& Controlled Entities
Annual Report
For the year ended 30 June 2020
Krakatoa Resources Limited
& Controlled Entities
CONTENTS
CORPORATE DIRECTORY ................................................................................................................... 3
DIRECTORS’ REPORT .......................................................................................................................... 4
AUDITOR’S INDEPENDENCE DECLARATION .................................................................................. 15
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
.............................................................................................................................................................. 16
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................... 17
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................... 18
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................ 19
NOTES TO THE FINANCIAL STATEMENTS ...................................................................................... 20
DIRECTORS’ DECLARATION.............................................................................................................. 36
INDEPENDENT AUDITOR’S REPORT ................................................................................................ 37
CORPORATE GOVERNANCE STATEMENT ...................................................................................... 40
ASX INFORMATION ............................................................................................................................. 57
SCHEDULE OF MINERAL TENEMENTS ............................................................................................ 60
– 2 –
Krakatoa Resources Limited
& Controlled Entities
CORPORATE DIRECTORY
PRINCIPAL AND REGISTERED OFFICE
Level 11, 216 St Georges Terrace
Perth WA 6000
Tel: +61 8 9481 0389
Fax: +61 8 9463 6103
Email: admin@ktaresources.com
Web: https://ktaresources.com
DIRECTORS
Colin Locke – Executive Chairman
Timothy Hogan – Non-Executive Director
David Palumbo – Non-Executive Director
COMPANY SECRETARY
David Palumbo
SHARE REGISTRAR
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Tel: +61 8 9323 2000
Fax: +61 8 9323 2033
Web: www.computershare.com.au
AUDITORS
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
PERTH WA 6000
STOCK EXCHANGE LISTING
Australian Securities Exchange
ASX Code: KTA
– 3 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT
Your directors present the following report on Krakatoa Resources Limited (the “Company”) and
controlled entities (referred to hereafter as the “Group”) for the financial year ended 30 June 2020.
DIRECTORS
The names of directors in office at any time during the financial year and up to the date of this report
are:
- Colin Locke (Executive Chairman)
- Timothy Hogan (Non-Executive Director)
- David Palumbo (Non-Executive Director)
Unless noted above, all directors have been in office since the start of the financial year to the date of
this report.
COMPANY SECRETARY
The following persons held the position of Company secretary during the financial year:
- David Palumbo
PRINCIPAL ACTIVITIES
The principal activity of the Group during the financial year was the acquisition and exploration of
resource based projects.
OPERATING RESULTS
The loss of the Group after providing for income tax amounted to $2,650,603 (2019: $739,390).
FINANCIAL POSITION
As at 30 June 2020, the Group had a cash balance of $686,170 (2019: $407,285) and a net asset
position of $478,986 (2019: $250,767).
DIVIDENDS PAID OR RECOMMENDED
No dividends have been paid, and the directors do not recommend the payment of a dividend for the
financial year ended 30 June 2020.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
No significant changes in the state of affairs occurred during the financial year.
REVIEW OF OPERATIONS
During the financial period, the Company pivoted its activities towards the Belgravia Project and
identifying targets in Australia’s best known porphyry jurisdiction – the Lachlan Fold Belt, NSW.
– 4 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
Belgravia Project
The Belgravia Project covers an area of 80km2 and is located in the central part of the Molong
Volcanic Belt (MVB), Lachlan Fold Belt, NSW. It contains the same rocks (Fairbridge Volcanics and
Oakdale Formation), or their lateral equivalents, that respectively host the giant Cadia-Ridgeway mine
35km south and Alkane Resources' Boda discovery 65km north. Historical exploration at Belgravia
has failed to adequately consider the regolith and tertiary basalt (up to 40m thick) that obscures much
of the prospective geology. The Project contains six targets with considerable exploration potential for
porphyry Cu-Au and associated skarn mineralisation.
On 5 December 2019, the Company completed the acquisition of the Belgravia Project, with all
conditions precedent being satisfied. The Company paid AUD$300,000, issued 10,000,000 fully paid
ordinary shares and executed a deed for the 1% Net Smelter Royalty as consideration for the
acquisition of the Project.
Aircore program – Belgravia Project, Bell Valley Target Area
Gold and multielement assay results from the aircore drilling program were announced on 22 April
2020 and interpreted to have further heightened the prospectivity of the Bell Valley area. Among
findings were two gold highs, 0.192 ppm Au and 0.187 ppm Au occur in lenses of quartz-rich gravels
located beneath tertiary basalt.
– 5 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
Aeromagnetic survey
The March 2020 quarter commenced with the Company receiving the results from the drone
aeromagnetic survey on the Bell Valley Target Area completed in late 2019. Results identified several
magnetic and structural features with geological similarity to the adjacent Copper Hill and Cadia
Valley copper-gold deposits.
Successful outcomes from the high-resolution drone survey at Bell Valley saw the Company swiftly
complete a high-resolution aeromagnetic survey across the entire Belgravia Project
DGPR program – Belgravia Project, Bell Valley Target Area
A deep ground penetrating radar ("DGPR") survey was completed during the June 2020 quarter at
Belgravia. The objective was to map the sub-surface geology and provide evidence of favourable
hosting environments for mineralisation.
DGPR results for Bell Valley were announced after the period end with several anomalous zones
revealed.
The Company considers the economic potential for copper-gold mineralisation associated with a
porphyry in the Bell Valley area may lie at depth (>200m) and the DGPR supports high-grade copper-
gold veins potentially extending upwards from a porphyry source forming a secondary target at
shallower levels.
DGPR program – Belgravia Project, Sugarloaf Target Area
A DGPR survey totalling 5,810m across 5 lines at Sugarloaf was completed during the June 2020
quarter. The DGPR identified seven anomalies, forming two separate polygons striking over 900m
and 500m respectively. The DGPR results support the previously recognised prospectivity and
solidifies the area as drill-ready.
Turon Project
The Turon Project covers an area of 120km2. It is situated approximately 50km east of the Company's
Belgravia Project and 60km northeast of Newcrest Mining's Cadia Valley Operations, in the Hill End
Synclinorial Zone, NSW. The geology at Turon bears many similarities in terms of host-rocks,
structural and mineralisation-style to other high-grade turbidite-hosted gold deposits, including
Fosterville in the Bendigo-Ballarat zone, central Victoria.
Past explorers report numerous significant gold grades from chip and mullock sampling along the
length of the gold workings, including 1,535g/t, 135g/t, 26g/t, 14.6g/t, 12.55g/t and 11.3 g/t Au. The
outstanding chip result of 1,535g/t gold lies south of Dead Horse Reef and remains untested by
drilling.
DGPR program – Turon Project, Britannia Mine
The DGPR survey completed in the June 2020 quarter at Britannia comprised eight lines for 3,448
metres. Interpretation across Britannia prospect identified two critical DGPR anomalies thought to
coincide with structurally controlled quartz veining. Their relative depth distinguishes the anomalies
with a shallower anomaly that directly corresponds with the historic Britannia workings, and a deeper
anomaly offset from the known mineralisation which remains untested.
Proposed drill program - Turon
Quartz Ridge and Box Ridge at Turon represent exciting shallow exploitable opportunities for the
Company where multiple walk-up drill targets with significant historical gold tenor are known.
Rand Project
The Company procured the Rand Project through direct license application, In the June quarter 2020.
The project includes four contiguous exploration licence applications, covers a combined area of
580km2 , and is located approximately 60km NNW of Albury in southern NSW. The Project contains a
largely masked by colluvium. Gold
40km structural corridor with
mineralisation is associated with emplacement of the I-type Jindera granite, which is mostly captured
by project.
the prospective geology
– 6 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
Mt Clere Rare Earth Project
The Mt Clere Rare Earth Project comprises four tenement applications covering a total area of
1,153km2, located approximately 200km northwest of Meekatharra, within the Gascoyne Region of
Western Australia.
Previous exploration programs were completed by BHP, Astro Mining NL, and All-Star Resources Plc,
all of which delineated numerous prospective areas for thorium and REE mineralisation (refer to ASX
announcement dated 19 June 2019). However, no field work was conducted in the second half of the
2020 financial year.
Dalgaranga Project
The Dalgaranga Project is located 80km northwest of Mount Magnet in Western Australia and lies
within the Dalgaranga Greenstone Belt. The Dalgaranga Greenstone Belt is about 50km long and up
to 20km wide and contains gold mineralisation (Dalgaranga gold mine), a zinc deposit (Lasoda),
graphite deposits, and occurrences of tantalum, beryllium, tin, tungsten, lithium and molybdenum
related to pegmatites. No work was conducted on the Dalgaranga Project during the June 2020
quarter.
The Company has concluded
is prospective for base metal
that the Dalgaranga Project
mineralisation, as it lies along strike from the Lasoda VMS mineralisation, contains the right rocks
(west of the knotted schists exposed in the open pit) and contains an EM conductor in the south of the
property that is, in-turn, supported by coincident lead soil geochemistry.
Mac Well Project
The Mac Well Project has a land area of 66.9km2 and is located 10km west of the Company's
Dalgaranga Project. The Project contains a 7.5km strike along the prospective Warda Warra
greenstone belt, mostly untested due to a thick transported cover. The Company considers favourable
structural conditions for gold mineralisation are likely within the Mac Well tenement, acknowledging
the significance and prospectivity of the western granite-greenstone contact, as evidenced by the
Western Queen Mine.
During the year, the Company submitted 9 samples for micro analysis and completed a short field
program, confirming the widespread occurrences of ultramafic and gabbroic rocks in areas previously
mapped as granite or alluvium/colluvium.
– 7 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
INFORMATION ON DIRECTORS
Colin Locke
Executive Chairman
From 1984 to 1993, Colin Locke worked in the mining industry
processing base and precious metals. During this time, he traded
resource stocks and international futures contracts.
In 1993, Mr. Locke joined an Australian commodity and futures
broking firm as an investment advisor and became a Director in
1994. In 1998 Mr. Locke founded a boutique Australian Financial
Services firm and held the position of Managing Director from
1999 until 2010.
In 2007 Mr. Locke held the role of Corporate Advisor during the
acquisition process for the Mayoko iron ore project in the
Republic of Congo that was subsequently taken over in 2010 for
circa AUD 50mi and later on sold for over 300mi.
thought
From 2008, Mr. Locke focused on natural resources exploration
pursuits
founded
Western Mining Network Ltd, (now European Cobalt, EUC)
where he held the role of Executive Director from 2010 until
2012.
Indonesian archipelago and
the
Interest in Securities
Mr. Locke brings to the board and shareholders a mining related
background with business management and financial experience
spanning over 30 years.
