,092,358
(38,807,390)
3,157,778
Loss for the year
Other comprehensive loss
for the period
Total comprehensive loss
for the period
Transactions with owners
Issue of shares
Share based payments
Exercise/Lapse of options
Share issue expense
17
17,18
18
17
–
–
–
1,605,000
50,750
–
–
–
–
31,506
(1,550,464)
(1,550,464)
–
–
(1,550,464)
(1,550,464)
–
1,605,000
82,256
–
(94,611)
–
(467,916)
467,916
(94,611)
–
–
Total transactions with owners
1,561,139
(436,410)
467,916
1,592,645
Balance as at 30 June 2021
42,433,949
655,948
(39,889,938)
3,199,959
30 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
CONSOLIDATED STATEMENT OF CASH FLOWS
for the financial year ended 30 June 2022
Cash flows from operating activities
Payments for LiB recycling project
Payments for exploration and evaluation
Payments to suppliers and employees
Interest received
Receipt from ATO (COVID-19 cash boost)
Note
2022
$
(402,645)
(1,123,791)
(891,474)
1,634
–
2021
$
–
(932,632)
(590,127)
779
62,258
Net cash used in operating activities
27(b)
(2,416,276)
(1,459,722)
Cash flows from investing activities
Payment for investment securities
Proceed on sale of tenements
Proceeds on sale of investment securities
Amount advanced to Critical Metals Ltd
Net cash (used in)/received by investing activities
Cash flows from financing activities
Proceeds from issues of equity securities
Proceeds from exercise of options
Payment for share issue costs
Net cash received by financing activities
–
–
–
(200,000)
(200,000)
(21,932)
100,000
29,049
–
107,117
5,457,357
1,605,000
504,000
(327,862)
–
(94,611)
5,633,495
1,510,389
Net increase in cash and cash equivalents
3,017,219
157,784
Cash and cash equivalents at the beginning of the financial year
1,013,733
855,949
Cash and cash equivalents at the end of the financial year
27(a)
4,030,952
1,013,733
The accompanying notes form part of the financial statements.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
1. General Information
The consolidated financial statements of Hannans Ltd (Company or Hannans) and its subsidiaries (collectively, the Group) for the
year ended 30 June 2022 were authorised for issue in accordance with a resolution of the Directors on 23 September 2022.
Hannans is a for profit company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the
Australian Securities Exchange.
The nature of the operations and principal activities of the Group are mineral exploration and project development which is further
describe’ in the Directors' Report. Information on other related party relationships is provided in note 25.
2.
Summary of significant accounting policies
The financial report is a general purpose financial report, which
has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and
other authoritative pronouncements of the Australian
Accounting Standards Board. The financial report includes the
financial statements of Hannans Ltd and its subsidiaries.
The financial report also complies with International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
(a)
Basis of preparation
The financial report has been prepared on an accruals
basis and is based on historical cost, except for certain
financial assets and liabilities which are carried at fair
value. Cost is based on the fair values of the
consideration given in exchange for assets. All amounts
are presented in Australian dollars, unless otherwise
noted.
Separate financial statements for Hannans as an
individual entity are no longer presented as the
consequence of a change to the Corporations Act 2001,
however, required financial information for Hannans as
an individual entity is included in note 30.
The accounting policies set out below have been
applied in preparing the financial statements for the
year ended 30 June 2022 and the comparative
information presented in these financial statements for
the year ended 30 June 2021.
Going concern basis of preparation
The Group recorded a loss of $3,695,128 (2021: loss
$1,550,464) for the year ended 30 June 2022 and had a
cash outflow from operating and investing activities of
$2,616,276 (2021: $1,352,605 outflow) during the twelve
(12) month period. The Group had cash and cash
equivalents at 30 June 2022 of $4,030,952 (2021:
$1,013,733) and has a working capital surplus of
$3,896,562 (2021: $582,093 surplus).
The Group’s cashflow forecast for the period ended
1 September 2022 to 31 March 2024 shows that the
Group to continue to meet its current committed
administration and exploration expenditure and
therefore the going concern basis of preparation
remains appropriate.
(b) New Accounting Standards for Application in the
Current Financial Year and Future Periods
The accounting policies adopted in the preparation of
the financial statements are consistent with those
followed in the preparation of the Company’s annual
financial statements for the year ended 30 June 2021
except for the new accounting standards stated below.
New standards, interpretations and amendments
adopted by the Group during the financial year
The Group has considered the implications of new and
amended Accounting Standards which have become
applicable for the current financial reporting period.
Initial adoption of AASB 2021-3:
Amendments to Australian Accounting Standards
– COVID-19 Related Rent Concessions
beyond 30 June 2021
The Group has applied AASB 2021-3: Amendments to
Australian Accounting Standards – COVID-19-Related
Rent Concessions beyond 30 June 2021 this reporting
period.
The amendment amends AASB 16 to extend by one
year, the application of the practical expedient added
to AASB 16 by AASB 2020-4: Amendments to Australian
Accounting Standards – COVID-19-Related Rent
Concessions. The practical expedient permits lessees
not to assess whether rent concessions that occur as a
direct consequence of the COVID-19 pandemic and
meet specified conditions are lease modifications and
instead, to account for those rent concessions as if they
were not lease modifications.
The amendment has not had a material impact on the
Group’s financial statements.
Initial adoption of AASB 2020-8:
Amendments to Australian Accounting Standards
– Interest Rate Benchmark Reform – Phase 2
The Group has applied AASB 2020-8 which amends
various standards to help listed entities to provide
financial statement users with useful information about
the effects of the interest rate benchmark reform on
those entities’ financial statements. As a result of these
amendments, an entity:
32 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
2.
Statement of significant accounting policies (cont’d)
(b) New Accounting Standards for Application in the
Current Financial Year and Future Periods (cont’d)
(b) New Accounting Standards for Application in the
Current Financial Year and Future Periods (cont’d)
∂ will not have to derecognise or adjust the carrying
amount of financial statements for changes required
by the reform, but will instead update the effective
interest rate to reflect the change to the alternative
benchmark rate;
∂ will not have to discontinue its hedge accounting
solely because it makes changes required by the
reform, if the hedge meets other hedge accounting
criteria; and
∂ will be required to disclose information about new
risks arising from the reform and how it manages
the transition to alternative benchmark rates.
The amendment has not had a material impact on the
Group financials.
New and Amended Accounting Standards and
Interpretation issued but not yet effective and
not yet adopted by the Group
AASB 2020-1: Amendments to Australian
Accounting Standards – Classification of
Liabilities as Current or Non-current
The amendment amends AASB 101 to clarify whether a
liability should be presented as current or non-current.
The Group plans on adopting the amendment for the
reporting period ending 30 June 2024. The amendment
is not expected to have a material impact on the
financial statements once adopted.
AASB 2020-3: Amendments to Australian
Accounting Standards – Annual Improvements
2018-2020 and Other Amendments
AASB 2020-3: Amendments to Australian Accounting
Standards – Annual Improvements 2018-2020 and
Other Amendments is an omnibus standard that
amends AASB 1, AASB 3, AASB 9, AASB 116, AASB 137
and AASB 141. The Group plans on adopting the
amendment for the reporting period ending 30 June
2023. The Group is in the process of determining the
impact of initial application.
AASB 2021-2: Amendments to Australian
Accounting Standards – Disclosure of Accounting
Policies and Definition of Accounting Estimates
The amendment amends AASB 7, AASB 101, AASB 108,
AASB 134 and AASB Practice Statement 2. These
amendments arise from the issuance by the IASB of the
following International Financial Reporting Standards:
Disclosure of Accounting Policies (Amendments to IAS
1 and IFRS Practice Statement 2) and Definition of
Accounting Estimates (Amendments to IAS 8).
The Group plans on adopting the amendment for the
reporting period ending 30 June 2024. The Group is in
the process of determining the impact of initial
application.
AASB 2021-5: Amendments to Australian
Accounting Standards – Deferred Tax related to
Assets and Liabilities arising from a Single
Transaction
The amendment amends the initial recognition
exemption in AASB 112: Income Taxes such that it is
not applicable to leases and decommissioning
obligations – transactions for which companies
recognise both an asset and liability and that give rise
to equal taxable and deductible temporary differences.
The Group plans on adopting the amendment for the
reporting period ending 30 June 2024. The Group is in
the process of determining the impact of initial
application.
