More annual reports from Manhattan Corporation Limited:
2023 Report2013
A N N U A L R E P O R T
ABN 61 123 156 089
www.manhattancorp.com.au
CONTENTS
CORPORATE DIRECTORY
CHAIRMAN’S REVIEW
REVIEW OF OPERATIONS
DIRECTORS’ REPORT
AUDITOR’S REPORT
AUDITOR’S DECLARATION
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ STATEMENT
CORPORATE GOVERNANCE STATEMENT
ASX ADDITIONAL INFORMATION
ANALYSIS OF SHAREHOLDINGS
TENEMENT SCHEDULE
1
2
6
16
28
30
31
31
32
33
34
35
56
57
73
73
76
CORPORATE GOVERNANCE STATEMENT
CORPORATE DIRECTORY
DIRECTORS
Alan J Eggers
Executive Chairman
Computershare Investor Services Pty Ltd
SHARE REGISTRY
B.Sc, B.Sc(Hons), M.Sc, F.S.E.G., MAusIMM, MAIG
Level 2, Reserve Bank Building
Marcello Cardaci
Non Executive Director
PERTH WA 6000
B.Juris, LLB, B.Com
45 St Georges Terrace
INVESTOR ENQUIRIES
John A G Seton
Non Executive Director
Australia:
1300 850 505
LLM(Hons)
International:
+61 3 9415 4000
COMPANY SECRETARY
Sam Middlemas
B.Com, PGradDipBus., CA
BUSINESS OFFICE
Ground Floor
15 Rheola Street
WEST PERTH WA 6005
PO Box 1038
WEST PERTH WA 6872
Telephone:
Facsimile:
+61 8 9322 6677
+61 8 9322 1961
REGISTERED OFFICE
Ground Floor
15 Rheola Street
WEST PERTH WA 6005
INTERNET ACCESS
Email:
Web Site:
Facsimile:
Web Site:
AUDITORS
+61 8 9323 2033
www.computershare.com.au
Rothsay Chartered Accountants
Level 1
4 Ventnor Street
WEST PERTH WA 6005
BANKERS
Westpac Banking Corporation
109 St Georges Terrace
PERTH WA 6000
SOLICITORS
Gilbert + Tobin
1202 Hay Street
WEST PERTH WA 6005
CORPORATE ADVISERS
Gresham Advisory Partners
PERTH WA 6000
info@manhattancorp.com.au
www.manhattancorp.com.au
STOCK EXCHANGE LISTING
Australian Securities Exchange (“ASX”)
COUNTRY OF INCORPORATION
ASX Code: MHC
Australia
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
1
CHAIRMAN’S REVIEW
CHAIRMAN’S
REVIEW
19 September 2013
Dear Shareholders and Investors
I’m pleased to, on behalf of the Board and our executive team, present Manhattan’s
2013 Annual Report, Financial Statements for the year ended 30 June 2013 and my
review of the uranium sector.
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MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
CHAIRMAN’S REVIEW
The year in review
It’s been a tough year in the capital markets and especially for junior uranium exploration companies. The
uranium sector has continued to lose ground with short term oversupply in the fuel market sapping investor
optimism and confidence that has seen both producer, and explorer, enterprise values slashed across the board
as investor confidence is tested.
The uranium price has continued to weaken with the spot price now down by 50% since the Japanese earthquake
and Fukushima incident in March 2011. Yellowcake is now at a seven year low of US$34lb, down from around
$50lb this time last year.
Despite the state of the equities markets, making it difficult to source funds, Manhattan successfully completed
a placement of shares in April 2013, at the then market price of 14 cents a share, to sophisticated and institutional
investors to raise $1 million cash.
Uranium Sector Outlook
Expert commentary and industry analysts generally continue to be positive with the fundamentals of the sector
sound.
UBS Global Equity research predicted, earlier in 2013, the death of the China led commodity “Super Cycle” with
the long standing key driver, constraints on supply growth, over the price outlook for most metals either flat or
negative going forward. By default, exceptions to this outlook were niche metals uranium and alumina where
constraints on supply continue into the foreseeable future.
This view is underwritten by the fact that there are 432 nuclear power plants operable in 31 countries and the
new build underway at an all time record level with 68 reactors now under construction around the world.
Nuclear power development programs include 28 new plants under construction in China, 10 in Russia, 7 in
India, 5 in South Korea, 3 in USA, 3 in Japan, 2 in Slovakia, 2 in Pakistan, 2 in UAE and a number of countries
including France, Argentina, Brazil and Finland with 1 each.
A further 162 plants, where approvals, funding or major commitments are in place are expected to be in
operation in the next 8 to 10 years.
Japan accounted for 12% of global fuel demand prior to March 2011. The shutdown announced following
Fukushima tipped the uranium market into oversupply. However, following the Japanese election result in late
December 2012 the outlook improved significantly when Japan moved to reverse its commitment to phase out
nuclear power by 2040. The new Japanese government announced their reactors are to be restarted as they
pass safety tests and they now have three new plants under construction.
Soaring coal and LNG imports into Japan, and Germany, have significantly increased their energy costs, increased
emissions and coal generated pollution whilst, in both countries, renewables fail to meet targets. In Europe the
shift towards renewables is proving costly for Germany’s utilities whilst the German government continues to
fund nuclear power plant construction abroad and imports nuclear power from France to meet its energy needs.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
3
CHAIRMAN’S REVIEW
Uranium Supply and Price Outlook
Uranium primary fuel supply squeeze is on the horizon with world production only able to supply around two
thirds of existing needs. With the current uranium price being well below the incentive level to bring on new
mine supply to fill the widening gap there remains a serious challenge with most new mines needing a minimum
of $60 to $70lb to consider development.
Inventories and recycling are unable to meet the shortfall and the cessation of Russian HEU weapons grade
material in late 2013 will contribute to the supply crunch.
Primary mine supply is currently delivering around 120Mlbs a year with secondary HEU weapons material and
MOX recycling meeting the balance of the 200Mlb reactor requirements. Uranium demand is predicted to be
320Mlbs a year in 10 years with a fuel supply shortfall looming of 85Mlbs possible by as soon as late 2014 and
as much as 165Mlbs shortfall by 2022.
In April 2013 when the uranium spot price was $40lb the industry price consensus for uranium oxide, by 12
independent global financial institutions, was an increase of 33% to US$53.60 by December 2013, 47% to
US$59.30 by December 2014 and up to 59% to US$64.20 by June 2015.
Exploration Access Approval to Granted Licences within QVSNR
Your company continues to engage with the Western Australian government to gain exploration access to the
key granted exploration licence, E28/1898, located within the Queen Victoria Spring Nature Reserve. Access to
this tenement is essential to the future development of our Ponton uranium ISL project.
The Western Australian State government’s commitment to support and develop the emerging WA uranium
mining sector is positive and Manhattan remains committed to gaining access approval to recommence resource
definition drilling on its Double 8, Stallion, Highway and Ponton uranium deposits and its advanced prospects
at Ponton.
Resource Estimates and Upgrades
Manhattan has reported Inferred Resources for Double 8 of 17.2Mlb of uranium oxide with additional drilled
Exploration Targets with Mineralisation Potential totalling 33 to 67Mlb uranium, at 200ppm U3O8 cutoff, for the
Double 8, Stallion South, Highway South and Ponton prospects.
DNA uranium analyses and disequilibrium determinations on 205 sonic and aircore drill samples confirmed the
positive disequilibrium factors of 1 to over 3 above 80ppm U3O8 from Stallion and Highway drilling. This factor
is significantly higher than the x1.2 currently applied to the reported resources and targets and, when applied,
will significantly lift the reported resource base at Ponton.
High resolution down hole Germanium HpGe probe data is now required to complete the resource estimate
modelling for Manhattan’s deposits. The HpGe probe data will establish (with the required statistical confidence)
the conversion of the high resolution gamma logs to uranium grades for future reporting of JORC mineral
resources, ore reserves and upgrades at Ponton by the Company’s independent resource consultants.
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MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
CHAIRMAN’S REVIEW
Project Assessment and Future Development
The sand hosted uranium mineralisation at Ponton is located in shallow, 40 to 70 metres deep, palaeochannels
along 55km of strike within Manhattan’s 100% owned 2,610km2 project area. Tetra Tech’s 2011 desktop scoping
study confirmed the deposits have potential to be viable, sustainable low cost ISL uranium producers with
modest capital requirements to develop and a lower quartile operational cost profile.
On resumption of drilling at Ponton work will also commence on an environmental impact statement and a
bankable feasibility study in preparation for the uranium mine development approval process.
Access approval to exploration licence E28/1898 (enabling resource definition drilling to recommence) will
trigger investor interest in Manhattan. The resource upgrades and access approval will put Manhattan in the
position to get on with defining and developing the large, low cost uranium resource at Ponton.
Based on recent takeovers by ARMZ for Uranium One and Denison Mines for Fission Energy Corp at above
US$10lb in the ground, Manhattan with 17Mlb reported and 33 to 67Mlb targets, has substantial latent value to
be realised for investors on exploration access being granted to its key licence areas in WA.
The Project, Uranium Recovery and Commitment
The potential scale of our project, located in Western Australia where the newly re-elected State government
has reconfirmed its commitment to develop the uranium mining industry, has the potential to be developed
into a world class low cost sustainable ISL uranium producer.
On a positive note broker predictions are the uranium market balance will tip into undersupply by late 2014 to
2015 and prices will recover.
The Board, and management team, at Manhattan are up to the challenge, aware of the urgency and committed
to achieving the outcomes required to establish a competitive substantial resource base, gain the necessary
social, State and Federal approvals and backing to finance and deliver the project which will generate value for
our investors.
ALAN J EGGERS
Executive Chairman
19 September 2013
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
5
REVIEW OF OPERATIONS
REVIEW OF
OPERATIONS
Introduction
Manhattan Corporation Limited’s (“Manhattan”) flagship project is the Ponton project
in WA where the Company is drill testing and developing palaeochannel sand hosted
uranium mineralisation amenable to in-situ leach (“ISL”) metal recovery (Figure 1).
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MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
REVIEW OF OPERATIONS
Drilling within the palaeochannels has established extensive continuity of the carbonaceous sand hosted uranium
mineralisation for over 55km of strike within the Company’s 100% owned 2,610km2 exploration licences at Ponton.
Manhattan continues to work with the Western Australian government to have ground exploration access approved on
its key granted tenement, E28/1898, in the northwest corner of the Queen Victoria Spring Nature Reserve (“QVSNR”)
where Manhattan has reported a JORC Inferred Resource estimate of 17.2 million pounds (“Mlb”) uranium oxide
(“U3O8”) and Exploration Targets totalling 33 to 67Mlb U3O8, at a 200ppm U3O8 cutoff, in four prospects. On gaining
exploration access the Company will recommence drilling to expand and upgrade its reported sand hosted uranium
resources and to define new uranium deposits at Ponton.
Manhattan also retains a 40% interest in the Gardner Range uranium, rare earth and gold project in WA (Figure 1)
where Northern Minerals Limited are operators and earning up to an 80% interest by sole funding and completing a
mining prefeasibility study.
FIGURE 1: MANHATTAN’S AUSTRALIAN URANIUM PROJECTS
Manhattan’s strategy for growth is to expand and upgrade its reported sand hosted uranium resources and define new
uranium deposits at its flagship Ponton uranium project in Western Australia.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
7
REVIEW OF OPERATIONS
1.
PONTON PROJECT (WA)
Interest:
Manhattan 100%
Operator: Manhattan Corporation Limited
Manhattan’s Ponton project is located approximately 200km northeast of Kalgoorlie on the edge of the Great Victoria
Desert in WA. The Company has 100% control of around 2,610km2 of applications and granted exploration tenements
underlain by Tertiary palaeochannels within the Gunbarrel Basin. These palaeochannels are known to host a number
of uranium deposits and drilled uranium prospects (Figure 2).
FIGURE 2: MANHATTAN’S PONTON TENEMENTS
The Ponton Project includes the Double 8 uranium deposit that has a JORC Inferred Resource of 17.2Mlb U3O8 at a
200ppm cutoff. The deposit is located on E28/1898 within the QVSNR (Figures 2 & 3).
In addition, Exploration Results reported by Manhattan in 2011 identified Mineralisation Potential totalling 33 to 67Mlb
U3O8 at the 200ppm U3O8 cutoff in four prospects at:
Double 8 of between 2.5 and 5.5Mlb U3O8;
Stallion South of between 8 and 16Mlb U3O8;
Highway South of between 8 and 16Mlb U3O8; and
Ponton of between 15 and 30Mlb U3O8
The resource potential for Stallion, Highway and Shelf are being assessed by the Company’s independent resource
consultants. The secular disequilibrium data indicates a positive disequilibrium factor of 1 to over 3 above 80ppm U3O8
and confirms that a disequilibrium factor for the deposits may be significantly higher than the x1.2 currently assumed
for the reported resource estimates at Ponton. The application of the high resolution Germanium HpGe probe, that
detects protactinium isotope Pa214 which reaches equilibrium with U238 within days, will establish (with the required
statistical confidence) the conversion of the high resolution gamma logs to uranium grades for reporting of resource
estimates at Ponton.
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MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
REVIEW OF OPERATIONS
Carbonaceous sand hosted uranium mineralisation, below 40 to 70 metres of cover, has now been defined by drilling
along 55 kilometres of Tertiary palaeochannels at Stallion, Stallion South, Double 8, Ponton, Highway and Highway
South prospects (Figure 3). At a depth of 40 to 70 metres the uranium mineralisation is in shallow reduced sand
hosted tabular uranium deposits in a confined palaeochannel that is potentially amenable to ISL metal recovery, the
lowest cost method of producing yellowcake with the least environmental impact.
These palaeochannels connect with Energy and Minerals Australia’s lignite hosted Mulga Rock uranium deposits with a
reported inferred resource estimate of 27,100 tonnes (60Mlb) U3O8 (Figures 1 & 2).
FIGURE 3: DOUBLE 8 RESOURCE, STALLION SOUTH, HIGHWAY SOUTH & PONTON PROSPECTS
KEY
PNC Drill Hole Mineralised
PNC Drill Holes
MHC Drill Holes
Uranium Deposit
Uranium Project (mineralisation)
Nippon Highway
STALLION
EM Survey
EM Defined Channel
Mineralised Envelope
QUEEN VICTORIA SPRING NATURE RESERVE
SHELF
HIGHWAY
STALLION SOUTH
8-16Mlb MP
DOUBLE 8
HIGHWAY SOUTH
8-16Mlb MP
17.2Mlb U3O8 IR
2.5-5.5Mlb U3O8 MP
PONTON
15-30 Mlb MP
N
0
10km
Manhattan’s aircore and sonic drilling program was targeted at sand hosted uranium mineralisation in over 100km
of conductive palaeochannels defined by the Company’s airborne EM and magnetic surveys and around uranium
mineralised sands discovered in previous drilling by Manhattan, PNC Exploration (“PNC”) and Uranerz in the area.
Manhattan’s five Exploration Licences, that encroach on or are within the QVSNR (EL’s 28/1898, 1979, 1983 & 2004),
were granted in August 2011 and (E28/1744) October 2012. Manhattan is now seeking exploration access approval to
the key licence E28/1898 located mostly within the QVSNR. On gaining exploration access to E28/1898 Manhattan
will recommence drill testing and evaluation of the Double 8 uranium deposit and the Exploration Targets identified
at Double 8, Stallion South, Highway South and Ponton prospects that will underpin the future development of the
project.
2.
DOUBLE 8 URANIUM DEPOSIT (WA)
Manhattan 100%
Interest:
Operator: Manhattan Corporation Limited
The Double 8 uranium deposit is located in granted tenement E28/1898 in the southwest of the project area within
the QVSNR (Figures 2 & 3).
