J u p i t e r M i n e s L t d | A n n u a l R e p o r t 2 0 2 3 CORPORATE DIRECTORY Australian Business Number 51 105 991 740 Directors Ian Murray Non-Executive Chair; Independent Scott Winter Non-Executive Director; Independent Peter North Non-Executive Director; Non-Independent Patrick Murphy Non-Executive Director; Non-Independent Bo Sung (Ben) Kim Non-Executive Director; Non-Independent Brad Rogers Managing Director Executives Brad Rogers Chief Executive Officer Melissa North Chief Financial Officer and Company Secretary Principal and Registered Office Level 8 220 St Georges Terrace Perth WA 6000 Telephone: +61 8 9346 5500 Email: info@jupitermines.com Share Registry Link Market Services Limited QV1 Building, Level 12 250 St Georges Terrace Perth WA 6000 Telephone: +61 1300 554 474 +61 2 9287 0303 Fax: registrars@linkmarketservices.com.au Email: Website: www.linkmarketservices.com.au Auditors Grant Thornton Audit Pty Ltd Level 43, 152-158 St Georges Terrace, Perth WA 6000 Telephone: +61 8 9480 2000 +61 8 9322 7787 Fax: info.wa@au.gt.com Email: Website: www.grantthornton.com.au Contents From the Chair From the CEO Operating and Financial Review Tshipi Environmental, Social and Governance Report Manganese Marketing Material Business Risks Mineral Resources and Ore Reserves Statement Directors’ Report Remuneration Report Corporate Governance Statement Financial Report Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Auditor’s Independence Declaration and Audit Report Additional Information for Listed Companies 2 3 4 4 8 14 16 17 23 28 37 50 51 52 53 54 55 84 88 1 From the Chair Dear Shareholders, On behalf of the Board of Jupiter, I am pleased to present the Annual Report for the financial year ending 28 February 2023. This is my second Chair’s Letter to you, having assumed the role of Non-Executive Chair in May 2022. Jupiter has a 49.9% economic interest in Tshipi é Ntle Manganese Mining Proprietary Limited (Tshipi) in South Africa. The mine’s performance was mixed in FY2023 – total production eased to 3.34 million tonnes compared with 3.68 million tonnes in FY2022. Sales of manganese increased, however, from 3.25 million tonnes to 3.48 million tonnes. Helped further by an increase in the manganese price over the year, Tshipi reported an increase in earnings before interest, tax and depreciation of $265.5 million and net profit after tax of $172.3 million for FY2023, compared with the previous financial year of $140.5 million and $85.7 million respectively. The safety performance at Tshipi was excellent, with the end of the financial year marking a 730-day lost time injury free record at the mine. I would like to congratulate the whole Tshipi team and contractors for this achievement. The financial performance at Tshipi allowed Jupiter to declare a group net profit after tax of $76.5 million and a final, unfranked dividend of 1.2 cents per share, complementing the interim unfranked dividend of 1.0 cent per share that was declared for the first half of FY2023. As we announced in March 2023, your Board has resolved to change its financial year-end date from 28 February to 30 June under Section 323D of the Corporations Act 2001 (Cth), which will align the Company’s reporting timetable with the standard Australian reporting cycle. Tshipi in which Jupiter has a 49.9% shareholding, and Jupiter’s South African marketing branch have also changed to a 30 June year-end. As a result, Jupiter will have a four-month financial reporting period beginning 1 March 2023 and ending on 30 June 2023 (Transitional Financial Year). Thereafter, Jupiter will revert to a 12-month financial year commencing on 1 July and ending 30 June of each year. For the Transitional Financial Year, Jupiter has released a Q3 Activities Report covering the period 1 January to 31 March 2023 and will release a Q4 Activities report on 31 July 2023. Jupiter will lodge a Preliminary Final Report and Appendix 4E on 31 August 2023 and its Audited Financial Statements and Annual Report on 29 September 2023, covering the Transitional Financial Year period. Under the guidance of Managing Director and Chief Executive Officer Brad Rogers, the Company’s strategy was released, aimed at growing Jupiter to become the largest manganese producing company in the world by 2028, while sustaining and improving customer, ESG and shareholder return outcomes. Our pursuit of growth will focus on increasing our earnings in line with increased manganese production and will adhere to our existing distribution policy, to distribute at least 70% of all dividends received. In closing I would like to thank Mr Rogers and his management team for their hard work and commitment to further enhancing the performance of Jupiter. I would also like to thank my fellow Non-Executive Directors for their support and guidance over the past year. Thank you also to all shareholders for your support. I look forward to catching up with many of you at Jupiter’s AGM in November 2023. Yours sincerely, Ian Murray Chair | Jupiter Mines Limited 2 2 From the CEO I was thrilled to join Jupiter in August last year. Jupiter enjoys ownership of a tier one asset. Tshipi has a very long mine life, with an established track record of production and sales that consistently place it amongst the top five manganese mines in the world. Tshipi’s quality resource and strong management has seen the mine produce outstanding free cashflow throughout the manganese price cycle, enabling Jupiter to pay an exceptional dividend to its shareholders. The performance of Tshipi in FY2023 continued that form. The mine is experiencing a record run in terms of safety outcomes. At the time of writing this letter, Tshipi has not had a lost time injury in two years (and counting). The mine’s total recordable injury frequency rate (TRIFR) is also at a record low, benchmarking Tshipi favourably against the best mines in the world. Tshipi also performed well during the year in terms of production and sales volumes. Tshipi sold just under 3.5 million tonnes of manganese ore during the year. This was in line with its five year average, although high grade ore sales achieved a record volume of 3.4 million tonnes during the year. This was a key reason why Tshipi reported very strong earnings and cashflow figures, notwithstanding relatively muted manganese prices and very high shipping rates prevailed during the year. Tshipi’s full year EBITDA of $266 million represented a 89% increase on the prior year: an outstanding performance, considering the Metal Bulletin manganese price was only 9% higher than the previous year. Shipping rates remained elevated for much of FY2023, consuming at least $60 million more in cost during the year, compared to the “normal” shipping markets seen prior the 2022 financial year. Fortunately, shipping costs moderated significantly by the end of the financial year. With this backdrop, the Jupiter Board declared total dividends of 2.2 cents per share for the financial year, equating to a 10% dividend yield at current share prices. In the last five years, Jupiter has paid $371 million in dividends, or around 84% of our current market capitalisation. This is remarkable given that Tshipi has more than 100 years of mine life remaining. Jupiter’s recently announced strategy is focused on continuing our strong record of dividend payments, whilst also pursuing growth. The outlook for manganese is supportive for growth and we believe that Jupiter is well placed to capitalise. Our strategy focuses on: 1. 2. 3. 4. Operational improvement at Tshipi, to expand margins and lower risk; Growing our manganese production volumes, by increasing Tshipi’s production levels and acquiring more manganese mines; Launching an inaugural Sustainability Report and pursuing actions that will improve our ESG outcomes, whilst also delivering financial benefits; and Investigating upside opportunities from investing and participating in the production of electric vehicle battery grade manganese, using Tshipi ore and leveraging Jupiter’s positioning as a large incumbent manganese producer. We will provide updates through the year as we execute this exciting growth strategy. Jupiter is a successful company, based on the quality of the Tshipi mine and its ability to support Jupiter’s outstanding dividend payment history. Our strategy outlines our plan to grow our investor value in a thoughtful way, while continuing to pay outstanding dividends to our shareholders. We are well positioned to execute on this strategy. I look forward to keeping you updated as we do. Thank you for your ongoing support. Brad Rogers Chief Executive Officer | Jupiter Mines Limited 3 Namibia Botswana Mozambique Ludertiz Johannesburg Eswatini Lesotho Durban Mn48 Wessels Nchwaning Gloria Kalagadi Kudumane UMK Tshipi Mamatwan 500km Legend Port Railway Roads Kalahari Manganese Field Figure 1: Tshipi location map and logistics routes South Africa Saldanha Cape Town Port Elizabeth Operating and Financial Review Jupiter Mines Limited (Jupiter or the Company) owns a 49.9% interest in Tshipi é Ntle Manganese Mining Proprietary Limited (Tshipi), which operates the Tshipi manganese mine in South Africa. For FY2023, Jupiter recorded a Group net profit after tax (NPAT) of $76.5 million (FY2022: $54.0 million). The Group generated underlying earnings before interest, tax, depreciation and amortisation of (EBITDA) $89.2 million (FY2022: $57.5 million). Share of profit from Tshipi was $86.0 million, doubling from FY2022 ($42.8 million). Whilst production was down year-on-year (3.3 million tonnes from 3.7 million tonnes in FY2022), Tshipi increased its sales by 7% to 3.5 million tonnes. Jupiter’s marketing branch earned $9.5 million in marketing fees for FY2023 (FY2022: $7.3 million). Tshipi Tshipi operates an open-pit manganese mine with an integrated ore processing plant located in the Kalahari Manganese Fields, in the Northern Cape Province of South Africa, which is the largest manganese bearing geological formation in the world. Tshipi is the largest manganese mine (by export volume) in South Africa and one of the five largest globally. Tshipi has more than 100 years of remaining resource, at current mining rates, and low operating costs. In FY2023, Tshipi continued its track record of dependable operational performance. The year was completed without any lost time injuries and an improving trend with respect to minor injuries and incidents. The mine delivered an increase in sold volumes, year on year, with high grade ore sales achieving an all-time record during the year. Profits were doubled, attributable to the increase in high grade ore sales as well as higher manganese prices and shipped volumes (all when compared to FY2022). Manganese prices averaged higher at US$3.52 per dmtu (Metal Bulletin 37% Free on Board (FOB) Port Elizabeth) (FY2022: US$3.22). 4 200 200 150 150 129 100 100 86 m m $ $ D D U U A A 50 50 - - (23) -50 -50 Y2022 NPAT FY2022 T F A P N Revenue Revenue Shipping Cost Shipping Cost 172 Increase Decrease Total 5 6 Marketing Other Selling Costs Other Selling Costs Marketing 32 27 19 2 (0) (3) (9) (12) Mining Mining M MRM R M Processing Processing Logistics Logistics Indirect Overheads Overheads Indirect Overheads Overheads Royalties Royalties Income Tax Income Tax Y2023 NPAT FY2023 T F A P N Figure 2: Movement in Tshipi profit and loss categories FY2022 to FY2023 Increase Decrease Total Mined volume • Waste and low grade ore • Graded ore Total Production • High grade • Low grade Total Sales Average CIF price achieved Average FOB cost of production Unit bcm bcm Tonnes Tonnes Tonnes US$/dmtu US$/dmtu February 2023 $ February 2022 $ 8,765,649 862,571 9,628,220 3,146,514 190,134 3,336,648 12,151,555 1,004,595 13,156,150 3,172,131 507,860 3,679,991 3,480,745 3,251,920 4.66 2.03 4.60 1.86 Note: the prices set out in the above table represent prices achieved by Tshipi, rather than market average prices. CIF stands for cost, insurance and freight. Mining and Production Logistics and Sales Total mining material moved volumes were down for the year, mostly due to equipment availability and unexpected rainfall. The equipment availability was caused by equipment owned and operated by Tshipi’s main mining contractor approaching end of useful life and therefore suffering declining reliability. New equipment has been introduced, starting in the last quarter of FY2023, resulting in improvements. Low grade ore processing and sales were limited during the year, due to the unfavourable prevailing market for low grade ore sales. Some low grade ore was processed for blending purposes. Materials handling projects were initiated to investigate ways to reduce fines generation. The overall FOB cost of production increased by 9% to US$2.03 from US$1.86 in FY2022. This was mainly due to increased drilling in Q2, comparatively lower production volumes, and royalties increasing. Tshipi increased its overall logistics year-on-year by 5%, moving 3,435,158 tonnes (FY2022: 3,273,773). The increase in land logistics volumes were to support the commensurately higher sales volumes. The first half of the year saw significant rail disruptions due to cable theft, power outages, flooding and derailments. This culminated in Transnet workers (Transnet is the rail and port operator in South Africa) striking for two weeks, impacting logistics and sales. Tshipi had sufficient port stocks to support the desired sales levels had the port capacity been available. Notwithstanding these logistical challenges, Tshipi achieved its second highest annual exports since its inception, and the highest annual exports of high grade ore ever. Sale of low grade ore remained suspended during most of the year, with only one parcel of low grade ore sold in the final quarter. 5 Corporate and Financial Tshipi recorded an EBITDA of ZAR3.1 billion and NPAT of ZAR2.0 billion for the year, an increase in NPAT of over 100% year-on-year (FY2022: ZAR1.5 billion and ZAR943 million, respectively). The increase was attributed to the increase in sales volumes, higher manganese prices and lower shipping costs. Tshipi Financial Statement Summary Set out below is a summary of Tshipi’s audited Statement of Profit and Loss and Statement of Financial Position. These Statements represent 100% of Tshipi. February 2023 ZAR’000 February 2022 ZAR’000 9,162,295 (6,360,838) 2,801,457 11,854 (14,819) (13,460) (43,386) 2,741,646 300,620 (15,666) 3,026,600 (328,318) 2,698,282 (715,921) 1,982,361 65,846 574,057 986,707 852,365 113,671 111,957 7,393,827 (6,073,721) 1,320,106 100,018 (14,174) (2,403) (17,054) 1,386,493 63,868 (13,487) 1,436,874 (102,562) 1,334,312 (391,247) 943,065 68,470 430,672 692,239 793,181 122,198 79,079 2,704,603 2,185,839 Statement of Profit or Loss Revenue Cost of sales Gross profit Other income Administrative expenses Net loss on disposal and impairment of property, plant and equipment Other expenses Profit from operating activities Finance income Finance expenses Profit before royalties and taxation Royalties Profit before taxation Income tax expense Profit for the year Statement of Financial Position Current assets Royalties prepaid Inventory Trade and other receivables Cash and cash equivalents Contract fulfilment cost assets Contract assets Total current assets 6 Non-current assets Property, plant and equipment Mineral rights Other financial assets Trade and other receivables Right of use assets Total non-current assets Total assets Current liabilities Current tax liabilities Trade and other payables Current contract liabilities Lease liability Total current liabilities Non-current liabilities Decommissioning and rehabilitation provision Deferred tax liabilities Lease liabilities Total non-current liabilities Total liabilities Equity Share capital and share premium Retained income Contributed assets reserve Total equity Total equity and liabilities February 2023 ZAR’000 February 2022 ZAR’000 3,355,832 159,670 39,474 73,721 16,342 3,645,039 6,349,642 35,115 750,643 113,671 1,227 900,656 149,921 846,765 19,341 1,016,027 1,916,683 321,359 3,994,639 116,961 4,432,959 6,349,642 2,811,726 166,891 38,720 33,142 10,705 3,061,184 5,247,023 18,256 485,225 122,198 125 625,804 101,009 750,089 19,523 870,621 1,496,425 321,359 3,312,278 116,961 3,750,598 5,247,023 7 Environmental, Social and Governance Report Jupiter is pleased to present the 2023 Environmental, Social and Governance Report for Tshipi. Tshipi has a successful record of outcomes in Environmental, Social and Governance (ESG) initiatives and is already an ESG leader. Tshipi, along with Jupiter, is committed to the ongoing reliable, safe, and responsible operations at the mine and its continued best-in-class environmental performance. In the next 12 months and pursuant to its announced Company Strategy, Jupiter will publish its own Sustainability Report, in line with corporate governance recommendations and best practice. As part of its Company Strategy, Jupiter has announced that it will pursue, as a priority project, the installation of solar power at Tshipi. While Tshipi is currently self-sufficient with respect to the supply of power, its current system is reliant on the use of diesel fuel. The implementation of solar power at Tshipi will have a positive impact with respect to the mine’s fossil fuel usage and carbon footprint, while also improving the mine’s financial performance. Key Sustainability Indicators Zero fatalities since inception 730 days consecutive LTI free days achieved on 1 March 2023 76% improvement in total recordable case frequency rate (FY2022: 76% improvement on FY2021) 0.08Mt GHG emissions, CO2 equivalent (FY2022: 0.06Mt) 54% reduction in actual potable water use versus annual provision (FY2022: 87% reduction) 84% compliance with follow up of chronic medical condition cases (FY2022: 81%) Safety and Health of Employees and Communities A focused approach to zero harm is critical to the business and remains one of the cornerstones of Tshipi’s management plans. Tshipi is committed to reducing (and ultimately eliminating) injuries from the workplace, and ensuring against any adverse effects on human health. Tshipi’s aim is to continually build and instil both a company and industry culture that protects people from harm and improves their health and wellbeing. Management Approach To achieve an enabling work environment, Tshipi has adopted the Safety by Design for Everyone framework which fosters collaboration between departments in achieving business objectives. This requires a systematic and integrated multi-disciplined approach towards creating a legally and fit for purpose working environment by intentionally designing the workplace and processes according to best practice standards. This includes which tools and equipment to use, which processes and controls to follow and what competencies are needed to consistently achieve workplace safe production targets. This allows for an inclusive and cross-departmental input to workplace design and risk control at inception, and ensures that all resources (facilities, equipment, tools, people) are aligned when planning for the safe and sustainable design of a workplace. Tshipi Well Designed Work Framework Ore body accurately modelled and continuously updated to ensure sustainable mining operations, processing of ore and delivery of quality products to clients over the life of mine and achieving value for all stakeholders. Safety and Health Policy Tshipi’s safety and health policy supports the long-term sustainability of the business by creating an enabling work environment to prevent harm to employees, the environment, and surrounding communities. Tshipi has embarked on a process of systematically identifying significant risks present in the operation and will ensure that these risks are eliminated through proper training and the implementation of an effective risk management framework focused on realising real risk reduction by continually improving performance over time. Objectives and targets are set on an annual basis and reviewed on a continual basis. 