Annual Report 2018
NICKEL MINES LIMITED
and its controlled entities
A.B.N. 44 127 510 589
Contents
Review of Operations
Corporate Governance Statement
Directors’ Report
Lead Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional ASX Information
Corporate Directory
1
6
7
17
18
19
20
21
22
49
50
56
58
Nickel Mines Limited
Review of Operations
Principal Activities and Review of Operations
(all amounts in US$ unless otherwise stated)
The operating loss of the Group for the year ended 30 June 2018
after income tax was $2,926,833 (2017 - $3,738,494)
The Company was incorporated on 12 September 2007, under
the laws of the State of New South Wales, Australia. The Group is
involved in the acquisition, exploration and development of nickel
mining projects. During the period the Company signed agreements
to become a downstream producer of nickel pig iron (NPI).
During and following the year ended 30 June 2018 significant milestones were achieved as follows:
> Following successful completion of the Company’s IPO
Nickel Mines provided notification of its exercise of its
option under the CSA to acquire a further 35% interest
in the RKEF Project to increase its interest to 60%. The
Company will pay $70 million to Shanghai Decent in cash
to acquire the additional 35% interest.
> In early June 2018 Nickel Mines signed a Memorandum of
Understanding (MOU) with Shanghai Decent to construct,
own and operate 2 RKEF lines, in addition to the 2 RKEF
lines operating under the CSA. This MOU is rapidly
progressing towards a definitive agreement, and upon
completion would see Nickel Mines operating 4 RKEF lines.
> In February 2018 PT Hengjaya Mineralindo (PT Hengjaya)
obtained a obtained borrow and use licence, a Ijin Pinjam
Pakai (IPPKH) in respect of approximately 994 hectares,
enabling an expanded resource area to be mined in closer
proximity to the coast which will reduce current mining
and hauling costs.
> During the year ended 30 June 2018 a total of 391,362
wmt were mined with an average stripping ratio of 1.3. A
total of 449,955 wmt were delivered during the year at an
average grade of 2.06% nickel.
Highlights:
> Successful completion of the Company’s Initial Public
Offering (IPO), with A$200 million being raised through
the issue of 571,428,571 shares at A$0.35 each, with the
Company being admitted to the ASX Official List on 20
August 2018.
> In September 2017 the Company entered into a Collaboration
and Subscription Agreement (CSA) with Shanghai Decent
Investment (Group) Co., Ltd., (Shanghai Decent), a Tsingshan
group company and another cornerstone investor, Shanghai
Wanlu Investment Co., Ltd (Wanlu). The CSA sets out (among
other things) the terms on which a 2-line Rotary Kiln
Electric Furnace (RKEF) plant within the Indonesia Morowali
Industrial Park (IMIP) will be funded and constructed (RKEF
Project).
> Construction of the 2 RKEF lines is progressing well
with a majority of the foundation works completed and
approximately 40% of procurement and 20% of civil works
having also been completed.
> Successful completion of the pre-IPO capital raise which
commenced in December 2017 and raised approximately $29
million. The funds raised were used to meet the precondition
requirements of the CSA and repay the debts owing.
> Following the successful completion of the pre-IPO capital
raise during the year, the Company received capital
contributions from Shanghai Decent and Wanlu in April 2018
for $26 million and $24 million, respectively, which have
been provided to Hengjaya Holdings Private Ltd (Hengjaya
Holdings) by way of a shareholder loan from the Company in
April 2018, resulting in the Company holding a 25% interest
in PT Hengjaya Nickel Industry (Hengjaya Nickel), the owner
of the RKEF Project.
1
Annual Report 2018 Review of Operations
Tsingshan Group
Collaboration and Subscription Agreement
On 19 September 2017, the Company entered into the CSA with
Shanghai Decent, a Tsingshan group company, and Wanlu, which sets
out (among other things) the terms on which the RKEF Project will be
funded and constructed and the future operations of the RKEF Project.
The RKEF Project is currently under construction within the IMIP,
located approximately 12 kilometres north of the Company’s
Hengjaya Mine on the island of Sulawesi
In addition to the construction of the RKEF Project, a material
objective of the CSA was to facilitate Shanghai Decent and Wanlu
becoming significant shareholders in the Company.
Funding for construction of RKEF Project
The guaranteed construction cost of the RKEF Project as agreed
under the CSA is no more than $200 million, of which:
> $50 million has been funded by the Company from the ‘Initial
Subscriptions’ from Shanghai Decent and Wanlu as described
below; and
> the balance shall be funded by Shanghai Decent by way of
shareholder loans injected into Hengjaya Holdings, a Singaporean
holding company which holds 100% of the shares (directly and
indirectly) of Hengjaya Nickel.
> Where the actual construction cost of the RKEF Project exceeds
$200 million, Shanghai Decent has agreed to indemnify Hengjaya
Holdings or Hengjaya Nickel (without recourse to the assets
or either of those entities) to the extent to which the actual
construction costs of the RKEF Project exceed $200 million and
such excess amounts are actually incurred by Hengjaya Holdings
or Hengjaya Nickel (as the case may be).
Pursuant to the CSA, in April 2018:
> Shanghai Decent subscribed for and were issued with
161,696,446 ordinary shares in the Company for consideration of
$26 million; and
> Wanlu subscribed for and were issued with 149,258,258 ordinary
shares in the Company for consideration of $24 million,
(together, ‘Initial Subscriptions’).
2
The Initial Subscriptions were completed following the satisfaction of
all relevant condition precedents under the CSA, including:
> completion of legal and financial due diligence by Shanghai
Decent and its professional advisers on the Company and the
Hengjaya Mine;
> there being no breach of any covenants, undertakings and
agreements required to be performed or caused to be performed
by the parties under the CSA prior to completion of the Initial
Subscriptions; and
> each of the Company, Shanghai Decent and Wanlu having
obtained all relevant approvals required to permit the Initial
Subscriptions.
In April 2018:
> the Company provided $50 million to Hengjaya Holdings by
way of shareholder loan (for accounting purposes this has been
treated as an investment in associate); and
> Hengjaya Holdings in turn provided the $50 million received
from the Company to Hengjaya Nickel ($25 million by way of
shareholder loan and $25 million as equity contributions), which
will be used by Hengjaya Nickel to contribute to the funding of
the construction of the RKEF Project.
Shanghai Decent is required under the CSA to fund the balance of
the construction costs of the RKEF Project via shareholder loans to
Hengjaya Holdings.
Shanghai Decent’s responsibilities for the RKEF Project
Under the terms of the CSA, Shanghai Decent is responsible for:
> the construction of the RKEF Project and shall take a lead role
in the design, construction and operationalisation of the RKEF
Project, which is to be undertaken through Hengjaya Nickel; and
> ensuring that the RKEF Project is completed with an annual
capacity of no less than 14,000 tonnes of equivalent contained
nickel within 20 calendar months from April 2018 when Nickel
Mines funded its first $50 million investment in the development
of the RKEF Project.
Shanghai Decent’s obligations above are subject to the absence
of a ‘force majeure event’ (being an event arising from any cause
beyond the reasonable control of Shanghai Decent, including without
limitation, acts of God, acts of civil or military authority, governmental
restrictions, wars and change of Law).
Shanghai Decent further undertakes to procure that its related
companies supply such utilities and logistics services within the IMIP
as required by the Hengjaya Nickel or the RKEF Project in line with
the IMIP ‘principle of non-discrimination’.
Nickel Mines Limited Review of Operations
In addition to the acquisition of the additional 35% of the share
capital of Hengjaya Holdings, the Company will also be assigned a
proportion of the total outstanding shareholder loans owing from
Hengjaya Holdings to Shanghai Decent at the time the RKEF Project
is completed, such that the Company will also have 60% of the total
shareholder loans made by the Company and Shanghai Decent to
fund the RKEF Project.
Call option to acquire up to 100% of Hengjaya Holdings
Under the CSA, the Company has been granted a call option (Call
Option) to require Shanghai Decent to sell to the Company all of the
shares in Hengjaya Holdings held by Shanghai Decent (Option Shares)
and assign all remaining shareholder loans owing from Hengjaya
Holdings to Shanghai Decent for consideration of $120 million, from
a 60% ownership position, which if exercised would increase the
Company’s shareholding in Hengjaya Holdings to 100%.
