& Controlled Entities
Annual Report
For the year ended 30 June 2023
Krakatoa Resources Limited
& Controlled Entities
CONTENTS
CORPORATE DIRECTORY ................................................................................................................... 3
DIRECTORS’ REPORT .......................................................................................................................... 4
AUDITOR’S INDEPENDENCE DECLARATION .................................................................................. 27
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
.............................................................................................................................................................. 28
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................... 29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................... 30
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................ 31
NOTES TO THE FINANCIAL STATEMENTS ...................................................................................... 32
DIRECTORS’ DECLARATION.............................................................................................................. 55
INDEPENDENT AUDITOR’S REPORT ................................................................................................ 56
ASX INFORMATION ............................................................................................................................. 59
SCHEDULE OF MINERAL TENEMENTS ............................................................................................ 62
– 2 –
Krakatoa Resources Limited
& Controlled Entities
CORPORATE DIRECTORY
PRINCIPAL AND REGISTERED OFFICE
Level 8, 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
CHIEF EXECUTIVE OFFICER
Mark Major
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 2023.
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 $3,466,003 (2022: $4,318,516).
FINANCIAL POSITION
As at 30 June 2023, the Group had a cash balance of $951,702 (2022: $4,220,925) and a net asset
position of $885,866 (2022: $3,826,063).
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 2023.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
No significant changes in the state of affairs occurred during the financial year.
– 4 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
REVIEW OF OPERATIONS
During the financial year, the Group continued its active systematic exploration focusing on the
Company’s WA assets. The company undertook significant exploration over the course of the 12
months which resulted in defining two JORC compliant mineral resource estimates and additional
target identification.
Details of the project specific exploration operations are provided below.
Mt Clere Project – Prospective for REE, Li, HMS, Ni, Cu +/- Co, PGE
During the financial year, the Mt Clere Project tenements were systematically explored for rare earth
elements, heavy mineral sands and nickel-copper metal sulphides. The company currently controls
more than 2,400km2 of prospective land separated over 11 tenements.
The project is located approximately 200km northwest of Meekatharra, within the Narrayer terrane
located in the north-western margins of the Yilgarn Craton in Western Australia.The Narryer Terrane
is thought to represent reworked remnants of greenstone sequences.
The initial exploration activities undertaken during the 2021 financial year identified several areas of
interest that recorded highly anomalous rare earth elements, base metals and pathfinder elements
associated with platinum group mineralisation systems. Several of these areas were followed up with
reconnaissance air core (AC) drilling program in the last financial year and resulted in the discovery of
significant REE mineralisation within the well-developed clay-rich regolith profiles over the Tower
area. These clay zones were enriched in high value magnetic and critical rare earth elements.
The company has drilled more than 200 holes around the Tower area and resulted in a major maiden
mineral resource estimate of 101 million tonnes (MT) of total rare earth oxide (TREO) grading 840
parts per million (ppm) (Figure 1). The mineral resource estimate is set out in the Table 1 below,
together with the exploration target for the extensional areas.
The impressive maiden mineral resource estimate (MRE) was defined in only 7 months following the
discovery at Tower and is highlighted by thick zones of near-surface mineralisation. 40% of the
mineral resource estimate is classified in an Indicated category. Importantly, the existing resource has
significant potential to substantially grow in size and scale as the mineral resource estimate only
includes ~20% of the identified exploration target drilled to date.
In addition, an exploration target for the Tower area was estimated to be an additional 57 – 481MT at
530-1050ppm TREO.
The potential quantity and grade of the exploration target is conceptual in nature and is therefore an
approximation. There has been insufficient exploration to estimate a mineral resource and it is
uncertain if further exploration will result in the estimation of a mineral resource. The parameters and
assumption of the various input parameters for the exploration target are detailed in Table 2.
Following delivery of a maiden MRE at the Tower Deposit in November, Krakatoa delivered another
significant milestone through the successful completion of a metallurgical test work program, which
generated excellent metallurgical recoveries on key rare earth elements Neodymium (Nd) and
Praseodymium (Pr).
The mineralogical study and metallurgical tests were conducted by the ANSTO research facility in
Sydney which has extensive experience in rare earth metallurgical testing on samples from many
deposits worldwide, including China. The results of the five composite samples represented the main
mineralised saprolite over 4-hole locations, with head grades ranging from 441-846ppm TRE+Y (300-
527ppm TRE-Ce) showed that extraction of the key magnetic (payable) REE’s achieved up to 63% for
Neodymium (Nd), 61% Praseodymium (Pr), 53% Terbium (Tb) and 44% Dysprosium (Dy).
These results were achieved using modest acidic water as the lixiviant at 50oC and pH 1 for a
duration of 6 hours. Importantly, these initial recovery rates compare favourably with other globally
significant clay hosted REE projects.
– 5 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
The QEMSCAN (quantitative evaluation of minerals by scanning electron microscopy) techniques.
provided encouraging results indicating that the clay is dominated by smectites, with minor amounts of
refractory minerals present. The small refractory mineral proportion is dominated by monazite, with
the higher extractions aligned with the sample having less contained monazite. All the REE clay
minerals and phases are typically less than 20 microns, which suggests simple beneficiation may be
beneficial.
Table 1. Tower project Mineral Resources estimate and Exploration Target.
Tonnes
TREO
TREO –
CeO2
CREO
HREO
LREO
U3O8
ThO2
(Mt)
(ppm)
(ppm)
(ppm)
(ppm)
(ppm)
(ppm)
(ppm)
40
61
101
824
852
840
481
540
517
233
290
267
182
266
233
642
586
607
1
2
2
31
32
32
57 - 481
530 - 1050
320-625
1 – 4
10- 35
Resource
Classification
JORC
Indicated
Inferred
Total(1)
Exploration
Target (2)
Notes:
(1) Mineral Resources reported at a cut-off grade of 300 ppm TREO-CeO2
(2) Exploration target is reported as a range. The potential quantity and grade of the Exploration Target is
conceptual in nature and is therefore an approximation. There has been insufficient exploration to
estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a
Mineral Resource
Table 2: Exploration Target parameters and assumptions
Parameter
Comments
Geological model
Bulk Density
Number of drill holes,
Based on drill hole regolith logging, assay results, geological mapping,
radiometric and spectral imagery
1.78 g/cm3 – estimated based on known clay material characteristics and reflects
same density as the Mineral resource estimate
139 drill holes in total: 39 logged and assayed over the Tower West area, plus 100
holes drilled and assayed that make up the Mineral resource estimates over the
Tower central and southern area; Clay hosted >500ppm TREO intersection
identified with geological information
Cut-off grades
200ppm TREO, no other element cut offs were used
Target grade
>750ppm TREO
Mineralisation zonation factor
– dilution factor
REO zone thickness in drilled areas were averaged and those REO zone thickness
outside the drilled area is discounted by ~35-40% to account for variability in
mineralisation zonation due to topographical and basement highs.
– 6 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
Figure 1 Tower Project JORC classification plan with drillhole and cross sections shown
Late in the reporting year the company initiated a series of major greenfield exploration programs
across the more extensive Mt Clere project. The objective is to carry out regional exploration
programs to replicate the Tower discovery success while also investigating other commodity
opportunities within the vast land holding.
These programs included outcrop geological mapping and geochemical (rock and soil) sampling to
generate new targets across under-explored region. Targeted exploration fieldwork at specific areas
of interest previously identified, which include Wheelo Creek & Number 6 bore, and a zone of
elevated metal values in stream samples identified northeast of One Gum bore, to name a few.