8 SHE Management Systems The Tshipi Safety Health and Environmental (SHE) way integrates related expectations and performance standards into a single management system aligned with the goal of zero harm. The procedures are aligned with the requirements of OSHAS 18001 and ISO 45001, and Tshipi anticipates conducting a gap assessment in the future to pave the way for formal certification. SHE Performance Standards have been developed for each legal appointee to ensure they are clear with regards to their areas of responsibility, all working places are covered and inspected based on level of risk present in the working places and legal requirements and provide guidance as to what protocols are to be adhered to in these working places to work towards well designed work principles. Effective Risk Management Risk management is a critical component of Tshipi’s long-term sustainability and future success. A Corporate Risk register is in place detailing material risks to the business and an operational risk assessment has been conducted and profiles have been developed for safety, health and hygiene and environmental priority unwanted events. A risk reduction framework has been developed which will entail the identification of gaps as assessed against a set of criteria and the development of objectives and targets to close the gaps and improve the effectiveness of risk management. To improve design for safety, the identification of risks and controls are considered in the mine production planning process to enable front-line managers to identify, prioritise and control risks that threaten their ability to meet objectives. Embedding risk management processes for safety and health is driving improvements in identifying, implementing, and monitoring critical controls, analysing deficiencies, and incorporating identified controls into task-risk assessments. Measures of Progress Through its focus on integrating risks and controls in workplace design, Tshipi has been operating fatality-free since start of operations. This important milestone on the journey to risk control and zero harm is complemented with a steady reduction in the number and severity of injuries and improvements across all key safety performance indicators. Tshipi has recorded no lost time injuries (LTIs) for FY2022 and FY2023 and has achieved two years without a Lost Time Injury on 1 March 2023. Tshipi has also recorded a year-on-year improvement in total recordable injury frequency rate in FY2023 of 0.20 representing a 76% year on year reduction. Lost Time Injury Frequency Rate 0.60 0.60 0.50 0.50 0.40 0.40 0.30 0.30 0.20 0.20 0.10 0.10 0.00 0.00 FY2018 FY2018 FY2019 FY2019 FY2020 FY2020 FY2021 FY2021 FY2022 FY2022 FY2023 FY2023 MARCH AND APRIL 2023 March and April 2023 12 month moving average 12 month moving average 0.00 Figure 3: Lost Time Injury Frequency Rate (LTIFR) per 200,000 hours worked 9 Total Recordable Injury Frequency Rate 2.50 2.50 2.00 2.00 1.50 1.50 1.00 1.00 0.50 0.50 0.00 0.00 FY2018 FY2018 FY2019 FY2019 FY2020 FY2020 FY2021 FY2021 FY2022 FY2022 FY2023 FY2023 MARCH AND APRIL 2023 March and April 2023 12 month moving average 12 month moving average Figure 4: Total Recordable Injury Frequency Rate (TRIFR) per 200,000 hours worked 0.13 10 Employee Health The health and overall wellness of Tshipi’s employees continues to receive priority. Campaigns also extend to the communities in which the employees live. The aim is to ensure that employees with existing health conditions remain controlled and that no new health cases develop. Through the effective implementation of comprehensive wellness campaigns, there are productive people at the working place, who are alert, healthy, motivated, and able to work safely for the duration of the shift. Tshipi’s aim is to support the United Nation’s Sustainable Development Goals targets for health outcomes to be achieved in local host communities by 2030. This year, Tshipi will focus on baseline social and health assessments in local communities. Tshipi aims to identify and implement strategic community-health solutions that address locally relevant health indicators. Targeted Health Campaigns Several health campaigns were conducted in FY2023, including World TB Day, Cancer Day, World Aids Day, Hypertension and Diabetes education, Gender Based Violence campaign and flu vaccinations and immune boosters were issued to employees. Figure 5: Targeted health campaigns throughout FY2023 To further enhance the health improvement strategy, Tshipi incorporated the emerging risks associated with mental health problems and conducted a site wide Mental Health Baseline Assessment with questions checking recurring behaviours or mood. 843 individuals participated and analysis of results indicate areas for further improvement and thus inclusion in the holistic wellness improvement plan. 11 Environmental Management Air Quality Tshipi is committed to sustainable development and continual improvement to minimise operating impacts on the environment and providing lasting benefits to the surrounding communities. Management Approach Tshipi has conducted specialist assessments for air quality, ground water, waste, biodiversity, stormwater management and greenhouse gas (GHG) emissions and is in the process of investigating meaningful targets for water, climate change and biodiversity performance as part of a new Sustainability Reporting framework. Tshipi is building the foundations that will guide progress towards achieving these targets. While Tshipi has made progress in areas such as water efficiency, realising long- term environmental management goals will require ongoing focus. Environmental Management Systems The Tshipi Environmental Management System integrates related expectations and performance standards into a single management system aligned with the goal of zero harm to the environment. Tshipi’s procedures are aligned with the requirements of ISO14001 and anticipate conducting a gap assessment in the future to pave the way for formal certification. Environmental Provisions Environmental expenditure for Tshipi’s managed operations in FY2023 was: • R4.0 million for waste disposal and remedial treatment; • R2.6 million for legal compliance; • R1 million for land management; • R0.7 million for Air Quality monitoring; • R0.5 million Water Quality monitoring; and • R0.3 million for bioremediation of polluted soil. A change in ambient air quality can result in a range of impacts which in turn may cause a disturbance and/or health impacts to nearby receptors. Tshipi is situated approximately 20 kilometres linear distance south of the mining town of Hotazel and 48 kilometres from the town of Kuruman. There are also established farmers within a radius of 2 to 10 kilometres of the mining right boundary. In compliance to license and permit conditions, Tshipi has implemented a dust fallout monitoring programme for three primary purposes: • • • to meet legislation requirements of Environmental Management: Air Quality Act (National Dust Control Regulations) as amended; to indicate long-term trends (Mine Air Quality Management Plan); and to generate or maintain awareness of dust-generating activities on site. A monthly and annual dust fallout monitoring programme in accordance with the approved Environment Impact Assessment and Environmental Management Plan, South African daily National Ambient Air Quality Standards and SANS 1929:2005 has been implemented and approximately 360 dust fallout samples are taken annually and analysed. For the FY2023 Dust Fallout Monitoring period, Tshipi has recorded three events where the acceptable dust-fall rate limit of 600mg/ m2/day were exceeded. These events did not trigger the regulatory requirement to report the occurrences to the Department of Environment, Nature, and Conservation. An investigation was conducted and Tshipi has strengthened its dust management plan to continuously improve the mitigation measures of air pollution impacts due to dust generation. GHG Emissions Tshipi is committed to the minimisation of GHG emissions and carbon footprint reduction. Tshipi has undertaken a mine GHG baseline and carbon equivalent assessment. The baseline assessment indicated the following areas for further investigation and implementation: • • • • start with reducing the volume of diesel required per tonne of material moved using fuel additives and more efficient hauling units; investigate regenerative braking systems in trucks; implement lighting efficiency optimisation through automated switches on lighting towers and replacement of incandescent globes with LED/CFL globes; and Explore solar water geysers for mine’s ablution facilities and change house. The third party GHG Annual Emission Assessment conducted in FY2023 reported a carbon equivalent of 0.038Mt CO2e for the studied period in FY2023 versus the baseline 0.079Mt CO2e. 12 Water and Wastewater Management Waste and Hazardous Materials Management Tshipi has expanded its onsite catchment capacity in terms of water storage dams from 39,000m3 to 91,000m3 with the operationalisation of the new storm water dam. The new 52,000m3 storm water dam increases Tshipi’s capacity to capture water during the rainy season and cater for a 1-in 50-year flood event. Tshipi has experienced significant rainfall in the past four years, which have filled all dams to nearly full capacity. The storm water dam is linked by water channels to manage the levels of both the dirty water dam and storm water dam to prevent any water spill and balance the 1-in 50-year flood. Collected storm water which is the least polluted water is further used for dust suppression of roads in the processing plant easing up the use of fresh potable water from Sedibeng Water, the potable water service provider. The increase in rainfall in the past four years has significantly increased the available water in the pit that can used to reduce the need for fresh potable water from Sedibeng Water. Priority is given to first use pit water and then storage dam water for production. Going forward, Tshipi will establish reduction targets for freshwater use per tonne. Tshipi initiated the bioremediation facility project, and the aim was to reduce the hazardous waste footprint to offsite the landfill by treating polluted soil on site and reintroducing it back into the environment. During FY2023 approximately 75 cubic metres of polluted soil was treated and introduced back to the environment. The remediated soil was used for the construction of road berms and walkways. A total reduction of 10% of hazardous waste tonnes was moved to land fill sites since the commencement of the bioremediation facility. Tshipi will continue to implement more initiatives to ensure that it complies with the requirements under National Environmental Waste Management Act with zero waste to land fill. Figure 6: Tshipi’s bioremediations facility project Figure 7: Tree planting on the mine and in the community and donations to local schools Ecological Impacts Tshipi has developed a Biodiversity Action Plan (BAP) to mitigate the impacts that result from the mine development. A number of mitigating actions were implemented to achieve the biodiversity commitments including land conservation by means of mining in a modular pattern to limit land disturbance. Tshipi has also tracked the number of protected trees that were removed due to the development of the mine. Approximately 10,137 Vachellia erioloba and Haematoxylon were removed or destroyed. In compliance with Tshipi’s approved Tree Removal Permit conditions and the BAP more than 6,000 indigenous trees were planted, and 1,000 trees were donated to the local municipality and schools at large. Tshipi views tree planting as an ongoing act to ensure sustainability and to date more than 7,280 indigenous trees have been planted. 13 Manganese Marketing Global crude steel production was 3.8% lower during FY2023 compared to FY2022. Crude steel production in China was flat in compared to FY2022, accounting for 56% of global crude steel production. Crude steel production volumes from the rest of the world (i.e. world excluding China) decreased by 8.1% over the same period. India was the only country out of the top ten crude steel producing countries whose crude steel production increased during FY2023, increasing by 6.2% from FY2022. Crude steel production during the current reporting period was impacted by a general downturn in global economic conditions including record high inflation and interest rates across many regions, in addition to an energy crisis which engulfed energy intensive industries in many European countries. In China, weak downstream demand from the construction and steel-intensive industrial sectors, in particular, led to an oversupply and build up of inventories at steel mills. In addition to the suppressed macroeconomic conditions already mentioned, demand in China was further hampered by sustained COVID-19 linked lockdown and restriction measures which were implemented in main metropolitan areas during the period. The World Steel Association recently released their updated short range outlook for 2023 and 2024, with steel demand forecast to increase by 2.3% in calendar year 2023 to 1,822.3 million tonnes and to increase by 1.7% in calendar year 2024 to 1,854.0 million tonnes. Chair of the World Steel Economics Committee, Mr. Máximo Vedoya, recently commented: “In 2022, recovery momentum after the pandemic shock was hampered by high inflation and increasing interest rates, the Russian invasion of Ukraine, and the lockdowns in China. As a result, steel-using sectors’ activity went down in the last quarter of 2022. This, combined with the effect of stock adjustments, led to worse than expected contraction in steel demand. Persistent inflation and high-interest rates in most economies will limit the recovery of steel demand in 2023, despite positive factors like China’s reopening, Europe’s resilience in the face of the energy crisis, and the easing of supply chain bottlenecks. In 2024, demand growth is driven by regions outside China but faces global deceleration due to China’s anticipated 0% growth, overshadowing the improved environment. Sustained inflation remains a downside risk, potentially keeping interest rates high. As China’s population declines and moves to consumption-driven growth, its contribution to global steel demand growth will lessen. Future global steel demand growth will rely on reduced drivers, primarily concentrated in Asia. Investments in decarbonisation and dynamic emerging economies will increasingly drive positive momentum for global steel demand, even as China’s contribution to global growth diminishes.”1 On an average yearly basis CIF denominated prices for semi-carbonate manganese ore, approximating 37% manganese ore content, were largely stable during FY2023 compared to FY2022. On an FOB price basis however the average yearly price during FY2023 increased by 9% compared to the average FOB price in FY2022, as decreasing freight rates contributed to higher returns on an FOB price basis. 14 Increased restocking activities in China and supply concerns for high grade oxide manganese ore were at the forefront of manganese ore price increases at the beginning of FY2023. High grade manganese ore prices increased dramatically, and stayed elevated, as logistical disruptions impacted product flow from Gabon and COVID-19 labour and weather related disruptions simultaneously impacted high grade manganese ore supply from Australia, resulting in a record high premium for high grade manganese ore over semi-carbonate manganese ore. Semi-carbonate manganese ore prices were, to a certain extent, able to leverage off the price increase of high grade manganese ore at the beginning of FY2023 however price gains for semi-carbonate manganese ore were limited with plentiful supply. Thereafter, semi-carbonate manganese ore prices generally remained range bound for the remainder of FY2023. Manganese ore prices reacted marginally to events during the year such as the easing of lockdown restrictions in June 2022 and again in December 2022 in China, the 12 day industrial strike action by employees of Transnet SOC Limited in South Africa in October 2022 and a derailment in Gabon in late December 2022 which brought manganese ore exports from Gabon to a standstill for several weeks. However, prices promptly corrected themselves after such events as increases in downstream demand failed to materialise and supply concerns abated. Downstream demand, both in China and globally, kept a cap on prices. With lacklustre steel production in regions outside of China translating into weak downstream demand for manganese ore, increased manganese ore was delivered to China, the primary consumer, which elevated the manganese ore price pressure even further, particularly during the second half of FY2023. This contributed to the increase in manganese ore port stocks in China in the second half of FY2023 with port stocks held at the three main ports reported at 6.5 million tonnes on 24 February 2023. Bulk freight rates remained elevated during the first four months of the financial year, at similar levels to those witnessed in FY2022, following Russia’s invasion of Ukraine which contributed to a rise in brent crude oil prices and supply chain disruptions. Since July 2022, bulk freight rates have shown a general declining trend as supply chain disruptions started to alleviate and an easing of supply/demand imbalances assisted in reducing cost drivers. Bulk freight rates at the end of February 2023 and continuing into May 2023 have hovered between US$25 per tonne and US$30 per tonne for a bulk ore shipment from major ports in South Africa to China. Stimulus and fiscal policy measures introduced in China during FY2023 have failed to improve the construction and property sectors, in particular real estate. Steel intensive activities within manufacturing and industrial sectors also struggled to gain upward momentum from the government led support measures. In addition to this consumer confidence was low, further hampered by continued lockdown and movement restrictions. This downturn was not unique to China, as previously mentioned, record high inflation, interest rates and elevated energy supply and costs have impacted consumers and the downstream market across many regions during the period. Many downside factors witnessed in FY2023 may still continue to influence the industry within the short term and are not expected to be immediately alleviated. The World Steel Association is however forecasting an increase in crude steel demand globally within the next two years, which should in turn increase manganese ore demand and consumption globally within this time period. 1 World Steel Association Short Range Outlook April 2023 (Press Release 18 April 2023) 15 Material Business Risks The following is a summary of the updated material business risks of the Group, which are not listed in order of importance or likelihood. These risks may adversely impact on the Group’s financial and operating performance and prospects. Company Risks Dividends to shareholders may fluctuate Exposure to only one producing mine and one commodity Loss of key personnel Risk of currency exchange rate fluctuations on dividends received by the Company in South African Rand Asset Risks Tshipi may face logistical restraints Manganese price fluctuations Tshipi being subject to extensive environmental regulations which may result in increased financial obligations and provisions Economic, political, or social instability in South Africa may have a material adverse effect on Tshipi’s operations. Tshipi’s financial condition and results of operations could be adversely affected by currency exchange rate fluctuations and inflation Whilst the Company’s stated dividend policy is to pay at least 70% of dividends that it receives from Tshipi, the level of dividends paid is not guaranteed and may fluctuate. In particular, any dividend is dependent on the income the Company receives from its investment in Tshipi. The Company’s sole asset is the Tshipi mine, which produces only one commodity, manganese. As such, the Company is exposed to the risks that Tshipi is exposed to, detailed further below. The Company has a small management team, and its success depends to an extent on this team. The loss of key personnel may result in the Company not being able to locate or employ qualified executives with relevant experience in a short time frame. Dividends received by the Company with respect to shares in Tshipi have historically been paid in Rand. The Australian dollar or other currency equivalent of future dividends with respect to the Company’s shares in Tshipi may be adversely affected by potential future fluctuations in the value of the Rand against the US dollar, the Australian dollar or other currencies. Tshipi’s ability to transport, and therefore sell its production, may be constrained by logistical difficulties resulting from the location of the Tshipi mine. Tshipi depends on rail networks, road and ports in South Africa and Namibia. Tshipi is also in direct competition for access to logistics from other commodity exporters. Tshipi’s revenue is directly related to the prices obtained for manganese ore. Manganese prices are influenced by the demand for, and supply of, manganese ore, and production cost levels. Tshipi’s operations are subject to compliance with extensive environmental legislation and regulations. It is currently applying to amend its rehabilitation and closure plan, which may have material impact on the relevant financial provisions for its closure obligations. Tshipi’s operations are subject to risks of operating within South Africa, which may include changes to laws and policies in relation to taxation, royalties, currency and divestment. A volatile socio-political environment may also impact operations. Manganese is sold throughout the world based primarily on a US dollar price. Tshipi generates revenues through the sale of its manganese ore in US dollars and subsequently converts this to Rand. The majority of Tshipi’s expenses are incurred in Rand. A weak US dollar would have the effect of Tshipi obtaining less Rand through its sales and consequently having less Rand with which to pay its expenses. 16 Mineral Resources and Ore Reserves Statement Jupiter reports Mineral Resources and Ore Reserves in accordance with the 2012 edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) as required by Chapter 5 of the ASX Listing Rules. Tshipi has a long mine life and a large manganese Mineral Resource reported in accordance with the JORC Code (2012). The following tables show the Mineral Resource and Ore Reserve estimates of the Tshipi mine reported in accordance with the JORC Code (2012) as at 28 February 2023, and a comparison to the previous year’s estimates. Mineral Resource Estimation Current Mineral Resource Statement as at 28 February 2023: Fe (%) SG (t/m3) Thickness (m) Classification Zone Measured Indicated Inferred X Y Z M C N Supergene Sub-Total X Y Z M C N Sub-Total X Y Z M C N Tonnes (t) 27,800,167 9,140,396 12,574,786 21,353,570 37,999,903 19,177,953 1,163,614 129,210,388 19,668,119 3,700,169 8,516,263 12,676,175 16,689,675 8,904,303 70,154,704 52,765,831 25,194,628 21,143,080 49,731,859 49,592,545 27,369,044 Total Mineral Resource Grand-Total 425,162,079 Sub-Total 225,796,987 Mn (%) 31.47 21.14 31.72 38.37 36.33 34.59 37.44 33.85 30.38 22.57 31.01 37.31 36.53 34.49 33.28 30.67 25.24 31.43 34.83 36.15 34.95 32.77 33.18 4.79 5.83 6.63 4.87 3.84 5.45 4.21 4.87 4.88 5.41 6.00 4.86 3.56 5.53 4.81 5.30 5.28 5.75 4.89 3.80 5.39 4.93 4.89 3.54 3.28 3.59 3.77 3.68 3.66 3.48 3.62 3.49 3.28 3.53 3.74 3.68 3.67 3.59 3.52 3.36 3.59 3.68 3.68 3.68 3.60 3.60 Reported in accordance with the JORC Code (2012). Mineral Resources are reported as inclusive of Ore Reserves. Mineral Resource grades and tonnages are reported in situ. Explicit (modelled) geological losses and an additional 5% geological loss have been accounted for in the tonnage estimates. The maximum depth of the Mineral Resource is 372m below surface. Rounding of figures may result in minor summation discrepancies. Competent Person: Coniace Madamombe 8.57 3.01 3.52 5.38 9.03 4.05 11.14 44.70 10.25 4.53 4.41 5.11 7.65 3.80 35.74 7.96 4.86 3.21 6.33 6.72 3.33 32.40 36.69 17 Previous Mineral Resource Estimate as at 28 February 2022: Classification Zone Measured Indicated Inferred X Y Z M C N Supergene Sub-Total X Y Z M C N Sub-Total X Y Z M C N Tonnes (t) 27,347,408 9,351,910 12,212,654 20,098,676 34 687 545 17,210,591 1,360,408 122,269,191 21,235,466 3,997,655 9,057,457 13,529,012 17,218,691 9,222,294 74,260,575 53,055,315 25,343,430 21,200,613 50,067,371 49,662,401 27,451,634 Total Mineral Resource Grand-Total 423,310,531 Sub-Total 226,780,765 Mn (%) 31.63 21.41 31.81 38.37 36.29 34.50 38.14 33.89 30.53 22.69 30.98 37.30 36.50 34.56 33.33 30.72 25.44 31.42 34.77 36.13 35.07 32.80 33.21 Fe (%) 4.77 5.69 6.61 4.91 3.87 5.44 4.41 4.87 4.87 5.33 6.02 4.87 3.56 5.50 4.80 5.31 5.24 5.74 4.88 3.81 5.34 4.92 4.89 SG (t/m3) Thickness (m) 3.53 3.29 3.59 3.76 3.67 3.65 3.49 3.61 3.49 3.28 3.53 3.74 3.68 3.66 3.59 3.52 3.35 3.59 3.68 3.68 3.68 3.59 3.60 8.46 3.06 3.53 5.39 9.20 4.01 11.57 45.21 10.16 4.44 4.35 5.16 7.59 3.76 35.46 7.91 4.91 3.19 6.34 6.67 3.27 32.28 36.56 Reported in accordance with the JORC Code (2012). Mineral Resources are reported as inclusive of Ore Reserves Mineral Resource grades and tonnages are reported in situ. Explicit (modelled) losses as well as an additional 5% geological loss have been applied. The maximum depth of the Mineral Resource is 372m below surface. Rounding of figures may result in minor summation discrepancies. Competent Person: Efet Banda 18 Comparison with Previous Mineral Resource Estimate: Classification Zone Measured Indicated Inferred X Y Z M C N Supergene Sub-Total X Y Z M C N Sub-Total X Y Z M C N Total Mineral Resource Grand-Total Sub-Total Tonnes (t) 452,759 (211,514) 362,132 1,254,894 3,312,358 1,967,362 (196,793) 6,941,197 (1,567,347) (297,486) (541,195) (852,837) (529,015) (317,991) (4,105,871) (289,484) (148,802) (57,533) (335,513) (69,856) (82,590) (983,778) 1,851,548 Mn (%) (0.16) (0.27) (0.09) (0.00) 0.03 0.09 (0.69) (0.05) (0.14) (0.12) 0.03 0.02 0.03 (0.08) (0.04) (0.04) (0.20) 0.01 0.06 0.02 (0.12) (0.03) (0.02) Fe (%) 0.01 0.14 0.02 (0.04) (0.02) 0.01 (0.20) 0.00 0.01 0.08 (0.02) (0.01) (0.00) 0.02 0.00 (0.01) 0.05 0.01 0.01 (0.01) 0.05 0.01 0.01 SG (t/m3) 0.00 (0.00) 0.01 0.01 0.00 0.01 (0.01) 0.00 (0.00) 0.00 (0.