AASB 2014-10: Amendments to Australian
Accounting Standards - Sale or Contribution of
Assets between an Investor and its Associate or
Joint Venture
The amendments to AASB 10 Consolidated Financial
Statements and AASB 128 Investments in Associates and
Joint Ventures clarify that a full gain or loss is
recognised when a transfer to an associate or joint
venture involves a business as defined in AASB 3
Business Combinations. Any gain or loss resulting from
the sale or contribution of assets that does not
constitute a business, however, is recognised only to the
extent of unrelated investors’ interests in the associate
or joint venture. The Group is in the process of
determining the impact of initial application.
(c)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash
in banks and investments in money market instruments
that are readily convertible to known amount of cash
which are subject to an insignificant risk of change in
value, net of outstanding bank overdrafts.
(d)
Employee benefits
Provision is made for employee benefits accumulated
as a result of employees rendering services up to the
reporting date. These benefits include wages and
salaries, annual leave and long service leave and are
recognised at the rates payable when these provisions
are expected to be settled.
Liabilities recognised in respect of employee benefits
expected to be settled within 12 months after the end of
the reporting period, are presented as current liabilities
and measured at their nominal values using the
remuneration rate expected to apply at the time of
settlement.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
2.
Statement of significant accounting policies (cont’d)
(d)
Employee benefits (cont’d)
(e)
Financial assets (cont’d)
For all other receivables measured at amortised cost, the
Group recognises lifetime ECL when there has been a
significant increase in credit risk since initial recognition.
If the credit risk on the financial instrument has not
increased significantly since initial recognition, the
Group measures the loss allowance for that financial
instrument at an amount equal to ECL within the next 12
months.
The Group considers an event of default has occurred
when a financial asset is more than 90 days past due or
external sources indicate that the debtor is unlikely to
pay its creditors, including the Group. A financial asset is
credit impaired when there is evidence that the
counterparty is in significant financial difficulty or a
breach of contract, such as a default or past due event
has occurred. The Group writes off a financial asset
when there is information indicating the counterparty is
in severe financial difficulty and there is no realistic
prospect of recovery.
Equity instruments
Shares and options held by the Group are classified as
equity instruments and are stated at FVPL. Gains and
losses arising from changes in fair value are recognised
directly to profit or loss for the period.
Loans receivables
Loans receivables are classified, at initial recognition,
and subsequently measured at amortised cost, FVOCI, or
FVPL. Loan receivables that are held to collect
contractual cash flows and are expected to give rise to
cash flows representing solely payments of principal and
interest are classified and subsequently measured at
amortised cost. Loan receivables that do not meet the
criteria for amortised cost are measured at FVPL.
(f)
Financial instruments issued by the Company
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity
instruments are recognised directly in equity as a
reduction of the proceeds of the equity instruments to
which the costs relate. Transaction costs are the costs
that are incurred directly in connection with the issue of
those equity instruments and which would not have
been incurred had those instruments not been issued.
Liability for long service leave not expected to be settled
within 12 months of the reporting date are measured as
the present value of expected future payments to be
made in respect of services provided by employees up
to the reporting date. 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 reporting date on corporate bonds with terms to
maturity and currency that match, as closely as possible,
the estimated future cash flows.
(e)
Financial assets
Financial assets are recognised and derecognised on
trade date where purchase or sale of an investment is
under a contract whose terms require delivery of the
investment within the timeframe established by the
market concerned, and are initially measured at fair
value, net of transaction costs.
Financial assets are subsequently measured at fair value
through profit or loss (FVPL), amortised cost, or fair
value through other comprehensive income (FVOCI).
The classification is based on two criteria: the Group’s
business model for managing the assets; and whether
the instruments’ contractual cash flows represent ‘solely
payments of principal and interest’ (SPPI) on the
principal amount outstanding (the SPPI criterion).
The SPPI test is applied to the entire financial asset, even
if it contains an embedded derivative. Consequently, a
derivative embedded in a debt instrument is not
accounted for separately.
Trade and other receivables
Trade receivables are initially recognised at their
transaction price and other receivables at fair value.
Receivables that are held to collect contractual cash
flows and are expected to give rise to cash flows
representing solely payments of principal and interest
are classified and subsequently measured at amortised
cost. Receivables that do not meet the criteria for
amortised cost are measured at FVPL.
The Group assesses on a forward-looking basis the ECL
associated with its debt instruments carried at amortised
cost. The amount of ECL is updated at each reporting
date to reflect changes in credit risk since initial
recognition of the respective financial instrument. The
Group always recognises the lifetime ECL for trade and
other short term receivables carried at amortised cost.
The ECL on these financial assets are estimated based
on the Group’s historic credit loss experience, adjusted
for factors that are specific to the debtors, general
economic conditions and an assessment of both the
current as well as forecast conditions at the reporting
date.
34 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
2.
Statement of significant accounting policies (cont’d)
(g) Goods and services tax
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except:
i. where the amount of GST incurred is not
recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an
asset or as part of an item of expense; or
ii.
for receivables and payables which are recognised
inclusive of GST.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables.
Cash flows are included in the cash flow statement on a
gross basis. The GST component of cash flows arising
from investing and financing activities which is
recoverable from, or payable to, the taxation authority is
classified as operating cash flows.
(h)
Impairment of non-financial assets
At each reporting date, the Group reviews the carrying
amounts of its tangible and intangible assets to
determine whether there is any indication that those
assets have suffered an impairment loss. Where the
asset does not generate cash flows that are independent
from other assets, the Group estimates the recoverable
amount of the cash–generating unit to which the asset
belongs. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine
the extent of the impairment loss (if any), being the
higher of the asset’s fair value less costs to sell and value
in use to the asset’s carrying value. Excess of the asset’s
carrying value over its recoverable amount is expensed
to the consolidated statement of comprehensive
income.
Recoverable amount is the higher of fair value less costs
to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their
present value using a pre–tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
Where an impairment loss subsequently reverses, the
carrying amount of the asset (cash–generating unit) is
increased to the revised estimate of its recoverable
amount, but only to the extent that the increased
carrying amount does not exceed the carrying amount
that would have been determined had no impairment
loss been recognised for the cash–generating unit in
prior years. A reversal of an impairment loss is
recognised in profit or loss immediately, unless the
relevant asset is carried at fair value, in which case the
reversal of the impairment loss is treated as a
revaluation increase.
(i)
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 full 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.
Deferred tax liabilities are recognised for taxable
temporary differences arising on investments in
subsidiaries, branches, associates and joint ventures
except where the entity is able to control the reversal of
the temporary differences and it is probable that the
temporary differences will not reverse in the foreseeable
future. Deferred tax assets arising from deductible
temporary differences associated with these investments
and interests are only recognised to the extent that it is
probable that there will be sufficient taxable profits
against which to utilise the benefits of the temporary
differences and they are expected to reverse in the
foreseeable future.
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 entity
expects, at the reporting date, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation
authority and the entity intends to settle its current tax
assets and liabilities on a net basis.
Current and deferred tax for the period
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.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
2.
Statement of significant accounting policies (cont’d)
(i)
Tax (cont’d)
Tax consolidation
Legislation to allow groups, comprising a parent entity
and its Australian resident wholly owned entities, to
elect to consolidate and be treated as a single entity for
income tax purposes was substantively enacted on 21
October 2002. The Company and its 100% owned
Australian resident subsidiaries implemented the tax
consolidation legislation on 1 July 2008 with Hannans as
the head entity. Income tax liabilities between the
entities would be allocated among the members of the
tax consolidated group should the head entity default
on its tax payment obligations. No amounts have been
recognised in the financial statements in respect of this
on the basis that the possibility of default is remote.
(j)
Exploration and evaluation expenditure
(k)
Government grants
Government grants are recognised where there is
reasonable assurance that the grant will be received and
all attached conditions will be complied with. When the
grant relates to an expense item, it is recognised as
income on a systematic basis over the periods that the
related costs, for which it is intended to compensate, are
expensed. When the grant relates to an asset, it is
recognised as income in equal amounts over the
expected useful life of the related asset.
When the Group receives grants of non-monetary
assets, the asset and the grant are recorded at nominal
amounts and released to profit or loss over the expected
useful life of the asset, based on the pattern of
consumption of the benefits of the underlying asset by
equal annual instalments.