129,000 Fully paid ordinary shares
7,000,000 options exercisable at $0.05 on or before 31 July 2021
4,000,000 options exercisable at $0.10 on or before 24 October
2020
Directorships held
listed entities
in other
None
Timothy Hogan
Non-Executive Director
Mr. Hogan has approximately 25 years’ experience in the
stockbroking industry in Australia, initially as a founding private
client advisor at Hogan and Partners. Mr. Hogan has provided
corporate and execution services for a wide variety of corporate
and private clients.
Mr. Hogan is currently a Director of Barclay Wells Limited, a
boutique advisory firm that specialises in Australian resource
stocks, and has assisted many companies from their initial capital
raising and flotation on the ASX through to production. Mr. Hogan
brings extensive experience and a wide range of contacts that
will benefit the Company.
6,000,000 options exercisable at $0.05 on or before 31 July 2021
4,000,000 options exercisable at $0.10 on or before 24 October
2020
– 8 –
Interest in Securities
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
Directorships held in other
listed entities
None
David Palumbo
Non-Executive Director & Company Secretary
Mr Palumbo is a Chartered Accountant and graduate of the
Australian Institute of Company Directors with over fourteen
years’ experience across company secretarial, corporate
advisory and financial management and reporting of ASX listed
companies. Mr Palumbo is an employee of Mining Corporate Pty
Ltd, where he has been actively involved in numerous corporate
transactions. Mr Palumbo is currently a Non-Executive Director of
Kaiser Reef Limited (ASX: KAU).
501,500 Fully paid ordinary shares
2,539,389 options exercisable at $0.05 on or before 31 July 2021
2,000,000 options exercisable at $0.10 on or before 24 October
2020
Interest in Securities
Directorships held in other
listed entities
None
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each director of Krakatoa Resources
Limited and for the executives receiving the highest remuneration.
1. Employment Agreements
Mr Colin Locke has worked for the Group in an executive capacity as Executive Chairman since his
appointment on 6 August 2015. Under the terms of the executive agreement, Mr Locke’s total
remuneration package is currently $144,000 (increased from $60,000 from 1 October 2019). A $24,000
travel allowance was also paid during the year to cover associated costs. An additional $5,000 was
paid in September before the increased remuneration package to recognise the increased workload.
The executive agreement may be terminated by either party with 3 months’ written notice.
Appointments of non-executive directors Timothy Hogan and David Palumbo are formalised in the form
of service agreements between themselves and the Group. Their engagements have no fixed term but
cease on their resignation or removal as a director in accordance with the Corporations Act 2001. Mr
Hogan is currently entitled to receive directors’ fees of $30,000 plus superannuation (decreased from
$60,000 from 1 February 2020) and Mr Palumbo is currently entitled to receive directors’ fees of
$60,000 per annum.
2. Remuneration policy
The Group’s remuneration policy has been designed to align director and executive objectives with
shareholder and business objectives by providing a fixed remuneration component and offering
specific long-term incentives based on key performance areas affecting the Group’s financial results.
The board believes the remuneration policy to be appropriate and effective in its ability to attract and
retain the best executives and directors to run and manage the Group, as well as create goal
congruence between directors, executives and shareholders.
– 9 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
The board’s policy for determining the nature and amount of remuneration for board members and
senior executives of the Group is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and other
senior executives, was developed by the board.
All executives receive a base salary (which is based on factors such as length of service and
experience), superannuation and are entitled to the issue of share options.
Incentive paid in the form of share options are intended to align the interests of directors and
Group with those of the shareholders.
The performance of executives is measured against criteria agreed annually with each executive and is
based predominantly on the forecast growth of the Group’s shareholders’ value. The board may,
however, exercise its discretion in relation to approving incentives, bonuses and options, and can
recommend changes to the committee’s recommendations. Any changes must be justified by reference
to measurable performance criteria. The policy is designed to attract the highest calibre of executives
and reward them for performance that results in long-term growth in shareholder wealth.
Executives are also entitled to participate in the employee share and option arrangements. All
remuneration paid to directors and executives is valued at the cost to the Group and expensed, or
capitalised to exploration expenditure if appropriate. Options, if given to directors and executives in
lieu of remuneration, are valued using the Black-Scholes methodology. The board policy is to
remunerate non-executive directors at market rates for time, commitment and responsibilities. The
remuneration committee determines payments to the non-executive directors and reviews their
remuneration annually, based on market practice, duties and accountability. Independent external
advice is sought when required.
The maximum aggregate amount of fees that can be paid to directors is $300,000. Fees for non-
executive directors are not linked to the performance of the Group. However, to align directors’
interests with shareholder interests, the directors are encouraged to hold shares in the Group and are
able to participate in the employee share option plan.
3. Performance-based remuneration
There is currently no performance-based remuneration policy in place.
4. Details of remuneration for the year ended 30 June 2020
The remuneration for each key management personnel of the Group during the financial year ended
30 June 2020 and 30 June 2019 was as follows:
2020
Key Management
Person
Directors
Colin Locke
Timothy Hogan
David Palumbo
Short-term
Benefits
Post-
employment
Benefits
Other
Long-
term
Benefits
Share based
Payment
Total
Perfor-
mance
Related
Value of
Options Re-
muneration
Cash, salary
&
commissions
$
Super-
annuation
Other Equity Options
$
$
$
$
$
%
%
152,000
47,500
60,000
-
4,513
-
259,500
4,513
-
-
-
-
-
-
-
-
- 152,000
-
-
52,013
60,000
- 264,013
-
-
-
-
-
-
– 10 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
2019
Key Management
Person
Directors
Colin Locke
Timothy Hogan
David Palumbo
Short-term
Benefits
Post-
employment
Benefits
Other
Long-
term
Benefits
Share based
Payment
Total
Perfor-
mance
Related
Value of
Options Re-
muneration
Cash, salary
&
commissions
$
Super-
annuation
Other Equity Options
$
$
$
$
$
%
%
84,000
60,000
40,000
-
5,700
-
184,000
5,700
-
-
-
-
-
-
-
-
-
-
-
84,000
65,700
40,000
- 189,700
-
-
-
-
-
-
5. Equity holdings of key management personnel
Shareholdings
Number of shares held by key management personnel during the financial year ended 30 June 2020
was as follows:
2020
Directors
Colin Locke
Timothy Hogan
David Palumbo
Total
Balance
1.7.2019
No.
Received as
Compensation
No.
Options
Exercised
No.
Net Change
Other
No.
Balance
30.6.2020
No.
129,000
-
501,500
630,500
-
-
-
-
-
-
-
-
-
-
-
-
129,000
-
501,500
630,500
Option holdings
Number of options held by key management personnel during the financial year ended 30 June 2020
was as follows:
2020
Balance
1.7.2019
No.
Received as
Compensation
No.
Options
Expired
No.
Net Change
Other
No.
Balance
30.6.2020
No.
Directors
Colin Locke
Timothy Hogan
David Palumbo
Total
11,000,000
10,000,000
4,539,389
25,539,389
-
-
-
-
-
-
-
-
-
-
-
-
11,000,000
10,000,000
4,539,389
25,539,389
– 11 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
6. Other transactions with key management personnel
During the year ended 30 June 2020, Barclay Wells Limited, an entity which Timothy Hogan is a
director, invoiced for brokerage of $16,451 plus GST on $267,500 raised in the share placements
completed in the 2020 financial year. The services were provided on arm’s length terms.
There were no other transactions with key management personnel during the 2020 financial year.
7. Equity instruments granted as compensation
There were no other equity instruments granted as compensation during the year.
8. Company Performance
The earnings of the consolidated entity for the five years to 30 June 2020 are summarised below:
Sales revenue
EBITDA
EBIT
2020
2019
$
-
$
-
2018
restated
2017
restated
$
-
$
-
2016**
$
-
(2,650,603)
(739,390)
(1,122,558)
(1,712,265)
(1,171,305)
(2,650,603)
(739,390)
(1,122,558)
(1,712,265)
(1,171,305)
(Loss) after income tax
(2,650,603)
(739,390)
(1,122,558)
(1,712,265)
(1,171,305)
** Figures have not been restated
The factors that are considered to affect total shareholder return ('TSR') are summarised below:
Share price at financial year end ($)
2020
0.038
Dividends declared (cents per share)
-
Basic loss per share (cents per share)
(1.47)
2019
0.022
-
(0.63)
2018
restated
2017
restated
0.027
-
(1.08)
0.04
-
(2.61)
2016**
0.18
-
(2.3)
** Figures have not been restated
End of “Remuneration Report (Audited)”
– 12 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
MEETINGS OF DIRECTORS
The number of Directors' meetings held during the financial year and the number of meetings attended
by each Director are:
Director
Colin Locke
Timothy Hogan
David Palumbo
Directors’ Meetings
Number eligible to attend
2
2
2
Number attended
2
2
2
EVENTS AFTER THE REPORTING PERIOD
On 13 July 2020, the Company announced that it had received firm commitments from professional
and sophisticated investors to raise $2,400,000 (before costs) via a placement of 30,000,000 ordinary
shares at an issue price of $0.08 per share.
No matters or circumstances have arisen since the end of the financial period which significantly
affected or may significantly affect the operations of the Group, the results of those operations, or the
state of affairs of the Group in future financial periods.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to
indemnify the auditor of the company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the
auditor of the company or any related entity.
ENVIRONMENTAL ISSUES
The Group’s operations are subject to significant environmental regulation under the law of the
Commonwealth and State in relation to discharge of hazardous waste and materials arising from any
mining activities and development conducted by the Group on any of its tenements. To date there
have been no known breaches of any environmental obligations.
INDEMNIFYING AND INSURANCE OF OFFICERS
The Group has entered into deeds of indemnity with each director and the company secretary
whereby, to the extent permitted by the Corporations Act 2001, the Group agreed to indemnify each
director against all loss and liability incurred as an officer of the Group, including all liability in
defending any relevant proceedings.
The Group has paid premiums to insure each of the directors and the company secretary against
liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of
their conduct while acting in the capacity of director of the Group, other than conduct involving a wilful
breach of duty in relation to the Group. The disclosure of the amount of the premium is prohibited by
the insurance policy.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
Further information, other than as disclosed this report, about likely developments in the operations of
the Group and the expected results of those operations in future periods has not been included in this
report as disclosure of this information would be likely to result in unreasonable prejudice to the
Group.
– 13 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in
any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the
Group for all or any part of those proceedings.
The Group was not a party to any such proceedings during the year.
NON-AUDIT SERVICES
The following fees were paid or payable to the auditor for non-audit services provided during the year
ended 30 June 2020:
—
taxation services
$
750
The directors are satisfied that the provision of non-audit services during the year by the auditor is
compatible with the general standard of independence for auditors imposed by the Corporations Act
2001.
The directors are of the opinion that the non-audit services provided by the auditor do not compromise
the auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed and approved to ensure that they do not impact the
integrity and objectivity of the auditor; and
none of the services provided undermine the general principles relating to auditor independence
as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting
Professional and Ethical Standards Board.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF RSM AUSTRALIA
PARTNERS
There are no officers of the Company who are former partners of RSM Australia partners.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2020 has been received and
can be found on the next page of the directors’ report.