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
9
REVIEW OF OPERATIONS
DOUBLE 8 INFERRED RESOURCE ESTIMATES
An Inferred Resource of 7,800 tonnes (17.2Mlb) of uranium oxide at a 200ppm U3O8 cutoff for the Double 8 uranium
deposit was reported in 2011. The reported resources are based on RC drilling by PNC in the mid 1980’s and are
classified as Inferred in accordance with the JORC Code (2004).
Double 8 Reported Inferred Resources
DOUBLE 8 INFERRED RESOURCE ESTIMATES
CUTOFF GRADE
U3O8 (ppm)
TONNES
(MILLION)
GRADE
U3O8 (ppm)
TONNES
U3O8 (t)
POUNDS (MILLION)
U3O8 (Mlb)
100
150
200
250
110
51
26
14
170
240
300
360
18,700
12,240
7,800
5,040
42.0
26.0
17.2
11.0
Where U3O8 is reported it relates to grade values calculated from down hole radiometric gamma logs. Double 8 drill holes were logged by PNC using Austral L300
Middiloggers for natural gamma radiation. Four Austral L300 loggers were used by PNC in the area, calibrated against each other on a regular basis, and gamma
responses compared to chemical assays from a number of core holes. Conversion factors for gamma response to U assays assuming secular equilibrium were then
established. eU3O8 grades are then estimated by converting down hole radiometric gamma logs to equivalent uranium eU and multiplied by 1.179 to convert to
equivalent uranium grades eU3O8. A further disequilibrium factor is applied by multiplying eU3O8 by 1.2 to establish U3O8. Down hole radiometric gamma logging in
sand hosted uranium deposits, similar to Double 8, is a common and well established method of estimating uranium grades. All U3O8 grade results reported are subject
to possible disequilibrium factors that should be taken into account when assessing the reported grades.
DOUBLE 8 MINERALISATION POTENTIAL
Exploration Results, reported in 2011, identified drilled Exploration Targets with additional uranium Mineralisation
Potential at Double 8.
At a 200ppm U3O8 cutoff reported Mineralisation Potential at Double 8 includes 4 to 8Mt grading 250 to 450ppm
U3O8 containing 1,100 to 2,500 tonnes or 2.5 to 5.5Mlb of contained U3O8.
Double 8 Reported Mineralisation Potential
DOUBLE 8 MINERALISATION POTENTIAL
CUTOFF GRADE
U3O8 (ppm)
TONNAGE RANGE
(MILLION)
GRADE RANGE
U3O8 (ppm)
TONNAGE RANGE
U3O8 (t)
POUNDS RANGE
(MILLION)
U3O8 (Mlb)
200
4 - 8
250 - 450
1,100 - 2,500
2.5 - 5.5
In accordance with clause 18 of the JORC Code (2004), tonnage and grade ranges reported as Mineralisation Potential in this report must be considered conceptual
in nature as there has been insufficient exploration and drilling to define a mineral resource and it is uncertain if further exploration and drilling will result in the
determination of a reportable resource.
The uranium mineralisation at Double 8 remains open and is yet to be closed off by drilling. Manhattan considers that
further drilling of the Double 8 deposit will expand on the reported resource and the confidence levels of resources
will improve and report to higher confidence categories under the JORC Code (2004).
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MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
REVIEW OF OPERATIONS
3.
STALLION SOUTH (WA)
Interest:
Manhattan 100%
Operator: Manhattan Corporation Limited
Stallion South is located immediately to the south of Stallion and northwest of Double 8 along the Ponton
palaeochannel. This prospect is within granted licence E28/1898 within the QVSNR (Figures 2 & 3).
The drilled uranium mineralisation at Stallion South is also hosted in palaeochannels within reduced carbonaceous
sands and weathered granitic sands in a confined aquifer overlying crystalline granite basement.
STALLION SOUTH MINERALISATION POTENTIAL
Exploration Results, reported in 2011, identified drilled Exploration Targets with uranium Mineralisation Potential, at
a 200ppm U3O8 cutoff, for Stallion South of 12 to 24Mt grading 250 to 350ppm U3O8 containing 3,600 to 7,300
tonnes or 8 to 16Mlb of contained U3O8.
Stallion South Reported Mineralisation Potential
STALLION SOUTH MINERALISATION POTENTIAL
CUTOFF GRADE
U3O8 (ppm)
TONNAGE RANGE
(MILLION)
GRADE RANGE
U3O8 (ppm)
TONNAGE RANGE
U3O8 (t)
POUNDS RANGE
(MILLION)
U3O8 (Mlb)
200
12 - 24
250 - 350
3,600 - 7,300
8 - 16
In accordance with clause 18 of the JORC Code (2004), tonnage and grade ranges reported as Mineralisation Potential in this report must be considered
conceptual in nature as there has been insufficient exploration and drilling to define a mineral resource and it is uncertain if further exploration and drilling will result in
the determination of a reportable resource.
On Manhattan gaining exploration access to E28/1898 further resource definition drilling will commence at the
Stallion South prospect.
4.
HIGHWAY SOUTH (WA)
Interest:
Manhattan 100%
Operator: Manhattan Corporation Limited
Highway South is centred 5km along the palaeochannel to the northeast of Double 8. This prospect is within granted
licence E28/1898 within the QVSNR (Figures 2 & 3).
The drilled uranium mineralisation at Highway South is also hosted in palaeochannels within reduced carbonaceous
sands and weathered granitic sands in a confined aquifer overlying crystalline granite basement.
HIGHWAY SOUTH MINERALISATION POTENTIAL
Exploration Results, reported in 2011, identified drilled Exploration Targets with uranium Mineralisation Potential, at
a 200ppm U3O8 cutoff, for Highway South of 12 to 24Mt grading 250 to 350ppm U3O8 containing 3,600 to 7,300
tonnes or 8 to 16Mlb of contained U3O8.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
11
REVIEW OF OPERATIONS
Highway South Reported Mineralisation Potential
HIGHWAY SOUTH MINERALISATION POTENTIAL
CUTOFF GRADE
U3O8 (ppm)
TONNAGE RANGE
(MILLION)
GRADE RANGE
U3O8 (ppm)
TONNAGE RANGE
U3O8 (t)
POUNDS RANGE
(MILLION)
U3O8 (Mlb)
200
12 - 24
250 - 350
3,600 - 7,300
8 - 16
In accordance with clause 18 of the JORC Code (2004), tonnage and grade ranges reported as Mineralisation Potential in this report must be considered conceptual
in nature as there has been insufficient exploration and drilling to define a mineral resource and it is uncertain if further exploration and drilling will result in the
determination of a reportable resource.
On Manhattan gaining exploration access to E28/1898 further resource definition drilling will commence at the
Highway South prospect.
5.
PONTON (WA)
Interest:
Manhattan 100%
Operator: Manhattan Corporation Limited
Ponton is located along the palaeochannel to the southeast of Double 8. This prospect is within granted licence
E28/1898 within the QVSNR (Figures 2 & 3).
The drilled uranium mineralisation at Ponton is also hosted in palaeochannels within reduced carbonaceous sands
and weathered granitic sands in a confined aquifer overlying crystalline granite and Patterson Group shale basement.
PONTON MINERALISATION POTENTIAL
Exploration Results, reported in 2011, identified drilled Exploration Targets with uranium Mineralisation Potential, at a
200ppm U3O8 cutoff, for Ponton of 23 to 45Mt grading 250 to 350ppm U3O8 containing 6,800 to 13,600 tonnes or
15 to 30Mlb of contained U3O8.
Ponton Reported Mineralisation Potential
PONTON MINERALISATION POTENTIAL
CUTOFF GRADE
U3O8 (ppm)
TONNAGE RANGE
(MILLION)
GRADE RANGE
U3O8 (ppm)
TONNAGE RANGE
U3O8 (t)
POUNDS RANGE
(MILLION)
U3O8 (Mlb)
200
23 - 45
250 - 350
6,800 - 13,600
15 - 30
In accordance with clause 18 of the JORC Code (2004), tonnage and grade ranges reported as Mineralisation Potential in this report must be considered conceptual
in nature as there has been insufficient exploration and drilling to define a mineral resource and it is uncertain if further exploration and drilling will result in the
determination of a reportable resource.
On Manhattan gaining exploration access to E28/1898 further resource definition drilling will commence at the
Ponton prospect.
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MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
REVIEW OF OPERATIONS
6.
STALLION (WA)
Interest:
Manhattan 100%
Operator: Manhattan Corporation Limited
The Stallion uranium prospect is located in E28/1523 and centred 14 kilometres northwest of the Double 8 uranium
deposit at Ponton (Figures 2 & 3).
In 2010 Manhattan completed 221 vertical aircore drill holes totalling 16,914m and 16 duplicate sonic drill holes
totalling 1,177m of drilling along 8 kilometres of the palaeochannel at Stallion (Figure 3). Drilling has been completed
on 200m and 400m spaced lines with holes drilled at 100m centres along each grid line across the palaeochannel
within mineralised zones. All drill holes were gamma logged.
The resource potential for the Stallion prospect is being assessed by the Company’s independent resource consultants.
The secular disequilibrium data for 205 sonic and aircore drill samples show a positive disequilibrium factor of 1 to
over 3 above 80ppm U3O8 and confirms that a disequilibrium factor for the Stallion prospect may be significantly
higher than the x1.2 currently assumed for the reported Inferred Resources and Mineralisation Potential in Manhattan’s
uranium deposits at Ponton. Due to the mobility of the uranium daughter isotopes in the Ponton sands, as measured
by a conventional gamma probe, Manhattan will now undertake down hole gamma logging using a high resolution
Germanium HpGe probe that detects protactinium isotope Pa214 which reaches equilibrium with U238 within days.
The Germanium HpGe probe data will establish (with the required statistical confidence) the conversion of the high
resolution gamma logs to uranium grades for reporting of resource estimates at Stallion.
The geological controls and style of the palaeochannel sand hosted uranium mineralisation at Stallion are similar to
the mineralisation encountered at Double 8.
7.
HIGHWAY (WA)
Interest:
Operator: Manhattan Corporation Limited
Manhattan 100%
The Highway uranium prospect is located in E28/1523 and E39/1143 centred 15 kilometres northwest of the Double 8
uranium deposit at Ponton (Figures 2 & 3).
In 2010 Manhattan completed 275 vertical aircore drill holes totalling 17,670m and 3 duplicate sonic drill holes
totalling 144m of drilling along 10 kilometres of the palaeochannel at Highway (Figure 3). Drilling has been completed
on 400m spaced lines with holes drilled at 100m centres along each grid line across the palaeochannel within
mineralised zones. All drill holes were gamma logged.
As at Stallion, the resource potential for Highway is being assessed by the Company’s independent resource consultants.
The secular disequilibrium data also indicates a positive disequilibrium factor of 1 to over 3 above 80ppm U3O8 and
confirms that a disequilibrium factor for the Highway prospect may be significantly higher than the x1.2 currently
assumed for the reported resource estimates at Ponton. Again, the application of the high resolution Germanium
HpGe probe, that detects protactinium isotope Pa214 which reaches equilibrium with U238 within days, will establish
(with the required statistical confidence) the conversion of the high resolution gamma logs to uranium grades for
reporting of resource estimates at Highway.
Apart from some shallow lignite hosted uranium mineralisation encountered along the northern part of the
palaeochannel at Highway, the geological controls and style of the channel sand hosted uranium mineralisation at
Highway are similar to the mineralisation encountered at Double 8 and Stallion.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
13
REVIEW OF OPERATIONS
8.
SHELF (WA)
Interest: Manhattan 100%
Operator: Manhattan Corporation Limited
The Shelf prospect is located along the palaeochannel approximately 10km northeast of Highway in E39/1143.
At Shelf previous drilling by PNC and Uranerz on 200m x 100m centres identified shallower lignite hosted uranium
mineralisation within the upper sandstone and claystone. In 2010 Manhattan drilled 8 duplicate aircore holes into, and
confirmed, the lignite mineralisation at Shelf.
As well, in 2010 Manhattan drilled on lines approximately 800m and 1.2km apart along 20km of the palaeochannel
to the north of Shelf and Highway to test the potential for additional resources within the palaeochannel to the north.
The resource potential for Shelf is being reviewed. As at Stallion and Highway, the application of the high resolution
Germanium HpGe probe down hole logging will establish (with the required statistical confidence) the conversion of
the high resolution gamma logs to uranium grades for reporting of resource estimates at Shelf.
9.
EAST ARM (WA)
Interest: Manhattan 100%
Operator: Manhattan Corporation Limited
Manhattan has undertaken 3,210m of reconnaissance aircore drilling across the palaeochannel at East Arm located
16km east of Highway on E39/1144. To date, no significant uranium mineralisation has been encountered in drill holes
at East Arm.
10.
GARDNER RANGE PROJECT (WA)
Interest: Manhattan 40%
Operator: Northern Minerals Limited
The Gardner Range project is located in the Tanami region of WA approximately 150km southeast of Halls Creek.
Manhattan holds a 40% interest in three granted exploration licences covering 550km2 bordering the Northern
Territory. Northern Minerals Limited (“Northern”) retains a 60% interest, are operators and can earn up to an 80%
interest in the joint venture by sole funding and completing a mining prefeasibility study.
The targets are high grade unconformity related uranium mineralisation similar to the Athabasca Basin deposits and
the Ranger uranium mine in NT, rare earth elements (“REE”) and gold mineralisation similar to the world class Tanami
Arunta province Callie, Granites and Tanami gold mines. Exploration results include rock chip samples assaying up to
16.8ppm gold at Venus, drilling at the Don Uranium prospect intersecting 0.44m of 1.5% U3O8 and 2m of 1.74ppm gold
at a depth of 40m and soil sampling, in late 2011, near the Don and Venus prospects returned positive gold results that
included anomalous gold up to 228ppbAu.
.
14
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
REVIEW OF OPERATIONS
SUMMARY
In 2011 Manhattan reported a revised Inferred Resource for Double 8 of 17.2Mlb of uranium oxide with additional
drilled Exploration Targets with Mineralisation Potential totalling 33 to 67Mlb U3O8, at the 200ppm U3O8 cutoff, for
the Double 8, Stallion South, Highway South and Ponton prospects.
Secular disequilibrium data for 205 sonic and aircore drill samples confirmed the positive disequilibrium factors of 1 to
over 3 above 80ppm U3O8 from Stallion and Highway drilling. This factor is significantly higher than the x1.2 currently
assumed for the reported Inferred Resources and Mineralisation Potential in Manhattan’s uranium deposits at Ponton.
Manhattan will now undertake down hole gamma logging using a high resolution Germanium HpGe probe that detects
protactinium isotope Pa214 which reaches equilibrium with U238 within days. The Germanium HpGe probe data will
establish (with the required statistical confidence) the conversion of the high resolution gamma logs to uranium grades
for future reporting of resource estimates at Ponton.
The sand hosted uranium mineralisation is located in shallow, 40 to 70 metres deep, contiguous palaeochannels along
55km of strike within Manhattan’s 100% owned 2,610km2 project area at Ponton.
Tetra Tech’s 2011 desktop scoping study confirms Manhattan’s shallow near surface sand hosted palaeochannel
uranium deposits at Ponton have potential to be viable, sustainable low cost ISL uranium producers with modest
capital requirements to develop.
On resumption of drilling at Ponton work will also commence on an environmental impact statement (“EIS”) and a
bankable feasibility study (“BFS”) in preparation for the uranium mine development approval process.