Acquisition costs are capitalised and exploration and
evaluation expenditure incurred is expensed
immediately to the profit and loss where the applicable
area of interest does not contain a JORC compliant
mineral resource. Where the area of interest contains a
JORC compliant mineral resource exploration and
evaluation expenditure is capitalised. These costs are
carried forward only if they relate to an area of interest
for which rights of tenure are current and in respect of
which:
i.
such costs are expected to be recouped through
successful development and exploitation or from
sale of the area; or
ii. exploration and evaluation activities in the area have
not, at balance date, reached a stage which permits
a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and
active operations in, or relating to, the area are
continuing.
Accumulated costs in respect of areas of interest which
are abandoned are written off in full against profit or
loss in the year in which the decision to abandon the
area is made. A regular review is undertaken of each
area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area
of interest.
Notwithstanding the fact that a decision not to abandon
an area of interest has been made, based on the above,
the exploration and evaluation expenditure in relation to
an area may still be written off if considered appropriate
to do so.
(l)
Joint arrangements
Joint ventures
A joint venture is a type of joint arrangement whereby
the parties that have joint control of the arrangement
have rights to the net assets of the joint venture. Joint
control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about
the relevant activities require unanimous consent of the
parties sharing control.
The considerations made in determining significant
influence or joint control is similar to those necessary to
determine control over subsidiaries.
The Group’s investments in joint ventures are accounted
for using the equity method.
Under the equity method, the investment in a joint
venture is initially recognised at cost. The carrying
amount of the investment is adjusted to recognise
changes in the Group’s share of net assets of the joint
venture since the acquisition date. Goodwill relating to
the joint venture is included in the carrying amount of
the investment and is neither amortised nor individually
tested for impairment.
The statement of profit or loss reflects the Group’s share
of the results of operations of the joint venture. Any
change in OCI of those investees is presented as part of
the Group’s OCI. In addition, when there has been a
change recognised directly in the equity of the joint
venture, the Group recognises its share of any changes,
when applicable, in the statement of changes in equity.
Unrealised gains and losses resulting from transactions
between the Group and joint venture are eliminated to
the extent of the interest in the joint venture.
The aggregate of the Group’s share of profit or loss of a
joint venture is shown on the face of the statement of
profit or loss outside operating profit and represents
profit or loss after tax and non-controlling interests in
the subsidiaries of the joint venture.
36 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
2.
Statement of significant accounting policies (cont’d)
(l)
Joint arrangements (cont’d)
(n) Foreign currency translation (cont’d)
The financial statements of the joint venture are
prepared for the same reporting period as the Group.
When necessary, adjustments are made to bring the
accounting policies in line with those of the Group. After
application of the equity method, the Group determines
whether it is necessary to recognise an impairment loss
on its investment in its joint venture. At each reporting
date, the Group determines whether there is objective
evidence that the investment in the joint venture is
impaired.
If there is such evidence, the Group calculates the
amount of impairment as the difference between the
recoverable amount of the joint venture and its carrying
value, then recognises the loss as ‘Share of profit of a
joint venture’ in the statement of profit or loss.
Upon loss of joint control over the joint venture, the
Group measures and recognises any retained
investment at its fair value. Any difference between the
carrying amount of the joint venture upon loss of joint
control and the fair value of the retained investment and
proceeds from disposal is recognised in profit or loss.
Joint operations
The Group’s recognises its interest in joint operations by
recognising its:
∂ Assets, including its share of any assets held jointly
∂
Liabilities, including its share of any liabilities
incurred jointly
∂ Revenue from the sale of its share of the output
arising from the joint operation
∂ Share of the revenue from the sale of the output by
the joint operation
∂ Expenses, including its share of any expenses
incurred jointly
(m) Payables
Trade payables and other accounts payable are
recognised when the entity becomes obliged to make
future payments resulting from the purchase of goods
and services.
(n)
Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in
Australian Dollars, which is Hannans’ functional and
presentation currency.
Transactions and balance
Transactions in foreign currencies are initially recorded
in the functional currency (Australian Dollars (AUD)) by
applying the exchange rates ruling at the date of the
transaction.
Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling
at the reporting date.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using
the exchange rate as at the date of the initial
transaction. Non-monetary items measured at fair value
in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
The gain or loss arising on translation of non-monetary
items measured at fair value is treated in line with the
recognition of gain or loss on change in fair value of the
item (i.e., translation differences on items whose fair
value gain or loss is recognised in other comprehensive
income or profit or loss are also recognised in other
comprehensive income or profit or loss, respectively).
(o)
Principles of consolidation
The consolidated financial statements comprise the
financial statements of the Group as at and for the
period ended 30 June 2022. 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; and
∂ The ability to use its power over the investee to
affect its returns.
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 with the other vote
holders of the investee;
∂ Rights arising from other contractual arrangements;
and
∂ 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
statement of comprehensive income from the date the
Group gains control until the date the Group ceases to
control the subsidiary.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
2.
Statement of significant accounting policies (cont’d)
(o)
Principles of consolidation (cont’d)
(q)
Leases
The Group assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified
asset for a period of time in exchange for consideration
Group as a lessee
The Group applies a single recognition and
measurement approach for all leases, except for short-
term leases (i.e., leases with a lease term of 12 months
or less) and leases of low-value assets. The Group
recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the
underlying assets.
(i)
Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease (i.e., the date
the underlying asset is available for use). Right-
of-use assets are measured at cost, less any
accumulated depreciation and impairment losses,
and adjusted for any re-measurement of lease
liabilities. The cost of right-of-use assets includes
the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made
at or before the commencement date less any
lease incentives received. Unless the Group is
reasonably certain to obtain ownership of the
leased asset at the end of the lease term, the
recognised right-of-use assets are depreciated on
a straight-line basis over the shorter of its
estimated useful life and the lease term (where
the entity does not have a purchase option at the
end of the lease term). Right-of-use assets are
subject to impairment assessment.
(ii)
Lease Liabilities
At the commencement date of the lease, the
Group recognises lease liabilities measured at the
present value of lease payments to be made over
the lease term. The lease payments include fixed
payments (including in-substance fixed
payments) less any lease incentives receivable,
variable lease payments that depend on an index
or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments
also include the exercise price of a purchase
option reasonably certain to be exercised by the
Group and payments of penalties for terminating
a lease, if the lease term reflects the Group
exercising the option to terminate. The variable
lease payments that do not depend on an index
or a rate are recognised as expense in the period
on which the event or condition that triggers the
payment occurs.
Profit or loss and each component of other
comprehensive income (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:
∂ De-recognises the assets (including goodwill) and
liabilities of the subsidiary;
∂ De-recognises the carrying amount of any non-
controlling interests;
∂ De-recognises the cumulative translation differences
recorded in equity;
∂ Recognises the fair value of the consideration
received;
∂ Recognises the fair value of any investment retained;
∂ Recognises any surplus or deficit in profit or loss;
and
∂ Reclassifies the parent’s share of components
previously recognised in OCI to profit or loss or
retained earnings, as appropriate, as would be
required if the Group had directly disposed of the
related assets or liabilities.
A list of subsidiaries appears in note 4 to the financial
statements.
(p)
Plant and equipment
Plant and equipment are stated at cost less accumulated
depreciation and impairment loss. Cost includes
expenditure that is directly attributable to the
acquisition of the item.
Depreciation is provided on plant and equipment.
Depreciation is calculated on a straight line or
diminishing value basis so as to write off the net cost of
each asset over its expected useful life to its estimated
residual value. The estimated useful lives, residual values
and depreciation method are reviewed at the end of
each annual reporting period.
The depreciation rates used for each class of depreciable
assets are:
Class of fixed asset
Depreciation rate (%)
Office furniture
10.00 – 20.00
Office equipment
7.50 – 66.67
Motor vehicles
16.67 – 25.00
38 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
2.
Statement of significant accounting policies (cont’d)
(q)
Leases (cont’d)
(t)
Share–based payments
In calculating the present value of lease
payments, the Group uses the incremental
borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not
readily determinable. After the commencement
date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for
the lease payments made. In addition, the
carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease
term, a change in the in-substance fixed lease
payments or a change in the assessment to
purchase the underlying asset.
(iii)
Short-term leases and Low Value Assets
The Group applies the short-term lease
recognition exemption to its short-term leases of
their Office Spaces (i.e., those leases that have a
lease term of 12 months or less from the
commencement date and do not contain a
purchase option). It also applies the lease of low-
value assets recognition exemption. Lease
payments on short-term leases and leases of low-
value assets are expensed on a straight-line basis
over the lease term.
