Manhattan Corporation Limited
Annual Report 2018

Plain-text annual report

ABN 61 123 156 089 Annual Report 30 June 2018 Manhattan Corporation Limited CONTENTS Corporate Directory Directors’ Report Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Consolidated Statement of Changes in Equity Notes to the Financial Statements Directors’ Declaration Auditor’s Independence Declaration Independent Audit Report ASX Additional Information PAGE NO 1 2 18 19 20 21 22 39 40 41 45 Manhattan Corporation Limited CORPORATE DIRECTORY Directors Mr Marcello Cardaci (Non-Executive Chairman) Mr Robert Perring (Non-Executive Director) Mr John Seton (Non-Executive Director) Company Secretary Ms Eryn Kestel Registered Office Level 2 33 Colin Street West Perth WA 6005 Telephone: +61 8 9322 6677 Facsimile: Website: Email: +61 8 9322 1961 www.manhattancorp.com.au info@manhattancorp.com.au Share Registry Computershare Investor Services Pty Ltd Level 2 Reserve Bank Building 45 St Georges Terrace Perth WA 6000 Australia Telephone: 1 300 850 505 Facsimile: + 61 8 9323 2033 Auditors Rothsay Chartered Accountants Level 1, Lincoln House 4 Ventnor Avenue, West Perth WA 6005 Securities Exchange The Company’s securities are quoted on the official list of the Australian Securities Exchange Limited, the home branch being Perth. ASX Code: MHC Manhattan Corporation Limited 1 2018 Annual Report to Shareholders Directors Report The Directors present their report for Manhattan Corporation Limited (“Manhattan” or “the Company”) and its subsidiaries (“the Group”) for the year ended 30 June 2018. DIRECTORS The names, qualifications and experience of the Company’s Directors in office during the period and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated. Mr Marcello Cardaci B. Juris, LLB, B.Com Non-Executive Chairman Marcello 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 capital equity raisings and mergers and acquisitions. Gilbert + Tobin specializes in the provision of legal advice to companies involved in various industries including resources and manufacturing. Mr Cardaci is a Director of Energia Minerals Limited (appointed 7 October 2014). He has not held any other listed directorships over the past three years. Mr Robert Perring M.Sc, DIC, B.Sc Hons Non-Executive Director (appointed 1 August 2018) Mr Perring is a qualified mineral exploration and resource geologist who has worked in a diverse range of geological terrains in Australia, South America and the Middle East (Saudi Arabia) exploring for a broad range of mineral deposit types (Au, Ni-Cu-PGE, Cu-Pb-Zn, Sn-Ta, U, Diamonds). In recent years he has focused on developing project and corporate opportunities for junior explorers. He commenced his professional career in 1980 initially working for a number of technologically innovative global mining companies (Pancontinental Mining Limited, Normandy Mining Limited, Newmont Mining Limited) before transitioning into the junior mining sector in 2006 to pursue discovery opportunities in countries with emerging mining industries and often challenging mining and exploration legislation (e.g. Saudi Arabia, Morocco, Ethiopia). Mr Perring has held senior technical and corporate positions in Normandy Mining Limited (General – Manager – Exploration) and Newmont Mining Limited (Director or Exploration – Australia and New Zealand) where he implemented innovative exploration strategies that culminated in the discovery of several new mineral resources (e.g. Moolart gold deposit, in production). He was educated in Australia (University of Technology, Sydney) and the United Kingdom (Imperial College, University of London) and is a member of the Australian Institute of Geoscientists. Mr Perring has not held any other listed directorships over the past three years. Mr John Seton LLM (Hons) Non-Executive Director John is an Auckland based solicitor with over 30 years’ experience in commercial law, stock exchange listed companies and the mineral resources sector. Mr Seton is a director and chief executive officer of Besra Gold Inc. and is a former director and chair of ASX listed FE Investments Group Limited (resigned August 2018). He has not held any other listed directorships over the past three years. Manhattan Corporation Limited 2 Annual Report to Shareholders Directors Report Mr Alan J Eggers B. Sc (Hons), M. Sc, F.S.E.G., MAusIMM, MAIG Executive Chairman (resigned 1 August 2018) Alan 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 twenty years of listed uranium company Summit Resources Limited. He built Summit into an ASX 200 company with a market capitalisation of $1.2 billion until its takeover by Paladin Energy Limited in May 2007 when he resigned from the board. His professional experience has included management of exploration initiatives and corporate administration of private and public companies. Mr Eggers has not held any other listed directorships over the past three years. COMPANY SECRETARY Eryn Kestel (appointed 8 September 2017) B. Bus, CPA Eryn is a Certified Practicing Accountant with more than 28 years corporate experience that includes over 13 years’ in the role of company secretary for ASX listed companies. Ms Kestel has not held any listed directorships over the past three years. John Ribbons (resigned 31 July 2017) B.Bus., CPA, ACIS John is a Chartered Secretary who has worked within the resources industry for over 20 years in the capacity of group financial controller, chief financial officer and company secretary. Mr Ribbons has extensive knowledge and experience with ASX listed exploration and production companies. Mr Ribbons has considerable site based experience with operating miners and has been involved with the listing of a number of exploration companies on the ASX. Mr Ribbons is a director of Montezuma Mining Company Limited (appointed 14 July 2014. Mr Ribbons has not held any other listed directorships over the past three years. INTERESTS IN THE SECURITIES OF THE COMPANY^ As at the date of this report the interests of the Directors in the securities of Manhattan Corporation Limited are: Director R. Perring M. Cardaci J. Seton Ordinary Shares 15,000,000 3,567,241 27,025, 137 Options over Ordinary Shares exercisable at 10 cents each - 2,000,000 2,000,000 ^ Includes shares and options held directly, indirectly and beneficially by key Management Personnel. RESULTS OF OPERATIONS The Group’s net loss after taxation attributable to the members of Manhattan Corporation for the year to 30 June 2018 was $3,597,940 (30 June 2017: $2,799,651). DIVIDENDS No dividend was paid or declared by the Group in the period and up to the date of this report. CORPORATE STRUCTURE Manhattan Corporation Limited is a company limited by shares, which is incorporated and domiciled in Australia. Manhattan Corporation Limited 3 Annual Report to Shareholders Directors Report NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES During the period, the principal activity was mineral exploration and development and evaluation of mineral projects and corporate opportunities in the resource sector worldwide. EMPLOYEES The Group has nil employees at 30 June 2018 (30 June 2017: Nil). REVIEW OF OPERATIONS Joshua Copper Project - Chile Highlights • • • • • • • • Manhattan enters into an agreement to acquire up to an 80% interest in the Joshua Copper Porphyry Project in Chile with Helix Resources Limited (Helix). On 8 June 2018 the Company agreed to terminate its proposed acquisition by way of a merger and RTO of New Zealand iron and heavy mineral sands development company, TTR, and immediately entered into the agreement with Helix to fund the drilling at the Joshua Copper Project The project, located 350km north of Santiago in the Coastal Belt at low altitude, is close to infrastructure with a 6.5km by 2km alteration system and coincident chargeable induced polarisation geophysical anomaly Hydrothermal alteration is similar to the world class Andacollo copper gold deposit 45km to NNW (400Mt at 0.34%Cu) mined by Teck Resources Limited Initial drill testing of less than 5% of the alteration system intersected multiple intersections of copper (plus molybdenum and gold) mineralisation including 400m at 0.25%Cu, 352m at 0.27%Cu and 240m at 0.22%Cu Manhattan can acquire 80% equity in the Joshua copper gold porphyry project by completing 8,000m of drilling and a Bankable Feasibility Study The first stage commitment to sole fund $1,000,000 of exploration and complete 3,000m of drilling will be funded by a $3,000,000 capital raise