Annual Report to Shareholders
Year Ended 30 June 2018
1
CONTENTS
CONTENTS ............................................................................................................ 2
CORPORATE INFORMATION ...................................................................................... 3
DIRECTORS’ REPORT ............................................................................................... 4
DIRECTORS ........................................................................................................... 4
AUDITOR’S INDEPENDENCE DECLARATION ................................................................. 22
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .. 23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................. 24
CONSOLIDATED STATEMENT OF CHANGES OF EQUITY ................................................. 25
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................ 26
NOTES TO THE FINANCIAL STATEMENTS .................................................................... 27
INDEPENDENT AUDITOR'S REPORT ........................................................................... 49
ASX ADDITIONAL INFORMATION ................................................................................ 53
SCHEDULE OF MINING & EXPLORATION TENEMENTS .................................................... 57
This Annual Report covers Latitude Consolidated Limited (“Latitude” or the “Company”) and its wholly
owned subsidiaries (the “Group”) (Formerly Integrated Resources Group Limited). The financial report is
presented in Australian currency. Latitude Consolidated Limited is a company limited by shares,
incorporated and domiciled in Australia.
2
CORPORATE INFORMATION
Directors:
Mr Timothy Moore
Non-Executive Chairman
Mr Morgan Barron
Non-Executive Director
Mr Roger Steinepreis
Non-Executive Director
Mr Nick Castleden
Non-Executive Director
Ms Kim Eckhof
Non-Executive Director
Company Secretary:
Mr Harry Miller
Home Securities Exchange:
Australian Securities Exchange Limited
Level 40, Central Park
152-158 St Georges Terrace
PERTH WA 6000
ASX Code: LCD
Share Registry:
Link Market Services Limited
Level 4 Central Park
152 St Georges Terrace
PERTH WA 6000
Telephone: +61 1300 554 474
Registered Office:
Ground Floor
16 Ord Street
WEST PERTH WA 6005
Telephone: +61 8 9482 0550
Email : info@latitudeconsolidated.com
Website : www.latitudeconsolidated.com.au
Postal Address:
P.O. Box 902
WEST PERTH WA 6872
Solicitors:
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
PERTH WA 6000
Auditors:
Grant Thornton Audit Pty Ltd
Level 43 Central Park
152-158 St Georges Terrace
PERTH WA 6000
3
DIRECTORS’ REPORT
ACN: 080 939 135
Your Directors are pleased to submit the financial statements of the Group consisting of Latitude Consolidated
Limited and the entities it controlled during the period for the financial year ended 30 June 2018. In order to
comply with the provisions of the Corporations Act 2001, the Directors report is as follows:
DIRECTORS
The names and details of Directors in office at any time during the financial year are:
Mr Timothy J Moore – Bachelor of Business UTS Sydney
Non-Executive Chairman – (Appointed 23 April 2004)
EXPERIENCE AND EXPERTISE
Mr Moore has extensive offshore experience investing in a number of industries including media, technology
and resources. Mr Moore also holds several other Board positions with private companies.
OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
Nil
OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS
Nil
Mr Morgan Barron – Bachelor of Commerce University of Western Australia, C.A. S.A. Fin
Non-Executive Director – (Appointed 6 November 2012)
EXPERIENCE AND EXPERTISE
Mr Barron is a Chartered Accountant and has over 15 years in corporate advisory. Mr Barron has advised and
guided many companies undertaking fundraising activities and corporate matters.
Mr Barron is a member of the Institute of Group Directors and is a Director and shareholder of Ventnor Capital
Pty Ltd and Ventnor Securities Pty Ltd which specialises in the provision of ASX Companies corporate advisory
services.
OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
Non-Executive Director - iSynergy Group Limited
OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS
Non-Executive Director – Eneabba Gas Limited (resigned 22 September 2016)
Non-Executive Director – Murray Cod Australia Limited (resigned 26 June 2017)
Mr Roger Steinepreis – Bachelor of Jurisprudence and Bachelor of Laws: University of Western
Australia
Non-Executive Director – (Appointed 6 November 2012)
EXPERIENCE AND EXPERTISE
Mr Steinepreis graduated from the University of Western Australia where he completed his law degree. Mr
Steinepreis was admitted as a barrister and solicitor of the Supreme Court of Western Australia in 1987 and
has been practicing as a lawyer for in excess of 25 years. Mr Steinepreis is the legal adviser to a number of
public companies on a wide range of corporate related matters. His areas of practice focus on company
restructures, initial public offerings and takeovers.
OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
Non-Executive Chairman - Apollo Consolidated Limited
Non-Executive Director – Talon Petroleum Limited
OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS
Non-Executive Chairman - Firestrike Resources Limited (resigned 18 April 2016)
4
ACN: 080 939 135
DIRECTORS (CONTINUED)
Mr Nick Castleden
Non-Executive Director – (Appointed 21 June 2017)
EXPERIENCE AND EXPERTISE
Mr Castleden is a geologist with over 20 years of experience in the mineral exploration and development
industry. Mr Castleden has worked in various exploration, geological and management roles with well-regarded
Australian mining companies including Mt Isa Mines, Perilya Mines, MPI Mines, LionOre, and with corporate
firm Verona Capital. Mr Castleden has extensive operational experience in Africa, North and South America
and across Australia. Mr Castleden also has specific experience in Western Australian gold, nickel and base
metal exploration businesses including participating in the discovery and delineation of gold and nickel sulphide
deposits that have progressed from feasibility studies through to successful mining operations.
OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
Managing Director - Apollo Consolidated Limited (appointed 4 August 2009)
Non-Executive Director – TNT Mines Limited (appointed 1 Nov 2017)
OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS
Non-Executive Director - Erin Resources Limited (resigned 24 June 2016)
Ms Kim Eckhof
Non-Executive Director – (Appointed 18 June 2018)
EXPERIENCE AND EXPERTISE
Ms Eckhof has a wealth of corporate advisory and equity capital markets experience, having worked previously
at Azure Capital in Perth and RFC Ambrian in London. Kim is currently working with Medea Natural Resources
in London, a corporate advisory firm focused on strategic, equity and debt advisory to natural resource
companies.
OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
Nil
OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS
Nil
COMPANY SECRETARY
Mr Harry Miller
Company Secretary – (Appointed 3 August 2018)
EXPERIENCE AND EXPERTISE
Mr Miller has an audit and compliance background across a number of sectors including junior resource
companies. He acts as company secretary for various listed and private companies. Mr Miller holds a Bachelor
of Commerce in Finance and Economics and a Master of Professional Accounting.
PRINCIPAL ACTIVITIES
Latitude Consolidated Limited is an Australian exploration company with a focus on gold and metals
exploration.
RESULTS
The loss attributable to members of the Group for the year ended 30 June 2018 amounted to $1,518,734 (2017:
$654,655).
DIVIDENDS
There were no dividends paid or declared during the year.
5
REVIEW OF OPERATIONS AND FINANCIAL RESULTS
ACN: 080 939 135
Acquisition of Pilbara Conglomerate Gold Exploration Tenure
On 30 October 2017 Latitude acquired a 100% interest in Pilbara exploration license application E45/5050 which
is 90km west of Nullagine. The tenement application covers >7km of lowermost Fortescue Group stratigraphy,
directly overlying Archaean basement rocks. This is inclusive of more than 4km of conglomerates & basal
sedimentary rocks.
Binding Heads of Agreement to Acquire the Mbeta Project
On 12 April 2018 the Group announced it had entered into a binding agreement to acquire a majority interest
(70%) in the Mbeta Lithium Project (“Mbeta”) located in Southern Zimbabwe. The Mbeta Project comprises
approx. 18km² of mineral claims, considered to be highly prospective for lithium and associated elements.
The Mbeta Project is located in southern Zimbabwe in an area approximately 40km southwest of Gwanda, near
Nyambe Hill. The district has seen minor historical lithium and tantalum mining and the Project area and is
considered under-explored, yet highly prospective, for lithium and associated elements.
Mbeta comprises 13 mineral claims with a combined area of 18km2 and lies in gently-undulating, lightly cropped
terrain with good access from Gwanda via tarmac and all-weather gravel roads. Reported historical lithium
mineralisation is hosted by several elongated pegmatite bodies close to the transition zone between a local
greenstone belt and surrounding basement granites and gneisses.
Additional information on the acquisition of the Mbeta Project, including full transactions terms are included in
the Group’s ASX announcement dated 12 March 2018.
Divestment of the Mt Ida Project to Alt Resources
On 7 June 2018 the Group confirmed that the sale of the Mt Ida Project tenements to Alt Resources Limited
(ASX: ARS) had been completed and settled, with Latitude receiving the consideration of $1 million in cash
(received via two separate payments of $400,000 within seven days of signing the agreement and $600,000 on
or before completion date) and a further $1 million in Shares and Options in ARS. Following completion Latitude
holds 12,500,000 Shares in ARS which currently represents 6.37% of the issued capital and 3,125,000 Options.
The divestment included all gold projects comprising the Mt Ida tenement package, the Quinn’s Mining Centre
(QMC), Mt Ida South and the Mt Ida joint venture projects respectively and we look forward to the leverage
upside of Alt Resources further exploration.
CORPORATE EVENTS
Unmarketable Parcel Sale Facility
On 5 July 2017 the Group completed the Unmarketable Parcel Sale Facility for holders of parcels of shares
worth less than $500. There were 1,586,766 shares held by 878 shareholders that were sold on market at 2.1
cents per share to unrelated parties. By making the Unmarketable Parcel Sale Facility available the Group has
reduced administrative costs associated with maintain a large number of small holdings.
Resignation and Appointment of Company Secretary
On 30 January 2018 the Group announced the appointment of Chris Huish as a Joint Company Secretary of
the Group. On 28 February 2018, the Group announced the resignation of Joel Ives as Joint Company
Secretary. On 3 August 2018 the Group announced the resignation of Chris Huish and the appointment of Harry
Miller. Harry Miller now carries out all roles as Company Secretary of the Group.
Board Appointment – Kim Eckhof
As announced on 18 June 2018 Latitude appointed Kim Eckhof as a Non-Executive Director following the receipt
of shareholder approval for the acquisition at the General Meeting.
Kim has a wealth of corporate advisory and equity capital markets experience, having worked previously at
Azure Capital in Perth and RFC Ambrian in London. Kim is currently working with Medea Natural Resources in
London, a corporate advisory firm focused on strategic, equity and debt advisory to natural resource companies.
6
ACN: 080 939 135
Two Tranche Capital Raise
On 20 June 2018 the Group successfully raised A$3.45m through the private placement of 138,000,000 fully
paid ordinary shares at an issue price of $0.025 per share. The funds were raised to support the Mbeta Project
acquisition and potential future acquisitions. The capital raise was completed under two tranches ($491,921 and
$2,958,079 respectively). With shareholder approval, Directors of the Group participated in the share placement.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Group that occurred during the financial
year not otherwise disclosed in this report or the financial statements.
LIKELY DEVELOPMENTS & EXPECTED RESULTS OF OPERATIONS
Other than as disclosed elsewhere in this report, there are no likely developments in the operations of the Group
that were not finalised at the date of this report.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Directors believe that the Group has, in all material respects, complied with all particular and significant
environmental regulations relevant to its operations.
The Group’s operations are subject to various environmental regulations under the Federal and State Laws of
Australia. The majority of the Groups ceased activities involved low level disturbance associated with
exploration drilling programs. Approvals, licences and hearings and other regulatory requirements are
performed as required by the management of the Group for each permit or lease in which the Group has an
interest.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
No matters or circumstances have arisen since the end of the year 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 subsequent financial years.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may
be brought against the officers in their capacity as officers of the Group, and any other payments arising from
liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that
arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their
position or of information to gain advantage for themselves or someone else or to cause detriment to the Group.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by
law, indemnified or agreed to indemnify any current or former officer or auditor of the Group against a liability
incurred as such by an officer or auditor.