Auditor
RSM Australia Partners continues in office in accordance with section 327C of the Corporations Act
2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001
Colin Locke
Executive Chairman
Dated: 29 September 2020
– 14 –
Level 32, Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
RSM Australia Partners
T +61 8 9261 9100
F +61 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Krakatoa Resources Limited for the year ended 30 June
2020, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 29 September 2020
ALASDAIR WHYTE
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Krakatoa Resources Limited
& Controlled Entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Revenue
Administration expense
Compliance and regulatory expense
Employee benefits expense
Exploration expenditure and project evaluation costs
Travel expenses
Share based payment expense
Loss before income tax expense
Income tax expense
3
Note
2
2020
$
2019
$
14,352
-
(128,549)
(311,450)
(264,013)
(1,888,397)
(72,546)
-
(2,650,603)
-
(63,758)
(240,749)
(189,700)
(168,197)
(76,986)
-
(739,390)
-
Loss from continuing operations after tax
(2,650,603)
(739,390)
Loss attributable to members of the parent entity
(2,650,603)
(739,390)
Other comprehensive income, net of tax
Reclassification adjustments
Reclassification to profit or loss on loss of control of
subsidiary
Other comprehensive income/(loss)
-
-
Total comprehensive (loss) attributable to members
of the parent entity
(2,650,603)
(739,390)
Basic and diluted loss per share (cents per share)
4
(1.47)
(0.63)
The accompanying notes form part of these financial statements.
– 16 –
Krakatoa Resources Limited
& Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Note
2020
$
2019
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
5
6
8
9
10
686,170
43,811
407,285
22,226
729,981
429,511
729,981
429,511
250,995
178,744
250,995
178,744
250,995
178,744
478,986
250,767
12,057,138
1,819,885
(13,398,037)
9,453,316
1,544,885
(10,747,434)
478,986
250,767
The accompanying notes form part of these financial statements.
– 17 –
Krakatoa Resources Limited
& Controlled Entities
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Note
Issued
Capital
$
Accumulated
Losses
$
Option
Premium
Reserve
$
Foreign
Currency
Translation
Reserve
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
630,223
(739,390)
-
(739,390)
385,000
(25,066)
-
250,767
250,767
(2,650,603)
(2,650,603)
2,792,500
(188,678)
275,000
478,986
Balance at 1 July 2018
9,093,382
(10,008,044) 1,544,885
Loss for the year
Other comprehensive income
Total comprehensive loss
-
-
-
(739,390)
-
(739,390)
with
owner
Transactions
directly recorded in equity
Shares issued during the year
Less: transaction costs arising
from issue of shares
Options issued during the year
Balance at 30 June 2019
9
9
385,000
-
(25,066)
-
9,453,316
-
-
(10,747,434) 1,544,885
-
-
-
-
-
-
Balance at 1 July 2019
9,453,316 (10,747,434) 1,544,885
Loss for the year
Other comprehensive income
Total comprehensive loss
-
-
(2,650,603)
(2,650,603)
with
owner
Transactions
directly recorded in equity
Shares issued during the year
Less: transaction costs arising
from issue of shares
Options issued during the year
Balance at 30 June 2020
9
9
2,792,500
-
-
(188,678)
-
-
275,000
12,057,138 (13,398,037) 1,819,885
-
-
The accompanying notes form part of these financial statements.
– 18 –
Krakatoa Resources Limited
& Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Note
2020
$
2019
$
CASH FLOWS FROM OPERATING ACTIVITIES
Other income
Payments to suppliers and employees
Payment for exploration and evaluation expenditure and
project evaluation costs
14,352
(735,164)
-
(459,677)
(1,257,404)
(198,341)
Net cash used in operating activities
11
(1,978,216)
(658,018)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration assets
Net cash used in investing activities
-
-
-
-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Payment of transaction costs associated with capital
raising
2,467,500
385,000
(210,399)
(5,406)
Net cash provided by financing activities
2,257,101
379,594
Net increase / (decrease) in cash held
Cash at beginning of financial year
278,885
407,285
(278,424)
685,709
Cash at end of financial year
5
686,170
407,285
The accompanying notes form part of these financial statements.
– 19 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements and notes represent those of Krakatoa Resources Limited (the
“Company”) and its controlled entities (the “Group” or “consolidated entity”). Krakatoa Resources
Limited is a listed public Company, incorporated and domiciled in Australia.
The financial statements were authorised for issue on 29 September 2020 by the directors.
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act
2001. The Group is a for profit entity for financial reporting purposes under Australian Accounting
Standards.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where
applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial
assets at fair value through other comprehensive income, investment properties, certain classes of
property, plant and equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the consolidated
entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial statements, are disclosed in note 1
(p).
Australian Accounting Standards set out accounting policies that the AASB has concluded would
result in a financial report containing relevant and reliable information about transactions, events and
conditions to which they apply. Compliance with Australian Accounting Standards ensures that the
financial statements and notes also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board. Material accounting policies adopted in the
preparation of this financial report are presented below. They have been consistently applied unless
otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs modified
by the revaluation of selected financial assets for which the fair value basis of accounting has been
applied. All amounts are presented in Australian dollars unless otherwise stated.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates
continuity of normal business activities and the realisation of assets and discharge of liabilities in the
normal course of business.
As disclosed in the financial statements, the Group incurred a loss of $2,650,603 and had net cash
outflows from operating activities of $1,978,216 for the year ended 30 June 2020. As at that date the
Group had net current assets of $478,986. The ability of the Group to continue as a going concern is
principally dependent upon the ability of the Group to secure funds by raising additional capital from
equity markets and managing cash flows in line with available funds.
– 20 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
The Directors believe that it is reasonably foreseeable that the Group will be able to continue as a
going concern and that it is appropriate to adopt the going concern basis in the preparation of the
financial report after consideration of the following factors:
As disclosed in Note 15, after the reporting period the Company issued 30,000,000 ordinary
shares to professional and sophisticated investors at an issue price of $0.08 per share to
raise $2,400,000 (before costs); and
The Directors are confident the Group will be successful in sourcing further capital from the
issue of additional equity securities to fund the ongoing operations of the Group
Accounting Policies
a) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities (including special purpose entities) controlled by the Company (its subsidiaries).
Income and expense of subsidiaries acquired or disposed of during the year are included in profit or
loss from the effective date of acquisition and up to the effective date of disposal, as appropriate.
Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the
non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with those used by other members of the Group. All intra-group
transactions, balances, income and expenses are eliminated in full on consolidation.
Changes in the Company’s ownership interests in subsidiaries that do not result in the Company
losing control are accounted for as equity transactions. The carrying amounts of the Company’s
interests and the non-controlling interests are adjusted to reflect the changes in their relative interests
in the subsidiaries. Any difference between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received is recognised directly in equity and
attributed to owners of the Company.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative
translation differences recognised in equity. The consolidated entity recognises the fair value of the
consideration received and the fair value of any investment retained together with any gain or loss in
profit or loss.
– 21 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Income Tax
b)
The income tax expense (revenue) for the period comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income
calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date.
Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to
(recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability
balances during the period as well unused tax losses. Current and deferred income tax expense
(income) is charged or credited directly to equity instead of the profit or loss when the tax relates to
items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred
tax assets also result where amounts have been fully expensed but future tax deductions are
available. No deferred income tax will be recognised from the initial recognition of an asset or liability,
excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax rates enacted or substantively
enacted at reporting date. Their measurement also reflects the manner in which management expects
to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to
temporary differences and unused tax losses are recognised only to the extent that it is probable that
future taxable profit will be available against which the benefits of the deferred tax asset can be
utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled and it is not probable that the reversal will occur
in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-
off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities where it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur in
future periods in which significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
– 22 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
c) Exploration and Evaluation Expenditure
Exploration and evaluation expenditure, including the costs of acquiring tenements, are expensed as
incurred. Expensing exploration and evaluation expenditure as incurred is irrespective of whether or
not the Board believe expenditure could be recouped from either a successful development and
commercial exploitation or sale of the respective assets.
Investments and other financial assets
d)
Investments and other financial assets are initially measured at fair value. Transaction costs are
included as part of the initial measurement, except for financial assets at fair value through profit or
loss. Such assets are subsequently measured at either amortised cost or fair value depending on
their classification. Classification is determined based on both the business model within which such
assets are held and the contractual cash flow characteristics of the financial asset unless, an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's
carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income
are classified as financial assets at fair value through profit or loss. Typically, such financial assets will
be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with
an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which
the consolidated entity intends to hold for the foreseeable future and has irrevocably elected to
classify them as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets
which are either measured at amortised cost or fair value through other comprehensive income. The
measurement of the loss allowance depends upon the consolidated entity's assessment at the end of
each reporting period as to whether the financial instrument's credit risk has increased significantly
since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a
12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has
increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The
amount of expected credit loss recognised is measured on the basis of the probability weighted
present value of anticipated cash shortfalls over the life of the instrument discounted at the original
effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance
is recognised within other comprehensive income. In all other cases, the loss allowance is recognised
in profit or loss.
– 23 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
e) Foreign Currencies
The individual financial statements of each group entity are presented in the currency of the primary
economic environment in which the entity operates (its functional currency). For the purpose of the
consolidated financial statements, the results and financial position of each group entity are
expressed in Australian dollars (‘$’), which is the functional currency of the Group and the
presentation currency for the consolidated financial statements.
In preparing the financial statements of each individual group entity, transactions in currencies other
than the entity’s functional currency are recognised at the rates of exchange prevailing at the dates of
the transactions. At the end of each reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at that date. Non monetary items carried at fair
value that are denominated in foreign currencies are retranslated at the rates prevailing at the date
when the fair value was determined. Non-monetary items that are measured in terms of historical cost
in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they
arise except for:
exchange differences on foreign currency borrowings relating to assets under construction for
future productive use, which are included in the cost of those assets when they are regarded
as an adjustment to interest costs on those foreign currency borrowings;
exchange differences on transactions entered into in order to hedge certain foreign currency
risks; and
exchange differences on monetary items receivable from or payable to a foreign operation for
which settlement is neither planned nor likely to occur (therefore forming part of the net
investment in the foreign operation), which are recognised initially in other comprehensive
income and reclassified from equity to profit or loss on repayment of the monetary items.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the
Group’s foreign operations are translated into Australian dollars using exchange rates prevailing at
the end of the reporting period. Income and expense items are translated at the average exchange
rates for the period, unless exchange rates fluctuated significantly during that period, in which case
the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are
recognised in other comprehensive income and accumulated in equity (attributed to non-controlling
interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Company’s entire interest in a foreign
operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation,
loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of
significant influence over an associate that includes a foreign operation), all of the accumulated
exchange differences in respect of that operation attributable to the Company are reclassified to profit
or loss.
