Manhattan Corporation Limited
Annual Report 2015

Plain-text annual report

2015 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 ASX ADDITIONAL INFORMATION ANALYSIS OF SHAREHOLDINGS TENEMENT SCHEDULE 1 2 6 15 25 27 28 28 29 30 31 32 55 56 56 59 CORPORATE DIRECTORY DIRECTORS SHARE REGISTRY Alan J Eggers Executive Chairman B.Sc, B.Sc(Hons), M.Sc, F.S.E.G., MAusIMM, MAIG Marcello Cardaci Non Executive Director B.Juris, LLB, B.Com John A G Seton Non Executive Director LLM(Hons) COMPANY SECRETARY Sam Middlemas B.Com, PGradDipBus., CA BUSINESS OFFICE Level 1 37 Ord Street WEST PERTH WA 6005 PO Box 1038 West Perth WA 6872 Telephone: Facsimile: +61 8 9322 6677 +61 8 9322 1961 REGISTERED OFFICE Level 1 37 Ord Street WEST PERTH WA 6005 INTERNET ACCESS Email: Web Site: info@manhattancorp.com.au www.manhattancorp.com.au COUNTRY OF INCORPORATION Australia Computershare Investor Services Pty Ltd Level 11 172 St Georges Terrace PERTH WA 6000 INVESTOR ENQUIRIES Australia: 1300 787 272 International: Facsimile: Web Site: +61 3 9415 4000 +61 8 9323 2033 www.computershare.com.au AUDITORS Rothsay Chartered Accountants Level 1, Lincoln Building 4 Ventnor Avenue 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 STOCK EXCHANGE LISTING Australian Securities Exchange (“ASX”) MHC ASX Code: MANHATTAN CORPORATION LIMITED 1 2015 ANNUAL REPORT CHAIRMAN'S REVIEW 29 September 2015 Dear Shareholders and Investors I’m pleased, on behalf of the Board and our executive team, to present Manhattan’s 2015 Annual Report including the Financial Statements for the year ended 30 June 2015 and my review of the uranium sector. Commodity Prices and Uranium Commodity prices are crashing and on a downward slope including zinc, nickel, gold, silver, iron ore, coal, coffee, sugar and oil. There is one exception, uranium. Despite general uncertainty in commodities markets, about the Chinese economy and rickety tech stocks, uranium price is up 33% in the last year. It’s now being widely accepted that low carbon nuclear power makes a significant contribution to meeting greenhouse gas emission targets. Japan, by restarting reactors, will meet its post 2020 greenhouse gas emission targets, South Korea increases its nuclear new build to reduce the country’s emissions to 37% below business as usual levels by 2030 and the USA also has released plans to reduce 2030 emissions by 33% delivered by low emissions from nuclear power reactors. Uranium price is forecast to rise by 80% to US$64.64lb by 2018 according to the median four analysts’ forecasts compiled by Bloomberg. Gold, by comparison, is expected to rise by 14% to US$1,285 an ounce in the same period. The improved prospects for uranium, the raw material in reactor fuel, is in contrast to slowing demand and ample supply for most other metals. Uranium is now trading at US$37.25lb, from a low of $28lb in August 2014. 2 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT CHAIRMAN'S REVIEW World Nuclear Power Developments What is happening is the US and Japan are renewing their commitment to nuclear power along with China, Russia, India, South Korea and UAE pushing ahead with their nuclear expansions. A new report by the World Nuclear Association (WNA) forecasts global nuclear power generation capacity should grow by more than 45% over the next 20 years. The report states that until the Fukushima accident in Japan the outlook for nuclear power around the world was improving, but despite the March 2011 disaster many countries are putting more emphasis on satisfying environmental and energy security of supply strategies, which should favour an increase in nuclear power. Nuclear electricity output is set to increase at a faster rate over the next five years than we have seen for more than two decades and a new pipeline of uranium mines will be needed to meet the demand for primary fuel. Nuclear Power is Cost Competitive The cost of nuclear power is in line with other baseload energy technologies, but nuclear power plants can generate more electricity, and more cheaply, over their full lifetime if financing costs are low. This is the conclusion of a recent joint OECD Nuclear Energy Agency and International Energy Agency report. Inventories are overhanging the market. In the short term the uranium markets will be driven by inventories with US holding 116Mlb, Europe 138Mlb, global suppliers 50Mlb with Japan holding an estimated 160Mlb and China 280Mlb U3O8 equivalent. These inventories are equivalent to around 5 years of current demand and 3 years demand in 2025. Record Nuclear New Build Underway in China This view is underwritten by the fact that there are 436 nuclear power plants operable in 31 countries and the new build continues at an all time record level with 67 reactors now under construction around the world. China, with 25 units under construction, is now building nuclear reactors faster than any other country in the world, in addition to making the world’s largest investments in new types of nuclear reactors. China is commissioning a new 1,000Mw reactor every month with four connected in 2015 and a further eight to be commission by the end of the year. China will surpass the US as the largest producer of nuclear power and consumer of uranium at 52 million pounds a year by 2025. USA and Japan Renew Commitment to Nuclear President Obama this month unveiled a blue print for reducing carbon emissions from the nation’s power plants by almost a third from 2015 to 2030, allowing reactors to count towards individual state’s efforts to meet federal targets for carbon free electric power. USA has 5 new reactors under construction and Japan 3. Japanese Prime Minister Shinzo Abe confirmed plans to have atomic energy account for 22% of the nation’s energy by 2030. Now, Japan’s Kyushu Electric Power Company has finally recommissioned its Sendai unit one nuclear reactor, now fully operational, and a second unit to be commissioned by mid October 2015. MANHATTAN CORPORATION LIMITED 3 2015 ANNUAL REPORT CHAIRMAN'S REVIEW Russia, Asia and Middle East Developments Russia is building 9 new reactors, India 6 and the South Korean government recently announced two further nuclear power reactors are to be constructed and plans for four coal fired power stations dropped. Korea now has 24 nuclear plants operating, 6 under construction and 8 on order or planned. UAE has four reactors under construction that are on track to enter commercial operation by 2020 and another 10 proposed. New Uranium Mines Required To feed the rising global capacity, the world will likely need to increase primary mine production by 83% to 267 million pounds of uranium oxide by 2025, up from 146 million pounds of uranium oxide in 2014. The WNA report concludes that rapid uranium demand growth in a number of countries, particularly China, coupled with a limited contribution of secondary supplies will result in the need for additional mined uranium. With the mine supply shortfall growing the uranium mines needed to supply the existing and new reactors are years away, according to a report by KPMG, with current uranium prices about half of the US$75lb required to attract investment in new mines. Australian Uranium Industry in Positive Space Industry experts agree, Australia is well placed to cash in on a uranium boom with the world’s largest known recoverable uranium resources, already a reliable supplier and the world’s third largest producer. Market analysts predict the shortfall in supply will require at least 12 to 15 new medium sized mines, producing 3 to 5 million pounds a year, are required to meet supply by 2020. The lag time on