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Thickness (m) 0.11 (0.05) (0.01) (0.01) (0.16) 0.04 (0.42) (0.51) 0.09 0.08 0.05 (0.05) 0.06 0.04 0.28 0.05 (0.05) 0.02 (0.01) 0.05 0.06 0.13 0.13 A reconciliation between the 28 February 2022 and 28 February 2023 estimates is provided above. The recently acquired drillhole data permitted structural and geological model updates resulting in a net global tonnage gain of approximately 1.9Mt after accounting for 3.1Mt mining depletion that occurred between the reporting dates. Limited infill drilling in parts of the Indicated Mineral Resources enabled the upgrading of approximately 5.1Mt to Measured category resulting in a 6.9Mt increase in Measured Mineral Resources. However, the minor (1Mt) reduction in Inferred Mineral Resources resulting from the 1Mt upgrade to Indicated category reflects the limited additional drilling in the Inferred category and absence of initial drilling in the undrilled target areas in the northern parts of the Tshipi mine. 19 Ore Reserve Estimate Current Ore Reserves Statement as at 28 February 2023: Classification Zone Proved Total Ore Reserve Z M C N Supergene Sub-Total M C N Sub-Total Grand-Total Tonnes (t) 2,665,799 27,923,981 14,515,648 10,575,432 30,337 55,711,197 10,423,253 7,225,800 4,651,633 22,300,686 78,011,883 Reported in accordance with the JORC Code (2012). Mining loss of 2%. Processing loss of 2%. Competent Person: Jonathan Buckley Previous Ore Reserves Statement as at 28 February 2022: Classification Zone Proved Probable Total Ore Reserve Z M C N Supergene Sub-Total M C N Sub-Total Grand-Total Tonnes (t) 2,445,693 15,730,953 28,272,839 10,541,808 222,010 57,213,303 7,929,683 10,971,808 4,952,894 23,763,530 81,067,688 Reported in accordance with the JORC Code (2012). Mining loss of 2%; Processing loss of 2%. Competent Person: Jonathan Buckley Mn (%) 31.17 36.37 38.53 34.17 37.60 35.76 36.57 37.94 34.32 35.33 35.64 Mn (%) 31.26 38.57 36.34 33.96 39.92 35.73 37.94 36.54 34.37 35.32 35.61 Fe (%) 6.87 3.90 4.99 5.71 4.21 4.90 3.52 4.89 5.70 4.76 4.86 Fe (%) 6.86 5.04 3.93 5.77 4.89 4.96 4.92 3.53 5.65 4.78 4.90 SG (t/m3) 3.59 3.69 3.78 3.68 3.50 3.69 3.69 3.76 3.68 3.67 3.69 SG (t/m3) 3.58 3.78 3.68 3.66 3.54 3.69 3.76 3.69 3.68 3.67 3.68 20 Comparison with Previous Ore Reserves Statement: Classification Zone Proved Probable Total Ore Reserve Z M C N Supergene Sub-Total M C N Sub-Total Grand-Total Tonnes (t) 220,106 12,193,027 (13,757,191) 33,624 (191,673) (1,502,107) 2,493,571 (3,746,008) (301,261) (1,553,698) (3,055,805) Mn (%) (0.09) (2.20) 2.19 0.22 (2.32) 37.57 (1.37) 1.40 (0.05) 5.57 21.30 Fe (%) 0.02 (1.15) 1.07 (0.06) (0.68) 0.17 (1.39) 1.36 0.04 5.53 2.90 SG (t/m3) 0.01 (0.09) 0.10 0.01 (0.04) 1.62 (0.07) 0.08 0.00 0.01 0.80 The current Ore Reserves are based on the 2021 Life of Mine (LoM) Pit shell and design and the 2022 LoM Plan integrating the Medium-term and Long-term Plans (MTP and LTP). Due to the absence of the 2023 LoM production schedule, the current Ore Reserves have been estimated through depletion of the 2022 LoM production schedule with consideration of Mineral Resource classification changes. Competent Persons The current Mineral Resource estimate has been prepared under the supervision of and signed off by Mr Coniace Madamombe (MSc, BSc. Hons, Geology, FGSSA, Pr.Sci.Nat, MBA) who is a Director and Principal Geologist of The Mineral Corporation. The current Ore Reserve estimate has been prepared under the supervision of and signed off by Mr Jonathan Buckley (B.Eng. Hons, MSc. FSAIMM, Pr. Eng.), who is a Principal Mining Engineer and a full-time associate of The Mineral Corporation. Both Competent Persons have considerable experience in manganese Mineral Resource and Ore Reserve estimation and reporting and in the techno-economic assessment of manganese producing operations in the Kalahari Manganese Field. Neither the Competent Persons nor The Mineral Corporation have any material interest in either Jupiter or Tshipi which would compromise their independent status with regards to the Mineral Resource and Ore Reserve reporting for Tshipi. Mr Madamombe and Mr Buckley consent to the inclusion in this report of the statements based on their information as provided in the Competent Persons Report dated 28 February 2023, in the form and context in which they appear. Summary of Governance Arrangements and Internal Controls Mineral Resources and Ore Reserves are estimated by suitably qualified Jupiter or Tshipi personnel or external consultants in accordance with the requirements of the JORC Code (2012), industry standard techniques and internal guidelines for the estimation and reporting of Ore Reserves and Mineral Resources. All Mineral Resources estimates and supporting documentation are prepared and reviewed by a suitably qualified external Competent Person. All Ore Reserves estimates supporting documentation are prepared and reviewed by a suitably qualified external Competent Person. All Ore Reserve estimates are prepared in conjunction with feasibility studies and Company budgets which consider all material factors. The Mineral Resources and Ore Reserves Statement included in the Annual Report is reviewed by a suitably qualified external Competent Person prior to its inclusion. As part of Tshipi’s governance arrangements and internal controls, Tshipi’s reporting methodology for Mineral Resources and Ore Reserves is subject to periodic review and optimisation. 21 22 Directors’ Report In accordance with a resolution of Directors, the Directors present their Report together with the Financial Report of Jupiter Mines Limited (Jupiter) and its wholly owned subsidiaries (together referred to as the Consolidated Entity or Group) for the financial year ended 28 February 2023 and the Independent Auditor’s Report thereon. Directors The Directors of Jupiter at any time during or since the end of the financial year are as follows: Non-Executive • • • • Ian Murray Scott Winter Peter North Patrick Murphy • Bo Sung (Ben) Kim Executive • Brad Rogers (appointed 1 August 2022) • Scott Winter (Acting) (ceased 31 July 2022) Additional information is provided below regarding the current Directors and Executives. Ian Murray B.Com and GDA (University of Cape Town), FCA, MAICD Independent Chair; Non-Executive Director; Audit Committee Member Ian was appointed as a Director of Jupiter on 16 February 2022. Ian is a Chartered Accountant, a Member of Australian Institute of Company Directors, and holds an Executive degree in Advanced Management & Leadership from the University of Oxford (Saïd Business School). With over 25 years’ mining industry experience in senior leadership positions, including the position of Executive Chair and Managing Director of Gold Road Resources Ltd (ASX: GOR) and DRDGold Ltd (NYSE & JSE: DRD), he has also held executive positions with international ‘Big Four’ accounting firms. Ian has a wealth of financial, corporate, project development, mergers and acquisitions, and operational experience across Australia, Africa, Asia Pacific, and North America. Most recently, Ian led Gold Road as it transitioned from small market capitalisation explorer to large scale plus billion dollar gold producer. Ian has been the recipient of many awards during his leadership of Gold Road, including the Gavin Thomas award for leadership, the Diggers and Dealers Deal of the year award in 2017, after winning the best emerging company award in 2011 as well as the CEO of the year award from CEO Magazine. Ian is currently a Non-Executive Director of Black Rock Mining Limited, and volunteers on the board for non-for-profit and charity Miners Promise Ltd. Scott Winter B.Eng (Honours, Mining) (University of Queensland); GradDip. Applied Finance and Investment (Securities Institute Australia); MBA (Melbourne Business School) Independent Non-Executive Director; Remuneration and Nomination Committee Chair Scott was appointed as a Director of Jupiter on 30 July 2021. Scott led the aggregation of Australian and African business units and the formation of the Global Surface contract mining business with over 40 projects for Perenti Limited, the successful turnaround of the African business unit and growth of the Australian business unit. Previous to Perenti, Scott was Chief Operating Officer at Mineral Resources Ltd supporting the selldown and subsequent integration of its Wodgina lithium mine with Albermarle. Scott has not been a Director of any other ASX listed companies in the past three years. Peter North B.Sc (Mining Engineering) (Wits University); MBA (Wits Business School) Non-Executive Director; Audit Committee Chair; Remuneration and Nomination Committee Member Peter was appointed as a Director of Jupiter on 30 July 2021. Peter co-founded Safika Resources (Pty) Limited, a substantial shareholder of Jupiter. He led negotiations with Samancor that culminated in a shareholding in Hotazel Manganese Mines and the formation of the joint venture with Pallinghurst Resources which established Tshipi. Peter has 16 years corporate finance experience with Rand Merchant Bank and QuestCo in South Africa. Peter has not been a Director of any other ASX listed companies in the past three years. 23 Patrick Murphy LLB and B.Com (University of Western Australia) Non-Executive Director; Remuneration and Nomination Committee Member Melissa North B.Com (Murdoch University); Chartered Accountant Chief Financial Officer and Company Secretary Patrick was appointed as a Director of Jupiter on 30 November 2021. Patrick is a Managing Director of AMCI Group, a group company of AMCI Group, LLC, a substantial shareholder of Jupiter. Patrick is an experienced mining investment professional, having spent 15 years at AMCI and the global investment group Macquarie. He has specialised in deploying capital in the raw materials and mining industries for his entire career. Patrick has global experience and a proven pedigree in identifying and successfully executing value enhancing initiatives in the industry. He holds board positions for a number of AMCI companies and is Non-Executive Director of ASX listed Juno Minerals Limited (ASX:JNO) and Green Technology Metals (ASX:GT1). Melissa joined Jupiter in May 2012 as Group Financial Controller and was subsequently appointed CFO and Company Secretary in November 2012. Prior to joining Jupiter, Melissa held various roles in finance management and business advisory services over almost a decade, including Group Financial Controller positions within the Chime Communications Group and other large media agencies in London. Melissa qualified as a Chartered Accountant in 2004 after extensive work experience at Grant Thornton Perth (now Crowe Horwath). Over her time with Jupiter, Melissa has played a critical role in the development of the Company, culminating in its ASX listing in April 2018. Bo Sung (Ben) Kim B.Com (University of Queensland) Non-Executive Director; Audit Committee Member Principal Activities The principal activities of Jupiter during the year have been the operation of Tshipi in South Africa and the sale of manganese ore. Ben was appointed as a Director of Jupiter on 15 February 2022. Review of Financial Results and Operations Ben is the Managing Director of POSCO Australia, a substantial shareholder of Jupiter. Ben has built his career in POSCO in the Management Planning Team and the Raw Materials Division. Ben has not been a Director of any other ASX listed companies in the past three years. The consolidated results of Jupiter for the year ended 28 February 2023 was a profit of $76,470,852 after a $13,267,468 tax expense (FY2022: profit of $53,977,755 after a $3,499,406 tax expense). Further details of the results of the Consolidated Entity are set out in the accompanying financial statements and the Operating and Financial Review in this Annual Report. Significant Changes in the State of Affairs There were no significant changes. Dividends In respect of the 2023 financial year, the Directors have declared the following dividends: Dividend Interim unfranked, wholly conduit foreign income Final unfranked, wholly conduit foreign income Dividend per share Total dividend Payment date Paid 17 November 2022 Paid 19 May 2023 $0.010 $19,589,910 $0.012 $23,507,892 $0.022 $43,097,802 Brad Rogers B.Com (Curtin University); Post GradDip. Applied Finance (Securities Institute Australia); Chartered Accountant Managing Director and Chief Executive Officer Brad was appointed as Managing Director of Jupiter on 1 August 2022. Brad joined Jupiter from leading mining logistics company Bis Industries, where he was Managing Director and CEO since 2015. He previously served as Bis’ Chief Financial Officer and Director of Corporate Development. Bis is a large production focussed mining services company and an industry leader in bulk mining logistics, including through the invention and use of proprietary technology. Prior to Bis, Brad was General Manager Corporate Development at ASX listed mining, engineering and infrastructure company GRD Limited, where he was responsible for group strategy, corporate finance and investor relations. He also led GRD’s Global Renewables operating business in Australia and Asia for three years. Brad, a graduate of Curtin University and a Chartered Accountant, earlier worked as a corporate strategy advisor for Mainsheet Corporate and Arthur Andersen. Brad has not been a Director of any other ASX listed companies in the past three years. 24 Financial Position Environmental Regulations and Performance At 28 February 2023, Jupiter held $49,486,940 in cash and cash equivalents (FY2022: $39,158,487) and had a carrying value of investments using the equity method of $483,121,273 (FY2022: $447,779,813). Significant Events After Reporting Date These financial statements were authorised for issue on 30 May 2023 by Managing Director Brad Rogers. On 28 April 2023, the Directors declared a final dividend for the year ended 28 February 2023 of $0.012 per ordinary share, paid on 19 May 2023. Likely Developments, Business Strategies and Prospects The operations at Tshipi are expected to continue in a similar manner to present. Jupiter’s current operations are subject to general environmental regulation under the laws of the South Africa. The various exploration interests held by Jupiter impose future environmental obligations for site remediation following sampling and drilling programs. The Board is aware of these requirements and management is charged with ensuring compliance. The Directors are not aware of any breaches of these environmental regulations and licence obligations during the year. Please refer to the Environmental, Social and Governance Report in the Operating and Financial Review on page 8 for full details. Meetings – Attendance by Directors The number of Directors’ and Committee meetings and the number of meetings attended by each of the Directors of Jupiter during the financial year under review are: Board Audit Committee Remuneration and Nomination Committee Eligible to attend Attended Eligible to attend Attended Eligible to attend Attended 8 8 8 8 8 5 8 8 8 8 8 5 4 - 4 - 4 - 4 - 4 - 3 - - 3 3 3 - - - 3 3 3 - - Director Ian Murray Scott Winter Peter North Patrick Murphy Bo Sung Kim Brad Rogers Directors’ Interests Particulars of Directors’ interests in securities as at the date of this report are as follows: Director Ian Murray Scott Winter Peter North Patrick Murphy 1 Bo Sung Kim 2 Brad Rogers Balance at start of year Granted as remuneration Other changes Held at the end of reporting period - 215,000 697,000 60,000 134,992,472 - - - - - - - - - - - - - - 215,000 697,000 60,000 134,992,472 - 1 Patrick Murphy is a Managing Director of the AMCI Group, which has a relevant interest in AMCI Group LLC. This entity is the registered owner of 145,845,372 Ordinary Shares in the Company at the date of this report. 2 Bo Sung Kim is the Managing Director of POSCO Australia Pty Ltd (POSCO). POSCO is the registered owner of 134,992,472 Ordinary Shares in the Company at the date of this report. 25 Contracts with Directors Corporate Governance There are no agreements with any of the Directors other than remuneration agreements. The Directors aspire to maintain the standards of Corporate Governance appropriate to Jupiter. Jupiter’s Corporate Governance Statement is set out on pages 37 to 49 of this Report. Proceedings on behalf of Jupiter No person has applied for leave of Court to bring proceedings on behalf of Jupiter or intervene in any proceedings to which Jupiter is a party for the purpose of taking responsibility on behalf of Jupiter for all or any part of those proceedings. Jupiter was not a party to any such proceedings during the year. The Consolidated Entity was not a party to any such proceedings during the reporting year. This report is signed in accordance with a resolution of the Board of Directors. Brad Rogers Perth 30 May 2023 Auditor’s Independence Declaration The Lead Auditor’s Independence Declaration for the year ended 28 February 2023 has been received and can be found on pages 84 to 87 of the Annual Report. Indemnification and Insurance of Officers and Auditors Since the end of the previous financial year, Jupiter has paid premiums to insure the Directors and Officers of the Consolidated Entity. Details of the nature of the liabilities covered and the amount of premium paid in respect of Directors’ and Officers’ insurance policies preclude disclosure to third parties. Jupiter has not paid any premiums in respect of any contract insuring its auditor against a liability incurred in that role as an auditor of Jupiter. In respect of non-audit services, Grant Thornton Audit Pty Ltd, Jupiter’s auditor has the benefit of an indemnity to the extent Grant Thornton Audit Pty Ltd reasonably relies on information provided by Jupiter, which is false, misleading or incomplete. No amount has been paid under this indemnity during the financial year ending 28 February 2023 or to the date of this Report. Non-Audit Services The Board of Directors is satisfied that the provision of non-audit services during the financial year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons: • • all non-audit services are reviewed and approved by the Audit Committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. The following fees were paid or payable to Grant Thornton Australia Limited for non-audit services provided during the year ended 28 February 2023: Taxation and other services - $45,002 (FY2022: $38,418) 26 27 Remuneration Report (Audited) The Directors present the FY2023 Remuneration Report for Non-Executive Directors (NED), Executive Directors and other Key Management Personnel (KMP), prepared in accordance with the Corporations Act 2001 and the Corporations Regulations 2011. The Remuneration Report is presented under the following sections: 1. Introduction 2. Executive Remuneration Governance 3. Executive Remuneration 4. Non-Executive Remuneration 5. Planned Executive Remuneration Changes for FY2024 6. Statutory Remuneration Disclosures 7. Key Management Personnel Remuneration 8. Other Transactions with Key Management Personnel (1) INTRODUCTION This report outlines the Company’s approach to remuneration for its executives. Page 28 28 29 29 29 30 33 35 The Company’s FY2022 Remuneration Report received approval from the shareholders following the implementation of several recommended changes to the Board, executive team, executive performance and remuneration framework. This represented shareholders’ recognition of positive changes made by the Board in the way in which the business is managed, governed and its key personnel are remunerated and rewarded for performance. FY2023 saw further changes to the Board and executive with the appointment of Ian Murray as Chair and Brad Rogers as Managing Director and Chief Executive Officer (MD and CEO). These appointments resulted in further review and changes to the remuneration framework for Executives and Non-Executive Directors. Although significant progress has been made it is envisaged that the framework will evolve further in FY2024 as the Company’s business strategy is achieved. The Board recognises that the success of the business depends on the quality and engagement of its people. To ensure the Company continues to succeed and grow, it must attract, motivate and retain skilled Directors, Executives and employees. The Board delegates responsibility in relation to remuneration to the Remuneration and Nomination Committee (RN Committee) to ensure that people and performance are a priority. In considering the Company’s performance and benefits for shareholder wealth, the RN Committee have regard to the following indices in respect of the current financial year and the previous four financial years: $ 2023 2022 2021 2020 2019 Profit attributable to owners of the Company 76,470,852 53,977,755 67,519,400 95,118,503 138,033,499 Dividends paid 43,097,803 29,384,866 58,769,731 93,052,074 146,924,327 Change in share price 0.01 (0.12) 0.11 (0.10) (0.07) (2) EXECUTIVE REMUNERATION GOVERNANCE The information contained within this section provides an overview of the future executive remuneration governance for the Company. (i) Remuneration Philosophy The main objective is the retention of a high-quality Board and executive team, to maximise value of the shareholders’ investment. Remuneration levels will be competitively set to attract, retain and motivate appropriately qualified and experienced Directors and Executives. In determining the level and make up of remuneration levels for Executives of the Company, the remuneration policy will be structured to increase goal congruence between shareholders and Executives and includes the payment of incentives based on achievement of specific goals related to the performance of the Company and also the issue of equity based instruments to encourage alignment of personal and shareholder interests. 