approved by shareholders on 25 July 2018 The Joshua Copper Project gives Manhattan exposure to the significant upside of a potential new copper porphyry discovery in Chile, a world class mining destination. On 8 June 2018 Manhattan Corporation Limited (Manhattan) entered into a binding heads of agreement (Joshua Agreement) with Helix Resources Limited (ASX:HLX”) (Helix) to drill test the Joshua Copper Porphyry Project in Chile, South America (Joshua Project). Manhattan will have the right to earn up to an 80% equity in the Joshua Project by carrying out 8,000m of diamond drilling and completing a Bankable Feasibility Study (BFS) over three stages. The first stage and minimum commitment is an option where Manhattan must sole fund expenditure of AUD$1,000,000 with the aim of completing 3,000m of diamond drilling (Figures 1 & 2). The agreement gives Manhattan exposure to the significant upside of a potential new copper porphyry discovery in a world class mining destination: • • • • Discovered (2011) and 100% owned by Helix; Located 350km north of Santiago in the Coastal Belt, at low altitude and close to infrastructure; Large porphyry related alteration system - 6.5km by 2km; Coincident with large Induced Polarisation (IP) chargeable response; Manhattan Corporation Limited 4 Annual Report to Shareholders Directors Report • Alteration response similar to the Andacollo Cu-Au deposit (45km to NNW, 400mt @0.34% Cu) mined and operated by Teck; • Only Central Zone Stockwork has been drill tested so far - confirms porphyry provenance; • Drilling to date (16 RC-diamond holes) has tested less than 5% of the alteration system and less than 10% of the +15 mV/V IP chargeability anomaly; and Significant multiple intersections of copper mineralisation (+ Mo, Au) from the Joshua Central Zone Stockwork including: • • • • 400m @ 0.25%Cu; 352m @ 0.27%Cu; and 240m @ 0.22%Cu A recent technical review of the Joshua Copper Porphyry project by the Company has identified new and exciting drill targets with potential for higher grade mineralisation (>0.5%Cu) in the Joshua system which, if discovered, could potentially lead to a significant economic copper porphyry deposit discovery. Significantly, 90% of the +15mV/V response, which surrounds the central stockwork, is yet to be drill tested. Helix’s well established in-country exploration team have been retained to manage the initial proposed 3,000m diamond drill program, currently planned to commence in the third quarter of 2018. Subsequent to year end, Manhattan raised AUD$2,900,000 at $0.005 per share. Shareholder approval to the capital raising was obtained on 25 July 2018. Key Terms of the Joshua Agreement A summary of the material terms of the Joshua Agreement are: • Stage 1: Helix has granted an option to Manhattan under which Manhattan must sole fund expenditure of $1,000,000 on the Project within 9 months of the commencement date, such expenditure to be expended on a proposed 3,000m diamond drilling programme (Option); If Manhattan exercise the Option, then Manhattan shall have the right but not the obligation to earn up to an 80% JV Interest as follows: • • Stage 2: Manhattan may earn a 51% JV Interest in the Project by sole funding the expenditure necessary to complete a further 5,000m of drilling within 18 months of the commencement date; and Stage 3: At the completion of Stage 2, Manhattan may elect to earn a further 29% (giving it a total 80%) JV Interest by sole funding expenditure up to the completion of a BFS in respect of the Project; At Stage 2, Helix will be entitled to a royalty equal to 1% of the net smelter return derived from of material removed from the Project; and Helix will be the Manager of Stage 1. During Stage 2 and Stage 3, Manhattan will be the manager unless Helix and Manhattan mutually agree that Helix is to be retained as manager. The Joshua Agreement The Joshua Agreement is conditional on receipt of any regulatory approvals required under all applicable laws and regulations in relation to the entry into the Joshua Agreement and grant of the option within 3 months of the date of the Joshua Agreement; and Manhattan Corporation Limited 5 Annual Report to Shareholders Directors Report Manhattan raising a minimum of AUD$3,000,000 within 3 months of the date of the Joshua Agreement. FIGURE 1: JOSHUA COPPER PROJECT CHILE Geophysical Anomaly Backs Up Large System Concept An IP chargeability anomaly is coincident with the alteration system and significantly 90% of the +15mV/V response, which surrounds the central stockwork is yet to be drill tested. This IP response is important, because it encompasses the ore and ore-related alteration phases of many porphyry-related mineral systems around the world. FIGURE 2: JOSHUA ASTER ALTERATION ANOMALY AND COPPER SOIL GEOCHEMISTRY Alteration Anomaly and XRF Copper Soil Geochemistry. Evidence for large porphyry system present beyond the central stockwork Manhattan Corporation Limited 6 Annual Report to Shareholders Directors Report FIGURE 3: JOSHUA IP CHARGEABILITY ANOMALY IP chargeability image (150m below surface) with +15mV/V zones (blue lines) within the alteration footprint outline (red line) Exploration Status Only the Central Zone (Silica cap)) has been drilled previously (2011, 2012, 2015) – 16 RC/diamond holes within an area of only 700m by 500m, representing less than 5% of the total alteration footprint. From that “proof-of-concept” drilling, significant multiple thick intersections of copper mineralisation (+ Mo-Au) were returned, including 400m @ 0.25% Cu, 352m @ 0.27% Cu, 240m @ 0.22% Cu were returned. Immediate Exploration Program commenced September 2018 Manhattan is currently drilling the defined +15mV/V IP chargeability anomaly on notional 400m centres, targeting >0.5%Cu zones. FIGURE 4: JOSHUA PROPOSED INITIAL DRILL HOLES Priority drill targets in cross-section surrounding the central COPPER MINERALISED core and focused on testing the +15mV/V IP Chargeability zones. Manhattan Corporation Limited 7 Annual Report to Shareholders Directors Report PONTON URANIUM PROJECT Western Australia The Company is currently reviewing the importance of its Uranium portfolio to the Company and has pragmatically decided to write off all exploration expenditure on these assets. On 23 January 2017 Manhattan reported an upgraded JORC Code 2012 Inferred Resource for the Double 8 uranium deposit at Ponton in WA of 26 million tonnes (Mt), for 17.2 million pounds (Mlb) grading 300ppm uranium oxide (U3O8) at a 200ppm cutoff. FIGURE 5: PONTON URANIUM PROJECT The Inferred Resource estimate reported for Ponton project is: • Double 8 uranium deposit of 17.2Mlb U3O8 at 200ppm cutoff. Exploration Results at Ponton, reported on 7 February 2014, have also identified four wide spaced drilled Exploration Targets with tonnage ranges of 4 to 45Mt, 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 The Double 8 Inferred 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 H&S Consultants (H&SC). Manhattan Corporation Limited 8 Annual Report to Shareholders Directors Report The Double 8 uranium deposit and the Double 8, Stallion South, Highway South and Ponton Exploration Targets are all located on granted exploration licence, E28/1898, located within the Queen Victoria Spring Nature Reserve (QVSNR) (Figures 6 & 7) FIGURE 6: MANHATTAN’S PONTON FIGURE 7: DOUBLE 8 INFERRED RESOURCES (IR) DOUBLE 8, STALLION SOUTH, HIGHWAY SOUTH & PONTON EXPLORATION TARGETS (ET) Manhattan Corporation Limited 9 Annual Report to Shareholders Directors Report CORPORATE Mr Perring was appointed Non-Executive Director on 1 August 2018. A $2,900,000 capital raising was finalised and approved by shareholders on 25 July 2018. On 8 June 2018 Manhattan announced to ASX it had agreed to terminate its proposed acquisition, by way of amalgamation, of the assets of unlisted New Zealand based titano-magnetite iron sands development company, Trans- Tasman Resources Limited. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There have been no significant changes in the state of affairs of the Company during year to 30 June 2018 and up to the date of this report. SIGNIFICANT EVENTS AFTER THE BALANCE DATE On 1 August 2018 the Company received the final $2.9 million, completing the share placement announced on 8 June 2018. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS Likely developments in the operations of the Company are set out in the above review of operations in this annual report. Any future prospects are dependent upon the results of future exploration and evaluation. ENVIRONMENTAL REGULATIONS AND PERFORMANCE The Group carries or carried out operations that are subject to environmental regulations under legislation in Chile and Australia. The Group has formal procedures in place to ensure regulations are adhered to. The Group is not aware of any breaches in relation to environmental matters. SHARE OPTIONS As at the date of this report, there were 116,000,000 unissued ordinary shares under options (16,000,000 at the balance date). The details of the options at the date of this report are as follows: Number Exercise Price $ Expiry Date 13,000,000 3,000,000 100,000,000 116,000,000 0.10 0.001 0.01 28 November 2019 15 April 2019 1 August 2023 No option holder has any right under the options to participate in any other share issue of the company or any other entity. 10,000,000 unlisted options with an exercise price of 12 cents expiring on 31 December 2015 were forfeited and 5,000,000 unlisted options with an exercise price of 18 cents and 5,000,000 unlisted options with and exercise price of 15 cents expired during the period. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS The Company has made an agreement indemnifying all the Directors and officers of the Company against all losses or liabilities incurred by each Director or officer in their capacity as Directors or officers of the Company to the extent permitted by the Corporations Act 2001. The indemnification specifically excludes wilful acts of negligence. The Company paid insurance premiums in respect of Directors’ and Officers’ Liability Insurance contracts for current officers of the Company, including officers of the Company’s controlled entities. The liabilities insured are damages and legal costs that Manhattan Corporation Limited 10 Annual Report to Shareholders Directors Report may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group. The total amount of insurance premiums paid has not been disclosed due to confidentiality reasons. DIRECTORS’ MEETINGS During the period ended 30 June 2018, in addition to regular Board discussions, the number of meetings of directors held and the number of meetings attended by each director were as follows: Director Mr Alan Eggers* Mr Marcello Cardaci Mr John Seton Number of Meetings Eligible Number of Meetings to Attend Attended 8 8 8 - 8 8 7 - Mr Robert Perring** *Alan Eggers resigned 1 August 2018 **Robert Perring was appointed on 1 August 2018 PROCEEDINGS ON BEHALF OF COMPANY No person has applied for leave of court to bring proceedings on behalf of the Company or 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 any part of those proceedings. The Company was not a party to any such proceedings during the year. CORPORATE GOVERNANCE In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Manhattan Corporation Limited support and have adhered to the principles of sound corporate governance. The Board recognises the recommendations of the Australian Securities Exchange Corporate Governance Council and considers that Manhattan Corporation complies with those guidelines to the extent possible, which are of importance to the commercial operation of a junior listed resources company. During the period, shareholders continued to receive the benefit of an efficient and cost-effective corporate governance policy for the Company. In accordance with ASX Listing Rule 4.10.3 the Company has elected to publish its Corporate Governance Statement on the Company website at www.manhattancorp.com.au/corporategovernance. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES Section 307C of the Corporations Act 2001 requires the Company’s auditors to provide the Directors of Manhattan Corporation with an Independence Declaration in relation to the audit of the financial report for the year ended 30 June 2018. A copy of that declaration is included on page 41. REMUNERATION REPORT (AUDITED) This report outlines the remuneration arrangements in place for Directors and Executives of Manhattan Corporation Limited in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purpose of this report, Key Management Personnel (KMP) of the Company are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group Manhattan Corporation Limited 11 Annual Report to Shareholders Directors Report The report contains the following sections: 1. 2. 3. 4. 5. 6. Key Management Personnel covered by this Remuneration Report Remuneration Governance Details of Remuneration Share Based Remuneration Additional disclosures relating to options and shares Service Agreements 1. Key Management Personnel covered by this Remuneration Report The following were KMPs of the Group at any time during the years ended 30 June 2018 and 30 June 2017 and unless otherwise indicated, KMPs for the entire period: Non - Executive Directors Robert Perring Marcello Cardaci John Seton Executive Directors Alan Eggers (a) Executives Sam Middlemas – Company Secretary (b) (a) Alan Eggers resigned on 1 August 2018. (b) Sam Middlemas resigned on 28 September 2016. There were no other changes to KMPs after the reporting date and before the date of the financial report. 2. Remuneration Governance The Board is responsible for determining and reviewing compensation arrangements for the Directors. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team. Currently the Group does not link the nature and amount of the emoluments of such officers to the Group’s financial or operational performance. The expected outcome of this remuneration structure is to retain and motivate Directors. As part of its Corporate Governance Policies and Procedures, the Board has adopted a formal Remuneration Committee Charter. Due to the current size of the Group and number of Directors, the Board has elected not to create a separate Remuneration Committee but has instead decided to undertake the function of the Committee as a full Board under the guidance of the formal charter. The table below shows the performance of the Group as measured by loss per share over the past five financial years: Manhattan Corporation Limited 12 Annual Report to Shareholders Directors Report 3. Details of Remuneration Details of the nature and amount of each element of the emolument of each Director and Executive of the Group are as follows: Short Term Options 30 June 2018 Base Directors Consulting Share Based Post Total Option Performance Salary Fees Fees Payments employment Related Related Superannuation $ - - - - $ - 16,667 16,667 $ - - - - 210,000 $ - - - - $ - - - - $ - 16,667 16,667 210,000 % - - - - % - - - - Director Mr. R Perring(a) Mr. M Cardaci Mr. J Seton Mr. A Eggers(b) Total (a) Mr Perring was appointed 1 August 2018. (b) Mr Eggers resigned 1 August 2018. Short Term 30 June 2017 Base Directors Consulting Salary Fees Fees Options Share Based Post Total Option Performance employment Related Related Payments Superannuation $ % % Director Mr. A Eggers Mr M Cardaci Mr. J Seton Executives Mr S Middlemas(a) $ - $ 210,000 $ - - - 17,500 17,500 - - - 11,760 - Total 11,760 35,000 210,000 (a) Mr Middlemas resigned on 28 September 2016. $ - - - - - $ - - - 210,000 17,500 17,500 - 11,760 - 256,760 - - - - - - - - - - 4. Share Based Remuneration The terms and conditions of each grant of options affecting remuneration in the previous, this or future reporting periods are as follows: Grant date Grant Expiry date / Value per Value of Exercise No. Vested No. Expired number last exercise options at options at price date grant date grant date Director Mr A Eggers(a) Mr M Cardaci 28/11/2014 9,000,000 28/11/2019 28/11/2014 2,000,000 28/11/2019 Mr. J Seton 28/11/2014 2,000,000 28/11/2019 $0.013 $0.013 $0.013 $117,000 $26,000 $26,000 $0.10 $0.10 $0.10 9,000,000 2,000,000 2,000,000 Total 13,000,000 (a) Mr Eggers resigned 1 August 2018. 13,000,000 Manhattan Corporation Limited 13 Annual Report to Shareholders - - - - Directors Report 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 consideration and the exercise prices will be such price as determined by the board, at its absolute discretion, on or before the date of issue. There were no alterations to the terms and conditions of options granted as remuneration since their grant date. Options granted as part of remuneration have been valued using the Black-Scholes option pricing model, which takes account of factors such as the option exercise price, the current level and volatility of the underlying share price and the expected time to maturity of the option. Options granted under the plan carry no dividend or voting rights. During the year there were no options provided as remuneration to Directors or other Key Management Personnel of the Company. When exercisable, each option is convertible into one ordinary share of Manhattan. 