The Western Australian State government’s commitment to support and develop the emerging WA uranium mining
sector is positive and Manhattan is now focussed on gaining their approval to re access and commence resource
definition drilling on its Double 8, Stallion, Highway and Ponton uranium deposits and advanced prospects in WA.
The Company continues to review a number of M&A proposals and advanced uranium project acquisition opportunities
to grow the Company and generate additional shareholder value.
Manhattan’s Ponton uranium project, with an Inferred Resource of 17Mlb and Mineralisation Potential assessed of
33Mlb to 67Mlb, has the potential to be developed into a sustainable ISL uranium producer. Recent uranium M&A
activity is valuing in ground resources in excess of US$10lb. On gaining the necessary WA government approvals and
delivering resource upgrades Manhattan is poised to deliver significant returns to the Company’s shareholders.
ALAN J EGGERS
Executive Chairman
19 September 2013
COMPETENT PERSON’S STATEMENT
The information in this report that relates to reported Exploration Results or Mineral Resources is based on information
compiled by Mr Alan J Eggers, who is a Corporate Member of the Australasian Institute of Mining and Metallurgy (“AusIMM”).
Alan Eggers is a professional geologist and an executive director of Manhattan Corporation Limited. Mr Eggers has sufficient
experience that is relevant to the style of mineralisation and type of mineral deposits being reported on in this report and
to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves “JORC Code (2004)”. Mr Eggers consents to
the inclusion in this report of the information on the Exploration Results or Mineral Resources based on his information in the
form and context in which it appears.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
15
DIRECTORS’ REPORT
DIRECTOR’S
REPORT
The Directors have pleasure in presenting their
Annual Report and Financial Statements for
Manhattan Corporation Limited (“Manhattan”) for
the year ended 30 June 2013.
16
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
DIRECTORS’ REPORT
PRINCIPAL ACTIVITIES
The principal continuing activity of Manhattan during the year was mineral exploration and development and
evaluation of mineral projects and corporate opportunities in the resource sector world wide.
There has been no significant change in the nature of Manhattan’s business activities during the year under review.
OPERATING RESULTS
The loss of the Company for the year, after provision for income tax, amounted to $704,081 (2012: $1,215,970)
DIVIDENDS
No dividend has been paid or recommended by the Directors since the commencement of the year.
REVIEW OF OPERATIONS
Manhattan listed on the Australian Securities Exchange (“ASX”) on 29 January 2008 following an Initial Public Offering.
In the last Financial Year to 30 June 2013 the Company has focussed on exploration and development of its two
Western Australian uranium projects at Ponton and Gardner Range.
Manhattan’s flagship project is the Ponton project in WA where the Company is drill testing and developing
palaeochannel sand hosted uranium mineralisation amenable to in-situ leach (“ISL”) metal recovery.
The Ponton project is located approximately 200km northeast of Kalgoorlie on the edge of the Great Victoria Desert in
WA. The Company has 100% control of around 2,610km2 of applications and granted exploration tenements underlain
by Tertiary palaeochannels within the Gunbarrel Basin. These palaeochannels are known to host a number of uranium
deposits and drilled uranium prospects. Drilling within the palaeochannels has established extensive continuity of the
carbonaceous sand hosted uranium mineralisation for over 55km of strike within the Company’s licences at Ponton.
The Ponton Project includes the Double 8 uranium deposit that has a JORC Inferred Resource of 17.2Mlb U3O8 at a
200ppm cutoff. The deposit is located on E28/1898 within the QVSNR (Figures 2 & 3).
In addition, Exploration Results reported by Manhattan in 2011 identified Mineralisation Potential totalling 33 to 67Mlb
U3O8 at the 200ppm U3O8 cutoff in four prospects at:
Double 8 of between 2.5 and 5.5Mlb U3O8;
Stallion South of between 8 and 16Mlb U3O8;
Highway South of between 8 and 16Mlb U3O8; and
Ponton of between 15 and 30Mlb U3O8
The resource potential for Stallion, Highway and Shelf are being assessed by the Company’s independent resource
consultants. The secular disequilibrium data indicates a positive disequilibrium factor of 1 to over 3 above 80ppm U3O8
and confirms that a disequilibrium factor for the deposits may be significantly higher than the x1.2 currently assumed
for the reported resource estimates at Ponton. The application of the high resolution Germanium HpGe probe, that
detects protactinium isotope Pa214 which reaches equilibrium with U238 within days, will establish (with the required
statistical confidence) the conversion of the high resolution gamma logs to uranium grades for reporting of resource
estimates at Ponton.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
17
DIRECTORS’ REPORT
Carbonaceous sand hosted uranium mineralisation, below 40 to 70 metres of cover, has now been defined by drilling
along 55 kilometres of Tertiary palaeochannels at Stallion, Stallion South, Double 8, Ponton, Highway and Highway
South prospects. At a depth of 40 to 70 metres the uranium mineralisation is in shallow reduced sand hosted tabular
uranium deposits in a confined palaeochannel that is potentially amenable to ISL metal recovery, the lowest cost
method of producing yellowcake with the least environmental impact.
These palaeochannels connect with Energy and Minerals Australia’s lignite hosted Mulga Rock uranium deposits with a
reported inferred resource estimate of 27,100 tonnes (60Mlb) U3O8 (Figures 1 & 2).
Manhattan continues to work with the Western Australian government to have ground exploration access approved on
its key granted tenement, E28/1898, in the northwest corner of the Queen Victoria Spring Nature Reserve (“QVSNR”)
where Manhattan has reported a JORC Inferred Resource estimate of 17.2 million pounds (“Mlb”) uranium oxide
(“U3O8”) and Exploration Targets totalling 33 to 67Mlb U3O8, at a 200ppm U3O8 cutoff, in four prospects. On gaining
exploration access the Company will recommence drilling to expand and upgrade its reported sand hosted uranium
resources and to define new uranium deposits at Ponton.
Manhattan also retains a 40% interest in the Gardner Range uranium, rare earth and gold project in WA (Figure 1) where
Northern Minerals Limited are currently operators and earning up to an 80% interest by sole funding and completing
a mining prefeasibility study.
During 2013 Northern proposed to divest of its 60% interest in the Gardner Range JV tenements to its major
shareholder Australian Conglin International Investment Group Pty Ltd (“Conglin Yue”). Subject to the receipt of an
acceptable Deed of Covenant for Northern to transfer its Gardner Range JV interest to Conglin Yue (“Deed”) Manhattan
agreed to waive its pre-emptive rights with respect to the sale on 12 April 2013.
The Conglin Yue sale by Northern was approved by Northern shareholders on 28 June 2013.
The Company continues to review a number of M&A proposals and advanced uranium project acquisition opportunities
to grow the Company and generate additional shareholder value.
Manhattan has continued to advance its exploration and development projects and examine acquisition opportunities
in the resource sector, with particular focus on advanced uranium projects, with the potential to deliver an early cash
flow or a substantial uplift in shareholder value.
A full review of operations for the Financial Year, together with future prospects that form part of this Report, are
presented in the Chairman’s Review and the Review of Operations on pages 2 to 15 of this Annual Report.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
In the opinion of the Directors there were no significant changes in the state of affairs of the Company that occurred
during the Financial Year under review.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
There has not arisen since the end of the Financial Year any item, transaction or event of a material nature, in the
opinion of the Directors of the Company, to affect significantly the operation of the Company, the results of those
operations, or the state of affairs of the Company in future Financial Years.
18
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
DIRECTORS’ REPORT
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
There is no likely or expected change to the operations of the Company to systematically explore the Company’s key
projects, in particular the Ponton projects. The Company will continue to review all business development opportunities
that present themselves in an effort to enhance the exploration and development portfolio. This activity may or may
not lead to future acquisitions, divestments, joint ventures and other changes to the Company’s project portfolio.
ENVIRONMENTAL OBLIGATIONS
The Company operates within the resources sector and conducts its business activities with respect for the environment
while continuing to meet the expectations of the shareholders, employees and suppliers. The Company’s exploration
activities are currently regulated by significant environmental regulation under laws of the Commonwealth and states
and territories of Australia. The Company aims to ensure that the highest standard of environmental care is achieved,
and that it complies with all relevant environmental legislation. The Directors are mindful of the regulatory regime in
relation to the impact of the organisational activities on the environment. There have been no known breaches by the
Company during the Financial Year.
In February 2011 Manhattan adopted an Environmental Policy, that included an Environmental Management Plan for
Queen Victoria Spring Nature Reserve, and included the Environmental Policy in its Corporate Governance Statement.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Manhattan
support and have adhered to the ASX principles of corporate governance (as appropriate for a company of Manhattan’s
size). Manhattan’s Corporate Governance Statement is contained in this Annual Report and posted on its web site.
DIRECTORS AND COMPANY SECRETARY
The following persons held office as Directors and Company Secretary of Manhattan during the year. All Directors, and
the Company Secretary, were in office for the entire period unless otherwise stated:
Alan J Eggers
Marcello Cardaci
John A G Seton
Robert (Sam) Middlemas
PROFILE OF DIRECTORS AND COMPANY SECRETARY
Alan J Eggers B.Sc, B.Sc(Hons), M.Sc, F.S.E.G., MAusIMM, MAIG
EXECUTIVE CHAIRMAN
Alan Eggers is a professional geologist with over 35 years of international experience in exploration for uranium, base
metals, precious metals and industrial minerals. He was the founding director and managing director for 20 years of
listed uranium company Summit Resources Limited. He built Summit into an ASX top 200 company with a market
capital of $1.2 billion until its takeover by Paladin Energy Ltd in May 2007 when he resigned from the board. His
professional experience has included management of mineral exploration initiatives and corporate administration of
private and public companies. Alan is managing director of Wesmin Consulting Pty Ltd, formerly a director of ASX
listed Zedex Minerals Limited (resigned January 2010), was a founding director of the Australian Uranium Association
and holds a number of directorships in private companies.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
19
DIRECTORS’ REPORT
Marcello Cardaci B.Juris, LLB, B.Com
NON EXECUTIVE DIRECTOR
Marcello Cardaci is a partner in the Australian legal practice of Gilbert + Tobin. Mr Cardaci holds degrees in law and
commerce and is experienced in a wide range of corporate and commercial matters with a particular emphasis on
public and private equity raisings and mergers and acquisitions. Gilbert + Tobin specialises in the provision of legal
advice to companies involved in various industries including resources and manufacturing. Mr Cardaci is a non
executive director of Forge Group Limited (4 June 2007 to current) and Lemur Resources Ltd (8 November 2010 to
current). He was formerly a director of Sphere Investments Limited (2 June 1999 to 17 November 2010) and Tianshan
Goldfields Limited (2 February 2009 to 13 November 2010).
John A G Seton LLM(Hons)
NON EXECUTIVE DIRECTOR
John Seton is an Auckland based solicitor with extensive experience in commercial law, stock exchange listed
companies and the mineral resource sector. He is chief executive officer of TSX and ASX listed Besra Gold Inc, a former
director of Besra (July 1999 to February 2012), former director and chairman of ASX listed Summit Resources Limited
(until May 2007), Zedex Minerals Limited (resigned January 2010) and NZX listed SmartPay Limited (resigned January
2011). John holds or has held directorships in several companies listed on the ASX and NZX including Kiwi Gold NL,
Kiwi International Resources NL, Iddison Group Vietnam Limited and Max Resources NL. John was also the former chief
executive of IT Capital Limited, former Chairman of the Vietnam/New Zealand Business Council and former Chairman
of The Mud House Wine Group Limited (resigned 10 September 2010), an unlisted public company. Mr Seton also
holds a number of private company directorships.
Robert (Sam) Middlemas B.Com, PGradDipBus., CA
COMPANY SECRETARY
Sam Middlemas was appointed Company Secretary and Chief Financial Officer in March 2009. Sam is a chartered
accountant with more than 15 years experience in various financial and company secretarial roles with a number of
listed public companies operating in the resources sector. He is the principal of a corporate advisory company which
provides financial and secretarial services specialising in capital raisings and initial public offerings. Previously Mr
Middlemas worked for an international accountancy firm. His fields of expertise include corporate secretarial practice,
financial and management reporting in the mining industry, treasury and cash flow management and corporate
governance.
REMUNERATION REPORT
The remuneration report for the Financial Year ended 30 June 2012 is set out under the following main headings:
(A) Principles Used to Determine the Nature and Amount of Remuneration;
(B) Details of Remuneration;
(C) Service Agreements;
(D) Share Based Compensation;
(E) Additional Information; and
(F) Loans to Directors and Executives.
The information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
20
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
DIRECTORS’ REPORT
(A) Principles Used to Determine the Nature and Amount of Remuneration
The primary functions of the Remuneration Committee are to:
Make specific recommendations to the Board on remuneration of Director’s and senior officers;
Recommend the terms and conditions of employment for the Executive Chairman;
Undertake a review of the Executive Chairman’s performance, at least annually, including setting with the
Executive Chairman’s goals for the coming year and reviewing progress in achieving those goals;
Consider and report to the Board on the recommendations of the Executive Chairman on the remuneration
of all direct reports; and
Develop and facilitate a process for Board and Director evaluation.
The Board has elected not to establish a remuneration committee based on the size of the organisation and has
instead agreed to meet as deemed necessary and allocate the appropriate time at its regular Board meetings.
Non Executive Directors
Fees and payments to Non Executive Directors reflect the demands which are made on, and the responsibilities
of, the Directors. Non Executive Directors’ fees and payments are reviewed annually by the Board. The Executive
Chairman’s fees are determined independently to the fees of Non Executive Directors based on comparative
roles in the external market. The Executive Chairman is not present at any discussions relating to determination
of his own remuneration.
Directors’ Fees
The current base remuneration was reviewed in July 2010 in light of current conditions and the cash reserves of
the Company. Non Executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is
periodically recommended for approval by shareholders. The maximum Directors fees approved by shareholders
and payable currently stands at $200,000 per annum.
The following fees have applied during the Financial Year:
Base Fees
2013
Non Executive Directors
$35,000
2012
$35,000
Additional Fees
A Director may also be paid fees or other amounts as the Directors determine if a Director performs special
duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also
be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.
Retirement Allowances for Directors
Superannuation contributions required under the Australian superannuation guarantee legislation (currently 9%)
are made as part of Directors’ overall fee entitlements.
Executive Pay
The Executive pay and reward framework has two components:
• Base pay and benefits, including superannuation; and
• Long term incentives through issue of share options.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
21
DIRECTORS’ REPORT
The combination of these comprises the Executive’s total remuneration. The Company revisits its long term equity
linked performance incentives for Executives as deemed necessary by the Board. The equity linked performance
incentives take the form of share options to provide incentives for the Directors and senior management to drive
shareholder value through growth in share price.
Base Pay
Structured as a total employment cost package which may be delivered as a combination of cash and prescribed
non financial benefits at the Executives’ discretion. Executives are offered a competitive base pay that comprises
the fixed component of pay and rewards. Base pay for Executives is reviewed annually to ensure the Executive’s
pay is competitive with the market. An Executive’s pay is also reviewed every 12 months and will be adjusted in
line with the Executive’s performance and current market conditions.
Benefits
Executives and Key Management Personnel are entitled to receive additional benefits or allowances.
Long Term Incentives
The Executives are entitled to share options as approved by shareholders.
(B) Details of Remuneration
Amounts of Remuneration
Details of the remuneration of the Directors, the Key Management Personnel (as defined in AASB 124 Related
Party Disclosures) and Executives of Manhattan Corporation Limited for the Financial Year are set out in the
following tables.