7
DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE GROUP
ACN: 080 939 135
As at the date of this report, the interests of the Directors in ordinary shares and unlisted options of the Group
were:
Directors
Mr Timothy Moore
Mr Morgan Barron
Mr Roger Steinepreis
Mr Nick Castleden
Mrs Kim Eckhof
TOTAL
Shares
Options
Held Directly
Held Indirectly
Held Directly
Held Indirectly
154,037
-
1,812,930
2,551,113
1,000,000
5,518,080
6,971,458
5,850,395
-
-
17,239,260
1,000,000
1,000,000
1,000,000
-
-
-
30,061,113
-
1,000,000
1,000,000
2,000,000
-
3,000,000
MEETINGS OF DIRECTORS
During the financial year, there were 7 meetings of Directors, held with the following attendances:
Directors
Mr Timothy Moore
Mr Morgan Barron
Mr Roger Steinepreis
Mr Nick Castleden
Mrs Kim Eckhof
Meetings
Attended
Meetings Eligible
To Attend
7
7
7
6
-
7
7
7
7
-
Additionally, there were 11 Circular Resolutions passed in the 2018 financial year.
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for Directors and Key Management Personnel of
the Group for the year ended 30 June 2018. The information contained in this report has been audited as
required by section 308(3C) of the Corporations Act 2001.
This remuneration report details the remuneration arrangements for Key Management Personnel (“KMP”) who
are defined as those persons having authority and responsibility for planning, directing and controlling the major
activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group,
and includes the following specified executives in the Group:
Key Management Personnel
Directors:
Mr Timothy Moore (Non-Executive Chairman)
Mr Morgan Barron (Non-Executive Director)
Mr Roger Steinepreis (Non-Executive Director)
Mr Nick Castleden (Non-Executive Director)
Mrs Kim Eckhof (Non-Executive Director)
Remuneration Policy
The Group’s performance relies heavily on the quality of its Key Management Personnel. The Group has
therefore designed a remuneration policy to align Director and Executive reward with business objectives and
shareholder value.
8
REMUNERATION REPORT (AUDITED) (CONTINUED)
ACN: 080 939 135
Executive reward is linked to shareholder value 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 high calibre
management personnel and Directors to run and manage the Group.
Remuneration Structure
In accordance with best practice corporate governance, the structure of Non-Executive Director remuneration
is separate and distinct.
Non-Executive Director Remuneration
The Board’s policy is to remunerate Non-Executive Directors at market rates for comparable companies for
time, commitment and responsibilities and acknowledge that current Director remuneration is below market
rates. The Board 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.
During the year ended 30 June 2018 no external remuneration consultants were used.
The maximum aggregate amount of fees per annum that can be paid to Non-Executive Directors is subject to
approval by shareholders at the Annual General Meeting.
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 employee incentive option plans that may exist from time to time.
Executive Remuneration
Executive Remuneration consists of fixed remuneration and variable remuneration (comprising short-term and
long-term incentive schemes).
Fixed Remuneration
All Key Management Personnel are remunerated on a consultancy basis based on services provided by each
person. The Board reviews Key Management Personnel packages annually by reference to the Group’s
performance, executive performance and comparable information from industry sectors and other listed
companies in similar industries.
The fixed remuneration of the Group’s Key Management Personnel is detailed in the table on page [14].
Variable Remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders and Directors
and Key Management Personnel. Currently, this is facilitated through the issue of options to Key Management
Personnel to encourage the alignment of personal and shareholder interests. The Group believes this policy
will be effective in increasing shareholder wealth.
Principles used to determine the nature and amount of variable remuneration: relationship between
remuneration and group performance.
The overall level of Executive reward takes into account the performance of the Group over a number of years,
with greater emphasis given to the current and prior year. The main performance criteria used in determining
the executive reward remuneration is increasing shareholder value through aligning the Group with high quality
exploration assets. Due to the nature of the Group’s principal activities the Directors assess the performance of
the Group with regard to the price of the Group’s ordinary shares listed on the ASX, and the market capitalisation
of the Group.
9
REMUNERATION REPORT (AUDITED) (CONTINUED)
ACN: 080 939 135
Directors and Executives may be issued options to encourage the alignment of personal and shareholder
interests. Options issued to Directors may be subject to market based price hurdles and vesting conditions and
the exercise price of options is set at a level that encourages the Directors to focus on share price appreciation.
The Group believes this policy will be effective in increasing shareholder wealth. Key Management Personnel
are also entitled to participate in the employee share and option arrangements.
Variable Remuneration (Continued)
On the resignation of Directors, any vested options issued as remuneration are retained by the relevant party.
The Board may exercise discretion in relation to approving incentives such as options, performance rights or
performance shares. The policy is designed to reward Key Management Personnel for performance that results
in long-term growth in shareholder value.
During the year the Board completed a self-performance evaluation at a Director and Board level.
Service Contracts
Remuneration and other terms of employment for Executives are formalised in executive service agreements.
Major provisions of the agreements existing at balance date relating to remuneration are set out below.
Non-Executive Directors
Upon appointment to the Board, all Non-Executive Directors enter into a service agreement with the Group in
the form of a letter of appointment. The letter summarises the policies and terms, including compensation,
relevant to the office of Director.
The key terms of the Non-Executive Director service agreements are as follows:
Term of Agreement – ongoing subject to annual review.
Directors’ Fees of $30,000 per annum plus statutory superannuation (if applicable).
There is no notice period stipulated to terminate the contract by either party.
Voting and comments made at the Group’s last Annual General Meeting
Latitude Consolidated Ltd received over 99%.9 of ‘yes’ votes on its Remuneration Report for the financial year
ending 30 June 2017. The Group received no specific feedback on its Remuneration Report at the Annual
General Meeting.
10
ACN: 080 939 135
REMUNERATION REPORT (AUDITED) (CONTINUED)
Remuneration of Key Management Personnel
Details of the remuneration of the Directors and the Key Management Personnel (as defined in AASB 124
Related Party Disclosures) of Latitude Consolidated Limited are set out in the following table.
Short Term Benefits
Post-
Employment
Benefits
Share
Based
Payments
2018
Key Management
Personnel
Salary,
Fees &
Consulting
Non-
Monetary
Super-
annuation
Options/Pe
rf. Rights
Total
Perform
ance
Related
$
$
$
$
$
%
Non-Executive Directors
Mr Timothy Moore (1)
Mr Morgan Barron (1)
Mr Roger Steinepreis
(1)
Mr Nick Castleden (1)
*Ms Kim Eckhof
30,000
30,000
30,000
30,000
-
Total
120,000
-
-
-
-
-
-
-
2,850
15,572
15,572
45,572
48,422
-
-
-
2,850
15,572
45,572
15,572
15,572
77,860
45,752
15,572
200,710
34
32
34
34
100
(1) Related parties of Mr Moore, Mr Barron, Mr Steinepreis and Mr Castleden received compensation for work
performed during the financial year, see the “Other Related Party Transactions” section for further details.
Short Term Benefits
Post-
Employment
Benefits
Share
Based
Payments
2017
Key Management
Personnel
Salary,
Fees &
Consulting
Non-
Monetary
Super-
annuation
Options/Pe
rf. Rights
Total
Perform
ance
Related
$
$
$
$
$
%
Non-Executive Directors
Mr Timothy Moore
Mr Morgan Barron (1)
Mr Roger Steinepreis
(1)
Mr Nick Castleden (1)
50,650(2)
30,000
30,000
750
Contract (Part-Time) Executives
*Mr Mike Edwards
*Mr Alan Downie
Total
129,100
130,125
370,625
-
-
-
-
-
-
-
-
2,850
-
-
-
-
9,400
7,050
7,050
60,050
39,900
37,050
-
750
6,525
2,465
135,625
132,590
2,850
32,490
226,540
16
18
19
-
5
2
* Ms Kim Eckhof appointed 18 June 2018
(1) Related parties of Mr Barron, Mr Steinepreis and Mr Castleden received compensation for work performed
during the financial year, see the “Other Related Party Transactions” section for further details.
(2) In relation to Director fees, payments of $20,650 were made to Mr Moore for executive services performed
during the financial year.
11
ACN: 080 939 135
REMUNERATION REPORT (AUDITED) (CONTINUED)
Share-Based Compensation to Key Management Personnel
Options issued to Directors
On 20 June 2018, the Group issued 1,000,000 unlisted options to each Director, totalling 5,000,000 options,
exercisable at $0.05 each on or before 31 May 2021. Each option entitles the holder to subscribe for one share
upon exercise of option. Options granted carry no dividend or voting rights. The primary purpose of the grant
of these options issued to Director’s is to provide a performance linked incentive component in the
remuneration package in order to motivate and reward the performance of Director’s in their role. The terms
and conditions of each grant of options over ordinary shares affecting remuneration of directors in this financial
year are as follows:
Directors
Mr Timothy Moore
Mr Morgan Barron
Mr Roger Steinepreis
Mr Nick Castleden
Mrs Kim Eckhof
Number of
Options
Granted
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Grant Date
Expiry Date
20 June 2018
20 June 2018
20 June 2018
20 June 2018
20 June 2018
31 May 2021
31 May 2021
31 May 2021
31 May 2021
31 May 2021
Exercise
Price
$0.05
$0.05
$0.05
$0.05
$0.05
Fair Value
per Option at
Grant Date
$0.0156
$0.0156
$0.0156
$0.0156
$0.0156
Value of options granted to directors as part of compensation during the year ended 30 June 2018 are set
out below:
Directors
Mr Timothy Moore
Mr Morgan Barron
Mr Roger Steinepreis
Mr Nick Castleden
Mrs Kim Eckhof
Value of Options
Granted
$
15,572
15,572
15,572
15,572
15,572
Value of Options
Exercised
$
-
-
-
-
-
Value of Options
Lapsed
$
-
-
-
-
-
Share Holdings of Key Management Personnel
The number of ordinary shares of Latitude Consolidated Limited held, directly, indirectly or beneficially, by each
Director and Key Management Personnel, including their personally-related entities for the year ended 30 June
2018 is as follows:
Directors
Mr Timothy Moore
Mr Morgan Barron
Mr Roger Steinepreis
Mr Nick Castleden
Mrs Kim Eckhof
Total
Held at
1-Jul-17
5,125,495
4,150,395
5,052,190
1,751,113
-
Movement
During the Year
2,000,000*
1,700,000*
14,000,000*
800,000*
1,000,000*
16,079,193
19,500,000
Options
Exercised
Held at
30-Jun-18
-
-
-
-
-
-
7,125,495
5,850,395
19,052,190
2,551,113
1,000,000
35,579,193
*The share movement for all Directors in the period relates to shares that were purchased by the Directors under the two-tranche capital
raise that occurred in the period. This was approved by shareholders at the Notice of General Meeting on 18 June 2018.
12
REMUNERATION REPORT (AUDITED) (CONTINUED)
ACN: 080 939 135
Option Holdings of Key Management Personnel
The number of options over ordinary shares in Latitude Consolidated Limited held, directly, indirectly or
beneficially, by each Director and Key Management Personnel, including their personally-related entities for the
year ended 30 June 2018 is as follows:
Directors
Mr Timothy Moore
Mr Morgan Barron
Mr Roger Steinepreis
Mr Nick Castleden
Mrs Kim Eckhof
Total
Held at
1-Jul-17
Options
Expired
Granted as
Remuneration
Held at
30-Jun-18
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
5,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
5,000,000
Vested and
Exercisable
at 30-Jun-18
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
5,000,000
Performance Rights Holdings of Key Management Personnel
The number of Performance Rights over ordinary shares in Latitude Consolidated Limited held, directly,
indirectly or beneficially, by each Director and Key Management Personnel, including their personally-related
entities for the year ended 30 June 2018 is as follows:
Directors
Mr Timothy Moore
Mr Morgan Barron
Mr Roger Steinepreis
Mr Nick Castleden
Mrs Kim Eckhof
Total
Held at
1-Jul-17
Granted as
Remuneration
2,000,000
1,500,000
1,500,000
-
-
5,000,000
-
-
-
-
-
-
Forfeited
during the
Year
2,000,000
1,500,000
1,500,000
-
-
5,000,000
Held at
30-Jun-18
Vested and
Exercisable
at 30-Jun-18
-
-
-
-
-
-
-
-
-
-
-
-
Other Related Party Transactions
All transactions with other related parties are made on normal commercial terms and conditions and at deemed
market rates.