average of 5 to 7 years to approve, build new mines and produce yellowcake means new mine investment is required now to meet projected uranium oxide deliveries required by 2020. The recent modest recovery in uranium prices is underpinned by Japan restarting a number of its 47 idle reactors. Depressed uranium prices have curtailed exploration activities and the opening of new mines. Mines closures along with delays in commissioning Cameco’s Cigar Lake mine, a labour dispute at their McArthur River operation in Canada and political unrest in the Ukraine have also squeezed the supply outlook. Tenement Holdings and Access Approvals To conserve cash, Manhattan has continued to maintain minimal expenditure on its Ponton project whilst it seeks on ground access approval by the WA government to the key granted exploration licence, E28/1898, located within the Queen Victoria Spring Nature Reserve. Gaining access approval to E28/1898 and the Double 8, Stallion, Highway and Ponton uranium deposits and targets at Ponton will see resource definition drilling underway along the 55km of defined palaeochannels where previous broad spaced drilling has intersected uranium mineralisation amenable to in-situ metal recovery (ISR). 4 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT CHAIRMAN'S REVIEW Manhattan’s Resources and Project Development Manhattan has 100% control of WA’s 8th largest reported uranium resource with Inferred Resources for Double 8 of 17.2Mlb uranium oxide. In addition, drilled Exploration Targets totalling 33 to 67Mlb uranium, at 200ppm U3O8 cutoff, for the Double 8, Stallion South, Highway South and Ponton have been reported. Resource definition drilling at Ponton will likely deliver resource upgrades and, initially, form the basis of mine development plans at Ponton. Along with resource drilling, an environmental impact statement and a bankable feasibility study will commence in preparation for the uranium mine development approval process. Ponton Potential Lower Quartile ISR Producer The sand hosted uranium mineralisation at Ponton is located in shallow, 40 to 70 metres deep, palaeochannels. Tetra Tech’s 2011 desktop scoping study confirmed the uranium deposits have potential to be viable, sustainable low cost ISR producers with modest capital requirements to develop and lower quartile operational cost profile. Manhattan Liquidity and Outlook In recent months the Company’s share price has stagnated with thin market liquidity and obvious disinterest by investors. As flagged last year the catalysts that will trigger renewed investor interest in Manhattan will be access approvals to Ponton, a firmer and sustained uranium price and resumption of resource drilling at Ponton. The Company’s board remains optimistic that the recent increase in uranium price is a sign of a sustained rally and, despite the lack of real progress so far, the necessary approvals can be gained to further the drilling and development of its Ponton uranium project in the coming year. The board looks forward to your continued support as investors as we focus on restoring shareholder value, delivering an approved mining project and identify growth opportunities that add value. ALAN J EGGERS Executive Chairman 29 September 2015 MANHATTAN CORPORATION LIMITED 5 2015 ANNUAL REPORT REVIEW OF OPERATIONS INTRODUCTION Manhattan Corporation Limited’s (“Manhattan”) flagship Ponton uranium 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 1,250km2 of 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 (Figures 1 & 2). The Company is drill testing and developing palaeochannel sand hosted uranium mineralisation amenable to in-situ metal recovery (“ISR”). FIGURE 1: MANHATTAN’S PONTON URANIUM PROJECT In March 2011 Manhattan reported an Inferred Resource for the Double 8 uranium deposit at Ponton in WA of 17.2 million pounds (“Mlb”) of uranium oxide (“U3O8”) at a 200ppm cutoff. This information was prepared and first disclosed under JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. Exploration Results at Ponton, reported on 7 February 2014, have also identified four wide spaced drilled Exploration Targets with tonnage ranges of 4 to 45 million tonnes (“Mt”), grade ranges of 250 to 450ppm U3O8 totalling 33 to 67Mlb U3O8 at the 200ppm U3O8 cutoff. In accordance with clause 17 of the JORC Code 2012, the potential quantity and grade reported as Exploration Targets 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 Mineral Resource. The four Exploration Targets reported for the Ponton project are: • 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 6 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT REVIEW OF OPERATIONS REVIEW OF OPERATIONS The Double 8 Resource Estimate and the Double 8, Stallion South, Highway South and Ponton Exploration Targets reported here were prepared by the Company’s independent resource consultants Hellman & Schofield. The Double 8 uranium deposit and the four Exploration Targets at Double 8, Stallion South, Highway South and Ponton are all located on granted exploration licence, E28/1898, located mostly within the Queen Victoria Spring Nature Reserve (“QVSNR”) (Figures 2 & 3). FIGURE 2: MANHATTAN’S PONTON TENEMENTS The four Exploration Targets reported are based on actual exploration results including Manhattan’s aircore and sonic drilling of over 760 holes and 52,700 metres of drilling along the palaeochannels immediately to the north of QVSNR, over 50km of conductive palaeochannels defined by the Company’s airborne EM and magnetic surveys within QVSNR (Figure 3) and uranium mineralised sands discovered in previous drilling of 114 holes and 6,900 metres of drilling and down hole gamma logging by PNC Exploration (“PNC”) and Uranerz Limited (“Uranerz”) in the area. Manhattan is now seeking exploration access approval to exploration licence E28/1898 located mostly within the QVSNR. The licence was granted in August 2011. On gaining exploration access to E28/1898 Manhattan will recommence drill testing and evaluation of the Double 8 uranium deposit and the four Exploration Targets identified at Double 8, Stallion South, Highway South and Ponton prospects where resource definition drilling will underpin the future development of the project. MANHATTAN CORPORATION LIMITED 7 2015 ANNUAL REPORT REVIEW OF PROJECTS 1. PONTON PROJECT (WA) Interest: Manhattan 100% Operator: Manhattan Corporation Limited REVIEW OF OPERATIONS The Ponton project area is underlain by Tertiary palaeochannels within the Gunbarrel Basin. Carbonaceous sand hosted uranium mineralisation, below 40 to 70 metres of cover, has now been defined by drilling along 55 kilometres of the 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 ISR metal recovery, the lowest cost method of producing yellowcake with the least environmental impact. Within E28/1898 approximately 6,900 metres of drilling, in 114 drill holes, was drilled and down hole gamma logged by PNC and Uranerz in 1983 to 1986. This drilling discovered the palaeochannel sand hosted uranium mineralisation at Double 8, Stallion South, Highway South and Ponton (Figure 3). Manhattan has obtained and compiled all the PNC and Uranerz exploration results including the geological drill logs, assay results, down hole gamma logs, logging tool calibrations and estimated disequilibrium factors. These drill logs and gamma logs have been digitised and verified by Manhattan’s independent consultants 3D Exploration Pty Ltd. Forty four (44) of these drill holes were drilled into the Double 8 deposit. Double 8 was found to host roll-front or tabular type uranium mineralisation in the lower parts of the palaeochannel (40 to 70 metres depth) in reduced sands. The uranium mineralisation was drill intersected in an area along approximately nine kilometres of the palaeochannel, at widths of approximately 500m on average and down hole thicknesses of 3 to 25 metres. From December 2009 to December 2010 Manhattan drilled over 52,700 metres of aircore and sonic drilling in 767 holes along the palaeochannels at Ponton to the north of the QVSNR. Manhattan’s exploration and drilling results and the historic PNC and Uranerz data have been reviewed and the Inferred Resource estimated for Double 8 and Exploration Targets reported for Double 8, Stallion South, Highway South and Ponton prospects. FIGURE 3: DOUBLE 8 RESOURCE, STALLION SOUTH, HIGHWAY SOUTH & PONTON EXPLORATION TARGETS ET ET ET ET 8 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT   2. DOUBLE 8 URANIUM DEPOSIT (WA) Interest: Manhattan 100% Operator: Manhattan Corporation Limited REVIEW OF OPERATIONS REVIEW OF OPERATIONS 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). 