First acquisition of Hengjaya Holdings’ shares following completion of
the Initial Public Offering
The Company is required to acquire further shares in the capital of
Hengjaya Holdings from Shanghai Decent following completion of
its Initial Public Offering. Within 10 Business Days of the Company’s
Shares being listed and quoted on the ASX, the Company may notify
Shanghai Decent the number of shares in the capital of Hengjaya
Holdings, representing no less than 26% but no more than 35% of
the share capital of Hengjaya Holdings that the Company agrees to
acquire from Shanghai Decent (First Acquisition Notice).
Subsequent to end of the financial year, following successful
completion of the Company’s IPO the Company has provided notice
to Decent that it will acquire a further 35% of the share capital
of Hengjaya Holdings, increasing its shareholding in Hengjaya
Holdings (and as a result, the RKEF Project) from 25% to 60%. The
consideration payable for this additional 35% interest is $70 million
payable in cash to Shanghai Decent.
3
Annual Report 2018 Review of Operations
The Company must exercise the Call Option no later than 12 months
from the date on which the first batch of NPI is produced from the
RKEF Project (or such other date as may be agreed in writing with
Shanghai Decent).
If the Company elects to exercise the Call Option, the form of
consideration payable by the Company to acquire the Option Shares
and remaining shareholder loans will be at the election of Shanghai
Decent. Shanghai Decent can elect the consideration be in cash,
Shares in the Company or combination of both.
The Company has not yet decided whether it will exercise the Call
Option and the Company will make an assessment at the time this
option becomes available whether it is in the best interests of the
Company to exercise the Call Option.
RKEF Construction
Construction of the first 2 RKEF lines is progressing well. As of
mid-August, the majority of foundation works have been completed,
with approximately 40% of procurement and 20% of civil works also
completed. Most of the material equipment components have been
produced and put in lines in China, for shipping to the IMIP.
Memorandum of Understanding to acquire an interest in two
additional RKEF lines
On 1 June 2018, the Company entered into a non-binding
Memorandum of Understanding with Shanghai Decent whereby
the Company shall have the right, but not the obligation, to acquire
an interest of no less than 51% and up to 100% in a new special
purpose company which will be the owner of two new RKEF lines
which Shanghai Decent may choose to construct within the IMIP.
Nickel Mines and Shanghai Decent have agreed to negotiate in
good faith to enter into a definitive agreement within 3 months of
the signing of the Memorandum of Understanding. Upon signing a
definitive agreement, the Company shall pay Shanghai Decent a
non-refundable deposit of $5.0 million for the right to acquire its
initial interest in the new special purpose company and the right to
increase its ownership to 100% at a valuation of $300 million within
18 months from the commercial operation of the two new RKEF lines.
Hengjaya Mine
Overview
The Hengjaya Mine concession area covers 6,249 hectares and
is held under an Izin Usaha Pertambangan (IUP Operasi/Produksi)
or ‘Mining Business Licence, Operation/Production’ (IUP OP) with
drilling completed to date totalling 1,402 holes for 30,296 metres.
The resource is not fully defined with only approximately half of the
mapped ultramafic nickel bearing area having been resource drilled.
Operations:
Mining
Since the recommencement of mining at the Bete Bete deposit within
the Hengjaya project in October 2015, a total of over one million wmt
have been mined with an average stripping ratio of 1.06. During the
year ended 30 June 2018 a total of 391,362 wmt were mined with an
average stripping ratio of 1.3. A total of 449,955 wmt were delivered
during the year at an average grade of 2.06% nickel.
A record monthly delivery of 60,967 wmt was achieved in October
2017 with a record high of 3,707 wmt in one day was achieved in
January 2018.
4
Nickel Mines Limited Review of Operations
Ore Supply Agreements
Forestry
In September 2015 PT Hengjaya signed an ore supply agreement
with PT Sulawesi Mining Investment, a Tsingshan group company,
to supply 30,000 wmt per month of nickel ore at a cut-off grade of
1.90% nickel for six months and the Hengjaya Mine’s operations
were recommenced. In December 2016 PT Hengjaya entered into an
ore supply agreement with a Tsingshan group company PT Indonesia
Tsingshan Stainless Steel (ITSS) for the delivery of 50,000 wmt per
month at an average grade of 1.90% nickel (minimum 1.80%). In
October 2017 an updated ore supply agreement was signed with
ITSS guaranteeing to take supply of 50,000 wmt per month until 30
November 2018, with a cut-off grade of 1.60% nickel.
In February 2018 PT Hengjaya obtained an IPPKH in respect of
approximately 994 hectares, enabling an expanded resource area to
be mined in closer proximity to the coast which will reduce current
mining and hauling costs.
PT Hengjaya has commenced formally staking the IPPKH boundary
(Terpal Batas). Once completed a newly devised mine plan will be
implemented to mine a block in the new area with a haul distance
of only 6 kilometres to the jetty, greatly reducing haul distances and
allowing larger trucks to be used.
Upcoming Operations
The new central zone pit 21 will be an area of 13 hectares with an
average anticipated grade of 2.1% nickel and is 6km closer to the
jetty than Bete Bete. The new hauling road will be part of the old
APL road which will need some maintenance done and an extra 900
metres of new road needs to be built. Hauling to the jetty will be done
using 20-ton trucks instead of 6-ton trucks. There will be a new fleet
of excavators, dozers etc. for the central pit.
5
Annual Report 2018 Review of Operations
Mineral Resources Statement
Summarised below by resource category is the JORC resource estimate for the Hengjaya project, using a 1.50% nickel cut-off grade.
Category
Measured
Total Measured
Indicated
Total Indicated
Inferred
Total Inferred
Grand Total
Block
Dry Tonnes
Ni (%)
Co (%)
Fe (%)
Block B
Block C
Bete Bete
West Bete Bete
Central
Central 2
Block A
Block B
Bete Bete
West Bete Bete
Central
Central 2
Block A
Block B
Block C
18,000
690,000
700,000
5,500,000
1,200,000
350,000
6,400,000
890,000
210,000
15,000,000
300,000
900,000
17,000,000
2,700,000
200,000
600,000
100,000
22,000,000
38,000,000
1.70
1.80
1.80
1.90
1.80
1.80
1.80
1.90
1.70
1.90
2.00
1.90
1.80
1.70
1.90
2.00
1.70
1.80
1.80
0.03
0.05
0.05
0.04
0.05
0.07
0.08
0.09
0.03
0.06
0.04
0.05
0.05
0.08
0.09
0.03
0.04
0.05
0.06
16.00
16.00
16.00
15.00
6.10
16.00
17.00
40.00
16.00
17.00
17.00
12.00
17.00
17.00
41.00
15.00
16.00
17.00
17.00
Resource Comparison 2018 to 2017
Corporate Governance Statement
The Board is committed to maintaining standards of Corporate
Governance. Corporate Governance is about having a set of core
values and behaviours that underpin the Company’s activities and
ensure transparency, fair dealing and protection of the interests of
stakeholders. The Company has reviewed its corporate governance
practises against the Corporate Governance Principles and
Recommendations (3rd edition) published by the ASX Corporate
Governance Council.
The 2018 Corporate Governance Statement is dated as at 17 March
2018 and reflects the corporate governance practises throughout
the 2018 financial year. The 2018 Corporate Governance Statement
was approved by the Board on 17 March 2018. A description of the
Company’s current corporate governance practises is set out in the
Company’s Corporate Governance Statement which can be viewed at
www.nickelmines.com.au/corporate-governance/.
As the Company was not listed on the ASX in the prior year no annual
review of Mineral Resources was conducted at the time.
Statement of Compliance
The information in this report that relates to Mineral Resources is
based on information compiled by Mr Brett Gunter, a Competent
Person who is a Member of The Australasian Institute of Mining and
Metallurgy. Mr Gunter has sufficient experience that is relevant to the
style of mineralisation and type of deposit under consideration and
to the activity being 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’. Brett
Gunter consents to the inclusion in the report of the matters based on
his information in the form and context in which it appears.