– 7 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
King Tamba Project – Prospective for Ta, Rb, Nb, Sn, W, Li, +/- Base metals
The King Tamba Project (formerly known as 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 LCT pegmatites.
The presence of critical metal minerals such as tapiolite, tantalite, columbite, zinnwaldite and lepidolite
(lithium-bearing micas) were recognised during field mapping and confirmed anomalous critical metals
during the rock chip sampling programmes completed in late 2016 to mid-2017.
During the period, the company completed a resource development drill program that resulted in a
maiden mineral resource estimation (MRE) of 5Mt @ 0.14% Rb2O with a Li2O credit (Figure 2 and
Table 3). The resource was highlighted by thick zones of mineralised pegmatites up to 70m in
thickness and mineralisation remains open in all directions.
Figure 2 Location of Mineral Resource area, drill holes, and remanent mine facilities
– 8 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
Table 3: King Tamba Mineral Resource Estimate
Resource
Classification
JORC
Inferred
Total
Cut-off
Tonnes
Rb2O
(Rb2O %)
0.05
0.05
(Mt)
5.0
5.0
(%)
0.14
0.14
Li2O
(%)
0.05
0.05
Contained
Rb2O
(t)
7300
7300
Contained
Li2O
(t)
2700
2700
Krakatoa also completed a remote sensing study which highlights the lithium-caesium-tantalum (LCT)
pegmatite potential of King Tamba.
Prior to the Company’s acquisition of King Tamba, historical exploration focused on tantalum with
minimal exploration completed outside the main mining area. This first pass study of Sentinel-2
remote sensing data was assist with identifing prospective targets with potential to host LCT
mineralisation. Multiple targets were generated with the highest ranked correlating with known
mapped pegmatite outcrops. Many other target zones lie over areas which have not previously been
subject to mapping, sampling, or drilling (Figure 1).
Figure 3: Isometric Sentinel-2 response map over King Tamba area
– 9 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
Initial field testing of these targets was carried out in the end of the reporting period (June) with the
results reported on 5 July 2023 returning rock chips of up to 4.3% Li2O.
Opportunistic rock sampling in the area also revealed the presence of anomalous rubidium (peak
values of >5,000ppm (sample AD004) and 3463.9ppm Rb (sample 17D022)) Tantalum (1,854ppm
Ta2O5 (sample 16D016), and Niobium (725ppm Nb in sample 16D005) within the mine and southern
pegmatite area. Since then further work has identifed several zones of higher grade mineralsation.
Rand Project- Prospective for IRGS (Au), granite hosted Sn and REE.
During the financial year, the Company undertook reconnaissance aircore drilling focusing on REE
targets around the Ryan and Jindera Granite area (Figure 4).
Figure 4 Map showing location of KTA exploration licences and area of aircore drilling.
– 10 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
The drill program consisted of 27 holes for 1318m of Air Core. The assays were received indicating
the area has the potential for clay-hosted REE discovery (Figure 5).
Key intersections returned:
o 8m at 1056ppm TREO within 42m @ 483ppm TREO (from surface) (RAC004)
o 12m @ 875ppm TREO from 50m (RAC015)
o 4m @ 1209ppm TREO from 48m (RAC017)
o 14m @ 707ppm TREO from 46m (RAC026)
o 28m @ 658ppm TREO from 26m (RAC006)
o 6m @ 739ppm TREO from 18m (RAC011)
o 12m @ 602ppm TREO from 40m (RAC019)
o 12m @ 564ppm TREO from 36m (RAC024)
o 7m @ 572ppm TREO from 1m (RAC002)
Figure 5: Ryan Granite AC drillholes over bedrock geology with drill intercepts
The company is still in negotiations for land access over the well-known Goombargana granite area.
This is a historical mining area which was active prior to 1949 for the industrial mineral feldspar. More
recent exploration and metallurgical studies were undertaken on the commercialisation of potash and
soda feldspars, in the late 1990’s by Wallarah Minerals Pty Ltd (Wallarah). This project was
abandoned due to the Asian economic crisis in late 1990’s. The price for Soda Ash has fluctuated
around $250-$700/t within the last 5 years to $450/t more recently.
– 11 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
Belgravia Project – Cu, Au,
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 (Figure 6) with considerable exploration
potential for porphyry Cu-Au and associated skarn mineralisation.
During the reporting period the Company completed a Dipole Dipole Induced Polarisation (DDIP)
survey along the Bella anomaly. No further work has been undertaken.
Figure 6 Belgravia project location map, prospects and major copper & gold mines and deposits on regional
bedrock geology.
– 12 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
Turon Project – Au, +/-Cu
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 company completed a small diamond drill program in 2020 over several identified targets within
the Turon project. The drilling was designed to test several shallow gold targets situated within the
Box Ridge (Britannia Mine) and Quartz Ridge line of workings which strike over 2.4km and 1.6km
respectively.
Limited site-based reconnaissance activities were undertaken during the last financial year.
Mac Well Project - Au
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.
Limited site-based reconnaissance activities were undertaken during the last financial year.
Competent Person’s Statement
The information in this announcement is based on, and fairly represents information compiled by Mark
Major, Krakatoa Resources CEO, who is a Member of the Australasian Institute of Mining and
Metallurgy and a full-time employee of Krakatoa Resources. Mr Major has sufficient experience
relevant to the style of mineralisation and type of deposit under consideration, and to the activity
which he has undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint
Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. Mr Major consents to the inclusion in this announcement of the matters
based on this information in the form and context in which it appears.
The information in this report which relates to Mineral Resources for the Tower rare earth deposit is
based upon and fairly represents information compiled by Mr Greg Jones who is a Fellow of the
Australasian Institute of Mining and Metallurgy. Mr Jones is a full-time employee of IHC Mining and
has sufficient experience relevant to the style of mineralisation, the type of deposit under
consideration and to the activity which he is undertaking to qualify as a Competent Person as defined
in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves”. The Company confirms that it is not aware of any new information or data that
materially affects the information included in the relevant market announcement (ASX announcement
dated 21 November 2022) and that all material assumptions and technical parameters underpinning
the estimates in the relevant market announcement (ASX announcement dated 21 November 2022)
continue to apply and have not materially changed. The Company confirms that the form and context
in which the Competent Person’s findings are presented have not been materially modified from the
original market announcement (ASX announcement dated 21 November 2022).
– 13 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
The information in this report that relates to Mineral Resources for King Tamba is based on
information compiled by Mr Daniel Saunders, a Competent Person who is a Fellow of The
Australasian Institute of Mining and Metallurgy. Mr Saunders is a full-time employee of Cube
Consulting Pty Ltd, acting as independent consultants to Krakatoa Resources Limited. Mr Saunders
has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration, and to the activity being undertaken to qualify as a Competent Person as defined in the
2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves’. The Company confirms that it is not aware of any new information or data that
materially affects the information included in the relevant market announcement (ASX announcement
dated 9 March 2023) and that all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement (ASX announcement dated 9 March 2023) continue
to apply and have not materially changed. The Company confirms that the form and context in which
the Competent Person’s findings are presented have not been materially modified from the original
market announcement (ASX announcement dated 9 March 2023).
