JADAR LITHIUM LIMITED
(Formerly known as South East Asia Resources Limited)
ABN 66 009 144 503
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2018
Contents
1. Corporate Directory
2. Directors’ Report
3. Auditor’s Independence Declaration
4.
Independent Auditor’s Report
5. Directors’ Declaration
6.
Financial Report
7. Corporate Governance Statement
8. Additional Information for Listed Companies
Page
1
2
16
17
21
22
47
48
Corporate Information
Corporate Directory
Directors
Mr Luke Martino – Non-Executive Chairman
Mr Michael Davy – Non-Executive Director
Mr Martin Pawlitschek – Non-Executive Director
Mr Nicholas Sage – Non-Executive Director
Mr Stefan Muller – Non-Executive Director
Company Secretary
Ms Louisa Martino
Registered office
311-313 Hay Street
Subiaco WA 6008
Auditor
Grant Thornton
Level 43, Central Park
152-158 St Georges Terrace
PERTH, WESTERN AUSTRALIA 6000
Bankers
NAB
1238 Hay Street
West Perth WA 6005
Share Registry
Advance Share Registry
110 Stirling Highway
Nedlands WA 6909
Securities Exchange Listing
ASX Limited
20 Bridge Street
Sydney NSW 2000
ASX Code – JDR
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
1
Directors’ Report
Directors’ Report
The Directors’ present their report together with the financial report of Jadar Lithium Limited (“the Company”)
(“Formerly known as South East Asia Resources Limited”) (ASX: JDR) and its controlled entities (“the Group”,
“JDR” or “Consolidated Entity”) for the year ended 30 June 2018.
The powers of the Directors were suspended from April 2017, being the date of the appointment of the Joint
and Several Administrators and remained so during the term of the Deed of Company Arrangement (“DOCA”)
made in relation to the Company. The DOCA was effectuated on 19 December 2017 where full control of the
Company has passed to the Directors of the Company.
The Company was reinstated on ASX on 29 December 2017. For the 2018 financial year since reinstatement, the
entity has used the cash and assets in a form readily convertible to cash that it had at the time of reinstatement
in a way consistent with the Company’s business objectives.
Directors
The names and the particulars of the Directors who held office during or since the end of the half year and until
the date of this report are disclosed below.
Name
Status
Appointment/ Resignation
Mr Luke Martino
Mr Nicholas Sage
Mr Michael Davy
Mr Martin Pawlitschek
Mr Stefan Muller
Mr Gary Williams
Mr Jackob Tsaban
Mr Wayne Knight
Company Secretary
Non-Executive Chairman Appointed on 22 December 2017
Appointed on 22 December 2017
Non-Executive Director
Appointed on 15 February 2018
Non-Executive Director
Appointed on 15 February 2018
Non-Executive Director
Appointed on 24 July 2018
Non-Executive Director
Resigned 15 February 2018
Executive Director
Resigned 22 December 2017
Non-Executive Director
Resigned 22 December 2017
Non-Executive Director
Name
Status
Appointment/ Resignation
Mr Luke Martino
Ms Louisa Martino
Company Secretary
Company Secretary
Resigned 22 December 2017
Appointed 22 December 2017
Principal activities
During the year the principal activity of the Group was lithium and associated mineralisation exploration in the
Republic of Serbia.
Operating and financial review
The consolidated loss for the year amounted to ($1,216,699) (2017: $266,646).
Dividends paid or recommended
There were no dividends paid or recommended during the financial year ended 30 June 2018 (2017: Nil).
Significant changes in state of affairs
On 31 July 2017 all resolution of the General Meeting were passed and announced by the Company.
On 22 August 2017, 100,000,000 shares were issued at $0.001 per share to raise $100,000 for working capital
and 10,000,000 shares were issued at $0.05 per share for the conversion of liabilities of $500,000. The historical
accounts a condition precedent to the Deed of Company Arrangement, were also lodged for the 2015, 2016 and
2017 financial years and half-years.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
2
Directors’ Report
Significant changes in state of affairs (continued)
On 7 September 2017, the company lodged a Notice of Meeting, with the following resolutions included:
•
•
•
•
•
•
•
•
•
•
Ratification of disposal of its Malala Molybdenum Project;
Approval to change in nature and scale of activities;
Approval to consolidate capital;
Approval to issue Capital Raising Shares;
Approval to issue Consideration Securities;
Election of Directors Mr Luke Martino and Mr Nicholas Sage;
Approval to issue Advisor Shares;
Approval to issue Lead Manager Options;
Approval to issue Attaching Options; and
Approval to replace the Constitution.
On 7 September 2017, the company announced it had entered into a conditional binding agreement to acquire
100% of Centralist Pty Ltd.
On 2 October 2017, the company lodged a prospectus to ASIC for its offer to the public of 250 million shares at
an issue price of $0.02 each to raise a total of $5 million (before expenses), as well as a number of secondary
offers in connection with the Company’s proposed acquisition of Centralist Pty Ltd. A replacement prospectus
was released on 17 October 2017.
On the 6 October 2017 all resolutions of the General Meeting were passed and announced by the Company.
On 11 October 2017, it was announced that ASX had extended the Company’s de-listing deadline to the
commencement of trading on 3 January 2018. The extension was granted on the basis that the Company is in
the final stages of completing the acquisition of Serbian Lithium Projects.
On 8 December 2017, 101,000,000 shares were issued at $0.001 per share to raise $101,000 for working capital
On 13 December 2017, the consolidation of capital was completed, resulting in the reduction of the issued
number of shares from 1,689,605,582 to 89,530,536.
On 19 December 2017, all the conditions of the DOCA had been satisfied with the DOCA being effectuated on
this date. On this date full control of the Company passed to the Directors of the Company.
On 22 December 2017, the Company completed the transactions to acquire Centralist Pty Ltd. In addition, the
Company announced the capital raising was oversubscribed with $5 million raised under the public offer
pursuant to the Replacement Prospectus dated 17 October 2017. Directors Mr Jackob Tsaban and Mr Wayne
Knight resigned on completion.
On 29 December 2017, the shares of the Company were reinstated on ASX.
Review of operations
On 15 February 2018, Mr. Martin Pawlitschek and Mr. Michael Davy were appointed as Non-Executive Directors
and Mr Gary Williams resigned as a director of the Company.
On 16 February 2018, the Company announced the appointment of Deutsche Gesellschaft
fur
Wertpapieranalyse GmbH (“DGWA”), a boutique European investment and financial markets consulting firm
based in Frankfurt, Germany in respect of investor relations.
On 19 February 2018, the Company announced the commencement of 2018 work program which will focus on
the Cer and Bukulja projects which are considered prospective for pegmatite hosted lithium and associated
mineralisation deposits. The initial exploration program will focus on outcrop, soil and stream sediment
sampling as well as, review of historical data.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
3
Directors’ Report
Review of operations (Continued)
On 22 March 2018, the Company announced the appointment of a Specialist Lithium Borates Technical Advisor
(Mr Jerry Aiken). Mr Aiken has over 46 years of experience in the minerals industry in various positions,
including roles within the Exploration Department of ASARCO and 30 years for Rio Tinto Borax Exploration.
During the quarter ended 31 March 2018, the Company announced its listing on the German Exchanges.
On 5 April 2018, the Company announced the completion of its maiden field program at Cer and Bukulja Projects
which confirmed the presence of pegmatite outcrops on both licenses. The field program consisted of outcrop
and stream sediment sampling, as well as, preliminary mapping to define the surficial extent of the observed
pegmatite dykes.
Figure 1: Pegmatite outcrops from the Cer project area
On 12 April 2018, the Company announced that it had defined the fieldwork program and completed
preparations for the Rekovac, Krajkovac and Vranje South permits and commenced fieldwork on the Krajkovac
exploration license. The field program consisted of soil sampling, stream sediment sampling and outcrop
sampling, as well as, preliminary mapping throughout the permit areas.
On 3 May 2018, the Company announced that it had completed Reconnaissance Sampling Program on Krajkovac
Project and commenced Maiden Field Program on Vranje-South Project. All samples from the Krajkovac Project
had been submitted to laboratory for testing.
On 10 May 2018, the Company announced that it had completed the Reconnaissance Sampling Program on
Vranje-South Project with all samples submitted to laboratory for analysis.
Figure 2: Paleogene-Neogene sediments within the Vranje-South Permit area.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
4
Directors’ Report
Significant events after reporting date
On 6 July 2018, the Company announced that the preliminary sampling on Cer Project defined anomalous zones
and that a follow-up program was currently being planned for quarter three of 2018. The results of the stream
sediment survey define two, multi-element anomalies which are located on the south-eastern part of the
license. Both anomalous stream clusters drain from a single area within the South-eastern corner of the
project license.