Information relating to the Mineral Resources Statement is based
on, and fairly represents, information and supporting documentation
prepared by Nickel Mines staff and contractors and approved by Mr
Brett Gunter. The Mineral Resource Statement as a whole has been
approved by Mr Gunter and he has consented to the form and context
in which it appears in this report.
6
Nickel Mines Limited Directors’ Report
The Directors present their report together with the financial report of Nickel Mines Group, being Nickel Mines Limited (‘the Company’ or ‘Nickel
Mines’) and its controlled entities (“the Group”), for the year ended 30 June 2018 and the auditor’s report thereon:
Directors
The names and particulars of the Directors of the Company at any time during or since the end of the period are:
Robert Neale – Non-Executive Chairman
Director since 16 April 2018.
Mr Neale graduated from the University of Queensland in 1968 with a First Class Honours Degree in Geology
and Mineralogy with an additional major in Chemistry. Mr Neale is currently the Non-Executive Chairman of
Mayur Resources Limited, a recently listed industrial minerals and energy company with assets in Papua New
Guinea. Mr Neale is also a non-executive director of Amber Power Limited, an Australian, non-listed public
company, developing innovative new energy technologies.
Mr Neale is the former Managing Director of New Hope Corporation Limited (NHC) and non-executive director
of Plant Gas Limited until February 2016. He joined NHC in 1996 as General Manager and was appointed as
an executive officer in 2005 and to the Board of Directors in 2008 until his retirement in 2014. Mr Neale has more than 45 years’ experience in the
mining, oil and gas and exploration industries covering base metals, gold, coal, synthetic fuels and conventional oil and gas, bulk materials shipping,
and power generation. Prior to NHC he spent 23 years’ with Esso Australia and EXXON Coal and Minerals Company.
Norman Seckold – Executive Deputy Chairman
Executive Chairman to 16 April 2018. Director since 12 September 2007.
Norman Seckold graduated with a Bachelor of Economics degree from the University of Sydney in 1970. He
has spent more than 30 years in the full time management of natural resource companies, both in Australia
and overseas.
Mr Seckold has been the Chairman of a number of publicly listed companies including Moruya Gold Mines
(1983) N.L., which acquired the Golden Reward heap leach gold deposit in South Dakota, USA, Pangea
Resources Limited, which acquired and developed the Pauper’s Dream gold mine in Montana, USA, Timberline
Minerals, Inc. which acquired and completed a feasibility study for the development of the MacArthur copper
deposit in Nevada, USA, Perseverance Corporation Limited, which discovered and developed the Nagambie gold mine in Victoria, Valdora Minerals
N.L., which developed the Rustler’s Roost gold mine in the Northern Territory and the Ballarat East Gold Mine in Victoria, Viking Gold Corporation,
which discovered a high grade gold deposit in northern Sweden, Mogul Mining N.L., which drilled out the Magistral and Ocampo gold deposits in
Mexico and Bolnisi Gold N.L, which discovered and developed the Palmarejo and Guadalupe gold and silver mines in Mexico.
Mr Seckold is currently Chairman of Collerina Cobalt Limited, a minerals exploration and development company operating in Australia and
Indonesia, Planet Gas Limited, an energy explorer with interests in conventional and unconventional oil and gas resources, Santana Minerals Ltd.,
a precious metals exploration company with projects in Chile and Mexico, and unlisted public company Mekong Minerals Limited.
7
Annual Report 2018 Directors’ Report
Peter Nightingale – Executive Director and Chief Financial Officer
Director since 12 September 2007.
Peter Nightingale graduated with a Bachelor of Economics degree from the University of Sydney and is a
member of the Institute of Chartered Accountants in Australia. He has worked as a chartered accountant in
both Australia and the USA.
As a director or company secretary Mr Nightingale has, for more than 25 years, been responsible for the
financial control, administration, secretarial and in-house legal functions of a number of private and public
listed companies in Australia, the USA and Europe including Pangea Resources Limited, Timberline Minerals
Inc., Perseverance Corporation Limited, Valdora Minerals N.L., Mogul Mining N.L., Argent Minerals Limited,
Bolnisi Gold N.L and Cockatoo Coal Limited. Mr Nightingale is currently a director of ASX Listed Collerina Cobalt Limited and Planet Gas Limited
and unlisted public company Prospech Limited.
Justin Werner – Managing Director
Director since 23 August 2012.
Justin, who has a bachelor of management from the University of Sydney, has been involved in mining
industry for more than 15 years. He was a founding partner of PT Gemala Borneo Utama, a private Indonesian
exploration and mining company, which developed a heap leach gold mine in West Kalimantan and which
discovered the highly prospective Romang Island project with Robust Resources Limited which was acquired
by Indonesian business man Anthony Salim.
Prior to focusing on developing projects in Indonesia, Justin worked as a consultant for specialist mining
consultancies GPR Dehler, Jamieson Consulting and Partners in Performance, leading many successful
turnaround projects for blue chip mining companies including Freeport McMoran (Grassberg deposit, Indonesia where he spent 2 years), Lihir Gold
(Lihir mine, Papua New Guinea), Placer Dome (Nevada, USA), BHP Billiton (Ingwe Coal, South Africa), Rio Tinto (West Angeles Iron Ore, Australia),
Nickel West (Western Australia) and QNI Yabulu refinery (Queensland, Australia). Mr Werner is currently a Director of ASX Listed Collerina Cobalt
Limited.
James Crombie – Director
Director since 23 May 2008.
Jim Crombie graduated from the Royal School of Mines, London, in 1980 with a B.Sc. (Hons) in Mining
Engineering, having been awarded an Anglo American Scholarship. Mr. Crombie held various positions with
DeBeers Consolidated Mines and the Anglo American Corporation in South Africa and Angola between 1980
and 1986. He spent the next thirteen years as a Mining Analyst and Investment Banker with Shepards, Merrill
Lynch, James Capel & Co. and finally with Yorkton Securities. Mr. Crombie was the Vice President, Corporate
Development of Hope Bay Mining Corporation Inc. from February 1999 through May 2002 and President and
CEO of Ariane Gold Corp. from August 2002 to November 2003. Mr. Crombie was President, CEO and a director
of Palmarejo Silver and Gold Corporation until the merger with Coeur d’Alene Mines Corporation, one of the
world’s leading silver companies, in December 2007. He was a director of Sherwood Copper Corporation until its business combination with
Capstone Mining Corp. in November 2008. Currently, Mr. Crombie is President and CEO of Odyssey Resources Corp., and a director of Arain Silver
and Torex Gold Resources Inc.
8
Nickel Mines Limited Directors’ Report
Weifeng Huang – Director
Director since 26 April 2018.
Mr Huang graduated with a Bachelor of Engineering degree from Zhejiang University in 1982 and obtained a
Masters of Business Administration from Zhejiang University in 1998.
Mr Huang began his career in several industrial enterprises and has broad management experiences from
serving as the Plant Manager of Wenzhou Tractor Plant, the General Manager of Wenzhou Machinery Industrial
Corporation, the Vice Mayor of Wenzhou and the Executive Chairman of China Perfect Machinery Industry
Corp., Ltd. Mr Huang also served as the Deputy Director of the Management Committee of Shanghai Jinqiao
Export Processing Zone, where he was appointed as a Director of Shanghai Jinqiao Export Processing Zone
Development Co., Ltd, a publicly-listed company on the Shanghai Stock Exchange and the Deputy CEO of Shanghai Jinqiao Group. Mr Huang was
also a former Chairman of the board of Harbin High Tech (Group) Co., Ltd, another publicly-listed company on the Shanghai Stock Exchange.
Mr Huang is currently the Chairman of Shanghai Decent Investment (Group) Co., Ltd, (Shanghai Decent) a flagship company within the Tsingshan
group and the President Director of PT Indonesia Morowali Industrial Park. Under his leadership, Shanghai Decent has led in the investments of
over $5 billion in the Indonesia Morowali Industrial Park (IMIP), an industrial park covering 2,000 hectares, and making IMIP an industry recognised
ferronickel and stainless steel complex.