5. Additional disclosures relating to options and shares Share holdings of Key Management Personnel^ The number of shares in the company held during the period and up to the date of this report by each director and executive of Manhattan Corporation Limited, including their personally related parties, is set out below. There were no shares granted during the reporting period as compensation. 30 June 2018 Opening Balance Number granted Share Purchases Share Sales or Closing Balance as compensation Other changes Directors Mr. R Perring(a) Mr. M Cardaci Mr. J Seton Mr. A Eggers(b) - 3,567,241 24,002,976 33,420,947 Total 60,991,164 - - - - - - - - - - 15,000,000 - 3,022,161 (33,420,947) 15,000,000 3,567,241 27,025,137 - (15,398,786) 45,592,378 ^ Includes shares held directly, indirectly and beneficially by Key Management Personnel. (a) Mr Perring was appointed 1 August 2018. (b) Mr Eggers resigned 1 August 2018. 30 June 2017 Opening Balance Number granted Share Purchases Share Sales or Closing Balance as compensation Other changes Directors Mr. M Cardaci Mr. J Seton Mr. A Eggers Executives Mr. S Middlemas(a) 3,415,726 24,002,976 33,057,311 1,450,726 Total 65,782,484 (a)Mr Middlemas resigned 28 September 2016. - - - - - 151,515 151,515 363,636 - (4,007,260) - 3,567,241 24,002,976 33,420,947 - (1,450,726) - 666,666 (5,457,986) 60,991,164 Option holdings of Key Management Personnel^ The numbers of options over ordinary shares in the company held during the period by each director of Manhattan Corporation Limited and specified executive of the group, including their personally related parties, are set out below: Manhattan Corporation Limited 14 Annual Report to Shareholders Directors Report Vested options 30 June 2018 Mr. R Perring(a) Mr. M Cardaci Mr. J Seton Mr. A Eggers(b) Opening Balance - 2,000,000 2,000,000 9,000,000 Total 13,000,000 Number Number Other changes Closing Balance Exercisable Non- granted as Exercised compensation exercisable - - - - - - - - - - - - - - - 2,000,000 2,000,000 2,000,000 2,000,000 (9,000,000) - - (9,000,000) 4,000,000 4,000,000 - - - - - ^ Includes shares held directly, indirectly and beneficially by Key Management Personnel. (a) Mr Perring was appointed 1 August 2018. (b) Mr Eggers resigned 1 August 2018. 30 June 2017 Mr. R Perring(a) Mr. M Cardaci Mr. J Seton Mr. A Eggers(b) Executives Mr. S Middlemas(a) Opening Balance - 2,000,000 2,000,000 9,000,000 2,000,000 Total 15,000,000 (a)Mr Middlemas resigned 28 September 2016. Number Number Other changes Closing Balance Exercisable Non- granted as Exercised compensation exercisable Vested options - - - - - - - - - - - - - - - - - - 2,000,000 2,000,000 2,000,000 2,000,000 9,000,000 9,000,000 (2,000,000) - - (2,000,000) 13,000,000 13,000,000 - - - - - - There were no other forfeitures during year ended 30 June 2018 or year ended 30 June 2017. All equity transactions with key management personnel other than arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the Group would have adopted if dealing at arm’s length. 6. Service Agreements Executive Director The Executive Chairman, Mr Alan Eggers, was paid an annual consulting fee on a monthly basis. Mr Eggers was originally paid consulting fees of $360,000 per annum that was reduced to $210,000 per annum during the year ended 30 June 2017 to conserve the Company’s cash reserves. This amount is included in Note 17(d) “Related Party Transactions”. Non-Executive Directors The Non-Executive Directors on appointment, enter into a service agreement with the Company in the form of a letter appointment ad are paid an annual fee on a monthly basis. The letter summarises the Board policies and terms, including compensation, relevant to the office of Non-Executive Director. The Non-Executive Directors are also entitled to fees for other amounts as the board determines where he performs special duties or otherwise performs extra services or make special exertions on behalf of the Company. These fees are included as short-term consulting fees as outlined in the tables included in the Remuneration Report. Manhattan Corporation Limited 15 Annual Report to Shareholders Directors Report In determining whether a Non-Executive Director should perform any additional services on behalf of the company, the board takes into consideration factors such as the cash flow impact of employing an independent contractor, the relevant experience and technical expertise required in performing any services and relevant additional credentials required to perform a particular task. The aggregate fee remuneration for Non-Executive Directors has been set at an amount not to exceed $200,000 per annum. This amount may only be increased with the approval of Shareholders at a general meeting. Other transactions with Key Management Personnel and their related parties Wesmin Corporate Pty Ltd, a company of which Mr Eggers is a director, provided his services as Executive Chairman, personnel, office premises and administration staff to a value of $210,000 (2017: $210,000) to Manhattan during the year. This amount is included in Note 17(d) “Related Party Transactions” and are not in addition to the fees included in the remuneration table within this remuneration report. $37,583 (2017: $Nil) was outstanding at period end. Jura Trust Limited (a company of which Mr Seton is a director), as trustee of the Jura Trust, charged the Group director’s fees for the twelve months totalling $16,667 (2017: $17,500). This amount is included in Note 17(d) “Related Party Transactions” and is not in addition to the fees included in the remuneration table within this remuneration report. $16,667 (2017: $Nil) was outstanding at period end. These transactions have been entered into on normal commercial terms. End of Remuneration Report (Audited) Signed on behalf of the board in accordance with a resolution of the Directors. Marcello Cardaci Non-Executive Chairman 17 September 2018 Manhattan Corporation Limited 16 Annual Report to Shareholders Directors Report Governance Arrangements and Internal Controls A summary of the governance and controls applicable to the Company’s Mineral Resource process is as follows: - - - - - Review and validation of drilling and sampling methodology and data spacing, geological logging, data collection and storage, sampling and analytical quality control; Review of known and interpreted geological structure, lithology and weathering controls; Review of estimation methodology relevant to the mineralisation style; Visual validation of block model against raw data; and Internal peer review by senior company personnel. Ponton Mineral Resources June 2018 PROJECT JORC Category Cut Off Grade U3O8 (ppm) 100 DOUBLE 8 Inferred STALLION Inferred HIGHWAY Inferred SHELF Inferred 150 200 250 100 150 200 100 150 200 100 150 200 Million Tonnes 110 51 26 14 9.9 3.6 1.3 5.7 2.4 1.0 5.9 1.4 0.3 Grade U3O8 (ppm) 170 Million Pounds U3O8 (Mlb) 42.0 240 300 360 151 200 253 150 196 234 137 187 270 26.0 17.2 11.0 3.3 1.6 0.7 1.9 1.0 0.7 1.8 0.6 0.2 There has been no change to the Mineral Resource Estimates from 30 June 2017 Annual Report up to the date of this report. COMPETENT PERSON STATEMENTS The information in this Report that relates to reported Exploration Results or Mineral Resources for the Ponton Project 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 was the executive director of Manhattan Corporation Limited until his resignation on 1 August 2018. 