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. This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. Double 8 Inferred Resources DOUBLE 8 INFERRED RESOURCE ESTIMATES CUTOFF GRADE U3O8 (ppm) 100 150 200 250 TONNES (MILLION) GRADE U3O8 (ppm) TONNES U3O8 (t) 110 51 26 14 170 240 300 360 18,700 12,240 7,800 5,040 POUNDS (MILLION) U3O8 (Mlb) 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 EXPLORATION TARGET The Double 8 Exploration Target, reported in January 2014, is based on 44 drill holes totalling approximately 2,700 metres of drilling and down hole gamma logs in areas of the deposit where drill spacing is considered too wide to define a Mineral Resource to an inferred resource status. Exploration Results have identified a drilled Exploration Target with uranium mineralisation potential, at a 200ppm U3O8 cutoff, at Double 8 of 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 Exploration Target DOUBLE 8 EXPLORATION TARGET 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 17 of the JORC Code 2012, the potential quantity and grade reported as Exploration Targets 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 Mineral Resource. MANHATTAN CORPORATION LIMITED 9 2015 ANNUAL REPORT REVIEW OF OPERATIONS REVIEW OF OPERATIONS The uranium mineralisation at Double 8 remains open and is yet to be closed off by drilling. Manhattan considers that further infill drilling, on 100m x 400m centres, 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 2012. On gaining exploration access to E28/1898, and approval of Manhattan’s Program of Work (“POW”) by the Department of Mines and Petroleum (“DMP”), the Company plans to complete approximately 200 aircore drill holes for 16,000 metres of infill resource definition drilling on 400 x 100m centres along the defined palaeochannel within the reported Inferred Resource area at Double 8. This drilling program, including the resource definition drilling planned for the Stallion South, Highway South and Ponton prospects, will be completed within approximately one year of POW approval (Figure 3). 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 EXPLORATION TARGET The Stallion South Exploration Target, reported in January 2014, is based on 13 drill holes totalling approximately 780 metres of drilling and down hole gamma logs. This drilling, on approximately 400m x 3km centres along the palaeochannel, is considered too wide to define a Mineral Resource to an inferred resource status. Exploration Results have identified a drilled Exploration Target 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 Exploration Target STALLION SOUTH EXPLORATION TARGET 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 17 of the JORC Code 2012, the potential quantity and grade reported as Exploration Targets 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 Mineral Resource. On gaining exploration access to E28/1898, and approval of Manhattan’s POW by DMP, the Company plans to complete approximately 250 aircore drill holes for 20,000 metres of infill resource definition drilling on 400 x 100m centres along the defined palaeochannel at Stallion South. This drilling program, including the resource definition drilling planned for Double 8 and the Highway South and Ponton prospects, will be completed within approximately one year of POW approval (Figure 3). 10 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT REVIEW OF OPERATIONS 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 EXPLORATION TARGET The Highway South Exploration Target, reported in January 2014, is based on 33 drill holes totalling approximately 1,980 metres of drilling and down hole gamma logs. This drilling, on approximately 400m x 2km centres along the palaeochannel, is considered too wide to define a Mineral Resource to an inferred resource status. Exploration Results have 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. Highway South Exploration Target HIGHWAY SOUTH EXPLORATION TARGET 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 17 of the JORC Code 2012, the potential quantity and grade reported as Exploration Targets 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 Mineral Resource. On gaining exploration access to E28/1898, and approval of Manhattan’s POW by DMP, the Company plans to complete approximately 250 aircore drill holes for 20,000 metres of infill resource definition drilling on 400 x 100m centres along the defined palaeochannel at Highway South. This drilling program, including the resource definition drilling planned for Double 8 and the Stallion South and Ponton prospects, will be completed within approximately one year of POW approval (Figure 3). 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. MANHATTAN CORPORATION LIMITED 11 2015 ANNUAL REPORT REVIEW OF OPERATIONS PONTON EXPLORATION TARGET The Ponton Exploration Target, reported in January 2014, is based on 24 drill holes totalling approximately 1,440 metres of drilling and down hole gamma logs. This drilling, on approximately 1km x 1km centres along the palaeochannel, is considered too wide to define a Mineral Resource to an inferred resource status. Exploration Results have identified drilled Exploration Targets with uranium mineralisation potential, at a 200ppm U3O8 cutoff, for the Ponton prospect of 23 to 45Mt grading 250 to 350ppm U3O8 containing 6,800 to 13,600 tonnes or 15 to 30Mlb of contained U3O8. Ponton Exploration Target PONTON EXPLORATION TARGET 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 17 of the JORC Code 2012, the potential quantity and grade reported as Exploration Targets 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 Mineral Resource. On gaining exploration access to E28/1898, and approval of Manhattan’s POW by DMP, the Company plans to complete approximately 300 aircore drill holes for 24,000 metres of infill resource definition drilling on 400 x 100m centres along the defined palaeochannel at the Ponton prospect. This drilling program, including the resource definition drilling planned for Double 8 and the Stallion South and Highway South prospects, will be completed within approximately one year of POW approval (Figure 3). 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 Stallion is being assessed by the Company’s independent resource consultants. The secular disequilibrium data for 205 sonic and aircore drill holes indicates 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 Exploration Targets at Ponton. The application of the high resolution Germanium HpGe down hole probe when drilling recommences, 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 Stallion. The geological controls and style of the palaeochannel sand hosted uranium mineralisation at Stallion are similar to the mineralisation encountered at Double 8. 