28 (ii) Role of the Board (ii) STI The Board delegates responsibility in relation to remuneration to the RN Committee, which operates in accordance with the RN Committee Charter and the requirements of the Corporations Act 2001 and its Corporations Regulations 2011. Refer to section 6 which details the STI for the MD/CEO. The annual bonus for the CFO is discretionary. (iii) LTI (iii) Role of the Remuneration and Nomination Committee Refer to section 6 which details the LTI for the MD/CEO. The RN Committee is a committee of the Board. It is responsible for making recommendations to the Board on: • The Company’s remuneration policy and structure; • Executive remuneration policy for KMP; • Remuneration levels of the MD/CEO and KMP; • Operation of incentive plans and key performance hurdles for KMP; • Equity based remuneration plans for KMP; and, • NED remuneration; The RN Committee’s objective is to ensure remuneration policies and structures are fair and competitive and aligned with the long-term interests of the Company. The RN Committee will periodically obtain independent remuneration information to ensure NED fees and Executive remuneration packages are appropriate and in line with the market. (iv) Use of Remuneration Advisors During FY2023, the RN Committee engaged with and appointed independent consultants BDO Reward WA Pty Limited (BDO) and Korn Ferry to undertake benchmarking of Executive and NED remuneration, and to conduct a review of the overall Executive remuneration framework which would inform the Company’s approach to Executive remuneration. No specific recommendations were made by either consultant during the year. (v) Remuneration Report Approval at FY2022 Annual General meeting (AGM) At the Company’s FY2022 AGM, the Remuneration Report for FY2022 was voted on and approved by the Shareholders. (4) NON-EXECUTIVE REMUNERATION The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain NED’s of the highest calibre. The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst NED’s is reviewed annually. Directors’ fees cover all main Board activities. NED’s are not entitled to retirement benefits other than statutory superannuation or other statutory required benefits. NED’s do not currently participate in performance related remuneration (share or bonus schemes) designed for Executives or employees. Director fees currently paid to NED’s per annum are as follows: Director Chair Fee Director Fee Committee Fees Total Ian Murray $140,000 - $2,500 $142,500 Scott Winter Peter North Patrick Murphy Ben Kim Total - - - - $55,000 $5,500 $60,500 $55,000 $8,000 $63,000 $55,000 $55,000 $2,500 $2,500 $57,500 $57,500 $140,000 $220,000 $21,000 $381,000 (5) PLANNED EXECUTIVE REMUNERATION CHANGES FOR FY2024 As a result of the changes within the Board structure and executive team and the announcement of a new strategy for the Company, the RN committee will be further reviewing the remuneration and structure for Executives and NEDs. The objective is to be adequately prepared for the resourcing requirements of the business as the strategy is implemented over the coming years. (3) EXECUTIVE REMUNERATION (i) Fixed and Total Remuneration Approach The information contained within this section outlines details pertaining to the Executive remuneration structure for FY2023. With the change to the financial year end, the Short Term Incentives (STI) and Long Term Incentives (LTI) will be evaluated accordingly as at 30 June 2023. Remuneration is made up of a fixed component as well as a short- term incentive component. (i) Total Fixed Remuneration The MD/CEO fixed annual remuneration is $750,000 plus statutory superannuation. The Chief Financial Officer (CFO) fixed annual remuneration is $257,600 inclusive of superannuation. Total Fixed Remuneration (TFR) acts as a base level reward for a competent level of performance. It includes cash, compulsory superannuation contributions and any non- monetary benefits and will be based on: • • The size and complexity of the role; The criticality of the role to successful execution of the business strategy; • Role accountabilities; • Skills and experience of the individual; and • Market remuneration levels for comparable roles. 29 (ii) Executive Remuneration Framework The Total remuneration package will consist of the following elements of pay. Remuneration Elements Purpose Category Definition of Pay Category Total Fixed Remuneration Pay for meeting role requirements Fixed pay Short Term Incentive Incentive for the achievement of annual objectives Short term incentive Pay Long Term Incentive Incentive for achievement of sustained business growth (non-market measures) Long term incentive pay Pay linked to the present value or market rate of the role. Pay for delivering the annual operational plan for the Company. Short Term Incentive pay is linked to the achievement of short term ‘line-of-sight’ performance goals. It reflects ‘pay for short term performance’. Pay for creating value for shareholders. Reward pay is linked to shareholder returns It reflects ‘pay for results’. (6) STATUTORY REMUNERATION DISCLOSURES (i) Executive Contracts Remuneration and other terms of employment for the Executives are formalised in service agreements. The service agreements specify the components of remuneration, benefits and notice periods. Other major provisions of the agreements relating to remuneration are set out below. Brad Rogers (Managing Director and Chief Executive Officer) Contract Description: Agreement between the Company and Brad Rogers (Employee). Term: Commencement date of 1 August 2022 until the Employee is terminated. Services: The Employee is employed as MD and CEO of the Company and is responsible for all operational aspects within the Company. Remuneration Fixed remuneration: The Employee’s annual Remuneration Package is $750,000 plus statutory superannuation. Signing incentive: At Commencement Date, the Employee received the right to be issued 1,000,000 fully paid ordinary shares in the Company: 1. 500,000 will be issued on the day which is 12 months from the Commencement Date; and 2. 500,000 will be issued on the day which is 24 months from the Commencement Date. Other incentives: At Commencement Date, the Employee received 1,000,000 Share Options (exercisable into 1,000,000 fully paid ordinary shares), with a zero exercise price, vesting as follows: 1. 500,000 Share Options vest and are capable of exercise only when the Company’s share price achieves a 30 day VWAP of greater than $0.40; and 2. 500,000 Share Options vest and are capable of exercise only when the Company’s share price achieves a 30 day VWAP of greater than $0.50. Short term incentive: Performance measures covering three main categories with a safety gateway: Category Measure Health, Safety and Environment (HSE) TRIFR, action closeout, critical risk rollout, environmental audit Financial Performance versus budget for earnings, cost per tonne, volume movement Strategic Initiatives Strategic mine site and business project closeout 30 Brad Rogers (Managing Director and Chief Executive Officer) Remuneration Long term incentive: Performance measures covering three main categories: Category Measure Total Shareholder Return (TSR) Basket of like companies Growth Equity manganese production Strategic Initiatives Strategic business initiatives Termination Termination by the Company: The Employer may terminate the Employee’s employment for any reason by giving the Employee six months written notice or payment in lieu of notice, or a combination of notice and payment in lieu of notice. The Company may immediately terminate the agreement in certain circumstances, including if the Employee is in default of its obligations and does not remedy that default in addition to other standard default situations. Termination by the Employee: The Employee may terminate the agreement at any time by giving the Company six months written notice. Melissa North (Chief Financial Officer and Company Secretary) Contract Description: Term: Services: Executive services agreement between the Company and Melissa North (Employee). Commencement date of 1 January 2018 until the Employee is terminated. The Employee is employed as CFO and Company Secretary of the Company and is responsible for all financial aspects within the Company. The Employee also spends a proportion of their time seconded to Juno Minerals Limited (Juno) as CFO and Company Secretary. Remuneration Fixed remuneration: The Employee’s annual Remuneration Package is $257,600, inclusive of superannuation. The Employee receives an additional $100,000 per annum for their secondment to Juno, which is recharged to Juno. Short term incentive: The Employee may be entitled to an annual bonus at the discretion of the Board. In determining eligibility, the Board will consider without limitation, the performance of the Company, the Employee’s performance and prevailing market conditions. Termination Termination by the Company: The Employer may terminate the Employee’s employment for any reason by giving the Employee three months written notice or payment in lieu of notice, or a combination of notice and payment in lieu of notice. The Company may immediately terminate the agreement in certain circumstances, including if the Employee is in default of its obligations and does not remedy that default in addition to other standard default situations. Termination by the Employee: The Employee may terminate the agreement at any time by giving the Company three months’ written notice. 31 (ii) Shares held by directors and management personnel The movement during the year in the number of ordinary shares in the Company held directly, indirectly or beneficially, by each Director and key management personnel, including their personally related entities are as follows: Director / KMP Balance at start of year Granted as remuneration Other changes Ian Murray Scott Winter Peter North Patrick Murphy 1 Bo Sung Kim 2 Brad Rogers Melissa North - 215,000 697,000 60,000 134,992,472 - - - - - - - - - - - - - - - - Held at the end of reporting period - 215,000 697,000 60,000 134,992,472 - - 1. Patrick Murphy is a Managing Director of AMCI Group, which has a relevant interest in AMCI Group LLC. This entity is the registered owner of 145,845,372 Ordinary Shares in the Company at the date of this report. 2. Bo Sung Kim is the Managing Director of POSCO Australia Pty Ltd (POSCO). POSCO is the registered owner of 134,992,472 Ordinary Shares in the Company at the date of this report. None of the shares included in the table above are held nominally by key management personnel. (iii) Options and performance rights granted Options granted during the year were as follows: Director / KMP Grant date Number of options granted Fair value per option at grant date $ Exercise price per option $ Expiry date Conditions Brad Rogers 1 August 2022 500,000 0.046 Brad Rogers 1 August 2022 500,000 0.046 All options granted during the year were outstanding as at 28 February 2023. Performance rights granted during the year were as follows: - - 25 July 2025 25 July 2025 Exercisable only when Company’s share price achieves a 30 day VWAP of greater than $0.40. Exercisable only when Company’s share price achieves a 30 day VWAP of greater than $0.50. Director / KMP Grant date Number of rights granted Fair value at grant date $ Vesting date Vesting conditions Brad Rogers 1 August 2022 500,000 0.195 31 July 2023 Brad Rogers 1 August 2022 500,000 0.195 31 July 2024 Fully paid ordinary shares to be issued 12 months from Commencement Date. Fully paid ordinary shares to be issued 24 months from Commencement Date. All rights and options expire on the earlier of their expiry date or termination of the KMP’s employment. 32 e h t d n a 3 2 0 2 y r a u r b e F 8 2 d e d n e r a e y e h t r o f n o i t a r e n u m e r r i e h t f o s t n e m e l e e h t f o t n u o m a d n a e r u t a n e h t d n a y n a p m o C e h t f o s r e c i f f O e v i t u c e x E d n a s r o t c e r i D l l a f o n o i t a r e n u m e r e h t f o s l i a t e d e h t e d i v o r p e l b a t g n w o i l l o f e h T . r a e y l a i c n a n i f s u o i v e r p ) D E T A D I L O S N O C D N A Y N A P M O C ( N O I T A R E N U M E R L E N N O S R E P T N E M E G A N A M Y E K ) 7 ( f o % d e t a l e r e c n a m r o f r e p n o i t a r e n u m e r l a t o T s t n e m y a P n o i t a n m i r e T s t n e m y a p d e s a b - e r a h S e c i v r e s g n o L n o i t a u n n a r e p u S m r e t - t r o h s r e h t O y r a l a s & h s a C e v a e l s t n e l a v i u q e & s t i f e n e b s u n o b h s a C s e e f r a e Y e e y o l p m E l e n n o s r e P t n e m e g a n a M y e K r e h t O & s r o t c e r i D e v i t u c e x E - - - - - - - - - - - - - - - - - 3 . 6 1 - 4 3 7 7 7 5 , 0 0 0 0 6 1 , 0 0 0 0 8 , , 2 9 1 7 6 2 7 3 4 , 4 6 2 - - - - - - - - , 3 2 1 5 1 3 , 2 2 0 0 , 4 8 8 1 , 7 1 3 , 5 8 1 5 0 5 3 , 0 0 0 6 7 , 5 8 3 8 5 , 0 0 5 7 5 , 6 3 2 , 2 2 9 2 0 3 1 , 8 0 8 1 , 0 0 5 7 5 , 5 7 3 , 4 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - 6 9 2 , 4 9 - - - - 8 2 9 3 , 2 4 9 3 , - - - - - - - - - - - - - - - 4 5 7 , 4 1 7 6 6 6 2 , 8 9 8 3 2 , - 2 6 0 , 4 1 - - - - - - - - 4 6 1 5 3 2 , 2 1 - - - - - - - 0 7 7 , 4 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4 8 6 8 6 4 , - 0 0 0 0 6 1 , 0 0 0 0 8 , , 7 9 5 6 3 2 , 7 9 5 6 3 2 - 9 8 2 , 2 0 4 7 1 3 , 5 8 1 5 0 5 3 , 0 0 0 6 7 , 5 8 3 8 5 , 0 0 5 7 5 , 6 3 2 , 2 7 5 0 8 1 1 , 4 4 6 1 , 0 0 5 7 5 , 5 7 3 , 4 1 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 O E C & r o t c e r i D g n i g a n a M s r e g o R d a r B r e t n W i t t o c S O E C g n i t c A O F C & y r a t e r c e S y n a p m o C h t r o N a s s i l e M O E C & r o t c e r i D g n i g a n a M l a y i l p a h T k n a y i r P s r o t c e r i D e v i t u c e x e - n o N t n e d n e p e d n I ; r o t c e r i D r e t n W i t t o c S t n e d n e p e d n i - n o N ; r o t c e r i D h t r o N r e t e P t n e d n e p e d n i - n o N ; r o t c e r i D i m K g n u S o B t n e d n e p e d n i - n o N ; r o t c e r i D y h p r u M k c i r t a P t n e d n e p e d n I ; r o t c e r i D y a r r u M n a I 33 f o % d e t a l e r e c n a m r o f r e p n o i t a r e n u m e r l a t o T s t n e m y a P n o i t a n m i r e T s t n e m y a p d e s a b - e r a h S e v a e l s t n e l a v i u q e & s t i f e n e b s u n o b h s a C s e e f e c i v r e s g n o L n o i t a u n n a r e p u S m r e t - t r o h s r e h t O y r a l a s & h s a C - - - - - - - - - - - 7 . 6 - - 2 5 5 , 4 8 - 0 0 5 7 2 , 0 0 0 5 2 , - 4 6 2 , 5 5 - 8 5 4 , 1 4 5 3 5 , 1 1 4 , 1 - - - - - - - - - - - - - - - - - - - - - 6 9 2 , 4 9 0 9 1 , 5 0 0 , 3 2 0 0 , 4 8 8 , 1 - - - - - - - - - - - - - - - - - - - - - 8 2 9 , 3 2 4 9 , 3 6 5 6 , 3 5 5 2 1 , 8 3 - - - - - - - - - - - 0 7 7 , 4 1 - - - - - - - - - - - - - - 2 5 5 , 4 8 - 0 0 5 7 2 , 0 0 0 5 2 , - 4 6 2 , 5 5 - 8 5 4 , 1 4 5 5 6 , 9 5 2 , 1 1 5 3 , 4 6 0 , 1 r a e Y 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 t n e d n e p e d n i - n o N ; r i a h C n o s t r e b l i G n a i r B t n e d n e p e d n I ; r o t c e r i D y a r r u M l u a P t n e d n e p e d n I ; r o t c e r i D l l e B w e r d n A t n e d n e p e d n i - n o N ; r o t c e r i D o e H n i j g n o e Y t n e d n e p e d n i - n o N ; r o t c e r i D e d n e M n e g r ü J - s n a H l a t o T 3 2 0 2 l a t o T 2 2 0 2 e e y o l p m E 34 - - - - - - - - - - - 7 . 6 The KMP for the Group for FY2023 and since the end of the financial year were: - - - - - - - - - - - Executive Directors Name Position Non-Executive Directors Ian Murray Chair Non-Executive Director Scott Winter Non-Executive Director Peter North Non-Executive Director Patrick Murphy Non-Executive Director Bo Sung Kim Non-Executive Director Time as KMP Part year from 1 May 2022 Full year Full year Full year Full year Full year Brian Beem Alternate Director to Patrick Murphy Part year to 1 August 2022 Scott Winter Acting Chief Executive Officer Part year to 31 July 2022 Brad Rogers Managing Director and Chief Executive Officer Part year from 1 August 2022 Other Key Management Personnel (Executives) Melissa North Chief Financial Officer and Company Secretary Full year 8. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL During the current financial year, there were no other material transactions with key management personnel or their related parties. There were no loans with any of the key management personnel during the year and no loan amounts outstanding. End of Remuneration Report 0 9 1 , 5 0 0 , 3 2 0 0 , 4 8 8 , 1 6 9 2 , 4 9 8 2 9 , 3 2 4 9 , 3 6 5 6 , 3 5 5 2 1 , 8 3 0 7 7 , 4 1 - - - - - 2 5 5 , 4 8 0 0 5 , 7 2 0 0 0 , 5 2 4 6 2 , 5 5 8 5 4 , 1 4 5 3 5 , 1 1 4 , 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 5 5 , 4 8 0 0 5 , 7 2 0 0 0 , 5 2 4 6 2 , 5 5 8 5 4 , 1 4 5 5 6 , 9 5 2 , 1 1 5 3 , 4 6 0 , 1 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 t n e d n e p e d n i - n o N ; r i a h C n o s t r e b l i G n a i r B t n e d n e p e d n I ; r o t c e r i D y a r r u M l u a P t n e d n e p e d n I ; r o t c e r i D l l e B w e r d n A t n e d n e p e d n i - n o N ; r o t c e r i D o e H n i j g n o e Y t n e d n e p e d n i - n o N ; r o t c e r i D e d n e M n e g r ü J - s n a H l a t o T 3 2 0 2 l a t o T 2 2 0 2 35 36 CORPORATE GOVERNANCE STATEMENT (1) Overview The Company’s Board of Directors (Board) is responsible for the overall corporate governance of the Company, and it recognises the need for the highest standards of ethical behaviour and accountability. It is committed to administering its corporate governance structures to promote integrity and responsible decision-making. Accordingly, where appropriate the Company has sought to adopt the ‘Corporate Governance Principles and Recommendations’ (Fourth Edition) (ASX Recommendations) published by the ASX Corporate Governance Council. The corporate governance principles and practices adopted by the Company may depart from those generally applicable to ASX-listed companies under ASX Recommendations where the Board considers compliance is not appropriate having regard to the nature and size of the Company’s business and operations. The Company sets out below its “if not why not” report in relation to those matters of corporate governance where the Company’s practice departs from the ASX Recommendations to the extent that they are currently applicable to the Company. This statement is current as at 30 May 2023 and has been approved by the Board. (2) ASX Corporate Governance Principles and Recommendations Principle ASX Recommendation Comply Comments Principle 1 – Lay solid foundations for management and oversight 1.1 A listed entity should have and disclose a board charter setting out: Yes (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management. (a) The Company has adopted a Board Charter that discloses the role and responsibilities of the Board. (b) Under the Board Charter, the Board is responsible for the overall operation and stewardship of the Company and, in particular, is responsible for: • • • • oversight of control and accountability systems; appointing and removing the Chief Executive Officer, Chief Financial Officer and Company Secretary; approving the annual operating budget; approving and monitoring the progress of major capital and operating expenditure; • monitoring compliance with all legal and regulatory obligations; • reviewing any risk management system (which may be a series of systems established on a per-project basis); • monitoring any executive officer’s performance; and • approving and monitoring financial and other reporting to the market, shareholders of the Company (Shareholders), employees and other stakeholders. A copy of the Board Charter can be found on the Company’s website at www.jupitermines.com/ about-us/corporate-governance 37 Principle ASX Recommendation Comply Comments (a) The Company conducts background checks of candidates for the position of Director prior to their appointment or nomination for election by Shareholders, including checks as to good character, experience, education, qualifications, criminal history and bankruptcy. (b) The Company does not propose to conduct specific checks prior to nominating an existing Director for re-election by Shareholders at a general meeting on the basis that the Company conducts background checks during the Director’s appointment process. As a matter of practice, the Company includes in its notices of meeting a brief biography and other material information in relation to each Director who stands for election or re-election, including relevant qualifications and professional experience of the nominated Director for consideration by Shareholders. The Company has entered into employment contracts with Brad Rogers, Chief Executive Officer, and Melissa North, Chief Financial Officer. The Company has entered into letters of engagement with each of its Non-Executive Directors setting out the key terms and conditions of their engagement. The Company Secretary reports directly, and is accountable, to the Board through the Chair of the Board (Chair) in relation to all governance matters. The Company Secretary also advises and supports the Board to implement adopted governance procedures and co-ordinates the circulation of meeting agendas and papers. Principle 1 – Lay solid foundations for management and oversight 1.2 A listed entity should: Yes (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director. A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board. Yes Yes 1.3 1.4 38 Principle ASX Recommendation 1.5 A listed entity should: (a) have and disclose a diversity policy; (b) through its board or committee of the board, set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and (c) disclose in relation to each reporting period: i. ii. the measurable objectives set for that period to achieve gender diversity; the entity’s progress towards achieving those objectives; and iii. either: (a) the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined “senior executive” for these purposes); or (b) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under the Act. Comply Comments Yes (a) The Company’s Diversity Policy can be found on the Company’s website at www.jupitermines. com/about-us/corporate-governance. (b) The Board respects and values the benefits that diversity (e.g., gender, age, ethnicity, cultural background, disability and marital/family status etc) brings in relation to expanding the Company’s perspective and thereby improving corporate performance, increasing Shareholder value and maximising the probability of achieving the Company’s objectives. (c) i. and ii. As part of the Company’s renewed strategy, the Board is implementing diversity considerations within its recruitment process and will set updated measurable objectives to achieve gender diversity. iii. (a) The proportion of diversity across the Group at 28 February 2023 is: • Board – nil • Senior executive 1 – 67% • All Board and staff 2 – 45% 1 Senior executive includes Managing Director, Chief Financial Officer, Company Secretary and Head of Marketing and Finance. 2 Includes Directors and senior executives 1.6 A listed entity should: Yes (a) The Remuneration and Nomination Committee (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. (RN Committee) is responsible for the evaluation process for the Board, Committees and individual Directors. The evaluation process generally includes a combination of self-assessments by Directors on their individual performance and effectiveness of the Board and Committees. (b) In February 2023, the Company undertook a comprehensive externally conducted evaluation process. The Board was then provided with the feedback and key focus areas, which are currently being worked through to be implemented. 39 Principle ASX Recommendation Comply Comments 1.7 A listed entity should: Yes (a) The Board is responsible for monitoring the (a) have and disclose a process for periodically evaluating the performance of its senior executives; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. performance of executive officers. The Board has established policies to ensure that the Company remunerates fairly and responsibly. The Company designed its remuneration policy to ensure that the level and composition of remuneration is competitive, reasonable and appropriate to attract and maintain Directors with the requisite skills and experience to guide the Company towards achieving its objectives. (b) The Company will continue to disclose if and when it has conducted any performance evaluations. The Company appointed its Chief Executive Officer on 1 August 2022. A formal performance evaluation will be completed after 12 months. Principle 2 – Structure the board to be effective and add value 2.1 The board of a listed entity should: No (a) The Board has established a RN Committee. (a) have a nomination committee which: (i) The RN Committee presently consists of (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (a) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively. Scott Winter, Peter North and Patrick Murphy. Mr Winter is an independent Non-Executive Director. Mr North and Mr Murphy are Non-Executive Directors and not independent. (ii) Mr Winter is the chair of the RN Committee and an independent Director. (iii) The RN Committee Charter discloses the RN Committee’s role and responsibilities. The RN Committee Charter is available on the Company’s website at: www.jupitermines. com/about-us/corporate-governance (iv) As above. (v) The number of committee meetings and individual attendances of the members at those meetings can be found within the Directors’ Report. 