Mark Lochtenberg – Director
Director since 10 March 2017.
Mr Lochtenberg graduated with a Bachelor of Law (Hons) degree from Liverpool University, U.K. and has been
actively involved in the coal industry for more than 25 years. He was the Executive Chairman and founding
Managing Director of ASX-listed Cockatoo Coal Limited. He was a principal architect of Cockatoo’s inception
and growth from an early-stage grassroots explorer through to its current position as an emerging mainstream
coal producer.
He was also formerly the co-head of Glencore International AG’s worldwide coal division, where he spent 13
years overseeing a range of trading activities including the identification, due diligence, negotiation, acquisition
and aggregation of the coal project portfolio that would become Xstrata Coal. Prior to this MR Lochtenberg established a coal “swaps” market
for Bain Refco, (Deutsche bank) after having served as a senior coal trader for Hansen Neuerburg AG and as coal marketing manager for Peko
Wallsend Limited.
Mr Lochtenberg is currently Chairman of ASX listed Equus Resources Limited, a minerals exploration company with operations in Chile and a
Director of Australian Transport Energy Corridor Pty Ltd (‘ATEC’).
Yuanyaun Xu – Director
Director since 26 April 2018.
Ms Yuanyuan Xu graduated with a Bachelor’s Degree in Fashion Business & Fashion Design from Instituto
Marangoni.
Since graduation, Ms Xu has honed her business acumen, participating in the Shanghai Fashion Week with a
focus on marketing, public relations and procurement activities.
She is currently an Executive Director of Shanghai Wanlu Investment Co., Ltd.
9
Annual Report 2018 Directors’ Report
Richard Edwards – Company Secretary
Company Secretary since 28 March 2012.
Richard Edwards graduated with a Bachelor of Commerce degree from the University of New South Wales, is a Fellow of the Governance Institute
of Australia, a member of CPA Australia and holds a Graduate Diploma of Applied Finance and Investment from FINSIA. Following eight years as an
owner/manager of his own business Mr Edwards has worked for over ten years providing financial reporting and company secretarial services to
a range of publicly listed companies in Australia with a focus on the mining sector, including as CFO and Company Secretary of Indonesia focused
Sumatra Copper & Gold plc. He is also Company Secretary of ASX listed Collerina Cobalt Limited and unlisted public companies Indo Mines
Limited and Prospech Limited.
Directors’ Meetings
The number of Directors’ meetings held and number of meetings attended by each of the Directors of the Company, while they were a Director,
during the year are:
Director
Robert Neale
Norman Seckold
James Crombie
Weifeng Huang
Mark Lochtenberg
Peter Nightingale
Justin Werner
Yuanyuan Xu
Board meetings
Held
Attended
1
5
5
1
5
5
5
1
1
5
4
-
4
5
5
-
Directors’ Interests
The beneficial interests of each director of the Company in the issued share capital of the Company are:
Key management
personnel
Robert Neale
Norman Seckold
Peter Nightingale
James Crombie
Weifeng Huang
Mark Lochtenberg
Justin Werner
Yuanyuan Xu
1 July 2017
Purchased
500,000(1)
115,272,673
16,286,787
5,775,000
- (1)
11,693,333
21,099,491
149,258,258(1)
-
6,184,963(2)
3,720,842(2)
-
-
-
3,916,806(2)
-
Granted as
compensation(3)
-
2,258,025
2,258,025
805,000
-
-
-
-
(1) Number held at the date he/she became a director.
Sold
Date of this report
-
-
-
-
-
-
-
-
500,000
123,715,661
22,265,654
6,580,000
-
11,693,333
25,016,297
149,258,258
(2)
To enable the company to meet the precondition requirements of the CSA the directors agreed to receive shares in lieu of payment to extinguish
the debts owing. Norman Seckold received 3,472,777 shares; Peter Nightingale received 1,008,656 shares and Justin Werner received
2,416,806. Additionally the Company settled all outstanding loan and creditor balances with MIS Corporate Pty Limited (‘MIS’), an entity in
which Peter Nightingale and Norman Seckold hold a controlling interest by the issuance of 2,712,186 shares to both Peter Nightingale and
Norman Seckold. The remaining balance were purchased in the pre-IPO capital raise which commenced in December 2017.
(3)
Following the successful capital raise in December 2017 the Board approved a one-off payment to Peter Nightingale, Norman Seckold and
James Crombie totalling A$976,000 in recognition of the services they have provided leading up to the pre-IPO capital raise. The payment was
settled through the issue of shares at the rate of $0.16 per share.
10
Nickel Mines Limited Directors’ Report
Financial position
The net assets of the Group at 30 June 2018 were $75,144,714, with unrestricted cash on hand of $806,574. The increase in net assets from
the prior year was a result of the capital raise in December 2017 and the receipt of $50,000,000 under the CSA. The funds received were used to
repay the outstanding liabilities and to acquire the 25% interest in Hengjaya Holdings.
Dividends
The Directors do not recommend the payment of a dividend in respect of the year ended 30 June 2018. No dividends have been paid or declared
during the period or in prior periods.
Significant Changes in State of Affairs
In the opinion of the directors, significant changes in the state of affairs of the Group that occurred during the year ended 30 June 2018 were as
follows:
•
•
•
•
In September 2017 the Company entered into the CSA with Shanghai Decent and Wanlu. The CSA sets out (among other things) the
terms on which a 2-line Rotary Kiln Electric Furnace (RKEF) plant within the Indonesia Morowali Industrial Park (IMIP) will be funded and
constructed (RKEF Project).
Following the successful completion of a pre-IPO capital raise during the year, the Company received capital contributions from Shanghai
Decent and Wanlu in April 2018 for $26 million and $24 million, respectively, which have been provided to Hengjaya Holdings by way of a
shareholder loan from the Company in April 2018, resulting in the Company holdings a 25% interest in Hengjaya Nickel, the owner of the
RKEF Project.
In February 2018 PT Hengjaya obtained an IPPKH in respect of approximately 994 hectares, enabling an expanded resource area to be
mined in closer proximity to the coast which will reduce current mining and hauling costs.
During the year the Directors of the Company resolved to seek admission to the ASX Official List.
In the opinion of the Directors, there were no other significant changes in the state of affairs of the Group during the year ended 30 June 2018
other than as disclosed in this Directors’ Report, or in the financial statements.
Impact of Legislation and Other External Requirements
On 12 January 2014 the Indonesian Government introduced a ban on the export of unprocessed minerals. As a consequence the mining
operations at the Hengjaya project were ceased. Whilst the ban on the export of unprocessed minerals remains in place, mining operations were
recommenced in October 2015 following the signing of a series of ore offtake agreements to supply ore to companies within the Tsingshan Group
as detailed above. There were no environmental or other legislative requirements during the year that have significantly impacted the results or
operations of the Group.
Environmental Regulations
The Group’s operations are subject to environmental regulations in the Republic of Indonesia.
The Board of Directors regularly monitors compliance with environmental regulations. The Directors are not aware of any significant breaches of
these regulations during the year covered by this report.
Likely Developments
Information as to likely developments in the operations of the Group and the expected results of those operations in subsequent years has not
been included in this report because disclosure of this information would be likely to result in unreasonable prejudice to the Group.
11
Annual Report 2018 Directors’ Report
Indemnification of Officers and Auditors
During or since the end of the year, the Company has not indemnified or made a relevant agreement to indemnify an officer or auditor of the
Company against a liability incurred by such an officer or auditor. In addition, the Company has not paid or agreed to pay, a premium in respect of
a contract insuring against a liability incurred by an officer or auditor.
Non-audit services
During the year KPMG, the Group’s auditor, provided the following non-audit services:
Taxation services in relation to IPO
Investigating Accountant’s services in relation to IPO
2018
$
7,545
35,884
43,429
The directors have considered the non-audit services provided during the year by KPMG. These services do not undermine the general principles
relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants as they did not involve review or auditing the
auditors own work, acting in a management or decision making capacity for the Group, acting as an advocate for the Group or jointly sharing risks
and rewards. For this reason the Board is satisfied that the provision of those non-audit services provided during the year by KPMG is compatible
with and did not compromise the auditor independence of the Corporations Act 2001.