12 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT REVIEW OF OPERATIONS REVIEW OF OPERATIONS 7. HIGHWAY (WA) Interest: Manhattan 100% Operator: Manhattan Corporation Limited 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 down hole probe when drilling recommences, 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. 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. GARDNER RANGE PROJECT (WA) Interest: Manhattan 40% Operator: Australia Conglin International Investment Group Pty Ltd The Gardner Range project was located in the Tanami region of WA approximately 150km southeast of Halls Creek. Manhattan held a 40% interest in three granted exploration licences covering 195km2 bordering the Northern Territory. Northern Minerals Limited (“Northern”) retained a 60% interest in the Gardner Range JV, were operators and could earn up to an 80% interest in the joint venture by sole funding and completing a mining prefeasibility study. Following a review of the exploration results during the December Quarter 2014 it was decided to avoid further rehabilitation, holding and exploration costs and the three Gardner Range exploration licences were surrendered and the Gardner Range Joint Venture with Northern terminated. MANHATTAN CORPORATION LIMITED 13 2015 ANNUAL REPORT REVIEW OF OPERATIONS REVIEW OF OPERATIONS SUMMARY In March 2011 Manhattan reported Inferred Resource for Double 8 of 17.2Mlb of uranium oxide and in February 2014 the Company reported an additional four drilled Exploration Targets with uranium 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 Exploration Targets in Manhattan’s uranium deposits and prospects at Ponton. The application of the high resolution Germanium HpGe down hole probe, when drilling recommences, is required to establish (with the required statistical confidence) the conversion of the high resolution gamma logs to uranium grades for reporting of future resource estimates at Ponton. The sand hosted uranium mineralisation is located in shallow, 40 to 70 metres deep, contiguous palaeochannels along 55km of strike at Ponton. Manhattan’s three granted Exploration Licences and two EL applications over the prospective palaeochannels at Ponton cover an area of 1,250km2. 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 ISR 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. Whilst renewed confidence in the nuclear power sector, and record new build underway, has led to a recovery of the uranium oxide spot price from a low of US$28lb in mid 2014 to around US$37lb, prices remain flat. With the primary fuel supply shortfall growing the uranium mines needed to feed these plants are still years away according to a report by KPMG. With 67 reactors under construction around the world uranium prices are languishing at about half the level needed to attract investment in new mines. Manhattan is continuing to develop a proposal with the WA government to gain ground access to E28/1898 to commence resource definition drilling on its Double 8, Stallion, Highway and Ponton uranium deposits and advanced prospects in WA. The Company has reduced overheads and operating costs and remains focussed on gaining on the ground access approval at Ponton to move forward with the project’s resource definition, economic and environmental assessments and possible future development. Manhattan maintains an active generative program to identify advanced uranium projects and M&A opportunities to grow the Company and generate additional shareholder value. ALAN J EGGERS Executive Chairman 29 September 2015 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 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves “JORC Code 2012”. 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. 14 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT DIRECTORS' REPORT The Directors have pleasure in presenting their Annual Report and Financial Statements for Manhattan Corporation Limited (“Manhattan”) for the year ended 30 June 2015. 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 $585,255 (2014: $4,273,251) 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 2015 the Company has focussed on exploration and development of its Western Australian uranium project at Ponton. Manhattan’s flagship Ponton uranium 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 1,250km2 of 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. The Company is drill testing and developing palaeochannel sand hosted uranium mineralisation amenable to in-situ metal recovery (“ISR”). 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. In March 2011 Manhattan reported an Inferred Resource for the Double 8 uranium deposit at Ponton in WA of 17.2 million pounds (“Mlb”) of uranium oxide (“U3O8”) at a 200ppm cutoff. This information was prepared and first disclosed under JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. Exploration Results at Ponton, reported in February 2014, have also identified four wide spaced drilled Exploration Targets with tonnage ranges of 4 to 45 million tonnes (“Mt”), grade ranges of 250 to 450ppm U3O8 totalling 33 to 67Mlb U3O8 at the 200ppm U3O8 cutoff. In accordance with clause 17 of the JORC Code 2012, the potential quantity and grade reported as Exploration Targets 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 Mineral Resource. The four Exploration Targets reported for the Ponton project are: • 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 MANHATTAN CORPORATION LIMITED 15 2015 ANNUAL REPORT DIRECTORS' REPORT The Double 8 uranium deposit and the four Exploration Targets at Double 8, Stallion South, Highway South and Ponton are all located on granted exploration licence, E28/1898, located mostly within the Queen Victoria Spring Nature reserve (“QVSNR”). The four Exploration Targets reported are based on actual exploration results including Manhattan’s aircore and sonic drilling of over 760 holes and 52,700 metres of drilling along the palaeochannels immediately to the north of the QVSNR, over 50km of conductive palaeochannels defined by the Company’s airborne EM and magnetic surveys within QVSNR and uranium mineralised sands discovered in previous drilling of 114 holes and 6,900 metres of drilling and down hole gamma logging by PNC Exploration (“PNC”) and Uranerz Limited (“Uranerz”) in the area. 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. Manhattan is now seeking exploration access approval to exploration licence E28/1898 located mostly within the QVSNR. The licence was granted in August 2011. On gaining exploration access to E28/1898 Manhattan will recommence drill testing and evaluation of the Double 8 uranium deposit and the four Exploration Targets identified at Double 8, Stallion South, Highway South and Ponton prospects where resource definition drilling will underpin the future development of the project. During the year the Gardner Range Joint Venture with Northern Minerals Limited was terminated following the surrender of all tenements to avoid further exploration and development expenditures. 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. 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 14 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. 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. 