Figure 3: Cer project sampling points with Lithium results; underlying geology and target zones. [Geology legend – the red and
pink areas represent various phases of the Cer granitoid; the yellow and beige units represent younger sedimentary units]
On 24 July 2018, the Company announced the appointment of Mr Stefan Muller to the Board of Jadar as a Non-
Executive Director.
On 2 August 2018, the Company announced that the preliminary sampling on Bukulja Project defined a number
of anomalous zones and that a follow-up program was currently being planned for quarter three of 2018. The
anomalous zones are defined by a number of elements (including Lithium), which potentially indicate the
presence of lithium bearing pegmatites.
Figure 4: Bukulja stream and soil sampling points and anomalous zones. Most of the anomalies are located on the Bukulja
granitoid (represented as dark red on the map) and on the contacts of the granitoid on the western contact. The As/Sn anomaly
on the southern periphery of the license is located within the Miocene sediments and younger alluvial beds (represented by
yellow colours) and may reflect transported material from the granitoid
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
5
Directors’ Report
Significant events after reporting date (Continued)
On 20 August 2018, the Company announced that the first pass sampling on Vranje-South Project has defined
zones with elevated Li-B soil and stream sediment samples and that a follow-up program was currently being
planned.
Figure 5: Vranje-South project geology and Lithium soil sampling locations and results'
Competent Person Statement
The information contained in this Annual Report relating to Exploration Results has been compiled by Mr. Jerry L Aiken,
who is a Registered Member of the Society for Mining, Metallurgy & Exploration (SME). Mr. Aiken has sufficient
experience that is relevant to the style of mineralization and type of deposit under consideration, and to the
activity being undertaken to qualify as a competent person as defined in the 2012 edition of the "Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (the 2012 JORC Code). Mr. Aiken is a
consultant to Jadar Lithium Limited and consents to the inclusion in this Annual Report of this information in the form
and context in which it appears.
This report contains information extracted from previous ASX market announcements as noted throughout, that have
been prepared in accordance with the JORC Code (2012) and available for viewing on ASX. Jadar Lithium Limited
confirms that in respect of these announcements it is not aware of any new information or data that materially affects
the information included in any original ASX market announcement.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
6
Directors’ Report
Information on Directors
Luke Martino
Non-Executive Chairman (appointed on 22 December 2017)
Qualifications
BCom, FCA, FAICD
Experience
Mr Martino is a Fellow of the Institute of Chartered Accountant Australia and New
Zealand and a member of the Institute of Company Directors.
His area of expertise includes corporate finance and business growth consulting
advice to the mining and resources sector and a wide range of other industries. Mr
Martino was a Director of Pan Asia Corporation Ltd and is a Non-Executive Director
of Skin Elements Limited.
Interest in Shares and
Options
594,074 ordinary fully paid shares
5,000,000 options (exercise price of $0.02, expiring 3 years from issue)
Special Responsibilities
Member of Audit & Risk Committee and Nominations & Remuneration Committee
Directorships held in other
listed entities
Skin Elements Limited (current)
Pan Asia Corporation Limited (resigned 9 June 2017)
Nicholas Sage
Non-Executive Director (appointed on 22 December 2017)
Qualifications
BBus
Experience
Mr Sage is an experienced marketing and communications professional with excess
of 25 years in various management and consulting roles. Mr Sage is based in
Western Australia and currently consults to various companies and has held
various management roles within Tourism Western Australia. Mr Sage also runs his
own management consulting business and is a Non-Executive director of ASX listed
Cauldron Energy Limited and Fe Limited.
Interest in Shares and
Options
Nil
Special Responsibilities
Member of Nominations & Remuneration Committee
Directorships held in other
listed entities
Cauldron Energy Limited (current)
Fe Limited (current)
International Goldfields Limited (current)
Michael Davy
Non-Executive Director (appointed on 15 February 2018)
Qualifications
BCom (Acc)
Experience
Mr Davy is an Accountant with over 15 years’ experience. His experience is broad
having working in Oil and Gas, Resources, Property, Food Distribution, Restaurants
and startup Technology companies. Mr Davy is also a director and owner of a
number of successful private companies. During the past five years Mr Davy has held
directorships in three other ASX listed companies.
Interest in Shares and
Options
1,000,000 ordinary fully paid shares
Special Responsibilities
Member of Audit & Risk Committee
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
7
Directors’ Report
Directorships held in other
listed entities
Aus Asia Minerals Limited (current)
Raiden Resources Limited (current)
Dotz Nano Limited (resigned 31 October 2016)
Martin Pawlitschek
Non-Executive Director (appointed on 15 February 2018)
Qualifications
M Science, B. Science - Applied Geology (Honours), Dip. Applied Chemistry
Experience
Experience
Mr Pawlitschek currently serves as Senior Vice President of Geology for a mining
focused Private Equity fund. Mr Pawlitschek is based in Europe and is responsible
for undertaking technical due diligence on mining projects, principally from a
geology and resource risk perspective, but also to evaluate exploration upside. He
has taken part in over forty detailed due diligence reviews and site visits over the
last three years and was a key member in the selection of the funds projects to
date.
Mr Pawlitschek has over 20 years of experience primarily in exploration and
resource drilling with some exposure to underground and open pit mines. During
his 11-year tenure with BHP Billiton, he oversaw numerous exploration programs in
Australia, Laos and several countries in Southern and Central Africa. Later in his
career with BHP he was responsible for the technical aspects setting up several
new business opportunities in the diamond sector in Botswana, South Africa,
Angola and DRC. The Angolan projects resulted in the discovery of several large,
diamond-bearing kimberlites.
Mr Pawlitschek later joined one of the junior companies set up by BHP and moved
forward an ambitious diamond exploration program in the DRC. From there he
continued his career in the junior sector with a move to Senegal where he
managed a large portfolio of exploration permits for gold in Eastern Senegal, which
resulted in the development of what is now the 10MOz Sabodala gold camp with
an annual output in excess of 200KOz of gold. He also had early input in the
evaluation of the Grand Cote Mineral sands project on the coast of Senegal, this is
now the world’s largest mineral sands dredging operation.
Mr Pawlitschek is a Fellow of the Australasian Institute of Geoscientists.
Interest in Shares and
Options
Nil
Special Responsibilities
Nil
Directorships held in other
listed entities
Raiden Resources Limited (current)
Stefan Muller
Non-Executive Director (appointed on 24 July 2018)
Qualifications
Executive Program, INSEAD
Experience
Mr Muller has extensive financial markets and investment banking knowledge and
experience built over his 25 year career. Mr Muller is CEO and founder of DGWA
Deutche Gesellchaft fur Wertpapieranalyyse GmbH (‘DGWA”), a boutique European
Investment and financial markets consulting firm for national and international SME’s
based in Frankfurt Germany.
Mr Muller graduated as banker and began his career at Dresdner Bank AG as senior
vice president of global equity trading. He held senior positions with Equinet AG,
Bankhaus Sal Oppenheim (largest European private bank at that time) as Head of
global propriety trading and managing partner at Proprietary Partners AG, a Swiss
based hedge fund advisory company.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
8
Directors’ Report
Interest in Shares and
Options
5,000,000 options (exercise price of $0.03, expiring 31 July 2020), subject to
shareholder approval
Special Responsibilities
Nil
Directorships held in other
listed entities
European Lithium Limited (current)
Cape Lambert (current)
Gary Williams
Executive Director & Chief Executive Officer (appointed 29 November 2013,
Resigned 15 February 2018)
Qualifications
MBA
Experience
Experience
Interest in Shares and
Options
Special Responsibilities
Directorships held in other
listed entities
is an experienced
international mining executive with formal
Mr Williams
qualifications as a mining engineer holding MBA. As Founder and Managing Director
of the global mining materials handling company, Continental and mining services
United Mining Group, as well as previous position as Executive with Cyprus Coal, Coal
& Allied/CRA, Sheli and BP Coal, Mr Williams has more than 30 years’ experience in
the industry.
Mr Williams has significant expertise in the exploration and development of world
class, highly efficient open-pit, underground and resource infrastructure projects in
Australia, Thailand, Indonesia, New Zealand, North & South America and South
Africa. He has held no directorships in other listed companies in the last four years
196,986 ordinary fully paid shares
Nil
Nil
Jackob Tsaban
Executive Director & Chief Finance Officer (Appointed 18 October 2013, Resigned
21 December 2017)
Qualifications
Chartered Accountant
Experience
Mr Tsaban is a qualified chartered accountant. He moved from Israel to Australia in
2007 and was appointed as the Chief Financial Officer for the South East Asia
Resources group in January 2013.
Mr. Tsaban is also a Director of ORH Limited from 19 December 2013, a company
listed on the ASX.