Events Subsequent to Balance Date
Subsequent to the end of the year:
•
•
the Company successfully completed its IPO, with A$200 million being raised through the issue of 571,428,571 shares at A$0.35 each,
with the Company being admitted to the ASX Official List on 20 August 2018.
Following successful completion of the Company’s IPO Nickel Mines provided notification of its exercise of its option under the CSA to
acquire a further 35% interest in the RKEF Project to increase its interest to 60%. The Company will pay $70 million to Shanghai Decent
in cash to acquire the additional 35% interest.
In early June 2018 Nickel Mines signed a Memorandum of Understanding (MOU) with Shanghai Decent to construct, own and operate an
additional 2 RKEF lines. This MOU is rapidly progressing towards a definitive agreement, and upon completion would see Nickel Mines operating 4
RKEF lines.
Other than the matters detailed above, there has not arisen in the interval between the end of the financial year and the date of this report any
other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the
operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.
Remuneration Report - (Audited)
All amounts in this remuneration report are in Australian Dollars unless otherwise stated.
Principles of Compensation - (Audited)
Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Group. Key management
personnel comprise the directors of the Company. No other employees have been deemed to be key management personnel. The policy of
remuneration of directors and senior executives is to ensure the remuneration package properly reflects the person’s duties and responsibilities,
and that remuneration is competitive in attracting, retaining and motivating people of the highest quality. Compensation levels have been, and will
be, set to be in line with Australian listed entities of equivalent size and comparable operations in order to attract and retain suitably qualified and
experienced key management personnel but also having regard to the prevailing financial capacity of the Company.
12
Nickel Mines Limited Directors’ Report
Remuneration Report - (Audited) (Con’t)
Principles of Compensation - (Audited) (Con’t)
The Board is responsible for reviewing and evaluating its own performance. The evaluation process is intended to assess the Group’s business
performance, whether long term strategic objectives are being achieved and the achievement of individual performance objectives.
Remuneration generally consists of salary payments. The remuneration disclosed below represents the cost to the Group for the services provided
under these arrangements.
Consultancy Agreements with key management personnel
The Company has entered into an executive consultancy agreement with a company associated with Justin Werner. The agreement is
denominated in Australian Dollars. Under this executive consultancy agreement, the consultancy company of Mr Werner agrees to make Mr
Werner available to perform the duties and responsibilities of the position of Managing Director. The consultancy company currently receives a
monthly fee of $12,500 per month (exclusive of GST) and will receive a monthly fee of $25,833 (exclusive of GST) upon successful listing of the
Company on the ASX. The consultancy agreement commenced on 1 April 2018 and continues until terminated in accordance with its terms. Prior
to 1 April 2018 there was no formal contract with Mr Werner.
The Company has entered into an executive consultancy agreement with a company associated with Norman Seckold. The agreement is
denominated in Australian Dollars Under this executive consultancy agreement, the consultancy company of Mr Seckold agrees to make Mr
Seckold available to perform the duties and responsibilities of the position of Deputy Chairman and Executive Director. The consultancy company
currently receives a monthly fee of $8,500 per month (exclusive of GST) and will receive a monthly fee of $8,333 (exclusive of GST) upon
successful listing of the Company upon the ASX. The consultancy agreement commenced on 1 May 2018 and continues until terminated in
accordance with its terms. Prior to 1 May 2018 there was no formal contract with Mr Seckold.
The Company has entered into an executive consultancy agreement with a company associated with Peter Nightingale. The agreement is
denominated in Australian Dollars. Under this executive consultancy agreement, the consultancy company of Mr Nightingale agrees to make Mr
Nightingale available to perform the duties and responsibilities of the position of Chief Financial Officer and Executive Director. The consultancy
company currently receives a monthly fee of $8,500 per month (exclusive of GST) and will receive a monthly fee of $16,667 (exclusive of GST)
upon successful listing of the Company upon the ASX. The consultancy agreement commenced on 1 April 2018 and continues until terminated in
accordance with its terms. Prior to 1 April 2018 there was no formal contract with Mr Nightingale.
Each Executive Director is entitled to be reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of
the Board and any committee on which he or she serves. The consultancy agreements may be terminated by the Company or the consultancy
company by either party giving three months’ notice. The Company may terminate the consultancy agreements without notice in certain
circumstances, including but not limited to a breach of contract, criminal activity or serious misconduct by the consultancy company or the key
management personnel.
Each of the Company’s Non-Executive Directors have entered into Letters of Appointment with the Company to serve as Non-Executive Directors.
Each of the Letters of Appointment provide that amongst other things, in consideration for their services, the Company will pay the following fees
to the Non-Executive Directors.
Name
Robert Neale
James Crombie
Weifeng Huang
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Mark Lochtenberg
Non-Executive Director
Yuanyuan Xu
Non-Executive Director
Annual fee (A$)
150,000
50,000
50,000
50,000
50,000
13
Annual Report 2018 Directors’ Report
Remuneration Report - (Audited) (Con’t)
Principles of Compensation - (Audited) (Con’t)
No directors or senior executives receive performance related remuneration however for the year ended 30 June 2018 the Board approved a one-
off grant of shares to Peter Nightingale, Norman Seckold and James Crombie in recognition of the services they have provided leading up to the
pre-IPO capital raise.
There were no remuneration consultants used by the Group during the year ended 30 June 2018, or in the prior year.
Consequences of performance on shareholder wealth
In considering the Group’s performance and benefits for shareholder wealth, the Board has regard to the following indices in respect of the current
financial year and the previous four financial years.
USD
Net loss attributable to owners of the company
Dividends paid
2018
(3,311,526)
2017
(3,831,761)
2016
(1,377,084)
2015
(3,732,242)
2014
(2,968,977)
-
-
-
-
-
As the Group is in the development stage the Board also considers non-financial indices in assessing the Group’s performance and the
shareholders wealth. This includes obtaining the permits and approvals to further develop the mining operations, identifying opportunities for
potential strategic business partnerships and ventures and the success of fund raising ventures.
Details of Remuneration for the Year Ended 30 June 2018 - (Audited)
Details of director and senior executive remuneration and the nature and amount of each major element of the remuneration of each director of
the Company, and other key management personnel of the Group are set out below. All balances included are denominated in Australian Dollars:
Key
management
personnel
Executive directors
Peter J. Nightingale
Norman A. Seckold
Justin C. Werner
Non-executive directors
Robert C. Neale*
James Crombie
Weifeng Huang**
Mark H. Lochtenberg^
Yuanyuan Xu**
Total
Total
Year
2018
2017
2018
2017
2018
2017
2018
2018
2017
2018
2018
2017
2018
2018
2017
Short term
Salary and fees
A$
Post-
employment
Superannuation
A$
Share based
payments
Shares
A$
Proportion of
remuneration
performance related
%
Value of options
as a proportion of
remuneration
%
Total
A$
51,000
-
51,000
-
177,859
150,000
-
-
-
-
-
-
-
279,859
150,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
408,000
459,000
-
-
408,000
459,000
-
-
-
-
-
177,859
150,000
-
89%
-
89%
-
-
-
-
160,000
160,000
100%
-
-
-
-
-
-
-
-
-
-
976,000
1,255,859
-
150,000
-
-
-
-
-
78%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* Appointed as a Director on 16 April 2018.
** Appointed as a Director on 26 April 2018.
^ Appointed as a Director on 10 March 2017.
14
Nickel Mines Limited Directors’ Report
Remuneration Report - (Audited) (Con’t)
Details of Remuneration for the Year Ended 30 June 2018 - (Audited) (Con’t)
For the year ended 30 June 2017 Norman Seckold, Peter Nightingale, James Crombie and Mark Lochtenberg waived the Director fees owing
to them. For the year ended 30 June 2018 there was no remuneration paid or payable to Robert Neale, Weifeng Huang, Mark Lochtenberg and
Yuanyuan Xu.