The Key Management Personnel are the Directors of Manhattan Corporation Limited during the Financial Year
which were:
Alan J Eggers
Executive Chairman
Marcello Cardaci
Non Executive Director
John A G Seton
Non Executive Director
In addition, the following persons must be disclosed under the Corporations Act 2001 as Company Executives:
Robert (Sam) Middlemas
Company Secretary
22
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
DIRECTORS’ REPORT
Directors and Executives Remuneration
EXECUTIVE REMUNERATION
SHORT TERM
BENEFITS
EQUITY
COMPENSATION
TOTAL
PERCENTAGE
OPTIONS
Cash Salary &
Fees
Options
30 June 2013
$
$
349,998
35,000
35,000
28,920
448,918
30 June 2012
349,992
35,000
35,000
35,200
455,192
$
$
-
-
-
-
-
17,692
3,932
3,932
3,932
29,488
Directors
Alan J Eggers1
Marcello Cardaci
John A G Seton2
Key Management Personnel
Sam Middlemas3
Total Compensation
Directors
Alan J Eggers1
Marcello Cardaci
John A G Seton2
Key Management Personnel
Sam Middlemas3
Total Compensation
$
$
349,998
35,000
35,000
28,920
448,918
367,684
38,932
38,932
39,132
484,680
%
%
-
-
-
-
-
5
10
10
10
1 Mr Eggers was appointed Executive Chairman on 21 July 2009. All fees were paid under a Consultancy Agreement with Wesmin
Consulting Pty Ltd.
2 Mr Seton was appointed as a Non Executive Director on 21 July 2009. All fees paid to his private Company Jura Trust Limited.
3 Mr Middlemas was appointed Company Secretary on 3 March 2009. All fees were paid under a Consultancy Agreement with Sparkling
Investments Pty Ltd.
There were no other executive officers who received emoluments during the Financial Year ended 30 June 2013.
(C) Service Agreements
On appointment to the Board, all Non Executive Directors enter into a service agreement with the Company in
the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation,
relevant to the office of Director.
Remuneration and other terms of employment for Executive Directors and Key Management Personnel are
formalised in service agreements. Each of these agreements provide for the provision of performance related
conditions and other benefits including an allocation of options. Other major provisions of the agreements
relating to remuneration are set out below.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
23
DIRECTORS’ REPORT
Alan J Eggers Executive Chairman
Services provided by consulting company Wesmin Consulting Pty Ltd (“Wesmin”);
Term of agreement. Continues indefinitely until cancelled by the Company or the Executive;
Base Consulting fees of $350,000 per annum (increased from $300,000 on 1 September 2010) plus
reimbursement of relevant expenses and costs;
Agreement and fees reviewed annually by the Board of Directors;
2,250,000 options to acquire ordinary shares in the capital of the Company (60 cents, expire 21 July 2014);
2,250,000 options to acquire ordinary shares in the capital of the Company ($1.00, expire 21 July 2014); and
Termination of employment by the Company requires 12 month notice without cause and immediately for
cause related events.
(D) Share Based Compensation
Options
Options over shares in Manhattan are granted to Directors, consultants and employees as consideration and
are approved by a general meeting of shareholders. The Options are designed to provide long term incentives
for Executives and non Executives to deliver long term shareholder returns. Participants are granted options
which are granted for no issue price and the exercise prices will be such price as determined by the Board (in its
discretion) on or before the date of issue. Options are granted for no consideration.
The terms and conditions of each grant of options (up to 30 June 2013) affecting remuneration in the previous,
this or future reporting periods are as follows:
GRANT DATE
DATE
VESTED AND
EXERCISABLE
EXPIRY DATE
EXERCISE
PRICE
VALUE PER
OPTION AT
GRANT DATE
PERCENT
VESTED
21 July 2009
21 July 2010
21 July 2014
21 July 2009
21 July 2011
21 July 2014
$0.60
$1.00
$0.35
$0.32
100%
100%
Options granted carry no dividend or voting rights.
There were no options over ordinary shares in the Company provided as remuneration to Directors of Manhattan
or the Key Management Personnel of the Company during the current or previous financial year. All options
issued prior to this time were fully vested. When exercisable, each option is convertible into one ordinary share
of Manhattan. There were no new shares issued on exercise of employee incentive options (2012: Nil) by a
Company Director or officer during the Financial Year ended 30 June 2013.
Further information on the options is set out in Note 24 to the Financial Statements.
The assessed fair value at grant date of options granted to the individuals is allocated equally over the period
from grant date to vesting date, and the amount is included in the remuneration tables above. Fair values at grant
date are independently determined using a Black and Scholes option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the
option.
24
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
DIRECTORS’ REPORT
(E) Additional Information
Details of Remuneration: Options
Options are issued to Directors and Executives as part of their remuneration. The options are not issued based
on performance criteria, but are issued to the majority of Directors and Executives of Manhattan Corporation
Limited to increase goal congruence between Executives, Directors and shareholders.
DIRECTORS OF
MANHATTAN
YEAR
GRANTED
VESTED
PERCENTAGE
FINANCIAL
YEARS IN WHICH
OPTIONS
VESTED
NUMBER OF
OPTIONS
ISSUED
MAXIMUM
TOTAL
VALUE OF
GRANT YET
TO VEST
Alan J Eggers
Marcello Cardaci
John A G Seton
Key Management Personnel
2009
2009
2009
100
100
100
2011, 2012
4,500,000
2011, 2012
1,000,000
2011, 2012
1,000,000
Sam Middlemas
2009
100
2011, 2012
1,000,000
$
-
-
-
-
(F) Loans to Directors and Executives
There were no loans to Directors and Executives during the Financial Year.
This is the end of the Audited Remuneration Report.
DIRECTORS’ INTERESTS
The relevant interest of each Director in the shares or options issued by the Company as notified by the Directors to
the ASX in accordance with S205G(1) of the Corporations Act 2001, at the date of this report are as follows:
DIRECTORS
ORDINARY SHARES
OPTIONS OVER ORDINARY SHARES
Alan J Eggers
31,201,461
2,250,000
($0.60, 21 July 2014)
2,250,000
($1.00, 21 July 2014)
Marcello Cardaci
2,815,726
500,000
($0.60, 21 July 2014)
John A G Seton
26,658,721
500,000
($0.60, 21 July 2014)
500,000
($1.00, 21 July 2014)
500,000
($1.00, 21 July 2014)
SHARES UNDER OPTION
Unissued ordinary shares of Manhattan under option at the date of this Report are as follows:
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
25
DIRECTORS’ REPORT
DATE OPTIONS GRANTED
EXPIRY DATE
ISSUE PRICE OF
SHARES
NUMBER UNDER
OPTION
21 July 2009
21 July 2009
12 March 2010
12 March 2010
21 July 2014
21 July 2014
12 March 2015
12 March 2015
$0.60
$1.00
$1.80
$2.20
5,050,000
4,050,000
100,000
100,000
No option holder has any right under the options to participate in any other share issue of the Company or any other
entity.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were no options exercised during the Financial Year (2012: 2,250,000).
DIRECTORS’ MEETINGS
The number of Directors’ board meetings and the number of board meetings attended by each of the Directors of the
Company for the time the Director held office during the Financial Year were:
DIRECTORS
NUMBER ELIGIBLE TO
ATTEND
NUMBER ATTENDED
Alan J Eggers
Marcello Cardaci
John A G Seton
5
5
5
5
5
5
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section
237 of the Corporations Act 2001.
NON AUDIT SERVICES
The Company may decide to employ the Auditor on assignments additional to their statutory audit duties where
the Auditor’s expertise and experience with the Company is important. The Board has considered the position and is
satisfied that the provision of non audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001, and would not compromise the Auditor’s independence.
26
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
DIRECTORS’ REPORT
During the year the following fees were paid or payable for services provided by the Auditor of the Company, its
related practices and non related audit firms:
AUDIT SERVICES
2013
2012
Rothsay Chartered Accountants
Audit and Review of Financial Statements
Tax Work under the Corporations Act 2001
Total Remuneration for Audit Services
$
13,500
3,000
16,500
$
13,500
6,000
19,500
DIRECTORS’ AND OFFICERS INSURANCE
During the Financial Year, Manhattan paid a premium to insure the Directors and the Company Secretary.
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 Company, 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 Company. It is not
possible to apportion the premium between amounts relating to the insurance against legal costs and those relating
to other liabilities.
AUDITORS’ INDEPENDENCE DECLARATION
A copy of the Auditors’ Independence Declaration as required under section 307C of the Corporations Act 2001 is set
out on page 30 of the Annual Report.
Rothsay Chartered Accountants are appointed to office in accordance with section 327 of the Corporations Act 2001.
Signed in accordance with a Resolution of the Directors.
DATED at Perth on 19 September 2013
ALAN J EGGERS
Executive Chairman
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
27
AUDITOR’S REPORT
DIRECTORS’ REPORT
28
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
AUDITOR’S REPORT
DIRECTORS’ REPORT
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
29
AUDITOR’S DECLARATION
AUDITOR’S DECLARATION
30
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
FINANCIAL
STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended 30 June 2013
REVENUE
Revenue from Continuing Operations
EXPENSES
Expenses Excluding Finance Costs
Finance Costs
Loss Before Income Tax
Income Tax Expense
Loss For The Year
Total Comprehensive Loss for the Year Attributable to
Members of Manhattan Corporation Limited
Basic Earnings/(Loss) Per Share
Diluted Earnings/(Loss) Per Share
Note
2013
2012
$
485,769
$
855,052
(1,575,916)
(2,730,805)
(2,219)
(2,250)
(1,092,366)
(1,878,003)
388,285
662,033
(704,081)
(1,215,970)
(704,081)
(1,215,970)
(0.7) cents
(0.7) cents
(1.3) cents
(1.3) cents
5
6
8
7
7
The Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying Notes that
form part of these Financial Statements.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
31
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2013
Note
2013
ASSETS
Current Assets
Cash and Cash Equivalents
Trade and Other Receivables
Financial Assets at Fair Value
Total Current Assets
Non Current Assets
Property, Plant and Equipment
Exploration and Evaluation Expenditure
Total Non Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and Other Payables
Provisions
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed Capital
Reserves
Accumulated Losses
10
11
12
14
13
15
16
2012
$
677,534
240,932
523,000
1,441,466
14,507
8,019,527
8,034,034
$
647,906
180,415
16,500
844,821
2,185
8,922,510
8,924,695
9,769,516
9,475,500
64,200
6,790
70,990
64,631
4,234
68,865
70,990
68,865
9,698,526
9,406,635
17
18
16,343,633
4,654,693
15,347,661
4,654,693
(11,299,800)
(10,595,719)
TOTAL EQUITY
9,698,526
9,406,635
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying Notes that form
part of these Financial Statements.
32
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2013
Consolidated
Note
Contributed
Equity
Options
Reserve
Accumulated
Losses
Total
Balance at 1 July 2011
Total Comprehensive Income
Transactions with Owners in Their Capacity as Owners
Shares Issued During the Year
Directors, Employees and Consultants Options
-
55,530
Balance at 30 June 2012
Total Comprehensive Income
Transactions with Owners in their Capacity as Owners
Shares Issued During the Year
17b
995,972
$
$
$
$
14,897,661
4,599,163
(9,379,749)
10,117,075
-
450,000
-
-
(1,215,970)
(1,215,970)
-
-
450,000
55,530
15,347,661
4,654,693 (10,595,719)
9,406,635
-
-
-
(704,081)
(704,081)
-
995,972
Balance at 30 June 2013
16,343,633
4,654,693 (11,299,800)
9,698,526
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes that form
part of these Financial Statements.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
33
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2013
Note
2013
Cash Flows From Operating Activities
Payments to Suppliers and Employees
Interest Received
Net Cash Flows From/(Used In) Operating Activities
23
Cash Flows From Investing Activities
Proceeds from R&D Refunds
Sale of Trading Securities
Payments For Exploration and Evaluation
Net Cash Flows Used In Investing Activities
Cash Flows From Financing Activities
Proceeds From Issue of Shares
Cost of Shares Issued
Net Cash Flows From/(Used In) Financing Activities
Net (Decrease)/Increase In Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period
10
$
(961,275)
19,736
(941,539)
444,353
466,033
(994,447)
(84,061)
995,972
0
995,972
(29,628)
677,534
647,906
2012
$
(1,413,669)
31,053
(1,382,616)
1,202,943
823,999
(1,112,459)
914,483
450,000
0
450,000
(18,133)
695,667
677,534
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes that form part of
these Financial Statements.
34
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial report are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
(a) 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, Australian Accounting
Interpretations and the Corporations Act 2001.
Compliance with IFRS
The financial report of Manhattan Corporation Limited also complies with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board.
Historical Cost Convention
These Financial Statements have been prepared under the historical cost convention.
Critical Accounting Estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the
Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the Financial Statements are disclosed in Note 2.
Going Concern
The Company incurred a loss for the year of $704,081 (2012: $1,215,970) and a net cash outflow from
operating activities of $941,539 (2012: $1,382,616).
At 30 June 2013 the Group had cash assets of $647,906 (2012: $677,534) and working capital of $773,831
(2012: $1,372,601).
Included in the working capital the Group holds trading securities in ASX listed companies with a value of
$16,500 (2012: $523,000). These securities will be sold to fund the Group’s activities as required and the
Company is able to access funds through the equity markets. Based on this fact, the Directors consider it
appropriate that the finance report be prepared on a going concern basis.
(b) Basis of Consolidation
The consolidated financial statements incorporate the assets and liabilities of the Company’s wholly owned
subsidiary Manhattan Resources Pty Ltd as at 30 June 2013 and the results of the subsidiary for the year
then ended.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
35
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to
govern the financial and operating policies, so as to obtain benefits from its activities, generally accompanying
a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered when assessing whether the Group controls
another entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the Parent Entity,
using consistent accounting policies. Accounting policies of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted by the Group.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
Intercompany transactions and balances, income and expenses and profits and losses between Group
companies, are eliminated.
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s
equity therein. Minority interests consist of the amount of those interests at the date of the original business
combination and the minority’s share of changes in equity since the date of the combination. Losses
applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against
the interests of the Group except to the extent that the minority has a binding obligation and is able to make
an additional investment to cover the losses.
Investments in subsidiaries are accounted for at cost in the Statement of Financial Position of the Company.
(c) Segment Reporting
A business segment is identified for a group of assets and operations engaged in providing products or
services that are subject to risks and returns that are different to those of other business segments. A
geographical segment is identified when products or services are provided within a particular economic
environment subject to risks and returns that are different from those of segments operating in other
economic environments.
(d) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that
future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s
activities as described below. The amount of revenue is not considered to be reliably measurable until all
contingencies relating to the sale have been resolved. The Group bases its estimates on historical results,
taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
(e)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income
based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
36
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements.
However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the year ending 30 June and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount
and tax bases of investments in controlled entities where the parent entity is able to control the timing
of the reversal of the temporary differences and it is probable that the differences will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax
balances attributable to amounts recognised directly in equity are also recognised directly in equity.
(f)
Impairment of Assets
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely independent of the cash inflows from other assets or
company of assets (cash generating units). Non financial assets other than goodwill that suffered impairment
are reviewed for possible reversal of the impairment at each reporting date.
(g) Acquisition of Assets
Assets including exploration interests acquired are initially recorded at their cost of acquisition on the date
of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to
the acquisition.
When equity instruments are issued as consideration, their market price at the end of acquisition is used as
fair value, except where the notional price at which they could be placed in the market is a better indication
of fair value.
(h) Cash and Cash Equivalents
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short term, highly liquid investments with original maturities
of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities on the Consolidated Statement of Financial Position.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
37
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
(i)
Exploration and Evaluation Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped through
the 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.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the
decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life
of the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
(j) Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of Financial
Year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
(k) Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable
to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition
as part of the purchase consideration.