16 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT DIRECTORS' REPORT 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). In accordance with ASX Listing Rule 4.10.3 the Company has elected to publish its Corporate Governance Statement on the Company web site at www.manhattancorp.com.au/ corporategovernance . 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, iron ore, 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 capitalisation 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 a director and Executive Chairman of unlisted Trans-Tasman Resources Limited (1 October 2014 to current), director of Ocean Technologies Limited (19 December 2014 to current), managing director of Wesmin Corporate 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. 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 director of Energia Minerals Ltd (7 October 2014 to current) and was formerly a director of Sphere Minerals Limited (2 June 1999 to 17 November 2010), Tianshan Goldfields Limited (2 February 2009 to 13 November 2010), Forge Group Limited (4 June 2007 to 24 October 2013), Lemur Resources Ltd (8 November 2010 to 5 November 2013) and Style Ltd (17 May 2013 to 10 August 2015). 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 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. Mr Seton also holds a number of private company directorships. MANHATTAN CORPORATION LIMITED 17 2015 ANNUAL REPORT DIRECTORS' REPORT Robert (Sam) Middlemas B.Com, PGradDipBus., CA COMPANY SECRETARY Sam Middlemas was appointed Company Secretary and Chief Financial Officer on 3 March 2009. Sam is a chartered accountant with more than 20 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 2015 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. (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. 18 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT DIRECTORS' REPORT 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 non executive Director’s fees were reduced in 2014 from $35,000 per annum to $17,500 per annum to conserve the Company’s cash reserves and have applied during the current Financial Year. It is intended these Director’s fees will be reinstated to the original annual rate when the Company’s financial position allows. Base Fees 2015 2014 Non Executive Directors $17,500 $17,500 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 9.5%) 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. • 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. MANHATTAN CORPORATION LIMITED 19 2015 ANNUAL REPORT DIRECTORS' REPORT (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 Marcello Cardaci Non Executive Director Non Executive Director John A G Seton Executive Chairman In addition, the following persons must be disclosed under the Corporations Act 2001 as Company Executives: Robert (Sam) Middlemas Company Secretary. Directors and Executives Remuneration 1 Mr Eggers was appointed Executive Chairman on 21 July 2009. All fees were paid under a Consultancy Agreement with Wesmin Corporate 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 2015. 20 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT DIRECTORS' REPORT (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. Alan J Eggers Executive Chairman • • • Services provided by consulting company Wesmin Corporate Pty Ltd (“Wesmin”); Term of agreement. Continues indefinitely until cancelled by the Company or the Executive; Consulting fees of $360,000 per annum plus reimbursement of relevant expenses and costs. In 2014 the consulting fees were reduced to $210,000 per annum to conserve the Company’s cash reserves and have applied during the current Financial Year. It is intended these consulting fees will be reinstated to the original annual rate when the Company’s financial position allows. • Agreement and fees reviewed by a committee of the Board of Directors on a regular basis; 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 2015) 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 28 November 2014 28 November 2014 28 November 2019 21 JULY 2009 21 JULY 2010 21 JULY 2014 21 JULY 2009 21 JULY 2011 21 JULY 2014 $0.10 $0.60 $1.00 0.013 0.350 0.320 100% 100% 100% Options granted carry no dividend or voting rights. During the year there were 15,000,000 options provided as remuneration to Directors and Key Management Personnel of the Company. All options issued 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 (2014: Nil) by a Company Director or officer during the Financial Year ended 30 June 2015. During the year the 7,500,000 incentive options issued in 2009 all expired unexercised. MANHATTAN CORPORATION LIMITED 21 2015 ANNUAL REPORT DIRECTORS' REPORT Further information on the options is set out in Note 17 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. (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. Options issued to Directors and Key Management Personnel as at 30 June 2015 were as follows: Directors of Manhattan Year Granted Vested Percentage Financial Years in Which Options Vested Number of Options Issues (1) Maximum Total Value of Grant Yet to Vest Alan J Eggers Marcello Cardaci John A G Seton Key Management Personnel Sam Middlemas 2015 2015 2015 2015 100 100 100 100 2015 2015 2015 9,000,000 2,000,000 2,000,000 2015 2,000,000 $ - - - - (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 Option Over Ordianry Shares) Alan J Eggers Marcello Cardaci John A G Seton 31,257,311 2,815,726 26,658,721 9,000,000 2,000,000 2,000,000 22 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT DIRECTORS' REPORT SHARES UNDER OPTION Unissued ordinary shares of Manhattan under option at the date of this Report are as follows: Date Options Granted Expiry Date Issue Price of Shares Number Under Option 28 November 2014 28 November 2019 $0.10 15,000,000 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. 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 6 6 6 6 6 6 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. 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: MANHATTAN CORPORATION LIMITED 23 2015 ANNUAL REPORT DIRECTORS' REPORT Audit Services Number Eligible to Attend Number Attended Rothsay Chartered Accountants Audit and Review of Financial Statements Tax Work Under the Corporations Act 2001 Total Remuneration for Audit Services DIRECTORS’ AND OFFICERS INSURANCE $ 12,000 3,500 15,500 $ 9,500 4,000 13,500 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 27 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 29 September 2015 ALAN J EGGERS Executive Chairman 24 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT AUDITOR'S REPORT AUDITOR'S REPORT MANHATTAN CORPORATION LIMITED 25 2015 ANNUAL REPORT AUDITOR'S REPORT 26 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT AUDITOR'S DECLARATION AUDITOR'S DECLARATION MANHATTAN CORPORATION LIMITED 27 2015 ANNUAL REPORT FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Year Ended 30 June 2015 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 2015 2014 $ 9,547 $ 23,771 (736,911) (4,713,908) (339) (1,174) (727,703) (4,691,311) 142,448 418,060 (585,255) (4,273,251) (585,255) (4,273,251) (0.52) cents (4.2) cents (0.52) cents (4.2) 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. 