2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership. No The Company is currently finalising its skills matrix in relation to its Board members and includes a wide variety of desired skills and experience. The RN Committee is presently responsible for ensuring the Directors have the appropriate mix of competencies to enable the Board to discharge its responsibilities effectively. 40 Principle ASX Recommendation Comply Comments 2.3 A listed entity should disclose: Yes (a) The Board considers that Scott Winter and Ian (a) the names of the directors considered by the board to be independent directors; (b) if the director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that is does not compromise the independence of the director, the nature of interest, position, association or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director. 2.4 A majority of the board of a listed entity should be independent directors. No Murray are independent Directors because they are free from any business or other relationship with the Company that could materially interfere with, or reasonably be perceived to materially interfere with, the independent exercise of their judgement as Directors. (b) Not applicable. (c) The Company appointed Mr Winter as a Director on 30 July 2021 and Mr Murray was appointed on 15 February 2022. A majority of the Board are not independent Directors. Two of the Board’s six Directors, being Scott Winter and Ian Murray, are considered independent. The Company does not consider Bo Sung Kim independent because he is the Managing Director of POSCO Australia Pty Ltd, a substantial shareholder of the Company. The Company does not consider Patrick Murphy independent because of his association with AMCI Group, LLC, a substantial shareholder of the Company. The Company does not consider Peter North independent because of his association with Ntsimbintle Holdings Pty Ltd, a substantial shareholder of the Company. The Company does not consider Brad Rogers independent as he is the Managing Director. The Company believes that the current structure of the Board is the most appropriate given the size and current operations of the Company. 2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity. Yes The Chair, Ian Murray, is an independent Director. Brad Rogers is the Chief Executive Officer and is not the Chair. 41 Principle ASX Recommendation Comply Comments Yes Induction program 2.6 A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively. When a Director is appointed, they receive with their appointment letter a copy of the Company’s constitution, corporate governance policies and charters. The contents of this due diligence pack contain sufficient information to allow the new Director to gain an understanding of the rights, duties, responsibilities and role of the Board, Board committees and the executive team. The Company Secretary arranges for new Directors to undertake an induction program to enable them to gain an understanding of: • • • • the Company’s operations and the industry sectors in which it operates; the Company’s financial, strategic, operational and risk management position; their rights, duties and responsibilities; and any other relevant information. Director development In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo continual professional development. The Company released a comprehensive five year strategy update on 31 March 2023, setting out its vision to become the leading manganese producer in the world. As part of this, the Company plans to work with its internal teams to develop an integral set of core values, which it will share with stakeholders. Principle 3 – Instil a Culture of Acting Lawfully, Ethically and Responsibly 3.1 A listed entity should articulate and disclose its values. No 42 Principle ASX Recommendation Comply Comments 3.2 A listed entity should: Yes (a) have a code of conduct for its directors, senior executives and employees; and (b) ensure that the board or a committee of the board is informed of any material breaches of that code. 3.3 A listed entity should: (a) have and disclose a whistleblower policy; and (b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy. 3.4 A listed entity should: Yes Yes (a) have and disclose an anti-bribery and corruption policy; and (b) ensure that the board or a committee of the board is informed of any material breaches of that policy. The Board believes that the success of the Company has been, and will continue to be, enhanced by a strong ethical culture within the organisation. (a) The Company has a Code of Conduct and Ethics (Code) which sets the standards that all Directors, officers, employees, consultants and contractors and all other people representing the Company are expected to comply with in relation to all commercial operations. (b) The Code also outlines the procedure for reporting any breaches of the Code and the possible disciplinary action the Company may take in respect of any breaches. In addition to their obligations under the Corporations Act 2001 (Cth) (Corporations Act) in relation to inside information, all Directors, employees and consultants have a duty of confidentiality to the Company in relation to confidential information they possess. In fulfilling their duties, each Director dealing with corporate governance matters may obtain independent professional advice at the Company’s expense after consultation with the Chair. The Company ensures that all incumbent and new personnel have a copy of the Code. It is also available on the Company’s website at www.jupitermines. com/about-us/corporate-governance The Company has a Whistleblower Policy, available on the Company’s website, which demonstrates the Company’s commitment to promote a culture of ethical corporate behaviour The Company has an Anti-Bribery and Corruption Policy, available on the Company’s website. The Policy outlines the Company’s commitment to fair and legal business practices, anti-bribery and corruption. Any material incidents related to Bribery or Corruption will be reported to the Audit Committee and/or the Board, depending on the nature of the breach. 43 Principle ASX Recommendation Comply Comments Principle 4 – Safeguard the Integrity of Corporate Reports 4.1 The board of a listed entity should: No (a) The Company has established an Audit (a) have an audit committee which: (i) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and (ii) is chaired by an independent director, who is not the chair of the board, and disclose: (iii) the charter of the committee; (iv) the relevant qualifications and experience of the members of the committee; and (v) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings, or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner. The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases to the market that is not audited or reviewed by an external auditor. Yes Yes Committee to assist the Board in its oversight responsibilities in relation to financial management and reporting, external audit and financial risk management of the Company and safeguarding the independence of the external auditor. (i) The Audit Committee presently consists of Peter North, Ian Murray and Bo Sung Kim. Mr Murray is the only independent Director. (ii) Mr North acts as the chair of the Audit Committee. Mr North is not independent. (iii) The Audit Committee Charter sets out the functions, operating mechanisms and responsibilities of the Audit Committee. (iv) The Audit Committee Charter also requires that all committee members have a working familiarity with basic accounting and finance practices and that at least one member has financial expertise. Mr Murray is a Chartered Accountant. A copy of the Audit Committee Charter is available on the Company’s website at www.jupitermines.com/about-us/ corporate-governance (v) The number of committee meetings and individual attendances of the members at those meetings can be found within the Directors’ Report. As a matter of practice, the Company obtains declarations from its Chief Executive Officer and Chief Financial Officer substantially in the form referred to in Recommendation 4.2 before approving its financial statements. The Chief Executive Officer and Company Secretary are responsible for reviewing all communications to the market and to ensure they are full and accurate and comply with the Company’s obligations. 4.2 4.3 44 Principle ASX Recommendation Comply Comments Principle 5 – Make Timely and Balanced Disclosure 5.1 A listed entity should have a written policy for complying with its continuous disclosure obligations under the listing rule 3.1. Yes The Company has adopted a Continuous Disclosure Policy. 5.2 5.3 A listed entity should ensure that its board receives copies of all material market announcements promptly after they have been made. A listed entity that gives a new and substantive investor or analyst presentation should release a copy of the presentation materials on the ASX Market Announcements Platform ahead of the presentation. Principle 6 – Respect the Rights of Security Holders 6.1 6.2 A listed entity should provide information about itself and its governance to investors via its website. A listed entity should have an investor relations program that facilitates effective two-way communication with investors. Yes Yes Yes Yes The Company is a “disclosing entity” pursuant to section 111AR of the Corporations Act and, as such, is required to comply with the continuous disclosure requirements of Chapter 3 of the Listing Rules and section 674 of the Corporations Act. The Company is committed to observing its disclosure obligations under the Corporations Act and its obligations under the Listing Rules. The Company will post all announcements provided to ASX on its website. A copy of the Continuous Disclosure Policy is available on the Company’s website at www. jupitermines.com/about-us/corporate-governance The Company Secretary, who reports to the Chair, ensures that the Board receives copies of all material market announcements after they have been released. Under the Company’s Continuous Disclosure Policy, any written materials containing new price sensitive information to be used in investor presentations are lodged with ASX prior to the presentation commencing. Upon confirmation of release by ASX, the material is posted to the Company’s website. Information about the Company and its corporate governance, including copies of the Company’s various corporate governance policies and charters, are available on its website at www.jupitermines.com/about-us. The Company has adopted a Shareholder Communications Policy to promote effective communication with Shareholders, ensure all relevant information is disseminated to Shareholders effectively and to encourage the participation of Shareholders at Company general meetings. The Company communicates with Shareholders: • • • through releases to the market via the ASX; through the Company’s website; through information provided directly to Shareholders; and • at general meetings. 45 Principle ASX Recommendation Comply Comments 6.3 A listed entity should disclose how it facilitates and encourages participation at meetings of security holders. Yes 6.4 6.5 A listed entity should ensure that all substantive resolutions at a meeting of security holders are decided by a poll rather than by a show of hands. A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically. Yes Yes The Company supports Shareholder participation in general meetings and seeks to provide appropriate mechanisms for such participation, including by ensuring that meetings are held at convenient times and places to encourage Shareholder participation. In preparing for general meetings, the Company drafts the notice of meeting and related explanatory information so that they provide all of the information that is relevant to Shareholders in making decisions on matters to be voted on by them at the meeting. This information is presented clearly and concisely so that it is easy to understand and not ambiguous. The Company uses general meetings as a tool to effectively communicate with Shareholders and allow Shareholders a reasonable opportunity to ask questions of the Board of Directors and to participate in the meeting. Mechanisms for encouraging and facilitating Shareholder participation are reviewed regularly to encourage the highest level of Shareholder participation. Shareholders are able to vote on resolutions via the Share Registry Platform, or by submitting proxy forms as outlined in the Notice of Meeting. Voting on all resolutions at meetings of shareholders are decided by a poll. The Company considers that communicating with Shareholders by electronic means is an efficient way to distribute information in a timely and convenient manner. The Company provides new Shareholders with the option to receive communications from the Company electronically and encourages them to do so. Existing Shareholders are also encouraged to request communications electronically. The Company will provide all Shareholders that have opted to receive communications electronically with notifications when it uploads an announcement or other communication (including an annual report and notice of meeting) to the ASX announcements platform. 46 Principle ASX Recommendation Comply Comments Principle 7 – Recognise and Manage Risk 7.1 The board of a listed entity should: No (b) The Company does not have a separate risk (a) have a committee or committees to oversee risk, each of which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework. management committee. The Board as a whole is broadly responsible for risk management, including the review of any risk management system or series of systems that may be implemented by management on a per-project basis. The Audit Committee is responsible for the management of financial risk. The Board considers that, given the Company’s current scope of operations, efficiencies or other benefits would not be gained by establishing a separate risk management committee at present. As the Company’s operations evolve, the Board will reconsider the appropriateness of forming a separate risk management committee. 7.2 The board or a committee of the board should: Yes (a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound that the entity is operating with due regard to the risk appetite set by the board; and (b) disclose, in relation to each reporting period, whether such a review has taken place. (a) The Board has responsibility for the monitoring of risk management and reviews the Company’s risk management framework on an annual basis to ensure that the framework continues to be effective. (b) The Company will continue to disclose the outcome of the annual risk management review in its annual reports. 47 Principle ASX Recommendation Comply Comments 7.3 A listed entity should disclose: No (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes. 7.4 A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks. Yes (b) The Company does not currently have an internal audit function. This function is undertaken by relevant staff under the direction of the Board. The Company has adopted internal control procedures, including the following: • • • the Company has authorisation limits in place for expenditure and payments; a Director or senior manager must not approve a payment to themselves or a related party, other than standard salary/directors’ fees in accordance with their Board approved remuneration; and the Company regularly reviews its other financial materiality thresholds. The Board and senior management are charged with evaluating and considering improvements to the Company’s risk management and internal control processes on an ongoing basis. The Board considers that an internal audit function is not currently necessary given the current size and scope of the Company’s operations. As the Company’s operations evolve, the Board will reconsider the appropriateness of adopting an internal audit function. The Company’s primary business is the production and export of manganese via its 49.9% beneficial interest in Tshipi in South Africa. As such, the Company is exposed to the unique risks to which Tshipi is exposed. This includes, but is not limited to, the following key risks: • • • • • • fluctuations in the price of manganese ore; fluctuations in third party contractor costs; any reduction in the global demand for steel; risks arising from mining operations being concentrated at one mine; economic, political or social instability in South Africa may affect operations or profits; and a range of other economic, environmental and social sustainability risks faced by all other mining industry companies in an open economy. Further details on risk are provided in the Operating and Financial Review contained within the Company’s Annual Report. 48 Principle ASX Recommendation Comply Comments Principle 8 – Remunerate Fairly and Responsibly 8.1 The board of a listed entity should: No (a) The Board has established a RN Committee. (a) have a remuneration committee which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive. A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives. Yes (i) The RN Committee presently consists of Scott Winter, Peter North and Patrick Murphy. Mr Winter is an independent Non-Executive Director. Mr North and Mr Murphy are Non-Executive Directors and not independent. (ii) Mr Winter is the chair of the RN Committee and an independent Director. (iii) The RN Committee Charter discloses the RN Committee’s role and responsibilities. The RN Committee Charter is available on the Company’s website at: www.jupitermines. com/about-us/corporate-governance (iv) As above. (v) The number of committee meetings and individual attendances of the members at those meetings can be found within the Directors’ Report. The Company’s policies and practices regarding the remuneration of executive and Non-Executive Directors and other senior executives will be set out in the remuneration report contained in the Company’s annual report for each financial year. Furthermore, the Company’s remuneration policies and practices are subject to review by the RN Committee, as set out in the Company’s RN Committee Charter. A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and (b) disclose that policy or a summary of it. Yes (a) The Company’s Share Trading Policy states the requirements for all Directors, executives, employees, contractors and consultants of the Company dealing in the Company’s Securities. The policy provides that Directors and senior executives must not at any time enter into a transaction (e.g. writing a call option) that operates or is intended to operate to limit the economic risk of holdings of unvested Company securities under any equity-based remuneration schemes offered by the Company. (b) A copy of the Share Trading Policy is available on the Company’s website at www.jupitermines. com/about-us/corporate-governance 8.2 8.3 49 ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 28 FEBRUARY 2023 ABN 51 105 991 740 CONSOLIDATED ENTITY 50 5050 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 28 February 2023 Revenue Gross profit Other income Employee benefits expense Depreciation of property, plant and equipment Amortisation of intangible assets Administrative expenses Business development costs Other expenses Profit from operations Note 2 2 12 9, 26 9 4 Share of profit from joint venture entities using the equity method 10 Finance income Finance costs Foreign exchange gain Profit before income tax Income tax expense Profit from continuing operations Profit for the year from discontinued operations Profit for the year Other comprehensive income Items that may be subsequently transferred to profit or loss: Translation of foreign currency financial statements Items not to be reclassified to profit or loss in subsequent periods: Change in the fair value of equity instruments carried at FVOCI Other comprehensive (loss)/profit for the year, net of tax Total comprehensive profit for the year Profit for the year attributable to: Owners of the parent Total comprehensive profit attributable to: Owners of the parent Overall Operations Basic and diluted earnings per share from continuing operations Basic and diluted earnings per share from discontinued operations 3 25 14 14 5 5 Consolidated Group February 2023 $ February 2022 $ 9,496,639 9,496,639 897,078 (1,462,294) (36,847) (2,744) (77,611) (3,188,462) (3,251,513) 2,374,246 85,966,530 607,595 (17,932) 807,881 89,738,320 (13,267,468) 76,470,852 - 76,470,852 (801,187) 141 (801,046) 75,669,806 76,470,852 75,669,806 0.0390 - 7,302,852 7,302,852 819,670 (3,679,603) (3,153) (46) (120,686) - (2,367,471) 1,951,563 42,774,470 92,778 - 34,058 44,852,869 (3,499,406) 41,353,463 12,624,292 53,977,755 109,946 892,033 1,001,979 54,979,734 53,977,755 54,979,734 0.0211 0.0064 The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 51 Consolidated Statement of Financial Position As At 28 February 2023 Consolidated Group Note February 2023 $ February 2022 $ ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Equity instruments at fair value through other comprehensive income Property, plant and equipment Right of use asset Investments accounted for using the equity method Deferred tax asset TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Lease liability Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Deferred tax liability Lease liability TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated profits TOTAL EQUITY 6 7 9 26 10 3 11 26 3 26 13 14 49,486,940 43,791,012 214,697 93,492,649 6,334 72,961 490,811 483,121,273 490,186 484,181,565 577,674,214 39,055,949 82,621 127,946 39,158,487 45,649,449 57,884 84,865,820 6,193 2,122 - 447,779,813 80,846 447,868,974 532,734,794 41,955,308 - 127,300 39,266,516 42,082,608 66,081,265 421,550 66,502,815 105,769,331 471,904,883 383,677,676 (1,051,748) 89,278,955 55,331,584 - 55,331,584 97,414,192 435,320,602 383,677,676 (344,998) 51,987,924 471,904,883 435,320,602 The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. 52 Consolidated Statement of Changes in Equity For the Year Ended 28 February 2023 Ordinary Issued Capital $ Foreign Currency Translation Reserve $ Equity Instruments at FVOCI Reserve $ Share Based Payment Reserve $ Accumulated Profits $ Note Total $ Balance at 1 March 2021 410,435,400 (460,496) (10,339) 25(a) (26,757,724) Profit attributable to members of parent entity Total other comprehensive income for the year 14 Total comprehensive income for the year In-specie distribution to shareholders – capital reduction In-specie distribution to shareholders - dividend Dividends paid/declared Transfer of fair value reserve of equity instruments designated at FVOCI Balance as at 28 February 2022 Profit attributable to members of parent entity Total other comprehensive income for the year Total comprehensive income for the year Share based payments Dividends paid/declared 23 23 14 14 27 23 - - - - - 109,946 892,033 109,946 892,033 - - - - - - - (876,142) - - - 383,677,676 (350,550) 5,552 - - - - - - (801,187) (801,187) - - - 141 141 - - - - - - - - - - - - - - 49,351,079 459,315,644 53,977,755 53,977,755 - 1,001,979 53,977,755 54,979,734 - (26,757,724) (3,242,276) (3,242,276) (48,974,776) (48,974,776) 876,142 - 51,987,924 435,320,602 76,470,852 76,470,852 - (801,046) 76,470,852 75,669,806 94,296 - 94,296 - (39,179,821) (39,179,821) Balance as at 28 February 2023 383,677,676 (1,151,737) 5,693 94,296 89,278,955 471,904,883 The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. 