(r)
Provisions
The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation as a result of a past event at
reporting date, taking into account the risks and
uncertainties surrounding the obligation. Where a
provision is measured using the cashflows estimated to
settle the present obligation, its carrying amount is the
present value of those cashflows.
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, the receivable is recognised as an asset if it
is virtually certain that recovery will be received and the
amount of the receivable can be measured reliably.
(s)
Revenue recognition
Revenue is recognised when or as the Group transfers
control of goods or services to a customer at the
amount to which the Group expects to be entitled. If the
Group estimates the amount of consideration promised
includes a variable amount, the Group estimates the
amount of consideration to which it will be entitled.
Dividend and interest revenue
Dividend revenue is recognised on a receivable basis.
Interest revenue is recognised using the effective
interest method.
Equity–settled share–based payments are measured at
fair value at the date of grant. Fair value is measured by
use of the Black and Scholes model or Monte-Carlo
simulation model. The expected life used in the model
has been adjusted, based on management’s best
estimate, for the effects of non–transferability, exercise
restrictions, and behavioural considerations.
The fair value determined at the grant date of the
equity–settled share–based payments is expensed on a
straight–line basis over the vesting period, based on the
entity’s estimate of shares that will eventually vest.
For cash–settled share–based payments, a liability equal
to the portion of the goods or services received is
recognised at the current fair value determined at each
reporting date.
(u)
Fair value measurement
The Group measures equity instrument at fair value and
receivables are measured at amortised costs at each
balance sheet date.
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is based
on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
∂
∂
In the principal market for the asset or liability; or
In the absence of a principal market, in the most
advantageous market for the asset or liability.
All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:
∂ Level 1: 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; or
∂ Level 3: Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is unobservable.
(v)
Segment reporting policy
Operating segments are identified and segment
information disclosed on the basis of internal reports
that are regularly provided to, or reviewed by the
Group’s chief operating decision maker which, for the
Group, is the Board of Directors. In this regard, such
information is provided using similar measures to those
used in preparing the statement of comprehensive
income and statement of financial position.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
3.
Critical accounting estimates and judgements
In the application of the Group’s accounting policies, which are described in note 2, management is required to make judgments,
estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods.
The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain
assets and liabilities within the next annual reporting period are:
Key judgements — capitalised exploration and evaluation expenditure
The future recoverability of exploration and evaluation expenditure capitalised on the acquisition of areas of interest and/or
capitalised JORC compliant mineral resource expenditure are dependent on a number of factors, including whether the Group
decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset
through sale. To the extent that capitalised acquisition costs and/or capitalised JORC compliant mineral resource expenditure are
determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is
made.
Key judgements — share–based payments
The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined using a Black Scholes simulation model. The related assumptions
detailed in note 8. The accounting estimates and assumptions relating to equity-settled share-based payments would have no
impact on the carrying amount of assets and liabilities within the next annual reporting period but may impact expenses and equity.
Key judgements — loans and unquoted equity shares
The Group measures the fair value of loan and unquoted equity shares based on discounted future cash flows to their present value
that reflects the recent transaction based on market conditions, and the risks specific to the asset.
4.
Subsidiaries
The consolidated financial statements of the Group include:
Name of entity
Parent entity:
Hannans Ltd (i)
Subsidiaries:
HR Equities Pty Ltd (ii)
Hannans LiB Pty Ltd (ii)
Reed Exploration Pty Ltd (ii)
Principal
Activities
Country of
incorporation
2022
2021
% Ownership interest
Battery recycling
and exploration
Australia
Equities holding
Australia
Battery recycling
and exploration
Australia
Exploration
Australia
100
100
100
100
100
100
(i)
(ii)
(iii)
Hannans is the ultimate parent entity. All the companies are members of the group.
The 100% interest in HR Equities Pty Ltd, Hannans LiB Pty Ltd and Reed Exploration Pty Ltd are held by the parent entity.
Hannans LiB Pty Ltd was previously known as HR Forrestania Pty Ltd.
40 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
5.
Income/expenses from operations
Note
(a)
Interest income
Bank
Total interest income
(b) Other Income
Asset sale (i)
Cash flow boost (ii)
Total other income
(i) A tenement was sold to an unrelated third party. There is no carrying
balance of the tenement on the capitalised exploration and evaluation
expenses.
(ii) Due to the COVID-19 outbreak, the Cash Boost scheme was
introduced to provide eligible entities with additional cash flow as a
credit to their account with Australia Taxation Office. The Company
was an eligible entity and the amount relates to the Cash Boost
received in reference to the amount of employee income tax withheld.
(c)
Loss on disposal of shares
Proceeds on disposal of shares (net of broker fees)
Less: Carrying fair value of shares disposed
Total loss on disposal of shares
(d)
Employee benefits expense
Salaries and wages
Post employment benefits:
Defined contribution plans
Share–based payments:
Equity settled share–based payments
Total employee benefits expense
2022
$
1,545
1,545
–
–
–
–
–
–
2021
$
621
621
100,000
25,000
125,000
29,049
(29,535)
(486)
315,569
213,228
29,842
25,080
1,167,536
1,512,947
–
238,308
(e) Depreciation of non–current assets
4,318
3,882
(f)
Lease rental expenses:
Lease payments (i)
Total lease rental expenses
(i) The Group has a lease of office and storage space with lease terms of
12 months or less. The Group applies the ‘short-term lease’ recognition
exemption for the lease.
9,548
9,548
750
750
(g)
Share-based payments (income) / expense to consultants (i)
(i) Equity settled share-based payments to consultants were reversed due to non-market vesting conditions not being met.
(9,211)
31,506
H A N N A N S A N N U A L R E P O R T 2 0 22 | 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
6.
Income taxes
Income tax recognised in profit or loss
Current income tax
Current income tax charge
Deferred tax
Total tax benefit/(expense)
The prima facie income tax benefit/(expense) on pre-tax accounting loss from
operations reconciles to the income tax expense in the financial statements
as follows:
Loss from operations
Income tax benefit calculated at 25% (2021: 26%)
Effect of expenses that are not deductible in determining taxable profit
Effect of net deferred tax asset not recognised as deferred tax assets
Income tax benefit/(expense) attributable to operating loss
The tax rate for year ended 30 June 2022 payable by Australian corporate entities
on taxable profits under Australian tax law is 25% (2021: 26%). Unrecognised
deferred tax above is calculated at 25% (2021: 26%).
2022
$
2021
$
–
–
–
–
–
–
(3,695,128)
(923,782)
476,929
446,853
–
(1,550,464)
(403,121)
(46,102)
449,223
–
Statement of
Financial Position
Statement of
Comprehensive Income
2022
$
2021
$
2022
$
2021
$
Deferred Income Tax
Deferred income tax at 30 June
relates to the following
Deferred tax liabilities
Exploration and evaluation assets
(294,541)
(246,630)
(47,911)
–
(9,025)
(3,772)
20,106
–
–
100,112
6,177,282
4,622,144
(52)
(5,736)
(5,046)
11,150
–
35,020
9,008
5,932,875
4,807,030
(10,577,774)
(10,537,619)
–
–
52
(3,289)
1,274
8,956
–
(69,552)
91,104
244,407
(184,886)
4,160
41
(917)
1,009
(842)
(3,345)
25,629
(8,849)
480,751
–
(40,155)
(497,637)
–
–
Unearned income
Prepayments
Property, plant and equipment
Deferred tax assets
Accruals
Provision for loss on loan
Financial assets
Capital raising costs
Revenue tax losses
Capital losses
Deferred tax assets not brought to account
as realisation is not probable
Deferred tax assets not recognised
Deferred tax (income)/expense
42 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
6.
Income taxes (cont’d)
Tax consolidation
Relevance of tax consolidation to the Group
Legislation to allow groups, comprising a parent entity and its Australian resident wholly owned entities, to elect to consolidate and
be treated as a single entity for income tax purposes was substantively enacted on 21 October 2002. The Company and its 100%
owned Australian resident subsidiaries have implemented the tax consolidation legislation.
7.