– 14 –
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.
through
From 2008, Mr. Locke focused on natural resources exploration
pursuits
founded
Western Mining Network Ltd, (now Aston Minerals Limited, ASO)
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. He currently serves on the board of
Rubix Resources Limited (ASX: RB6)
1,329,000 Fully paid ordinary shares
4,000,000 options exercisable at $0.075 on or before
29 November 2023
2,500,000 share performance rights vesting at $0.20 on or before
29 November 2023
2,500,000 share performance rights vesting at $0.30 on or before
29 November 2023
2,500,000 share performance rights vesting at $0.40 on or before
29 November 2023
Directorships held in other
listed entities
Rubix Resources Limited
– 15 –
Krakatoa Resources Limited
& Controlled Entities
Timothy Hogan
Non-Executive Director
DIRECTORS’ REPORT (CONT.)
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.
Interest in Securities
400,000 Fully paid ordinary shares
3,000,000 options exercisable at $0.075 on or before
29 November 2023
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
Albion Resources Limited (ASX: ALB) and Rubix Resources
Limited (RB6).
Interest in Securities
4,500,000 Fully paid ordinary shares
2,100,000 options exercisable at $0.075 on or before
29 November 2023
Directorships held in other
listed entities
Albion Resources Limited
Rubix Resources Limited
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.
– 16 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
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 his agreement, his remuneration is subject to
annual review. Under the terms of his existing agreement, his remuneration is $160,000 (plus
superannuation). Under the terms of his agreement, Mr Locke received reimbursements for travel and
other expenses related to his employment during the financial year. The executive agreement may be
terminated by either party with 3 months’ written notice.
Mark Major was appointed as Chief Executive Officer, effective from 14 October 2020. Under the terms
of the executive agreement, Mr Major is entitled to receive a base salary of $220,000 per annum
(inclusive of superannuation), which is subject to annual review and mandatory increases in
superannuation legislation. 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 entitled to $40,000 per annum plus superannuation and Mr Palumbo is entitled to $66,300 per
annum including superannuation.
Key management personnel have no entitlement to termination payments in the event of removal for
misconduct.
Use of Remuneration Consultants
During the financial year ended 30 June 2023, there was no use of remuneration consultants by the
Group.
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.
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.
– 17 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
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 were no performance-based incentives offered to the board or employees during the financial
year. In the financial year ended 30 June 2022, the Board issued CEO Mark Major 5,000,000 incentive
options exercisable at $0.15 expiring on 29 November 2023.
Voting and comments made at the company's 2022 Annual General Meeting ('AGM')
At the 2022 AGM, 94% of the votes received supported the adoption of the remuneration report for
the year ended 30 June 2022. The company did not receive any specific feedback at the AGM
regarding its remuneration practices.
4. Details of remuneration for the year ended 30 June 2023
The remuneration for each director and key management personnel of the Group during the financial
year ended 30 June 2023 and 30 June 2022 was as follows:
2023
Short-term
Benefits
Post-
employment
Benefits
Other
Long-term
Benefits
Share based
Payment
Total
Perfor-
mance
Related
Value of
Options /
Rights Re-
muneration
Directors and Key
Management
Person
Cash, salary &
commissions
Super-
annuation
Other
Shares Options /
Rights
$
$
$
$
$
$
%
%
Colin Locke
160,000
16,800
Timothy Hogan
David Palumbo
40,000
60,000
4,200
6,300
Mark Major
200,913
21,096
460,913
48,396
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
176,800
44,200
66,300
222,009
509,309
-
-
-
-
-
-
-
-
-
-
– 18 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
2022
Short-term
Benefits
Post-
employment
Benefits
Other
Long-term
Benefits
Share based
Payment
Total
Perfor-
mance
Related
Value of
Options /
Rights Re-
muneration
Directors and Key
Management
Person
Cash, salary &
commissions
Super-
annuation
Other
Shares Options
$
$
$
$
$
$
%
%
Colin Locke
160,000
16,000
Timothy Hogan
David Palumbo
40,000
66,000
4,000
-
Mark Major
200,913
20,091
466,913
40,091
-
-
-
-
-
-
-
-
-
-
-
176,000
44,000
66,000
- 371,704
592,708
- 371,704
878,708
-
-
-
-
-
-
-
-
63
63
5. Equity holdings of key management personnel
Shareholdings
Number of shares held by key management personnel during the financial year ended 30 June 2023
was as follows:
2023
Directors and Key
Management
Person
Colin Locke
Timothy Hogan
David Palumbo
Mark Major
Total
Balance
1.7.2022
No.
Received as
Compensation
No.
Options
Exercised
No.
Net Change
Other
No.
Balance
30.6.2023
No.
1,129,000
400,000
3,601,500
-
5,130,500
-
-
-
-
-
-
-
-
-
-
-
-
398,500
-
398,500
1,129,000
400,000
4,000,000
-
5,529,000
Option holdings
Number of options held by key management personnel during the financial year ended 30 June 2023
was as follows:
2023
Balance
1.7.2022
No.
Received as
Compensation
No.
Options
Expired
No.
Net Change
Other
No.
Balance
30.6.2023
No.
Directors and Key
Management
Person
Colin Locke
Timothy Hogan
David Palumbo
Mark Major
Total
4,000,000
3,000,000
2,100,000
10,000,000
19,100,000
-
-
-
-
-
-
-
-
-
-
4,000,000
3,000,000
2,100,000
10,000,000
19,100,000
-
-
-
-
-
– 19 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
Share performance rights
Number of performance rights held by key management personnel during the financial year ended 30
June 2023 was as follows:
2023
Balance
1.7.2022
No.
Received as
Compensation
No.
Rights
Expired
No.
Net Change
Other
No.
Balance
30.6.2023
No.
Directors and Key
Management
Person
Colin Locke
Timothy Hogan
David Palumbo
Mark Major
Total
7,500,000
-
-
7,500,000
15,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,500,000
-
-
7,500,000
15,000,000
6. Other transactions with key management personnel
During the year, the Company paid C29 Metals Limited (CEO Mark Major was an Executive Director)
for the services of its Exploration Manager, per the Secondment Agreement, signed 18 January 2021.
The Company also receipted monies from C29 Metals, for the use of its office lease, and Plant and
Equipment.
The Company also paid Albion Resources Limited (of which David Palumbo is a Non-Executive
Director) for use of its office lease, until the Company took assignment of the lease on 1 March 2023.
The Company also receipted monies from Albion Resources for the secondment of its employee.
The Company receipted monies from Rubix Resources Limited (of which Colin Locke and David
Palumbo are Non-Executive Directors) for use of the Company’s office premises.
All transactions were made on normal commercial terms and conditions and at market rates.
The following transactions occurred with related parties:
Payments to C29 Metals Limited for secondment services
Monies receipted from C29 Metals Limited
Payments to Albion Resources Limited for use of its office lease
Receipts from Albion Resources Limited for secondment of employee
Receipts from Rubix Resources Limited for use of KTA office premises
Current amount payable to Colin Locke at 30 June 2023 for
reimbursement of corporate costs
– 20 –
Consolidated
2023
$
2022
$
19,578
(3,560)
16,018
27,082
(401)
26,681
6,559
6,317
-
-
-
-
-
-
-
-
Krakatoa Resources Limited
& Controlled Entities
There were no other related party transactions during the year ended 30 June 2023 (2022: Nil).
7. Equity instruments granted as compensation
There were no equity instruments granted as compensation during the year.