Ventnor Capital Pty Ltd (Mr Morgan Barron – Non-Executive Director)
Ventnor Capital Pty Ltd, a company of which Mr Morgan Barron is a Director, provided office accommodation,
bookkeeping, CFO, financial accounting services, company secretarial support, corporate services and
executive services in relation to the administration of the Group during the year. Ventnor Capital also provided
Due diligence, project evaluation and corporate transaction services during the year.
A total amount of $128,978 (2017: $129,677) was paid to Ventnor Capital Pty Ltd for providing all of the above
services for the year ended 30 June 2018. There was no amount outstanding to Ventnor Capital Pty Ltd as at
30 June 2018 (2017: $9,000).
13
ACN: 080 939 135
REMUNERATION REPORT (AUDITED) (CONTINUED)
Other Related Party Transactions (Continued)
Ventnor Securities Pty Ltd (Mr Morgan Barron – Non-Executive Director)
Ventnor Securities Pty Ltd, a company of which Mr Morgan Barron is a Director, provided capital raising support
to the Group during the year.
There were no transactions with Ventnor Securities Pty Ltd for the year ended 30 June 2018 (2017: $13,375).
There was no amount outstanding at 30 June 2018 (2017: $nil).
Steinepreis Paganin Lawyers & Consultants (Mr Roger Steinepreis – Non-Executive Director)
Steinepreis Paganin Lawyers & Consultants, a company of which Mr Roger Steinepreis is a Partner, provided
general legal advice and services to the Group during the year. A total amount of $40,091 (2017: $53,028) was
paid to Steinepreis Paganin Lawyers & Consultants during the year. A total amount of $14,258 (2017: $Nil) was
owed to Steinepreis Paganin Lawyers & Consultants as at 30 June 2018.
Cratonix Pty Ltd (Mr Nick Castleden – Non-Executive Director)
Cratonix Pty Ltd, a company of which is related to Nick Castleden through his spouse, provided general
exploration services to the Group during the year. A total amount of $8,300 (2017: $5,500) was paid to Cratonix
Pty Ltd during the year. There was no amount outstanding at 30 June 2018 (2017: $nil).
Darjeeling Pty Ltd (Mr Timothy Moore – Non-Executive Chairman)
Darjeeling Pty Ltd, a company of which Timothy Moore is a Director, provided general executive services to the
Group during the year. A total amount of $15,500 (2017: $20,650) was paid to Darjeeling Pty Ltd during the year.
There was no amount outstanding at 30 June 2018 (2017: $Nil)
**********END OF AUDITED REMUNERATION REPORT**********
AUDITOR
Grant Thornton Audit Pty Ltd continues in office in accordance with Section 327 of the Corporation Act 2001.
NON-AUDIT SERVICES
The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Group are important.
The Directors are satisfied that the provision of non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001.
Grant Thornton Audit Pty Ltd did not provide any non-audit services to the Group during the current or prior
year.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 for the
year ended 30 June 2018 has been received and can be found on page 22.
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied to the Court to bring proceedings on behalf of the Group or intervene in any proceedings
to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of
those proceedings.
The Group was not a party to any such proceedings during the year.
14
SHARE OPTIONS
ACN: 080 939 135
At 30 June 2018 there were 24,188,000 (2017: 11,688,000) share options on issue. During the year no options
expired unexercised (2017: 284,857) and no options were exercised (2017: nil).
Unlisted Options over Ordinary Shares
At the date of this report the following unlisted options over ordinary shares in Latitude Consolidated Limited
are on issue and outstanding:
No. of
Options
Exercise
Price
Expiry
Date
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Total
2,000,000
1,250,000
1,250,000
988,000
2,000,000
250,000
1,200,000
2,000,000
12,500,000
750,000
24,188,000
$0.08
$0.10
$0.08
$0.08
$0.15
$0.08
$0.15
$0.25
$0.05
$0.25
30-Nov-18
31-Aug-19
24-Nov-19
24-Nov-19
30-Nov-19
30-Nov-19
24-Nov-20
30-Nov-20
31-May-21
24-Nov-21
These options do not entitle the holders to participate in any share issue of the Group or any other body
corporate.
Performance Shares
At the date of this report the following performance shares which convert to ordinary shares in Latitude
Consolidated Limited are on issue and outstanding:
Class A Performance Shares
Class B Performance Shares
Total
No. of Performance Shares
2,000,000
2,000,000
4,000,000
Signed in accordance with a resolution of the Directors made pursuant to Section 306(3) of the Corporations
Act 2001.
Mr Timothy Moore
Chairman
Perth
26 September 2018
15
ACN: 080 939 135
Competent Person’s Statement:
The information in this document that relates to Mineral Resources is based on, and fairly represents,
information and supporting documentation compiled by or under the supervision of Mr Michael Edwards, a
Competent Person who is a member of the Australian Institute of Geoscientists a “Recognized Professional
Organization” (RPO) included in a list that is posted on the ASX website from time to time. Mr Edwards has
sufficient experience which is relevant to the style of mineralization and type of deposit under consideration
and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 and 2012
editions of the Australian Code for Reporting Exploration Results Mineral Resources and Ore Reserves.
Latitude Consolidated confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcement and, in the case of estimates of Mineral Resources,
all material assumptions and technical parameters underpinning the estimates in the initial announcement
continue to apply and have not materially changed. Latitude Consolidated 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.
The information in this document that relates to exploration results is based upon information compiled by Mr
Alan Downie, a Consultant to Latitude Consolidated Limited. Mr Downie is a Member of the Australasian
Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as
a Competent Person as defined in the December 2012 edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Downie consents to the inclusion
in the report of the matters based upon the information in the form and context in which it appears.
16
CORPORATE GOVERNANCE STATEMENT
ACN: 080 939 135
Latitude Consolidated Limited and the Board are committed to achieving and demonstrating the highest
standards of corporate governance. The Board continues to review the framework and practices to ensure they
meet the interests of shareholders. The Group has adopted systems of control and accountability as the basis
for the administration of corporate governance.
The Board is committed to administering the policies and procedures with openness and integrity, pursuing the
true spirit of corporate governance commensurate with the Group’s needs. The Corporate Governance
Statement has been structured with reference to the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations with 2014 Amendments 3rd edition to the extent that they are
applicable to the Group.
Information about the Group’s corporate governance practices are set out below.
THE BOARD OF DIRECTORS
The Group’s Constitution provides that the number of Directors shall not be less than three. There is no
requirement for any shareholding qualification.
If the Group’s activities increase in size, nature and scope, the size of the Board will be reviewed periodically
and the optimum number of Directors required to adequately supervise the Group’s activities will be determined
within the limitations imposed by the Constitution and as circumstances demand.
The membership of the Board, its activities and composition is subject to periodic review. The criteria for
determining the identification and application of a suitable candidate for the Board shall include quality of the
individual, background of experience and achievement, compatibility with other Board members, credibility
within the Group’s scope of activities, intellectual ability to contribute to Board duties and physical ability to
undertake Board duties and responsibilities. Performance was evaluated continuously during the reporting
period.
Directors are initially appointed by the full Board, subject to election by shareholders at the next Annual General
Meeting. Under the Group’s Constitution the tenure of a Director (other than Managing Director, and only one
Managing Director where the position is jointly held) is subject to reappointment by shareholders not later than
the third anniversary following his or her last appointment. Subject to the requirements of the Corporations Act,
the Board does not subscribe to the principle of retirement age and there is no maximum period of service as a
Director. A Managing Director may be appointed for the year and on any terms the Directors think fit and, subject
to the terms of any agreement entered into, the appointment may be revoked on notice. Written agreements
with each Director and Senior Executive setting out the terms of their appointment is obtained at election.
The Company Secretary is accountable directly to the board, through the chair, on all matters to do with proper
board functioning. The Group encourages the external auditor to attend and address any security holder
questions relevant to the audit.
17
COMMITTEES OF THE BOARD
ACN: 080 939 135
The whole Board acts as the Audit Committee given the limited size of the Group and Board.
The role of the Audit Committee is to:
(a) Monitor the integrity of the financial statements of the Group, reviewing significant financial reporting
judgements;
(b) Review the Group’s internal financial control systems and, unless expressly addressed by a separate
risk committee or by the Board itself, risk management systems;
(c) Monitor and review the external audit function including matters concerning appointment and
remuneration, independence and non-audit services; and
(d) Perform such other functions as assigned by law, the Group’s constitution, or the Board.
The Board has established a framework for the management of the Group including a system of internal
controls, a business risk management process and the establishment of appropriate ethical standards.
Given the current size of the Board, the Group does not have a remuneration committee. The Board as a whole
reviews remuneration levels on an individual basis, the size of the Group making individual assessment more
appropriate than formal remuneration policies. In doing so, the Board seeks to retain professional services as it
requires, at reasonable market rates, and seeks external advice and market comparisons where necessary.
There is no formal nomination committee. Acting in its ordinary capacity from time to time as required, the Board
carries out the process of determining the need for, screening and appointing new Directors. In view of the size
and resources available to the Group, it is not considered that a separate nomination committee would add any
substance to this process.
INDEPENDENCE
Given the Group’s present size and scope, it is currently not the Group’s policy to have a majority of
independent Directors. Directors have been selected to bring specific skills and industry experience to the
Group. The Board has an expansive range of relevant industry experience, financial, legal and other skills and
expertise to meet its objectives.
When determining the independent status of each Director the board has considered whether the Director:
-
-
Is a substantial shareholder of the Group or an officer of, or otherwise associated directly with, a
substantial shareholder of the Group.
Is employed, or has previously been employed in an executive capacity by the Group, and there has not
been a period of at least three years between ceasing such an employment and serving on the Board.
- Has within the last three years been a principal of a material professional adviser or a material consultant
-
to the Group, or an employee materially associated with the services provided.
Is a material supplier or customer of the Group or an officer of or otherwise associated directly or indirectly
with a material supplier or customer.
- Has a material contractual relationship with the Group other than as a Director.
APPOINTMENTS TO OTHER BOARDS
Directors are required to take into consideration any potential conflicts of interest when accepting appointments
to other boards.
18
INDEPENDENT PROFESSIONAL ADVICE
ACN: 080 939 135
The Board has determined that individual Directors have the right in connection with their duties and
responsibilities as Directors, to seek independent professional advice at the Group’s expense. With the
exception of expenses for legal advice in relation to Directors’ rights and duties, the engagement of an outside
adviser is subject to prior approval of the Chairman and this will not be withheld unreasonably.
GENDER DIVERSITY
In support of successfully executing our Strategy and achieving our objectives, we aim to recruit, develop and
retain talented, diverse and motivated workforce that shares our Group’s values. The Board and management
have developed diversity objectives for the Group.
At Latitude Consolidated we aspire to a workforce profile which reflects as far as possible the talent available
in the communities in which we work. This requires us to achieve workforce diversity in all its forms, including
as to gender, age, geographical location, race and ethnicity, religion, and cultural background. We will ensure
that our policies and procedures enable and support a diverse workforce.