28 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT FINANCIAL STATEMENTS FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2015 Note 2015 10 11 13 12 $ 439,291 77,430 516,721 - 5,122,934 5,122,934 2014 $ 733,845 141,070 874,915 - 5,122,934 5,122,934 5,639,655 5,997,849 ASSETS Current Assets Cash and Cash Equivalents Trade and Other Receivables 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 14 Provisions Total Current Liabilities 47,000 - 47,000 22,574 - 22,574 TOTAL LIABILITIES 47,000 22,574 NET ASSETS EQUITY Contributed Capital Reserves Accumulated Losses 5,592,655 5,975,275 15 16 16,893,633 4,857,328 16,893,633 4,654,693 (16,158,306) (15,573,051) TOTAL EQUITY 5,592,655 5,975,275 The Consolidated Statement of Financial Position should be read in conjunction with the accompanying Notes that form part of these Financial Statements. MANHATTAN CORPORATION LIMITED 29 2015 ANNUAL REPORT FINANCIAL STATEMENTS FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Year Ended 30 June 2013 Consolidated Contributed Equity Options Reserve Accumulated Losses Total Balance at 1 July 2013 Total Comprehensive Income Transactions with Owners in Their Capacity as Owners Shares Issued During the Year Directors, Employees and Consultants Options Balance at 30 June 2014 Total Comprehensive Income Transactions with Owners in their Capacity as Owners Shares Issued During the Year Balance at 30 June 2015 $ $ $ $ 16,343,633 4,654,693 (11,299,800) 9,698,526 - 550,000 - - - - (4,273,251) (4,273,251) - - 550,000 - 16,893,633 4,654,693 (15,573,051) 5,975,275 - - - - (585,255) (585,255) - 202,635 16,893,633 4,857,328 (16,158,306) 5,592,655 The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes that form part of these Financial Statements. 30 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT FINANCIAL STATEMENTS FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended 30 June 2015 Note 2015 2014 Cash Flows From Operating Activities Payments to Suppliers and Employees Interest Received $ (246,540) 9,547 Net Cash Flows From/(Used In) Operating Activities 21 (236,993) 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 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 10 185,852 - (243,413) (57,561) - - (294,554) 733,845 439,291 $ (529,249) 12,548 (516,701) 440,560 11,225 (399,145) 52,640 550,000 550,000 85,939 647,906 733,845 The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes that form part of these Financial Statements. MANHATTAN CORPORATION LIMITED 31 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS For the Year Ended 30 June 2015 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 $585,255 (2014: $4,273,251) and a net cash outflow from operating activities of $236,993 (2014: $516,701). At 30 June 2015 the Group had cash assets of $439,291 (2014: $733,845) and working capital of $469,721 (2014: $852,341). The Company has reduced operating cash outflow to minimal levels while it assesses the market and opportunities. Based on this fact, the Directors consider it appropriate that the finance report be prepared on a going concern basis. 32 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (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 2015 and the results of the subsidiary for the year then ended. 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. MANHATTAN CORPORATION LIMITED 33 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS 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. 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. 34 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (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. (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. MANHATTAN CORPORATION LIMITED 35 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (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. 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 36 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS 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. 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. MANHATTAN CORPORATION LIMITED 37 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (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"). (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. 38 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (q) New Accounting Standards and UIG Interpretations Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2015 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. 4. FINANCIAL RISK MANAGEMENT TThe 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. MANHATTAN CORPORATION LIMITED 39 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (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 $516,721 (2014: $874,915). The following financial assets of the Group are neither past due or impaired: FINANCIAL ASSETS Cash and Cash Equivalents Trade and Other Receivables Total 2015 $ 439,291 77,430 516,721 2014 $ 733,845 141,070 874,915 40 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (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 $47,000 (2014: $22,574). 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 2015 2014 Other Revenue From Continuing Operations Interest Revenue from Sale of Investments Total $ 9,547 - 9,547 $ 12,546 11,225 23,771 MANHATTAN CORPORATION LIMITED 41 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS 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 2015 $ - 3,801 - 27,382 29,060 7,505 82,025 243,412 38,943 202,635 102,148 736,911 2015 $ 339 2014 $ 16,500 775 2,185 35,595 27,630 162,137 175,090 4,198,594 31,500 - 63,902 4,713,908 2014 $ 1,174 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: 42 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS EARNINGS (LOSS) PER SHARE Basic Loss Per Share Loss Used in Calculating EPS 2015 $ (0.005) (585,255) 2014 $ (0.042) (4,273,251) Weighted Average Number of Ordinary Shares Number Number Outstanding During the Year Used in Calculating Basic EPS 111,476,273 102,495,451 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 2015. 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 2015 $ 2014 $ (67,500) (112,500) - (74,948) (142,448) - (305,560) (418,060) (b) Deferred Income Tax Expense Comprises DEFERRED INCOME TAX EXPENSE (Decrease)/Increase in Deferred Tax Asset (Decrease)/Increase in Deferred Tax Liability Total Deferred Income Tax Expense 2015 $ - - - 2014 $ - - - No deferred tax has been recognised in either the Income Statement or directly in equity. MANHATTAN CORPORATION LIMITED 43 2015 ANNUAL REPORT (c) Reconciliation of Income Tax Expense to Prima Facie Tax Payable NOTES TO THE FINANCIAL STATEMENTS 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 2015 $ (727,702) (218,311) 2014 $ (4,691,311) (1,407,393) (73,024) (1,139,872) - - - 45,000 - 101,787 (1,500) (67,500) (67,500) - 1,582 - 75,000 5,912 199,787 (2,936) (112,500) (112,500) (d) Tax Losses and Other Timing Differences for Which No Deferred Tax Asset has been Recognised TAX LOSSES RECOGNISED 2015 $ 2014 $ Unused Tax Losses with no Deferred Tax Asset Recognised 4,084,605 4,008,438 Accrued Superannuation/Provision for Annual Leave 600 2,100 Total Tax Losses 4,085,205 4,010,538 The Group has tax losses arising in Australia of $13,617,350 ($4,085,205 at 30% tax rate) (2014: $4,008,438) 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. 44 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT 10. CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS Cash at Bank and In Hand Deposits at Call Total Cash and Cash Equivalents NOTES TO THE FINANCIAL STATEMENTS 2015 $ 16,784 422,507 439,291 2014 $ 1,174 732,671 733,845 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 2015 $ 8,135 69,095 200 77,430 2014 $ 12,436 112,500 16,134 141,070 Due to the short term nature of these receivables the carrying values represent their respective fair values at 30 June 2015. 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. MANHATTAN CORPORATION LIMITED 45 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS 12. 