In addition, in relation to a partial disposal of a subsidiary that does not result in the Company losing
control over the subsidiary, the proportionate share of accumulated exchange differences are
reattributed to non-controlling interests and are not recognised in profit or loss. For all other partial
disposals (i.e. partial disposals of associates or jointly controlled entities that do not result in the
Company losing significant influence or joint control), the proportionate share of the accumulated
exchange differences is reclassified to profit or loss.
– 24 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Impairment of Assets
f)
At the end of each reporting date, the Group assesses whether there is any indication that an asset
may be impaired. The assessment will include the consideration of external and internal sources of
information including dividends received from subsidiaries, associates or jointly controlled entities
deemed to be out of pre-acquisition profits. 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.
Impairment testing is performed annually for intangible assets with indefinite lives. Where it is not
possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
g) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-
term highly liquid investments with original maturities of 3 months or less.
h) Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable
to the financial assets.
All revenue is stated net of the amount of goods and services tax (GST”).
i) Goods and Services Tax
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. In these circumstances the
GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST
component of investing and financing activities, which are disclosed as operating cash flows.
j) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method, less any allowance for expected credit losses
Collectability of trade and other receivables is reviewed on an ongoing basis. Debts which are
known to be uncollectable are written off.
k) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group before the end of
the financial period and which are unpaid. The amounts are unsecured and usually paid within 30
days of recognition.
Issued capital
l)
Ordinary shares are classified as equity. Costs directly attributable to the issue of shares or options
are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly
attributable to the issue of new shares or options, or for the acquisition of a business, are included in
the cost of the acquisition as part of the purchase consideration.
– 25 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
m) Earnings per share
Basic earnings per share
Basic earnings per share is determined by dividing the net profit after income tax attributable to
members of the company, excluding any costs of servicing equity other than ordinary shares, by the
weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average number of shares assumed to have been
issued for no consideration in relation to dilutive potential ordinary shares.
n) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
o) Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments 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.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by
using a valuation model taking into account the terms and conditions upon which the instruments
were granted. The accounting estimates and assumptions relating to equity-settled share-based
payments would have no impact on the carrying amounts of assets and liabilities within the next
annual reporting period but may impact profit or loss and equity.
p) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-
current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in the Company's normal operating cycle; it is held primarily for the purpose of trading; it is
expected to be realised within 12 months after the reporting period; or the asset is cash or cash
equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months
after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Company's normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months
after the reporting period; or there is no unconditional right to defer the settlement of the liability for at
least 12 months after the reporting period. All other liabilities are classified as non-current.
– 26 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
q) Application of new or amended Accounting Standards and Interpretations
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (AASB) that are mandatory for
the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The
standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating
leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the
statement of financial position, measured at the present value of the unavoidable future lease
payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or
less and leases of low-value assets (such as personal computers and small office furniture) where an
accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments
are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be
recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred
and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease
expense recognition will be replaced with a depreciation charge for the leased asset (included in
operating costs) and an interest expense on the recognised lease liability (included in finance costs).
In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be
higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before
Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is
replaced by interest expense and depreciation in profit or loss under AASB 16.
For classification within the statement of cash flows, the lease payments will be separated into both a
principal (financing activities) and interest (either operating or financing activities) component. For
lessor accounting, the standard does not substantially change how a lessor accounts for leases. The
Company will adopt this standard from 1 July 2019 and the impact of its adoption is insignificant.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but
are not yet mandatory, have not been early adopted by the Company for the annual reporting period
ended 30 June 2020. The Group’s assessment of the impact of these new or amended Accounting
Standards and Interpretations, most relevant to the Group, are set out below:
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1
January 2020 and early adoption is permitted. The Conceptual Framework contains new definition
and recognition criteria as well as new guidance on measurement that affects several Accounting
Standards. Where the consolidated entity has relied on the existing framework in determining its
accounting policies for transactions, events or conditions that are not otherwise dealt with under the
Australian Accounting Standards, the consolidated entity may need to review such policies under the
revised framework. At this time, the application of the Conceptual Framework is not expected to have
a material impact on the consolidated entity's financial statements.
– 27 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2:
REVENUE
Interest received
Other Income
NOTE 3:
INCOME TAX EXPENSE
a. Reconciliation of income tax expense to
prima facie tax payable:
Loss from ordinary activities before income tax
expense
Prima facie tax benefit on loss from ordinary
activities before income tax at 27.5% (2019:
27.5%)
Increase/(decrease) in income tax due to:
- Capital raising costs
- Losses and
recognised
temporary differences not
Income tax attributable to the Group
b. Unused tax losses and temporary differences
for which no deferred tax asset has been
recognised at 27.5% (2019: 27.5%):
tax assets have not been
Deferred
recognised in respect of the following:
Tax revenue losses
2020
$
2019
$
-
14,352
14,352
-
-
-
2020
$
2019
$
(2,650,603)
(739,390)
(728,916)
(203,332)
(188,678)
917,594
(91,006)
294,338
-
-
7,588,391
6,670,797
Potential deferred tax assets attributable to tax losses and exploration expenditure carried
forward have not been brought to account at 30 June 2020 because the directors do not
believe it is appropriate to regard realisation of the deferred tax assets as probable at this point
in time. These benefits will only be obtained if:
-
the Group derives future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions for the loss and exploration expenditure to be
realised;
- no changes in tax legislation adversely affect the Group in realising the benefit from the
deductions for the loss and exploration expenditure.
– 28 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2020
$
2019
$
NOTE 4:
EARNINGS PER SHARE
Loss used to calculate basic EPS
(2,650,603)
(739,390)
Weighted average number of ordinary shares outstanding
during the period used in calculating basic and diluted EPS
179,897,260
117,787,671
No.
No.
Basic and diluted EPS
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 6: TRADE AND OTHER RECEIVABLES
GST receivable
Other assets
Cents
Cents
(1.47)
(0.63)
2020
$
2019
$
686,170
686,170
407,285
407,285
40,894
2,917
43,811
12,117
10,109
22,226
Allowance for expected credit losses
The consolidated entity has not recognised a loss in respect of the expected credit losses for the year
ended 30 June 2020.
NOTE 7: REMUNERATION OF AUDITORS
Audit Services – RSM Australia Partners
NOTE 8: TRADE AND OTHER PAYABLES
27,760
27,760
27,500
27,500
Trade payables and accrued expenses
250,995
178,744
Trade creditors, excluding related party payables, are expected to be paid on 30 day terms.
– 29 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 9: ISSUED CAPITAL
2020
No.
2020
$
2019
No.
2019
$
Fully paid ordinary shares with no par value
218,750,000 12,057,138 135,000,000 9,453,316
a)
Ordinary shares
At the beginning of reporting period
Shares issued during the year:
- 24 June 2019
- 27 September 2019
- 23 October 2019
- 5 December 2019
- 5 February 2020
Less capital raising costs
135,000,000 9,453,316 117,500,000 9,093,382
-
-
330,000
15,000,000
750,000
15,000,000
10,000,000
400,000
43,750,000 1,312,500
(188,678)
17,500,000
-
-
-
-
385,000
-
-
-
-
(25,066)
Net share capital
218,750,000 12,057,138 135,000,000 9,453,316
b)
Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going
concern, so that it may continue to provide returns for shareholders and benefits for other
stakeholders. The Group’s capital includes ordinary share capital and financial liabilities, supported by
financial assets.
Due to the nature of the Group’s activities, being mineral exploration, it does not have ready access to
credit facilities, with the primary source of funding being equity raisings. Accordingly, the objective of
the Group’s capital risk management is to balance the current working capital position against the
requirements of the Group to meet exploration programmes and corporate overheads. This is
achieved by maintaining appropriate liquidity to meet anticipated operating requirements, with a view
to initiating appropriate capital raisings as required. The Group is not subject to any externally imposed
capital requirements.
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Working capital position
2020
$
686,170
43,811
(250,995)
2019
$
407,285
22,226
(178,744)
478,986
250,767
– 30 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 10: RESERVES
Option premium reserve
Opening balance
Options issued
Closing balance
Total Reserves
Option premium reserve
2020
$
2019
$
1,544,885
275,000
1,819,885
1,544,885
-
1,544,885
1,819,885
1,544,885
The Option premium reserve is used to recognise the fair value of options issued but not exercised.
NOTE 11: RECONCILIATION OF CASH FLOW FROM
OPERATIONS WITH LOSS AFTER INCOME TAX
Loss after income tax
Non cash-flows in loss:
Share based payments
Changes in assets and liabilities:
Trade and other receivables
Other assets
Trade payables and accruals
2020
$
2019
$
(2,650,603)
(739,390)
600,000
(28,777)
7,191
93,973
-
(159)
(10,109)
91,640
Cash flow used in operations
(1,978,216)
(658,018)
Non Cash Investing & Financing Activities:
There were no non-cash investing entered into by the Group during the year (2019: Nil).
– 31 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12: KEY MANAGEMENT PERSONNEL COMPENSATION
Remuneration of Key Management Personnel
The totals of remuneration paid to the KMP of the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Share based payments
Total remuneration
NOTE 13: RELATED PARTY TRANSACTIONS
2020
$
259,500
4,513
-
2019
$
184,000
5,700
-
264,013
189,700
During the year ended 30 June 2020, Barclay Wells Limited, an entity which Timothy Hogan is a
director, invoiced for brokerage of $16,451 plus GST on $267,500 raised in share placements
completed in the 2020 financial year.
All related party transactions are made on normal commercial terms and condition and at market
rates.
NOTE 14: CONTINGENT LIABILITIES
The Group has no contingent liabilities as at 30 June 2020 (2019: Nil).
NOTE 15: EVENTS AFTER THE REPORTING PERIOD
On 14 July 2020, the Company issued 30,000,000 ordinary shares to professional and sophisticated
investors at an issue price of $0.08 per share to raise $2,400,000 (before costs).
No matters or circumstances have arisen since the end of the financial period which significantly
affected or may significantly affect the operations of the Group, the results of those operations, or the
state of affairs of the Group in future financial periods.
NOTE 16: COMMITMENTS
In order to maintain current rights of tenure to Western Australia exploration tenements, the Group is
required to perform minimum exploration requirements specified by the Department of Mines and
Petroleum of $53,440 (2019: $42,440).
In order to maintain current rights of tenure to the New South Wales exploration tenements, the Group
is required to perform minimum exploration requirements specified by the NSW Resources Regulator
of $255,000 (2019: Nil).
The Group has no other commitments.