We believe that drawing our workforce from a diverse pool will give us the best talent and most effectively
deliver our strategy to achieve diversification of our workforce.
• Focus on increasing female participation in management and all other levels of the organisation.
• Monitor and report the number of females within the organisation.
• Continue to tolerate and respect differences in ethnicities and religious practices and belief of all
employees.
• Reviewing the means by which we recruit new employees and setting appropriate diversification goals
to facilitate the recruitment of diversity within all levels of the organisation.
This Diversity Policy is also supported by internal processes that will set out measurable objectives to support
the achievement of diversity across the Group.
The Group currently has one female Board members and one female employee.
CONTINUOUS REVIEW OF CORPORATE GOVERNANCE
Directors consider, on an ongoing basis, how management information is presented to them and whether such
information is sufficient to enable them to discharge their duties as Directors of the Group. Such information
must be sufficient to enable the Directors to determine appropriate operating and financial strategies from time
to time in light of changing circumstances and economic conditions. The Directors recognise that mineral
exploration is a business with inherent risks and that operational strategies adopted should, notwithstanding,
be directed towards improving or maintaining the net worth of the Group.
CODE OF CONDUCT
The Group has adopted a Code of Conduct for the Group’s executives that promote the highest standards of
ethics and integrity in carrying out their duties to the Group.
The Code of Conduct can be found on the Group’s website at www.latitudeconsolidated.com.au.
19
CONTINUOUS DISCLOSURE
ACN: 080 939 135
The Group's Board aims to ensure that the market is properly informed of all information that must be disclosed
under the ASX Listing Rules (Listing Rule 3.1 in particular).
There must at all times be a system in place to collect and process information that could realistically be
disclosed. The ultimate determination as to whether or not to disclose in doubtful cases may be made by the
Board and/or Chairman, taking into account the overall situation of the Group and, if necessary, legal or other
advice. To assist in this regard, and, where appropriate, to determine whether information must be disclosed,
the Group has established a Continuous Disclosure Compliance Committee ('Compliance Committee') to deal
with continuous disclosure issues. The Compliance Committee consists of the Chairman and Group Secretary
and, when available, any other Director.
The obligation to keep 'management' fully informed of any significant internal issue relating to or affecting the
Group is central to the training and development of all Latitude Consolidated Limited employees and contractors
and consultants.
RISK MANAGEMENT SYSTEMS
The identification and management of risk, including calculated risk-taking activity is viewed by management as
an essential component in creating shareholder value.
Management is responsible for developing, maintaining and improving the Group’s risk management and
internal control system. Management provides the board with periodic reports identifying areas of potential risks
and the safeguards in place to efficiently manage material business risks. These risk management and internal
control systems are in place to protect the financial statements of the entity from potential misstatement, and
the Board is responsible for satisfying itself annually, or more frequently as required, that management has
developed a sound system of risk management and internal control.
Strategic and operational risks are reviewed at least annually as part of the forecasting and budgeting process.
The Group has identified and actively monitors risks inherent in the industry in which the Group operates.
The Board also receives a written assurance from the Company Secretary that to the best of their knowledge
and belief, the declaration provided to the Board in accordance with section 295A of the Corporations Act is
founded on a sound system of risk management and internal control, and that the system is operating effectively
in relation to financial reporting risks. The Board notes that due to its nature, internal control assurance from the
Company Secretary can only be reasonable rather than absolute. This is due to such factors as the need for
judgement, the use of testing on a sample basis, the inherent limitations in internal control and because much
of the evidence is persuasive rather than conclusive and therefore is not and cannot be designed to detect all
weaknesses in internal control procedures.
COMMUNICATION WITH SHAREHOLDERS
The Group respects the rights of its shareholders and to facilitate the effective exercise of those rights in the
Group is committed to:
Communicating effectively with shareholders;
Providing shareholders with ready access to balanced and understandable information about the Group
and corporate proposals; and
Making it easier for shareholders to participate in General Meetings of the Group.
The Group sees its website www.latitudeconsolidated.com.au as an important tool for effective communication
and all information disclosed to ASX is posted on the Group's website as soon as practicable after disclosure.
The Board encourages full participation of Shareholders at Annual General and General Meetings and uses
these meetings to assist Shareholders in understanding the Group's objectives and strategies in relation to its
business activities.
20
COMMUNICATION WITH SHAREHOLDERS (CONTINUED)
ACN: 080 939 135
The Board encourages Shareholders to discuss Group issues with Directors and to facilitate this contact
provides details of authorised Group contacts on all disseminated information.
ASX PRINCIPLES OF GOOD CORPORATE GOVERNANCE
The Board has reviewed its current practices in light of the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations with 2014 Amendments 3rd edition with a view to making
amendments where applicable after considering the Group's size and the resources it has available.
As the Group's activities develop in size, nature and scope, the size of the Board and the implementation of any
additional formal corporate governance committees will be given further consideration.
The following table sets out the ASX Corporate Governance Guidelines with which the Group does not comply:
ASX Principle
Reference/comment
Principle 2: Structure the Board to add value
2.1
The Board should establish a
nomination committee.
2.4
A majority of the Board should
be independent Directors and
the chair should be an
independent Director.
Given the size of the Board there is no formal nomination committee.
Acting in its ordinary capacity from time to time as required, the Board
carries out the process of determining the need for, screening and
appointing new Directors. In view of the size and resources available to
the Group, it is not considered that a separate nomination committee
would add any substance to this process.
Given the Group’s present size and scope, it is currently not Company
policy to have a majority of independent Directors. Directors have been
selected to bring specific skills and industry experience to the Group. Mr
Roger Steinepreis and Mr Morgan Barron are considered not to be
independent by virtue of being a partner or director of a material adviser
to the Group, Mr Timothy Moore, Mr Nick Castleden and Mrs Kim Eckhof
are deemed not to be independent to the Group.
Principle 4: Safeguard integrity in financial reporting
4.1
The Board should establish an
audit committee.
The Group does not have an Audit Committee. The Board believes that,
with only four Directors on the Board, the Board itself is the appropriate
forum to deal with this function.
Principle 7: Recognise and manage risk
7.1-2
The Board should establish a
risk committee.
The Group does not have a risk committee. The Board believes that,
with only four Directors on the Board, the Board itself is the appropriate
forum to deal with this function. The board continuously reviews and
addresses risks facing the Group.
Principle 8: Remunerate fairly and responsibly
8.1
The Board should establish a
remuneration committee.
Given the current size of the Board, the Group does not have a
remuneration committee. The Board as a whole reviews remuneration
levels on an individual basis, the size of the Group making individual
assessment more appropriate than formal remuneration policies. In
doing so, the Board seeks to retain professional services as it requires,
at reasonable market rates, and seeks external advice and market
comparisons where necessary.
21
Central Park, Level 43
152-158 St Georges Terrace
Perth WA 6000
Correspondence to:
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
F +61 8 9480 2050
E info.wa@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Latitude Consolidated Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of (Client
name) for the year ended 30 June 2018, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M P Hingeley
Partner – Audit & Assurance
Perth, 26 September 2018
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2018
ACN: 080 939 135
Interest revenue
Other income
Fair value gain on available for sale assets
Compliance costs
Consulting and professional fees
Depreciation expense
Directors’ benefit expense
Employee benefits expense
Exploration & evaluation expenditure
Exploration & evaluation expenditure written off
Insurance expense
Interest expense
Loss on sale of fixed asset
Loss on sale of exploration & evaluation expenditure
asset
Other expenses
Rent expense
Share based payments
Share registry costs
Travel expenses
Loss from continuing operations
Income tax (expense) / benefit
Note
8
9
10
11
14
5
2018
$
3,621
-
29,375
(4,500)
(246,657)
(465)
(122,000)
(2,850)
(478,774)
-
(15,946)
-
(1,185)
(485,751)
(55,128)
(15,124)
(77,860)
(20,268)
(25,222)
(1,518,734)
2017
$
3,711
18,182
-
(49,236)
(290,453)
-
(93,600)
(28,990)
-
(10,275)
(18,912)
(1,164)
-
-
(28,541)
(23,899)
(67,355)
(37,375)
(26,748)
(654,655)
-
-
Loss after income tax expense
(1,518,734)
(654,655)
Other Comprehensive Income for the year:
Other comprehensive income for the year, net of
income tax
Total Comprehensive Loss for the year attributed
to members of Latitude Consolidated Limited
Total Basic and Diluted Loss per share – cents per
share - for the year attributable to members of
Latitude Consolidated Limited
-
-
(1,518,734)
(654,655)
Basic and Diluted Loss per share – cents per share
4
(1.09)
(0.71)
The above Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with
the accompanying notes.
23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at year ended 30 June 2018
ACN: 080 939 135
Note
2018
$
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Available for sale financial assets
Total Current Assets
Non-Current Assets
Plant and equipment
Exploration and evaluation asset
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS / (LIABILITIES)
EQUITY
Issued capital
Share based payments reserve
Accumulated losses
TOTAL EQUITY
6
7
8
9
11
12
13
13
2017
$
769,149
34,319
-
803,468
4,256,402
60,993
750,938
5,068,333
-
-
-
4,650
2,116,779
2,121,429
5,068,333
2,924,897
220,542
220,542
138,232
138,232
220,542
138,232
4,847,791
2,786,665
36,816,609
500,977
(32,469,795)
4,847,791
33,431,399
329,827
(30,974,561)
2,786,665
The above Statement of Financial Position is to be read in conjunction with the accompanying notes.
24
CONSOLIDATED STATEMENT OF CHANGES OF EQUITY
For the year ended 30 June 2018
ACN: 080 939 135
2017
Total Equity at 30 June 2016
Loss for the year
Total other comprehensive income
Total Comprehensive Loss for the Year
Capital raised (net of costs)
Conversion of convertible note
Acquisitions settled in equity
Share based payments
Expired options
Total Equity at 30 June 2017
Loss for the year
Total other comprehensive income
Total Comprehensive Loss for the Year
Capital raised (net of costs)
Share based payments
Expired performance rights
Total Equity at 30 June 2018
Note
Issued Capital
$
30,046,121
-
-
-
2,485,142
268,136
632,000
-
-
33,431,399
-
-
-
3,385,210
-
-
36,816,609
13
13
13
Reserve
$
23,164
-
-
-
-
-
262,472
67,355
(23,164)
329,827
-
-
-
-
194,650
(23,500)
500,977
Accumulated
Losses
$
(30,343,070)
(654,655)
-
(654,655)
-
-
-
-
23,164
(30,974,561)
(1,518,734)
-
(1,518,734)
-
-
23,500
(32,469,795)
Total Equity
$
(273,785)
(654,655)
-
(654,655)
2,485,142
268,136
894,472
67,355
-
2,786,665
(1,518,734)
-
(1,518,734)
3,385,210
194,650
-
4,8747,791
The above Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
25
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2018
ACN: 080 939 135
Note
15
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Payments relating to project analysis and due
diligence
Net cash used in operating activities
Cash flows from investing activities
Proceeds from sale of exploration and evaluation
assets
Payments for purchase of subsidiaries
Payments for exploration expenditure
Proceeds from sale of plant and equipment
Payments for purchase of plant and equipment
Net cash provided by / (used) in investing
activities
Cash flows from financing activities
Proceeds from issues of shares and options
Capital raising costs
Net cash provided by financing activities
Net increase / (decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of the
year
Cash and cash equivalents at the end of the year
6
2018
$
3,621
(447,161)
(4,500)
(448,040)
1,000,000
-
(569,707)
3,000
-
2017
$
3,711
(523,268)
(187,645)
(707,202)
20,000
(245,000)
(1,039,975)
-
(4,650)
433,293
(1,269,625)
3,630,000
(128,000)
3,502,000
3,487,253
769,149
4,256,402
2,611,960
(126,816)
2,485,144
508,317
260,832
769,149
The above Statement of Cash Flows is to be read in conjunction with the accompanying notes.