Key management personnel disclosures
(a)
Details of key management personnel
The Directors and Executives of Hannans Ltd during the year were:
Directors
∂
∂
Damian Hicks
Jonathan Murray
∂
∂
Markus Bachmann
Clay Gordon
∂
Amanda Scott
(b)
Key management personnel compensation
The aggregate compensation made to key management personnel of the Company
and the Group is set out below.
Short–term employee benefits
Share-based payments
Long–term employee benefits
Post–employment benefits
Total key management personnel compensation
2022
$
2021
$
421,079
1,167,538
–
29,842
1,618,459
367,408
–
–
25,080
392,488
The compensation of each member of the key management personnel of the Group is set out in the Directors Remuneration report
on pages 8 to 13.
8.
Share–based payments
The Company has an ownership–based compensation arrangement for employees and consultants of the Group.
Each option issued under the arrangement converts into one ordinary share of Hannans on exercise. No amounts are paid or payable
by the recipient on receipt of the option. Options neither carry rights to dividends nor voting rights. Options may be exercised at any
time from the date of vesting to the date of their expiry. The number of options granted is at the sole discretion of the Directors.
Incentive options issued to Directors (executive and non–executive) are subject to approval by shareholders and attach vesting
conditions as appropriate.
The following share–based payment arrangements were in existence during the current and comparative reporting periods:
Options series
27 October 2019
Number
Grant date
Expiry date
Exercise price (cents)
28,000,000
27 October 2017
27 October 2022
19 November 2019
3,500,000
19 November 2019
19 November 2022
30 October 2022
30 October 2022
25 November 2025
25 November 2025
25 November 2025
20,000,000
25,000,000
29 October 2020
30 October 2022
29 October 2020
30 October 2022
55,000,000
26 November 2021
25 November 2025
55,000,000
26 November 2021
25 November 2025
55,000,000
26 November 2021
25 November 2025
1.5
1.5
2.2
2.7
6.1
(i)
(ii)
H A N N A N S A N N U A L R E P O R T 2 0 22 | 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
8.
Share-based payments (cont’d)
(i) The volume weighted average price (VWAP) for the five (5) trading days before and five (5) trading days after the 1st anniversary of the approval by
shareholders PLUS a premium of 50%.
(ii) The VWAP for the five (5) trading days before and five (5) trading days after the 2nd anniversary of the approval by shareholders PLUS a premium of
50%.
Details of options over ordinary shares in the Company provided as remuneration to each director during the year are set out in the
Directors Remuneration report on pages 8 to 13.
The following reconciles the outstanding share options granted at the beginning and end of the financial year:
2022
2021
Weighted
average
exercise price
$
0.018
0.060
0.018
0.015
0.048
0.015
Weighted
average
exercise price
$
0.032
0.022
–
0.027
0.018
0.018
Number of
options
108,655,848
70,000,000
–
(49,155,848)
129,500,000
129,500,000
Number of
options
129,500,000
165,000,000
(28,000,000)
(25,000,000)
241,500,000
31,500,000
Balance at beginning of the financial year
Granted during the financial year
Exercised during the financial year
Expired during the financial year
Balance at end of financial year
Exercisable at end of the financial year
(i)
Issued during the financial year
No options over ordinary shares were issued to an external consultant during the year (2021: 70,000,000*). A total of
165,000,000 options were granted to senior executives and employees during the year (2021: nil).
Details
Fair value at grant date
Expected volatility (%)
Risk-free interest rate (%)
Expected life of share options
Share price on issue
Option granted on 26 November 2021
Tranche 1
Tranche 2
Tranche 3
2.12 cents
1.9 cents
1.53 cents
100%
1.21%
4 years
100%
1.21%
4 years
100%
1.21%
4 years
3.5 cents
3.5 cents
3.5 cents
* These options have been reversed as they do not meet the non-market vesting conditions during the year and is not
expected to meet the vesting conditions by the expiry date.
(ii)
Exercised at end of the financial year
During the financial year a total of 28,000,000 (2021: nil) options over ordinary shares were exercised, comprising of 28,000,000
options exercisable at 1.8 cents per option expiring on 27 October 2021 to raise $504,000.
(iii)
Expired during the financial year
During the financial year a total of 25,000,000 (2021: 49,155,848) options over ordinary shares expired as the vesting conditions
were not achieved, comprising of the following:
∂ 10,000,000 options exercisable at 1.2 cents expired on 30 October 2021; and
∂ 15,000,000 options exercisable at 1.7 cents expired on 30 October 2021.
(iv) Balance at end of the financial year
The share options outstanding at the end of the financial year had a weighted average exercise price of $ $0.048 (2021: $0.018)
and a weighted average remaining contractual life of 2.41 years (2021: 0.94 years).
44 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
Note
2022
$
2021
$
9.
Remuneration of auditors
Fees to Ernst & Young (Australia)
Fees for auditing the statutory financial report of the parent covering
the group and auditing the statutory financial reports of any controlled
entities
Other assurance services
Total auditor remuneration
10.
Current trade and other receivables
Accounts receivable (i)
Net goods and services tax (GST) receivable
Other receivables
Loan to a related party at fair value (ii)
25
(i)
(ii)
There were no current trade and other receivables that were past due but
not impaired (2021: nil).
Critical Metals Ltd (CM1), of which Mr Damian Hicks, Mr Jonathan Murray
and Mr Markus Bachmann are the Directors, was provided with a short
term loan facility of $200,000 at an interest rate of 12.5% per annum. The
loan is unsecured. CM1 has drawn down $200,000 on the loan facility. The
fair value of the loan was based on net present value with no expected
future cash flows. As there is a significant uncertainty as to the repayment
of this loan, the fair value of the loan amount was nil as at 30 June 2022.
11.
Other financial assets at fair value through profit and loss
Current
Equity instruments
Quoted equity shares (i)
Total
Non-current
Equity instruments
Quoted equity shares (i)
Unquoted equity shares (ii)
Total
55,107
7,000
62,107
72,336
35,585
36,211
–
144,132
34,339
–
34,339
26,026
42,563
22,260
–
90,849
140,331
140,331
–
115,001
115,001
65,000
65,000
98,459
230,001
328,460
(i)
Investments in listed entities include the following:
(a) 687,594 (2021: 687,594) fully paid ordinary shares in Errawarra Resources Ltd (ASX:ERW)
where 437,594 (2021: 437,594) fully paid ordinary shares are escrowed to 14 December 2022; and
(b) 50,000 (2021: 50,000) fully paid ordinary shares in NickelX Ltd (ASX:NKL). There were no shares escrowed at 30 June 2022 (2021: 25,000).
(ii) Investment in unlisted entities include the following:
(a) 575,000 fully paid ordinary shares in Critical Metals Ltd. Critical Metals Ltd has 35,902,500 ordinary shares on issue. The principal activity of the
Company is to investigate the recovery of vanadium from steel slag, sourcing lithium ion battery feedstock for recycling and exploration of
mining tenements. The fair value of the shares was determined based on the latest capital raising price in October 2021 adjusted for changes
in the market factors to 30 June 2022.
(b) 1 share at $1 in Equity & Royalty Investments Ltd. Equity & Royalty Investments Ltd has 100 million ordinary shares on issue. The principal
activity of the Company is the investment in equity and royalties in other companies with the objective of realising gains through equity and
generating an income stream through the royalties.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
2022
$
30,000
30,000
Office
furniture
and equipment
at cost
Motor vehicles
at cost
$
$
2021
$
30,000
30,000
Total
$
20,291
29,025
49,316
–
–
–
–
–
–
20,291
29,025
49,316
–
–
–
–
–
–
20,291
29,025
49,316
19,349
253
–
19,602
689
–
20,291
689
–
6,679
3,629
–
10,308
3,629
–
13,937
18,717
15,088
2022
$
689
3,629
4,318
26,028
3,882
–
29,910
4,318
–
34,228
19,406
15,088
2021
$
253
3,629
3,882
12.
Non–current other receivables
Other asset – term deposit
13.
Property, plant and equipment
Cost
Balance at 1 July 2020
Additions
Disposals
Balance at 1 July 2021
Additions
Disposals
Balance at 30 June 2022
Accumulated depreciation and impairment
Balance at 1 July 2020
Depreciation expense
Disposals
Balance at 1 July 2021
Depreciation expense
Disposals
Balance at 30 June 2022
Net book value
As at 30 June 2021
As at 30 June 2022
Aggregate depreciation allocated during the year:
Office furniture and equipment
Motor vehicles
46 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
14.