Interest in Shares and
Options
181,500 fully paid ordinary shares
Special Responsibilities
Nil
Directorships held in other
listed entities
ORH Limited (current)
Wayne Knight
Non-Executive Director (Appointed 3 December 2017, Resigned 21 December
2017)
Qualifications
Diploma of Financial Planning
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
9
Directors’ Report
Experience
Mr Knight has worked in the financial services industry since 1989 and has a Diploma
in Financial Planning 1, 2, 3, 4. He is an Authorised Representative of Tandem
Financial Advice Limited and offers services in the areas of personal superannuation
investments, risk management, rollover and redundancy
planning, managed
planning, wealth creation and insurances. He has held no directorships in other listed
companies in the last four years.
Interest in Shares and
Options
Special Responsibilities
Directorships held in other
listed entities
68,250 ordinary fully paid shares
Nil
Nil
Information on Company Secretary
Luke Martino
Louisa Martino
Qualification and experience of Mr Martino are disclosed under Director
Information.
Ms Martino provides company secretarial and accounting services. Prior to this she
was the Chief Financial Officer of a private company during its stage seeking
investor financing.
Ms Martino previously worked for a corporate finance company, assisting company
compliance (ASIC and ASX) and capital raisings. She also has experience working for
a government organisation in its Business Development division where she
performed reviews of business opportunities and prepared business case
documents seeking Government funding.
Ms Martino also worked for a major accounting firm in Perth, London and Sydney
where she provided corporate advisory services, predominantly on IPOs and
mergers and acquisitions and also performed due diligence reviews.
She has a Bachelor of Commerce from the University of Western Australia, is a
member of Chartered Accountants Australia and New Zealand and a member of
Financial Services Institute of Australasia (FINSIA).
Meetings of directors
During the financial year 4 meetings of Directors were held. Attendances by each Director during the year are
stated in the following table.
Director’s Meetings
Number eligible to attend
Number attended
Mr Luke Martino
Mr Nicholas Sage
Mr Michael Davy
Mr Martin Pawlitschek
Mr Gary Williams
Mr Jackob Tsaban
Ms Wayne Kinght
4
4
3
3
1
0
0
4
2
2
3
1
0
0
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
10
Directors’ Report
Share options
At the date of this report, the un-issued ordinary shares of Jadar Lithium Limited under option are as follows:
Grant Date
Expiry Date
Exercise
Price
Number of shares
under option
22/12/2017
22/12/2017
22/12/2020
22/12/2020
$0.02
$0.02
65,250,000
5,000,000
70,250,000
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.
REMUNERATION REPORT (AUDITED)
This remuneration report, which forms part of the directors’ report, sets out information about the
remuneration of the Company’s directors and key management personnel for the financial year ended 30 June
2018. The key management personnel of the Company include the Directors and other officers of the Company.
For the purposes of this report “key management personnel” are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the Company.
The Non-Executive Directors’ fees are approved by the Board within the aggregate approved by the
shareholders at a general meeting. The fee pool currently stands at $200,000 as approved at the Company’s
AGM in October 2017. During the year, no Non-Executive Directors used this fee pool. The Company does not
provide retirement benefits, however directors may salary sacrifice an element of their total remuneration to
superannuation. In addition, the Board seeks shareholder approval for any options that may be issued to
directors.
The amount of aggregate remuneration and the manner in which it is apportioned amongst directors is reviewed
annually. Shareholder approval is sought where there is a proposed change in the total remuneration paid to
non-executive directors.
The Board considers the Company’s particular circumstances as well as the fees paid to non-executive directors
of comparable companies when undertaking the annual review process and determining the nature and amount
of key management remuneration. There is no relationship between board policy for key management
remuneration and the entity’s performance.
The Company received 99.97% of yes votes on its remuneration report for the financial year ended 30 June
2017. The Company received no specific feedback to its remuneration report at the AGM. The Company did not
use any remuneration consultants during the year.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
11
Directors’ Report
Details of the remuneration
The Key Management Personnel of Jadar Lithium Limited includes the Directors of the Company.
30 June 2018
L Martino
(Non-Executive Chairman)
N Sage
(Non-Executive Director)
M Davy
(Non-Executive Director)
M Pawlitschek
(Non-Executive Director)
G Williams
(Executive Director)
J Tsaban
(Non-Executive Director)
W Knight
Non-Executive Director)
Total
Short Term
Salary, Fees &
Commissions
$
Post
Employment
Superannuation
$
18,000
18,000
12,266
12,000
7,599
-
-
67,865
-
-
-
-
-
-
-
-
Other/
Bonus
Share-
based
payments
Total
$
-
-
-
-
-
-
-
-
$
$
-
-
-
-
-
-
-
-
18,000
18,000
12,266
12,000
7,599
-
-
67,865
Performance
based
remuneration
%
-
-
-
-
-
-
-
No remuneration was paid to directors in the year ended 30 June 2017.
Employment Contracts of Directors and Senior Executives
There were no service agreements in place for the year ended 30 June 2018 (2017: Nil)
KMP options and rights holdings
The number of options held by each Director of the Group during the financial year was as follows:
30-Jun-18
L Martino
(Non-Executive Chairman)
M Davy
(Non-Executive Director)
N Sage
(Non-Executive Director)
M Pawlitschek
(Non-Executive Director)
G Williams
(Executive Director)
J Tsaban
(Non-Executive Director)
W Knight
(Non-Executive Director)
Total
Balance at
the start of
the year
Granted as
Remuneration
during the
year
Exercised
during
the year
Other
changes
during the
year
Balance
at the end
of the
year
Vested and
exercisable
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000*
-
-
-
-
-
-
5,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Vested and
un-
exercisable
5,000,000
-
-
-
-
-
-
5,000,000
* Relates to issue of options to Indian Ocean, an entity related to Mr Martino. During the year Indian Ocean was issued 5,000,000 unlisted
options in consideration for lead manager services provided to the Company in relating to the Public Offer.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
12
Directors’ Report
KMP ordinary shareholdings
The number of ordinary shares held by each Director of the Group during the financial year was as follows:
30-Jun-18
L Martino
(Non-Executive Chairman)
M Davy
(Non-Executive Director)
N Sage
(Non-Executive Director)
M Pawlitschek
(Non-Executive Director)
G Williams
(Executive Director)
J Tsaban
(Non-Executive Director)
W Knight
Non-Executive Director)
Total
Balance at the
start of the
year
Granted as
Remuneration
during the year
Issued on exercise
of options during
the year
Other changes
during the year
Balance at
end of year or
at resignation
date
-
-
-
-
196,986
181,500
68,250
446,736
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
594,074
594,074
1,000,000
1,000,000
-
-
-
-
-
-
-
196,986
181,500
68,250
1,594,074
2,040,810
KMP performance shareholding
There was no performance shares held by Key Management Personnel during the financial year (2017: Nil).
Loans to Key Management Personnel
There were no loans to Key Management Personnel during the financial year (2017: Nil).
Other related party transactions
Purchases from and sales to related parties are made on terms equivalent to those that prevail in arm’s length
transactions. The Group acquired the following services from entities that are controlled by members of the
Group’s key management personnel:
Entity
Nature of transactions Key
Management
Personnel
Total Revenue / (Expense)
2017
$
2018
$
Payable Balance
2018
$
2017
$
Indian Ocean Group
Corporate advisory
Luke Martino
(140,263)
(135,510)
(3,000)
(78,761)
Indian Ocean Group
Lead manager options
Luke Martino
(62,794)
Okewood Pty Ltd
Consulting services
Nicholas Sage
(20,000)
-
-
Jackori Consulting
Accounting and
Reporting Fees
Kobi Tsaban
(35,000)
(6,672)
-
-
-
-
-
-
During the year transactions of $140,263 were made with Indian Ocean Group (IOG) of which Mr Luke Martino is
a director. The transactions included the provision of various professional services, not all directly provided by
Mr Martino and included the following:
•
•
•
•
including the structuring and procurement of projects and early funding,
corporate work,
accounting support,
secretarial and advisors with regards to recapitalisation and transactional work with Serbia and investors.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
13
Directors’ Report
At 30 June 2018 the outstanding balance relating to IOG totaled to $3,000.
During the year Indian Ocean was issued 5,000,000 unlisted options in consideration for lead manager services
provided to the Company in relation to the Public Offer. The options have an exercise price of $0.02, expire 3
years from issue and are subject to 24 month escrow from quotation. The value of the options issued was
$62,794).
During the year transactions of $20,000 were made with Okewood Pty Ltd (Okewood), an entity related to Mr
Nicholas Sage. The transactions related to provision of consulting services during the year. At 30 June 2018 there
was nil balance outstanding to Okewood.