26
ACN: 080 939 135
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2018
NOTE 1: REPORTING ENTITY
Latitude Consolidated Limited is a listed public Company incorporated and domiciled in Australia. The
consolidated financial statements of the Group as at and for the year ended 30 June 2018 comprises of the
Company and its subsidiaries (together referred to as the “consolidated entity’ or “Group”.
A description of the nature of the Group’s operations and its principal activities is included in the Directors’ Report
which does not form part of this financial report.
The financial statements were authorised by the Board of Directors on the date of signing the Directors'
Declaration.
NOTE 2: BASIS OF PREPARATION
This General Purpose Financial Report has been prepared in accordance with Australian Accounting Standards,
other authoritative pronouncements of the Australian Accounting Standards Board (including Australian
Interpretations) and the Corporations Act 2001.
The Financial Statements and Notes of the Group comply with Australian Accounting Standards. Compliance
with Australian Accounting Standards ensures that the financial statements and notes comply with International
Financial Reporting Standards (IFRS).
Latitude Consolidated Limited is a company limited by shares. The financial report is presented in Australian
currency which is also the Group’s functional currency. Latitude Consolidated Limited is a for-profit entity.
This Financial Report was approved by the Board of Directors on 26 September 2018.
Going Concern
These financial statements have been prepared on the basis of going concern, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of
business.
The Directors are confident that the Group can continue as a going concern and as such are of the opinion that
the financial report has been appropriately prepared on a going concern basis. Should the Group be unable to
undertake the initiatives disclosed above, there is uncertainty which may cast doubt whether the Group will be
able to continue as a going concern and whether it will realise its assets and extinguish its liabilities in the normal
course of business and at the amounts stated in the financial statements.
The financial statements do not include any adjustments relating to the recoverability or classification of recorded
asset amounts nor to the amounts or classification of liabilities that may be necessary should the Group and
consolidated entity not be able to continue as a going concern.
Historical Cost Convention
These financial statements have been prepared under the historical cost convention.
27
ACN: 080 939 135
NOTE 2: BASIS OF PREPARATION (CONTINUED)
Significant Accounting Estimates and Assumptions
The preparation of financial statements in conformity with Australian Accounting Standards requires the use of
certain critical accounting estimates. It also requires management to exercise its judgement in the process of
applying the Group’s accounting policies. The Directors evaluate estimates and judgements incorporated into the
financial report based on historical knowledge and best available current information. Estimates assume a
reasonable expectation of future events and are based on current trends and economic data, obtained both
externally and within the Group.
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions
of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of certain assets and liabilities within the next annual reporting year end are:
Impairment of Capitalised Exploration and Evaluation Expenditure
(i)
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of
factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully
recovers the related exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological
changes, which could impact the cost of mining, future legal changes (including changes to environmental
restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, results and net assets will be reduced in the year in which this determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet
reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves. To the extent it is determined in the future that this capitalised expenditure should be written off, results
and net assets will be reduced in the period in which this determination is made.
Recoverability of Potential Deferred Tax Assets
(ii)
The Group recognises deferred income tax assets in respect of tax losses to the extent that it is probable that the
future utilisation of these losses are considered probable. Assessing the future utilisation of these losses requires
the Group to make significant estimates related to expectations of future taxable income. Estimates of future
taxable income are based on forecast cash flows from operations and the application of existing tax laws. To the
extent that future cash flows and taxable income differ significantly from estimates, this could result in significant
changes to the deferred income tax assets recognised, which would in turn impact the financial results.
Share-based Payment Transactions
(iii)
The Group measures the cost of equity-settled transactions with management and other parties by reference to
the fair value of the equity instruments at the date at which they are granted. The fair value is determined by the
Board of Directors using the Black-Scholes valuation method, taking into account the terms and conditions upon
which the equity instruments were granted. The assumptions in relation to the valuation of the equity instruments
are detailed in Note 14: Share-Based Payments. 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 expenses and equity.
28
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
ACN: 080 939 135
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements, and have been applied consistently.
(a) Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
share options, are recognised as a deduction from equity, net any tax effects. Dividends on ordinary shares are
recognised as a liability in the year in which they are declared.
(b) Exploration Expenditure
Exploration and evaluation costs, including the costs of acquiring permits and licenses, are capitalised as
exploration and evaluation assets on an area of interest basis in the Consolidated Statement of Financial
Position. Costs incurred before the Group has obtained the legal rights to explore an area are recognised in the
profit or loss.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
(a) the expenditures are expected to be recouped through successful development and exploitation of the
area of interest; or
(b) activities in the area of interest have not at the reporting date reached a state which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and
significant operations in the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical
feasibility and commercial viability, and facts and circumstances suggest that the carrying amount exceeds the
recoverable amount. Once the technical feasibility and commercial viability of the extraction of minerals in an
area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first
tested for impairment and then reclassified to development expenditure.
(c) Cash and Cash Equivalents
For the purposes of presentation in the statement of Consolidated Statement of Financial Position and
Consolidated Statement of Cash Flows, cash and cash equivalents include cash on hand, deposits held at call
with banks, other short-term highly liquid investments with original maturities of three months or less, and bank
overdrafts.
(d)
Trade and Other Receivables
Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor
with no intention of selling the receivables. They are included in current assets, except for those with maturities
greater than 12 months after the balance date which are classified as non-current assets. Trade and other
receivables are initially recognised at fair value and subsequently carried at amortised cost using the effective
interest method, less any impairment losses.
29
ACN: 080 939 135
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Plant and Equipment
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. Depreciation is calculated on a
straight-line basis to write-off the net cost of each item of plant and equipment over their expected useful lives
as follows:
Furniture & fittings
5 years
(f)
Financial Assets
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. They are subsequently measured
at either amortised cost or fair value depending on their classification. Classification is determined based on the
purpose of the acquisition and subsequent reclassification to other categories is restricted. Financial assets are
derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the Group has transferred substantially all the risks and rewards of ownership.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets, principally equity securities, that are either
designated as available-for-sale or not classified as any other category. After initial recognition, fair value
movements are recognised in other comprehensive income through the available-for-sale reserve in equity.
Cumulative gain or loss previously reported in the available-for-sale reserve is recognised in profit or loss when
the asset is derecognised or impaired.
(g)
Income Tax
Current and deferred tax is recognised as an expense or income in the profit or loss, except when it relates to
items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity,
or where it arises from the initial accounting for a business combination, in which case it is taken into account in
the determination of goodwill or excess.
Current Tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the
taxable profit or tax loss for the year. It is calculated using tax rates and tax laws that have been enacted or
substantively enacted by reporting date. Current tax for current and prior years is recognised as a liability (or
asset) to the extent that it is unpaid (or refundable).
Deferred Tax
Deferred tax is accounted for using the Consolidated Statement of Financial Position liability method. Temporary
differences are differences between the tax base of an asset or liability and its carrying amount in the
Consolidated Statement of Financial Position. The tax base of an asset or liability is the amount attributed to that
asset or liability for tax purposes. In principle, deferred tax liabilities are recognised for all taxable temporary
differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts
will be available against which deductible temporary differences or unused tax losses and tax offsets can be
utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when
the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting
date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are
offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
30
ACN: 080 939 135
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Share Based Payments
The fair value at grant date of options granted to directors and contractors is recognised as a share based
payment expense, with a corresponding increase in equity. The fair value is measured at grant date and spread
over the period during which the employees become unconditionally entitled to the options. The fair value of the
options granted is measured using the Black-Scholes model, taking into account the terms and conditions upon
which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number
of share options that vest except where forfeiture is only due to share prices not achieving the threshold for
vesting.
(i)
Dividend and Revenue
Dividend revenue from investments is recognised when the Group’s right to receive payment has been
established.
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest
rate applicable.
All revenue is stated net of the amount of goods and services tax (GST).
(j)
Impairment of Assets
Financial Assets
(i)
A financial asset is considered to be impaired if objective evidence indicates that one or more events have had
a negative effect on the estimated future cash flows of that asset. An impairment loss in respect of a financial
asset measured at amortised cost is calculated as the difference between its carrying amount, and the present
value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in
respect of an available-for-sale financial asset is calculated by reference to its current fair value.
All impairment losses are recognised in the profit or loss. Any cumulative loss in respect of an available-for-sale
financial asset recognised previously in equity is transferred to the profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the
impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale financial
assets that are debt securities, the reversal is recognised in the profit or loss. For available-for-sale financial
assets that are equity securities, the reversal is recognised directly in other comprehensive income.
Non-Financial Assets
(ii)
Carrying amounts of the Group’s non-current assets are reviewed each reporting date to determine whether
there is any indication of impairment. If such an indication exists, then the asset’s recoverable value amount is
estimated. An impairment loss is recognised if the carrying amount of the asset exceeds its recoverable amount.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a discount
rate that reflects current market assessments and risk.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the
asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
31
ACN: 080 939 135
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j)
Impairment of Assets (Continued)
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to
the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to
the profit or loss.
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.
(k)
Trade Payables
Trade and other payables are stated at amortised cost, which approximates fair value due to the short term
nature of these liabilities.
(l)
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take
a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until
such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised as expenses in the year in which they are incurred.
(m) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the
cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
Consolidated Statement of Financial Position are shown inclusive of GST.
Cash flows are presented in the Consolidated 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.
(n) Earnings Per Share
The Group presents basic and diluted earnings per share (EPS) date for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average
number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the
effects of all dilutive potential ordinary shares, which comprise share options granted to executives.
(o) Rounding of Amounts
The Group is of a kind referred to in Corporations Instrument 2016/191, issued by ASIC relating to ‘rounding-
off’. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest
dollar.
(p) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Directors,
acting as chief operating decision makers. The Directors are responsible for allocating resources and assessing
the performance of the operating segment.
32
ACN: 080 939 135
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q) New and Revised Standards that are effective for these financial statements
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by
the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the
current annual reporting period, resulting in no changes to accounting policy changes and no changes to
recognition and measurement. Various other Standards and Interpretations were on issue but were not yet
effective at the date of authorisation of the financial report. The issue of these Standards and Interpretations
does not affect the Groups present policies and operations. The Directors anticipate that the adoption of these
Standards and Interpretations in future periods will not materially affect the amounts recognised in the financial
statements of the Group but may change the disclosure presently made in the financial statements of the Group.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard
replaces all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments:
Recognition and Measurement'. AASB 9 introduces new classification and measurement models for financial
assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose
objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely
principal and interest. All other financial instrument assets are to be classified and measured at fair value
through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and
losses on equity instruments (that are not held-for-trading) in other comprehensive income ('OCI'). For financial
liabilities, the standard requires the portion of the change in fair value that relates to the entity's own credit risk
to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting
requirements are intended to more closely align the accounting treatment with the risk management activities
of the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an
allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial
instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted.
The standard introduces additional new disclosures. The Group will early adopt this standard from 1 July 2017
which has resulted in the available for sale asset recognised at fair value through profit and loss during the year
ended 30 June 2018 and has no impact on the comparative period.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard
replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance
leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position,
measured at the present value of the unavoidable future lease payments to be made over the lease term. The
exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal
computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use'
asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to
the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial
direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line
operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included
in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the
earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation
and Amortisation) results will be improved as the operating expense is replaced by interest expense and
depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease
payments will be separated into both a principal (financing activities) and interest (either operating or financing
activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts
for leases. The Group will adopt this standard from 1 July 2019 but the impact of its adoption has been assessed
as immaterial by the Group.