Following the successful capital raise in December 2017 the Board approved a one-off payment to Peter Nightingale, Norman Seckold and James
Crombie totalling A$976,000 (excluding GST) in recognition of the services they have provided leading up to the pre-IPO capital raise. The payment of
A$1,057,600 (including GST) was converted to US$851,368 using the rate of 80.5c and settled through the issue of shares on 31 January 2018 at the
pre-IPO capital raising price of US$0.16 per share.
The total remuneration expense for the year ended 30 June 2018 of A$1,255,859 has been recognised in the Statement of Profit or Loss at the
USD equivalent of US$974,607.
Movement in shares – (Audited)
The movement during the reporting period in the number of ordinary shares in the Company held directly, indirectly or beneficially, by each key
management person, including their related parties, is as follows:
1 July 2017
Purchased
Robert Neale
Norman Seckold
Peter Nightingale
James Crombie
Weifeng Huang
Mark Lochtenberg
Justin Werner
Yuanyuan Xu
500,000(1)
115,272,673
16,286,787
5,775,000
-(1)
11,693,333
21,099,491
149,258,258(1)
-
6,184,963(2)
3,720,842(2)
-
-
-
3,916,806(2)
-
(1) Number held at the date he/she became a director.
Granted as
compensation(3)
-
2,258,025
2,258,025
805,000
-
-
-
-
Sold
30 June 2018
-
-
-
-
-
-
-
-
500,000
123,715,661
22,265,654
6,580,000
-
11,693,333
25,016,297
149,258,258
(2) To enable the company to meet the precondition requirements of the CSA the directors agreed to receive shares in lieu of payment to extinguish
the debts owing. Norman Seckold received 3,472,777 shares; Peter Nightingale received 1,008,656 shares and Justin Werner received
2,416,806. Additionally the Company settled all outstanding loan and creditor balances with MIS Corporate Pty Limited, an entity in which Peter
Nightingale and Norman Seckold hold a controlling interest by the issuance of 2,712,186 shares to both Peter Nightingale and Norman Seckold.
All other share purchases were made in cash as part of the pre-IPO capital raise which commenced in December 2017.
(3) Following the successful capital raise in December 2017 the Board approved a one-off payment to Peter Nightingale, Norman Seckold and
James Crombie totalling A$976,000 (excluding GST) in recognition of the services they have provided leading up to the pre-IPO capital raise.
The payment was settled through the issue of shares at the rate of US$0.16 per share.
Transactions with Key Management Personnel – (Audited)
Peter Nightingale and Norman Seckold hold a controlling interest in an entity, MIS Corporate Pty Limited, which provided full administrative
services, including administrative, accounting and investor relations staff both within Australia and Indonesia, rental accommodation, services and
supplies, to the Group. Fees charged by MIS Corporate Pty Limited during the year amounted to A$279,452 (2017 - A$371,325) which included
the monthly fee of A0$15,000 per month and reimbursement of consultant expenses incurred by MIS Corporate Pty Limited on behalf of the Group.
At 30 June 2018 A$51,346 (30 June 2017: A$629,236) remained outstanding and was included in the creditor’s balance.
15
Annual Report 2018 Directors’ Report
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
The lead auditor’s independence declaration is set out on page 17 and forms part of the Directors’ Report for the period ended 30 June 2018.
Signed at Sydney this 31st day of August 2018 in accordance with a resolution of the Board of Directors:
Robert Neale
Chairman
Norman Seckold
Deputy Chairman
16
Nickel Mines Limited Lead Auditor’s Independence Declaration
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Nickel Mines Limited
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
I declare that, to the best of my knowledge and belief, in relation to the audit of Nickel Mines Limited for
the financial year ended 30 June 2018 there have been:
i.
ii.
KPMG
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
To the Directors of Nickel Mines Limited
no contraventions of any applicable code of professional conduct in relation to the audit.
I declare that, to the best of my knowledge and belief, in relation to the audit of Nickel Mines Limited for
the financial year ended 30 June 2018 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Adam Twemlow
Partner
Brisbane
31 August 2018
KPMG
Adam Twemlow
Partner
Brisbane
31 August 2018
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
20
Liability limited by a scheme approved under
Professional Standards Legislation.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
20
Liability limited by a scheme approved under
Professional Standards Legislation.
17
Annual Report 2018
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2018
USD
Nickel ore sales revenue
Cost of sales
Gross profit
Administration expenses:
Directors’ fees and consultants’ expenses
Depreciation expense
Tax charges
Agency fee charges
Other expenses
Results from operating activities
Financial income
Financial expense
Finance costs
Loss before income tax
Income tax benefit/(expense)
Loss for the year
Other comprehensive income
Items that may be classified subsequently to profit or loss
Total comprehensive loss for the year
Loss attributable to:
Owners of the Company
Non-controlling interest
Loss for the year
Total comprehensive loss attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive loss for the year
Earnings per share
Basic and diluted loss per share (cents)
Notes
2018
$
2017
$
12
4
5
5
8
13,551,415
(10,693,574)
2,857,841
(1,987,189)
(64,425)
(23,540)
(1,800,000)
(602,673)
(1,619,986)
675,890
(1,326,476)
(650,586)
(2,270,572)
8,594,750
(7,683,830)
910,920
(554,740)
(50,337)
(136,234)
(3,300,000)
(245,239)
(3,375,630)
10,683
(552,895)
(542,212)
(3,917,842)
(656,261)
(2,926,833)
179,348
(3,738,494)
-
(2,926,833)
-
(3,738,494)
(3,311,526)
(3,831,761)
384,693
93,267
(2,926,833)
(3,738,494)
(3,311,526)
(3,831,761)
384,693
93,267
(2,926,833)
(3,738,494)
9
(0.72)
(1.21)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
18
Nickel Mines Limited Consolidated Statement of Financial Position
As at 30 June 2018
USD
Notes
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
Other current assets
Total current assets
Non-current assets
Other non-current asset
Investment in equity accounted investee
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Current tax payable
Provision – employee’s benefit obligation
Borrowings
Total current liabilities
Non-current liabilities
Provision – rehabilitation
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Foreign currency translation reserve
Accumulated losses
Total equity attributable to equity holders of the Company
Non-controlling interest
Total equity
18
6
10
7
15
11
12
13
13
2018
$
806,574
387,412
588,843
768,643
2017
$
278,775
288,689
959,451
136,855
2,551,472
1,663,770
242,045
50,000,025
26,627,634
76,869,704
-
-
26,276,076
26,276,076
79,421,176
27,939,846
2,855,385
12,315,006
657,471
478,549
-
3,991,405
372,305
268,996
5,381,025
18,337,332
285,057
-
285,057
297,066
8,151,024
8,448,090
4,276,462
26,785,422
75,144,714
1,154,424
14
103,105,128
26,188,005
(595,498)
(595,498)
(29,272,456)
(25,960,930)
73,237,174
1,907,540
(368,423)
1,522,847
75,144,714
1,154,424
The above consolidated statement of financial position should be read in conjunction with accompanying notes.