During the year transactions of $35,000 were made with Jackori Consulting, a related entity of which Mr Jackob
Tsaban is a director, for provision of professional services in capacity as Chief Financial Officer. These services
were provided on normal commercial terms and conditions and at market rates. There was nil balance
outstanding as at 30 June 2018.
There were no other related party transactions during the year.
REMUNERATION REPORT (END)
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
14
Directors’ Report
Likely future developments
The Group intends to continue to undertake appropriate exploration and evaluation activities sufficient to
maintain tenure of its exploration licences, as well as, determine the technical prospectively of the projects.,
until such time that an informed decisions can be made in order to commercially exploit or relinquish them.
Indemnifying officers
During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the
Company (as named above), the company secretary, and all executive officers of the Company and of any
related body corporate against a liability incurred as such a Director, secretary or executive officer to the extent
permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the
liability and the amount of the premium.
The Company has not otherwise, during or since the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate
against a liability incurred as such an officer or auditor. There have also been no legal proceedings during the
year and no application for leave has been made in respect of the Company for proceedings on behalf of the
Company.
Environmental regulations
The Company’s operations are not regulated by any significant environmental regulation under the Law of the
Commonwealth or of a State or Territory of Australia. However, the group’s operations in the Republic of Serbia
are subject to environmental regulations under the Serbian laws. The group has a policy of complying with its
environmental performance obligations and at the date of this report, it is not aware of any breach of such
regulations.
This report is made in accordance with a resolution of the Board of Directors.
Luke Martino
Non-Executive Chairman
28 September 2018
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
15
Central Park, Level 43
152-158 St Georges Terrace
Perth WA 6000
Correspondence to:
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
F +61 8 9480 2050
E info.wa@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Jadar Lithium Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Jadar
Lithium Limited for the year ended 30 June 2018, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M P Hingeley
Partner – Audit & Assurance
Perth, 27 September 2018
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Central Park, Level 43
152-158 St Georges Terrace
Perth WA 6000
Correspondence to:
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
F +61 8 9480 2050
E info.wa@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Jadar Lithium Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Jadar Lithium Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Accounting for Acquisition of Subsidiary
(Note 10)
In December 2017, the Company completed the purchase of
Centralist Pty Ltd for consideration of ordinary shares.
The transaction was unique and the magnitude of the
transaction had financial significance to the Group. Significant
judgement was involved to apply the appropriate accounting
standards to determine how to account for the purchased
assets and to determine the valuation of the consideration
paid.
This area is a key audit matter due to the complexity of the
transaction and the valuation consideration requiring
judgement.
Our procedures included, amongst others:
reviewing the purchase agreements to understand
key terms and conditions;
obtaining management's reconciliation of values
applied to each asset and liability acquired;
assessing how the Group estimated the fair value of
the assets and liabilities identified in the acquisition;
reviewing reserve reports prepared by management’s
expert as they pertain to the valuation assets
acquired and evaluating the assumptions and
methodology used;
assessing the competence, capabilities and
objectivity of management’s expert;
utilising an auditor’s expert to assess the
reasonableness of key assumptions used in the
asset valuation;
performing sensitivity analysis on significant
assumptions, including the discount rate, price and
cost assumptions; and
reviewing the appropriateness of the related
disclosures within the financial statements.
We considered the adequacy of the disclosures made in the
Note 10 relating to the economic interest paid and the
purchase of the subsidiary in accordance with the
requirements of Australian Accounting Standards.
Carrying Value of Exploration Asset
(Note 13)
The Group recorded an exploration asset attributable to the
acquisition of Centralist Pty Ltd totalling $1,026,769 and
capitalised exploration of $265,424 (total $1,292,193).
In accordance with AASB 6 Exploration for and Evaluation of
Mineral Resources, management is required at each reporting
date to assess if there are any triggers for impairment which
may suggest the carrying value of production assets is in
excess of the recoverable value. The process for determining
the recoverable amount involves management judgement and
subjectivity with regard to the underlying assumptions in
determining the life of mine.
Our procedures included, amongst others:
obtaining the management reconciliation of capitalised
exploration and evaluation expenditure and agreeing to
the general ledger;
reviewing management’s area of interest considerations
against AASB 6;
conducting a detailed review of management’s
assessment of trigger events prepared in accordance
with AASB 6 including;
o
tracing projects to statutory registers, exploration
licenses and third party confirmations to determine
whether a right of tenure existed;
This area is a key audit matter due to judgemental nature of
the estimates and assumptions used in the determination of
the recoverable value.
o
o
enquiry of management regarding their intentions
to carry out exploration and evaluation activity in
the relevant exploration area, including review of
management’s budgeted expenditure;
understanding whether any data exists to suggest
that the carrying value of these exploration and
evaluation assets are unlikely to be recovered
through development or sale;
evaluating the competence, capabilities and objectivity
of management in the evaluation of potential impairment
triggers; and
assessing the appropriateness of the related financial
statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2018, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 11 to 14 of the Directors’ report for the year ended 30 June
2018.
In our opinion, the Remuneration Report of Jadar Lithium Limited, for the year ended 30 June 2018 complies with section
300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M P Hingeley
Partner – Audit & Assurance
Perth, 27 September 2018
Directors' Declaration
Directors' Declaration
In the Director’s opinion:
1.
The consolidated financial statements and notes set out on pages 22 and 46 are in accordance with the
Corporations Act 2001, including:
a)
b)
complying with Australian Accounting Standards and Corporations Regulations 2001;
giving a true and fair view, the consolidated entity’s financial position as at 30 June 2018 and of its
performance for the year ended on that date;
c)
complying with International Financial Reporting Standards as disclosed in Note 1; and
2.
3.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
This declaration has been made after receiving the declaration required to be made to the directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on
behalf of the Directors by:
Luke Martino
Non-Executive Chairman
28 September 2018
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
21
Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2018
Interest income
Other Income
Consulting fees
Director fees
DOCA expense
Marketing and investor relations
Other expenses
Professional fees
Reinstatement expense
Share registry and listing fees
Loss before income tax expense
Income tax expense
Loss for the year
Other comprehensive income:
Items which may be subsequently reclassified to profit or loss
Exchange differences on translating foreign operations
Total other comprehensive income for the year
Total Comprehensive loss for the year
NOTE
4
5
6
2018
$
12,275
-
(173,750)
(67,865)
(160,000)
(120,958)
(29,708)
(211,569)
(373,937)
(91,187)
(1,216,699)
-
2017
$
-
63,054
(240,741)
-
-
-
(112)
(6,671)
-
(82,176)
(266,646)
-
(1,216,699)
(266,646)
(9,722)
(9,722)
-
-
(1,226,421)
(266,646)
Earnings per share for loss attributable to the ordinary equity holders of the Company:
Basic and diluted earnings per share earnings/(loss)
9
(0.62)
(1.17)
Cents
Cents
The accompanying notes form part of these financial statements.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
22
Statement of Financial Position
As at 30 June 2018
Current Assets
Cash & cash equivalents
Trade & other receivables
Prepayments
Total Current Assets
Non-Current Assets
Exploration asset
Total Non-Current Assets
Total Assets
Current Liabilities
Trade & other payables
Borrowings
Amounts to be converted as part of debt conversion agreement
Total Current Liabilities
Total Liabilities
Net Assets/ (liabilities)
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
NOTE
11
12
13
15
16
17
18
19
20
2018
$
3,419,022
89,840
38,886
3,547,748
1,292,193
1,292,193
4,839,941
54,490
-
-
54,490
54,490
2017
$
30,674
8,293
-
38,967
-
-
38,967
305,826
777,500
1,132,450
2,215,776
2,215,776
4,785,451
(2,176,809)
39,336,517
31,210,629
53,071
-
(34,604,137)
(33,387,438)
4,785,451
(2,176,809)
The accompanying notes form part of these financial statements.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
23
Statement of Changes in Equity
For the Year Ended 30 June 2018
CONSOLIDATED ENTITY
Balance at 1 July 2016
Loss for the year
Other comprehensive loss
Sub-total
Conversion of convertible loans and debt
Contributions of equity, net of transaction costs
Balance at 30 June 2017
Balance at 1 July 2017
Loss for the year
Other comprehensive income
Total Comprehensive loss for the year
Transactions with owners, recognised directly in equity
Issued capital
Acquisition of Centralist Pty Ltd
Capital raising costs
Conversion of debt to equity
Share based payments
Balance at 30 June 2018
Note
Issued Capital
$
Option Reserve
$
Foreign Currency
Reserve
$
Accumulated
Losses
$
20
18
18
20
18
18
18
18
18
23,833,825
-
-
-
7,021,804
355,000
31,210,629
31,210,629
-
-
-
5,637,000
1,000,000
(456,562)
1,632,450
313,000
39,336,517
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
62,793
62,793
-
-
-
-
-
-
-
-
-
Total
$
(9,286,967)
(266,646)
--
(266,646))
7,021,804
355,000
(33,120,792)
(266,646)
-
(266,646)
-
-
(33,387,438)
(2,176,809)
(33,387,438)
(2,176,809)
(1,216,699) (1,216,699)
(9,722)
(9,722)
-
(1,216,699)
(9,722)
(1,226,421)
-
-
-
-
-
-
-
-
-
-
(9,722)
(34,604,137)
5,637,000
1,000,000
(456,562)
1,632,450
375,793
4,785,451
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
24
Statement of Cash Flows
For the Year Ended 30 June 2018
Cash Flows from Operating Activities
Receipts from suppliers
Payments to suppliers and employees
Payments for transaction costs
Interest received
NOTE
2018
$
2017
$
-
(861,298)
(743,937)
12,275
63,054
(387,380)
-
-
Net cash (used in) operating activities
23
(1,592,960)
(324,326)
Cash Flows from Investing Activities
Payments for exploration and evaluation
Net cash (used in) investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares
Capital raising costs
Proceeds from borrowings
Repayment of borrowings
Net cash provided by financing activities
(266,765)
(266,765)
5,637,000
(364,343)
-
-
-
-
-
355,000
(26,339)
-
5,246,318
355,000
Net (decrease)/ increase in cash and cash equivalents
3,386,593
30,674
Cash and cash equivalents at the beginning of the financial year
Foreign exchange
30,674
1,755
-
-
Cash and cash equivalents at the end of the financial year
11
3,419,022
30,674
The accompanying notes form part of these financial statements.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
25
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
1. Statement of Significant Accounting Policies
The financial report covers the consolidated entity of Jadar Lithium Limited (formerly known as South East Asia
Resources Limited) (the “Company”) and controlled entities (the “Group”). Jadar Lithium Limited is a listed
public company, incorporated and domiciled in Australia. The company is a for-profit entity for the purpose of
preparing financial statements. The financial report was authorised for issue by a resolution of the Board of
Directors on 27 September 2018.