Exploration and evaluation expenditure
Balance at beginning of financial year
LESS: Write off costs (i)
Balance at end of financial year
(i) During the year, Hannans recognised a write off of nil (2021: $16,000) in respect of
capitalised exploration and evaluation.
The recoverability of the carrying amount of the exploration and evaluation assets is
dependent on the continuance of the consolidated entities right to tenure of the
interest, the results of future exploration and the successful development and
commercial exploration, or alternatively, sale of the respective area of interest. For
those areas of interest de-recognised or written off during the year, exploration
results indicates the subsequent successful development and commercial
exploration may be unlikely and the decision was made to discontinue activities in
these areas, resulting in full de recognition of the capitalised exploration and
evaluation in relation to the related areas of interest.
15.
Current trade and other payables
Trade payables (i)
Accruals
Other payable
(i) The average credit period on purchases of goods and services is 30 days. No interest is
charged on the trade payables for the first 30 to 60 days from the date of invoice.
Thereafter, interest is charged at various penalty rates. The consolidated entity has financial
risk management policies in place to ensure that all payables are paid within the credit
timeframe.
16.
Provisions
Current
Employee benefits
Balance at 1 July 2020
Increase/(decrease) in provision
Utilised during the year
Balance at 1 July 2021
Increase/(decrease) in provision
Utilised during the year
Balance at 30 June 2022
2022
$
2021
$
2,240,000
–
2,240,000
2,256,000
(16,000)
2,240,000
215,923
128,487
33,907
378,317
405,035
136,713
38,356
580,104
40,536
40,536
Employee
benefits
$
11,076
18,462
(22,153)
7,385
44,607
(11,456)
40,536
7,385
7,385
Total
$
11,076
18,462
(22,153)
7,385
44,607
(11,456)
40,536
H A N N A N S A N N U A L R E P O R T 2 0 22 | 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
17.
Issued capital
2,606,271,476 fully paid ordinary shares (2021: 2,359,977,192)
2022
$
2021
$
48,067,444
48,067,444
42,433,949
42,433,949
2022
No.
2021
$
No.
$
Fully paid ordinary shares
Balance at beginning of financial year
2,359,977,192
42,433,949
1,987,954,539
40,872,810
Vendor Shares – 4 Dec 2020
Share Purchase Plan – 22 December 2020
Placement of shares – 22 December 2020
Exercise of options – 28 October 2021
Rights issue – 8 November 2021
Share issue costs
–
–
–
–
–
–
7,250,000
239,772,654
124,999,999
28,000,000
218,294,284
504,000
5,457,357
–
(327,862)
–
–
–
50,750
1,055,000
550,000
–
–
(94,611)
Balance at end of financial year
2,606,271,476
48,067,444
2,359,977,192
42,433,949
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
18.
Reserves
Balance at 1 July 2020
Share based payment expense
Exercise/lapse of options
Balance at 1 July 2021
Share based payment expense
Exercise/lapse of options
Balance at 30 June 2022
Nature and purpose of reserves
Option reserve
Option reserve
$
1,092,358
31,506
(467,916)
655,948
1,158,325
(307,335)
Total
reserve
$
1,092,358
31,506
(467,916)
655,948
1,158,325
(307,335)
1,506,938
1,506,938
The option reserve recognises the fair value of options issued and valued using the Black-Scholes model.
Share options
As at 30 June 2022, options over 241,500,000 (2021: 129,500,000) ordinary shares in aggregate are as follow:
Issuing entity
Hannans Ltd
Hannans Ltd
Hannans Ltd
Hannans Ltd
Hannans Ltd
Hannans Ltd
Hannans Ltd
No of shares
under option
Class of shares
28,000,000
3,500,000
20,000,000
25,000,000
55,000,000
55,000,000
55,000,000
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Exercise price
of option
1.5 cents each
1.5 cents each
2.2 cents each
2.7 cents each
6.1 cents each
(i)
(ii)
Expiry date
of options
27 Oct 2022
19 Nov 2022
30 Oct 2022
30 Oct 2022
25 Nov 2025
25 Nov 2025
25 Nov 2025
(i) The volume weighted average price (VWAP) for the five (5) trading
days before and five (5) trading days after the 1st anniversary of the
approval by shareholders PLUS a premium of 50%.
(ii) The VWAP for the five (5) trading days before and five (5) trading days
after the 2nd anniversary of the approval by shareholders PLUS a
premium of 50%.
Share options are all unlisted, carry no rights to dividends and no voting rights. On 25 November 2021 165,000,000 options were
issued to directors (2021: 70,000,000 options issued to consultants). A total of 28,000,000 options were exercised during the period
(2021: nil). A total of 25,000,000 (2021: 49,155,848) expired unexercised during the period.
48 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
19.
Accumulated losses
Balance at beginning of financial year
Loss attributable to members of the parent entity
Items reclassified from reserves directly in retained earnings:
Options lapsed
Options exercised
Balance at end of financial year
20.
Loss per share
Basic loss per share:
Diluted loss per share:
Loss for the year
2022
$
2021
$
(39,889,938)
(3,695,128)
(38,807,390)
(1,550,464)
22,295
285,040
467,916
–
(43,277,731)
(39,889,938)
2022
Cents per share
2021
Cents per share
(0.15)
(0.15)
(0.07)
(0.07)
The loss and weighted average number of ordinary shares used in the calculation of basic and diluted loss per share are as follows:
Loss for the year
Weighted average number of ordinary shares
for the purposes of basic loss per share
Effects of dilution from:
Share options
Weighted average number of ordinary shares adjusted
for the effect of dilution loss per share
2022
$
2021
$
(3,695,128)
(1,550,464)
2022
No.
2021
No.
2,518,719,281
2,181,967,701
–
–
2,518,719,281
2,181,967,701
At 30 June 2022 241,500,000 (2021: 129,500,000) were not included in the diluted earnings per share calculation as they are anti-
dilutive.
21.
Commitments for expenditure
Exploration, evaluation & development (expenditure commitments)
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
2022
$
2021
$
343,866
947,390
32,256
1,323,511
385,514
1,060,933
327,241
1,773,688
H A N N A N S A N N U A L R E P O R T 2 0 22 | 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
22.
Contingent liabilities and contingent assets
The Office of State Revenue (OSR) informed the Company on 30 October 2012 that it has raised a Duties Investigation regarding the
restructure involving the Mineral Rights Deed between the Company and Errawarra Resources Ltd. OSR has requested preliminary
supporting information to assess the duty on the transaction. On 21 October 2015 OSR informed the Company that the matter is
currently being reviewed by the technical branch. The Company does not consider it probable a stamp duty liability will arise.
23.
Segment reporting
The Group operates in the mineral exploration industry in Australia. For management purposes, the Group is organised into one main
operating segment which involves the exploration of minerals in Australia. All of the Group’s activities are interrelated and discrete
financial information is reported to the Board as a single segment. Accordingly, all significant operating decisions are based upon
analysis of the Group as one segment. Operating segments are identified and segment information disclosed on the basis of internal
reports that are regularly provided to, or reviewed by, the Group’s Chief Operating Decision Maker which, for the Group, is the Board
of Directors. In this regard, such information is provided using similar measures to those used in preparing the statement of
comprehensive income and statement of financial position.
24.
Farm-in and joint operations and other projects
Name of project
Forrestania (i)
Fraser Range (ii)
Principal activity
Exploration
Exploration
LiB Recycling Project (iii)
Lithium-Ion battery recycling technology
Interest
2022
%
20
N/A
N/A
2021
%
20
N/A
N/A
(i)
(ii)
Reed Exploration entered into a joint arrangement with Classic Minerals Ltd (Classic) (ASX: CLZ) whereby Reed Exploration
retained a 20% interest in the Forrestania gold rights which is free-carried until a decision to mine has been made. Classic is
required to meet all exploration expenditure to keep the project in good standing.