(l)
Investments and Other Financial Assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as
either financial assets at fair value through profit or loss, loan and receivables, or available for sale investments,
as appropriate. When financial assets are recognised initially they are measured at fair value, plus, in the case of
investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines
the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates
this designation at each financial year end.
Financial Assets at Fair Value Through Profit or Loss
This category has two sub-categories: financial assets held for trading, and those designated at fair value through
profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the
purpose of selling in the short term or if so designated by management. The policy of management is to designate
a financial asset at fair value through profit or loss if there exists the possibility it will be sold in the short term
and the asset is subject to frequent changes in value. Derivatives are also categorised as held for trading unless
they are designated as hedges. Assets in this category are classified as current assets if they are either held for
trading or are expected to be realised within twelve months of the year ending 30 June.
38
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
Loans and Receivables
Loans and 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 receivable. They are included in current assets, except for those with
maturities greater than twelve months after the year ending 30 June which are classified as non current
assets. Loans and receivables are included in receivables in the year ending 30 June.
Available for Sale Financial Assets
Available for sale financial assets, comprising principally marketable equity securities, are non-derivatives
that are either designated in this category or not classified in any of the other categories. They are included
in non current assets unless management intends to dispose of the investment within twelve months of the
year ending 30 June.
Purchases and sales of investments are recognised on trade date being the date on which the Group commits
to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all
financial assets not carried at fair value through profit or loss. 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 and financial assets designated through profit or loss are subsequently
carried at fair value. Loans and receivables and held to maturity investments are carried at amortised cost
using the effective interest rate method. Realised and unrealised gains and losses arising from changes in
the fair value of the “financial assets at fair value through profit or loss” category are included in the income
statement in the period in which they arise. Unrealised gains and losses arising from changes in the fair
value of non monetary securities classified as available for sale are recognised in equity in the net unrealised
gains reserve. When securities classified as available for sale are sold or impaired, the accumulated fair value
adjustments previously reported in equity are included in the income statement as gains and losses on
disposal of investment securities.
The Group assesses at each balance date whether there is objective evidence that a financial asset or group
of financial assets is impaired. In the case of equity securities classified as available for sale, a significant
or prolonged decline in the fair value of a security below its cost is considered in determining whether the
security is impaired. If any such evidence exists for available for sale financial assets, the cumulative loss,
measured as the difference between the acquisition cost and the current fair value, less any impairment
loss on that financial asset previously recognised in profit and loss is transferred from equity to the income
statement. Impairment losses recognised in the income statement on equity instruments classified as held
for sale are not reversed through the income statement.
(m) Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the
items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and
the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
39
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
Plant and equipment are depreciated on a reducing balance or straight line basis at rates based upon their
effective lives up to five years.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each year ending 30
June.
(n) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred
is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of
the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables
in the year ending 30 June.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the taxation authority, are presented as
operating cash flow.
(o) Employee Benefit Provisions
Wages and Salaries, Annual Leave and Sick Leave
Liabilities for wages and salaries, including non monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the year ending 30 June are recognised in respect of employees’
services rendered up to the year ending 30 June and measured at amounts expected to be paid when the
liabilities are settled. Liabilities for non accumulating sick leave are recognised when leave is taken and
measured at the actual rates paid or payable. Liabilities for wages and salaries, and annual leave are included
as part of Other Payables.
Long Service Leave
Liabilities for long service leave are recognised as part of the provision for employee benefits and measured
as the present value of expected future payments to be made in respect of services provided by employees
to the year ending 30 June using the projected unit credit method. Consideration is given to expected
future salaries and wages levels, experience of employee departures and periods of service. Expected future
payments are discounted using national government bond rates at the year ending 30 June with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
Share Based Payments
The Group provides benefits to employees (including Directors) in the form of share based payment
transactions, whereby employees render services in exchange for shares or options over shares (“equity
settled transactions”).
The fair value of options granted is recognised as an employee benefit expense with a corresponding
increase in equity (share option reserve). The fair value is measured at grant date and recognised over the
period during which the employees become unconditionally entitled to the options. Fair value is determined
by an independent valuator using a Black and Scholes option pricing model. In determining fair value, no
account is taken of any performance conditions other than those related to the share price of Manhattan
(“Market Conditions”).
40
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
(p) Earnings Per Share
Basic Earnings Per Share
Basic earnings per share is calculated by dividing profit/(loss) attributable to equity holders of the Group,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the Financial Year, adjusted for bonus elements in ordinary shares issued
during the year.
Diluted Earnings Per Share
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of additional ordinary shares that would have
been outstanding assuming the conversions of all dilutive potential ordinary shares.
(q) New Accounting Standards and UIG Interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for the
30 June 2013 reporting period.
The Group has assessed the impact of these new standards and interpretations not to be material to the
Group’s Financial Statements.
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the entity and that are believed to be
reasonable under the circumstances.
Key Estimates: Impairment of Exploration and Exploration Expenditure
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that
may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is
determined by Value in use calculations performed in assessing recoverable amounts and incorporate a number
of key estimates. The Group has made an impairment charge for the year which has been recognised in the
Income Statement.
Share Based Payment Transactions
The Group measures the cost of equity settled share based payments at fair value at the grant date using the Black
and Scholes model taking into account the exercise price, the term of the option, the impact of dilution, the share
price at the grant date, the expected volatility of the underlying share, the expected dividend yield and risk free
interest rate for the term of the option.
3. SEGMENT INFORMATION
The Group operates in one industry, mineral resource exploration and assessment of mineral projects and in one
main geographical segment, being Australia.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
41
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
4. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate
risk and price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the
unpredictability of the financial markets and seeks to minimise potential adverse effects on the financial
performance of the Group. The Group does not use derivative financial instruments, however the Group uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity
analysis in the case of interest rate and other price risks, aging analysis for credit risk and at present are not
exposed to price risk.
Risk management is carried out by the Board of Directors with assistance from suitably qualified external and
internal advisors. The Board provides written principles for overall risk management and further policies will
evolve commensurate with the evolution and growth of the Group.
(a) Market Risk
(i)
Foreign Exchange Risk
The Group does not currently operate internationally and therefore its exposure to foreign exchange
risk arising from currency exposures is limited.
(ii)
Price Risk
The Group holds a number of available for sale equity investments. These material investments are
managed on an individual basis and all buy and sell decisions are approved by the Board of Directors.
The Group is not exposed to commodity price risk as the Group is still carrying out exploration.
(iii)
Cash Flow and Fair Value Interest Rate Risk
The Group’s only interest rate risk arises from cash and cash equivalents and borrowings. Term deposits
and current accounts held with variable interest rates expose the Group to cash flow interest rate risk.
The Group does not consider this to be material to the Group and have therefore not undertaken any
further analysis of risk exposure.
(b) Credit Risk
Credit risk is managed by the Board for the Group. Credit risk arises from cash and cash equivalents as well
as credit exposure including outstanding receivables and committed transactions. All cash balances held at
banks are held at internationally recognised institutions, with minimum independently rated rates of ‘A’. The
majority of receivables are immaterial to the Group. Given this the credit quality of financial assets that are
neither past due or impaired can be assessed by reference to historical information about default rates.
The maximum exposure to credit risk is the carrying amount of the financial assets of cash and trade and
other receivables to the value of $828,321 (2012: $918,466).
42
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
The following financial assets of the Group are neither past due or impaired:
FINANCIAL ASSETS
Cash and Cash Equivalents
Trade and Other Receivables
Total
2013
$
647,906
180,415
828,321
2012
$
677,534
240,932
918,466
(c) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the
availability of funding through an adequate amount of committed credit facilities and the ability to close
out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash
flows and matching the maturity profits of financial assets and liabilities. As at reporting date the Group had
sufficient cash reserves to meet its requirements. The Group therefore had no credit standby facilities or
arrangements for further funding in place.
The financial liabilities of the Group at reporting date were trade payables incurred in the normal course of
the business of $64,200 (2012: $64,631). These were non interest bearing and were due within the normal
30 to 60 days terms of creditor payments. The Group had no borrowings during the year and have therefore
not undertaken any further analysis of risk exposure.
(d) Fair Value Estimation
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The fair value of financial instruments traded in active markets is based on current quoted market prices at
reporting date. The quoted market price used for financial assets held by the Group is the current market
price.
The carrying value less any required impairment provision of trade receivables and payables are assumed to
approximate their fair values due to their short term nature.
5. REVENUES
REVENUES
2013
2012
Other Revenue From Continuing Operations
Interest
Revenue from Sale of Investments
Total
$
19,736
466,033
485,769
$
31,053
823,999
855,052
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
43
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
6. EXPENSES
(a) Expenses, Excluding Finance Costs, Included in the Income Statement
EXPENSES
Cost of Investments
Legal Fees
Depreciation
ASX and Share Registry Fees
Consultant Fees
Rent
Employee Benefits
Exploration Impairment
R&D consultants fees
Share Based Payments
General and Administration Costs
Total Expenses, Excluding Finance Costs
(b) Finance Costs
FINANCE COSTS
Total Finance Costs - bank fees and charges
7. EARNINGS (LOSS) PER SHARE
2013
$
506,500
17,007
12,322
36,071
28,920
346,010
302,875
91,592
81,683
0
152,936
1,575,916
2012
$
1,351,000
2,838
16,287
40,061
35,200
341,115
346,236
31,289
209,151
55,530
302,098
2,730,805
2013
$
2,219
2012
$
2,250
Basic earnings (loss) per share (“EPS”) amounts are calculated by dividing net loss for the year attributable to
ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the
period.
Diluted earnings (loss) per share amounts are calculated by dividing the net loss attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding during the period (adjusted for the
effects of dilutive options).
The following reflects the income and share data used in the total operations basic and diluted earnings (loss) per
share computations:
44
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
EARNINGS (LOSS) PER SHARE
Basic Loss Per Share
Loss Used in Calculating EPS
Weighted Average Number of Ordinary Shares
Outstanding During the Year Used in Calculating Basic EPS
2013
$
(0.007)
(704,081)
Number
94,563,796
2012
$
(0.013)
(1,215,970)
Number
92,206,081
Diluted EPS is not disclosed as potential ordinary shares are not dilutive as their potential conversion to fully paid
shares would not increase the loss per share.
(a) Capital Allotment Subsequent To Year End
The Company has not undertaken any capital raising(s) post 30 June 2013.
8.
INCOME TAX EXPENSE
(a)
Income Tax Expense
INCOME TAX EXPENSE
Current Tax
Deferred Tax
Under (Over) Provided in Prior Years
Total Income Tax Expense
(b) Deferred Income Tax Expense Comprises
2013
$
2012
$
(135,000)
(190,340)
-
(253,285)
(388,285)
-
(471,693)
(662,033)
DEFERRED INCOME TAX EXPENSE
(Decrease)/Increase in Deferred Tax Asset
(Decrease)/Increase in Deferred Tax Liability
Total Deferred Income Tax Expense
2013
$
-
-
-
2012
$
-
-
-
No deferred tax has been recognised in either the Income Statement or directly in equity.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
45
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
(c) Reconciliation of Income Tax Expense to Prima Facie Tax Payable
RECONCILIATION OF INCOME TAX
Loss From Continuing Operations Before Income Tax
Tax at the Australian rate of 30%
Tax Effect of Permanent Differences:
Exploration Expenses
Share Based Payments Expense
Unrealised losses
Realised Capital Gains
R&D Expenses Claimed as an Offset
Other Deductions
Benefits of Tax Losses Not Brought to Account
Temporary Differences
R&D Tax Offset
Total Tax Payable
2013
$
(1,092,366)
(327,710)
2012
$
(1,878,004)
(563,401)
(270,857)
(316,812)
-
12,140
-
90,000
(5,513)
502,673
(733)
(135,000)
(135,000)
16,659
158,100
76,133
152,272
(32,398)
514,089
(4,642)
(190,340)
(190,340)
(d) Tax Losses and Other Timing Differences for Which No Deferred Tax Asset has been Recognised
TAX LOSSES RECOGNISED
2013
$
Unused Tax Losses with no Deferred Tax Asset Recognised
3,912,925
Accrued Superannuation/Provision for Annual Leave
Total Tax Losses
5,037
3,917,962
2012
$
3,139,257
5,770
3,145,027
The Group has tax losses arising in Australia of $13,043,083 ($3,912,925 at 30% tax rate) (2012: $3,139,257)
of which no deferred tax asset has been recognised that are available indefinitely for offset against future
taxable profits of the Group.
9. DIVIDENDS PAID OR PROPOSED
There were no dividends paid or proposed during the year.
10. CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS
Cash at Bank and In Hand
Deposits at Call
Total Cash and Cash Equivalents
2013
$
16,820
631,086
647,906
2012
$
13,370
664,164
677,534
46
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
Cash at bank and in hand earns interest at floating interest rates based on the daily bank rates.
(a)
Interest Rate Exposure
The Group’s exposure to interest rate risk is discussed in Note 4.
(b) Reconciliation to Cash at the End of the Year
The above figures represent the cash at the end of the Financial Year as shown in the Statement of Cash
Flows.
11. TRADE AND OTHER RECEIVABLES (CURRENT)
TRADE AND OTHER RECEIVABLES
GST Receivable
Tax Receivable
Other Debtors
Total Trade and Other Receivables
(a) Fair Values and Credit Risk
2013
$
44,639
135,000
776
180,415
2012
$
45,904
190,340
4,688
240,932
Due to the short term nature of these receivables the carrying values represent their respective fair values
at 30 June 2013.
The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables
mentioned above. Refer to Note 4 for more information on the risk management policy of the Group and the
credit quality of the entity’s receivables.
(b) Other Receivables
These amounts generally arise from transactions outside the usual operating activities of the Group. Collateral
is not normally obtained.
12. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS (CURRENT)
TRADING SECURITIES
Investments Held for Trading
2013
$
16,500
2012
$
523,000
All investments held in ASX listed companies using market values at year end.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
47
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
13. EXPLORATION AND EVALUATION EXPENDITURE (NON CURRENT)
Recoverability of the carrying amount of exploration assets is dependent upon successful exploration and
development or sale of mineral deposits of the respective areas of interest. Carrying values were assessed in light
of exploration and current market conditions, and an impairment provision has been raised based on this review.
EXPLORATION AND EVALUATION EXPENDITURE
As at 1 July
Capitalised During the Year
Impairment of Exploration Expenditure
As at 30 June
2013
$
8,019,527
994,575
(91,592)
8,922,510
2012
$
6,932,198
1,118,618
(31,289)
8,019,527
14. PROPERTY, PLANT AND EQUIPMENT (NON CURRENT)
PROPERTY, PLANT AND EQUIPMENT
2013
2012
Computer Equipment and Software
Cost or Fair Value
Accumulated Depreciation
Net Book Amount
$
48,909
(46,724)
2,185
$
48,909
(34,402)
14,507
Opening Net Book Amount
14,507
30,794
Additions
Disposals
Depreciation Charge for the Year
Closing Net Book Amount
15. TRADE AND OTHER PAYABLES (CURRENT)
TRADE AND OTHER PAYABLES
Trade Payables
Other Creditors
Total Trade and Other Payables
0
0
(12,322)
2,185
2013
$
10,764
53,436
64,200
0
0
(16,287)
14,507
2012
$
41,883
22,748
64,631
Trade payables and other creditors are non interest bearing and will be settled on 30 to 60 day terms.
48
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
16. PROVISIONS (CURRENT)
PROVISIONS
2013
2012
Current
Provisions for Annual Leave
Total Provisions
17.