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. For full details of Exploration Result. and Mineral Resources refer to the ASX announcements by Manhattan Corporation Limited dated 7 February 2014 and 23 January 2017. Manhattan Corporation Limited is not aware of any new information or data that materially effects the information in these announcements. The information in this Report that relates to Exploration Results for the Joshua Project is based on information review by Mr Robert Perring who is a Non-Executive Director of Manhattan Corporation Limited and Member of the Australian Institute of Geoscientists. Mr R Perring has sufficient experience which is relevant to this style of mineralisation and type of deposit under consideration and to the overseeing activities which he is undertaking to qualify as a Competent Person as defined in the 2004 and 2012 Editions of the “Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves’. Mr R Perring consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. For full details of exploration results refer to the ASX announcements by Helix Resources Ltd dated 10 August 2011, 28 March 2012, 8 June 2012, 17 December 2015 and 6 February 2016, and to the ASX announcement by Helix Resources Ltd dated 8 June 2018. Helix Resources Ltd and Manhattan Corporation Limited are not aware of any new information or data that materially effects the information in these announcements. Manhattan Corporation Limited 17 Annual Report to Shareholders Consolidated Statement of Comprehensive Income Notes Consolidated 30 June 2018 $ 30 June 2017 $ Revenue from continuing operations Interest income Expenses Public company costs Consulting fees Legal fees R&D consultants fees Employee benefits Impairment of exploration expenditure Finance costs Other expenses Loss before income tax Income tax expense Net loss for the period Other Comprehensive loss Items that may be reclassified subsequently to profit and loss Income tax benefit Other comprehensive loss for the period 7 9 274 274 2,536 2,536 40,202 219,988 205,896 - 10,500 3,091,677 - 29,951 3,597,940 45,096 36,560 - 12,600 63,000 2,546,570 391 101,945 2,806,162 - 3,975 3,597,940 2,799,651 - - - - Total comprehensive loss for the period 3,597,940 2,799,651 Loss per share attributable to owners of Manhattan Corporation Limited Basic and diluted loss per share (cents per share) 8 2.54 0.02 Manhattan Corporation Limited 18 Annual Report to Shareholders Consolidated Statement of Financial Position CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Notes 11 12 Consolidated 30 June 2018 $ 30 June 2017 $ 40,799 10,297 187,493 10,880 51,096 198,373 Deferred exploration and evaluation expenditure 13 278,000 3,000,000 TOTAL NON-CURRENT ASSETS 278,000 3,000,000 TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 329,096 3,198,373 14 671,796 77,107 TOTAL CURRENT LIABILITIES 671,796 77,107 TOTAL LIABILITIES 671,796 77,107 NET (DEFICIENCY) / ASSETS (342,700) 3,121,266 EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY 15 16 17,763,416 4,857,328 17,629,441 4,857,328 (22,963,444) (19,365,503) (342,700) 3,121,266 Manhattan Corporation Limited 19 Annual Report to Shareholders Consolidated Statement of Cash Flows Notes CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Proceeds from R&D refund Interest received Consolidated 30 June 2018 $ 30 June 2017 $ (63,955) 122,399 274 (233,740) 100,328 4,178 NET CASH USED IN OPERATING ACTIVITIES 58,718 (129,234) CASH FLOWS FROM INVESTING ACTIVITIES Payments for costs associated with proposed TTR merger Expenditure on exploration (125,312) (214,075) - (404,767) NET CASH USED IN INVESTING ACTIVITIES (339,387) (404,767) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Share issue costs 133,975 - 140,000 - NET CASH FROM FINANCING ACTIVITIES 133,975 140,000 Net (decrease) / increase in cash held Cash and cash equivalents at beginning of period (146,694) 187,493 (394,001) 582,494 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 11 40,799 187,493 Manhattan Corporation Limited 20 Annual Report to Shareholders Consolidated Statement of Changes in Equity At 1 July 2017 Loss for the period Other comprehensive loss Total comprehensive loss Issued capital $ Accumulated losses $ Share based payment reserves $ 17,629,441 (19,365,503) 4,857,328 - - - (3,597,940) - (3,597,940) Transactions with owners in their capacity as owners Issue of share capital 133,975 - At 30 June 2018 17,763,416 (22,963,444) 4,857,328 At 1 July 2016 Loss for the year Other comprehensive loss Total comprehensive loss 17,489,441 (16,565,852) 4,857,328 - - - (2,799,651) - (2,799,651) - - - - - - - Total $ 3,121,266 (3,597,940) - (3,597,940) 133,975 (342,700) 5,780,917 (2,799,651) - (2,799,651 Transactions with owners in their capacity as owners Issue of share capital At 30 June 2017 140,000 17,629,441 - (19,365,503) - 4,857,328 140,000 3,121,266 Manhattan Corporation Limited Annual Report to Shareholders 21 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________________________________ FOR THE YEAR ENDING 30 JUNE 2018 1. CORPORATE INFORMATION The financial report of Manhattan Corporation Limited (“Manhattan Corporation” or “the Company”) and its controlled entities (“the Group”) for the year ended 30 June 2018 was authorised for issue in accordance with a resolution of the Directors on 14 September 2018. Manhattan Corporation Limited is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and the principal activities of the Group are described in the Directors’ Report. 2. 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. The Financial Statements are for the consolidated entity consisting of Manhattan Corporation Limited and its subsidiary. The Financial Statements are presented in the Australian currency. Manhattan Corporation Limited is a company limited by shares, domiciled and incorporated in Australia. The financial statements were authorised for issue by the Directors on 14 September 2018. The Directors have the power to amend and reissue the financial statements. (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 Statements 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 $3,597,940 (2017: $2,799,651) and a net cash inflow from operating activities of $58,718 (2017: outflow: $129,234). At 30 June 2018 the Group had cash assets of $40,799 (2017: $187,493) and working capital deficiency of $620,700 (2017: working capital $121,266). Manhattan Corporation Limited 22 Annual Report to Shareholders The Company has raised $2,900,000 subsequent to 30 June 2018 see Note 19 ‘Subsequent Events at End of Financial Year’. Based on this fact, the Directors consider it appropriate that the finance report be prepared on a going concern basis. (b) Basis of Consolidation The consolidated Financial Statements incorporate the assets and liabilities of the Company’s wholly owned subsidiary Manhattan Resources Pty Ltd as at 30 June 2018 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 Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the full Board of Directors. (d) Revenue Recognition Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. (e) Income Tax The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Manhattan Corporation Limited 23 Annual Report to Shareholders Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting, nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the year ending 30 June and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. (f) Impairment of Assets For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or company of assets (cash generating units). Non financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. (g) Acquisition of Assets Assets including exploration interests acquired are initially recorded at their cost of acquisition on the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition. When equity instruments are issued as consideration, their market price at the end of acquisition is used as fair value, except where the notional price at which they could be placed in the market is a better indication of fair value. (h) Cash and Cash Equivalents For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. (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. Manhattan Corporation Limited 24 Annual Report to Shareholders When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. (j) Trade and Other Payables These amounts represent liabilities for goods and services provided to the Group prior to the end of Financial Year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. (k) Contributed Equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. (l) Investments and Other Financial Assets Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loan and receivables, or available for sale investments, as appropriate. When financial assets are recognised initially they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year end. Financial Assets at Fair Value Through Profit or Loss This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. The policy of management is to designate a financial asset at fair value through profit or loss if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in value. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within twelve months of the year ending 30 June. 