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 2015 $ 5,122,934 243,412 (243,412) 5,122,934 2014 $ 8,922,510 399,018 (4,198,594) 5,122,934 13. PROPERTY, PLANT AND EQUIPMENT (NON CURRENT) PROPERTY, PLANT AND EQUIPMENT Computer Equipment and Software Cost or Fair Value Accumulated Depreciation Net Book Amount Opening Net Book Amount Additions Disposals Depreciation Charge for the Year Closing Net Book Amount 14. TRADE AND OTHER PAYABLES (CURRENT) TRADE AND OTHER PAYABLES Trade Payables Other Creditors Total Trade and Other Payables 2015 $ 2015 $ - - - - - - - - - 47,000 47,000 2014 $ 48,909 (48,909) - 2,185 - - (2,185) - 2014 $ 9,759 12,815 22,574 Trade payables and other creditors are non interest bearing and will be settled on 30 to 60 day terms. 46 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS 15. ISSUED CAPITAL (a) Ordinary Shares ISSUED CAPITAL NOTE 2015 2014 2015 2014 Ordinary Shares Shares Shares $ $ Issued and Fully paid (a) 111,476,273 100,476,273 16,893,633 16,343,633 Total Contributed Equity 111,476,273 100,476,273 16,893,633 16,343,633 (b) Share Movements During the Year SHARE MOVEMENTS 2015 2014 Number of Shares $ Number of Shares $ 1 July 2014 111,476,273 16,893,633 100,476,273 16,343,633 New Shares Issued During Year Placement of Securities at 5 cents Share Issue costs 30 June 2015 - - 11,000,000 550,000 - 111,476,273 16,893,633 111,476,273 16,893,633 (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. 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. MANHATTAN CORPORATION LIMITED 47 2015 ANNUAL REPORT CAPITAL RISK MANAGEMENT Total Borrowings Less Cash and Cash Equivalents 10 Net Cash Total Equity Total Capital 16. RESERVES SHARE BASED PAYMENT RESERVE Balance at Beginning of the Year Share Based Payments Total Share Based Payments Reserve Nature and Purpose of Reserves NOTES TO THE FINANCIAL STATEMENTS 2015 $ - 439,291 439,291 2014 $ - 733,845 733,845 5,592,655 6,031,946 5,975,274 6,709,119 2015 $ 4,654,693 202,635 4,857,328 2014 $ 4,654,693 - 4,654,693 The share based payment reserve is used to recognise the fair value of options issued to Directors, consultants and employees. 17. KEY MANAGEMENT PERSONNEL DISCLOSURES (a) Directors The following persons were Directors of Manhattan during the Financial Year: Name Alan J Eggers Marcello Cardaci John A G Seton Position Executive Chairman Non Executive Director Non Executive Director (b) Key Management Personnel The following persons were Key Management Personnel of Manhattan during the Financial Year: Name Sam Middlemas Position Company Secretary 48 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (c) Key Management Personnel Compensation KEY MANAGEMENT PERSONNEL COMPENSATION 2015 $ 2014 $ Short Term Employee Benefits 275,545 275,545 Post Employment Benefits Share Based Payments Total Compensation - - - - 275,545 275,545 (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 EXPIRED BALANCE AT END OF YEAR VESTED AND EXERCISABLE UNVESTED Directors Alan Eggers 4,500,000 9,000,000 Marcello Cardaci1 1,000,000 2,000,000 John Seton 1,000,000 2,000,000 Key Management Personnel Sam Middlemas 1,000,000 2,000,000 Total 7,500,000 15,000,000 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 - - - - - 2015 - - - - - 2014 - - - - - (4,500,000) 9,000,000 9,000,000 (1,000,000) 2,000,000 2,000,000 (1,000,000) 2,000,000 2,000,000 (1,000,000) 2,000,000 2,000,000 (7,500,000) 15,000,000 15,000,000 - - - - - 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 Mr Marcello Cardaci has an indirect interest via a current association with the trustee of Pollara Trust with respect to the Options. Registered holder is Pollara Pty Ltd as trustee of the Pollara Trust. MANHATTAN CORPORATION LIMITED 49 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (iii) Share Holdings The numbers of shares in the Company held during the Financial Year by each Director of Manhattan Corporation 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 Total 2015 30,901,461 355,850 2,815,726 3,407,260 1,160,726 38,285,173 31,201,461 2,815,726 3,407,260 - - - 355,850 2014 - - - 780,726 38,205,173 380,000 380,000 - - - - - 31,257,311 2,815,726 3,407,260 1,160,726 38,641,023 (300,000) 30,901,461 - - - - 2,815,726 3,407,260 1,160,726 38,285,173 (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 Corporate Pty Ltd (“Wesmin”). Wesmin has provided his services as Executive Chairman, personnel, office premises and administration staff to a value of $211,551 (2014: $374,629) 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 $2,826 (2014: $775) to Manhattan during the year on normal commercial terms. 50 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (iii) Sam Middlemas Sam Middlemas is a director of Sparkling Investments Pty Ltd (“Sparkling Investments”). Sparkling Investments has provided company secretarial services of $29,060 (2014: $27,630) to Manhattan during the year on normal commercial terms. 18. NON CASH INVESTING AND FINANCING ACTIVITIES There were no non cash investing or financing activities during the year ended 30 June 2015. 19. 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 2015. 20. AUDITOR’S REMUNERATION AUDIT SERVICES 2015 2014 Rothsay Chartered Accountants Audit and Review of Financial Statements Tax Work under the Corporations Act 2001 Total Remuneration for Audit Services $ 12,000 3,500 15,500 $ 9,500 4,000 13,500 21. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES 2015 $ 2014 $ (Loss) after Income Tax for the Period (585,255) (4,273,251) Adjustments for: Depreciation Expense Exploration Provisions (Profit)/Loss on Trading Securities Share Based Payments Expense Taxation movements (Increase)/Decrease in Trade and Other Receivables (Increase)/Decrease in Prepayments (Increase)/Decrease in Provisions (Increase)/Decrease in Trade and Other Payables Cash Flow from/(Used In) Operations - 243,412 - 202,635 (142,448) - (15,935) - 60,598 (236,993) 2,185 4,198,594 5,275 - (418,060) 593 (15,935) (9,314) (6,790) (516,703) MANHATTAN CORPORATION LIMITED 51 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS 22. SHARE BASED PAYMENTS (a) Options The following share based payment arrangements to Directors and employees existed at 30 June 2015. 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. GRANT DATE EXPIRY DATE EXERCISE PRICE BALANCE AT START OF YEAR ISSUED DURING THE YEAR EXPIRED DURING THE YEAR BALANCE AT END OF YEAR VESTED & EXERCISABLE AT END OF YEAR 21 July 2009 21 July 2014 $0.60 5,050,000 21 July 2009 21 July 2014 $1.00 4,050,000 2015 12 March 2010 12 March 2015 12 March 2010 12 March 2015 28 November 2014 28 November 2019 $1.80 $2.20 $0.10 100,000 100,000 - - - - 5,050,000 4,050,000 100,000 100,000 - - - - - - - - - 15,000,000 - 15,000,000 15,000,000 Total Options 9,300,000 15,000,000 9,300,000 15,000,000 15,000,000 2014 21 July 2009 21 July 2014 $0.60 5,550,000 - (500,000) 5,050,000 5,050,000 21 July 2009 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 4.42 years. (b) Expenses Arising From Share Based Payment Transactions There were no share based transactions during the year. 52 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT 23. 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 NOTES TO THE FINANCIAL STATEMENTS 2015 $ 2014 $ 432,654 755,385 12,960,766 13,275,162 232,852 6,212,726 6,748,040 16,893,633 4,857,328 463,134 6,443,008 6,832,154 16,893,633 4,654,693 (15,002,921) (14,716,172) 6,748,040 (286,749) (286,749) 6,832,154 (4,446,096) (4,446,096) 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. 24. 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 2015 $ 66,008 428,000 494,008 2014 $ 32,864 211,000 243,864 (b) Capital or Leasing Commitments There are no capital or leasing commitments as at 30 June 2015. 