– 32 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17: CONTROLLED ENTITIES
Equity Holding Equity Holding
Country of Incorporation
Subsidiaries of Krakatoa Resources Ltd:
Krakatoa Australia Pty Ltd
Krakatoa Minerals Pty Ltd
Krakatoa Minerals – SMC Limited
2634501 Ontario Limited
Australia
Australia
Uganda
Canada
NOTE 18: PARENT ENTITY DISCLOSURES
Financial position
2020
%
100
100
100
100
2019
%
-
100
100
100
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Reserves
Total equity
Financial performance
(Loss) for the year
Total comprehensive (loss) for the year
2020
$
729,981
-
729,981
2019
$
429,511
-
429,511
250,995
250,995
178,744
178,744
12,057,138
(13,398,037)
1,819,885
478,986
9,453,316
(10,747,434)
1,544,885
250,767
(2,650,603)
(2,650,603)
(739,390)
(739,390)
Guarantees:
Krakatoa Resources Limited has not entered into any guarantees in the current or previous financial
year, in relation to the debts of its subsidiaries.
Other Commitments and Contingencies:
Krakatoa Resources Limited has no commitment to acquire property, plant and equipment and has no
contingent liabilities (Note 14).
– 33 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 19: OPERATING SEGMENTS
The Group has identified its operating segments based on the internal reports that are used by the
Board (the chief operating decision makers) in assessing performance and in determining the
allocation of resources.
The operating segments are identified by the Board based on the phase of operation within the mining
industry. For management purposes, the Group has organised its operations into two reportable
segments on the basis of stage of development as follows:
Development assets; and
Exploration and evaluation assets, which includes assets that are associated with the
determination and assessment of the existence of commercial economic reserves.
The Board as a whole will regularly review the identified segments in order to allocate resources to the
segment and to assess its performance.
During the year ended 30 June 2020, the Group had no development assets. The Board considers
that it has only operated in one segment, being mineral exploration.
The Group is domiciled in Australia. All revenue from external customers are only generated from
Australia. No revenues were derived from a single external customer.
NOTE 20: FINANCIAL RISK MANAGEMENT
The Group has exposure to the following risks from their use of financial instruments:
credit risk;
liquidity risk; and
-
-
- market risk.
This note presents information about the Group’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework. Management monitors and manages the financial risks relating to the
operations of the Group through regular reviews of the risks.
Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at
reporting date to recognised financial assets, is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the statement of financial position and notes to the
financial statements.
The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the
aggregate value of transactions is spread amongst approved counterparties.
Credit risk related to balances with banks and other financial institutions is managed by the board.
The board’s policy requires that surplus funds are only invested with counterparties with a Standard &
Poor’s rating of at least AA-. All of the Group’s surplus funds are invested with AA Rated financial
institutions.
– 34 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 20: FINANCIAL RISK MANAGEMENT (CONT.)
The credit risk for counterparties included in cash and cash equivalents at 30 June 2020 is detailed
below:
Financial assets:
Cash and cash equivalents
- AA rated counterparties
2020
$
2019
$
686,170
407,285
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 Group.
Liquidity risk
The responsibility with liquidity risk management rests with the Board of Directors. The Group
manages liquidity risk by monitoring forecast cash flows and ensuring that adequate working capital is
maintained. The Group’s policy is to ensure that it has sufficient cash reserves to carry out its planned
exploration activities over the next 12 months.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates
and equity prices will affect the Group’s income or the value of its holdings of financial instruments.
Interest rate risk
The Group does not have any exposure to interest rate risk as there were no external borrowings at
30 June 2020 (2019: nil). Interest bearing assets are all short term liquid assets and the only interest
rate risk is the effect on interest income by movements in the interest rate. There is no other material
interest rate risk.
– 35 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Krakatoa Resources, I state that:
1. In the opinion of the directors:
(a)
the financial statements and notes of the Group are in accordance with the Corporations Act
2001, including:
(i)
(ii)
giving a true and fair view of the financial position of the Group as at 30 June 2020
and of its performance for the year ended on that date; and
complying with Accounting Standards (including
Interpretations) and the Corporations Regulations 2001;
the Australian Accounting
(b)
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable; and
the financial statements and notes also comply with International Financial Reporting Standards
as disclosed in Note 1.
2. This declaration has been made after receiving the declarations required to be made by the
directors in accordance with sections of 295A of the Corporations Act 2001 for the financial year
ended 30 June 2020.
On behalf of the Board
Colin Locke
Executive Chairman
Dated: 29 September 2020
– 36 –
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
RSM Australia Partners
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
KRAKATOA RESOURCES LIMITED
Opinion
We have audited the financial report of Krakatoa Resources Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
(ii)
Giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Exploration expenditure and project evaluation costs
Refer to statement of profit or loss and other comprehensive income
The Group incurred exploration expenditure and
project evaluation costs of $1,888,397 during the
year ended 30 June 2020. In accordance with its
accounting policy, the Group expenses these costs
as incurred is irrespective of whether the Board
believe expenditure could be recouped from either a
successful
commercial
development
exploitation or sale of the respective assets.
and
is
the Group’s most significant
We considered this to be a key audit matter because
it
transaction
category and the matter of significant audit attention
in performing the audit.
Our audit procedures
expenditure and project evaluation costs included;
in relation
to exploration
Assessing whether the Group’s accounting policy
for exploration and evaluation expenditure is in
compliance with Australia Accounting Standards;
Obtaining evidence that the right to tenure of the
exploration areas of interests are valid;
Performing substantive
testing on exploration
expenditure on a sample basis with additional
attention to any items identified as large or
unusual; and
Assessing the adequacy of the disclosures in the
financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2020 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
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 ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Krakatoa Resources Limited, for the year ended 30 June 2020,
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.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 29 September 2020
ALASDAIR WHYTE
Partner
Krakatoa Resources Limited
& Controlled Entities
CORPORATE GOVERNANCE STATEMENT
The Company is committed to implementing the highest standards of corporate governance. In
determining what those high standards should involve the Company has considered the ASX Corporate
Governance Council’s Principles of Good Corporate Governance and Recommendations.
In line with the above, the Board has set out the way forward for the Company in its implementation of
its Principles of Good Corporate Governance and Recommendations. The approach taken by the board
was to set a blueprint for the Company to follow as it introduces elements of the governance process.
Due to the current size of the Company and the scale of its operations it is neither practical nor
economic for the adoption of all of the recommendations approved via the board charter. Where the
Company has not adhered to the recommendations it has stated that fact in this Corporate Governance
Statement however has set out a mandate for future compliance when the size of the Company and the
scale of its operations warrants the introduction of those recommendations. Date of last review and
Board approval: 29 September 2020.
Compliance Reference
Commentary
Principle /
Recommendation
Principle 1:
Lay solid foundations
for management and
oversight
Recommendation 1.1
A
listed
disclose:
a)
entity
should
the respective roles
and responsibilities of
its
and
board
management; and
matters
those
expressly reserved to
the board and those
delegated
to
management.
b)
Yes
Board Charter
Code of
Conduct,
Independent
Professional
Advice Policy,
Website
– 40 –
and
size
skills
required
composition,
responsibilities
To add value to the Company the
Board has been formed so that it has
effective
and
commitment to adequately discharge
its
duties.
Directors are appointed based on the
by
specific
the
their decision-
Company and on
making and judgment. The Board’s
role is to govern the Company rather
than to manage it. In governing the
Company, the Directors must act in
the best interests of the Company as a
whole.
role of senior
management to manage the Company
in accordance with the direction and
delegations of the Board and the
responsibility of the Board to oversee
the activities of management
in
carrying out those delegated duties.
the
is
It
In carrying out its governance role, the
main task of the Board is to drive the
performance of the Company. The
the
that
Board must also ensure
Company complies with all of
its
contractual, statutory and any other
legal
the
requirements of any regulatory body.
The Board has the final responsibility
for the successful operations of the
Company. To assist the Board carry its
functions, it has developed a Code of
obligations,
including
Krakatoa Resources Limited
& Controlled Entities
Conduct to guide the Directors.
In general, the Board is responsible
for, and has the authority to determine,
all matters relating to the policies,
practices,
and
operations of the Company. It is
required to do all things that may be
necessary to be done in order to carry
out the objectives of the Company.
management
Without intending to limit this general
role of
the principal
functions and responsibilities of the
Board include the following:
the Board,
Leadership of the Organisation:
overseeing
the Company and
establishing codes that reflect the
values of the Company and guide
the conduct of the Board.
Strategy Formulation: to set and
review the overall strategy and
goals
the Company and
ensuring that there are policies in
place to govern the operation of
the Company.
for
Overseeing Planning Activities:
the development of the Company’s
strategic plan.
of
Shareholder Liaison:
ensuring
communications with
effective
shareholders
an
through
appropriate communications policy
and promoting participation at
general meetings of the Company
as well as ensuring timely and
all
disclosures
balanced
material
information concerning
the Company that a reasonable
person would expect to have a
material effect on the price or
value of the entity’s securities.
Monitoring, Compliance and Risk
Management: the development of
the Company’s risk management,
and
compliance,
and
accountability
monitoring and directing
the
financial
operational
and
performance of the Company.
control
systems
Company Finances:
approving
expenses and approving and
monitoring
acquisitions,
divestitures and financial and other
reporting along with ensuring the
integrity of the Company’s financial
and other reporting.
Human Resources: reviewing the
– 41 –
Krakatoa Resources Limited
& Controlled Entities
performance of Executive Officers
and monitoring the performance of
their
senior management
implementation of the Company’s
strategy.
in
the
Ensuring the Health, Safety and
in
Well-Being of Employees:
senior
conjunction with
team, developing,
management
overseeing and
the
reviewing
effectiveness of the Company’s
occupational health and safety
systems to ensure the well-being
of all employees.
Delegation
Authority:
of
delegating appropriate powers to
the Managing Director to ensure
the
day-to-day
management of the Company and
establishing and determining the
powers and
the
Committees of the Board.
functions of
effective
Monitoring the effectiveness of the
Company’s corporate governance
practices.
the Board’s and
Full details of
roles and
Company Secretary’s
responsibilities are contained in the
Board Charter. The Board collectively
and each Director has the right to seek
independent professional advice at the
Company’s expense, up to specified
limits, (that limit is currently set at
$2,000), to assist them to carry out
their responsibilities.
Directors are appointed based on the
specific governance skills required by
the Company. Given the size of the
Company and the business that it
operates, the Company aims at all
times to have at least one Director with
the
appropriate
experience
Company’s
The
operations.
Company’s current Directors all have
relevant experience in the operations.
In addition, Directors should have the
relevant blend of personal experience
in:
to
Accounting
and
financial
management; and
Director-level
experience.
business
Each member of
is
committed to spending sufficient time
to enable them to carry out their duties
the Board
Yes
Director
Selection
Procedure,
Website
Recommendation 1.2
A listed entity should:
a) undertake appropriate
before
checks
appointing a person,
or putting forward to
security
a
candidate for election,
as a director; and
holders
security
b) provide
with
all
holders
information
material
in
possession
its
relevant to a decision
on whether or not to
elect or re- elect a
director.