Basis of Preparation
This financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to
which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and
notes also comply with International Financial Reporting Standards. Material accounting policies adopted in
the preparation of this financial report are presented below. They have been consistently applied unless
otherwise stated.
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities. The reporting currency is Australian Dollars.
a. Principles of Consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30
June 2018. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its
involvement with the subsidiary and has the ability to affect those returns through its power over the
subsidiary. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised
gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset
sales are reversed on consolidation, the underlying asset is also tested for impairment from group perspective.
Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and
net assets that is not held by the Group. The Group attributes total comprehensive income or loss of
subsidiaries between the owners of the parent and the non-controlling interests based on their respective
ownership interests.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
26
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
b.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred
tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current
tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the
profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also
result where amounts have been fully expensed but future tax deductions are available. No deferred income
tax will be recognised from the initial recognition of an asset or liability, excluding a business combination,
where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of
the reporting period. Their measurement also reflects the manner in which management expects to recover
or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax
asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities where it is intended that net settlement or simultaneous realisation and
settlement of the respective asset and liability will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
c. Property, Plant & Equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated
depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Plant & Equipment
The cost of fixed assets constructed within the consolidated entity includes the cost of materials, direct labor,
borrowing costs and an appropriate proportion of fixed and variable overheads.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
27
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future consolidated benefits associated with the item will flow to the group and
the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss
during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding
freehold land, is depreciated on a straight-line basis over their useful lives to the consolidated entity
commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the
shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Office Furniture
Office Equipment
Depreciation Rate
6% - 40%
12.5% - 40%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in profit or loss.
d. Leases
A distinction is made between finance leases which effectively transfer from the lessor to the lessee
substantially all the risks and benefits incidental to ownership of leased non-current assets, and operating
leases under which the lessor effectively retains substantially all such risks and benefits.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair
value of the leased property or the present value of the minimum lease payments, including any guaranteed
residual values. Lease payments are allocated between the reduction of the lease liability and the lease
interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the
lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they are incurred. Lease incentives under operating leases are
recognised as a liability and amortised on a straight-line basis over the life of the lease term.
e. Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity
becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial
assets that are delivered within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not
classified as at fair value through profit and loss. Transaction costs related to instruments classified as at fair
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
28
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and
measured as set out below.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the
risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations
are either discharged, cancelled or expire. The difference between the carrying value of the financial liability
extinguished or transferred to another party and the fair value of consideration paid, including the transfer of
non-cash assets or liabilities assumed, is recognised as profit or loss.
Classification and Subsequent Measurement
i.
Financial assets at fair value through profit or loss
Financial assets are classified at fair value through profit and loss when they are held for trading for the
purpose of short term profit taking, where they are derivatives not held for hedging purposes, or designated as
such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is
managed by key management personnel on a fair value basis in accordance with a documented risk
management or investment strategy. Realised and unrealised gains and losses arising from changes in fair
value are included in profit or loss in the period in which they arise.
ii.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are subsequently measured at amortised cost using the effective interest rate
method.
iii. Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the group’s intention to hold these investments to maturity. They are
subsequently measured at amortised cost using the effective interest rate method.
iv. Available-for-sale (AFS) financial assets
AFS financial assets are non-derivative financial assets that are either designated as such or that are not
classified in any of the other categories. They comprise investments in the equity of other entities where there
is neither a fixed maturity nor fixed or determinable payments. All AFS financial assets are measured at fair
value. Gains and losses are recognised in other comprehensive income and reported within the AFS reserve
within equity, except for impairment losses and foreign exchange differences on monetary assets, which are
recognised in profit or loss. When the asset is disposed of or is determined to be impaired the cumulative gain
or loss recognised in other comprehensive income is reclassified from the equity reserve to profit or loss and
presented as a reclassification adjustment within other comprehensive income. Interest calculated using the
effective interest method and dividends are recognised in profit or loss within ‘finance income’.
v.
Impairment
At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has
been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the
instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in
profit or loss.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
29
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
vi.
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised
cost using the effective interest rate method.
f. Derivative financial instruments
Derivative financial instruments are accounted for at FVTPL.
All derivative financial instruments are recognised initially at fair value and reported subsequently at fair value
in the statement of financial position.
If a forecast transaction is no longer expected to occur any related gain or loss recognised in other
comprehensive income is transferred immediately to profit or loss.
g.
Impairment of Non-Financial Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is
compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is
expensed to the Statement of profit or loss and other comprehensive income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
h.
Intangibles
Exploration and evaluation
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an
exploration and evaluation asset in the year in which they are incurred where the following conditions are
satisfied:
i.
ii.
a.
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a
stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interest is
continuing.
b.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore,
studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation
and amortised of assets used in exploration and evaluation activities. General and administrative costs are only
included in the measurement of exploration and evaluation costs where they are related directly to
operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable
amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated
being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
30
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
(if any). Where an impairment loss subsequently reverses, the carrying amount of the asset 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 asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the
relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to
development.
i.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the group’s entities is measured using the currency of the primary
consolidated environment in which that entity operates. The consolidated financial statements are presented
in Australian dollars which is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-
monetary items measured at historical cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when
fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except
where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the
extent that the gain or loss is directly recognised in equity; otherwise the exchange difference is recognised in
profit or loss.
Group companies
The financial results and position of foreign operations whose functional currency is different from the group’s
presentation currency are translated as follows:
Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
Income and expenses are translated at average exchange rates for the period;
Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign
currency translation reserve in the statement of financial position. These differences are recognised in profit or
loss in the period in which the operation is disposed.
j.
Employee Entitlements
Provision is made for the Company’s liability for employee benefits arising from services rendered by
employees to reporting date. Employee benefits that are expected to be settled wholly within one year have
been measured at the amounts expected to be paid when the liability is settled, plus related on-costs.
Employee benefits payable later than one year have been measured at the present value of the estimated
future cash outflows to be made for those benefits.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
31
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
k. Cash
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of one month or less, and bank overdrafts. Bank overdrafts are shown
within short-term borrowings in current liabilities on the statement of financial position.
l. Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
All revenue is stated net of the amount of goods and services tax (GST).
m. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily
take a substantial period of time to prepare for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are expensed in the period in which they are incurred.
n. Trade and Other Creditors
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end
of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
o. Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the proceeds.
p. Earnings Per Share
• Basic earnings per share: Basic earnings per share are determined by dividing the net loss attributable to
equity holders of the Company, by the weighted average number of ordinary shares outstanding during
the year.