25. CONTINGENT LIABILITIES AND CONTINGENT ASSETS The Directors are of the opinion that there are no contingent liabilities or contingent assets as at 30 June 2015. MANHATTAN CORPORATION LIMITED 53 2015 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS 26. INTERESTS IN JOINT VENTURES Manhattan had the following Joint Venture Interest: Gardner Range Farm In and Joint Venture Agreement The Gardner Range tenements were subject to the Gardner Range Farm In and Joint Venture Agreement dated 15 October 2009 ("Gardner Range JV"). The joint venture was not a separate legal entity. It was a contractual arrangement between the participants under the signed JV agreement. The Gardner Range project was located in the Tanami region of WA approximately 150km southeast of Halls Creek. Manhattan held a 40% interest in three granted exploration licences covering 195km2 bordering the Northern Territory. Northern Minerals Limited (“Northern”) retained a 60% interest in the Gardner Range JV, were operators and could earn up to an 80% interest in the joint venture by sole funding and completing a mining prefeasibility study. Following a review of the exploration results during the December Quarter 2014 it was decided to avoid further rehabilitation, holding and exploration costs and the three Gardner Range exploration licences were surrendered and the Gardner Range Joint Venture with Northern terminated. 54 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT 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 28 to 54 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 2015 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 2015, 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 2015. 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 29 September 2015 MANHATTAN CORPORATION LIMITED 55 2015 ANNUAL REPORT ASX ADDITIONAL INFORMATION Additional information required by ASX Limited Listing Rules not disclosed elsewhere in this 2015 Annual Report is set out below. 1. ANALYSIS OF SHAREHOLDINGS As at 28 September 2015 Manhattan Corporation Limited has on issue 111,476,273 ordinary shares. All issued ordinary fully paid shares carry one vote per share. There are six hundred and thirty four (634) holders of fully paid ordinary shares on Manhattan’s share register as at 28 September 2015. 1.1 Top Twenty Shareholders The names of shareholders in Manhattan’s Top Twenty as at 28 September 2015 are as follows: Forsyth Barr Custodians Ltd 2,909,073 TOP 20 SHAREHOLDERS Rank Holder 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Minvest Securities (New Zealand) Limited Nicholas P S Olissoff HSBC Custody Nominees (Australia) Limited Alan J Eggers & Associates Edwin Spruce Arron & Jack Tone Arron Investment Custodial Services Limited Claymore Trustees Limited Robert Simeon Lord Pollara Pty Ltd Residuum Nominees Pty Ltd Sundowner International Limited HSBC Custody Nominees (Australia) Limited Custodial Services Limited UBS Wealth Management Australia Nominees Pty Ltd Clive James Currie Nefco Nominees Pty Ltd Robert Christopher Wrixon Michael Ashforth Jennifer Florence Fowler TOTAL Number Percentage 23,251,461 20.86 9,559,462 7,979,038 8,005,850 4,358,260 4,229,000 3,407,260 3,000,000 2,815,726 2,350,000 2,303,452 1,950,000 1,890,467 1,617,961 1,500,000 1,223,000 1,000,000 947,178 900,000 8.58 7.16 7.18 3.91 3.79 3.06 2.69 2.61 2.53 2.11 2.07 1.75 1.70 1.45 1.35 1.10 0.90 0.85 0.81 85,197,188 76.43 56 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT ASX ADDITIONAL INFORMATION 1.2 Spread of Security Holders As at 28 September 2015 Manhattan had 634 holders of ordinary shares with the spread of security holders as follows: SPREAD OF SECURITY HOLDERS Size of Holding Number of Holders Shares Held Percentage Held 1 1,001 5,001 10,001 100,001 - - - - - 1,000 5,000 10,000 100,000 Over TOTAL 57 152 118 230 77 634 35,026 471,402 1,010,710 8,220,245 101,738,890 111,476,273 0.03 0.42 0.91 7.37 91.27 100.00 1.3 Minimum Holdings and Marketable Parcels As at 28 September 2015 there were three hundred and fifty two (352) holders holding less than a Marketable Parcel of ordinary shares as defined in Chapter 19 of the ASX Listing Rules. A Marketable Parcel is a parcel of securities (ordinary shares) of not less than A$500.00 based on the closing price on SEATS. 1.4 Unlisted Options The unissued ordinary shares of Manhattan under option as at 28 September 2015 total 15,000,000 options. The options do not carry a right to vote at a general meeting of shareholders. Manhattan’s unlisted option details are as follows: UNLISTED OPTIONS Vesting Date Exercise Price Number of Options Number of Holders Expiry Date 28 November 2014 $0.10 15,000,000 4 28 November 2019 TOTAL 15,000,000 1.5 Restricted Securities Subject to Escrow Period As at 28 September 2015 the Company had no ordinary shares or options with rights to acquire ordinary shares the subject of escrow. MANHATTAN CORPORATION LIMITED 57 2015 ANNUAL REPORT ASX ADDITIONAL INFORMATION 1.6 Substantial Shareholders The following are registered by the Company as at 28 September 2015 as substantial security holders in the Company, having declared the following relevant interests in voting securities in terms of section 671B of the Corporations Act 2001: SUBSTANTIAL SHAREHOLDERS Substancial Security Holder Number Percentage Alan J Eggers and Associates John Andrew Gowans Seton and Associates Nicholas P S Olissoff CQS Asset Management Limited TOTAL 31,257,311 26,658,721 9,559,462 9,180,000 76,655,534 28.04 23.91 8.58 8.23 68.76 1.7 Share Registrar Manhattan’s share register is maintained in Perth at: Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace PERTH WA 6000 Investor Enquiries: 1300 787 272 (within Australia) International: Facsimile: Web Site: +61 3 9415 4000 +61 8 9323 2033 www.computershare.com.au 1.8 Voting Rights On a show of hands every shareholder present in person or by a proxy shall have one vote and upon a poll each fully paid ordinary share shall have one vote. 1.9 Stock Exchange Listings Manhattan’s ordinary shares have been granted quotation on the Australian Stock Exchange Limited (“ASX”). ASX code MHC. 1.10 On Market Buyback Currently, there is no on market buy back of the Company’s securities. 58 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT ASX ADDITIONAL INFORMATION 2. TENEMENT SCHEDULE As at 28 September 2015 Manhattan held interests in the following exploration tenements: WESTERN AUSTRALIA Tenement Number Project Registered Holder(s) Manhattan’s Interest Date Granted Expiry Date Area Notes E39/1143 Ponton E28/1523 Ponton E28/1898 Ponton E39/1782 Ponton E28/2454 Ponton MHC MHC MHC MHC MHC 100% 100% 100% 100% 100% 24 Aug 2006 23 Aug 2015 35 sub blocks (1) 26 Nov 2008 25 Nov 2015 20 sub blocks 11 Aug 2011 10 Aug 2016 56 sub blocks 10 July 2015 9 July 2020 189 sub blocks App App 121 sub blocks (2) NOTES (1) (2) Application for Extension of Term lodged with DMP Application lodged with DMP on 28 February 2014 ABBREVIATIONS E Exploration Licence WA DMP Western Australian Department of Mines and Petroleum km2 App Square Kilometre MHC Manhattan Corporation Limited ABN 61 123 156 089 Application Lodged AREAS Western Australia 1 Sub block Ponton Project 421 sub blocks Total Area 2.97km2 1,250km2 MANHATTAN CORPORATION LIMITED 59 2015 ANNUAL REPORT NOTES 60 MANHATTAN CORPORATION LIMITED 2015 ANNUAL REPORT BUSINESS OFFICE Level 1 37 Ord Street West Perth WA 6005 PO Box 1038 West Perth WA 6872 Telephone : +61 8 9322 6677 Facsimile : +61 8 9322 1961 Email Website : info@manhattancorp.com.au : www.manhattancorp.com.au