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 Manhattan Corporation Limited 25 Annual Report to Shareholders the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. Available for sale financial assets and financial assets designated through profit or loss are subsequently carried at fair value. Loans and receivables and held to maturity investments are carried at amortised cost using the effective interest rate method. Realised and unrealised gains and losses arising from changes in the fair value of the “financial assets at fair value through profit or loss” category are included in the income statement in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available for sale are recognised in equity in the net unrealised gains reserve. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments previously reported in equity are included in the income statement as gains and losses on disposal of investment securities. The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available for sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss is transferred from equity to the income statement. Impairment losses recognised in the income statement on equity instruments classified as held for sale are not reversed through the income statement. (m) 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. (n) 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. Manhattan Corporation Limited 26 Annual Report to Shareholders 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"). (o) 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. (p) New Accounting Standards and UIG Interpretations Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2018 reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and interpretations is set out below. New standards and interpretations not mentioned are considered unlikely to impact on the financial reporting of the Group. AASB 9 Financial Instruments (applicable for annual reporting periods commencing on or after 1 January 2018). AASB 9 (December 2014) is a new Principal standard which replaces AASB 139. This new Principal version supersedes AASB 9 issued in December 2009 (as amended) and AASB 9 (issued in December 2010) and includes a model for classification and measurement, a single, forward-looking ‘expected loss’ impairment model and a substantially-reformed approach to hedge accounting. AASB 9 is effective for annual reporting periods beginning on or after 1 January 2018. However, the Standard is available for early adoption. The own credit changes can be early applied in isolation without otherwise changing the accounting for financial instruments. The final version of AASB 9 introduces a new expected-loss impairment model that will require more timely recognition of expected credit losses. Specifically, the new Standard requires entities to account for expected credit losses from when financial instruments are first recognised and to recognise full lifetime expected losses on a timelier basis. Amendments to AASB 9 (December 2009 & 2010 editions) (AASB 2013-9) issued in December 2013 included the new hedge accounting requirements, including changes to hedge effectiveness testing, treatment of hedging costs, risk components that can be hedged and disclosures. AASB 9 includes requirements for a simpler approach for classification and measurement of financial assets Manhattan Corporation Limited 27 Annual Report to Shareholders compared with the requirements of AASB 139. The main changes are described below. (a) (b) (c) Financial assets that are debt instruments will be classified based on (1) the objective of the entity’s business model for managing the financial assets; (2) the characteristics of the contractual cash flows. Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument. Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases. (d) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows: • • The change attributable to changes in credit risk are presented in other comprehensive income (OCI); and The remaining change is presented in profit or loss. AASB 9 also removes the volatility in profit or loss that was caused by changes in the credit risk of liabilities elected to be measured at fair value. This change in accounting means that gains caused by the deterioration of an entity’s own credit risk on such liabilities are no longer recognised in profit or loss. Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11 and superseded by AASB 2010-7, AASB 2010-10 and AASB 2014-1 – Part E. AASB 2014-7 incorporates the consequential amendments arising from the issuance of AASB 9 in December 2014. AASB 2014-8 limits the application of the existing versions of AASB 9 (AASB 9 (December 2009) and AASB 9 (December 2010)) from 1 February 2015 and applies to annual reporting periods beginning on or after 1 January 2015. Based on the financial assets and liabilities currently held, the Group does not anticipate any impact on the Financial Statements upon adoption of this standard. The Group does not presently engage in hedge accounting. AASB 15 Revenue from Contracts with Customers (applicable for annual reporting periods commencing on or after 1 January 2017). In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers, which replaces IAS 11 Construction Contracts, IAS 18 Revenue and related interpretations (IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC-31 Revenue-Barter Transactions Involving Advertising Services). The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps: a) b) c) Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Manhattan Corporation Limited 28 Annual Report to Shareholders d) e) Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation Early application of this standard is permitted. AASB 2014-5 incorporates the consequential amendments to a number of Australian Accounting Standards (including Interpretations) arising from the issuance of AASB 15. There will be no impact on the Group’s financial position or performance. AASB 16 Leases (applicable for annual reporting periods commencing on or after 1 January 2019). The key features of AASB 16 are as follows: Lessee accounting: • • • Lessees are required to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee measures right-of-use assets similarly to other non-financial assets and lease liabilities similarly to other financial liabilities. Assets and liabilities arising from a lease are initially measured on a present value basis. The measurement includes non-cancellable lease payments (including inflation-linked payments), and also includes payments to be made in optional periods if the lessee is reasonable certain to exercise an option to extend the lease, or not to exercise an option to terminate the lease. • IFRS 16 contains disclosure requirements for lessees. Lessor accounting: • • AASB 16 substantially carries forward the lessor accounting requirements in AASB 117. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently. AASB 16 also requires enhanced disclosures to be provided by lessors that will improve information disclosed about a lessor’s risk exposure, particularly to residual value risk. The new standard will be effective for annual periods beginning on or after 1 January 2019. Early adoption is permitted, provided the new revenue standard, AASB 15 Revenue from Contracts with Customers, has been applied, or is applied at the same date as AASB 16. The effect of this amendment on the Group’s Financial Statements has yet to be determined. 3. 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. Manhattan Corporation Limited 29 Annual Report to Shareholders 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. 4. SEGMENT INFORMATION The Group operates in one segment, being mineral resource exploration and assessment of mineral projects in Chile. 5. FINANCIAL RISK MANAGEMENT The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of the financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group does not use derivative financial instruments, however the Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and other price risks and aging analysis for credit risk. Risk management is carried out by the Board of Directors with assistance from suitably qualified external and internal advisors. The Board provides written principles for overall risk management and further policies will evolve commensurate with the evolution and growth of the Group. (a) Market Risk (i) Foreign Exchange Risk The Group does not currently operate internationally and therefore its exposure to foreign exchange risk arising from currency exposures is limited. (ii) Price Risk The Group does not currently hold any equity investments so it is not exposed to equity securities price risk. 