ISSUED CAPITAL
(a) Ordinary Shares
$
6,790
6,790
$
4,234
4,234
ISSUED CAPITAL
NOTE
2013
2012
2013
2012
Ordinary Shares
Shares
Shares
$
$
Issued and Fully paid
(a)
100,476,273
93,330,398
16,343,633
15,347,661
Total Contributed Equity
100,476,273
93,330,398
16,343,633
15,347,661
(b) Share Movements During the Year
SHARE MOVEMENTS
2013
2012
Number of
Shares
$
Number of
Shares
$
1 July
93,330,398
15,347,661
91,080,398
14,897,661
New Shares Issued During Year
Placement of Securities at 14 cents
7,145,875
1,000,423
Conversion of Vendor Options
2,250,000
450,000
Share Issue costs
30 June
(4,451)
100,476,273
16,343,633
93,330,398
15,347,661
(c) Ordinary Shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group
in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of
ordinary shares present at a meeting in person, or by proxy, is entitled to one vote, and upon a poll each share
is entitled to one vote. There is no authorised or par value share as prescribed in the Group’s constitution.
(d) Capital Risk Management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern,
so that they can continue to provide returns to shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
49
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
PROVISIONS
Total Borrowings
Less Cash and Cash Equivalents
10
Net Cash
Total Equity
Total Capital
18. RESERVES
PROVISIONS
Balance at Beginning of the Year
Share Based Payments
Total Share Based Payments Reserve
Nature and Purpose of Reserves
2013
$
-
647,906
647,906
2012
$
-
677,534
677,534
9,698,526
10,346,432
9,406,635
10,084,169
2013
$
4,654,693
0
4,654,693
2012
$
4,599,163
55,530
4,654,693
The share based payment reserve is used to recognise the fair value of options issued to Directors, consultants
and employees.
19. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Directors
The following persons were Directors of Manhattan during the Financial Year:
Name
Position
Alan J Eggers
Executive Chairman
Marcello Cardaci
Non Executive Director
John A G Seton
Non Executive Director
(b) Key Management Personnel
The following persons were Key Management Personnel of Manhattan during the Financial Year:
Name
Position
Sam Middlemas
Company Secretary
50
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
(c) Key Management Personnel Compensation
PROVISIONS
Short Term Employee Benefits
Post Employment Benefits
Share Based Payments
Total Compensation
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
2013
$
448,918
-
-
448,918
2012
$
455,192
-
29,488
484,680
(d) Remuneration of Directors and Key Management Personnel
(i)
Remuneration of Directors and Key Management Personnel
Options provided as remuneration and shares issued on the exercise of such options, together with
the terms and conditions of the options, can be found in Section D of the Remuneration Report.
(ii)
Option Holdings
The number of options over ordinary shares in the Company held during the Financial Year by each
Director of Manhattan and Key Management Personnel, including their personally related parties, are
set out below:
OPTION
HOLDINGS
BALANCE
AT START
OF YEAR
GRANTED AS
COMPENSATION
EXERCISED
OTHER
CHANGES
BALANCE
AT END
OF YEAR
VESTED AND
EXERCISABLE
UNVESTED
Directors
Alan Eggers
4,500,000
Marcello Cardaci1
1,000,000
John Seton
1,000,000
Key Management
Personnel
Sam Middlemas
1,000,000
Total
7,500,000
Directors
Alan Eggers
4,500,000
Marcello Cardaci1
1,000,000
John Seton
1,000,000
Key Management
Personnel
Sam Middlemas
1,000,000
Total
7,500,000
2013
-
-
-
-
0
2012
-
-
-
-
0
-
-
-
-
0
-
-
-
-
0
-
-
-
-
0
-
-
-
-
0
4,500,000
4,500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
7,500,000
7,500,000
4,500,000
4,500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
7,500,000
7,500,000
1 The options are held by Mr Marcello Cardaci as trustee for the MD Cardaci Family Trust.
.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
0
0
0
0
0
0
0
0
0
0
51
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
(iii)
Share Holdings
The numbers of shares in the Company held during the Financial Year by each Director of Manhattan
Limited and Key Management Personnel of the Company, including their personally related parties
are set out below. There were no shares granted during the reporting period as compensation.
DIRECTORS AND
OFFICERS SHARE
HOLDINGS
BALANCE AT THE
START OF THE
YEAR
SHARE
PURCHASES
SHARE SALES OR
OTHER CHANGES
BALANCE AT
THE END OF THE
YEAR
Directors
Alan Eggers
Marcello Cardaci
John Seton
Key Management
Personnel
Sam Middlemas
Total
Directors
Alan Eggers
Marcello Cardaci
John Seton
Key Management
Personnel
Sam Middlemas
31,201,461
2,815,726
3,407,260
610,726
38,035,173
2013
-
-
-
170,000
170,000
2012
29,201,461
2,000,000
2,815,726
3,407,260
610,726
-
-
-
Total
36,035,173
2,000,000
-
-
-
-
-
-
-
-
-
-
31,201,461
2,815,726
3,407,260
780,726
38,205,173
31,201,461
2,815,726
3,407,260
610,726
38,035,173
(e) Loans to Key Management Personnel
There were no loans made or outstanding to Directors of Manhattan and Key Management Personnel of the
Company, including their personally related parties.
(f) Other Transactions with Key Management Personnel
(i)
Alan J Eggers
Alan Eggers is a director of Wesmin Consulting Pty Ltd (“Wesmin”). Wesmin has provided his services
as Executive Chairman, personnel, office premises and administration staff to a value of $909,991
(2012: $964,894) to Manhattan during the year on normal commercial terms.
(ii) Marcello Cardaci
Marcello Cardaci is a partner in the firm of Gilbert + Tobin Lawyers. Gilbert + Tobin Lawyers has provided
legal services of $20,592 (2012: $40,824) to Manhattan during the year on normal commercial terms.
(iii)
Sam Middlemas
Sam Middlemas is a director of Sparkling Investments Pty Ltd (“Sparkling Investments”). Sparkling
Investments has provided company secretarial services of $28,920 (2012: $35,200) to Manhattan
during the year on normal commercial terms.
52
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
20. NON CASH INVESTING AND FINANCING ACTIVITIES
There were no non cash investing or financing activities during the year ended 30 June 2013.
21. SUBSEQUENT EVENTS AFTER END OF FINANCIAL YEAR
Since the end of the Financial Year no matters have arisen that have significantly affected or may significantly
affect the operations of the Group, results of those operations or the state of affairs in financial years subsequent
to 30 June 2013.
22. AUDITOR’S REMUNERATION
AUDIT SERVICES
2013
2012
Rothsay Chartered Accountants
Audit and Review of Financial Statements
Tax Work under the Corporations Act 2001
Total Remuneration for Audit Services
$
13,500
3,000
16,500
$
13,500
6,000
19,500
23. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
RECONCILIATION OF CASH FLOWS
FROM OPERATING ACTIVITIES
2013
$
2012
$
(Loss) after Income Tax for the Period
(704,081)
(1,215,970)
Adjustments for:
Depreciation Expense
Exploration Provisions
(Profit)/Loss on Trading Securities
Share Based Payments Expense
Taxation movements
12,322
91,592
40,467
16,286
31,289
527,001
55,530
(388,285)
(662,033)
(Increase)/Decrease in Trade and Other Receivables
(Increase)/Decrease in Prepayments
(Increase)/Decrease in Provisions
(Increase)/Decrease in Trade and Other Payables
(776)
4,671
2,555
(4)
Cash Flow from/(Used In) Operations
(941,539)
182
(784)
-
(134,117)
(1,382,616)
24. SHARE BASED PAYMENTS
(a) Options
The following share based payment arrangements to Directors and employees existed at 30 June 2013.
All options granted to Director’s and employees are for ordinary shares in Manhattan Corporation Limited,
which confer a right of one ordinary share for every option held.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
53
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
GRANT DATE
EXPIRY DATE
EXERCISE
PRICE
BALANCE AT
START OF
YEAR
FORFIETED
DURING THE
YEAR
BALANCE AT
END OF YEAR
VESTED &
EXERCISABLE
AT END OF
YEAR
21 July 2009
21 July 2009
21 July 2014
$0.60
5,050,000
21 July 2014
$1.00
4,050,000
2013
12 March 2010
12 March 2015
12 March 2010
12 March 2015
$1.80
$2.20
100,000
100,000
9,300,000
2012
Total Options
21 July 2009
21 July 2009
-
-
-
-
-
5,050,000
5,050,000
4,050,000
4,050,000
100,000
100,000
100,000
100,000
9,300,000
9,300,000
21 July 2014
$0.60
5,550,000
(500,000)
5,050,000
5,050,000
21 July 2014
$1.00
4,550,000
(500,000)
4,050,000
4,050,000
12 March 2010
12 March 2015
12 March 2010
12 March 2015
$1.80
$2.20
100,000
100,000
-
-
100,000
100,000
100,000
100,000
Total Options
10,300,000
(1,000,000)
9,300,000
9,300,000
The weighted average remaining contractual life of share options outstanding at the end of the period was 1.07 years.
(b) Expenses Arising From Share Based Payment Transactions
EXPENSE FROM SHARE BASED
PAYMENT TRANSACTIONS
NOTE
Options Issued During the Year
18
Total Expense
2013
$
0
0
2012
$
55,530
55,530
25. PARENT ENTITY INFORMATION
PARENT ENTITY INFORMATION
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Net Assets
Issued Capital
Share Based Payments Reserve
Accumulated Losses
Total Equity
Loss of the Parent Entity
Total Comprehensive Loss of the Parent Entity
2013
$
685,848
17,007,387
507,826
6,723,490
10,283,897
16,343,633
4,654,693
2012
$
440,622
15,871,500
1,277,065
6,977,800
8,893,700
15,347,661
4,654,693
(10,714,429)
(11,108,654)
10,283,897
394,225
394,225
8,893,700
1,128,729
1,128,729
54
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
In 2009 Manhattan acquired a 100% interest in Manhattan Resources Pty Ltd and this subsidiary has been
consolidated since the acquisition on 21 July 2009.
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2013
26. COMMITMENTS
(a) Exploration Expenditure
Committed expenditures in accordance with tenement lease grant conditions:
EXPLORATION EXPENDITURE COMMITMENT
Annual Tenement Rental Obligations
Annual Exploration Expenditure Commitments
Total Exploration Expenditure Commitment
2013
$
176,540
1,094,000
1,270,540
2012
$
100,194
924,000
1,024,194
(b) Capital or Leasing Commitments
There are no capital or leasing commitments as at 30 June 2013.
27. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Directors are of the opinion that there are no contingent liabilities or contingent assets as at 30 June 2013.
28. INTERESTS IN JOINT VENTURES
Manhattan has the following Joint Venture Interests:
(a) Exploration Joint Venture Agreements
During the year, Manhattan maintained its 100% interest in the Ponton Project and diluted in accordance with
the Farm In and Joint Venture Agreement terms with Northern Minerals Limited (see below) to a 60% interest in
the Gardner Range Project.
(b) Gardner Range Farm In and Joint Venture Agreement
The Gardner Range tenements are currently subject to the Gardner Range Farm In and Joint Venture Agreement
dated 15 October 2009 (“Gardner Range JV”).
The joint venture is not a separate legal entity. It is a contractual arrangement between the participants under
the signed JV agreement.
The Gardner Range Project in Western Australia comprises four exploration licences E80/1735, E80/3275,
E80/3817 and E80/4081. During 2011 Northern Uranium Limited (“Northern”) earned a 60% interest in
Manhattan’s Gardner Range project by expenditure of $1.05 million. Northern is now operator of the project
and in a strategic alliance with French nuclear group, Areva NC, via Areva’s wholly owned Australian subsidiary
Afmeco Mining and Exploration Pty Ltd (“Afmeco”).
On Northern acquiring its 60% Farm In interest Northern and Manhattan have entered into a joint venture with
Manhattan holding a 40% interest. Manhattan has elected not to contribute to exploration expenditure and
have its interest free carried to the completion of a Pre Feasibility Study to develop a mine and retain a 20%
interest. On completion of the Pre Feasibility Study Manhattan has the option to contribute to expenditure in
accordance with its then interest or be free carried to the completion of a Definitive Feasibility Study to develop
a mine and retain a 10% interest.
The Joint Venture does not hold any assets and accordingly the Company’s share of exploration, evaluation and
development expenditure is accounted for in accordance with the policy set out in Note 1. There are no capital
commitments or contingent liabilities associated with the Gardner Range Farm In and Joint Venture Agreement.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
55
DIRECTORS’ STATEMENT
DIRECTORS’ STATEMENT
DIRECTORS’ DECLARATION
In the opinion of the Directors of Manhattan Corporation Limited (“Manhattan”):
(a) The Financial Statements comprising the Consolidated Statements of Comprehensive Income, Financial
Position, Cash Flows, Statement of Changes in Equity and the Notes to Accompany the Financial Statements
as set out on pages 31 to 55 are in accordance with the Corporations Act 2001, and:
(i)
comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) give a true and fair view of the financial position of Manhattan as at 30 June 2013 and of its performance
for the Financial Year ended on that date;
(b)
In the Directors’ opinion, there are reasonable grounds to believe that Manhattan will be able to pay its debts
as and when they become due and payable;
(c) The remuneration disclosures included in the Directors’ report (as part of the Audited Remuneration report),
for the year ended 30 June 2013, comply with section 300A of the Corporations Act 2001; and
(d) The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from
the Chief Executive and Chief Financial Officers for the Financial Year ended 30 June 2013.
This declaration is made in accordance with a resolution of the Board of Directors and is signed on behalf of the
Directors by:
ALAN J EGGERS
Executive Chairman
19 September 2013
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
56
CORPORATE GOVERNANCE STATEMENT
CORPORATE GOVERNANCE
STATEMENT
in place
This Statement summarises the main corporate governance practices
during the Financial Year, which comply with the ASX Corporate Governance Council
recommendations unless otherwise stated.
Further information about the Company’s corporate governance practices is set out
on the Company’s web site at www.manhattancorp.com.au. In accordance with the
recommendations of the ASX, information published on the web site includes charters
(for the Board and subcommittees), codes of conduct and other policies and procedures
relating to the Board and its responsibilities.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
57
CORPORATE GOVERNANCE STATEMENT
1. BOARD OF DIRECTORS
1.1 Role of Board and Management ASX Principle 1
The Board of Manhattan Corporation Limited (“Manhattan”) is responsible for its corporate governance, that is,
the system by which the Company is managed. In governing the Company, the Directors must act in the best
interests of the Company as a whole. It is the role of senior management to manage the Company in accordance
with the direction and delegations of the Board and the responsibility of the Board to oversee the activities of
management in carrying out these delegated duties.
In carrying out its governance role, the main task of the Board is to drive the performance of the Company. The
Board must also ensure that the Company complies with all of its contractual, statutory and any other legal
obligations, including the requirements of any regulatory body. The Board has the final responsibility for the
successful operations of the Company. In addition, the Board is responsible for identifying areas of significant
business risk and ensuring arrangements are in place to adequately manage those risks.
To assist the Board to carry out its functions, it has developed a Code of Conduct to guide the Directors and key
executives in the performance of their roles. The Code of Conduct is detailed in Section 3.1 of this report.
The Board represents shareholders’ interests in developing and then continuing a successful mineral resources
business, which seeks to optimise medium to long term financial gains for shareholders. By not focusing on short
term gains for shareholders, the Board believes that this will ultimately result in the interests of all stakeholders
being appropriately addressed when making business decisions.
The Board is responsible for ensuring that the Company is managed in such a way to best achieve this desired
result. Given the size of the Company’s exploration and development activities, the Board currently undertakes
an active, not passive role.
The Board is responsible for evaluating and setting the strategic directions for the Company, establishing goals
for management and monitoring the achievement of these goals. The Executive Chairman is responsible to the
Board for the day to day management of the Company.