33
ACN: 080 939 135
NOTE 4: LOSS PER SHARE
Basic and diluted loss per share – cents
2018
$
2017
$
(1.09)
(0.71)
Loss used in the calculation of basic and diluted loss per share
(1,518,734)
(654,655)
Weighted average number of ordinary shares outstanding during the
year used in calculation of basic and diluted loss per share1
Weighted average number of options outstanding
Less: anti-dilutive options
Weighted average number of ordinary shares outstanding during the
year used in calculation of diluted loss per share1
138,882,846
92,016,852
12,030,466
(12,030,466)
7,433,625
(7,433,625)
138,882,846
92,016,852
1 The 24,188,000 options outstanding as at 30 June 2018 (2017: 11,688,000) were not taken into account in the
calculation of the weighted average number of ordinary shares as they are considered anti-dilutive.
NOTE 5: INCOME TAX
Major components of income tax expense for the Periods ended 30 June 2018 and 30 June 2017 are:
Income statement
Current income
Current income tax charge (benefit)
Current income tax not recognised
Deferred income tax
Relating to origination and reversal of temporary differences
Deferred tax benefit not recognised
Income tax expense (benefit) reported in income statement
2018
$
2017
$
(340,766)
340,766
(612,948)
612,948
7,701,854
(7,701,854)
-
4,213,521
(4,213,521)
-
A reconciliation of income tax expense (benefit) applicable to accounting profit before income tax at the
statutory income tax rate to income tax expense at the Group’s effective income tax rate for the Periods
ended 30 June 2018 and 30 June 2017 is as follows:
Accounting profit (loss) before tax from continuing operations
Accounting profit (loss) before income tax
(1,518,734)
(1,518,734)
(654,655)
(654,655)
34
ACN: 080 939 135
NOTE 5: INCOME TAX (CONTINUED)
At the statutory income tax rate of 30% (2017: 30%)
Add:
Non-deductible expenditure(1)
Temporary differences and losses not recognised
Less:
Tax amortisation of capital raising costs
At effective income tax rate of 0% (2017: 0%)
Income tax expense reported in income statement
2018
$
(455,620)
23,378
567,558
2017
$
(196,397)
23,636
296,971
(135,316)
-
(124,210)
-
-
-
-
-
(1) Non-deductible expenses includes Impairment of exploration and evaluation expenditure, foreign exchange
loss and entertainment expenses.
The net deferred tax asset arising from the tax losses has not been recognised as an asset in the Consolidated
Statement of Financial Position because recovery is not probable.
The taxation benefit of tax losses not brought to account will only be obtained if:
(i) Assessable income is derived of a nature and of an amount sufficient to enable the benefits to be
realised; conditions for deductibility imposed by the law are complied with; and
(ii) No changes in tax legislation adversely affect the realisation of the benefit from deductions.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank (1)
2018
$
4,256,402
4,256,402
2017
$
769,149
769,149
(1) Cash at bank is subject to floating interest rates at an effective interest rate of 0.14% (2017: 0.72%).
NOTE 7: TRADE AND OTHER RECEIVABLES
Other receivables
Prepaid expenses
2018
$
40,688
20,305
60,993
2017
$
34,319
-
34,319
The above amounts are short term and do not bear interest and their carrying amount is equivalent to their fair
value. The Group’s exposure to credit and market risks related to trade and other receivables are disclosed in
Note 17.
35
NOTE 8: AVAILABLE FOR SALE FINANCIAL ASSETS
ACN: 080 939 135
Listed ordinary shares
Unlisted options
A reconciliation of the fair value movements in the available for sale asset
is set out below:
Balance at beginning of the year
Additions
Revaluations
Balance at end of the year
NOTE 9: PLANT AND EQUIPMENT
Plant and equipment – at cost
Accumulated depreciation
A reconciliation of the fair value movements in the available for sale asset
is set out below:
Balance at the start of the year
Additions
Depreciation
Disposals
Balance at the end of the year
NOTE 10: EXPLORATION AND EVALUATION EXPENDITURE
Mbeta lithium and other Zimbabwean exploration expenses
Australian tenements
2018
$
662,500
88,438
750,938
-
721,563
29,375
750,938
2018
$
-
-
-
4,650
-
(465)
(4,185)
-
2018
$
430,859
47,915
478,774
2017
$
-
-
-
-
-
-
-
2017
$
4,650
-
4,650
-
4,650
-
-
4,650
2017
$
-
-
-
During the year, the Group acquired a 70% interest in the Mbeta Lithium Project in southern Zimbabwe.
Previously, all exploration expenditure for each area of interest was carried forward as an asset in the
Statement of Financial Position, provided the rights to tenure of the area of interest were current. As at 30 June
2018, all exploration expenditure relating to the areas of interest in Zimbabwe and in Western Australia was
expensed until further development of these projects takes place. This is consistent with the Group’s
accounting policy where costs are only carried forward to the extent that they are expected to be recouped
through successful development of the area or where activities in the area have not yet reached a stage that
permits reasonable assessment of the existence of economically recoverable reserves.
36
NOTE 11: EXPLORATION AND EVALUATION ASSET
ACN: 080 939 135
Exploration and evaluation asset – at cost
A reconciliation of the carrying amounts of exploration and evaluation
expenditure is set out below:
Balance at the start of the year
Capitalised exploration and evaluation expenditure during the year
Sale of exploration and evaluation capitalised
Capitalised exploration written off during the year1
Balance at the end of the year
2018
$
-
2017
$
2,116,779
2,116,779
90,535
(2,207,314)
-
-
-
2,127,054
-
(10,275)
2,116,779
1 Capitalised exploration written off during the year relates to tenements sold or dropped during the year.
This is consistent with the Group’s accounting policy where costs are only carried forward to the extent that they
are expected to be recouped through successful development of the area or where activities in the area have
not yet reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves. Ultimate recoupment of these costs is dependent on successful development and commercial
exploration or alternatively sale of the respective areas of interest.
The Group has certain obligations to perform minimum exploration work and to expend minimum amounts of
money on such work on mining tenements. These obligations may be varied from time to time subject to approval
and are expected to be fulfilled in the normal course of the operations of the Group. These commitments have
not been provided for in the financial report. Due to the nature of the Group’s operations in exploring and
evaluating areas of interest, it is difficult to accurately forecast the nature and amount of future expenditure
beyond the next year. Expenditure may be reduced by seeking exemption from individual commitments, by
relinquishing of tenure or by entering new joint venture arrangements. Expenditure may be increased when new
tenements are granted or joint venture agreements amended. There are no exploration commitments as at 30
June 2018 (2017: $433,900) due to the following transaction.
37
NOTE 11: EXPLORATION AND EVALUATION ASSET (CONTINUED)
ACN: 080 939 135
During the financial year ended 30 June 2018, the Group entered into a binding Heads of Agreement with Alt
Resources Limited to dispose of its 100% equity interest in its subsidiary MGK Resources Pty Ltd which housed
the Quinns and Mt Ida South Projects, and Mt Ida Joint Venture. The sale was completed on 14 May 2018 and
the subsidiary was disposed for a consideration of $1,000,000 cash, 12,500,000 shares and 3,125,000 options
in Alt Resources Limited (ARS), initially valued at approximately $0.051 per share and $0.0269 per option
respectively. The summary of the transaction is as follows:
Consideration received for sale of MGK Resources Pty Ltd
Consideration received (cash)
Consideration received (shares)
Consideration received (options)
Costs recognised in relation to sale of MGK Resources Pty Ltd
Net assets of MGK as at 14 May 2018*
Investment in MGK
Loan to MGK as at 30 June 2017
Loan to MGK from 1 July 2017 – 14 May 2018
Acquisition costs
Mt Ida exploration costs as at 30 June 2017
Mt Ida exploration costs from 1 July 17 – 14 May 2018
Loss on sale of exploration and evaluation capitalised
NOTE 12: TRADE AND OTHER PAYABLES
Trade payables (1)
Other payables
Accruals
Total Trade and Other Payables
2018
$
1,000,000
637,500
84,063
1,721,563
173,658
661,621
76,765
55,569
304,192
900,543
35,366
(2,207,314)
(485,751)
2018
$
65,485
35,748
119,309
220,542
2017
$
73,602
35,880
28,750
138,232
(1) Trade payables are non-interest bearing and are normally settled on 30-day terms.
The above amounts do not bear interest and their carrying amount is equivalent to their fair value.
38
NOTE 13: ISSUED CAPITAL & RESERVES
ACN: 080 939 135
(a) Issued Capital
Fully paid ordinary shares
2018
No.
275,179,002
2018
$
36,816,609
2017
No.
131,179,002
2017
$
33,431,399
(b) Movements in fully paid shares on issue
Date
Balance as at 1 July 2016
Acquisition of MGK Resources Pty Ltd
Non-Renounceable Entitlements issue
Settlement of liability to related parties
Convertible note conversion
Acquisition of tenements
Placement to sophisticated investors
Share purchase plan
Underwritten shortfall and top-up placement
Share issue costs
Balance as at 30 June 2017
Tranche 1 placement
Tranche 2 placement
Acquisition of project
Share issue costs
Balance as at 30 June 2018
Issue
Price
$0.05
$0.04
$0.04
$0.036
$0.041
$0.04
$0.027
$0.027
19/07/2016
27/08/2016
27/08/2016
01/09/2016
30/09/2016
25/11/2016
01/03/2017
02/03/2017
24/04/2018
19/06/2018
22/06/2018
$0.025
$0.025
$0.03
No.
$
31,675,953
30,046,121
10,000,000
17,550,618
1,558,975
7,448,224
2,000,000
15,542,725
19,166,707
26,235,800
-
131,179,002
19,676,840
118,323,160
6,000,000
-
275,179,002
550,000
702,015
62,359
268,136
82,000
621,659
517,500
708,367
(126,758)
33,431,399
491,921
2,958,079
180,000
(244,790)
36,816,609
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the
number of shares held.
At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to
share capital form 1 July 1998. Therefore, the Group does not have a limited amount of authorised capital and
issued shares do not have a par value.
39
NOTE 13: ISSUED CAPITAL & RESERVES (CONTINUED)
ACN: 080 939 135
(c) Reserves
Options Reserve
Performance Rights Reserve
Options Reserve
Balance as at 1 July 2016
Acquisition of MGK Resources Pty Ltd
Issued under the Employee Share Option Plan
Issued under the Employee Share Option Plan
Issued for the acquisition of tenements
Issued to a contractor
Expiry of options
Balance as at 30 June 2017
Issued to Directors
Issued to consultant
Balance as at 30 June 2018
Performance Rights Reserve
Balance as at 1 July 2016
Acquisition of MGK Resources Pty Ltd
Performance rights issued
Balance as at 30 June 2017
Expiry of performance rights
Balance as at 30 June 2018
Nature and Purpose of Reserve
2018
$
500,977
-
500,977
No.
284,857
1,250,000
3,200,000
988,000
6,000,000
250,000
(284,857)
11,688,000
5,000,000
7,500,000
24,188,000
-
4,000,000
5,000,000
9,000,000
2017
$
306,327
23,500
329,827
$
23,164
45,279
9,280
24,852
217,192
9,724
(23,164)
306,327
77,860
116,790
500,977
-
-
23,500
23,500
(5,000,000)
4,000,000
(23,500)
-
The reserve is used to recognise the fair value of all options, performance shares and Performance rights on
issue but not yet exercised.
Terms of Performance Shares:
a. Class A Performance Shares – converting 1:1 into fully paid ordinary shares upon the delineation of an
additional 100,000 ounce JORC resource on the Project tenements by the Group at a minimum grade
cut-off of 1.0 g/t Au, by 31 August 2018; and
b. Class B Performance Shares – converting 1:1 into fully paid ordinary shares upon the Group completing
its first commercial ‘gold pour’ from mining production at the tenements by 31 August 2019.
No accounting value has been assigned to the Performance Shares issued to the inability to reliably measure
the value.