• Diluted earnings per share: Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account the after income tax effect of interest and other financing
costs associated with dilutive potential ordinary shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
q. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part
of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
32
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
r. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
s. Critical Accounting Estimates and Judgements
The application of accounting policies requires the use of judgements, 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 knowledge and experience, best available information and
other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the
period in which the estimate is revised if it affects only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
The critical accounting estimates and judgements applicable to this financial report are as follows:
Exploration and evaluation expenditure
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be
recovered or where the activities have not reached a stage which permits a reasonable assessment of the
existence of reserves. While there are certain areas of interest from which no reserves have been extracted,
the directors are of the continued belief that such expenditure should not be written off since feasibility
studies in such areas have not yet concluded. Such capitalised expenditure is carried at reporting date at nil
value.
Share-based payment transactions:
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined using a Black and Scholes
model.
The Group measures the cost of cash-settled share-based payments at fair value at the grant date using the
Black and Scholes formula taking into account the terms and conditions upon which the instruments were
granted.
t. Equity-settled compensation
Share-based payments to employees are measured at the fair value of the instruments issued. Share-based
payments to non-employees are measured at the fair value of goods or services received or the fair value of
the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably
measured, and are recorded at the date the goods or services are received. The corresponding amount is
recorded to the option reserve. The fair value of options is determined using the Black-Scholes pricing
model. The number of shares and options expected to vest is reviewed and adjusted at the end of each
reporting period such that the amount recognised for services received as consideration for the equity
instruments granted is based on the number of equity instruments that eventually vest.
u. New Accounting Standards
The following Australian Accounting Standards have been issued or amended and are applicable to the annual
financial statements of the consolidated group (or the company) but are not yet effective at 30 June 2018. This
assumes the following have not been adopted in preparation of the financial statements at the reporting date.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
33
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
Australian Accounting Standards
AASB No.
Title
Application date of
standard *
Issue date
AASB 9
Financial Instruments
1 January 2018
December 2014
AASB 15
Revenues from Contracts with Customers
1 January 2018
October 2015
AASB 16
Leases
1 January 2019
February 2016
* Annual reporting periods beginning after
The above table is complete as at 30 June 2018, therefore any further standards/interpretations issued after
this date will also need to be disclosed up until the date of authorisation of the financial report.
New, revised or amending Accounting Standards and Interpretations adopted
The Company has adopted all of the new, revised or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting
period there has been no significant impact on the application of those standards.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted. New disclosures AASB 9, AASB 15 and AASB 16 for the next reporting period have been
assessed and the Company believes there will be no material impact on the financial statements as a result of
the new disclosures.
2. Financial Risk Management Policies
The group’s principal financial instruments comprise mainly of deposits with banks, receivable and payables.
The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance
with the Group's financial risk management policy. The objective of the policy is to support the delivery of the
Group's financial targets whilst protecting future financial security.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews
and agrees policies for managing each of the risks identified below.
a. Treasury Risk Management
Due to the size of the group, responsibility for identification and control of financial risks rests with the Board
of Directors. This includes the use of hedging derivative instruments, credit risk policies and future cash flow
requirements. The level of activity during the financial year did not warrant using derivative financial
instruments such as foreign exchange contracts and interest rate swaps to hedge certain risk exposures.
b. Financial Risk Exposures and Management
The group’s activities expose it to financial risks, market risk (including currency risk, fair value interest rate
risk), credit risk, liquidity risk and cash flow interest rate risk. The level of activity during the financial year did
not warrant using derivative financial instruments such as foreign exchange contracts and interest rate swaps
to hedge certain risk exposures. Where relevant and appropriate, the Company will avail itself of appropriate
hedging instruments in future financial years.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
34
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
c. Foreign Exchange Risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are
denominated in a currency that is not the entity’s functional currency.
As a result of operations in Serbia, the Group’s statement of financial position can be affected by movements
in the RSD/AUD exchange rates. The Group also has transaction currency exposure. Such exposure arises from
purchases by an operating entity in currencies other than the functional currency.
d. Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date
to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements. The group did not have
any material credit risk exposure to any single debtor or group of debtors at reporting date.
e. Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash to fund the group’s activities. The
directors regularly monitor the Company’s cash position and on an on-going basis consider a number of
strategic initiatives to ensure that adequate funding continues to be available.
The table below reflects all contractually fixed pay-offs and receivables for settlement, repayments and
interest resulting from recognised financial assets and liabilities. The undiscounted cash flows for the
respective upcoming fiscal years are presented. Cash flows for financial assets and liabilities without fixed
amount or timing are based on the conditions existing at 30 June 2018.
Maturity analysis of financial assets and liability based on management’s expectation
The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and
outflows. Trade payables and other financial liabilities mainly originate from the financing of the day to day
operations of the group. These assets are considered in the group’s overall liquidity risk.
Year ended 30 June 2018
Consolidated financial assets
Cash and cash equivalents
Loans and receivables
Consolidated financial liabilities at
amortised cost
Trade and other payables
≤ 6 months
$
6-12 months
$
1-5 years
$
> 5 years
$
Total
$
3,419,022
89,840
3,508,862
54,490
54,490
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,419,022
89,840
3,508,862
54,490
54,490
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
35
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
Year ended 30 June 2017
Consolidated financial assets
Cash and cash equivalents
Loans and receivables
Consolidated financial liabilities at
amortised cost
Trade and other payables
Borrowings
Amount to be converted
f.
Interest Rate Risk
≤ 6 months
$
6-12 months
$
1-5 years
$
> 5 years
$
30,674
8,293
38,967
305,826
777,500
1,132,450
2,215,776
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
30,674
8,293
38,967
305,826
777,500
1,132,450
2,215,776
From time to time the Group has significant interest bearing assets, but they are as results of the timing of
equity raisings and capital expenditure rather than a reliance on interest income. The interest rate risk arises
on the rise and fall of interest rates. The Group’s income and operating cash flows are not expected to be
materially exposed to changes in market interest rates in the future and the expose to interest rates is limited
to the cash and cash equivalents balances.
At reporting date, the group had the following mix of financial assets and liabilities exposed to Australian
variable interest rate risk that are not designated in cash flow hedges:
Financial Assets
Cash and cash equivalents
Net exposure
2018
$
2017
$
3,419,022
3,419,022
30,674
30,674
The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date.
At 30 June 2018, if interest rates had moved, as illustrated in the table below, with all other variables held
constant, post tax profit and equity would have been affected as follows:
Judgments of reasonably possible movements:
Consolidated
+/- 1% in interest rates
Post Tax Profit
Higher/(Lower)
Equity
Higher/(Lower)
2018
$
2017
$
2018
$
2017
$
17,248
-
17,248
-
The movements in profit are due to higher/lower interest costs from variable rate cash balances. The
movements are reasonable with reference to the historical interest rate fluctuations.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
36
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
f. Price Risk
The Group's exposure to commodity and equity securities price risk is minimal at present.
g. Net Fair Values
Due to short term nature of the receivables and payables the carrying value approximates the fair value.
3. Segment Information
The Group has identified its operating segments based on the internal reports that are reviewed and used by
the Board of Directors (the chief operating decision makers) in assessing performance and in determining the
allocation of resources.
The Group’s sole operating segment is consistent with the presentation of these consolidated financial
statements.
4. Other Income
Other income
Total other income
5. Professional fees
Accounting and company secretary fees
Audit fees
Legal fees
Consolidated entity
2018
$
-
-
2017
$
63,054
63,054
Consolidated entity
2018
$
86,190
98,101
27,278
2017
$
6,671
-
-
211,569
6,671
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
37
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
6.
Income Tax Expense
Reconciliation of income tax expense to prima facie tax payable
Profit/(loss) from ordinary activities before income tax expense
Prima facie tax benefit on loss from ordinary activities before income tax at
27.5% (2017: 30%)
Consolidated entity
2018
$
2017
$
(1,216,699)
(266,646)
(334,592)
(79,994)
Tax effect of amounts which are taxable (deductible) in calculating taxable income:
- deferred tax assets not recognised
Income tax expense
334,592
3,367,812
-
-
Unused tax losses for which no deferred tax asset has been recognised
15,782,574
14,303,370
Potential Tax Benefit at 27.5% (2017: 30%)
4,340,208
4,291,011
Income tax benefit due to timing differences not brought to account. Deferred tax liability is reduced to nil by
benefits attributable to tax losses not brought to account. The potential tax benefit will only be obtained if:
i.
ii.
iii.
The consolidated entity derives future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions for the losses to be realised;
The consolidated entity continues to comply with the conditions for deductibility imposed by tax
legislation(a); and
No changes in tax legislation adversely affect the consolidated entity in realising the benefit from the
deductions for the losses.
The Consolidated Entity’s ability to realise and recognise the deferred tax asset in future periods is dependent
on the Entity satisfying the “Continuity of Ownership” or “Same Business” tests. Given the significant changes
in share structure, the Consolidated Entity may not be able to retain its carried forward losses.
7.