8. Group Performance
The earnings of the consolidated entity for the five years to 30 June 2023 are summarised below:
Sales revenue
EBITDA
EBIT
(Loss) after income tax
2023
$
2022
$
2021
$
2020
$
-
(3,417,968)
(3,458,145)
(3,466,003)
-
(4,314,173)
(4,318,516)
(4,318,516)
-
(3,719,276)
(3,719,276)
(3,719,276)
-
(2,650,603)
(2,650,603)
(2,650,603)
2019
$
-
(739,390)
(739,390)
(739,390)
The factors that are considered to affect total shareholder return (‘TSR’) are summarised below:
Share price at financial year end ($)
Dividends declared (cents per share)
Basic loss per share (cents per share)
2023
0.024
-
(1.00)
2022
0.047
-
(1.43)
2021
0.048
-
(1.38)
2020
0.038
-
(1.47)
2019
0.022
-
(0.63)
End of “Remuneration Report (Audited)”
– 21 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
SHARES UNDER OPTION
Unissued ordinary shares of Krakatoa Resources Limited under option at the date of this report are as
follows:
Grant date
30/11/2020
15/01/2021
02/08/2021
29/04/2022
Expiry date
29/11/2023
29/11/2023
29/11/2023
29/11/2023
Exercise Number
price
$0.075
$0.075
$0.075
$0.150
under
option
15,000,000
1,200,000
5,000,000
5,000,000
26,200,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in
any share issue of the company or of any other body corporate.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were no shares issued under the exercise of options throughout the financial period ended 30
June 2023.
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
4
4
4
Number attended
4
4
3
EVENTS AFTER THE REPORTING PERIOD
On 19 July 2023, the Company issued 63,000,000 fully paid ordinary shares to raise $2.27m before
costs. Further to this on 25 September 2023, the Company announced that 8,521,333 fully paid
ordinary shares were issued to raise an additional $306,768 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.
RISK MANAGEMENT
The Board of Directors review the key risks associated with conducting exploration and evaluation
activities in Australia and steps to manage those risks. The key material risks faced by the Group
include:
– 22 –
Krakatoa Resources Limited
& Controlled Entities
Exploration and development
DIRECTORS’ REPORT (CONT.)
The future value of the Group will depend on its ability to find and develop resources that are
economically recoverable. Mineral exploration and development is a speculative undertaking that may
be impeded by circumstances and factors beyond the control of the Group. Success in this process
involves, among other things; discovery and proving-up an economically recoverable resource or
reserve, access to adequate capital throughout the project development phases, securing and
maintaining title to mineral exploration projects, obtaining required development consents and
approvals and accessing the necessary experienced operational staff, the financial management,
skilled contractors, consultants and employees.
The Group is entirely dependent upon its projects, which are the sole potential source of future
revenue, and any adverse development affecting these projects would have a material adverse effect
on the Group, its business, prospects, results of operations and financial condition.
Economic Conditions
Factors such as (but not limited to) political movements, stock market fluctuations, interest rates,
inflation levels, commodity prices, foreign exchange rates, industrial disruption, taxation changes and
legislative or regulatory changes, may all have an adverse impact on operating costs, the value of the
Group’s projects, the profit margins from any potential development and the Company’s share price.
Reliance on key personnel
The Group’s success is to a large extent dependent upon the retention of key personnel and the
competencies of its directors, senior management, and personnel. The loss of one or more of the
directors or senior management could have an adverse effect on the Group’s. There is no assurance
that engagement contracts for members of the senior management team personnel will not be
terminated or will be renewed on their expiry. If such contracts were terminated, or if members of the
senior management team were otherwise no longer able to continue in their role, the Group would
need to replace them which may not be possible if suitable candidates are not available.
Future funding risk
Continued exploration and evaluation is dependent on the Company being able to secure future
funding from equity markets. The successful development of a mining project will depend on the
capacity to raise funds from equity and debt markets. The Company will need to undertake
equity/debt raisings for continued exploration and evaluation. There can be no assurance that such
funding will be available on satisfactory terms or at all at the relevant time. Any inability to obtain
sufficient financing for the Group’s activities and future projects may result in the delay or cancellation
of certain activities or projects, which would likely adversely affect the potential growth of the Group.
Unforeseen expenditure risk
Exploration and evaluation expenditures and development expenditures may increase significantly
above existing projected costs. Although the Group is not currently aware of any such additional
expenditure requirements, if such expenditure is subsequently incurred, this may adversely affect the
expenditure proposals of the Group and its proposed business plans.
– 23 –
Krakatoa Resources Limited
& Controlled Entities
Environmental, weather & climate change
DIRECTORS’ REPORT (CONT.)
The highest priority climate related risks include reduced water availability, extreme weather events,
changes to legislation and regulation, reputational risk, and technological and market changes. Mining
and exploration activities have inherent risks and liabilities associated with safety and damage to the
environment, including the disposal of waste products occurring as a result of mineral exploration and
production, giving rise to potentially substantial costs for environmental rehabilitation, damage control
and losses. Delays in obtaining approvals of additional remediation costs could affect profitable
development of resources.
Cyber Security and IT
The Group relies on IT infrastructure and systems and the efficient and uninterrupted operation of
core technologies. Systems and operations could be exposed to damage or interruption from system
failures, computer viruses, cyber-attacks, power or telecommunication provider’s failure or human
error.
INDEMNITY AND INSURANCE OF AUDITOR
The Group has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the Group or any related entity against a liability incurred by the auditor.
During the financial year, the Group has not paid a premium in respect of a contract to insure the
auditor of the Group 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.
– 24 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the company, or to intervene in any proceedings to which the company is a
party for the purpose of taking responsibility on behalf of the company for all or part of those
proceedings.
NON-AUDIT SERVICES
The following fees were paid or payable to the auditor for non-audit services provided during the year
ended 30 June 2023:
—
taxation services
$
1,000
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 Group who are former partners of RSM Australia partners.
ROUNDING OF AMOUNTS
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian
Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been
rounded off in accordance with that Corporations Instrument to the nearest dollar.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2023 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.
– 25 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ REPORT (CONT.)
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001
On behalf of the directors
Colin Locke
Executive Chairman
Dated: 29 September 2023
– 26 –
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
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
2023, 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 2023
TUTU PHONG
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 2023
Other income
Administration expense
Compliance and regulatory expense
Employee benefits expense
Exploration expenditure and project evaluation costs
Depreciation
Share based payment expense
Loss before income tax expense
Income tax expense
Note
2023
$
2022
$
2
2
2
2
14
3
21,246
51,275
(434,541)
(243,937)
(306,846)
(2,453,096)
(40,177)
(8,652)
(197,300)
(245,064)
(397,848)
(3,020,284)
(4,343)
(504,952)
(3,466,003)
-
(4,318,516)
-
Loss after income tax for the year
(3,466,003)
(4,318,516)
Other comprehensive income
Other comprehensive income for the year, net of tax
-
-
Total comprehensive loss for the year
(3,466,003)
(4,318,516)
Loss attributable to members of the parent entity
(3,466,003)
(4,318,516)
Basic and diluted loss per share (cents per share)
4
(1.00)
(1.43)
The accompanying notes form part of these financial statements.
– 28 –
Krakatoa Resources Limited
& Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other Assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Plant and equipment
Right-of-use assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Lease liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2023
$
2022
$
5
6
7
6
8
9
10
11
9
9
951,702
48,297
26,262
1,026,261
4,220,925
152,632
69,597
4,443,154
68,000
203,356
89,725
361,081
109,600
151,723
-
261,323
1,387,342
4,704,477
383,584
22,314
55,588
461,486
39,990
39,990
833,562
44,852
-
878,414
-
-
501,476
878,414
885,866
3,826,063
12
13
22,485,776
3,301,922
(24,901,832)
21,968,622
3,293,270
(21,435,829)
885,866
3,826,063
The accompanying notes form part of these financial statements.