On 29 November 2020 Reed Exploration entered into an earn-in agreement (Agreement) with Kingmaker Metals Pty Ltd
(Kingmaker) whereby Reed Exploration may earn a 70% interest in the Fraser Range tenement (Tenement) by incurring
exploration expenditure of $1 million in accordance with the following schedule:
∂
Initial commitment – the Group must incur a minimum $100,000 of exploration expenditure by 30 June 2021, following
which it shall have the right to withdraw from this agreement or proceed to the next stage. As at 30 June 2021, $130,998
of exploration expenditure was incurred on the Tenement;
∂ may elect to incur an additional $200,000 of exploration expenditure by 30 June 2022 to earn a 33% interest in the
Tenement (Stage 1 Interest);
∂ may elect to incur an additional $300,000 of exploration expenditure by 30 June 2023 to earn a 51% interest in the
Tenement (Stage 2 Interest); and
∂ may incur an additional $400,000 of exploration expenditure by 30 June 2024 to earn a 70% interest in the Tenement
(Stage 3 Interest).
Hannans would be the manager and be solely responsible for all exploration decisions, pay all rates and rents and maintain the
Tenement in good standing. Kingmaker would be free-carried until a decision to mine is made.
In June 2022, the Company withdrew from the Agreement and was released from all further obligations.
All expenditure throughout the farm-in period is reflected as exploration expenditure in the statement of comprehensive
income, consistent with the accounting policy in relation to expenditure on mining properties outlined in note 2(j).
(iii)
On 26 November 2021, shareholders approved the Company entering into an agreement with Critical Metals Ltd (CM1) and
its wholly owned subsidiary, LiB Recycling Pty Ltd (together referred to as Critical Metals) to commercialise the lithium-ion
battery technology (Technology) in Norway, Sweden, Denmark, and Finland (Agreement). Under the Agreement, Hannans
will manage and fund all tasks and activities in the territories through to a final investment decision (FID) with respect to the
construction of each plant for the processing or recycling of feedstock batteries using the Technology within 12 months of
Neometals releasing the results of their front-end engineering and design study in relation to the processing and/or recycling
of LiB batteries (Feed Report Date). The activities to be undertaken are on Hannans discretion. Refer to the Notice of Annual
General Meeting dated 25 October 2021 for further information.
Capital commitments and contingent liabilities
The capital commitments and contingent liabilities arising from the Group’s interests in joint operations are disclosed in note 22.
50 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
25.
Related party disclosures
(a)
Equity interests in related parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 4 to the financial statements.
(b)
Key management personnel (KMP) remuneration
Details of KMP remuneration are disclosed in note 7 to the financial statements.
(c)
Loans to KMP and their related parties
Critical Metals Ltd (CM1), of which Mr Damian Hicks, Mr Jonathan Murray and Mr Markus Bachmann are the Directors, was
provided with a short term loan facility of $200,000 at an interest rate of 12.5% per annum. The loan is unsecured. CM1 has
drawn down $200,000 on the loan facility. The fair value of the loan was based on net present value with no expected future
cash flows. As there is a significant uncertainty as to the repayment of this loan, the fair value of the loan amount was nil as at
30 June 2022.
(d)
Transactions with other related parties
The following table provides the total amount of transactions that have been entered into with related parties for the relevant
financial year.
Director transactions
Steinepreis Paganin
Corporate Board Services
Scott Geological
Advance Geological
Critical Metals Ltd
Sales to
related parties
$
Purchases
from related
parties
$
Amounts
owed by
related parties*
$
Amounts
owed to
related parties*
$
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
–
–
–
741
–
–
–
–
8,884
2,256
213,073
15,136
185,515
150,000
14,213
5,825
81,095
14,888
10,850
–
–
–
–
–
–
–
–
–
9,181
2,474
8,229
433
39,067
–
10,346
–
27,818
–
–
–
* The amounts are classified as trade receivables and trade payables, respectively.
Refer to the Remuneration Report for nature of services provided by the related parties.
(e)
Parent entity
The ultimate parent entity in the Group is Hannans Ltd.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
26.
Subsequent events
The following matters or circumstances have arisen since 30 June 2022 that 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:
(a)
Revised Agreement with Greenhouse Investments Ltd and Capital Raising
On 28 July 2022, the Company announced that it executed a revised agreement with Greenhouse Investments Ltd
(Greenhouse) to acquire 100% of the non-exclusive rights to commercialise a lithium battery (LiB) recycling technology
(Technology) in the United Kingdom and Ireland (Non-Exclusive Territories) and the sole and exclusive rights to
commercialise the Technology in Italy and South Eastern Europe (Exclusive Territories). Under the original binding heads of
agreement between Hannans and Greenhouse, the licences for the Non-Exclusive Territories were to be sub-licensed to
Hannans, while in the Exclusive Territories, Hannans would receive a right to fund new lithium battery recycling plants in those
jurisdictions, in consideration for project equity (to be negotiated on a case-by-case basis). Under the revised agreement, all
Greenhouse licences (for the Exclusive Territories and Non-Exclusive Territories) will be novated to Hannans and Hannans will
directly hold a 100% interest in the licences. This new arrangement presents as a stronger outcome for Hannans shareholders
and removes the complexity and risks associated with sub-licenses and the right to fund. Hannans needs to raise up to $2m
at 2.0 cents per share to fund the activities in the new territories. The agreement with Greenhouse is subject to satisfaction of
conditions, including obtaining shareholder approval, entry into a substantive agreement, and re-comply with ASX’s
requirement for admission and quotation.
(b)
Board Succession
On 12 September 2022, the Company announced details of the Board succession plan to align the Board’s skills matrix with
its planned future business activities.
Mr Jonathan Murray will continue as Chairman of the Board.
Hannans’ largest shareholder Neometals Ltd has nominated Mr Andrew Umbers to be non-executive director, and Mr Umbers
has provided his consent to be a director. Mr Umbers has over 35 years of experience in Investment Banking and resides in
London, UK. He was a Director at Barclays De Zoete Wedd, Managing Director at Credit Suisse, CEO at Evolution plc and a
Director of European Equities of Credit Suisse. Mr Umbers has been responsible for advising on the listing and financing of
approximately 100 companies on European stock markets. He was formerly Chairman of Leeds United Football Club and is
Founder and Managing Partner of Oakwell Sports, the leading sports and sports technology commercial, strategic and financial
adviser in Europe.
Hannans’ proposed second largest shareholder Greenhouse has nominated Mr Mark Sumich to be non-executive director,
and Mr Sumich has provided his consent to be a director. Mr Sumich has 30 years of corporate and commercial experience,
as an entrepreneur, business consultant, corporate lawyer and corporate finance executive and resides in Perth, Australia. He
has held Chair and Managing Director roles in ASX-listed companies in the IT, technology, and resources sectors, raised over
A$100m in C-level roles, co-founded two ASX-listed entities (Globe Metals & Mining Ltd and DMC Mining Ltd) and has
significant international business experience in Europe, Africa and China.
Mr Sumich was previously employed by Clayton Utz and Price Waterhouse Coopers, has a law degree (Hons) from the
University of Western Australia, a Master of Business Administration from the London Business School and holds a Graduate
Diploma in Applied Finance & Investment from FINSIA.
Mr Umbers and Mr Sumich will only join the Board of Directors if shareholders approve the Greenhouse Transaction, and
Hannans recommences trading on ASX.
The existing Board and management will focus their efforts on communicating the change in scale and nature of Hannans
activities to Hannans shareholders, completing the capital raise and ensuring the recommencement of trading on ASX.
52 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
27.
Notes to the consolidated statement of cash flows
(a)
Reconciliation of cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents
includes cash on hand and in banks and investments in money market
instruments, net of outstanding bank overdrafts. Cash and cash equivalents
at the end of the financial year as shown in the statement of cash flows is
reconciled to the related items in the statement of financial position as
follows:
Cash and cash at bank
Term deposit
(b)
Reconciliation of loss for the year to net cash flows from
operating activities
Loss for the year
Write off exploration and evaluation expenses
Issue of share-based payments
Depreciation of non–current assets
Loss on disposal of shares
Gain on sale or disposal of assets
Equity settled share-based payments
Change in fair value of financial assets
designated at fair value though profit or loss
Changes in net assets and liabilities,
net of effects from acquisition and disposal of businesses:
(Increase)/Decrease in assets:
Trade and other receivables
Increase/(Decrease) in liabilities:
Trade and other payables and provisions
Net cash used in operating activities
2022
$
2021
$
4,030,952
1,013,733
–
–
4,030,952
1,013,733
(3,695,128)
(1,550,464)
–
–
4,318
–
–
1,158,325
16,000
50,750
3,882
486
(100,000)
31,506
338,129
(244,709)
(53,283)
(5,089)
(168,637)
337,916
(2,416,276)
(1,459,722)
Non–cash financing activities
During the current year, the Group did not enter into any non-cash financing activities which are not reflected in the consolidated
statement of cash flows.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
28.