Key Management Personnel Disclosures
Aggregate Compensation
Short term employee benefits
Post-Employment Benefits
Consolidated entity
2018
$
67,865
-
67,865
2017
$
-
-
-
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
38
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
8.
Auditor's Remuneration
Remuneration of Grant Thornton Audit Pty Ltd of the parent entity for:
- Auditing or reviewing of financial reports (a)
Consolidated entity
2018
$
98,101
2017
$
-
(a)
In the year ended 30 June 2018 the audit fee relates to Grant Thornton fees in respect to the audit and
review of financial accounts from 31 December 2014 to 30 June 2018.
9.
Loss per Share
Loss attributable to ordinary equity holders
Losses used to calculate basic and diluted EPS
Consolidated entity
2018
$
2017
$
(1,226,421)
(266,646)
(1,226,421)
(266,646)
No.
Weighted average number of ordinary shares outstanding during the year used
in calculating basic EPS*
Weighted average number of ordinary shares outstanding during the year used
in calculating diluted EPS*
197,257,411
22,815,145
197,257,411
22,815,145
* The weighted average number of ordinary shares used in the calculation of loss per share has been adjusted
for the share consolidation completed by the Company on 13 December 2017.
Anti-dilutive options have not been used in the EPS calculation. As at 30 June 2018 there were 70,250,000
options on issue.
10.
Acquisition of Subsidiary
On 22 December 2017, the Company completed the acquisition of 100% of the issued share capital of
Centralist Pty Ltd which through its wholly owned subsidiary holds the tenements of the Serbian Lithium
Project.
The consideration for the acquisition as follows:
•
•
Issue of 37,500,000 consideration shares to the vendors;
Issue of 12,500,000 Adviser Shares to Dempsey Resources Pty Ltd in consideration for corporate
advisory services provided to the Company in relation to the acquisition.
The assets and liabilities recognised as a result of the acquisitions are as follows:
Net identifiable assets acquired:
Exploration assets
Pre-acquisition net assets acquired
Total consideration paid
$
1,026,769
(26,769)
1,000,000
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
39
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
10.
Acquisition of Subsidiary (continued)
Other items in relation to the acquisition are as follows:
As a condition precedent to the acquisition, Mr Bozo Guzjian will be engaged as an in country-manager by
Centurion from completion. In consideration for his services, Mr Guzijan will be paid a salary of EUR65,000 per
annum for a minimum term of two years.
The acquisition of Centralist Pty Ltd has been accounted for as an acquisition of an asset on the basis that it
does not constitute a business as defined by AASB 3 Business Combinations.
11.
Cash and Cash Equivalents
Cash at bank and on hand
12.
Current Trade and other Receivables
Other receivables
Total
Consolidated entity
2018
$
2017
$
3,419,022
30,674
Consolidated entity
2018
$
89,840
89,840
2017
$
8,293
8,293
There are no balances within trade and other receivables that are impaired and are past due. It is expected
these balances will be received when due.
The Group has no significant concentration of credit risk with respect to any single counter party or group of
counter party. The class of assets described as trade and other receivables is considered to be the main source
of credit risk related to the Group.
13.
Exploration Asset
Opening balance
Asset acquisition
Exploration capitalised
Closing balance
Consolidated entity
2018
$
-
1,026,769
265,424
1,292,193
2017
$
-
-
-
-
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
40
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
14.
Controlled Entities
The Consolidated Entity incorporates the assets, liabilities and results of the following companies:
Country of
Incorporation
Jadar Lithium Limited (Parent Entity)
Centralist Pty Ltd
Australia
Australia
Centurion Metals d.o.o., Beograd
Republic of Serbia
Percentage
Interest
2018
2017
100%
100%
-
-
15.
Trade and Other Payables
Unsecured liabilities
Trade payables
Consolidated Entity
2018
$
54,490
54,490
2017
$
305,826
305,826
All amounts are short-term and the carrying values are considered to approximate fair value.
16.
Borrowings
Current borrowings
Convertible loans – unsecured (a)
Short-term borrowings (b)
Consolidated Entity
2018
$
2017
$
-
-
-
500,000
277,500
777,500
(a) The convertible loans represented the remaining not converted balance raised during 2013 financial year.
It did not have a maturity date and is expected to be converted into ordinary shares. The above loan was
converted as debt to equity on 22 August 2017.
(b) The short term borrowings included loans provided by related parties in prior periods with no set maturity
date. Of the amount $250,000 was settled with equity on 29 September 2017 and the remaining balance
was settled in cash.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
41
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
17. Amounts to be converted
Following the execution of the Deed of Company arrangement on 16 April 2015, it was agreed that the
following amount of liabilities and loans owed by the company and or its controlled subsidiaries will be
converted to regular shares. This was approved during shareholders meeting held on 8 December 2016.
Short term loans
Balance at the end of reporting period
The balance was converted as debt to equity on 29 September 2017.
18.
Contributed equity
2018
$
-
-
2017
$
1,132,450
1,132,450
Consolidated entity
2018
$
2017
$
389,530,536 (2016: 807,956,577) fully paid ordinary shares
(a)
39,336,517
31,210,629
a)
Ordinary Shares
At the beginning of the reporting period
Issue of shares - placement
Issue of shares – share based payment
Issue of shares – acquisition of Centralist Pty Ltd
Issue of shares – conversion of debt to equity
Issue of shares – public offer (net of costs)
39,336,517
31,210,629
2018
$
31,210,629
,637,000
313,000
1,000,000
1,632,450
4,543,438
2017
$
23,833,825
305,000
50,000
-
7,021,804
At reporting date
39,336,517
31,210,629
At the beginning of reporting period
Issue of shares – conversion of debt to equity
Issue of shares – placement
Issue of shares – share based payments
1 for 20 consolidation
Issue of shares – public offer
Issue of shares – acquisition of Centralist
At the end of reporting period
No. Shares
No. Shares
807,956,577
312,520,518
32,649,005
140,436,059
637,000,000
305,000,000
313,000,000
50,000,000
(1,701,075,046)
250,000,000
50,000,000
-
-
-
389,530,536
807,956,577
Ordinary shares have no par value and participate in dividends and the proceeds on winding up of the parent
entity in proportion to the number of shares held. On a show of hands every holder of ordinary shares present
at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
42
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
18.
Contributed equity (continued)
b) Capital management
Management controls the capital of the group in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and ensure that the group can fund its operations and continue as a going
concern.
The group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial
assets.
There are no externally imposed capital requirements.
Management effectively manages the group’s capital by assessing the group’s financial risks and adjusting its
capital structure in response to changes in these risks and in the market. These responses include the
management of debt levels, distributions to shareholders and share issues.
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital
19.
Reserves
a)
Reserves
Option reserve 70,250,000 (30 June 2017: Nil) options on issue
Foreign currency option reserve
b)
Option Reserve
At the beginning of the reporting period
Free attaching options
Lead manager options
At the end of reporting period
c)
Foreign currency reserve
At the beginning of the reporting period
Movement
At the end of reporting period
Consolidated entity
2018
$
-
(3,419,022)
(3,419,022)
2017
$
777,500
(30,674)
746,826
39,336,517
31,210,629
35,917,495
31,957,438
Consolidated entity
2018
$
62,794
(9,723)
53,071
-
65,250,000
5,000,000
70,250,000
-
(9,723)
(9,723)
2017
$
-
-
-
-
-
62,794
62,794
-
-
-
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
43
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
20.
Accumulated Losses
Accumulated losses at the beginning of the financial year.
Loss during the current year
Accumulated losses at the end of the financial year
21.
Related Party Transactions
Directors and key management personnel
Consolidated Entity
2018
$
2017
$
33,387,438
33,120,792
1,216,699
266,646
34,604,137
33,387,438
Disclosures relating to directors and key management personnel are set out in Directors’ Report and in Note 6.
Other related party transactions
Purchases from and sales to related parties are made on terms equivalent to those that prevail in arm’s length
transactions. The Group acquired the following services from entities that are controlled by members of the
Group’s key management personnel:
Entity
Nature of
transactions
Key
Management
Personnel
Total Revenue /
(Expense)
2018
$
2017
$
Payable Balance
2018
$
2017
$
Indian Ocean Group
Corporate advisory
Luke Martino
(140,263)
(135,510)
(3,000)
(78,761)
Indian Ocean Group
Lead manager options
Luke Martino
(62,794)
Okewood Pty Ltd
Consulting Services
Jackori Consulting
Accounting and
Reporting Fees
Nicholas
Sage
Kobi Tsaban
-
-
(20,000)
(35,000)
(6,672)
-
-
-
-
-
-
During the year transactions of $140,263 were made with Indian Ocean Group (IOG) of which Mr Luke Martino
is a director. The transactions included the provision of various professional services, not all directly provided
by Mr Martino and included the following:
•
•
•
•
including the structuring and procurement of projects and early funding,
corporate work,
accounting support,
secretarial and advisors with regards to recapitalisation and transactional work with Serbia and investors.