40
ACN: 080 939 135
NOTE 13: ISSUED CAPITAL & RESERVES (CONTINUED)
Options valuations during the period
For the options granted during the current financial year, the Group used the Black Scholes method and the
valuation model inputs used to determine the fair value at the grant date, are as follows:
Class
1
2
3
4
5
6
7
8
9
10
Grant date
01/09/2016
26/11/2015
26/11/2015
26/11/2015
26/11/2015
05/12/2016
05/12/2016
05/12/2016
05/12/2016
20/06/2018
Expiry date
31/08/2019
24/11/2021
24/11/2020
24/11/2019
24/11/2019
30/11/2018
30/11/2019
30/11/2020
30/11/2019
31/05/2021
Share price
at grant date
0.045
0.029
0.029
0.029
0.029
0.047
0.047
0.047
0.047
0.03
Exercise
price
0.10
0.25
0.15
0.08
0.08
0.08
0.15
0.25
0.08
0.05
Expected
volatility
172%
172%
172%
172%
172%
172%
172%
172%
172%
100%
Dividend
yield
-
-
-
-
-
-
-
-
-
-
Risk-free
interest rate at grant date
Fair value
1.43%
2.27%
2.27%
2.17%
2.17%
1.80%
1.94%
2.08%
1.94%
2.12%
0.036
0.023
0.026
0.025
0.025
0.034
0.036
0.039
0.039
0.0156
As at 30 June 2018 the Group had a total of 24,188,000 (2017: 11,688,000) unlisted options on issue with a
weighted average exercise price of 9.76 cents (2017: 14.9 cents). The weighted average remaining contractual
life of all share options outstanding at the end of the year is 2.33 years (2017: 2.7 years).
During the year ended 30 June 2018, no options over shares were exercised (2017: nil).
Capital Management
When managing capital, the Board’s objective is to ensure the Group continues as a going concern as well as
to maximise the returns to shareholders and benefits for other stakeholders. The Board also aims to maintain a
capital structure that ensures the lowest cost of capital available to the entity.
The Board is constantly reviewing the capital structure to take advantage of favourable costs of capital or high
returns on assets. As the market is constantly changing, the Board may issue new shares, return capital to
shareholders or sell assets to reduce debt.
The Group was not subject to any externally imposed capital requirements during the year.
NOTE 14: SHARE BASED PAYMENT
On 20 June 2018, the Group issued 1,000,000 unlisted options to each Director, totalling 5,000,000 options,
exercisable at $0.05 each on or before 31 May 2021. Each option entitles the holder to subscribe for one share
upon exercise of option. Options granted carry no dividend or voting rights. The valuation inputs for the options
are outlined in Note 13. The terms and conditions of each grant of options over ordinary shares affecting
remuneration of directors in this financial year are as follows:
Number of
Options
Granted
5,000,000
Grant Date
Expiry Date
Exercise Price
20 June 2018
31 May 2021
$0.05
Fair Value per
Option at
Grant Date
$0.0156
Total Value of
Options
Issued
$77,860
41
NOTE 15: OPERATING CASH FLOW
ACN: 080 939 135
Reconciliation of Loss for the Year to Net Cash Flows provided
by Operations
2018
$
2017
$
Loss for the year
(1,518,734)
(654,655)
Adjustments for:
Depreciation expense
Sale of exploration and evaluation assets
Interest expense – non-cash
Share based payments
Capitalised exploration and evaluation expenditure written off
Other expenses settled in equity
Revaluation expense
Exploration & evaluation expenditure
Loss on sale of fixed asset
Changes in assets and liabilities:
(Increase) / decrease in trade receivables and other assets
Decrease in available for sale financial assets
Increase / (decrease) in trade and other payables
Net cash flows used in operations
NOTE 16: RELATED PARTY TRANSACTIONS
465
485,751
-
77,860
-
-
(29,375)
478,774
1,185
-
(20,000)
1,164
67,355
10,275
52,390
-
-
-
(26,674)
400
82,308
(448,040)
3,996
-
(167,727)
(707,202)
(a) Key Management Personnel Compensation
Information on remuneration of all Directors and Key Management Personnel is contained in the Remuneration
Report within the Directors’ Report.
The aggregated compensation paid to Directors and Key Management Personnel of the Group is as follows:
Short-term employee benefits
Post-employment benefits
Share based payments
2018
$
327,127
2,850
77,860
407,837
2017
$
370,625
2,850
32,490
405,965
(b)
Loans to Key Management Personnel
No loans have been made to key management personnel, including their personally related parties, of Latitude
Consolidated Limited.
42
ACN: 080 939 135
NOTE 16: RELATED PARTY TRANSACTIONS (CONTINUED)
(c)
Other Related Party Transactions
Transactions with other related parties are made on normal commercial terms and conditions and at market
rates. Outstanding balances are unsecured and are repayable in cash.
Ventnor Capital Pty Ltd (Mr Morgan Barron – Non-Executive Director)
Ventnor Capital Pty Ltd, a company of which Mr Morgan Barron is a Director, provided office accommodation,
bookkeeping, CFO, financial accounting services, company secretarial support, corporate services and executive
services in relation to the administration of the Company during the year. Ventnor Capital also provided Due
diligence, project evaluation and corporate transaction services during the year.
A total amount of $128,978 (2017: $129,677) was paid to Ventnor Capital Pty Ltd for providing all of the above
services for the year ended 30 June 2018. There was no amount outstanding to Ventnor Capital Pty Ltd as at 30
June 2018 (2017: $9,000).
Ventnor Securities Pty Ltd (Mr Morgan Barron – Non-Executive Director)
Ventnor Securities Pty Ltd, a company of which Mr Morgan Barron is a Director, provided capital raising support
to the Group during the year.
There were no transactions with Ventnor Securities Pty Ltd for the year ended 30 June 2018 (2017: $13,375).
There was no amount outstanding at 30 June 2018 (2017: $nil).
Steinepreis Paganin Lawyers & Consultants (Mr Roger Steinepreis – Non-Executive Director)
Steinepreis Paganin Lawyers & Consultants, a company of which Mr Roger Steinepreis is a Partner, provided
general legal advice and services to the Group during the year. A total amount of $40,091 (2017: $53,028) was
paid to Steinepreis Paganin Lawyers & Consultants during the year. A total amount of $14,258 (2017: $Nil) was
owed to Steinepreis Paganin Lawyers & Consultants as at 30 June 2018.
Cratonix Pty Ltd (Mr Nick Castleden – Non-Executive Director)
Cratonix Pty Ltd, a company of which is related to Nick Castleden through his spouse, provided general exploration
services to the Group during the year. A total amount of $8,300 (2017: $5,500) was paid to Cratonix Pty Ltd during
the year. There was no amount outstanding at 30 June 2018 (2017: $nil).
Darjeeling Pty Ltd (Mr Timothy Moore – Non-Executive Chairman)
Darjeeling Pty Ltd, a company of which Timothy Moore is a Director, provided general executive services to the
Group during the year. A total amount of $15,500 (2017: $20,650) was paid to Darjeeling Pty Ltd during the year.
There was no amount outstanding at 30 June 2018 (2017: $Nil)
NOTE 17: AUDITOR’S REMUNERATION
Amounts Payable to Auditor
Audit and review services - payable to Grant Thornton Audit Pty Ltd
There were no non-audit services provided by auditors during the year.
2018
$
33,848
33,848
2017
$
30,860
30,860
43
ACN: 080 939 135
NOTE 18: FINANCIAL INSTRUMENTS
(a)
Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise cash, receivables, payables and related party loans.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and
agrees policies for managing each of the risks identified.
The Group manages its exposure to key financial risks, including interest rate, credit and liquidity risks in
accordance with the Group’s risk management policy. The primary objective of the policy is to reduce the volatility
of cash flows and asset values arising from such movements.
The Group uses different methods to measure and manage the different types of risks to which it is exposed.
These include monitoring the levels of exposure to interest rate risk, ageing analysis and monitoring of credit
allowances to manage credit risk and the use of future cash flow forecasts to monitor liquidity risk.
(b)
Significant Accounting Policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis
of measurement and the basis on which income and expenses are recognised, with respect to each class of
financial asset, financial liability and equity instrument are disclosed in Note 3 to the financial statements.
(c)
Categorisation of Financial Instruments
Details of each category in accordance with Australian Accounting Standard AASB 139 Financial Instruments:
Recognition and Measurement are disclosed either on the face of the Consolidated Statement of Financial
Position or in the notes.
(d)
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the Consolidated Statement of Financial Position have been
analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the
measurements. The fair value hierarchy consists of the following levels:
quoted prices in active markets for identical assets or liabilities (Level 1);
inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(Level 3).
Assets
Available for sale financial assets
Level 1
Level 2
Level 3
Total
662,500
662,500
88,438
88,438
-
-
750,938
750,938
The options granted (representative of level 2 available for sale financial assets) were valued using the Black
Scholes method and the valuation inputs used to determine the fair value at grant date, are as follows:
No of
Options
3,125,000
Grant date
11/05/2018
Expiry date
11/05/2021
Share price
at grant date
0.053
Exercise
price
0.08
Expected
volatility
98.13%
Dividend
yield
-
Risk-free
interest rate at grant date
Fair value
2.16%
0.0283
44
ACN: 080 939 135
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
(e)
Credit Risk
(i)
Exposure to Credit Risk
The carrying amount of the Company’s financial assets represents the maximum credit exposure. The
Company’s maximum exposure to credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
Available for sale financial assets
(ii)
Interest Rate Risk
2018
$
4,256,402
60,993
750,938
5,068,333
2017
$
769,149
34,319
-
803,468
The Company’s maximum exposure to interest rates at the reporting date was:
Range of
Effective Carrying
Interest
Amount
Rate
(%)
$
Interest Rate Exposure
Variable
Interest
Rate
$
Non
Interest
Bearing
$
Floating
Interest
Rate
$
Total
$
0.14%
4,256,402
4,256,402
0.72%
769,149
769,149
-
-
-
-
4,256,402
769,149
2018
Financial Assets - Current
Cash and cash equivalents
2017
Financial Assets - Current
Cash and cash equivalents
(iii)
Trade and Other Receivables
The Company’s maximum exposure to credit risk for trade and other receivables at the reporting date was:
Carrying
Amount
$
Not past
Past due but not impaired
1-3
3 Months 1 Year
due and not Months
impaired
$
$
to
1 Year
$
to
5 Years
$
Impaired
Financial
Assets
$
60,993
60,993
34,319
34,319
-
-
-
-
-
-
-
-
2018
Financial Assets - Current
Trade and other receivables
2017
Financial Assets - Current
Trade and other receivables
45
ACN: 080 939 135
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
(f)
(i)
Liquidity Risk
Exposure to Liquidity Risk
The carrying amount of the Company’s financial liabilities represents the maximum liquidity risk. The
Company’s maximum exposure to liquidity risk at the reporting date was:
Financial Liabilities - Current
Trade and other payables
Total Financial Liabilities
(ii)
Contractual Maturity Risk
The following table discloses the contractual maturity analysis at the reporting date:
2018
$
2017
$
220,542
220,542
138,232
138,232
Carrying
Amount
Less than
1 month
1-3
Months
2018
Financial Liabilities - Current
Trade and other payables
2017
Financial Liabilities - Current
Trade and other payables
(g) Market Risk
(i)
Currency Risk
$
$
$
220,542
220,542
138,232
138,232
3 Months
to
1 Year
$
Maturity Dates
1 Year
to
5 Years
$
Over
5 Years
$
-
-
-
-
-
-
-
-
The Company is not exposed to any foreign currency risk at the report date.
(ii)
Interest Rate Risk
The Company’s only exposure to interest rate risk is Cash as set out in Note 18(e)(ii).
(iii)
Other Price Risk
There are no other price risks of which the Company is aware.