– 42 –
Krakatoa Resources Limited
& Controlled Entities
for
as a Director of the Company.
In determining candidates
the
the Nomination Committee
Board,
(refer to recommendation 2.1) follows
a prescribed process whereby
it
evaluates the mix of skills, experience
and expertise of the existing Board. In
particular, the Nomination Committee
is to identify the particular skills that
will best
the Board's
effectiveness. Consideration is also
given to the balance of independent
directors. Potential candidates are
identified
the
if
Nomination Committee (or equivalent)
recommends an appropriate candidate
for appointment to the Board. Any
appointment made by the Board is
subject to ratification by shareholders
at the next general meeting.
relevant,
increase
and,
than
impact of Board
The Board recognises
that Board
renewal is critical to performance and
tenure on
the
succession planning. Each director
other
the Managing Director,
must not hold office (without re-
election) past the third annual general
meeting of the Company following the
director's appointment or three years
following that director's last election or
appointment (whichever is the longer).
However, a director appointed to fill a
casual vacancy or as an addition to
the Board must not hold office (without
re-election) past
the next annual
general meeting of the Company. At
each annual general meeting a
minimum of one director or one third of
the total number of directors must
resign. A director who retires at an
annual general meeting is eligible for
re-election at that meeting and re-
appointment of directors
is not
automatic.
to
is
The Nomination Committee
for
responsible
a
implementing
identify, assess and
program
enhance Director competencies.
In
addition, the Nomination Committee
puts in place succession plans to
ensure an appropriate mix of skills,
experience, expertise and diversity are
maintained on the Board.
– 43 –
Krakatoa Resources Limited
& Controlled Entities
Yes
Recommendation 1.3
A listed entity should have
a written agreement with
each director and senior
executive setting out the
their
of
terms
appointment.
Kept at
registered
office,
Independent
Professional
Advice Policy
Each non-executive director has a
written agreement with the Company
their
that covers all aspects of
appointment
time
term,
including
commitment required, remuneration,
disclosure of interests that may affect
independence, guidance on complying
with
corporate
governance policies and the right to
seek independent advice, indemnity
and insurance arrangements, rights of
access to the Company’s information
and ongoing confidentiality obligations
as well as roles on the Company’s
committees.
the Company’s
Each executive director’s agreement
with the Company includes the same
details as the non-executive directors’
includes a
agreements but also
position
reporting
description,
hierarchy and termination clauses.
independent
to properly discharge
To assist directors with independent
judgement, it is the Board's policy that
if a director considers it necessary to
professional
obtain
advice
the
responsibility of
their office as a
director then, provided the director first
obtains approval from the Chair for
incurring such expense, the Company
will pay
the reasonable expenses
associated with obtaining such advice
(that limit is currently set at $2,000).
Recommendation 1.4
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.
Recommendation 1.5
A listed entity should:
a) have a diversity policy
includes
which
requirements
the
for
board or a relevant
committee of the board
set measurable
to
for
objectives
achieving
gender
diversity and to assess
Yes
Board Charter,
Website
the Board’s and
Full details of
Company Secretary’s
roles and
responsibilities are contained in the
Board Charter.
Yes
Diversity
Policy,
Website
– 44 –
recognises
The Company
and
respects the value of diversity at all
levels of
The
the organisation.
to setting
is committed
Company
measurable objectives for attracting
and engaging women at the Board
level,
in senior management and
across the whole organisation.
The Diversity Policy was re-adopted
during the year and the Company set
both
annually
objectives
and
entity’s progress
achieving them;
the
the
in
each
b) disclose that policy or
a summary of it; and
c) disclose as at the end
of
reporting
period the measurable
for
objectives
achieving
gender
the
diversity set by
board or a relevant
committee of the board
in accordance with the
entity’s diversity policy
and
progress
towards
achieving
them, and either:
1) the
its
respective
proportions
of
men and women
on the board, in
senior executive
positions
and
across the whole
organisation
(including how the
entity has defined
“senior executive”
for
these
purposes); or
2) if the entity is a
Krakatoa Resources Limited
& Controlled Entities
following objectives
the
employment of women:
for
the
senior
to the Board – no target set
to
(including
Secretary) – 20%
to the organisation as a whole
– 20%
management
Company
As at the date of this report, the
Company has the following proportion
of women appointed:
to the Board – 0%
to
senior
(including
Secretary) – 0%
to the organisation as a whole
– 25%
management
Company
in some
instances.
that
industry
the
The Company recognises
mining and exploration
is
intrinsically male dominated in many of
the operational sectors and the pool of
women with appropriate skills will be
limited
The
Company recognises
that diversity
extends to matters of age, disability,
status,
ethnicity,
marital/family
religious/cultural
and
sexual orientation. Where possible,
the Company will seek to identify
suitable candidates for positions from
a diverse pool.
background
best
this evaluation
practice
It is the policy of the Board to conduct
evaluation of its performance. The
objective of
to
is
provide
corporate
governance to the Company. During
the financial year an evaluation of the
performance of the Board and its
members was not formally carried out.
However, a general review of the
Board and executives occurs on an
on-going basis
that
structures suitable to the Company's
status as a listed entity are in place.
to ensure
“relevant
employer” under
the Workplace
Gender Equality
the entity’s
Act,
most
recent
“Gender Equality
as
Indicators”,
defined
in and
published under
that Act.
Yes
Recommendation 1.6:
A listed entity should:
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
Board ,
Committee &
Individuals
Performance
Evaluation
Procedure
Website
– 45 –
Krakatoa Resources Limited
& Controlled Entities
Yes
No
Board ,
Committee &
Individuals
Performance
Evaluation
Procedure,
Website
best
practice
It is the policy of the Board to conduct
evaluation of individuals’ performance.
The objective of this evaluation is to
provide
corporate
governance to the Company. During
the financial year an evaluation of the
performance of the individuals was not
However, a
formally carried out.
general
individuals
occurs on an on-going basis to ensure
that
the
Company's status as a listed entity are
in place.
review of
structures
suitable
the
to
Nomination
Committee
Charter,
Independent
Professional
Advice Policy
Website
is
The full Board performs the role of
Nomination Committee. The role of a
Nomination Committee
to help
achieve a structured Board that adds
value to the Company by ensuring an
appropriate mix of skills are present in
Directors on the Board at all times.
The Nomination Committee did not
meet during the year ended 30 June
2020.
evaluation
was
undertaken
the
in
reporting
accordance with that
process.
in
period
Recommendation 1.7:
A listed entity should:
a) have and disclose a
process
for
periodically evaluating
the performance of its
senior executives; and
b) disclose, in relation to
each reporting period,
a
whether
performance
was
evaluation
the
undertaken
in
reporting
accordance with that
process.
in
period
Principle 2: Structure
the board to add value
listed
Recommendation 2.1
The Board of a
entity should:
a) have a nomination
committee which:
1) has at least three
members,
a
majority of whom
are
independent
directors; and
is chaired by an
independent
director,
disclose:
the charter of the
committee;
the members of
the
committee;
and
and
2)
4)
3)
and
identifying
the need
succession
review by
The responsibilities of a Nomination
include devising
Committee would
for Board membership,
criteria
regularly
for
reviewing
various skills and experience on the
specific
Board
individuals for nomination as Directors
for
the Board. The
Nomination Committee also oversees
management
plans
including the Executive Director and
his/her direct reports and evaluate the
Board’s performance and make
recommendations for the appointment
and removal of Directors. Matters
such as remuneration, expectations,
terms, the procedures for dealing with
conflicts of interest and the availability
of independent professional advice are
clearly understood by all Directors,
who are experienced public company
Directors. The Board collectively and
each Director has the right to seek
5) as at the end of
each
reporting
period, the number
of
the
times
committee met
the
throughout
the
period
individual
attendances of the
members at those
meetings; or
and
if it does not have a
nomination
committee, disclose
the
fact and
that
b)
– 46 –
processes it employs
board
to address
issues
succession
that
and
to ensure
the board has
the
appropriate balance
of skills, knowledge,
experience,
independence
and
diversity to enable it
to discharge its duties
responsibilities
and
effectively.
Recommendation 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.
Recommendation 2.3
A listed entity should
disclose:
a)
of
the names of
the
directors considered
to be
by the board
independent
directors;
if a director has an
position,
interest,
or
association
relationship
the
type described in Box
2.3 but the board is
of the opinion that it
does not compromise
independence of
the
the
the
director,
the
nature
of
position,
interest,
or
association
in
relationship
question
an
explanation of why the
board
that
opinion; and
the length of service
of each director.
and
of
is
b)
c)
Krakatoa Resources Limited
& Controlled Entities
Yes
Yes
Kept at
registered
office
Board Charter,
Independence
of Directors
Assessment
Website
independent professional advice at the
Company’s expense, up to specified
limits, (that limit is currently set at
$2,000), to assist them to carry out
their responsibilities.
The Company has reviewed the skill
set of its Board to determine where the
skills lie and any relevant gaps in skills
shortages. The Company is working
through professional development
initiatives as well as seeking to identify
suitable Board candidates for positions
from a diverse pool.
recognises
The Company
the
importance of Non-Executive Directors
and
the external perspective and
advice that Non-Executive Directors
can offer. An Independent Director:
1. is a Non-Executive Director and;
2. is not a substantial shareholder of
the Company or an officer of, or
otherwise associated directly with,
a substantial shareholder of the
Company;
3. within the last three years has not
been employed in an executive
capacity by
the Company or
another group member, or been a
Director after ceasing to hold any
such employment;
4. within the last three years has not
been a principal of a material
professional adviser or a material
consultant
the Company or
another group member, or an
employee materially associated
with the service provided;
to
5. is not a material supplier or
customer of
the Company or
another group member, or an
officer of or otherwise associated
directly or indirectly with a material
supplier or customer;
no material
contractual
relationship with the Company or
other group member other than as
a Director of the Company;
6. has
7. has not served on the Board for a
period which could, or could
– 47 –
Krakatoa Resources Limited
& Controlled Entities
to,
reasonably be perceived
materially
the
interfere with
Director’s ability to act in the best
interests of the Company; and
8. is free from any interest and any
business or other
relationship
which could, or could reasonably
be
to, materially
interfere with the Director’s ability
to act in the best interests of the
Company.
perceived
with
regard
Materiality for the purposes of points 1
to 8 above is determined on the basis
of both quantitative and qualitative
the
aspects
to
independence of Directors.
An
amount over 5% of the Company’s
expenditure or 10% of the particular
is
directors annual gross
considered to be material. A period of
more than six years as a Director
would be considered material when
assessing independence.
income
Colin Locke
(appointed 6 August
2015) is an Executive Director of the
Company and does not meet the
Company’s criteria for independence.