The Board has sole responsibility for the following:
Appointing and removing the Executive Chairman and any other Executive Director and approving their
remuneration;
Appointing and removing the Company Secretary/Chief Financial Officer and approving their remuneration;
Determining the strategic direction of the Company and measuring the performance of management
against approved strategies;
Reviewing the adequacy of resources for management to properly carry out approved strategies and
business plans;
Adopting operating and exploration expenditure budgets at the commencement of each Financial Year and
monitoring the progress by both financial and non financial key performance indicators;
Monitoring the Company ’s medium term capital and cash flow requirements;
Approving and monitoring financial and other reporting to regulatory bodies, shareholders and other
organisations;
Determining that satisfactory arrangements are in place for auditing the Company’s financial affairs;
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Reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct
and compliance with legislative requirements; and
Ensuring that policies and compliance systems consistent with the Company’s objectives and best practice
are in place and that the Company and its officers act legally, ethically and responsibly on all matters.
The Board’s role and the Company’s corporate governance practices are being continually reviewed and improved
as the Company’s business develops.
The Board convenes regular meetings with such frequency as is sufficient to appropriately discharge its
responsibilities.
The Board may from time to time, delegate some of its responsibilities listed above to its senior management
team.
The Executive Chairman is responsible for running the affairs of the Company under delegated authority from
the Board and implementing the policies and strategy set by the Board. In carrying out his responsibilities the
Executive Chairman must report to the Board in a timely manner and ensure all reports to the Board present a
true and fair view of the Company’s operational results and financial position.
The role of management is to support the Executive Chairman and implement the running of the general
operations and financial business of the Company, in accordance with the delegated authority of the Board.
1.2 Composition of the Board ASX Principle 2
To add value to the Company, the Board has been formed so that it has effective composition, size and
commitment to adequately discharge its responsibilities and duties. The names of the Directors and their
qualifications and experience are disclosed in the Directors’ Report. Directors are appointed based on the specific
governance skills required by the Company and on the independence of their decision making and judgement.
The Company’s Board during the year comprised one Executive and two Non Executive Directors. The executive
Director was Mr Eggers, Executive Chairman. The Company recognises the importance of Non Executive Directors
and the external perspective and advice that Non Executive Directors can offer.
None of the Board meets the
independence criteria under the ASX Corporate Governance Council
Recommendation 2.1 as all Directors are either executives, shareholders or have been material professional
advisors or consultants to the Company within the last three years. The Board recognises the Corporate
Governance Council’s recommendation that a majority of a board should consist of independent directors. The
Board views the shareholdings of Directors as important, although this is outside the ASX Recommendations
criteria for independence, as it believes it more correctly aligns the Board with shareholder interests. In considering
the independence of Directors, the Board considers issues of materiality and relies on thresholds for qualitative
and quantitative materiality as contained in the Board Charter which is disclosed on the Company’s web site.
The Board believes the current structure is appropriate given the Company’s current size and activities. The
existing Directors provide the necessary diversity of qualifications, skills and experience and bring quality and
independent judgement to all relevant issues.
Mr Eggers currently holds the position of Executive Chairman which does not comply with ASX Corporate
Governance Recommendations 2.2 and 2.3. While the Board recognises the importance of a division of
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CORPORATE GOVERNANCE STATEMENT
responsibility and independence at the head of the Company, the existing structure is considered appropriate
and provides a unified leadership structure. Mr Eggers is the controlling shareholder of the Company, and has
been a major force in the current growth and direction of the Company. His in depth knowledge of the uranium
industry, his past position in growing a small exploration company into an ASX Top 200 company and his
experience in growth strategies as presented to the Board has led to the conclusion that at this stage of the
Company’s development he is able to bring quality and independent judgement to all relevant issues, and the
Company benefits from his long standing experience of its operations and business relationships.
If the Company’s activities increase in size, nature and scope the size of the Board will be reviewed and the
optimum number of Directors required for the Board to properly perform its responsibilities and functions will
be re assessed.
The Board acknowledges that a greater proportion of independent Directors is desirable over the longer term and
will be seeking to demonstrate that it is monitoring the Board’s composition as required.
The membership of the Board, its activities and composition is subject to periodic review. The criteria for
determining the identification and appointment of a suitable candidate for the Board shall include the quality of
the individual’s background, experience and achievement, compatibility with other Board members, credibility
within the Company’s scope of activities, intellectual ability to contribute to Board duties and physical ability to
undertake Board duties and responsibilities.
Directors are initially appointed by the full Board subject to election by shareholders at the next Meeting of
shareholders. Under the Company’s Constitution the tenure of Directors (other than a managing director) is
subject to reappointment by shareholders not later than the third anniversary following their last appointment.
Subject to the requirements of the Corporations Act 2001, 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 any period and on any terms the Directors think fit and, subject to the terms of any agreement entered into,
the Board may revoke any appointment.
There are procedures in place, agreed to by the Board, to enable Directors in furtherance of their duties to seek
professional advice at the expense of the Company.
The terms in office held by each Director at the date of this Corporate Governance Statement are as follows:
Name
Position
Appointed
Alan J Eggers
Executive Chairman
Marcello Cardaci
Non Executive Director
John A G Seton
Non Executive Director
2009
2007
2009
1.3 Responsibilities of the Board ASX Principle 1
In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies,
practices, management and operations of the Company. It is required to do all things that may be necessary to
be done in order to carry out the objectives of the Company.
Without intending to limit this general role of the Board, the principal functions and responsibilities of the Board
include the following:
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1.3.1 Leadership of the Company
Overseeing the Company and establishing codes that reflect the values of the Company and guide the
conduct of the Board, management and employees.
1.3.2 Strategy Formulation
Working with senior management to set and review the overall strategy and goals for the Company and
ensuring that there are policies in place to govern the operation of the Company.
1.3.3 Overseeing Planning Activities
Overseeing the development of the Company’s strategic plans (including exploration programmes and
initiatives) and approving such plans as well as the annual budget.
1.3.4 Shareholder Liaison
Ensuring effective communications with shareholders through an appropriate communications policy and
promoting participation at general meetings of the Company.
1.3.5 Monitoring Compliance and Risk Management
Overseeing the Company’s risk management, compliance, control and accountability systems and
monitoring and directing the operational and financial performance of the Company.
1.3.6 Company Finances
Approving expenses in excess of those approved in the annual budget and approving and monitoring
acquisitions, divestitures and financial and other reporting.
1.3.7 Human Resources
Appointing, and, where appropriate, removing a managing director as well as reviewing the performance
of the managing director and monitoring the performance of senior management in their implementation
of the Company’s strategy.
1.3.8 Ensuring Health, Safety and Well Being of Employees
In conjunction with the senior management team, developing, overseeing and reviewing the effectiveness
of the Company’s occupational health and safety systems to ensure the well being of all employees.
1.3.9 Delegating Authority
Delegating appropriate powers to the Executive Chairman to ensure the effective day to day management
of the Company and establishing and determining the powers and functions of the Committees of the
Board.
1.4 Board Policies
1.4.1 Conflicts of Interest
Directors must:
Disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought
to exist between the interests of the Director and the interests of any other parties in carrying out the
activities of the Company; and
If requested by the Board, within seven days or such further period as may be permitted, take such
necessary and reasonable steps to remove any conflict of interest.
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If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as per the Corporations
Act 2001, absent himself from the room when discussion and/or voting occurs on matters about which the
conflict relates.
1.4.2 Commitments
Each member of the Board is committed to spending sufficient time to enable them to carry out their
duties as a Director of the Company.
1.4.3 Confidentiality
In accordance with legal requirements and agreed ethical standards, Directors and key executives of
the Company have agreed to keep confidential, information received in the course of the exercise of
their duties and will not disclose non public information except where disclosure is authorised or legally
mandated.
1.4.4 Independent Professional Advice
The Board collectively and each Director has the right to seek independent professional advice at the
Company’s expense, up to specified limits, to assist them to carry out their responsibilities.
1.4.5 Related Party Transactions
Related party transactions include any financial transaction between a Director and the Company. Unless
there is an exemption under the Corporations Act 2001 from the requirement to obtain shareholder
approval for the related party transaction, the Board cannot approve the transaction.
1.4.6 Attestations by the Executive Chairman and Company Secretary
In accordance with the Board’s policy, the Executive Chairman and the Company Secretary/Chief Financial
Officer made the attestations recommended by the ASX Corporate Governance Council, and s295A of
the Corporations Act 2001 as to the Company’s financial condition prior to the Board signing this Annual
Report.
2. TRADING IN THE COMPANY’S SHARES
The Company’s Securities Trading Policy imposes basic trading restrictions on all employees and consultants of the
Company with ‘inside information’, and additional trading restrictions on the Directors of the Company. The Company’s
Securities Trading Policy was adopted by the Board of the Company and last updated on 16 September 2011.
‘Inside information’ is information that:
Is not generally available; and
If it were generally available, it would, or would be likely to, influence investors in deciding whether to buy or sell
the Company’s securities.
If an employee possesses inside information, the person must not:
62
Trade in the Company’s securities;
Advise others or procure others to trade in the Company’s securities; or
Pass on the inside information to others, including colleagues, family or friends knowing (or where the employee
or Director should have reasonably known) that the other persons will use that information to trade in, or procure
someone else to trade in, the Company’s securities.
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This prohibition applies regardless of how the employee or Director learns the information (eg. even if the employee
or Director overhears it or is told in a social setting).
In addition to the above, Directors must notify the Company Secretary as soon as practicable, but not later than 2
business days, after they have bought or sold the Company’s securities or exercised options. In accordance with the
provisions of the Corporations Act 2001 and the ASX Listing Rules, the Company on behalf of the Directors must
advise the ASX of any transactions conducted by them in the securities of the Company.
Please refer to the Company’s web site to review the Company’s Share Trading Policy.
3. BOARD COMMITTEES
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the
formation of separate or special committees at this time. The Board as a whole is able to address the governance
aspects of the full scope of the Company’s activities and to ensure that it adheres to appropriate ethical standards.
The Board has however established a framework for the management of the Company including a system of internal
controls, a business risk management process and the establishment of appropriate ethical standards.
The full Board currently holds meetings at such times as may be necessary to address any general or specific matters
as required.
If the Company’s activities increase in size, scope and nature, the appointment of separate or special committees will
be reviewed by the Board and implemented if appropriate.
3.1 Audit Committee ASX Principle 4
The full Board carries out the role of the audit committee. While this is a departure from ASX Corporate
Governance Council Recommendations 4.1 and 4.2, it provides a more efficient mechanism based on the size of
the Board and the complexity of the Company. The Board follows the Audit Committee charter and there were
two meetings during the year set aside to deal with the issues and responsibilities usually delegated to the audit
committee so as to ensure the integrity of the Financial Statements of the Company and the independence of
the external auditor.
The Board in its entirety reviews the audited Annual Financial Statements and the audit reviewed Half Yearly
Financial Statements and any reports which accompany published Financial Statements.
The Board in its entirety considers the appointment of the external auditor and reviews the appointment of the
external auditor, their independence, the audit fee and any questions of resignation or dismissal.
The Board is also responsible for establishing policies on risk oversight and management.
The Board members consider themselves to be financially literate and have industry knowledge, and the Company
Secretary is a qualified accountant and has the requisite financial expertise to assist the Audit Committee with
financial matters.
Please refer to the Company’s web site to review the Audit Committee charter.
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3.2 Remuneration Committee ASX Principle 8
The full Board carries out the role of the remuneration committee. While this is a departure from ASX Corporate
Governance Council Recommendation 9.1, it provides a more efficient mechanism based on the size of the Board
and the complexity of the Company. The Board follows the Remuneration Committee charter and there was one
meeting during the year set aside to deal with remuneration issues.
The responsibilities of the Board in its entirety include setting policies for senior officers’ remuneration, setting
the terms and conditions of employment for the Executive Chairman, reviewing and setting Manhattan’s issue of
options to employees and consultants, reviewing superannuation arrangements, reviewing the remuneration of
Non Executive Directors and undertaking an annual review of the Executive Chairman’s performance, including,
setting with the Executive Chairman’s goals for the coming year and reviewing progress in achieving those goals.
The Company is committed to remunerating its executives in a manner that is market competitive and consistent
with best practice as well as supporting the interests of shareholders.
There is no scheme to provide retirement benefits, other than statutory superannuation, to Non Executive
Directors.
For a full discussion of the Company’s remuneration philosophy and framework and the remuneration received
by Directors in the current period please refer to the Remuneration Report, which is contained within the
Directors’ Report.
Please refer to the Company’s web site to review the Remuneration Committee charter.
3.3 Nomination Committee ASX Principle 2
The full Board carries out the role of the nomination committee. While this is a departure from ASX Corporate
Governance Council Recommendation 2.4, it provides a more efficient mechanism based on the size of the
Board and the complexity of the Company. The Board follows the Nomination Committee charter and sets aside
time at Board meetings to deal with nomination issues.
The responsibilities of the Board in its entirety include devising criteria for Board membership, regularly reviewing
the need for various skills and experience on the Board and identifying specific individuals for nomination
as Directors for review by the Board. The Board also oversees management succession plans including the
Executive Chairman, and evaluates the Board’s performance and makes recommendations for the appointment
and removal of Directors.
Directors are appointed based on the specific governance skills required by the Company. Given the size of the
Company and the business that it operates, the Company aims at all times to have at least one Director with
experience in the mining and exploration industry, appropriate to the Company’s market. In addition, Directors
should have the relevant blend of personal experience in:
Accounting and financial management;
Legal skills; and
For the Executive Chairman the appropriate business experience.
Please refer to the Company’s web site to review the Nomination Committee charter.
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4. ETHICAL STANDARDS
The Board acknowledges the need for continued maintenance of the highest standard of corporate governance
practice and ethical conduct by all Directors and employees of the Company.
4.1 Code of Conduct for Directors and Key Executives ASX Principle 3
The Board has adopted a Code of Conduct for Directors and key executives to promote ethical and responsible
decision making. The code is based on a code of conduct for Directors prepared by the Australian Institute of
Company Directors.
In accordance with legal requirements and agreed ethical standards, Directors and key executives of the Company:
Will act honestly, in good faith and in the best interests of the whole Company;
Owe a fiduciary duty to the Company as a whole;
Have a duty to use due care and diligence in fulfilling the functions of office and exercising the powers
attached to that office;
Will act with a level of skill expected from Directors and key executives of a publicly listed company;
Will use the powers of office for a proper purpose and in the best interests of the Company as a whole;
Will demonstrate commercial reasonableness in decision making;
Will not make improper use of information acquired as Directors and key executives;
Will not disclose non public information except where disclosure is authorised or legally mandated;
Will not take improper advantage of the position of Director or use the position for personal gain or to
compete with the Company;
Will not take advantage of Company property or use such property for personal gain or to compete with the
Company;
Will protect and ensure the efficient use of the Company’s assets for legitimate business purposes;
Will not allow personal interests, or the interests of any associated person, to conflict with the interests of
the Company;
Have an obligation to be independent in judgment and actions and Directors will take all reasonable steps
to be satisfied as to the soundness of all decisions of the Board;
Will make reasonable enquiries to ensure that the Company is operating efficiently, effectively and legally
towards achieving its goals;
Will not engage in conduct likely to bring discredit upon the Company;
Will encourage fair dealing by all employees with the Company’s suppliers, competitors and other
employees;
Will encourage the reporting of unlawful/unethical behaviour and actively promote ethical behaviour and
protection for those who report violations in good faith;
Will give their specific expertise generously to the Company; and
Have an obligation, at all times, to comply with the spirit, as well as the letter of the law and with the
principles of this Code.