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. 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 $50,648 (2017: $198,373). The following financial assets of the Group are neither past due or impaired: Manhattan Corporation Limited 30 Annual Report to Shareholders Cash and cash equivalents Trade and other receivables (c) Liquidity Risk 30 June 2018 $ 40,799 10,297 30 June 2017 $ 187,493 10,880 50,648 198,373 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 $671,796 (2017: $77,107). 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 has 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 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. 6. INVESTMENT IN SUBSIDIARIES The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1 (b). Name of Entity Country of Incorporation Manhattan Resources Pty Ltd Australia 7. OTHER EXPENSES Equity Holding as at 30 June 2018 100% 2008 Equity Holding as at 30 June 2017 100% 2008 (a) Expenses, Excluding Finance Costs, Included in the Income Statement Expenses General and administration Rent Other expenses 8. LOSS PER SHARE Loss used in calculating basic and dilutive EPS Weighted average number of ordinary shares used in calculating basic loss per share: Manhattan Corporation Limited 31 30 June 2018 $ 28,480 - 1,471 29,951 30 June 2017 $ 97,472 4,473 - 101,945 3,597,940 2,799,651 Number of Shares 141,836,227 136,320,208 Annual Report to Shareholders There is no impact from 16,000,000 options outstanding at 30 June 2018 (2017: 16,000,000 options) on the loss per share calculation because they are anti-dilutive. These options could potentially dilute basic EPS in the future. On 1 August 2018, 580,000,000 ordinary shares and 100,000,000 share options were issued that would have significantly changed or potentially changed the number of ordinary shares at the end of the period if those transactions had have occurred before the end of the reporting period. 9. INCOME TAX EXPENSE (a) Income tax expense Major component of tax expense for the period: Current tax Deferred tax Under (Over) provided in prior years (b) Numerical reconciliation between aggregate tax expense recognised in the statement of comprehensive income and tax expense calculated per the statutory income tax rate. A reconciliation between tax expense and the product of accounting loss before income tax multiplied by the Group’s applicable tax rate is as follows: Loss from continuing operations before income tax expense Tax at the group rate of 27.5% Income tax benefit not brought to account Income tax expense (c) Deferred tax The following deferred tax balances have not been brought to account: Liabilities Capitalised exploration and evaluation expenditure Offset by deferred tax assets Deferred tax liability recognised Losses available to offset against future taxable income Share issue costs deductible over five years Accrued expenses Deferred tax assets offset against deferred tax liabilities 30 June 2018 $ - - - - Consolidated 30 June 2017 $ - - (3,975) (3,975) 3,597,940 989,434 (989,434) - 2,799,651 769,904 (773,879) (3,975) Consolidated 30 June 2018 $ 30 June 2017 $ 83,400 (83,400) - 6,222,358 3,275 192,052 900,000 (900,000) - 4,405,371 3,275 4,500 (83,400) (900,000) Manhattan Corporation Limited 32 Annual Report to Shareholders Deferred tax assets not brought to account as realisation is not regarded as probable Deferred tax asset recognised (d) Unused tax losses Unused tax losses Potential tax benefit not recognised at 27.5% (6,110,432) (3,513,146) - - 22,219,752 6,110,432 17,443,933 3,513,146 The benefit for tax losses will only be obtained if: (i) the Group derives future assessable income in Australia of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised, and (ii) the Group continues to comply with the conditions for deductibility imposed by tax legislation in Australia and (iii) no changes in tax legislation in Australia, adversely affect the Group in realising the benefit from the deductions for the losses. 10. DIVIDENDS PAID OR PROPOSED There were no dividends paid or proposed during the year. 11. CASH AND CASH EQUIVALENTS Reconciliation of Cash and Cash Equivalents Cash comprises of: Cash at bank 40,799 187,493 Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. Reconciliation of operating loss after tax to the cash flows from operations Loss from ordinary activities after tax Non-cash items Exploration expenditure written off Change in assets and liabilities Decrease / (increase) in trade and other receivables (Decrease) / increase in trade and other payables Net cash outflow used in operating activities Consolidated 30 June 2018 $ 30 June 2017 $ (3,597,940) (2,799,651) 3,091,676 2,546,570 583 564,399 97,995 25,852 58,718 (129,234) Cash at bank and in hand earns interest at floating interest rates based on the daily bank rates. 12. TRADE AND OTHER RECEIVABLES (CURRENT) GST receivable Other Manhattan Corporation Limited 33 10,097 200 10,297 10,680 200 10,880 Annual Report to Shareholders Other debtors and goods and services tax are non-interest bearing and generally receivable on 30 day terms. They are neither past due nor impaired. The amount is fully collectible. Due to the short-term nature of these receivables, their carrying value is assumed to approximate their fair value. (a) Fair Values and Credit Risk Due to the short-term nature of these receivables the carrying values represent their respective fair values at 30 June 2018. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above. Refer to Note 5 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. 13. EXPLORATION AND EVALUATION EXPENDITURE At beginning of the period Exploration expenditure during the period Impairment loss Total exploration and evaluation 3,000,000 5,122,934 369,676 423,636 (3,091,676) (2,546,570) 278,000 3,000,000 The ultimate recoupment of costs carried forward for exploration expenditure is dependent on the successful development and commercial exploitation or sale of the respective mining areas. The impairment loss relates to the withdrawal from tenements held in Australia that the Group has made a decision not to continue exploration and wrote down the carrying value to nil. 14. TRADE AND OTHER PAYABLES (CURRENT) Trade creditors Other creditors Consolidated 30 June 2018 $ 31,622 640,174 671,796 30 June 2017 $ 19,250 57,857 77,107 Trade payables and other creditors are non-interest bearing and will be settled on 30 to 60 day terms. Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value. 15. ISSUED CAPITAL (a) Issued capital Ordinary shares fully paid 17,763,416 17,629,441 Manhattan Corporation Limited 34 Annual Report to Shareholders (b) Movements in shares on issue At beginning of the period 140,278,693 17,629,441 136,036,273 17,489,441 30 June 2018 30 June 2017 Number of $ Number of $ shares shares Issue for cash less fundraising costs At 30 June (c) Ordinary shares 21,000,000 133,975 4,242,420 140,000 - - - - 161,278,693 17,763,416 140,278,693 17,629,441 The Group does not have authorised capital nor par value in respect of its issued capital. Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of the Group, to participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Group. (d) Capital risk management The Group’s capital comprises share capital, reserves less accumulated losses amounting to ($342,700) at 30 June 2018 (2017: $3,121,266). The Group manages its capital to ensure its ability to continue as a going concern and to optimise returns to its shareholders. The Group was ungeared at period end and not subject to any externally imposed capital requirements. Refer to note 5 for further information on the Group’s financial risk management policies. Share options (e) At 30 June 2018, there were 16,000,000 unissued ordinary shares under options (30 June 2017: 16,000,000 options). The details of the options are as follows: Number 13,000,000 3,000,000 16,000,000 Exercise Price $ 0.10 Expiry Date 28 November 2019 0.001 15 April 2019 No option holder has any right under the options to participate in any other share issue of the Group or any other entity. No options were issued during the year. Information relating to the Manhattan Corporation Employee Share Option Plan, including details of options issued under the plan, is set out in note 21. 