53 Consolidated Statement of Cash Flows For the Year Ended 28 February 2023 Consolidated Group Note February 2023 $ February 2022 $ CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Receipts from customers Income taxes paid Net cash (used in) / from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Proceeds from sale of financial assets Dividend received from investments Interest received Net cash from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Dividend paid Increase in bank guarantees and credit card facilities Net cash used in financing activities Net increase / (decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of financial year Less cash classified as held for distribution at the beginning of the year Effect of exchange rates on cash holdings in foreign currencies Cash and cash equivalents at the end of the financial year Cash held by continuing operations 18 9 10 23 6 6 6 (7,752,835) 8,322,714 (2,459,062) (1,889,183) (77,709) - 50,625,070 589,078 51,136,439 (39,179,821) (156,814) (39,336,635) 9,910,621 39,158,487 - 417,832 49,486,940 (6,156,229) 8,501,075 (1,460,788) 884,058 (4,244) 928,960 25,588,450 92,617 26,605,783 (48,974,776) - (48,974,776) (21,484,935) 65,622,312 (5,000,001) 21,111 39,158,487 49,486,940 39,158,487 The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. 54 Notes to the Consolidated Financial Statements For the Year Ended 28 February 2023 Note 1: Summary of significant accounting policies Basis of Preparation These consolidated financial statements and notes represent those of Jupiter Mines Limited (Jupiter) and its Controlled Entities (the Consolidated Group or Group). The principal activities of Jupiter during the year have been investment in the Tshipi manganese mine in South Africa and the sale of manganese ore. The separate financial statements of the parent entity, Jupiter Mines Limited, have not been presented within this financial report as permitted by the Corporations Act 2001. Basic parent entity financial information has been disclosed at Note 22. The financial statements were authorised and issued by the Board of Directors on 30 May 2023. Foreign Currency Translation (i) Functional and presentation currency The Group’s consolidated financial statements are presented in Australian Dollars ($), which is also the parent company’s functional currency. The functional currency for the interest in Tshipi is the South African Rand. The results are translated into Australian Dollars for disclosure in Jupiter’s consolidated accounts. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. (ii) Translation of interest in Joint Venture The results of the South African Joint Venture interest are translated into Australian Dollars using an average rate over the period of the transactions. Assets and liabilities are translated at exchange rates prevailing at reporting dates. These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. 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. 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 and have been consistently applied unless otherwise stated. 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. All amounts in the financial report have been rounded to the nearest dollar. Tables may not cast in all instances due to rounding. Jupiter is a for-profit entity for the purpose of preparing the financial statements. (a) Principles of Consolidation The Group financial statements consolidate those of the Parent Company and all its subsidiaries as of 28 February 2023. 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 28 February. A list of controlled entities is contained in Note 8 to the financial statements. In preparing the consolidated financial statements, all inter-Group balances and transactions between entities in the Consolidated Group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity. 55 Business Combinations (c) Income Tax The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition- date fair values of assets transferred, liabilities incurred, and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values. Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of: (a) fair value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquiree, and (c) acquisition- date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately. (b) Interests in Joint Ventures The Group acquired an interest in Tshipi, a joint venture entity, in October 2010. A joint venture is an arrangement that the Group controls jointly with one or more other investors, and over which the Group has rights to a share of the arrangement’s net assets rather than direct rights to underlying assets and obligations for underlying liabilities. Investments in joint ventures are accounted for using the equity method. Any goodwill or fair value adjustment attributable to the Group’s share in the associate or joint venture is not recognised separately and is included in the amount recognised as investment. The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture, is reduced for any dividends received, and adjusted where necessary to ensure consistency with the accounting policies of the Group. Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested for impairment. 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 profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are 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 as unused tax losses. Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss. Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, 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 year when the asset is realised, or the liability is settled, and 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) a legally enforceable right of set- off exists; and (b) 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 years in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. 56 (d) Property, Plant and Equipment (e) Financial Instruments Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses. Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Classification and initial measurement of financial assets Financial assets are classified according to their business model and the characteristics of their contractual cash flows. Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable). Subsequent measurement of financial assets For the purpose of subsequent measurement, financial assets, other than those designated and effective as hedging instruments, are classified into the following two categories: • • Financial assets at amortised cost Equity instruments at fair value through other comprehensive income (Equity FVOCI) All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within other expenses. Financial assets at amortised cost Financial assets with contractual cash flows representing solely payments of principal and interest and held within a business model of ‘hold to collect’ contractual cash flows are accounted for at amortised cost using the effective interest method. The Group’s trade and most other receivables fall into this category of financial instruments as well as bonds that were previously classified as held-to-maturity under AASB 139. Plant and equipment Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. The cost of fixed assets constructed within the Consolidated Group includes the cost of materials, direct labour, borrowing costs and any directly attributable overhead expenditure. 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 economic 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 the Statement of Profit or Loss and Other Comprehensive Income during the financial year in which they are incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the Consolidated Group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Leasehold improvements Furniture & fittings Plant & equipment: Motor vehicles Site equipment 20.00% 33.33% 12.50% 33.33% 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 the Statement of Profit or Loss and Other Comprehensive Income. 57 Equity instruments at fair value through other comprehensive income Investments in equity instruments that are not held for trading are eligible for an irrevocable election at inception to be measured at FVOCI. Under this category, subsequent movements in fair value are recognised in other comprehensive income and are never reclassified to profit or loss. Dividend income is taken to profit or loss unless the dividend clearly represents return of capital. Trade and other receivables The Group makes use of a simplified approach in accounting for trade and other receivables and records the loss allowance at the amount equal to the expected lifetime credit losses. In using this practical expedient, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses. Trade receivables from customers are mostly covered under irrevocable letters of credit. These letters of credit are typically valid for between 90 – 120 days from recognition of the receivable resulting in debtors outstanding greater than 120 days. The final revenue and associated trade receivable is dependent on the metal and moisture content of the shipped ore on arrival at the discharge port, which results in trade receivables balances being outstanding for this time period. Letters of credit provide sufficient certainty that the receivable will be settled and as such no provision for doubtful debts is created at this point. Financial assets at fair value through other comprehensive income The Group recognises 12 months expected credit losses for financial assets at FVOCI. As most of these instruments have a high credit rating, the likelihood of default is deemed to be small. However, at each reporting date the Group assesses whether there has been a significant increase in the credit risk of the instrument. In assessing these risks, the Group relies on readily available information such as the credit ratings issued by the major credit rating agencies for the respective asset. The Group only holds simple financial instruments for which specific credit ratings are usually available. In the unlikely event that there is no or only little information on factors influencing the ratings of the asset available, the Group would aggregate similar instruments into a portfolio to assess on this basis whether there has been a significant increase in credit risk. In addition, the Group considers other indicators such as adverse changes in business, economic or financial conditions that could affect the borrower’s ability to meet its debt obligation or unexpected changes in the borrowers operating results. Should any of these indicators imply a significant increase in the instrument’s credit risk, the Group recognises for this instrument or class of instruments the lifetime expected credit losses. Classification and measurement of financial liabilities The Group’s financial liabilities include only trade and other payables. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method. All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income. (f) 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. 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. Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. (g) Employee Benefits Provisions are 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. 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. Those cash flows are discounted using market yields on high quality corporate bonds with terms to maturity that match the expected timing of cash flows. (h) Provisions Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. (i) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, less credit card facilities used. Bank overdrafts are shown as short-term borrowings in liabilities. 58 (j) Trade and Other Receivables (m) Goods and Services Tax (GST) Trade receivables from customers are mostly covered under irrevocable letters of credit. These letters of credit are typically valid for between 90 – 120 days from recognition of the receivable resulting in debtors outstanding greater than 120 days. The final revenue and associated trade receivable is dependent on the metal and moisture content of the shipped ore on arrival at the discharge port, which results in trade receivables balances being outstanding for this time period. Letters of credit provide sufficient certainty that the receivable will be settled and as such no provision for doubtful debts is created at this point. (k) Revenue and Other Income AASB 15 Revenue from Contracts with Customers outlines a single comprehensive model of accounting for revenue arising from contracts with customers. The core principle is that an entity recognises revenue based on a five-step model to reflect the transfer of goods or services, measured at the amount to which the Branch expects to be entitled to in exchange for those goods or services. The application of the five-step model in AASB 15 requires the exercise of judgement, considering all facts and circumstances relevant to each contract - the relevant judgements have been disclosed in Note 1(p). The standard also provides guidance on the accounting treatment of costs attributable to fulfilling the contract, as well as the incremental costs of obtaining the contract. In terms of AASB 15, the Company identifies each separate performance obligation contained in the contract and allocates a portion of the contract revenue to each performance obligation. Revenue is then only recognised on the satisfaction of each of the relevant performance obligations. Revenue from contracts with customers is recognised when control is transferred to the customer. Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument. Full details are provided at Note 2. All revenue is stated net of the amount of goods and services tax. (l) 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 recognised in the Statement of Profit or Loss and Other Comprehensive Income in the period in which they are incurred. 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 Taxation Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities that are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. (n) Trade and Other Payables Trade and other payables are carried at amortised cost and, due to their short term nature, are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial period that are unpaid and arise when Jupiter becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts mainly relate to the purchase of manganese ore from Tshipi. These are unsecured and are usually paid within two to three months of recognition. Please refer to Note 2. (o) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial period. (p) Critical Accounting Estimates and Judgements The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key estimates – Impairment of non-financial assets The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Key judgements – revenue from contracts with customers The Jupiter Mines Limited (External Profit Company) (SA Branch) acted as an agent, as opposed to a principal, for all sales contracts entered into during the financial year. In determining whether the SA Branch acted as an agent, management considered elements of control and risks assumed by the SA Branch. The SA Branch earned a fixed percentage marketing fee for the sales contracts, assumed limited risks (inventory, pricing) and although the SA Branch obtained legal title of the goods this was only obtained momentarily and did not demonstrate that the SA Branch controlled the goods. Based on these factors, the Branch considered it was acting in an agency relationship. 59 The revenue and associated trade receivables and trade payables balances are calculated based on management’s best estimate of the metal and moisture content of the ore shipped to customers. Extensive sampling and surveying is performed prior to shipment in an effort to ensure the accuracy of these estimations. Due to the inherent limitations of sampling and the method of transport, variances in the metal and moisture content measured on arrival at the discharge port may be different from those estimated by management on the date of the sale. Variances in the metal and moisture content of the shipped ore on arrival at the discharge port will have an impact on the profitability of the SA Branch. (r) Equity (Share Capital) Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of the consideration received by the Group. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received. Basic earnings per share Basic earnings per share is determined by dividing the operating profit/(loss) after income tax by the weighted average number of ordinary shares outstanding during the financial year. (q) Non-current assets held for sale and discontinued operations Diluted earnings per share The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the classification. Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position. A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and: • Represents a separate major line of business or geographical area of operations • Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations, or; • Is a subsidiary acquired exclusively with a view to resale Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit or loss. Diluted earnings per share adjusts the amounts used in the determination of basic earnings per share by taking into account unpaid amounts on ordinary shares and any reduction in earnings per share that will probably arise from the exercise of options outstanding during the financial year. (s) Leases The Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether: • • • The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group The Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract The Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use. Measurement and recognition of leases At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, and any direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). Additional disclosures are provided in Note 25. All other notes to the financial statements include amounts for continuing operations, unless indicated otherwise. The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at the date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate. 60 Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. (t) Share-based Payments Equity-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, or options over shares that are provided to employees in exchange for the rendering of services. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using the Monte Carlo option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting amount. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. If the non-vesting condition is within the control of the entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the reward is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification. New and amended Accounting Standards and Interpretations for current year This financial report complies with Australian Accounting Standards and International Financial Reporting Standards issued by the International Accounting Standards Board. The accounting policies adopted are consistent with those of the previous financial year except that the Group has adopted the following new or amended standards which became applicable on 1 January 2022: • AASB 2021-3 Amendments to Australian Accounting Standards – COVID-19 Related Rent Concessions beyond 30 June 2021 (effective for annual reporting periods beginning on or after 1 April 2021) This amends AASB 16 Leases to extend the availability of the practical expedient for lessees to not account for COVID-19 related rent concessions as lease modifications by one year. This amendment did not have a significant impact on the financial statements on application. • AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018–2020 and Other Amendments (effective from 1 January 2022) This amends (to the extent relevant to the Group): (i) AASB 9 Financial Instruments to clarify the fees an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability; (ii) AASB 3 Business Combinations to update a reference to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations; and (iii) AASB 137 Provisions, Contingent Liabilities and Contingent Assets to specify the costs that an entity includes when assessing whether a contract will be loss-making. These amendments did not have a significant impact on the financial statements on application. New Accounting Standards not yet effective A number of new standards, amendments to standards and interpretations issued by the AASB which are not yet mandatorily applicable to the Group have not been applied in preparing these financial statements. The Group has not elected to adopt any new Accounting Standards or Interpretations prior to their applicable date of implementation. There are no standards that are not yet effective and that would be expected to have a material impact on the Group in the current or future reporting periods, and on foreseeable future transactions. 61 Note 2: Revenue and other income Consolidated Group Marketing Fee Income February 2023 $ February 2022 $ Marketing fee revenue 9,496,639 7,302,852 Gross profit 9,496,639 7,302,852 Other income Other income 897,078 897,078 819,670 819,670 The SA Branch is registered in South Africa for the purpose of the sale and export of Jupiter’s share of Tshipi manganese ore. AASB 15 Revenue from Contracts with Customers outlines a single comprehensive model of accounting for revenue arising from contracts with customers. The core principle is that an entity recognises revenue based on a five-step model to reflect the transfer of goods or services, measured at the amount to which the SA Branch expects to be entitled to in exchange for those goods or services. The application of the five-step model in AASB 15 requires the exercise of judgement, considering all facts and circumstances relevant to each contract - the relevant judgements have been disclosed in Note 1. The standard also provides guidance on the accounting treatment of costs attributable to fulfilling the contract, as well as the incremental costs of obtaining the contract. In terms of AASB 15, the SA Branch identifies each separate performance obligation contained in the contract and allocates a portion of the contract revenue to each performance obligation. Revenue is then only recognised on the satisfaction of each of the relevant performance obligations. Revenue from contracts with customers is recognised when control is transferred to the customer. Sale of Manganese Ore Given the Branch only takes control of the goods momentarily before control passes to the customer as well as the limited risks which the Branch assumes the Branch is considered to be acting in an agency capacity. The nature of the SA Branch’s contracts is to arrange for the goods (manganese ore) to be provided by another party (Tshipi) and therefore the SA Branch is acting in an agency capacity, facilitating the sale between Tshipi and the customer. 