However,
and
knowledge of the Company makes his
contribution to the Board such that it is
appropriate for him to remain on the
Board.
experience
his
Timothy Hogan (appointed 7 October
2015) is a Non-Executive Director of
the Company
the
Company’s criteria for independence.
and meets
David Palumbo (appointed 7 August
2017) is a Non-Executive Director of
the Company
the
Company’s criteria for independence.
and meets
2 out of 3 directors are independent.
is
not
The Chairperson
an
independent Director and is not the
CEO
/ Managing Director. The
Company is continually evaluating and
reviewing the Board structure.
Yes
No
Recommendation 2.4
A majority of the board of
a listed entity should be
independent directors.
Recommendation 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.
Independence
of Directors
Assessment,
Website
Independence
of Directors
Assessment,
Website
– 48 –
Krakatoa Resources Limited
& Controlled Entities
Director
Induction
Program,
Ongoing
Education
Framework,
Website
It is the policy of the Company that
each new Director undergoes an
induction process in which they are
given a full briefing on the Company.
Where possible this includes meetings
with key executives,
the
premises, an induction package and
presentations. Information conveyed
to new Directors include:
tours of
Yes
Recommendation 2.6
A listed entity should have
a program for inducting new
directors
provide
and
appropriate
professional
development opportunities
for directors to develop and
the skills and
maintain
to
needed
knowledge
perform
as
role
directors effectively.
their
Principle 3: Act
ethically and
responsibly
Recommendation 3.1
A listed entity should:
code
a) have
for
a
conduct
directors,
executives
employees; and
of
its
senior
and
b) disclose that code or
a summary of it.
Principle 4: Safeguard
integrity in corporate
reporting
Recommendation 4.1
The board of a listed entity
should: (a) have an audit
committee which:
a) has at least three
members, all of
whom are non-
executive directors
and a majority of
whom are
independent
directors; and
1)
is chaired by an
independent
Yes
Code of
Conduct
Website
No
Audit
Committee
Charter,
Website
– 49 –
details
a
of
the
and
roles
responsibilities of a Director;
formal
on Director
policies
appointment as well as conduct
and contribution expectations;
of
the Corporate
Governance Statement, Charters,
Policies and Memos and
copy
a copy of the Constitution of the
Company.
In order
continuing
to achieve
improvement in Board performance, all
Directors are encouraged to undergo
continual professional development.
The Board has
implemented an
Ongoing Education Framework.
its commitment
As part of
to
recognising the legitimate interests of
the Company has
stakeholders,
established a Code of Conduct to
guide compliance with legal and other
obligations to legitimate stakeholders.
These
include
stakeholders
customers,
clients,
employees,
government authorities, creditors and
the community as whole.
the
that
size
Audit
Given
and
current
composition of the Board, the Board
believes
there would be no
efficiencies gained by establishing a
separate
Committee.
Accordingly, the Board performs the
role of Audit Committee.
Items that are usually required to be
discussed by an Audit Committee are
discussed at a separate meeting when
required. When the Board convenes
as the Audit Committee it carries out
those functions which are delegated to
it in the Company’s Audit Committee
director, who is
not the chair of
the board,
and disclose:
2) the charter of the
5)
3)
committee;
the relevant
qualifications and
4) experience of the
members of the
committee; and
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
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.
b)
Krakatoa Resources Limited
& Controlled Entities
Charter. The Board deals with any
conflicts of interest that may occur
when convening in the capacity of the
Audit Committee by ensuring that the
Director with conflicting interests is not
party to the relevant discussions.
The Board did not meet as the Audit
Committee during the year. To assist
the Board to fulfil its function as the
Audit Committee, the Company has
adopted an Audit Committee Charter
which describes the role, composition,
functions and responsibilities of the
Audit Committee. All of the Directors
consider themselves to be financially
literate and possess relevant industry
experience.
has
any
arises,
the
rotation of
The Board
established
The Company
selection,
procedures
for
its
appointment and
is
external auditor.
responsible for the initial appointment
of
the
the external auditor and
appointment of a new external auditor
as
vacancy
when
recommended by the Audit Committee
(or its equivalent). Candidates for the
position of external auditor must
demonstrate complete independence
from
the
engagement period. The Board may
otherwise select an external auditor
based on criteria relevant
the
and
Company's
circumstances. The performance of
the external auditor is reviewed on an
annual basis by the Audit Committee
any
(or
recommendations are made to the
Board.
the Company
equivalent)
business
through
and
its
to
entity’s
Recommendation 4.2
The board of a listed entity
should, before it approves
the
financial
statements for a financial
period, receive from its
a
C E O
CFO
in
that,
declaration
their
opinion,
financial
the
records of the entity have
been properly maintained
and
financial
statements comply with
appropriate
the
that
and
the
Yes
Kept at
registered
office
– 50 –
for each
The Executive Director
(Executive
Chairman) and Company Secretary
(Chief Financial Officer) provide a
declaration to the Board in accordance
with section 295A of the Corporations
financial report and
Act
assure the Board that such declaration
is founded on a sound system of risk
management and internal control and
that the system is operating effectively
in all material respects in relation to
financial reporting risks.
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.
Recommendation 4.3
A listed entity that has an
AGM should ensure that
its external auditor attends
its AGM and is available to
from
answer
security holders
relevant
to the audit.
questions
Principle 5: Make timely
and balanced disclosure
Recommendation 5.1
A listed entity should:
a) have a written policy
for complying with its
continuous disclosure
obligations under the
Listing Rules; and
b) disclose that policy or
a summary of it.
Principle 6: Respect
the rights of security
holders
listed
entity
Recommendation 6.1
A
should
provide information about
itself and its governance
to investors via its website.
Krakatoa Resources Limited
& Controlled Entities
Yes
AGM
The external auditor is required to
attend every AGM for the purpose of
answering questions
from security
holders relevant to the audit.
Yes
Continuous
Disclosure
Policy,
Website
for
overseeing
The Board has designated
the
Company Secretary as the person
and
responsible
coordinating disclosure of information
to the ASX as well as communicating
with the ASX. In accordance with the
the Company
ASX Listing Rules
immediately notifies
the ASX of
information:
1. concerning the Company that a
reasonable person would expect
to have a material effect on the
price or value of the Company’s
securities; and
2. that would, or would be likely to,
influence persons who commonly
invest
in deciding
whether to acquire or dispose of
the Company’s securities.
in securities
The Company’s website includes the
following:
Corporate Governance policies,
procedures, charters, programs,
and
assessments,
frameworks
codes
Names and biographical details
of each of its directors and senior
executives
Constitution
Copies of annual, half yearly and
quarterly reports
ASX announcements
Yes
Website
Disclosure
Policy,
Website
– 51 –
Krakatoa Resources Limited
& Controlled Entities
Copies of notices of meetings of
security holders
Media releases
Overview of
the Company’s
current business, structure and
history
Details of upcoming meetings of
security holders
Summary of the terms of the
securities on issue
Historical
market
price
information of the securities on
issue
Contact details
for
the share
registry and media enquiries
Share
registry
key
security
holder forms
The Company respects the rights of its
the
shareholders and
effective exercise of those rights the
Company is committed to:
facilitate
to
communicating effectively with
shareholders through releases to
the market via ASX, information
mailed to shareholders and the
general meetings
the
Company;
of
giving
balanced
shareholders
to
ready
and
information
and
the Company
access
understandable
about
corporate proposals;
requesting the external auditor to
general
attend
meeting and be available
to
answer shareholder questions
about the conduct of the audit
and the preparation and content
of the auditor’s report of future
Annual Reports.
annual
the
The Company also makes available a
telephone number and email address
for shareholders to make enquiries of
the Company.
to
The Company respects the rights of its
shareholders and
the
effective exercise of those rights the
Company is committed to making it
easy for shareholders to participate in
shareholder meetings of the Company.
facilitate
Shareholders are regularly given the
opportunity to receive communications
electronically.
Yes
Recommendation 6.2
A listed entity should
design and implement an
investor relations program
to facilitate effective two-
way communication with
investors.
Shareholder
Communication
Policy, Social
Media Policy
Website
Recommendation 6.3
A listed entity should
disclose the policies and
processes it has in place
to facilitate and encourage
participation at meetings
of security holders.
Recommendation 6.4
A listed entity should give
security holders the option
to receive
Yes
Yes
Shareholder
Communication
Policy
Website
Shareholder
Communication
Policy
Website
– 52 –
Krakatoa Resources Limited
& Controlled Entities
communications from and
send communications to,
the entity and its security
registry electronically.
Principle 7: Recognise
and manage risk
Recommendation 7.1
The board of a listed entity
should:
a) have a committee or
No
Risk
Management
Policy
Website
2)
committees to
oversee risk, each of
which:
1) has at least three
members, a
majority of whom
are independent
directors; and
is chaired by an
independent
director, and
disclose:
the charter of the
committee;
the members of
the committee;
and
3)
4)
5) 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
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.
b)
Recommendation 7.2
The board or a committee
of the board should:
a) review the entity’s risk
management
framework at least
annually to satisfy
itself that it continues
to be sound; and
it
that
Risk
Given
is not structured
The Board has not established a
and
separate Risk Committee,
therefore
in
accordance with Recommendation
the current size and
7.1.
composition of the Board, the Board
believes
there would be no
efficiencies gained by establishing a
Committee.
separate
Accordingly, the Board performs the
role of Risk Committee. Items that are
usually required to be discussed by a
Risk Committee are discussed at a
required.
separate meeting when
When the Board convenes as the Risk
Committee
those
functions which are delegated to it in
the Company’s Risk Committee
Charter. The Board deals with any
conflicts of interest that may occur
when convening in the capacity of the
Risk Committee by ensuring that the
Director with conflicting interests is not
party to the relevant discussions.
carries out
it
identification
The Board as a whole did not meet as
the Risk Committee during the year.
Risk
risk
management discussions occurred
during the year. To assist the Board to
fulfil
the Risk
function as
Committee, the Company has adopted
a Risk Management Policy.
and
its
Yes
Risk
Management
Policy
Website
The Company’s Risk Management
Policy states that the Board as a whole
is responsible for the oversight of the
Company’s
risk management and
control framework. The objectives of
the Company’s Risk Management
Strategy are to:
identify risks to the Company;
balance risk to reward;
– 53 –
Krakatoa Resources Limited
& Controlled Entities
b) disclose, in relation to
each reporting period,
whether such a
review has taken
place.
ensure regulatory compliance
is achieved; and
ensure senior executives, the
Board
investors
and
understand the risk profile of
the Company.
through
risk
The Board monitors
various arrangements including:
regular Board meetings;
share price monitoring;
market monitoring; and
regular
position and operations.
review of
financial
No
Audit
Committee
Charter
Website
The Company has developed a Risk
Register in order to assist with the risk
management of the Company. The
Company’s Risk Management Policy
is considered a sound strategy for
addressing and managing risk. During
the year,
the
following categories of risks affecting
the Company as part of
the
Company’s systems and processes for
managing material business
risks:
reporting,
operational,
sovereignty and market-related risks.
the Board reviewed
financial
The Board performs the role of Audit
Committee. When the Board convenes
as the Audit Committee it carries out
those functions which are delegated to
it in the Company’s Audit Committee
Charter which include overseeing the
establishment and implementation by
management
for
identifying, assessing, monitoring and
managing material risk throughout the
Company, which
the
Company’s internal compliance and
control systems.
includes
system
of
a
and
Due to the nature and size of the
Company's
the
operations,
Company’s
derive
ability
substantially all of the benefits of an
independent internal audit function, the
expense of an independent internal
auditor
to be
is not considered
appropriate.
to
Recommendation 7.3
A listed entity should
disclose:
a)
b)
if it has an internal
audit function, how
the function is
structured and what
role it performs; or
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.