16. RESERVES Consolidated 30 June 2018 $ 30 June 2017 $ Share based payment reserve 4,857,328 4,857,328 Manhattan Corporation Limited 35 Annual Report to Shareholders Movements in Reserves Share based payment reserve At beginning of the period Share based payment expense At end of period 4,857,328 4,857,328 - - 4,857,328 4,857,328 The share based payment reserve is used to record the value of equity benefits provided to directors, executives and employees as part of their remuneration and non-employees for their services. Refer to note 25 for further details of the options issued during the period. 17. RELATED PARTY TRANSACTIONS (a) Details of key management personnel 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) Remuneration of Key Management Personnel Short term employee benefits Share based payments Total remuneration (c) Loans to Key Management Personnel Consolidated 30 June 2018 $ 30 June 2017 $ 243,334 - 256,760 - 243,334 256,760 There were no loans made or outstanding to Directors of Manhattan and Key Management Personnel of the Company, including their personally related parties. (d) Other Transactions with Key Management Personnel (i) Alan J Eggers Alan Eggers is a director of Wesmin Corporate Pty Ltd. Wesmin has provided his services as Executive Chairman, personnel, office premises and administration staff to a value of $210,000 (2017: $210,000) 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 $60,459 (2017: $Nil) 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 2018. Manhattan Corporation Limited 36 Annual Report to Shareholders 19. SUBSEQUENT EVENTS AFTER END OF FINANCIAL YEAR On 1 August 2018 580,000,000 shares were issued at $0.005 cents per share to raise $2,900,000. 20. AUDITOR’S REMUNERATION The auditor of Manhattan Corporation Limited is Rothsay Auditing Amounts received or due and receivable by Rothsay Auditing for: - an audit or review of the financial report of the entity and any other entity in the Consolidated group 25,000 24,500 - tax advice in relation to the entity and any other entity in the consolidated group - 25,000 1,000 25,500 21. SHARE BASED PAYMENTS (a) Options The following share-based payment arrangements to Directors and employees existed at 30 June 2018. 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 1 July 2017 Number Granted Exercised Number Number Expired / Forfeited Number Balance at 30 June 2018 Number 28 November 2014 28 November 2019 $0.10 13,000,000 4 April 2016 15 April 2019 $0.001 3,000,000 Weighted remaining contractual life (years) Weighted average exercise price 16,000,000 2.3 $0.10 - - - - - - - - - - - 13,000,000 - 3,000,000 - 16,000,000 - - 1.3 $0.10 (b) Expenses Arising from Share Based Payment Transactions There were no share-based transactions during the year. 22. PARENT ENTITY INFORMATION The following information related to the parent entity, Manhattan Corporation Limited, at 30 June 2018. The information presented here has been prepared using consistent accounting policies as presented in Note 2. 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. 30 June 2018 $ 30 June 2017 $ Manhattan Corporation Limited 37 Annual Report to Shareholders Current assets Non-current assets Total Assets Current liabilities Non-current liabilities Total Liabilities Net Assets Issued capital Share based payment reserve Accumulated losses Total Equity Loss for the period Other comprehensive income for the period 50,648 191,972 6,263,497 10,396,843 6,314,145 10,588,815 671,796 77,107 5,985,048 5,979,548 6,656,844 6,056,655 (342,700) 4,532,160 17,763,416 17,629,441 4,857,328 4,857,328 (22,963,444) (17,954,609) (342,700) 4,532,160 30 June 2018 $ 30 June 2017 $ (5,008,835) (2,617,613) - - Total comprehensive loss for the period (5,008,835) (2,617,613) 23. COMMITMENTS (a) Exploration Expenditure Annual tenement rental obligations Annual exploration expenditure commitments Current commitment under Joshua Agreement (b) Capital or Leasing Commitments There are no capital or leasing commitments as at 30 June 2018. 24. CONTINGENT LIABILITIES AND CONTINGENT ASSETS - - 722,000 722,000 20,322 182,000 - 202,322 The Directors are of the opinion that there are no contingent liabilities or contingent assets as at 30 June 2018. 25. INTERESTS IN JOINT VENTURES Manhattan currently has no Joint Venture interests. Manhattan Corporation Limited 38 Annual Report to Shareholders 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 18 to 38 are in accordance with the Corporations Act 2001, and: (i) (ii) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and give a true and fair view of the financial position of Manhattan as at 30 June 2018 and of its performance for the Financial Year ended on that date; 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; The remuneration disclosures included in the Directors’ Report (as part of the Audited Remuneration Report), for the year ended 30 June 2018, comply with section 300A of the Corporations Act 2001; A statement that the attached Financial Statements are in compliance with International Financial Reporting Standards has been included in the Notes to the Financial Statements; and 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 2018. (b) (b) (c) (d) This declaration is made in accordance with a resolution of the Board of Directors and is signed on behalf of the Directors by: Marcello Cardaci Non-Executive Chairman 17 September 2018 Manhattan Corporation Limited 39 Annual Report to Shareholders ASX Additional Information Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The information is current at 21 August 2018. Substantial Share Holders The names of shareholders who have notified the Company in accordance with Section 671B of the Corporations Act 2001 are: Shareholder Name ARALAD MANAGEMENT PTY LTD No. of Ordinary Shares Percentage % 43,000,000 5.80 Distribution of Share Holders 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 -100,000 100,001 and over TOTAL Ordinary Shares Number of Holders 63 130 87 214 242 736 Number of Shares 32,980 381,277 747,982 8,761186 731,355,268 741,278,693 There were 377 holders of ordinary shares holding less than a marketable parcel. Top Twenty Share Holders Rank Name 1. ARALAD MANAGEMENT PTY LTD 2. 3. MR JASON BONTEMPO + MRS TIZIANA BATTISTA BLU BONE PTY LTD 4. KOBIA HOLDINGS PTY LTD 5. 6. 7. 8. 9. 10. 11. MINVEST SECURITIES (NEW ZEALAND) LIMITED JET CAPITAL PTY LTD KERO INVESTMENTS PTY LTD PTY LTD INVESTMENTS JAEGER KINGSLANE PTY LTD MERRIWEE PTY LTD FERNLAND HOLDINGS PTY LTD PORTFOLIO PO Address C/- SERVICE, BOX SUBIACO WA, 6008 61 EVANDALE STREET, FLOREAT WA, 6014 ADMIN 8271, BOX WEST D150, PORTFOLIO 505, WEMBLEY ADMIN C/- SERVICE, GPO BOX D150, PERTH WA, 6840 C/- ACCOLADE SERVICES, GPO PERTH BOX WA, 6840 BOX PO 1038, PERTH WA, 6872 PO WA, 6913 HALLIN 1C ARDROSS WA, 6153 PO BOX 288, WEST PERTH WA, 6872 PO WA, 6904 C/- IPS, PO BOX R226, ROYAL EXCHANGE NSW, 1225 C/- TERRA CAPITAL, LEVEL 139 MACQUARIE 12, STREET, SYDNEY NSW, 2000 SUBIACO COURT, 1311, BOX Units 43,000,000 % of Units 5.80 30,000,000 4.05 25,000,000 3.37 25,000,000 3.37 24,002,976 22,000,000 20,300,000 20,000,000 20,000,000 20,000,000 3.24 2.97 2.74 2.70 2.70 2.70 17,240,736 2.33 Manhattan Corporation Limited 45 Annual Report to Shareholders 12. 13. 14. TETRAMIN LTD SUPERANNUATION A/C> PTY MR JAHNN STATI LTD MR MARK MARGARET PATRICIA BUSHWOOD NOMINEES PTY LTD BAHEN JOHN TRUSTEES + MRS BAHEN J & J BANDY NOMINEES PTY LTD 20, BOX STREET, LATHAM BENTLEY STONE PERTH 12 SOUTH UNIT STREET, WA, 6151 8A ALFRED COVE WA, 6154 PO 159, WA, 6982 61 EVANDALE STREET, FLOREAT WA, 6014 PO BOX 78376, GREY LYNN, AUCKLAND 1245, NEW ZEALAND GPO BOX 546, ADELAIDE SA, 5001 ADMIN C/- SERVICE, GPO BOX D150, PERTH WA, 6840 4 UNIT AVENUE, WA, 6005 2 UNIT COURT, 6018 MELLERSH WA, VENTNOR PERTH 7 GWELUP 11 WEST PORTFOLIO 15,000,000 2.02 14,000,000 14,000,000 12,725,000 10,891,565 10,000,000 10,000,000 1.89 1.89 1.72 1.47 1.35 1.35 10,000,000 1.35 10,000,000 1.35 Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL) Total Remaining Holders Balance 373,160,277 368,118,416 50.34 49.66 Restricted Securities There are no restricted securities. On-Market Buy Back There is no current on-market buy back. Voting Rights All ordinary shares carry one vote per share without restriction. Interests in Tenements Held Project Tenement Number Tenure Title Interest AREA Status of Tenure Ponton E28/1523 E28/1898 E28/2454 Holder MHC MHC MHC % 100 100 100 (ha) 20 sub blocks 34 sub blocks 121 sub blocks Relinquished November 2017 22 Sub blocks surrendered Manhattan Corporation Limited 46 Annual Report to Shareholders 

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