4.2 Code of Ethics and Conduct ASX Principle 3
The Company has implemented a Code of Ethics and Conduct, which provides guidelines aimed at maintaining
high ethical standards, corporate behavior and accountability within the Company.
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CORPORATE GOVERNANCE STATEMENT
All Directors and employees are expected to:
Respect the law and act in accordance with it;
Respect confidentiality and not misuse Company information, assets or facilities;
Value and maintain professionalism;
Avoid real or perceived conflicts of interest;
Act in the best interests of shareholders;
By their actions, contribute to the Company’s reputation as a good corporate citizen, which seeks the respect
of the community and environment in which it operates;
Perform their duties in ways that minimise environmental impacts and maximise workplace safety;
Exercise fairness, courtesy, respect, consideration and sensitivity in all dealings within their workplace and
with customers, suppliers and the public generally; and
Act with honesty, integrity, decency and responsibility at all times.
An employee that breaches the Code of Ethics and Conduct may face disciplinary action. If an employee suspects
that a breach of the Code of Ethics and Conduct has occurred or will occur, he or she must advise that breach to
management. No employee will be disadvantaged or prejudiced if he or she reports in good faith a suspected
breach. All reports will be acted upon and kept confidential.
As part of its commitment to recognising the legitimate interests of stakeholders, the Company has established
the Code of Ethics and Conduct to guide compliance with legal and other obligations to legitimate stakeholders.
These stakeholders include employees, government authorities, creditors and the community as whole. This
Code includes the following:
4.2.1 Responsibilities to Shareholders and the Financial Community Generally
The Company complies with the spirit as well as the letter of all laws and regulations that govern
shareholders’ rights. The Company has processes in place designed to ensure the truthful and factual
presentation of the Company’s financial position and prepares and maintains its accounts fairly and
accurately in accordance with the generally accepted accounting and financial reporting standards.
4.2.2 Employee Practices
The Company endeavours to provide a safe workplace in which there is equal opportunity for all employees
at all levels of the Company. The Company does not tolerate the offering or acceptance of bribes or the
misuse of the Company’s assets or resources.
4.2.3 Responsibilities to the Community
As part of the community the Company:
Is committed to conducting its business in accordance with applicable environmental laws and
regulations and encourages all employees to have regard for the environment when carrying out
their jobs;
Encourages all employees to engage in activities beneficial to their local community; and
Supports community charities.
The Company supports the Indigenous Community:
Is committed to conducting its business in accordance with applicable heritage laws and regulations
and encourages all employees to have regard for the specific rights of indigenous communities when
carrying out their jobs; and
Encourages all employees to engage in activities beneficial to the indigenous community.
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4.2.4 Responsibilities to the Individual
The Company is committed to keeping private information, which has been provided by employees and
investors confidential and protecting it from uses other than those for which it was provided.
4.2.5 Conflicts of interest
Employees and Directors must avoid conflicts as well as the appearance of conflicts between their
personal interests and the interests of the Company.
4.2.6 How the Company Monitors and Ensures Compliance with its Code
The Board, management and all employees of the Company are committed to implementing this Code of
Ethics and Conduct and each individual is accountable for such compliance.
Disciplinary measures may be imposed for violating the Code.
4.3 Diversity Policy
ASX Principle 3
The Company has implemented a Diversity Policy which is committed to an inclusive workplace that embraces
and promotes diversity. Diversity may result from a range of factors including gender, age ethnicity and cultural
backgrounds.
All Directors and employees are expected to:
Ensure diversity is incorporated into behaviours and practises of the Company;
Facilitate equal employment opportunities based on job requirements;
Value and maintain professionalism;
Create an inclusive workplace culture.
The board has not established measurable objectives for achieving gender diversity at this stage of the Company’s
development due to the size and nature of the Company’s activities. The Policy focusses on identifying and
removing any barriers to diversity to create a workplace culture of inclusion and equal opportunities. The
proportion of women employees in the whole organisation is 40%, women in senior executive positions 0% and
women on the board 0%.
5. DISCLOSURE OF INFORMATION
5.1 Continuous Disclosure to ASX ASX Principle 5
The continuous disclosure policy requires all executives and Directors to inform the Executive Chairman or, in
their absence, the Company Secretary of any potentially material information as soon as practicable after they
become aware of that information.
Information is material if it is likely that the information would influence investors who commonly acquire
securities on ASX in deciding whether to buy, sell or hold the Company’s securities.
Information is not material and need not be disclosed if:
5.1.1 A reasonable person would not expect the information to be disclosed or it is material but due to a
specific valid commercial reason is not to be disclosed; and
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CORPORATE GOVERNANCE STATEMENT
5.1.2 The information is confidential; or
5.1.3 One of the following applies:
It would breach a law or regulation to disclose the information;
The information concerns an incomplete proposal or negotiation;
The information comprises matters of supposition or is insufficiently definite to warrant disclosure;
The information is generated for internal management purposes;
The information is a trade secret;
It would breach a material term of an agreement, to which the Company is a party, to disclose the
information;
It would harm the Company’s potential application or possible patent application; or
The information is scientific data that release of which may benefit the Company’s potential
competitors.
The Executive Chairman is responsible for interpreting and monitoring the Company’s Disclosure policy
and where necessary informing the Board. The Company Secretary is responsible for all communications
with ASX.
5.2 Communication with Shareholders ASX Principle 6
The Company places considerable importance on effective communications with shareholders.
The Company’s communication strategy requires communication with shareholders and other stakeholders in
an open, regular and timely manner so that the market has sufficient information to make informed investment
decisions on the operations and results of the Company. The strategy provides for the use of systems that ensure
a regular and timely release of information about the Company to be provided to shareholders. Mechanisms
employed include:
Announcements lodged with ASX;
ASX Quarterly Reports;
Half Yearly Report and Annual Report; and
Presentations at the Annual General Meeting and General Meetings of shareholders.
The Board encourages the full participation of shareholders at the Annual General Meeting and any General
Meetings of shareholders to ensure a high level of accountability and understanding of the Company’s strategy
and goals.
Manhattan provides updates on any changes in its circumstances as and when they occur by continuous disclosure
in compliance with the ASX Listing Rules, press releases, investor presentations and making all announcements
and corporate information available on the Company’s web site.
The Company also posts all reports, ASX and media releases and copies of business and investor presentations
on the Company’s web site.
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6. RISK MANAGEMENT
6.1
Identification of Risk ASX Principle 7
Manhattan operates in the mineral resource and energy sectors where there are a number of risk factors inherent
to the Company’s operations. The Company mitigates its risk factors primarily by ensuring it has a suitably
qualified and experienced Board of Directors with a range of professional qualifications appropriate to the
industry and business sector in which it operates.
Recognition of these risk factors and subsequent effective management, control and reporting of risk are an
essential part of the Company’s day to day operations to minimise potential losses and create medium to long
term shareholder wealth. The Board is responsible for the oversight, adequacy and implementation of the
Company’s risk management and control framework. Responsibility for internal control and risk management
is delegated to the appropriate level of management within the Company with the Executive Chairman and
Company Secretary having ultimate responsibility to the Board for the identification of risk, risk management
and internal control framework.
Areas of strategic, operational, legal, reporting, compliance, business and financial risks are identified, assessed
and continually monitored by executive management to assist the Company to achieve its business objectives.
These areas of risk are highlighted in the Business Plan presented to the Board by the Executive Chairman on a
regular basis. Arrangements put in place by the Board to monitor risk management include monthly reporting
by executive management to the Board in respect of operations and the financial position of the Company and
ensuring all legal, reporting and compliance matters and obligations are met.
The main operational risks for Manhattan in the industry and business sector in which it operates have been
identified as:
Sovereign risk, legislation and political issues;
Government policies and changes to those policies;
Financial and equity markets stability;
Fluctuating commodity prices and demand;
Fluctuating exchange rates;
Compliance with licence and permit conditions;
Land access, environmental and Native Title issues;
Availability of specialist drilling, laboratory, exploration support and transport services;
Availability of specialist airborne geophysical survey contractors and consultants;
Availability of suitably experienced and qualified professionals, personnel and consultants;
Increasing costs of operations;
Availability of capital and debt facilities; and
Retention of key executives and staff.
These risks areas identified by the Company’s Board are provided here to assist shareholders better understand
the nature of the risks faced by the Company, and other companies, in the industry sector in which it operates.
They are not necessarily an exhaustive list.
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CORPORATE GOVERNANCE STATEMENT
6.2
Integrity of Financial Reporting ASX Principle 7
In accordance with section 295A of the Corporations Act 2001 the Company’s Executive Chairman and Chief
Financial Officer report in writing to the Board that:
The Financial Statements of the Company for each Half Year and Financial Year present a true and fair view,
in all material aspects, of the Company’s financial condition and operational results and are in accordance
with accounting standards;
The financial records of the Company for each Half Year and Financial Year have been properly maintained
and the financial reporting is in accordance with section 295A(2) of the Corporations Act 2001;
The above statement is founded on a sound system of risk management and internal compliance and
control which implements the policies adopted by the Board; and
The Company’s risk management and internal compliance and control framework is operating efficiently
and effectively in all material respects.
The Board notes that due to its nature, internal control assurance from the Executive Chairman and Chief Financial
Officer can only be reasonable and not absolute. This is due to such factors as the need to apply judgment,
reasonable enquiry and practical and efficient internal control systems, inherent limitations to internal control
and because much of the evidence available is persuasive and changing rather than conclusive and set and
therefore is not and cannot be designed to detect all weaknesses in control procedures.
Internal management accounts are prepared on a monthly basis, full Cash Flow Statements on a quarterly basis
and lodged with the ASX and a Half Year audit reviews and Financial Year audits are completed by the Company’s
independent Auditors. The Half Year and Financial Year Financial Statements are lodged with ASX and posted
on the Company’s web site.
6.3 Audit and Role of Auditor ASX Principle 6
The Company’s internal preparation for the Half Yearly audit review and the Financial Year audit includes
preparing the Financial Statements and accompanying explanatory notes, conducting a series of routine reviews
and financial tests and reviewing the carrying values of all assets. The Company’s Auditor is required to attend the
Annual General Meeting and be available to answer shareholder questions about the conduct of the audit and the
preparation and content of the Auditor’s Report.
7. PERFORMANCE REVIEW ASX Principle 8
The Board has adopted and undertaken a self evaluation process to measure its own performance during the Financial
Year. This process included a review of the performance of the Board individually and as a whole, and includes a review
in relation to the composition and skills mix of the Directors of the Company.
Arrangements undertaken during the year to monitor the performance of the Company’s executives included:
70
A review by the Board of the Company’s financial performance; and
Annual performance appraisal meetings incorporating analysis of key performance indicators with each individual
to ensure that the level of reward is aligned with respective responsibilities and individual contributions made to
the success of the Company.
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8. ENVIRONMENTAL POLICY
The Company’s Board of Directors has formerly adopted an Environmental Policy that includes Environmental
Management Plans for its proposed resource exploration and development activities, the adoption of the Australian
Uranium Association Code of Practice and a comprehensive Radiation Management Plan for its proposed exploration
and development activities. The full Environmental Policy including Management Plans and the Code of Practice are
posted on the Company’s web site at www.manhattancorp.com.au.
8.1 Applicability
All Manhattan Corporation Limited (“Manhattan”) Directors, officers, employees, consultants, contractors,
business partners and suppliers are responsible for ensuring Manhattan’s Environmental policy is adhered to.
8.2 Introduction
Manhattan has developed the Environmental Policy, that has been adopted by the Company’s Board, as the
Company believes excellence in environmental management performance and the adoption of best practice in
implementing its Environmental Policy is essential to business success and compatible with delivering sustainable
long term economic benefits to its shareholders along with balancing the economic, social, community and
environmental needs of sustainable development. Manhattan also seeks to reduce the environmental footprint
whilst generating wealth and delivering value to shareholders.
The aim of the Environmental Policy is to provide an overarching framework for Manhattan to achieve a
sustainable high standard of environmental performance.
The Board will review this Environmental Policy regularly to ensure that it is current and that the requirements
of the Environmental Policy at all times meet resource industry standards of excellence for environmental
performance.
Manhattan is a Member of the Australian Uranium Association and has adopted its Code of Practice that includes:
1.
2.
3.
4.
5.
6.
Continuous Improvement to Best Practice in Management;
Safely Manage, Contain and Transport all Hazardous Materials, Tailings and Other Wastes;
Provide Adequately for Mine Closure and Rehabilitation;
Continuous Improvement in Best Practice in Radiation Control;
Adhere to all Applicable International, National, State and Local Authority Regulatory Obligations; and
Provide Information about Uranium and its properties to Stakeholders.
The Australian Uranium Association’s Code of Practice is appended to this Policy and forms part of this Company’s
Environmental Policy.
Manhattan has further developed a specific Environmental Management Plan for its proposed resource
exploration and development activities within the Queen Victoria Spring Nature Reserve at Ponton in Western
Australia. This Environmental Management Plan is appended to this Policy and forms part of the Company’s
Environmental Policy.
These guidelines have been prepared by Manhattan Corporation Limited to provide information relating to
planning and implementing exploration activities within A Class reserves in Western Australia to avoid, manage
and mitigate impacts on conservation values, including Department of Environment and Conservation (DEC)
managed land.
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
71
CORPORATE GOVERNANCE STATEMENT
8.3 Environmental Objectives
Manhattan’s environmental objectives are achieved by:
(a)
Complying with applicable environmental legislation as a minimum standard and applying industry
standards;
(b)
Developing and implementing an Environmental Management System, including Environmental and
Radiation Management Plans for all its operations;
(c)
Developing standards and building management systems to identify, assess and manage environmental
risks within its operations;
(d)
Implementing and assigning Board and management accountability for Manhattan’s environment
standards, guidelines, procedures, reporting and performance;
(e)
Striving to achieve continuous improvement in environmental performance;
(f)
Ensuring all Manhattan’s Directors, officers, employees, consultants, contractors, business partners and
suppliers are fully aware of their environmental responsibilities;
(g)
Consulting with government, local communities, land owners, local authorities, native title claimants
and holders, indigenous groups, interest groups and stakeholders in relation to Manhattan’s operations,
projects and proposed business and development activities;
(h)
Undertaking regular inspections, compliance reviews and audits on the Company’s environmental
performance and reporting; and
(i)
Reporting environmental performance and compliance openly and transparently.
8.4 Responsibilities
The Company’s Board of Directors is responsible for the development, implementation, compliance and reporting
of Manhattan’s Environmental Policy and Environmental Management Plans and the Company’s Chief Executive
Officer and or Managing Director is accountable to the Board of Directors for ensuring the Policy and plans are
effectively implemented and monitored through annual performance reviews.
72
MANHATTAN CORPORATION LIMITED
2013 ANNUAL REPORT
ASX ADDITIONAL INFORMATION
ASX ADDITIONAL INFORMATION
ASX ADDITIONAL INFORMATION
Additional information required by ASX Limited Listing Rules not disclosed elsewhere in this 2013 Annual Report is
set out below.
1. ANALYSIS OF SHAREHOLDINGS
As at 19 September 2013 Manhattan Corporation Limited has on issue 100,476,273 ordinary shares. All issued
ordinary fully paid shares carry one vote per share. There are six hundred and sixty four (664) holders of fully paid
ordinary shares on Manhattan’s share register as at 19 September 2013.
1.1 Top Twenty Shareholders
The names of shareholders in Manhattan’s Top Twenty as at 19 September 2013 are as follows:
TOP 20 SHAREHOLDERS
Rank
Holder
1
2
3
4
5
6
7
8
9
Minvest Securities (New Zealand) Limited
Nicholas P S Olissoff
Alan J Eggers & Associates
E S & J T Arron
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