– 29 –
Krakatoa Resources Limited
& Controlled Entities
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Note
Issued
Capital
$
Accumulated
Losses
$
Option Premium
Reserve
$
Total
$
Balance at 1 July 2021
16,525,965
(17,117,313)
2,794,069
2,202,721
Loss for the year
Other comprehensive income
Total comprehensive loss
-
-
-
(4,318,516)
-
(4,318,516)
-
-
-
(4,318,516)
-
(4,318,516)
Transactions with owner 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 2022
12
12
5,787,996
-
-
5,787,996
(345,339)
-
21,968,622
-
-
(21,435,829)
-
499,201
3,293,270
(345,339)
499,201
3,826,063
Balance at 1 July 2022
21,968,622
(21,435,829)
3,293,270
3,826,063
Loss for the year
Other comprehensive income
Total comprehensive loss
-
-
-
(3,466,003)
-
(3,466,003)
-
-
-
(3,466,003)
-
(3,466,003)
Transactions with owner directly
recorded in equity
Shares issued during the year
Less: transaction costs arising from
issue of shares
Share based payments
Balance at 30 June 2023
12
12
14
560,000
-
-
560,000
(42,846)
-
22,485,776
-
-
(24,901,832)
-
8,652
3,301,922
(42,846)
8,652
885,866
The accompanying notes form part of these financial statements.
– 30 –
Krakatoa Resources Limited
& Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Note
2023
$
2022
$
CASH FLOWS FROM OPERATING ACTIVITIES
Interest income
Other income
Payments to suppliers and employees
Payment for exploration and evaluation expenditure and
project evaluation costs
Lease interest repaid
216
21,030
(834,060)
-
51,275
(871,222)
(2,873,895)
(7,858)
(2,581,660)
-
Net cash used in operating activities
15
(3,694,567)
(3,401,607)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for plant and equipment
(78,351)
(156,066)
Net cash used in investing activities
(78,351)
(156,066)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Payment of transaction costs associated with capital
raising
Lease repayments
560,000
5,782,246
(42,846)
(13,459)
(345,339)
-
Net cash provided by financing activities
503,695
5,436,907
Net (decrease)/increase in cash held
Cash at beginning of financial year
(3,269,223)
4,220,925
1,879,234
2,341,691
Cash at end of financial year
5
951,702
4,220,925
The accompanying notes form part of these financial statements.
– 31 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 2023 by the directors.
Basis of Preparation
These general-purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board
('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial
statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board ('IASB').
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.
All amounts are presented in Australian dollars unless otherwise stated.
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
(s).
Significant accounting policies
Material accounting policies adopted in the preparation of this financial report are presented below.
They have been consistently applied unless otherwise stated.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian
Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been
rounded off in accordance with that Corporations Instrument to the nearest nearest dollar.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued
by the Australia Accounting Standards Board (‘AASB’) that are mandatory for the current reporting
period.
Any new or amended Accounting Standards or Interpretations that not yet mandatory have not been
early adopted.
– 32 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
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.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
Group only. Supplementary information about the parent entity is disclosed in note 23.
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.
– 33 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
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.
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, its
carrying value is written off.
– 34 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
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.
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.
– 35 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
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.
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.
– 36 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
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) Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance
costs are expensed in the period in which they are incurred.
j) 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.
k) 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.
l) 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.
m) Employee Benefits
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee
benefits are benefits (other than termination benefits) that are expected to be settled wholly before 12
months after the end of the annual reporting period in which the employees render the related service,
including wages, salaries and sick leave. Short-term employee benefits are measured at the
(undiscounted) amounts expected to be paid when the obligation is settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are
recognised as a part of current trade and other payables in the statement of financial position. The
Group’s obligations for employees’ annual leave and long service leave entitlements are recognised
as provisions in the statement of financial position.
Defined contribution superannuation expense
Contributions to defined contributions superannuation plans are in the period in which they are
incurred.
Share-based payments
The consolidated entity operates equity-settled share-based payment employee share and option
schemes. The fair value of the equity to which employees become entitled is measured at grant date
and recognised as an expense over the vesting period, with a corresponding increase to an equity
account.
– 37 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Share based payments to non-employees are measured at the fair value of goods or services
received or the fair value of the equity instruments issued, if it is determined the fair value of the good
or services cannot be reliably measured and are recorded at the date the goods or services are
received. The corresponding amount is shown in the option reserve.
The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained
using an appropriate valuation model which incorporates all market vesting conditions. The number of
shares and options expected to vest is reviewed and adjusted at the end of each reporting period
such that the amount recognised for services received as consideration for the equity instruments
granted shall be based on the number of equity instruments that eventually vest.
Issued capital
n)
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.
o) 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 Group, 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.
p) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
q) Property, Plant and Equipment
Land and buildings are shown at fair value, based on periodic, at least every 3 years, valuations by
external independent valuers, less subsequent depreciation and impairment for buildings. The
valuations are undertaken more frequently if there is a material change in the fair value relative to the
carrying amount. Any accumulated depreciation at the date of revaluation is eliminated against the
gross carrying amount of the asset and the net amount is restated to the revalued amount of the
asset. Increases in the carrying amounts arising on revaluation of land and buildings are credited in
other comprehensive income through to the revaluation surplus reserve in equity. Any revaluation
decrements are initially taken in other comprehensive income through to the revaluation surplus
reserve to the extent of any previous revaluation surplus of the same asset. Thereafter the
decrements are taken to profit or loss.
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
– 38 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property,
plant and equipment (excluding land) over their expected useful lives as follows:
Plant and equipment
2-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate,
at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated
useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the Group. Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is
transferred directly to retained profits.
r) Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable,
any lease payments made at or before the commencement date net of any lease incentives received,
any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of
costs expected to be incurred for dismantling and removing the underlying asset, and restoring the
site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or
the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects
to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its
for any
estimated useful
remeasurement of lease liabilities.
life. Right-of use assets are subject to impairment or adjusted
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease
liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease
payments on these assets are expensed to profit or loss as incurred.
s) 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.
– 39 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
t) 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 Group'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 Group'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.
u) Leases
A lease liability is recognised at the commencement date of a lease. The lease liability is initially
recognised at the present value of the lease payments to be made over the term of the lease,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the
Company’s incremental borrowing rate. Lease payments comprise of fixed payments less any lease
incentives receivable, variable lease payments that depend on an index or a rate, amounts expected
to be paid under residual value guarantees, exercise price of a purchase option when the exercise of
the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are expensed in the period in which they are
incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying
amounts are remeasured if there is a change in the following: future lease payments arising from a
change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and
termination penalties. When a lease liability is remeasured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is
fully written down.
– 40 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 2: OTHER INCOME AND EXPENSES
Other income
Interest income
Other Income
Loss before income tax from continuing operations
includes the following specific expenses:
Administration expense
Short-term lease payments
Bank charges
Interest charges paid/payable on lease liabilities
Net foreign exchange loss
Other administrative expenses
Employee benefits expense
Salaries and directors’ fees
Defined contribution superannuation expense
Depreciation
Plant and equipment
Office lease right-of-use assets
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 30% (2022: 30%)
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 30% (2022: 30%):
Deferred tax assets have not been
recognised in respect of the following:
Tax revenue losses
– 41 –
2023
$
2022
$
216
21,030
21,246
-
51,275
51,275
21,686
1,447
7,858
656
402,894
434,541
229,512
77,334
306,846
26,718
13,459
40,177
3,741
448
-
4,406
188,705
197,300
368,963
28,885
397,848
4,343
-
4,343
(3,466,003)
(4,318,516)
(1,039,801)
(1,295,555)
(56,166)
1,095,967
(55,327)
1,350,882
-
-
21,936,128
18,318,021
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 3:
INCOME TAX EXPENSE (CONT.)