62 The SA Branch receives a fixed commission on each sale based on the FOB selling price. The amount and timing of revenue to be recognised from marketing fee income under AASB 15 was considered below against the five step model: • • • • There is a contract with Tshipi, for each parcel sold, which entitles the SA Branch to receive the commission. The contract has commercial substance and both parties are committed to performing their obligations; The performance obligation for the SA Branch in respect to each sale is that the SA Branch needs to facilitate the sale between the customer and Tshipi; The transaction price can be determined as it is calculated as a fixed percentage of the FOB selling price; There is only one performance obligation in the contract and therefore the whole transaction price has been allocated to this performance obligation; • Revenue is recognised when the performance obligation is satisfied. The performance obligation of the SA Branch is considered to be satisfied when control passes from Tshipi to the customer. Control passes to the customer when the ore passes over the rail of the vessel (bill of lading date), this is when the customer has the obligation to pay for the goods transferred and when risk and rewards of ownership are transferred to the customer. Marketing fee income is determined based on the final metal and moisture content at the discharge port. On the bill of lading date, the provisional marketing fee income is recognised based on the load port metal and moisture content which is considered to be the best estimate. Once the final metal and moisture content is determined on finalisation of the sales transaction, typically between two and four months later, the marketing fee income initially recognised is adjusted subsequently. At the reporting period, the fair value of the original marketing fee income and associated receivable is adjusted by reference to the best estimate of the actual metal and moisture content. The changes in fair value are recorded as an adjustment to marketing fee income. On the bill of lading date, there is no uncertainty regarding Jupiter’s entitlement to the marketing fee as their responsibilities under the marketing fee arrangement have been performed and they have an unconditional right to the marketing fee on this date. The marketing fee amount receivable will only be adjusted for the final metal and moisture content, as stated above. Jupiter invoices Tshipi for the marketing fee once the final metal and moisture content can be determined and the customer has paid Tshipi for the final invoice. The payment is typically three months after the marketing fee income was first recognised and the contract is therefore considered to be short term in nature. Under AASB 15, the accounting for marketing fee income will remain unchanged in that marketing fee income will be recognised when control passes to the customer, which will continue to be the date of delivery when risks and rewards passed to the customer. Note 3: Income tax expense and deferred taxes The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective tax rate of Jupiter at 30% (FY2022: 30%) and the reported tax expense in the profit or loss are as follows: Tax expense comprises: (a) Current tax Add (subtract): Consolidated Group February 2023 $ February 2022 $ 2,783,273 1,617,968 Current tax in respect of prior years 143,856 (526,120) Deferred income tax relating to origination and reversal of temporary differences: - - - Origination and reversal of timing differences Recognition of deferred tax asset losses Under provision in respect of prior years Income Tax expense (b) Accounting profit before tax Domestic tax rate for Jupiter at 30% (FY 2022: 30%) Tax rate differential Other expenditure not allowed or allowable for income tax purposes Non-assessable gain on deconsolidation Under provision in respect of prior years Share of profit in equity accounted investments Income tax expense 10,615,800 (276,474) 1,013 13,267,468 89,738,320 26,921,496 (198,933) 1,587,560 - 144,869 (15,187,524) 13,267,468 1,461,418 (15,382) 961,522 3,499,406 57,477,161 17,243,148 (141,375) (2,573,944) (3,787,288) 435,403 (7,676,538) 3,499,406 Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows: Deferred Tax Assets/(Liabilities) Liabilities Right of use asset Investments using the equity method Balance as at 28 February 2023 Assets Property, plant and equipment Pension and other employee obligations Provisions Trade and other receivables Other Right of use liability Tax losses Balance as at 28 February 2023 Net Deferred Tax Liabilities Opening balance 1 March 2022 Recognised in Profit and Loss During the Year Closing Balance 28 February 2023 - (55,331,584) (55,331,584) 3,935 27,147 - 12,602 21,780 - 15,382 80,846 (55,250,738) (147,243) (10,602,438) (10,749,681) (1,135) (2,752) 40,334 (12,602) (2,060) 126,465 261,090 409,340 (10,340,341) (147,243) (65,934,022) (66,081,265) 2,800 24,395 40,334 - 19,720 126,465 276,472 490,186 (65,591,079) 63 Note 4: Other expenses Insurance expense Consultancy fees Professional fees Directors’ fees Regulatory fees Other costs Note 5: Earnings per share Consolidated Group February 2023 $ February 2022 $ 962,048 530,369 213,372 366,751 183,286 995,687 974,482 107,609 279,708 344,632 239,070 421,970 3,251,513 2,367,471 Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the Parent Company. Reconciliation of earnings to net profit for the year: Net profit Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS Effects of dilution from: Share options Weighted average number of ordinary shares adjusted for the effect of dilution Profit per share from continued operations Profit per share from discontinued operations Note 6: Cash and cash equivalents Cash at bank and on hand Short-term bank deposits Consolidated Group February 2023 $ 76,470,852 No. February 2022 $ 53,977,755 No. 1,958,991,033 1,958,991,033 1,156,164 1,960,147,197 $0.0390 - Consolidated Group February 2023 $ 40,840,483 8,646,457 49,486,940 - 1,958,991,033 $0.0211 $0.0064 February 2022 $ 30,695,467 8,463,020 39,158,487 Amounts disclosed above relate to cash and cash equivalents for continuing operations. The effective interest rate on short-term bank deposits was 2.14% (FY2022: 0.35%) for a term of 30 days. 64 Note 7: Trade and other receivables Trade receivables GST and VAT receivables Income tax refundable Sundry receivables Consolidated Group February 2023 $ 42,856,189 252,264 - 682,559 43,791,012 February 2022 $ 44,382,101 190,707 445,150 631,491 45,649,449 All of the Group’s trade and other receivables have been reviewed for indicators of impairment. It was found that the Group’s exposure to bad debts is not significant. Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value. Details regarding the foreign exchange and interest rate risk exposure are disclosed in Note 21. The majority of trade receivables represent amounts receivable by Jupiter South Africa branch relating to the sale of manganese ore to third party customers. Refer to Note 2 for further details. Note 8: Interests in subsidiaries Controlled entities consolidated Parent Entity: • Jupiter Mines Limited Subsidiaries of Jupiter Mines Limited: • • Jupiter Kalahari Pty Limited Jupiter Mines Limited (Incorporated in Australia) External Profit Company (SA Branch) Country of Incorporation Australia Australia South Africa Percentage Owned (%) February 2023 February 2022 100 100 100 100 Note 9: Property, plant and equipment Details of the Group’s property, plant and equipment and their carrying amounts are as follows: Leasehold Improvements $ Plant and Equipment $ Furniture and Fittings $ Gross carrying amount Balance as at 1 March 2022 Additions Disposals Balance as at 28 February 2023 Depreciation and impairment Balance as at 1 March 2022 Depreciation Disposals Balance as at 28 February 2023 Carrying amount as at 28 February 2023 110,923 47,844 (110,923) 47,844 (110,923) (2,744) 110,923 (2,744) 45,100 179,077 16,705 (177,360) 18,422 (177,762) (2,647) 177,360 (3,049) 15,373 Total $ 486,637 77,709 (484,024) 80,322 196,637 13,160 (195,741) 14,056 (195,830) (484,515) (1,479) 195,741 (1,568) 12,488 (6,870) 484,024 (7,361) 72,961 65 Gross carrying amount Balance as at 1 March 2021 Additions Disposals Balance as at 28 February 2022 Depreciation and impairment Balance as at 1 March 2021 Depreciation Disposals Balance as at 28 February 2022 Carrying amount as at 28 February 2022 Leasehold Improvements $ 110,923 - - 110,923 Plant and Equipment $ 3,693,053 3,347 (3,517,323) 179,077 Furniture and Fittings $ 195,740 897 - 196,637 Total $ 3,999,716 4,244 (3,517,323) 486,637 (110,923) (3,689,194) (195,740) (3,995,857) - - (110,923) - (3,063) 3,514,495 (177,762) 1,315 (90) - (195,830) 807 (3,153) 3,514,495 (484,515) 2,122 Note 10: Investments accounted for using the equity method Set out below is the Joint Venture held by the Group as at 28 February 2023, in which the opinion of the Directors, are material to the Group. The entity listed below has share capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation or registration is also their principal place of business, and the proportion of the Group’s ownership interest is the same as the proportion of voting rights held. Interest in this entity is held through a fully controlled entity, Jupiter Kalahari Pty Ltd. Name of Entity Tshipi é Ntle Manganese Mining Proprietary Limited Country of Incorporation February 2023 February 2022 Nature of Relationship Measurement Method South Africa 49.9% 49.9% Joint Venture Joint Venture Summarised Financial Information Tshipi é Ntle Manganese Mining Proprietary Limited Opening carrying value of joint venture Share of profit using the equity method Dividend paid Total investments using the equity method Current assets (a) Non-current assets Total assets Current liabilities (b) Non-current liabilities Total liabilities Net assets a) Includes cash and cash equivalents b) Includes financial liabilities (excluding trade and other payables) 66 February 2023 $ February 2022 $ 447,779,813 85,966,530 (50,625,070) 483,121,273 224,370,679 288,410,942 512,781,621 72,734,784 82,051,866 154,786,650 357,994,971 68,834,921 12,114,684 430,593,793 42,774,470 (25,588,450) 447,779,813 199,686,438 272,493,961 472,180,399 56,316,197 78,347,316 134,663,513 337,516,886 71,378,479 12,650,726 Summarised Financial Information Revenue Profit for the year Depreciation and amortisation Tax expense February 2023 $ February 2022 $ 796,252,413 172,277,768 51,135,627 62,217,362 672,065,953 85,720,409 77,189,317 35,562,610 In accordance with the Group’s accounting policies and processes, the Group performs impairment testing annually at 28 February. The Board has considered in depth its Tshipi investment with regards to impairments indicators under AASB 136 and both internal and external sources of information. The Board does not believe any indicators exist. Note 11: Trade and other payables Trade payables Income tax payable Sundry payables and accrued expenses Consolidated Group February 2023 $ 38,285,545 22,916 747,488 39,055,949 February 2022 $ 41,833,377 - 121,931 41,955,308 Due to the short term nature of these payables, their carrying value approximates their fair value. The majority of trade payables represent amounts payable to Tshipi relating to the purchase of manganese ore. Refer to Note 2 for further information. Note 12: Employee remuneration Expenses recognised for employee benefits are analysed below: Salary and wages Superannuation costs Payroll and other taxes Share based payments Employee benefits expense Consolidated Group February 2023 $ February 2022 $ 1,279,990 73,643 14,365 94,296 1,462,294 3,618,517 46,053 15,033 - 3,679,603 67 Note 13: Issued capital The share capital of Jupiter consists only of fully paid ordinary shares; the shares do not have a par value. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting of Jupiter. Shares issued and fully paid: Beginning of the year Total contributed equity Note 14: Reserves 2023 No. Shares 2022 No. Shares February 2023 $ February 2022 $ 1,958,991,033 1,958,991,033 383,677,676 383,677,676 1,958,991,033 1,958,991,033 383,677,676 383,677,676 Foreign Currency Translation Reserve $ Equity Instruments at FVOCI Reserve $ Share Based Payment Reserve $ Balance at 1 March 2021 (460,496) (10,339) Exchange difference on translation of foreign operations Fair value loss on equity instruments designated at FVOCI Proceeds on disposal of equity instruments Transfer of fair value reserve of equity instruments designated FVOCI Balance as at 28 February 2022 Exchange difference on translation of foreign operations Fair value gain on equity instruments designated at FVOCI Share based payments 109,946 - - - - (350,550) (801,187) - - (36,927) 928,960 (876,142) 5,552 - 141 - Balance as at 28 February 2023 (1,151,737) 5,693 - - - - - - - - 94,296 94,296 Total $ (470,835) 109,946 (36,927) 928,960 (876,142) (344,998) (801,187) 141 94,296 (1,051,748) Note 15: Capital and leasing commitments The Group leases an office as follows: Non-cancellable operating leases contracted for but not capitalised in financial statements: Minimum lease payments • Not later than 12 months • Between 12 months and 5 years Consolidated Group February 2023 $ February 2022 $ - - - 52,450 - 52,450 During FY2023, the office premises have been capitalised under AASB 16. Refer to Note 26. The lease commitment in FY2022 relates to the periodic lease of office premises. Amounts include rent and outgoings with a 3.5% annual rent review increase. It does not take into account reduced guarantees or returned deposits or incentives. 68 Note 16: Contingent liabilities and assets Contingent liabilities The Parent Entity has provided guarantees to third parties in relation to the performance and obligations of controlled entities in respect of banking facilities. At reporting date, the value of these guarantees and facilities are $214,697 (FY2022: $57,884). Total utilised at reporting date was $214,697 (FY2022: $57,884). Contingent assets No contingent assets exist as at 28 February 2023 or 28 February 2022. Note 17: Segment reporting The Group operates in the mining industry. The Group has identified its operating segments based on the internal reports that are reviewed and used by the chief operating decision makers (the Board of Directors and key management) in assessing performance and determining the allocation of resources. The Group’s segments are structured primarily based on its exploration and production interests. These are considered to be Tshipi (Manganese) which is located in South Africa, and Jupiter’s South African branch which carries the sale of Jupiter’s share of manganese ore. Information is not readily available for allocating the remaining items of revenue, expenses, assets and liabilities, or these items are not considered part of the core operations of any segment. Any transactions between reportable segments have been offset for these purposes. Segment information for the reporting period is as follows: 28 February 2023 Marketing fee revenue Employee benefits expense Other expenses Segment operating profit Jupiter – Manganese (South Africa) $ Tshipi – Manganese (South Africa) $ 9,496,639 (236,998) (255,669) 9,003,972 - - - - Total $ 9,496,639 (236,998) (255,669) 9,003,972 Share of profit from joint venture entities using the equity method - 85,966,530 85,966,530 Finance costs Foreign exchange gain Total Corporate (5,095) 789,064 9,787,941 - - 85,966,530 Net profit before tax from continuing operations Segment assets from continued operations 47,393,256 483,121,273 Corporate assets Total assets Segment liabilities Corporate liabilities Total liabilities (38,321,650) - (5,095) 789,064 95,754,471 (6,016,151) 89,738,320 530,514,529 47,159,685 577,674,214 (38,321,650) (67,447,681) (105,769,331) 69 Central Yilgarn Iron Project – Iron Ore (Australia) $ Jupiter – Manganese (South Africa) $ Tshipi – Manganese (South Africa) $ 7,302,852 (213,706) (100,566) - 6,988,580 - - - - - - - - 12,624,292 12,624,292 - - - - 42,774,470 42,774,470 (1,334) 51,472 - - 12,624,292 7,038,718 42,774,470 Total $ 7,302,852 (213,706) (100,566) 12,624,292 19,612,872 (1,334) 51,472 62,437,480 (17,584,611) 44,852,869 - - 47,146,637 447,779,813 494,926,450 (41,755,854) - 37,808,344 532,734,794 (41,755,854) (55,658,338) (97,414,192) Consolidated Group February 2023 $ 76,470,852 February 2022 $ 53,977,755 39,591 - (607,595) (1,219,862) (85,966,530) 94,296 1,858,437 (2,899,359) 646 10,749,681 (409,340) (1,889,183) 3,199 (12,624,292) (92,638) 143,834 (42,774,470) - 522,225 (503,927) (175,186) 1,356,867 1,050,691 884,058 28 February 2022 Marketing fee revenue Employee benefits expense Other expenses Gain from discontinued operations Segment operating profit Share of profit from joint venture entities using the equity method Finance costs Foreign exchange gain Total Corporate Net profit before tax from continuing operations Segment assets from continued operations Corporate assets Total assets Segment liabilities Corporate liabilities Total liabilities Note 18: Reconciliation of cash flows from operating activities Profit after income tax Adjustments for: Depreciation and amortisation Discontinued operations Interest income Foreign exchange differences Share of profit from joint venture entities using equity method Share based payments Net changes in working capital: Decrease in trade and other receivables Decrease in trade payables and other creditors Increase/(decrease) in provisions Increase in deferred tax liability (Decrease)/increase in deferred tax asset Net cash (used in) / from operating activities 70 Note 19: Events after the reporting date These financial statements were authorised for issue on 30 May 2023 by Managing Director Brad Rogers. Subsequent to year end the Board declared a final dividend for the year ended 28 February 2023 of $0.012 per ordinary share, which was paid on 19 May 2023. Note 20: Related party transactions The Group’s related parties include its associates and joint venture, key management and others as described below. Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received. Outstanding balances are settled in cash. Consolidated Group February 2023 $ February 2022 $ Transactions with key management personnel: Director fees paid to Andrew Bell Consultants, a company in which Mr A Bell has a beneficial interest Director fees paid to Mr P Murray Director fees paid to Mr B Gilbertson Director fees paid to Matakana Investments, a company in which Mr P North has a beneficial interest Director fees to AMCI Investments Pty Ltd, a company in which Mr P Murphy has a beneficial interest Director fees paid to POSCO Australia, a company in which Mr Y Heo has a beneficial interest Director fees paid to POSCO Australia, a company in which Mr B Kim has a beneficial interest Director fees paid to AMCI Finance GmbH, a company in which Mr H Mende has a beneficial interest Director fees paid to Mr I Murray Director fees paid to Mr S Winter Salaries including bonuses Superannuation and equivalents Other short term benefits Total short term employee benefits Long service leave Termination payments Share based payments Total remuneration - - - 76,000 57,500 - 57,500 - 118,057 245,317 705,281 53,656 - 1,313,311 3,928 - 94,296 1,411,535 25,000 27,500 84,552 58,385 14,375 55,264 2,236 41,458 1,644 34,218 718,886 38,125 14,770 1,116,413 3,942 1,884,002 - 3,004,357 71 Expenditure reimbursement to key management personnel Private office and expenses reimbursed to Mr B Gilbertson Expenses reimbursed to Mr P Thapliyal Expenses reimbursed to Mr P Murray Expenses reimbursed to Mr S Winter Expenses reimbursed to Mr B Rogers Expenses reimbursed to AMCI Investments Pty Ltd, a company in which Mr P Murphy has a beneficial interest Expenses reimbursed to Ikan Consulting Pty Ltd, a company in which Mr I Murray has a beneficial interest Total expenditure reimbursed Transactions with joint ventures: Consolidated Group February 2023 $ February 2022 $ - - - 2,500 11,178 12,725 25,295 51,698 59,370 6,763 316 1,702 - - - 68,151 Trade amounts receivable from Tshipi é Ntle Manganese Mining Proprietary Limited (Marketing, management fee and other fees) Trade amounts payable to Tshipi é Ntle Manganese Mining Proprietary Limited (Purchases and other charges) 4,676,158 2,608,734 34,448,292 40,150,848 72 Note 21: Financial instruments The Group’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payables. The totals for each category of financial instruments, measured in accordance with AASB 9 as detailed in the accounting policies to these financial statements, are as follows: Financial Assets Cash and cash equivalents Trade and other receivables Equity instruments at FVOCI Other current assets Financial Liabilities Trade and other payables Consolidated Group February 2023 $ February 2022 $ 49,486,940 43,791,012 6,334 214,697 39,158,487 45,649,449 6,193 57,884 93,498,983 84,872,013 39,055,949 39,055,949 41,955,308 41,955,308 Financial Risk Management Policies Credit Risk Exposures The Directors monitor the Group’s financial risk management policies and exposures and approve financial transactions. The Directors’ overall risk management strategy seeks to assist the Group in meeting its financial targets while minimising potential adverse effects on financial performance. Its functions include the review of credit risk policies and future cash flow requirements. Specific Financial Risk Exposures and Management The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk, liquidity risk and equity price risk. (a) Credit Risk Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group. Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial stability of significant customers and counterparties), ensuring to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment. Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating, or in entities that the Directors have otherwise cleared as being financially sound. The maximum exposure to credit risk by class of recognised financial assets at reporting date, excluding the value of any collateral or other security held, is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented in the statement of financial position. Credit risk also arises through the provision of financial guarantees, as approved at Board level, given to parties securing the liabilities of certain subsidiaries. Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed in Note 7. There are no amounts of collateral held as security in respect of trade and other receivables. The Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Consolidated Group. Credit risk related to balances with banks and other financial institutions is managed by investing cash with major financial institutions in both cash on deposit and term deposit accounts. Interest rates on major deposits that are re-invested are at a fixed rate on a monthly basis. 73 (b) Liquidity Risk Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms: The Group has no significant exposure to liquidity risk due to the level of cash and cash equivalents detailed at Note 6. The Group manages liquidity risk by monitoring immediate and forecast cash requirements and ensuring adequate cash reserves are maintained. The tables below reflect an undiscounted contractual maturity analysis for financial liabilities. Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates. • preparing forward looking cash flow analysis in relation to its operational, investing and financing activities; • monitoring undrawn credit facilities; • obtaining funding from a variety of sources; • maintaining a reputable credit profile; • managing credit risk related to financial assets; • only investing surplus cash with major financial institutions; and • comparing the maturity profile of financial liabilities with the realisation profile of financial assets. Within 1 Year 1 to 5 Years Over 5 Years Total 2023 $ 2022 $ 2023 $ 2022 $ 2023 $ 2022 $ 2023 $ 2022 $ Consolidated Group Financial liabilities Trade and other payables 39,055,949 41,955,308 Total expected outflows 39,055,949 41,955,308 Financial assets Cash and cash equivalents 49,486,940 39,158,487 Trade and other receivables 43,791,012 45,649,449 - - - - Equity instruments at FVOCI - - 6,334 Other current assets 214,697 57,884 - Total expected inflows 93,492,649 84,865,820 6,334 Net inflow on financial instruments 54,436,700 42,910,512 6,334 - - - - 6,193 - 6,193 6,193 - - - - - - - - - - - - - - - - 39,055,949 41,955,308 39,055,949 41,955,308 49,486,940 39,158,487 43,791,012 45,649,449 6,334 214,697 6,193 57,884 93,498,983 84,872,013 54,443,034 42,916,705 74 (c) Market Risk (i) Interest rate risk Market risk arises from the Groups use of interest-bearing and foreign currency financial instruments. It is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), foreign exchange (currency risk) or other market factors (other price risk). Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed-rate financial instruments. The financial assets with exposure to interest rate risk are detailed below (no financial liabilities recognised at the end of the period): Financial Assets Cash and cash equivalents Other current assets Consolidated Group February 2023 $ February 2022 $ 49,486,940 214,697 49,701,637 39,158,487 57,884 39,216,371 (ii) Foreign exchange risk (iii) Other price risk Jupiter operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the US Dollar and South African Rand. Jupiter’s exposure to currency risk is on cash, trade receivables, and borrowings. Foreign currency risk is the risk of exposure to transactions that are denominated in a currency other than the Australian dollar. The carrying amounts of the Group’s financial assets and liabilities are denominated in three different currencies as set out below: 28 February 2023 Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices largely due to demand and supply factors for commodities. As the Group does not derive revenue from sale of products, the effect on profit and equity as a result of changes in the price risk is not considered material. The fair value of the mining projects will be impacted by commodity price changes (predominantly iron ore, nickel and uranium) and could impact future revenues once operational. However, management monitors current and projected commodity prices. AUD ZAR USD Total $ (iv) Summarised sensitivity analysis Financial Assets 15,995,782 32,070,087 1,421,071 49,486,940 The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to interest rate risk and foreign exchange risk. Management have reviewed interest rate and foreign exchange risk and determined the rates applied to be appropriate. 75 Interest Rate Risk Foreign Exchange Risk -50 bps +50 bps -10% +10% 28 February 2023 Carrying Amount $ Profit $ Other Equity $ Profit $ Other Equity $ Other Equity $ Profit $ Other Equity $ Interest Rate Risk Foreign Exchange Risk -50 bps +50 bps -10% +10% 28 February 2022 Carrying Amount $ Profit $ Other Equity $ Profit $ Other Equity $ Profit $ - (4,379,101) - - - - - - - 4,379,101 - - 3,905,595 - (3,905,595) (473,506) 473,506 Profit $ - (4,564,945) - - 4,195,531 (369,614) Other Equity $ - - - - - - Profit $ - 4,564,945 - - (4,195,531) 369,614 - - - - - - 247,435 - - - - 247,435 - - - - - - - - - - - - 195,792 - - - - 195,792 - - - - - - - - - - - - Other Equity $ - - - - - - - - - - - - - - 49,486,940 (247,435) Financial Assets Cash and cash equivalents Trade and other receivables Equity instruments at FVOCI Other current assets 43,791,012 6,334 214,697 Financial Liabilities Trade and other payables 39,055,949 Total (decrease)/increase (247,435) 39,158,487 (195,792) Financial Assets Cash and cash equivalents Trade and other receivables Equity instruments at FVOCI Other current assets 45,649,449 6,193 57,884 Financial Liabilities Trade and other payables 41,955,308 Total (decrease)/increase (195,792) 76 $ 2 2 0 2 $ 3 2 0 2 $ 2 2 0 2 $ 3 2 0 2 $ 2 2 0 2 $ 3 2 0 2 $ 2 2 0 2 $ 3 2 0 2 $ 2 2 0 2 $ 3 2 0 2 $ 2 2 0 2 $ 3 2 0 2 % 2 2 0 2 % 3 2 0 2 l a t o T g n i r a e B t s e r e t n I - n o N s r a e Y 5 r e v O s r a e Y 5 o t 1 r a e Y n i h t i W e t a R t s e r e t n I g n i t a o l F 1 R I E A W g n i r u t a M e t a R t s e r e t n I d e x i F ) v ( , 7 8 4 8 5 1 9 3 , 0 4 9 6 8 4 , , 9 4 - - 9 4 4 , 9 4 6 5 4 , , 2 1 0 1 9 7 3 4 , 9 4 4 , 9 4 6 5 4 , , 2 1 0 1 9 7 3 4 , 3 9 1 6 , 4 3 3 , 6 3 9 1 6 , 4 3 3 , 6 4 8 8 7 5 , 7 9 6 , 4 1 2 4 8 8 7 5 , 7 9 6 , 4 1 2 3 1 0 , 2 7 8 , 4 8 3 8 9 , 8 9 4 , 3 9 6 2 5 , 3 1 7 , 5 4 3 4 0 , 2 1 0 , 4 4 8 0 3 , 5 5 9 1 4 , , 9 4 9 5 5 0 9 3 , 8 0 3 , 5 5 9 1 4 , , 9 4 9 5 5 0 9 3 , 8 0 3 , 5 5 9 , 1 4 9 4 9 , 5 5 0 , 9 3 8 0 3 , 5 5 9 , 1 4 9 4 9 , 5 5 0 , 9 3 - - - - - - - - - - - - - - - - - - - - - - - - - - - - , 0 2 0 3 6 4 8 , 7 5 4 , 6 4 6 8 , 7 6 4 , 5 9 6 0 3 , , 3 8 4 0 4 8 0 4 , - - - - - - - - - - - - - - - - - - - - 0 2 0 , 3 6 4 , 8 7 5 4 , 6 4 6 , 8 7 6 4 , 5 9 6 , 0 3 , 3 8 4 0 4 8 0 4 , 9 1 0 . 7 3 . 1 s t n e l a v i u q e h s a c d n a h s a C : s t e s s A l a i c n a n i F - - - - - - - - - - - - s e l b a v i e c e r r e h t o d n a e d a r T s t e s s a l a i c n a n i f r e h t O s t e s s a t n e r r u c r e h t O s t e s s A l a i c n a n i F l a t o T s e l b a y a p r e h t o d n a e d a r T : s e i t i l i b a i L l a i c n a n i F e t a R t s e r e t n I e v i t c e f f E e g a r e v A d e t h g i e W . 1 77 (d) Net Fair Value The net fair values of cash and cash equivalents and non-interest bearing monetary financial assets and liabilities approximate their carrying value. The net fair value of financial assets and financial liabilities is based upon market prices where a market exists or by discounting the expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles. Listed equity investments have been valued by reference to market prices prevailing at reporting date. February 2023 February 2022 Carrying Amount $ Net Fair Value $ Carrying Amount $ Net Fair Value $ 49,486,940 49,486,940 43,791,012 43,791,012 6,334 214,697 6,334 214,697 39,158,487 45,649,449 6,193 57,884 39,158,487 45,649,449 6,193 57,884 93,498,983 93,498,983 84,872,013 84,872,013 39,055,949 39,055,949 41,955,308 41,955,308 Financial Assets Cash at bank Trade and other receivables Equity instruments at FVOCI Other current assets Financial Liabilities Trade and other payables (e) Categories The carrying amounts of financial assets and financial liabilities in each category are as follows: February 2023 Amortised Cost $ 49,486,940 43,791,012 - 214,697 93,492,649 39,055,949 39,055,949 FVOCI $ - - 6,334 - 6,334 - - Financial Assets Cash and cash equivalents Trade and other receivables Equity instruments at FVOCI Other current assets Financial Liabilities Trade and other payables 78 Financial Assets Cash and cash equivalents Trade and other receivables Equity instruments at FVOCI Other current assets Financial Liabilities Trade and other payables Note 22: Parent company information ASSETS Current assets Non-current assets TOTAL ASSETS LIABILITIES Current liabilities Non-current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Financial assets reserve Accumulated profits TOTAL EQUITY FINANCIAL PERFORMANCE Profit for the period Other comprehensive profit TOTAL COMPREHENSIVE INCOME The parent company commitments are reflected in Note 15. February 2022 Amortised Cost $ 39,158,487 45,649,449 - 57,884 84,865,820 41,955,308 41,955,308 FVOCI $ - - 6,193 - 6,193 - - Consolidated Group February 2023 $ February 2022 $ 80,816,015 450,378,843 531,194,858 36,328,384 22,961,591 59,289,975 76,241,926 415,660,238 491,902,164 39,654,187 16,927,375 56,581,562 471,904,883 435,320,602 383,677,677 1,571,793 86,655,413 383,677,676 1,477,356 50,165,570 471,904,883 435,320,602 42,472,797 141 42,472,938 47,613,777 892,033 48,505,810 79 Note 23: Dividends Dividends declared during the year: In-specie distribution of shares in Juno Minerals Limited, dividend component ($0.0017 per share; declared 25 March 2021, distributed 7 May 2021) Unfranked final dividend ($0.02 per share, wholly conduit foreign income; declared 22 April 2021, paid 21 May 2021) Unfranked interim dividend ($0.005 per share, wholly conduit foreign income; declared 19 October 2021, paid 9 November 2021) 1 Unfranked final dividend ($0.01 per share, wholly conduit foreign income; declared 29 April 2022, paid 20 May 2022) 1 Unfranked interim dividend ($0.01 per share, wholly conduit foreign income; declared 27 October 2022, paid 17 November 2022) 1 Consolidated Group February 2023 $ February 2022 $ - - - 19,589,911 19,589,910 39,179,821 3,242,276 39,179,821 9,794,955 - - 52,217,052 Subsequent to year end, Jupiter declared a final unfranked dividend for FY2023 of $0.012 per share, of wholly conduit foreign income, totalling $23,507,892. The dividend was paid on 19 May 2023. 1The amount of cash dividends declared and paid in the current period totalled $39,179,821 (prior period $48,974,776). Note 24: Auditors’ remuneration Amounts paid or payable to the auditors of the Company and charged as an expense were: Audit and review of the financial statements • • Auditors of Jupiter Auditors of subsidiary or related entities Remuneration for audit and review of financial statements Other non-audit services • Taxation and other services Total other service remuneration Total auditors’ remuneration Consolidated Group February 2023 $ February 2022 $ 139,407 13,493 152,900 45,002 45,002 197,902 109,120 14,081 123,201 38,418 38,418 161,619 80 Note 25: Disposal group classified as held for distribution to owners and discontinued operations (a) Demerger – Juno Minerals Limited During the prior financial year, Jupiter completed the demerger of its Central Yilgarn Iron Ore assets through Juno Minerals Limited (Juno). Consequently, assets and liabilities allocable to the assets were classified as a disposal group in the prior year and have been disposed in the prior year. Prior year revenue and expenses, gains and losses relating to the discontinuation of this subgroup have been eliminated from profit or loss from the Group’s continuing operations and are shown as a single line item in the statement of profit or loss. The Group recognised a net accounting profit on demerger as follows: Fair value of Juno on demerger (i) Carrying value of net assets of Juno Pre-tax profit on demerger February 2022 $ 30,000,000 (17,375,708) 12,624,292 (i) The fair value of the assets included in the demerger was based on management’s assessment of the fair value of the Central Yilgarn Iron Project and peer group analysis, and the seed capital funding provided to Juno. The demerger distribution is accounted for as a reduction in equity split between share capital $26,757,724 and demerger dividend of $3,242,276. The difference between the fair value of the distribution and the capital reduction amount is the demerger dividend. (b) Discontinued operations – Juno Gain on demerger Profit for the year from discontinued operations Note 26: Leases February 2023 $ - - February 2022 $ 12,624,292 12,624,292 The Company has a five year lease agreement for office premises at 220 St Georges Terrace, Perth, WA. February 2023 $ February 2022 $ Lease Liabilities Current Non-current Total Lease Liabilities 82,621 421,550 504,171 The future minimum lease payments arising under the Company’s lease contracts at the end of the reporting period are as follows: 28 February 2023 Lease payments Finance charges Net present value Within 1 Year $ 120,433 (37,812) 82,621 Recognised in 1-5 Years $ 489,934 (68,384) 421,550 - - - Total $ 610,367 (106,196) 504,171 81 Right of use asset Right of use assets - at cost Less accumulated depreciation Carrying amount of right of use assets Note 27: Share-based payments February 2023 $ February 2022 $ 523,532 (32,721) 490,811 - - - During the year ended 28 February 2023 the following options and shares were issued to the Chief Executive Officer: - - 1,000,000 share options; and rights to 1,000,000 fully paid ordinary shares. Share options Set out below is a summary of unlisted options outstanding at 28 February 2023. On 1 August 2022, the Chief Executive Officer received 1,000,000 Share Options (exercisable into 1,000,000 fully paid ordinary shares), with a zero exercise price, vesting as follows: 1. 500,000 Share Options vest and are capable of exercise only when the Company’s share price achieves a 30 day VWAP of greater than $0.40; and 2. 500,000 Share Options vest and are capable of exercise only when the Company’s share price achieves a 30 day VWAP of greater than $0.50. Vested Unvested Issue Date Expiry date Exercise price (Cents) Fair value per unit (Cents) Total fair value $ Unlisted options - 1,000,000 01/08/22 25/07/25 - 0.046 46,200 The following share options were issued during the year ended 28 February 2023, alongside the key inputs utilised in the pricing model. The Group has determined the fair value of its options awarded using the Monte Carlo pricing model. Granted during the year Grant date Expiry date Fair value of option at Grant date ($) Exercise price (Cents) Risk free rate Expected volatility 1,000,000 01/08/22 25/07/25 0.046 - 2.68% 51.88% Total: Value of options granted during the year ($) 46,200 46,200 Amount of expense recognised during the year ($) 8,983 8,983 Rights to Ordinary Shares On 1 August 2022, the Chief Executive Officer received the right to be issued 1,000,000 fully paid ordinary shares in the Company as a signing incentive: Awarded during the year 500,000 500,000 Award date 01/08/22 01/08/22 Vesting date Expiry date Fair value of performance right at award date ($) No. vested during year No. lapsed during year 31/07/23 31/07/24 N/A N/A 0.195 0.195 - - - - Total Amount of expense recognised during the year ($) 56,875 28,438 85,313 82 DIRECTORS’ DECLARATION The Directors of Jupiter Mines Limited declare that: 1. the financial statements, notes and the additional disclosures included in the Directors Report designated as audited, of the consolidated entity are in accordance with the Corporations Act 2001 including: (a) complying with Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and (b) give a true and fair view of the financial position as at 28 February 2023 and of the performance for the year ended on that date of the consolidated entity; 2. The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1. 3. There are reasonable grounds to believe that Jupiter Mines Limited will be able to pay its debts as and when they become due and payable. 4. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 28 February 2023. Signed on behalf of the Board of Directors Brad Rogers Managing Director and Chief Executive Officer 30 May 2023 Perth, Australia 83 INDEPENDENT AUDITOR’S REPORT Grant Thornton Australia Limited Level 43 Central Park 152-158 St Georges Terrace Perth WA 6000 PO Box 7757 Cloisters Square Perth WA 6850 T +61 8 9480 2000 (cid:36)(cid:88)(cid:71)(cid:76)(cid:87)(cid:82)(cid:85)(cid:182)(cid:86)(cid:3)(cid:44)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:39)(cid:72)(cid:70)(cid:79)(cid:68)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) To the Directors of Jupiter Mines Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Jupiter Mines Limited for the year ended 28 February 2023, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b no contraventions of any applicable code of professional conduct in relation to the audit. Grant Thornton Audit Pty Ltd Chartered Accountants B P Steedman Partner – Audit & Assurance Perth, 30 May 2023 www.grantthornton.com.au ABN-41 127 556 389 ACN-127 556 389 Grant Thornton Australia Ltd ABN 41 127 556 389 ACN 127 556 389. ‘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 Limited 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 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. w 84 INDEPENDENT AUDITOR’S REPORT Grant Thornton Australia Limited Level 43 Central Park 152-158 St Georges Terrace Perth WA 6000 PO Box 7757 Cloisters Square Perth WA 6850 T +61 8 9480 2000 Independent Auditor’s Report To the Members of Jupiter Mines Limited Report on the audit of the financial report Opinion We have audited the financial report of Jupiter Mines Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 28 February 2023, 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 Directorsʼ 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 Groupʼs financial position as at 28 February 2023 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 Auditorʼs 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 Boardʼs APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (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. www.grantthornton.com.au ABN-41 127 556 389 ACN-127 556 389 Grant Thornton Australia Ltd ABN 41 127 556 389 ACN 127 556 389. ‘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 Limited 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 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. w 85 INDEPENDENT AUDITOR’S REPORT 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. Impairment on Investments accounted for using the equity method Note 1(e) and Note 10 The Group recorded an equity method investment totalling $483,121,273 (2022: $447,779,813) as at 28 February 2023 in relation to its 49.9% ownership in Tshipi é Ntle Manganese Mining Proprietary Limited. The Group recognises this investment as a joint venture using the equity method in accordance with AASB 128 Investment in Associates and Joint Ventures and is considered for impairment in the event of significant or prolong decline in value. Our procedures included, amongst others: • Evaluating the appropriateness of managements use of the equity method to account for the investment in Tshipi é Ntle Manganese Mining Proprietary Limited in accordance with AASB 128; • Obtaining and corroborating managementʼs assessment of impairment indicators; • Independently assessing whether any impairment indicators exist; Management assesses impairment indicators on an annual basis in accordance with AASB 136 Impairment of Assets. • Reviewing internal reporting prepared by management to assess the performance of Tshipi é Ntle Manganese Mining Proprietary Limited; This area is a key audit matter due to the significant balance carried by the Group that management have assessed using estimates and judgements. • Reviewing the work of the component auditors of Tshipi é Ntle Manganese Mining Proprietary Limited; • Evaluating the key inputs and assumptions included in managementʼs internal reporting; and • Assessing the adequacy and appropriateness of the related financial statement disclosures. Information other than the financial report and auditorʼs report thereon The Directors are responsible for the other information. The other information comprises the information included in the Groupʼs annual report for the year ended 28 February 2023 but does not include the financial report and our auditorʼs 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 Groupʼs 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. 86 Grant Thornton Australia Limited 2 INDEPENDENT AUDITOR’S REPORT Auditorʼs 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 auditorʼs 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_2020.pdf.This description forms part of our auditorʼs report. Report on the remuneration report Opinion on the remuneration report We have audited the Remuneration Report included in pages 27 to 35 of the Directorsʼ report for the year ended 28 February 2023. In our opinion, the Remuneration Report of Jupiter Mines Limited, for the year ended 28 February 2023 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 B P Steedman Partner – Audit & Assurance Perth, 30 May 2023 87 Grant Thornton Australia Limited 3 ADDITIONAL INFORMATION FOR LISTED COMPANIES Additional information required by the ASX listing rules and not disclosed elsewhere in this report is set out below. The information is effective as at 10 May 2023. Substantial shareholders The number of substantial shareholders and their associates are set out below: Name Ntsimbintle Holdings (Pty) Ltd Safika Resources (Pty) Ltd Hans J. Mende Fritz R. Kundrun AMCI Group, LLC POSCO Australia GP Pty Ltd (and its associate POSCO Australia Pty Ltd) Number of fully paid ordinary shares % holding 389,917,225 389,917,225 252,458,801 240,251,826 145,845,372 134,992,472 19.90 19.90 12.89 12.26 7.44 6.89 The above holdings are as per the Substantial Holder notices lodged with ASX and reflect the percentage of voting rights of each Substantial Holder and not necessarily their actual holding in the Company. Voting rights Ordinary Shares: On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Distribution of equity security holders Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Number of shareholders Number of shares % of capital 197 976 732 2,250 596 43,968 3,080,954 6,081,931 87,060,779 1,862,723,401 0.00 0.16 0.31 4.44 95.09 Shareholders with less than a marketable parcel As at 10 May 2023 there were 527 shareholders on the register holding less than a marketable parcel ($500) based on the closing market price of $0.21. 88 Twenty largest shareholders Shareholder Ntsimbintle Holdings (Pty) Ltd HSBC Custody Nominees (Australia) Limited AMCI Group LLC POSCO Australia GP Pty Ltd Citicorp Nominees Pty Limited HJM Jupiter L.P. FRK Jupiter L.P. BNP Paribas Noms Pty Ltd JP Morgan Nominees Australia Pty Limited Jwalpa Limited BNP Paribas Nominees Pty Ltd Mr Kenneth Joseph Hall Cockcroft Holdings Limited Netwealth Investments Limited Palm Beach Nominees Pty Limited National Nominees Limited NGE Capital Limited E-Tech Capital Pty Ltd Treasury Services Group Pty Ltd 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Hanco Invest Pty Ltd Unissued equity securities There are no unissued equity securities. Securities exchange The Company is listed on the Australian Securities Exchange. Number of shares held % of issued capital 389,917,225 206,289,896 145,845,372 134,992,472 126,629,769 110,113,430 94,406,455 78,362,828 68,183,257 67,032,038 63,712,339 26,000,000 24,816,226 15,458,298 11,711,960 10,025,055 8,258,153 7,006,285 6,996,299 6,265,096 19.90 10.53 7.44 6.89 6.46 5.62 4.82 4.00 3.48 3.42 3.25 1.33 1.27 0.79 0.60 0.51 0.42 0.36 0.36 0.32 89 90 J u p i t e r M i n e s L t d | A n n u a l R e p o r t 2 0 2 3 Level 7, 16 St Georges Terrace Perth, Western Australia, 6000 T +61 8 9346 5500 jupitermines.com Level 8, 220 St Georges Terrace Perth, Western Australia, 6000 T +61 8 9346 5500 jupitermines.com
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