Yes
Recommendation 7.4
A listed entity should
disclose whether it has any
material exposure to
economic, environmental
Corporate
Governance
Statement
– 54 –
its
The Company has considered
economic, environmental and social
sustainability risks by way of internal
review and has concluded that it is not
economic,
subject
to material
Krakatoa Resources Limited
& Controlled Entities
environmental and social sustainability
risks.
and social sustainability
risks and, if it does, how it
manages or intends to
manage those risks.
Principle 8: Remunerate
fairly and responsibly
Recommendation 8.1
The board of a listed entity
should:
a) have a remuneration
committee which:
1) has at least three
members, a
majority of whom
are independent
directors; and
is chaired by an
independent
director,
and disclose:
the charter of the
committee;
the members of
the committee;
and
4)
3)
2)
b)
5) 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
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.
Recommendation 8.2
A listed entity should
separately disclose its
policies and practices
regarding the
remuneration of non-
No
Remuneration
Committee
Charter,
Independent
Professional
Advice Policy
Website
the
The Board performs
role of
Remuneration Committee. When the
Board convenes as the Remuneration
those
Committee
functions which are delegated to it in
the
Remuneration
Company’s
Committee Charter.
it carries out
of
role
The
a Remuneration
Committee is to assist the Board in
fulfilling its responsibilities in respect of
establishing appropriate remuneration
for
levels and
employees.
Remuneration
Committee did not meet during the
financial year ended 30 June 2020.
incentive policies
The
of
for
and
responsibilities
recommendations
a
The
include
Remuneration Committee
setting policies
for senior officers’
remuneration, setting the terms and
conditions of employment
the
Executive Director,
reviewing and
making recommendations to the Board
on the Company’s incentive schemes
and superannuation arrangements,
reviewing the remuneration of both
Non-Executive
Executive
for
Directors,
remuneration by gender and making
recommendations on any proposed
changes and undertaking reviews of
the Managing Director’s performance,
including, setting with the Executive
Director goals and reviewing progress
in achieving those goals. The Board
collectively and each Director has the
right to seek independent professional
advice at the Company’s expense, up
to specified
is
limits,
currently set at $2,000), to assist them
to carry out their responsibilities.
(that
limit
Yes
Remuneration
Policy
Website
fees out of
amount
Non-Executive Directors are to be paid
the maximum
their
aggregate
by
approved
shareholders for the remuneration of
Non-Executive Directors. Executive
Director remuneration is set by the
– 55 –
Krakatoa Resources Limited
& Controlled Entities
Board with the executive director in
question not present. Full details
of
regarding
Directors has been included in the
Remuneration Report within
the
Annual Report.
remuneration
the
and
Non-Executive
Executives
Directors are prohibited from entering
transactions or arrangements
into
which
risk of
the economic
participating in unvested entitlements.
limit
Yes
Remuneration
Policy
Website
executive directors and
the remuneration of
executive directors and
other senior executives.
Recommendation 8.3
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.
– 56 –
Krakatoa Resources Limited
& Controlled Entities
ASX INFORMATION
AS AT 18 SEPTEMBER 2020
The following additional information is required by the ASX Limited in respect of listed public
companies and was applicable at 18 September 2020.
1.
Shareholder and Option holder information
a.
Number of Shareholders and Option Holders
Shares
As at 18 September 2020, there were 1,484 shareholders holding a total of 250,950,000 fully
paid ordinary shares.
Options
As at 18 September 2020, there were 82,800,000 Quoted Options exercisable at $0.05 on or
before 31 July 2021 held by 182 holders.
As at 18 September 2020, there were 12,000,000 Unquoted Options exercisable at $0.10 on
or before 24 October 2020 held by 4 holders and 5,000,000 Unquoted Options exercisable at
$0.075 on or before 31 July 2021 held by 6 holders.
b.
Distribution of Equity Securities
Fully paid ordinary shares
Number (as at 18 September 2020)
Category (size of holding)
Shareholders
Ordinary Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
46
25
210
826
377
1,484
9,040
110,549
1,824,458
34,776,400
214,229,553
250,950,000
The number of shareholdings held in less than marketable parcels is 51 shareholders
amounting to 20,043 shares.
Quoted $0.05 options
Number (as at 6 September 2019)
Category (size of holding)
Shareholders
Options
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
-
9
3
78
92
182
-
45,000
26,112
4,626,509
78,102,379
82,800,000
The number of option holdings held in less than marketable parcels is 10 option holders
amounting to 53,334 options.
– 57 –
Krakatoa Resources Limited
& Controlled Entities
c.
The names of substantial shareholders listed in the company’s register as at 18 September
2020 are:
Shareholder
Ordinary Shares
Lafras Luitingh
Helmsdale Investments Pty Ltd
25,286,538
15,537,500
%Held of Total
Ordinary Shares
10.08%
6.19%
d.
Voting Rights
The voting rights attached to the ordinary shares are as follows:
Each ordinary share is entitled to one vote when a poll is called, otherwise each member
present at a meeting or by proxy has one vote on a show of hands.
e.
20 Largest Shareholders as at 18 September 2020 — Ordinary Shares
Number of
Ordinary
Fully Paid
Shares Held
% Held of
Issued
Ordinary
Capital
25,286,538
10.08
15,537,500
4,500,000
4,500,000
3,750,000
2,937,560
2,830,000
2,525,000
2,500,000
6.19
1.79
1.79
1.49
1.22
1.17
1.13
1.01
1.00
MR LAFRAS LUITINGH
HELMSDALE INVESTMENTS PTY LTD
LOCKSLEY HOLDINGS PTY LTD
RIVERSDALE HOLDINGS PTY LTD
MRS MEILY DAHLIA EVIANA
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
E C DAWSON SUPER PTY LTD
3,070,000
PROF YEW KWANG NG
MRS JUDITH SUZANNE PIGGIN + MR DAMIEN JAYE PIGGIN + MR
GLENN ADAM PIGGIN
TAMBAR PTY LTD
10. DR TONY CREA + MRS GINA CREA
11. MR GURUMURTHY NIDIGAL + MRS PURNIMA NIDIGAL
2,500,000
1.00
12. MR ROSS EDWARD GUSTAFSON + MRS ALISON JANE UTLEY
13. ARCHFIELD HOLDINGS PTY LTD
14. MISS KATRINA EMILIA KUHN
15. MR JOHN COLIN LOOSEMORE + MRS SUSAN MARJORY
LOOSEMORE
2,352,691
2,250,000
2,058,941
2,000,001
16. MR KENNETH ERNEST CONWAY + MRS BARBARA ANN CONWAY
2,000,000
17. MR DOMINIC VIRGARA
18. MR DAVID GEORGE CRAGGS
19. R C FISHING PTY LTD
20. MR KONG HOCK TAN + MRS MARY MENG MAY ANG
2,000,000
1,890,299
1,732,327
1,687,218
87,908,075
0.94
0.90
0.82
0.80
0.80
0.80
0.75
0.69
0.67
35.03
– 58 –
Krakatoa Resources Limited
& Controlled Entities
f.
20 Largest Quoted $0.05 Option Holders as at 18 September 2020
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
MR TIMOTHY HOGAN
SOPRANO INVESTMENTS (WA) PTY LTD
KING CORPORATE PTY LTD
MR COLIN LOCKE
DABBLER PTY LTD
MR COLIN KENNETH LOCKE
MR JOHN LOMBARDO
MR DAVID LEE PALUMBO
HARD ROCK MINING PTY LTD
10. MRS VICTORIA HELEN GARDINER
11.
12.
13.
14.
ARCHFIELD HOLDINGS PTY LTD
ARCHFIELD HOLDINGS PTY LTD
TITAN SECURITIES PTY LTD
HELMSDALE INVESTMENTS PTY LTD
15. MR MURRAY WILLIAM BROUN
16. MR JOHN ROBERT TYRRELL + MS CLAIRE KATHERINE
TYRRELL
17. MINING CORPORATE PTY LTD
18. MR JOHN COLIN LOOSEMORE + MRS SUSAN MARJORY
LOOSEMORE
19. MR GRAHAM ROBERT FOREMAN
20. MRS JILLIANNE MURIEL FREEMAN
2.
The name of the company secretary is David Palumbo.
Number of
Ordinary
Fully Paid
Shares Held
% Held of
Issued
Ordinary
Capital
6,000,000
5,120,903
4,000,000
4,000,000
3,000,000
3,000,000
2,597,500
2,539,389
2,200,000
2,150,000
2,100,000
2,000,000
1,908,683
1,500,000
1,480,000
1,455,000
1,400,000
1,333,334
1,300,000
1,107,867
7.25
6.18
4.83
4.83
3.62
3.62
3.14
3.07
2.66
2.60
2.54
2.42
2.31
1.81
1.79
1.76
1.69
1.61
1.57
1.34
50,192,676
60.62
3.
4.
5.
The address of the principal registered office in Australia is:
Level 11, 216 St Georges Terrace Perth WA 6000
Registers of securities are held at the following address:
Computershare Investor Services Pty Ltd, Level 11, 172 St Georges Terrace, Perth WA 6000
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member
Exchanges of the ASX Limited.
– 59 –
Krakatoa Resources Limited
& Controlled Entities
SCHEDULE OF MINERAL TENEMENTS
AS AT 18 SEPTEMBER 2020
Project
Tenement
Interest held by
Krakatoa Resources Limited
Belgravia
Turon
Rand
Rand
Rand
Rand
Mt Clere
Mt Clere
Mt Clere
Mt Clere
Dalgaranga
Dalgaranga
Dalgaranga
Dalgaranga
Dalgaranga
Mac Well
EL8153
EL8942
ELA5982
ELA5985
ELA6012
ELA6013
E52/3730
E52/3731
E52/3836
E09/2357
P59/2082
P59/2140
P59/2141
P59/2142
E59/2389
E59/2175
100%
100%
-
-
-
-
-
-
-
-
100%
100%
100%
100%
-
100%
All tenements not indicated as 100% owned are under application.
– 60 –