Potential deferred tax assets attributable to tax losses and exploration expenditure carried
forward have not been brought to account at 30 June 2023 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.
2023
$
2022
$
NOTE 4:
EARNINGS PER SHARE
Loss used to calculate basic EPS
(3,466,003)
(4,318,516)
Weighted average number of ordinary shares outstanding
during the period used in calculating basic and diluted EPS
347,940,686
302,004,725
Basic and diluted loss per share
(1.00)
(1.43)
Cents
Cents
No.
No.
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
GST receivable
Non-Current
Other receivables
2023
$
2022
$
951,702
951,702
4,220,925
4,220,925
48,297
48,297
68,000
68,000
152,632
152,632
109,600
109,600
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 2023.
– 42 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 7: OTHER ASSETS
Other Assets
NOTE 8: PLANT AND EQUIPMENT
Equipment at cost
Equipment – accumulated depreciation
Equipment
Balance at the beginning of the year
Additions
Disposals
Depreciation
Balance at the end of the year
NOTE 9: RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
a. Right-of-use assets
Office lease at Cost
Office lease – accumulated depreciation
Office lease
Balance at the beginning of the year
Additions
Depreciation
Balance at the end of the year
b. Lease Liabilities
Office Lease
Current
Non-Current
Total
2023
$
2022
$
26,262
26,262
69,597
69,597
234,416
(31,060)
203,356
151,723
78,351
-
(26,718)
203,356
103,184
(13,459)
89,725
-
103,184
(13,459)
89,725
95,578
55,588
39,990
95,578
156,066
(4,343)
151,723
-
156,066
-
(4,343)
151,723
-
-
-
-
-
-
-
-
-
-
-
Effective 1 March 2023, the Company signed an agreement with Albion Resources Limited to transfer
their existing lease to Krakatoa for shared office premises at Level 4, 172 St Georges Terrace, Perth
WA 6000, that Albion no longer utilises. There was 2 years left on the term.
NOTE 10: TRADE AND OTHER PAYABLES
Trade payables and accrued expenses
383,584
383,584
833,562
833,562
Trade creditors, excluding related party payables, are expected to be paid on 30-day terms.
– 43 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 11: PROVISIONS
CURRENT
Employee benefits
2023
$
2022
$
22,314
22,314
44,852
44,852
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes all unconditional entitlements where employees
have completed the required period of service and also those where employees are entitled to pro-
rata payments in certain circumstances. The entire amount is presented as current, since the
consolidated entity does not have an unconditional right to defer settlement. However, based on past
experience, the consolidated entity does not expect all employees to take the full amount of accrued
leave or require payment within the next 12 months.
NOTE 12: ISSUED CAPITAL
2023
No.
2023
$
2022
No.
2022
$
Fully paid ordinary shares with no par value 363,376,584 22,485,776 344,709,917 21,968,622
a)
Ordinary shares
At the beginning of reporting period
Shares issued during the year:
- 13 July 2021 – Option conversion
(refer note 13b(i))
- 22 July 2021 – Option conversion
(refer note 13b(i))
- 29 July 2021 – Option conversion
(refer note 13b(i))
- 3 August 2021 – Option conversion
(refer note 13b(i))
- 29 April 2022 (i)
- 28 April 2023 (ii)
Less capital raising costs
344,709,917 21,968,622 278,950,000 16,525,965
-
-
-
-
-
-
-
-
702,200
35,110
4,111,777
205,589
6,870,922
343,546
4,075,018
203,751
-
18,666,667
-
- 50,000,000
-
-
560,000
(42,846)
5,000,000
-
(345,339)
Net share capital
363,376,584 22,485,776 344,709,917 21,968,622
(i)
(ii)
50,000,000 shares were issued on 29 April 2022 at an issue price of $0.10 per share
raising $5,000,000 in cash before costs.
18,666,667 shares were issued on 28 April 2023 at an issue price of $0.03 per share to
raise $560,000 before costs.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of
the company in proportion to the number of and amounts paid on the shares held. The fully paid
ordinary shares have no par value and the company does not have a limited amount of authorised
capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote.
– 44 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 12: ISSUED CAPITAL (CONT.)
Share buy-back
There is no current on-market share buy-back.
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.
The capital risk management policy remains unchanged from the 30 June 2022 Annual Report.
Cash and cash equivalents
Trade and other receivables
Other assets
Trade and other payables
Provisions
Lease Liabilities
Working capital position
2023
$
951,702
48,297
26,262
(383,584)
(22,314)
(55,588)
2022
$
4,220,925
152,632
68,597
(833,562)
(44,852)
-
564,775
3,563,740
– 45 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 13: RESERVES
2023
$
2022
$
(a) Share based payment reserve
3,301,922
3,293,270
(b) Movement in share-based payment reserve
Balance at 1 July 2021
Options exercised during period – 13 July 2021 (i)
Options exercised during period – 22 July 2021 (i)
Options exercised during period – 29 July 2021 (i)
Options exercised during period – 3 August 2021 (i)
Options lapsed during the period (ii)
Options lapsed during the period (ii)
Amounts received for exercise prior to 30 June 2021
Corporate advisory options issued (Note 14a)
Employees options (Note 14a)
KMP Performance rights (Note 14b)
KMP Options issued – 29 April 2022 (iii)
Balance at 30 June 2022
Balance at 1 July 2022
Options vested during the period
Balance at 30 June 2023
No.
119,000,000
(702,200)
(4,111,777)
(6,870,922)
(4,075,018)
(67,040,083)
(5,000,000)
-
5,000,000
-
-
5,000,000
41,200,000
41,200,000
-
41,200,000
$
2,794,069
-
-
-
-
-
-
(5,751)
105,000
28,248
82,182
289,522
3,293,270
3,293,270
8,652
3,301,922
(i) A total of 15,759,917 listed options with an exercise price of $0.05 were exercised during the
period. Refer note 12.
(ii) On 31 July 2021, 67,040,083 listed options exercisable at $0.05 per share and 5,000,000
unlisted options exercisable at $0.075 per share expired unexercised.
(iii) On 29 April 2022, 5,000,000 unlisted options exercisable at $0.15 on or before 29 November
2023 were issued to CEO Mark Major.
NOTE 14: SHARE BASED PAYMENTS
Below is a summary of share-based payments made by the group:
KMP options
Employee options
Corporate advisory options
KMP performance rights
2023
$
-
8,652
-
-
8,652
2022
$
289,522
28,248
105,000
82,182
504,952
– 46 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
a)
Options
There were no options issued during the financial year ended 30 June 2023. Options issued in
the previous financial year, which are still on issue have been disclosed below.
Class
Employee
Options1
Corporate
Advisory
Options2
CEO Options3
Number of
Instruments
Grant
Date
Expiry
Date
Exercise
Price
Fair value per
instrument $
1,200,000 15/01/2021 29/11/2023
$0.075
0.045
Total
Value $
54,336
5,000,000 02/08/2021 29/11/2023
$0.075
0.021
105,000
5,000,000 21/04/2022 29/11/2023
$0.15
$0.058
289,522
1 Options were issued to employees in tranches of 500,000 (tranche 1) and 700,000 (tranche 2) on 21
January 2021. Service conditions associated with the employment agreement were completed on 15
January 2022 (tranche 1 – fully vested during previous reporting period) and on 15 January 2023 (tranche
2 – fully vested in current reporting period). At the balance date 30 June 2023, a total of $8,652 (2022:
$28,248) vested during the current reporting period.