Financial risk management objectives and policies
(a)
Financial risk management objectives
The Group manages the financial risks relating to the operations of the Group.
The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes
although it holds, at 30 June 2022, shares in various other listed mining companies. The use of financial derivatives is governed
by the Group’s Board of Directors.
The Group’s activities expose it primarily to the financial risks of changes in interest rates, but at 30 June 2022 it is also exposed
to market price risk. The Group does not enter into derivative financial instruments to manage its exposure to interest rate.
(b)
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial
liability and equity instrument are disclosed in note 2 to the financial statements.
(c)
Foreign currency risk management
The Group is not exposed to any significant currency risk on receivable, payable or borrowings. All loans are denominated in
the Group’s functional currency.
(d)
Interest rate risk management
The Group is exposed to interest rate risk as it places funds at both fixed and floating interest rates. The risk is managed by
maintaining an appropriate mix between fixed and floating rate products which also facilitate access to money.
Cash flow sensitivity analysis for variable rate instruments
A change of 1 per cent in interest rates at the reporting date would have increased profit or loss by the amounts shown below.
This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2021:
2022
Variable rate instruments
2021
Variable rate instruments
Profit or Loss
Equity
1%
increase
1%
decrease
1%
increase
1%
decrease
34,096
34,096
7,071
7,071
(34,096)
(34,096)
(7,071)
(7,071)
–
–
–
–
–
–
–
–
The following table details the Group’s exposure to interest rate risk.
54 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
28.
Financial risk management objectives and policies (cont’d)
(d)
Interest rate risk management (cont’d)
Fixed maturity dates
Weighted
average
effective
interest rate
Variable
interest
rate
Less
than 1 year
1–5
years
Consolidated
2022
Financial assets:
%
$
$
Cash and cash equivalents
0.03%
3,409,621
Trade and other
receivables
Other receivables
– non-current
Financial liabilities:
Trade and
other payables
2021
Financial assets:
–
0.90%
–
–
3,409,621
–
–
–
Cash and cash equivalents
0.04%
707,147
Trade and other
receivables
Other receivables
– non-current
Financial liabilities:
Trade and
other payables
–
–
1.60%
30,000
737,147
–
–
–
–
–
–
–
–
–
–
199
–
199
–
–
$
–
–
30,000
30,000
–
–
–
–
–
–
–
–
5+
years
$
Non
interest
bearing
$
Total
$
–
–
–
–
–
–
–
–
–
–
–
–
621,331
4,030,952
144,132
144,132
–
30,000
765,463
4,205,084
378,317
378,317
378,317
378,317
306,586
1,013,733
26,026
26,225
–
30,000
332,612
1,069,958
580,104
580,104
580,104
580,104
H A N N A N S A N N U A L R E P O R T 2 0 22 | 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
28. Financial risk management objectives and policies (cont’d)
(e)
Liquidity risk
The Group manages liquidity risk by maintaining sufficient cash to meet the operating requirements of the business and
investing excess funds in highly liquid, high security short term investments. The Group’s liquidity needs can be met through a
variety of sources, including cash generated from operations and issue of equity instruments.
The following table details the Group’s non-derivative financial instruments according to their contractual maturities. The
amounts disclosed are based on contractual undiscounted cash flows.
Less than
6 months
6 months
to 12 months
1 to 2 years
Greater than
2 years
$
$
$
$
2022
Trade and other payables
378,317
Other financial liabilities
–
378,317
2021
Trade and other payables
580,104
Other financial liabilities
–
580,104
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
378,317
–
378,317
580,104
–
580,104
It is a policy of the Group that creditors are paid within 30 days.
(f)
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 has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where
appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit ratings of its
counterparties are continuously monitored.
The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having
similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high credit–ratings
assigned by international credit–rating agencies.
The Group ‘s maximum exposure to credit risk at each balance date in relation to each class of recognised financial assets is the
carrying amount, net of any allowance for doubtful debts, of those assets as indicated in the consolidated statement of financial
position. The maximum credit risk exposure of the Group at 30 June 2022 is nil (2021: nil).
(g)
Price risk
Market risk is the potential for loss arising from adverse movements in the level and volatility of equity prices.
The Group’s listed and unlisted equity investments are as detailed in note 11.
A 5 per cent increase (2021: 5 per cent increase) at reporting date in the listed equity prices would increase the market value of
the securities by $12,767 (2021: $8,173) and an equal change in the opposite direction would decrease the value by the same
amount. The increase/decrease would be reflected in the statement of profit or loss as these equity instruments are classified
as equity instruments at FVPL. The increase/decrease net of deferred tax would be $9,575 (2021: $5,721).
The fair value of the CM1 loan was based on net present value with no expected future cash flows. As there is a significant
uncertainty as to the repayment of this loan, the fair value of the loan amount was nil as at 30 June 2022 (2021: nil). Refer to
note 10 for maximum credit risk exposure.
(h)
Capital risk management
For the purposes of the Group’s capital management, capital includes issued capital and all other equity reserves attributable
to the equity holders of the parent, which at 30 June 2022 was $6,296,651 (2021: $3,199,959). The Group’s objective when
managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for
shareholders.
At 30 June 2022 the Group does not hold any external debt funding (2021: Nil) and is not subject to any externally imposed
covenants in respect of capital management.
56 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
29.
Financial instruments
The fair value of financial assets and financial liabilities of the Group approximated their carrying amount. It does not include fair value
information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation
of fair value. The table below analyses financial instruments carried at fair value by value measurement hierarchy.
Quantitative disclosures fair value measurement hierarchy
as at 30 June
Quoted
prices in
active
market
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Total
2022
Assets measured at fair value
Equity instruments (note 11):
Quoted equity shares (i)
Unquoted equity shares (ii)
Loan to a related party (iii)
2021
Assets measured at fair value
Equity instruments (note 11):
Quoted equity shares (i)
Unquoted equity shares (ii)
140,331
–
–
140,331
163,459
–
163,459
–
–
–
–
–
–
–
–
115,001
–
140,331
115,001
–
115,001
255,332
–
230,001
163,459
230,001
230,001
393,460
The management assessed that cash and short-term deposits, trade receivables, trade payables and other current liabilities
approximate their carrying amounts largely due to the short term maturities of these instruments.
The fair value of the financial assets is included at the amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the
fair value:
(i)
(ii)
(iii)
Fair value of equity instruments and financial assets is derived from quoted market prices in active markets. Refer note 28(g)
for market price risk impact.
The lowest level input has been used to fair value unquoted ordinary shares. The investment was fair valued using the latest
share issue price dated October 2021 discounted for market conditions. An increase in share price of +/- 20% would have an
impact to the consolidated statement of profit or loss of $23,000.
The fair value of the loan was based on net present value with no expected future cash flows. As there is a significant uncertainty
as to the repayment of this loan, the fair value of the loan amount was nil as at 30 June 2022. Refer to notes 10 and 25(c) for
further information.
H A N N A N S A N N U A L R E P O R T 2 0 22 | 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2022
30.
Parent entity disclosures
The following details information related to the parent entity, Hannans Ltd, at 30 June 2022.
The information presented here has been prepared using consistent accounting policies as presented in note 2.
Results of the parent entity
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Financial position of parent entity at year end
Current assets
Non–current assets
Total Assets
Current liabilities
Non–current liabilities
Total Liabilities
Total equity of the parent entity comprising of:
Share capital
Reserves
Accumulated losses
Total Equity
2022
$
2021
$
(3,979,875)
(1,666,557)
–
–
(3,979,875)
(1,666,557)
3,815,416
2,205,232
6,020,648
321,784
–
321,784
753,472
2,315,411
3,068,883
181,966
–
181,966
62,041,536
1,506,938
56,408,040
655,948
(57,849,610)
(54,177,071)
5,698,864
2,886,917
(a)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had not entered into any guarantees in relation to the debts of its subsidiaries as at 30 June 2022
(2021: Nil).
(b)
Commitments for the acquisition of property, plant and equipment by the parent entity
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022 (2021: Nil).
58 | H A N N A N S A N N U A L R E P O R T 2 0 2 2
H A N N A N S A N N U A L R E P O R T 2 02 2 | 59
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