46
ACN: 080 939 135
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
(iv)
Sensitivity Disclosure Analysis
Taking into account past performance, future expectations and economic forecasts, the Company believes the
following movements are ‘reasonably possible’ over the next 12 months (base rates are sourced from the
Reserve Bank of Australia).
It is considered that 100 basis points is a ‘reasonably possible’ estimate of potential variations in the interest rate.
The following table discloses the impact on net operating result and equity for each category of financial
instrument held by the Company at year end as presented to key management personnel, if changes in the
relevant risk occur.
2018
Financial Assets - Current
Cash and cash equivalents
2017
Financial Assets - Current
Cash and cash equivalents
Carrying
Amount
$
Interest Rate Risk
+1%
-1%
Profit
$
Equity
$
Profit
$
Equity
$
4,256,402
42,564
42,564
(42,564)
(42,564)
769,149
7,649
7,649
(7,649)
(7,649)
NOTE 19: EVENTS OCCURRING AFTER THE REPORTING PERIOD
No matters or circumstances have arisen since the end of the year which significantly affected or may
significantly affect the operations of the Company, the results of those operations or the state of affairs of the
Company in subsequent financial years.
NOTE 20: CONTINGENT ASSETS AND LIABILITIES
The Directors are not aware of any contingent assets or liabilities that may arise from the Company’s operations
as at 30 June 2018 (2017: nil).
NOTE 21: SEGMENT REPORTING
The Company has identified one operating segment based on the internal reports that are reviewed and used
by the executive management team (the chief operating decision makers) in assessing performance and in
determining the allocation of resources. The Company operates in Australia (exploration) and Zimbabwe
(exploration) however at this stage prepares reports internally that reflect exploration totals in both regions as a
total sum as opposed to preparing separate reports.
47
ACN: 080 939 135
DIRECTOR’S DECLARATION
In the Directors’ opinion:
(a)
the accompanying financial statements set out on pages 27 to 53 and the Remuneration Report in the
Directors’ Report are in accordance with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the Company’s financial position as at 30 June 2018 and of its
performance, as represented by the results of its operations, changes in equity and cash flows, for
the year ended on that date; and
complying with Australian Accounting Standards, Corporations Regulations 2001 and other
mandatory professional reporting requirements;
(b)
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
This declaration is made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 for the year ended 30 June 2018.
This declaration is made in accordance with a resolution of the Board of Directors.
On behalf of the Directors
Mr Timothy Moore
Chairman
Perth
26 September 2018
48
Central Park, Level 43
152-158 St Georges Terrace
Perth WA 6000
Correspondence to:
PO Box 7757
Cloisters Square
Perth WA 6850
T +61 8 9480 2000
F +61 8 9480 2050
E info.wa@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Latitude Consolidated Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Latitude Consolidated Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement of profit
or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash
flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Accounting for sale of subsidiary
Note 11
In May 2018, the Group completed sale of the Quinns and Mt
Ida South Projects and the Mt Ida Joint Venture for
consideration of cash, shares and options in Alt Resources
Limited. The sale of these assets resulted in a net loss.
Reading the terms and conditions of the sale agreement
and the related accounting treatment against requirements
of Australian Accounting Standards;
Our procedures included, amongst others:
The transaction was unique and the magnitude of the
transaction had financial significance to the Group. Significant
judgement was involved to apply the appropriate accounting
standards to determine how to account for the disposed
assets and to determine the valuation of the consideration
received. As a result of the Group’s detailed assessment over
the risk exposure and sale of the assets, the Group
recognised a $485,751 loss on disposal of subsidiary.
Agreeing the issue of shares and options to ASX
announcements;
Evaluating the methodology and key inputs and
assumptions to the valuation calculation for consideration
received for reasonableness; and
Assessing the adequacy of the Group's disclosures in
respect to transaction.
This area is a key audit matter due to the complexity of the
transaction and the valuation of consideration requiring
significant judgment.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2018, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 8 to 14 of the Directors’ report for the year ended 30 June
2018.
In our opinion, the Remuneration Report of Latitude Consolidated Limited, for the year ended 30 June 2018 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M P Hingeley
Partner – Audit & Assurance
Perth, 26 September 2018
ACN: 080 939 135
ASX ADDITIONAL INFORMATION
Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Annual
Report is set out below.
SHAREHOLDINGS
The issue capital of the Company at 20 September 2018 is 275,179,002 ordinary fully paid shares. All
ordinary shares carry one vote per share.
TOP 20 SHAREHOLDERS AS AT 20 SEPTEMBER 2018
MCNEIL NOMINEES PTY LIMITED
VIMINALE PTY LTD
BLUEKNIGHT CORPORATION PTY LTD
RIVERVIEW CORPORATION PTY LTD
CITICORP NOMINEES PTY LIMITED
CROESUS MINING PTY LTD
RANCHLAND HOLDINGS PTY LTD
TUKDAH PTY LTD
CELERY PTY LTD
BNP PARIBAS NOMINEES PTY LTD
1
2
3
4
5
6
7
8
9
10
11 NEWTON6 PTY LIMITED
12
TALLTREE HOLDINGS PTY LTD
12 OAKHURST ENTERPRISES PTY LTD
12 NEWHAT INVESTMENTS LIMITED
12 DR GEORG H SCHNURA
12
13
14 MR WALID KHNAIZER
15 MR MARK GASSON
15 MR KLAUS PETER ECKHOF
15 MR JUSTIN ANTHONY VIRGIN
LAKE SPRINGS PTY LTD
16
17 OPEKA DALE PTY LTD
18 MRS FIFI J SMITH
19
20 MR MICHAEL PETER HETRELEZIS
J P MORGAN NOMINEES AUSTRALIA LIMITED
ARMOURED FOX CAPITAL PROPRIETARY LIMITED
JGS CONSULTING PTY LTD
Shares Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
No. of
Shares Held
29,944,994
9,417,706
8,000,000
6,718,346
6,216,958
6,200,000
6,000,000
5,478,999
5,271,655
5,049,846
4,600,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
3,623,689
3,495,448
3,000,000
3,000,000
3,000,000
2,948,837
2,800,000
2,631,578
2,498,279
2,310,344
142,206,679
% Held
10.88%
3.42%
2.91%
1.22%
2.26%
2.25%
2.18%
1.99%
1.92%
1.84%
1.67%
1.45%
1.45%
1.45%
1.45%
1.45%
1.32%
1.27%
1.09%
1.09%
1.09%
1.07%
1.02%
0.96%
0.91%
0.84%
51.68%
No. of Holders No. of Shares
267,189,247
7,783,717
107,742
87,266
11,030
275,179,002
230
170
15
28
96
539
Number holding less than a marketable parcel
197
1,300,723
Shareholders by Location
Australian holders
Overseas holders
No. of Holders No. of Shares
250,919,175
24,259,827
275,179,002
516
23
539
53
ACN: 080 939 135
ASX ADDITIONAL INFORMATION (CONTINUED)
VOTING RIGHTS
The holders of ordinary shares are entitled to one vote per share at meetings of the Company.
SUBSTANTIAL SHAREHOLDERS AS AT 20 SEPTEMBER 2018
MCNEIL NOMINEES PTY LIMITED
OPTION HOLDINGS
No. of
Shares Held
29,944,994
% Held
10.88%
The Company has the following classes of options on issue at 20 September 2018 as detailed below.
Options do not carry any rights to vote.
Class
LCD-OP1
LCD-OP2
LCD-OP3
LCD-OP4
LCD-OP5
LCD-OP6
LCD-OP7
LCD-OP8
LCD-OP9
LCD-OP10
Unlisted
Options
Unlisted
Options
Unlisted
Options
Unlisted
Options
Unlisted
Options
Unlisted
Options
Unlisted
Options
Unlisted
Options
Unlisted
Options
Unlisted
Options
Options Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Terms
No. of
Options
Exercisable at 0.10c expiring on or before 31 August 2019
1,250,000
Exercisable at 0.08c expiring on or before 30 November 2018
2,000,000
Exercisable at 0.15c expiring on or before 30 November 2019
2,000,000
Exercisable at 0.25c expiring on or before 30 November 2020
2,000,000
Exercisable at 0.08c expiring on or before 24 November 2019
1,250,000
Exercisable at 0.15c expiring on or before 24 November 2020
1,200,000
Exercisable at 0.25c expiring on or before 24 November 2021
750,000
Exercisable at 0.08c expiring on or before 24 November 2019
988,000
Exercisable at 0.08c expiring on or before 30 November 2019
250,000
Exercisable at 0.05c expiring on or before 31 May 2021
12,500,000
24,188,000
Unlisted Options
No. of Holders
-
-
-
-
19
13
No. of
Options
-
-
-
-
24,188,000
24,188,000
54
ASX ADDITIONAL INFORMATION (CONTINUED)
ACN: 080 939 135
The following Option holders hold more than 20% of a particular class of the Company’s Unlisted Options.
Holder
Vaportrail Pty Ltd
Seefeld Investments Pty Ltd
Maincost Pty Ltd
Gazzard Investments Pty Ltd
Michael Edwards
Alan Downie
-
-
LCD-OP1 LCD-OP2 LCD-OP3 LCD-OP4 LCD-OP5 LCD-OP6
464,286
357,143
-
-
-
-
-
-
1,000,000 1,000,000 1,000,000
1,000,000 1,000,000 1,000,000
-
-
-
-
-
-
750,000
450,000
-
-
-
-
750,000
500,000
-
-
-
-
-
-
Holder
Michael Edwards
Alan Downie
Joel Ives
Brett Tucker
Read Corporate
DJ Carmichael
LCD-OP7 LCD-OP8 LCD-OP9 LCD-OP10
750,000
-
-
-
-
-
-
-
-
250,000
-
-
494,000
494,000
-
7,500,000
PERFORMANCE SHARE HOLDINGS
The Company has the following classes of performance shares on issue at 20 September 2018 as detailed
below. The performance shares were issued on 1 September 2016. Each performance shares converts into
one fully paid ordinary share upon reaching the milestones (set out in “terms” section of the table below).
Performance shares do not carry any rights to vote. No milestones were met during the year and thus no
performance shares were converted.
Class
Class A
Performance
Shares
Class B
Performance
Shares
Terms
Convert upon the delineation of an additional 100,000
ounce JORC resource on the tenements acquired from
MGK Resources Pty Ltd by the Company at a minimum
grade cut-off of 1.0 g/t Au, expire 31 August 2018
Convert upon the Company completing its first
commercial “gold pour” from mining production at the
tenements acquired from MGK Resources Pty Ltd,
expiring 31 August 2019
No. of
Options
2,000,000
2,000,000
4,000,000
Performance Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Performance Shares
No. of Holders
No. of Perf.
Shares
-
-
-
2
10
12
-
-
-
190,478
3,809,522
4,000,000
The following Performance Share holders hold more than 20% of a particular class of the Company’s
Performance Shares.
55
ASX ADDITIONAL INFORMATION (CONTINUED)
ACN: 080 939 135
Holder
Vaportrail Pty Ltd
Seefeld Investments Pty Ltd
Class A
742,857
571,429
Class B
742,857
571,428
56
ACN: 080 939 135
ASX ADDITIONAL INFORMATION (CONTINUED)
SCHEDULE OF MINING & EXPLORATION TENEMENTS
Project/Tenements
Location
Held at year
end
Acquired in
the year
Disposed in
the year
WA
WA
WA
Mt Burges
E15/1587 - Granted
Levers Well
E45/5050 - Application
Quinn’s Project
E29/649
E29/748
E29/930
E29/943
M29/36
M29/37
M29/65
E29/997
E29/998
Mt Ida South Project
E29/790
M29/421
E29/1007
E29/1008
E29/1014
E29/1016
MT Ida South JV
WA
E29/921
E29/901
E29/969
E29/970
E29/971
E29/973
E29/993
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
-
80%
80%
80%
80%
80%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
57