2 Options were issued to unrelated parties for corporate advisory services on 2 August 2021 with an
exercisable price of $0.075 and an expiry of 29 November 2023. Options were recognised in full on the
grant date, as there were no attached vesting conditions.
3 Options were issued to CEO Mark Major for improved share price performance based on exploration
work performed at Mt Clere rare earth project. Options were issued on 29 April 2022 with an exercisable
price of $0.015 and an expiry of 29 November 2023. Options were recognised in full on the grant date, as
there were no attached vesting conditions.
Set out below is a summary of options on issue by the Group:
2023
Expiry
Grant Date
Date
30/11/2020 29/11/2023
15/01/2021 29/11/2023
2/08/2021 29/11/2023
29/04/2022 29/11/2023
Exercise
Price
0.075
0.075
0.075
0.15
weighted average exercise price
Balance at
the Start of
the year
15,000,000
1,200,000
5,000,000
5,000,000
26,200,000
0.09
Granted
Exercised
Forfeited
Other/Expired
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
the end of
the period
- 15,000,000
- 1,200,000
- 5,000,000
- 5,000,000
- 26,200,000
-
0.09
– 47 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2022
Grant Date Expiry Date
16/08/2019 31/07/2021
28/11/2019 31/07/2021
28/11/2019 31/07/2021
30/11/2020 29/11/2023
15/01/2021 29/11/2023
2/08/2021 29/11/2023
29/04/2022 29/11/2023
Exercise
Price
0.05
0.05
0.075
0.075
0.075
0.075
0.15
Granted
Exercised
Balance at
the Start of
Forfeited
the year
Other/Expired
72,800,000
- (15,759,917) (57,040,083)
10,000,000
(10,000,000)
-
-
5,000,000
(5,000,000)
-
-
15,000,000
-
-
-
1,200,000
-
-
-
-
-
-
5,000,000
-
5,000,000
-
-
104,000,000 10,000,000
(72,040,083)
(15,759,917)
Balance at
the end of
the period
-
-
-
15,000,000
1,200,000
5,000,000
5,000,000
26,200,000
weighted average exercise price
0.06
0.11
0.05
0.05
0.09
b)
Performance Rights
On 30 November 2020, the Group issued 7,500,000 Performance Rights to the Group’s CEO,
Mark Major which vested on a pro-rata basis 12 months after his employment commenced
which was on 14 October 2021. These Performance Rights vested in full during the 30 June
2022 (2022: $82,182 in value vested) financial period and expire on 29 November 2023.
On 30 November 2020, the Group issued and 7,500,000 Performance Rights to Executive
Chairman Colin Locke following shareholder approval at the Group’s AGM. These
Performance Rights were recognised in full during the 30 June 2021 financial period and
expiring on 29 November 2023.
NOTE 15: RECONCILIATION OF CASH FLOW FROM
OPERATIONS WITH LOSS AFTER INCOME TAX
Loss after income tax
Non-cash-flows in loss:
Share based payments
Depreciation expense
Changes in assets and liabilities:
Trade and other receivables
Other assets
Trade payables and accruals
Provisions
2023
$
2022
$
(3,466,003)
(4,318,516)
8,652
40,177
504,952
4,343
145,935
43,335
(444,125)
(22,538)
(94,675)
(114,593)
588,734
28,148
Cash flow used in operations
(3,694,567)
(3,401,607)
– 48 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Non-Cash Investing & Financing Activities:
There were no non-cash investing entered into by the Group during the year (2022: Nil).
NOTE 16: REMUNERATION OF AUDITORS
Audit Services – RSM Australia Partners
Audit and review of the financial statements
Other services – RSM Australia Pty Ltd
Preparation of tax return
2023
$
2022
$
37,750
35,000
1,000
38,750
1,050
36,050
NOTE 17: 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
2023
$
460,913
48,396
-
2022
$
466,913
40,091
371,704
509,309
878,708
NOTE 18: RELATED PARTY TRANSACTIONS
During the year, the Company paid C29 Metals Limited (CEO Mark Major was an Executive Director)
for the services of its Exploration Manager, per the Secondment Agreement, signed 18 January 2021.
The Company also receipted monies from C29 Metals, for the use of its office lease, and Plant and
Equipment.
The Company also paid Albion Resources Limited (of which David Palumbo is a Non-Executive
Director) for use of its office lease, until the Company took assignment of the lease on 1 March 2023.
The Company also receipted monies from Albion Resources for the secondment of its employee.
The Company receipted monies from Rubix Resources Limited (of which Colin Locke and David
Palumbo are Non-Executive Directors) for use of the Company’s office premises.
All transactions were made on normal commercial terms and conditions and at market rates.
– 49 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
The following transactions occurred with related parties:
Payments to C29 Metals Limited for secondment services
Monies receipted from C29 Metals Limited
Payments to Albion Resources Limited for use of its office lease
Receipts from Albion Resources Limited for secondment of employee
Consolidated
2023
$
2022
$
19,578
(3,560)
16,018
27,082
(401)
26,681
Receipts from Rubix Resources Limited for use of KTA office premises
6,559
Current amount payable to Colin Locke at 30 June 2023 for reimbursement
of corporate costs
6,317
-
-
-
-
-
-
-
-
There were no other related party transactions during the year ended 30 June 2023 (2022: Nil).
NOTE 19: CONTINGENT LIABILITIES
The Group has given bank guarantees at 30 June 2023 of $15,132 in relation to the office lease
(2022: Nil).
NOTE 20: EVENTS AFTER THE REPORTING PERIOD
On 19 July 2023, the Company issued 63,000,000 fully paid ordinary shares to raise $2.27m before
costs. Further to this on 25 September 2023, the Company announced that 8,521,333 fully paid
ordinary shares were issued to raise an additional $306,768 before costs.
No other 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 21: 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 $875,440 (2022: $830,440).
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 $146,660 (2022: $146,660).
The Group has no other commitments.
– 50 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 22: 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 23: PARENT ENTITY DISCLOSURES
Financial position
2023
%
100
100
100
100
2022
%
100
100
100
100
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Reserves
Total equity
Financial performance
(Loss) for the year
Total comprehensive (loss) for the year
2023
$
2022
$
1,022,293
293,081
1,315,374
4,423,734
151,723
4,575,457
449,770
39,990
489,760
846,020
-
846,020
22,485,776
(24,962,084)
3,301,922
825,614
21,968,622
(21,532,455)
3,293,270
3,729,437
2023
$
(3,429,629)
(3,429,629)
2022
$
(4,413,533)
(4,413,533)
Guarantees and Contingencies:
Krakatoa Resources Limited entered into a bank guarantees in relation to its office lease (refer to
Note 19 (2022: Nil). The Company has not entered into any other guarantees in the current or
previous financial year.
Other Commitments:
Krakatoa Resources Limited has no commitment to acquire property, plant and equipment (Note19).
– 51 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 24: 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 2023, 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 25: 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.
– 52 –
Krakatoa Resources Limited
& Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 25: FINANCIAL RISK MANAGEMENT (CONT.)
Credit risk (cont.)
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.
The credit risk for counterparties included in cash and cash equivalents at 30 June 2023 is detailed
below:
Financial assets:
Cash and cash equivalents
- AA rated counterparties
2023
$
2022
$
951,702
4,220,925
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.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial
instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which the financial liabilities are required to be paid.
The tables include both interest and principal cash flows disclosed as remaining contractual maturities
and therefore these totals may differ from their carrying amount in the statement of financial position.