At 30 June 2018 the outstanding balance relating to IOG totaled to $3,000.
During the year Indian Ocean was issued 5,000,000 unlisted options in consideration for lead manager services
provided to the Company in relation to the Public Offer. The options have an exercise price of $0.02, expire 3
years from issue and are subject to 24 month escrow from quotation. The value of the options issued was
$62,794).
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
44
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
During the year transactions of $20,000 were made with Okewood Pty Ltd (Okewood), an entity related to Mr
Nicholas Sage. The transactions related to provision of consulting services during the year. At 30 June 2018
there was nil balance outstanding to Okewood.
During the year transactions of $35,000 were made with Jackori Consulting, a related entity of which Mr
Jackob Tsaban is a director, for provision of professional services in capacity as Chief Financial Officer. These
services were provided on normal commercial terms and conditions and at market rates. There was nil balance
outstanding as at 30 June 2018.
During the year ended 30 June 2018 there was no other related party transactions.
22.
Contingent Liabilities
With respect to the liabilities as previously reported by South East Asia Energy Resources Pte Limited as at 30
June 2014 and written off as at 31 December 2014, the Group has taken all reasonable steps to determine
whether the relevant creditors have a claim on monies of the Group. The Group acknowledges that South East
Asia Energy Resources Pte Limited has made no communication to the Company since 23 February 2015 which
indicated that the operations had closed. The Group recognises that there is contingent liability of $685,764
relating to these claims however there is no present obligation to settle these amounts.
Apart from the above mentioned items, as at 30 June 2018 the Group has no other contingent liabilities nor
does it have any contingent assets.
23.
Cash Flow Information
Reconciliation of Loss after Income Tax to Net Cash Outflow from Operating Activities
Loss after income tax
Adjustment for non-cash items
Foreign loss
Increase/(decrease) in:
(Increase) in GST receivables
(Increase) in other receivables
(Increase) in other current assets
(Decrease)/ increase in trade and other payables
Net cash outflow from operating activities
Consolidated entity
2018
$
2017
$
(1,216,699)
(266,646)
2,847
(79,801)
(1,746)
(38,886)
-
-
(110,314)
-
(258,675)
52,634
(1,592,960)
(324,326)
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
45
Notes to and Forming Part of the Accounts
For the Year Ended 30 June 2018
24.
Parent Entity Disclosures
Parent Entity
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Total Liabilities
Net Assets/(Liabilities)
Equity
Issued capital
Options Reserve
Accumulated losses
Total Equity
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive Loss
25.
Subsequent Events
2018
$
3,407,484
1,456,503
4,863,987
2017
$
38,967
-
38,967
52,456
52,456
2,215,777
2,215,777
4,811,531
(2,176,810)
39,336,517
36,740,629
62,794
-
(34,587,780)
(38,937,439)
4,811,531
(2,176,810)
(1,200,342)
(266,646)
-
-
(1,200,342)
(266,646)
On 6 July 2018, the Company announced that the preliminary sampling on Cer Project defined anomalous
zones and that a follow-up program was currently being planned for quarter three of 2018.
On 24 July 2018, the Company announced the appointment of Mr Stefan Muller to the Board of Jadar as a
Non-Executive Director.
On 2 August 2018, the Company announced that the preliminary sampling on Bukulja Project defined
anomalous zones and that a follow-up program was currently being planned for quarter three of 2018.
On 20 August 2018, the Company announced that the first pass sampling on Vranje-South Project defined Li-B
Anomalies and that a follow-up program was currently being planned.
26.
Contractual Commitments
Exploration expenditure commitments:
No longer than 1 year
Longer than 1 year and not longer than 5 years
30 June 2018
$
243,858
1,668,447
1,912,305
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
46
Corporate Governance Statement
For the Year Ended 30 June 2018
The Board of Jadar Lithium Limited are committed to achieving and demonstrating the highest standards of
corporate governance. As such, the Company has adopted what it believes to be appropriate corporate
governance policies and practices having regard to its size and the nature of its activities.
The Board has adopted the ASX Corporate Governance Principles and Recommendations which are
complemented by the Company’s core principles of honesty and integrity. The corporate governance policies
and practices adopted by the Board are outlined in the Corporate Governance section of the Company’s website
http://jadarlithium.com.au/corporate-governance.
The Company has also lodged an Appendix 4G with this Annual Report.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
47
Additional Information for Listed Companies
Additional information required by Australian Securities Exchange Limited and not shown elsewhere in this Annual Report is as
follows. The information is as at 26 September 2018.
NUMBER OF HOLDERS OF EQUITY SECURITIES
ORDINARY SHAREHOLDERS
There are 389,530,536 fully paid ordinary shares on issue, held by 955 individual shareholders.
TWENTY LARGEST SHAREHOLDERS (AS AT 26 September 2018)
Ordinary Shareholders
JP Morgan Nominees Australia Limited
Okewood Pty Ltd
Allgreen Holdings Pty Ltd
Mattinc Ventures Pty Limited
Sunshore Holdings Pty Ltd
Fanucci Pty Ltd
Brispot Nominees Pty Ltd
Benito Toscana Pty Ltd
HM Pension Fund Pty Ltd
Mr Bozo Guzijan
Sunshore Holdings Pty Ltd
Coal Contractors Pty Ltd
Sacco Developments Australia Pty Limited
UBS Nominees Pty Ltd
Attollo Investments Pty Ltd
Buzz Capital Pty Ltd
Cintra Holdings Pty Ltd
Juneday Pty Ltd
Samro Capital Pty Ltd
SMC Capital Pty Ltd
Number
38,650,999
8,750,000
7,575,833
7,500,000
7,050,000
6,250,000
5,552,285
5,250,000
5,062,500
5,000,000
5,000,000
5,000,000
4,786,461
4,235,345
4,218,750
4,218,750
3,750,000
3,750,000
3,500,000
3,500,000
Fully Paid Ordinary
Percentage
9.92
2.25
1.95
1.92
1.81
1.60
1.43
1.35
1.30
1.28
1.28
1.28
1.23
1.09
1.08
1.08
0.96
0.96
0.90
0.90
138,600,923
35.58
VOTING RIGHTS
Each member entitled to vote may vote in person or by proxy or by attorney and on a show of hands. Every person who is a
member or a representative or a proxy of a member shall have one vote and on a poll every member present in person or by proxy
or attorney or other authorised representative shall have one vote for each share held.
HOLDERS OF NON-MARKETABLE PARCELS
There are 335 shareholders who hold less than a marketable parcel of shares.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
48
Additional Information for Listed Companies
DISTRIBUTION OF SHARE HOLDERS (AS AT 26 September 2018)
1 to
1,001 to
5,001 to
10,001 to
100,001 and over
1,000
5,000
10,000
100,000
Number of
Holders
83
47
16
403
406
955
Number of
Shares
23,422
125,402
117,658
20,583,925
368,680,129
389,530,536
SUBSTANTIAL SHAREHOLDERS
As at report date, there is no shareholder recorded in the Register as a Substantial Shareholder.
SHARE BUY-BACKS
There is no current on-market buy-back scheme.
OPTIONS
As at 26 September 2018 the Company had 70,250,000 unlisted options on issue with an exercise price of $0.02 and an expiry date
of 22 December 2020. Unlisted options do not carry any voting rights.
DISTRIBUTION OF OPTION HOLDERS (AS AT 26 September 2018)
1 to
1,001 to
5,001 to
10,001 to
100,001 and over
1,000
5,000
10,000
100,000
Number of
Holders
-
-
-
1
39
40
Number of
Options
-
-
-
100,000
70,150,000
70,250,000
RESTRICTED SECURITIES
As at 27 September 2018 restricted securities are as follows:
•
•
•
50,000,000 ordinary shares, escrowed to 29 December 2019;
6,700,000 unquoted options (@ $0.02, expiry 22/12/2020), escrowed to 29 December 2019
63,550,000 unquoted options (@$0.02, expiry 22/12/2020), escrowed to 22 December 2018
OTHER INFORMATION
Jadar Lithium Limited, incorporated and domiciled in Australia, is a public listed Company limited by shares.
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
49
Additional Information for Listed Companies
SCHEDULE OF TENEMENTS
Project
Cer
Bukulja
Rekovac
Krajkovac
Vranje-South
Serbia
Tenement ID Location
2223
2226
2224
2209
2225
Serbia
Serbia
Serbia
Serbia
Interest
100%
100%
100%
100%
100%
Jadar Lithium Limited (formerly South East Asia Resources Limited) ABN 66 009 144 503 – Annual Report 2018
50