Weighted
average
interest rate
1 year or
less
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
Remaining
contractual
maturities
Consolidated - 2023
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade and other
payables
Interest-bearing - fixed
rate
Lease liability
Total non-derivatives
-
383,584
-
5.40%
55,588
439,172
39,990
39,990
-
-
-
-
383,584
-
-
95,578
479,162
– 53 –
Krakatoa Resources Limited
& Controlled Entities
NOTE 25: FINANCIAL RISK MANAGEMENT (CONT.)
Liquidity risk (Cont.)
Remaining contractual maturities (cont.)
Weighted
average
interest
rate
Consolidated - 2022
%
1 year or less
$
Between 1
and 2 years
$
Between
2 and 5
years
$
Over 5
years
$
Remaining
contractual
maturities
$
Non-derivatives
Non-interest bearing
Trade and other
payables
-
833,562
Total non-derivatives
833,562
-
-
-
-
-
-
833,562
833,562
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 2023 (2022: 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.
NOTE 26: DIVIDENDS
There were no dividends declared or paid by the Company during the year, and no dividend is
recommended (2022: nil).
– 54 –
Krakatoa Resources Limited
& Controlled Entities
DIRECTORS’ DECLARATION
In the directors' opinion:
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements;
the attached financial statements and notes comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board as described in note 1 to
the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's
financial position as at 30 June 2023 and of its performance for the financial year ended on that
date; and
●
there are reasonable grounds to believe that the company will be able to pay its debts as and
when they become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act
2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
On behalf of the Board
Colin Locke
Executive Chairman
Dated: 29 September 2023
– 55 –
RSM Australia Partners
Level 32 Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
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 2023, 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)
Giving a true and fair view of the Group's financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(ii) 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.
How our audit addressed this matter
Key Audit Matter
Exploration expenditure and project evaluation costs
Refer to consolidated statement of profit or loss and other comprehensive income
The Group incurred exploration expenditure and
project evaluation costs of $2,453,096 during the
year ended 30 June 2023. In accordance with its
accounting policy, the Group expenses these costs
as incurred.
Our audit procedures included;
• Assessing whether the Group’s accounting policy
for exploration expenditure and project evaluation
costs is in compliance with Australia Accounting
Standards;
We considered this to be a key audit matter because
it is the Group’s most significant item in the
statement of profit or loss and other comprehensive
income.
• Obtaining evidence that the right to tenure of the
exploration areas of interests are valid; and
• On a sample basis, agreeing exploration
expenditure and project evaluation costs
to
supporting documentation.
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 2023 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: 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 2023.
In our opinion, the Remuneration Report of Krakatoa Resources Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 29 September 2023
TUTU PHONG
Partner
Krakatoa Resources Limited
& Controlled Entities
ASX INFORMATION
AS AT 27 SEPTEMBER 2023
The following additional information is required by the ASX Limited in respect of listed public
companies and was applicable at 27 September 2023.
1.
Shareholder and Option holder information
a.
Number of Shareholders and Option Holders
Shares
As at 27 September 2023, there were 2,185 shareholders holding a total of 434,897,917 fully
paid ordinary shares.
Options
As at 27 September 2023, there were 21,200,000 Unquoted Options exercisable at $0.075 on
or before 29 November 2023 held by 8 holders, and 5,000,000 Unquoted Options exercisable
at $0.15 on or before 29 November 2023 held by 1 holder.
Share Performance Rights
As at 27 September 2023, there were 5,000,000 Unquoted Share Performance Rights
exercisable at $0.20, 5,000,000 Unquoted Share Performance Rights exercisable at $0.30,
and 5,000,000 Unquoted Share Performance Rights exercisable at $0.40 held by 2 holders.
All Performance Rights expire on 29 November 2023.
b.
Distribution of Equity Securities
Fully paid ordinary shares
Number (as at 27 September 2023)
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
95
50
292
1176
572
2,185
9,457
208,730
2,544,421
50,366,784
381,768,525
434,897,917
The number of shareholdings held in less than marketable parcels is 857 shareholders
amounting to 9,741,279 shares.
c.
The names of substantial shareholders listed in the company’s register as at 27 September
2023 are:
Shareholder
Ordinary Shares
Lafras Luitingh
37,551,547
Helmsdale Investments Pty Ltd
25,545,834
%Held of Total
Ordinary Shares
8.63%
5.87%
– 59 –
Krakatoa Resources Limited
& Controlled Entities
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 27 September 2023 — Ordinary Shares
Name
1
2
3
4
5
6
7
8
9
10
11
12
MR LAFRAS LUITINGH
HELMSDALE INVESTMENTS PTY LTD
MS CHUNYAN NIU
PETERS INVESTMENTS PTY LTD
CITICORP NOMINEES PTY LIMITED
SUNSEEKER ENTERPRISES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
CELTIC CAPITAL PTY LTD
MRS MEILY DAHLIA EVIANA
KEBIN NOMINEES PTY LTD
PROF YEW KWANG NG
SANCOAST PTY LTD
13 MR FRANK JOHN WILLIAM GRAHAM
14 MR TIMOTHY DONALD WAINWRIGHT
15 MR GRAHAM GEOFFREY WALKER
15 MR PETER MURRAY HOFFMAN
15 MR DAMIEN MICHAEL ANTHONY TRINDER
Number of
Ordinary
Fully Paid
Shares Held
% Held of
Issued
Ordinary
Capital
37,551,547
25,545,834
16,631,048
16,195,000
7,909,610
4,600,000
8.63
5.87
3.82
3.72
1.82
1.06
4,091,102
0.94
3,966,667
3,750,000
3,699,118
3,500,000
3,500,000
3,000,000
3,000,000
2,800,000
2,653,212
2,622,864
0.91
0.86
0.85
0.80
0.80
0.69
0.69
0.64
0.61
0.60
0.57
0.57
0.56
18 MR GURUMURTHY NIDIGAL + MRS PURNIMA NIDIGAL
19 MR SHOUZHI ZHANG
20
DR ZACHARY PATRICK O'BRIEN
2,500,000
2,415,488
2.
The name of the company secretary is David Palumbo.
152,431,490
35.05
3.
4.
The address of the principal registered office in Australia is:
Level 8, 216 St Georges Terrace Perth WA 6000
Registers of securities are held at the following address:
Computershare Investor Services Pty Ltd, Level 17, 221 St Georges Terrace, Perth WA 6000
– 60 –
Krakatoa Resources Limited
& Controlled Entities
5.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member
Exchanges of the ASX Limited.
– 61 –
Krakatoa Resources Limited
& Controlled Entities
SCHEDULE OF MINERAL TENEMENTS
AS AT 27 SEPTEMBER 2023
Project
Tenement
Interest held by
Krakatoa Resources Limited
Belgravia
Turon
Rand
Rand
Rand
Rand
Mt Clere
Mt Clere
Mt Clere
Mt Clere
Mt Clere
Mt Clere
Mt Clere
Mt Clere
Mt Clere
Mt Clere
Mt Clere
Mac Well
King Tamba
King Tamba
King Tamba
King Tamba
King Tamba
King Tamba
EL8153
EL8942
EL9000
EL9276
EL9277
EL9366
E09/2357
E52/3730
E52/3731
E52/3836
E52/3873
E52/3876
E52/3877
E51/1994
E52/3938
E52/3962
E52/3972
E59/2175
P59/2082
P59/2140
P59/2141
P59/2142
E59/2389
E59/2503
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
All tenements not indicated as 100% owned are under application.
– 62 –