Annual Report 2018
19
19
Annual Report 2018 Consolidated Statement of Changes in Equity
For the year ended 30 June 2018
USD
Balance at 1 July 2016
Total comprehensive income for the year
Loss for the year
Total comprehensive loss for the year
Transactions with owners, recorded directly in equity
Issue of shares
Balance at 30 June 2017
Notes
Share capital
$
26,103,169
Accumulated losses
$
Foreign currency
translation reserve
$
Total
$
Non-controlling interest
$
(22,129,169)
(595,498)
3,378,502
1,429,580
-
-
(3,831,761)
(3,831,761)
14
84,836
-
-
-
-
26,188,005
(25,960,930)
(595,498)
(3,831,761)
(3,831,761)
84,836
(368,423)
93,267
93,267
-
1,522,847
1,154,424
Total equity
$
4,808,082
(3,738,494)
(3,738,494)
84,836
Balance at 1 July 2017
Total comprehensive income for the year
Loss for the year
Total comprehensive loss for the year
Transactions with owners, recorded directly in equity
Issue of shares
Costs of issue
14
14
Balance at 30 June 2018
26,188,005
(25,960,930)
(595,498)
(368,423)
1,522,847
1,154,424
-
-
(3,311,526)
(3,311,526)
-
-
79,587,329
(2,670,206)
103,105,128
(29,272,456)
(595,498)
-
-
-
-
(3,311,526)
(3,311,526)
79,587,329
(2,670,206)
73,237,174
384,693
384,693
-
-
1,907,540
(2,926,833)
(2,926,833)
79,587,329
(2,670,206)
75,144,714
The above consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
20
Nickel Mines Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2018
USD
Cash flows from operating activities
Cash receipts from customers
Cash payments to employees and suppliers
Interest received
Research and development repayment
Net cash from/(used in) operating activities
Cash flows from investing activities
Payments for investments in equity accounted investees
Payments for property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Costs of issue
Repayment of borrowings
Net cash from financing activities
Net increase in cash and cash equivalents
Effect of exchange rate adjustments on cash held
Cash and cash equivalents at the beginning of the year
Notes
2018
$
2017
$
18
15
14
18
13,468,402
(21,513,018)
55,677
(259,102)
(8,248,041)
9,142,340
(8,832,278)
10,683
(236,066)
84,679
(50,000,025)
(670,670)
(50,670,695)
-
(111,191)
(111,191)
73,908,362
(1,770,206)
(13,182,546)
58,955,610
36,874
490,925
278,775
84,836
-
-
84,836
58,324
2,243
218,207
Cash and cash equivalents at the end of the year
806,574
278,775
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
21
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 1 - REPORTING ENTITY
Nickel Mines Limited (the ‘Company’) is a company domiciled in Australia. The consolidated financial report for the year ended 30 June 2018
comprises the Company and its subsidiaries (together referred to as the ‘Group’). The Group is a for-profit entity and is involved in nickel mining
and production operations.
NOTE 2 - BASIS OF PREPARATION
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (‘AASBs’)
adopted by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001. The consolidated financial report of the Group
complies with International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board
(‘IASB’).
The financial report was authorised for issue by the Directors on 31 August 2018.
Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments which are measured
at fair value.
Functional and presentation currency
These consolidated financial statements are presented in United States dollars, which is the Company’s functional currency.
Use of estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected. There were no significant areas of uncertainty or critical judgements made by management
in applying the accounting policies in the current year.
Going concern
The consolidated financial statements have been prepared on a going concern basis, which contemplates the continuation of normal business
operations and the realisation of assets and settlement of liabilities in the normal course of business.
During the year ended 30 June 2018, the Group incurred a net loss before tax of $2,270,572 and net cash outflows from operating activities of
$8,248,041. As at 30 June 2018, the Group had net assets of $75,144,714, including unrestricted cash of $806,574.
While the net current assets show a deficit of $1,439,933 at 30 June 2018, on 20 August 2018 the Company issued 571.4 million shares and
raised A$200,000,000 in cash, before capital raising costs (see note 23 – Subsequent events).
The Directors have prepared cash flow projections for the coming 12 months which include the obligations under the Collaboration and
Subscription Agreement with Shanghai Decent Investment (Group) Co. Ltd, that support the ability of the Group to continue as a going concern.
These cashflow projections assumes the Group maintains expenditure in line with the level of funding available.
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have
been applied consistently by all entities in the Group.
22
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries
are included in the consolidated financial statements from the date that control commences until the date that control ceases.
Non-controlling interest
The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree. Acquisitions of
non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders and therefore no goodwill is
recognised as a result of such transactions.
Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing
the consolidated financial statements. Where a controlled entity issues shares to minority interests which does not result in loss of control by the
Group, any gain or loss arising on the Group’s interest in the controlled entity is recognised directly in equity.
Investments in equity-accounted investees
The Group’s interests in equity-accounted investees comprise interests in associates and a joint venture.
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies.
A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather
than rights to its assets and obligations for its liabilities.
Interests in associates and joint ventures are accounted for using the equity method. They are recognised initially at cost, which includes
transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and OCI of
equity-accounted investees, until the date on which significant influence or joint control ceases.
Nickel ore sales revenue
Nickel ore sales revenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and rebates.
Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration
is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with
the goods and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured
reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
23
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Con’t)
Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated to United States dollars at the foreign exchange rate ruling at that
date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary
assets and liabilities denominated in foreign currencies that are stated at fair value are translated to United States dollars at foreign exchange
rates ruling at the dates the fair value was determined.
The Group transacts in the following foreign currencies: Australian dollars (A$ or AUD) and Indonesian Rupee (IDR).
Financial statements of foreign operations
The assets and liabilities of foreign entities are translated to United States dollars at the foreign exchange rates ruling at the reporting date. The
revenues and expenses of foreign operations are translated to United States dollars at rates approximating the foreign exchange rates ruling at the
dates of the transactions. Foreign exchange differences arising on retranslation are recognised directly in the foreign currency translation reserve
(‘FCTR’), a separate component of equity.
Foreign exchange gains and losses arising from a monetary item receivable or payable to a foreign operation, the settlement of which is neither
planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recognised directly in
the FCTR.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to United States
dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to United States dollars at exchange
rates at the dates of the transactions. When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to
profit or loss as part of the profit or loss on disposal.
At 30 June 2018 the functional currency of all components in the Group is United States dollars. The FCTR represents the foreign exchange
differences which arose on retranslation in prior years on subsidiaries which have not yet been disposed.
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see below accounting
policy Impairment).
Depreciation and amortisation
Mining properties amortisation rate is applied on the basis of units of production over the life of the economically recoverable resources. The
amortisation is included in the costs of conversion of inventories.
Depreciation is charged to the income statement using a reducing balance method from the date of acquisition using the following rates:
•
•
•
•
•
Furniture and fittings and plant and machinery are depreciated at 25%.
Land and buildings and infrastructure are depreciated at 5%.
Mine infrastructure assets are depreciated at 5%.
Office equipment is depreciated at rates of between 25% and 40%.
Plant and machinery are depreciated at 25%.
24
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Con’t)
Impairment
Financial assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is
considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of
that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the
present value of the estimated future cash flows discounted at the original effective interest rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively
in groups that share similar credit risk characteristics.
Non-financial assets
The carrying amounts of the Group’s assets, other than deferred tax assets and inventories, are reviewed at each balance sheet date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in the income statement, unless an asset has previously been revalued, in which case the impairment loss is
recognised as a reversal to the extent of that previous revaluation with any excess recognised through profit or loss.
Calculation of recoverable amount
The recoverable amount of assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
Reversals of impairment
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Share capital
Transaction costs
Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit.
Dividends
Dividends are recognised as a liability in the period in which they are declared.
Expenses
Net financing income
Net financing costs comprise interest payable on borrowings calculated using the effective interest method, interest earned and foreign exchange
gains and losses.
Interest income is recognised in the income statement as it accrues, using the effective interest method. Dividend income is recognised in the
income statement on the date the entity’s right to receive payment is established.
25
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Con’t)
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of
the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
Borrowing costs which are directly attributable to the Group’s exploration and evaluation and development activities are capitalised in relation to
qualifying assets.
Income tax
Income tax on the income statement for the year comprises current and deferred tax. Income tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet
date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not provided for: The initial recognition of assets or liabilities that affect neither accounting nor taxable
profit and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount
of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax
rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be
utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend.
Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not
recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of
the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the Australian
Taxation Office is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing
activities which are recoverable from, or payable to, the Australian Taxation Office are classified as operating cash flows.
26
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Con’t)
Employee benefits
Wages, salaries, annual leave, sick leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries, annual leave and sick leave that are expected to be settled within 12 months of the reporting
date represent present obligations resulting from employees’ services provided to reporting date, are calculated at undiscounted amounts
based on remuneration wage and salary rates that the Group expects to pay as at reporting date including related on-costs, such as workers
compensation insurance and payroll tax.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on average costs over the relevant period
of production, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing
them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it
is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, when
appropriate, the risks specific to the liability.
Site restoration
In accordance with the Group’s environmental policy and applicable legal requirements, a provision for site restoration in respect of disturbed land,
and the related expense, is recognised when the land is disturbed.
Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets
and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable,
further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
Liabilities classified at fair value through profit or loss
The fair value of those convertible notes that are measured at fair value through profit or loss have been measured with reference to the terms of
the Convertible Loan Facility Agreement (‘Loan Facility’) using a valuation technique that considers inputs that include risk adjusted discount factor,
probability of achieving IPO and US treasury bond rate.
27
Annual Report 2018 For the year ended 30 June 2018
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Con’t)
Exploration, evaluation and development expenditure
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised at cost or fair value, as exploration and evaluation assets
on an area of interest basis. Costs incurred before the consolidated entity has obtained the legal rights to explore an area are recognised in the
statement of comprehensive income.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
(i)
the expenditures are expected to be recouped through successful development and exploitation of the area of interest; or
(ii)
activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable assessment of the existence
or other wise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are
continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and commercial viability
and facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing,
exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash generating unit shall
not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration
and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from exploration and evaluation
expenditure to mining property and development assets within property, plant and equipment.
Financial instruments
The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity
instrument in accordance with the substance of the contractual arrangement.
Financial assets and financial liabilities are recognised on the Group Statement of Financial Position when the Group becomes a party to the
contractual provisions of the instrument.
Loans and receivables
Loans and receivables comprise trade and other receivables.
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are
recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are
measured at amortised cost using the effective interest method, less any impairment losses.
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts that are
repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for
the purpose of the statement of cash flows.
Trade and other payables
Trade and other payables are stated at their amortised cost. Trade payables are non-interest bearing and are normally settled on 30 day terms.
28
Nickel Mines Limited For the year ended 30 June 2018
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Con’t)
Liabilities classified at fair value through profit or loss
When a convertible note is identified to contain an embedded derivative that meets the definition of a liability, the whole contract is measured and
accounted for at fair value through profit or loss, unless the derivative is able to be measured reliably, in which case it is separated from the host
contract and accounted for separately at fair value through profit or loss.
Any gains or losses arising on the instrument upon fair valuing at inception are not immediately recognised as a gain or loss in profit or loss,
but are instead deferred and recognised as a gain or loss in profit or loss on a systematic basis over the life of the instrument. Any subsequent
movement in the fair value of financial instruments that are carried at fair value through profit or loss are recognised directly in profit or loss within
finance expenses.
Transaction costs of financial liabilities that are carried at fair value through profit or loss are expensed in profit or loss.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2018, and have
not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out below. The Group
does not plan to adopt these standards early.
AASB 9 Financial Instruments
AASB 9 replaces the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement. AASB 9 includes revised guidance on
the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial
assets and the new general hedge accounting requirements. It also carries forward the guidance on recognition and de-recognition of financials
instruments from AASB 139.
AASB 9 is effective for the Group’s annual reporting period beginning 1 July 2018. The standard is not expected to have a material impact on the
financial statements based on the nature of the financial assets and liabilities recognised at 30 June 2018.
AASB 15 Revenue from Contracts with Customers
AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing
revenue recognition guidance, including AASB 118 Revenue, AASB 111 Construction Contracts and IFRIC 13 Customer Loyalty Programs. AASB
15 is effective for the Group’s annual reporting period beginning on 1 July 2018. The consolidated entity is assessing the potential impact on its
consolidated financial statements resulting from the application of AASB 15. The Group plans to adopt the cumulative method with the effect of
applying this standard at the date of initial application (i.e. 1 July 2018) and as a result the Group will not apply the requirements of AASB 15 to
the comparative period presented. The revenue of the Group is subject to a contractual arrangement which will expire in November 2018 and the
implementation of AASB 15 is not expected to have a significant impact on the accounting treatment of the contract and as such it does not expect
the application of AASB 15 to have a significant impact on its consolidated financial statements.
29
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Con’t)
New standards and interpretations not yet adopted (con’t)
AASB 16 Leases
AASB 16 replaces existing leases guidance, including AASB 17 Leases. The standard is effective for annual periods beginning on or after 1 January
2019. Early adoption is permitted for entities that apply IFRS 15 at or before the date of initial application of IFRS 16.
AASB 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use asset representing its right
to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-
term leases and leases of low-value items. Lessor accounting remains similar to the current standard – i.e. lessors continue to classify leases as
finance or operating leases.
The Group has not yet competed a detailed assessment of the potential impact of applying AASB 16 on the financial statements.
2018
$
2017
$
88,767
43,429
91,790
378,687
602,673
55,677
(315,813)
(602,881)
(407,782)
620,213
(650,586)
11,291
367,662
8,459
387,412
99,976
-
51,719
93,544
245,239
10,683
(417,133)
-
(120,859)
(14,903)
(542,212)
4,041
284,648
-
288,689
NOTE 4 - OTHER EXPENSES
Audit fees – KPMG audit of financial report
IPO related fees – KPMG
Travel
Legal fees
NOTE 5 - FINANCIAL INCOME AND FINANCE EXPENSE
Interest income
Interest expense
Loss on extinguishing liabilities
Net change in fair value of financial liabilities at fair value
Foreign exchange gain/(loss)
NOTE 6 - TRADE AND OTHER RECEIVABLES
GST receivable
Trade receivables
Other
30
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 7 - OTHER CURRENT ASSETS
Prepayments – IPO Costs
Prepayments - other
Security deposit
Other
NOTE 8 - INCOME TAX EXPENSE
Loss before tax – continuing operations
Prima facie income tax expense/(benefit) at the Australian tax rate of 30% (2017 – 30%)
Increase in income tax expense/(benefit) due to:
- Effect of tax rates in foreign jurisdictions
- Non-deductible expenses
- Effect of deferred tax assets for tax losses not brought to account
- Effect of net deferred tax assets not brought to account
- Effect of foreign currency conversion
Income tax expense/(benefit) – current and deferred
Deferred tax assets/(liabilities) have been recognised in respect of the following items:
DTA on Australian tax losses
DTL net deductible temporary differences
Net
Deferred tax assets have not been recognised in respect of the following items:
Deductible temporary differences (net)
Tax losses
Net
2018
$
2017
$
483,451
268,221
8,002
8,969
768,643
-
63,268
34,265
39,322
136,855
(2,270,572)
(681,172)
(3,917,842)
(1,175,352)
(136,976)
1,632,739
(42,686)
(32,882)
(82,762)
656,261
-
-
-
-
961,344
152,318
-
(117,657)
(179,348)
-
-
-
760,707
(26,609)
734,098
759,664
(607,346)
152,318
The deductible temporary differences and tax losses do not expire under the current tax legislation. Deferred tax assets have not been recognised
in respect of these items because it is not probable that future taxable profit will be available against which the Company can utilise the benefits
of the deferred tax asset. The Company does not have any franking credits.
31
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 9 - LOSS PER SHARE
Basic and diluted loss per share have been calculated using:
Net loss for the year attributable to equity holders of the Company
Weighted average number of ordinary shares (basic and diluted)
Issued ordinary shares at the beginning of the year
- Effect of shares issued on 8 June 2017
- Effect of shares issued on 22 December 2017
- Effect of shares issued on 28 December 2017
- Effect of shares issued on 11 January 2018
- Effect of shares issued on 30 January 2018
- Effect of shares issued on 31 January 2018
- Effect of shares issued on 26 March 2018
- Effect of shares issued on 18 April 2018
- Effect of shares issued on 26 April 2018
2018
$
2017
$
(3,311,526)
(3,831,761)
Nº of
shares
317,330,516
-
43,011,718
15,294,233
13,624,425
4,148,352
6,796,291
1,648,352
31,180,898
28,768,277
Nº of
shares
316,580,516
45,330
-
-
-
-
-
-
-
-
Weighted average number of shares at the end of the year
461,803,062
316,625,846
As the Group is loss making, none of the potentially dilutive securities are currently dilutive. Subsequent to 30 June 2018 the Group issued an
additional 571.4 million shares, see Note 23.
NOTE 10 - INVENTORY
Inventory – ore stockpiles
588,843
588,843
959,451
959,451
During the period the Group continued to provide ore to PT Indonesia Tsingshan Stainless Steel (‘ITSS’), an Indonesian subsidiary of Tsingshan
Group, under an offtake agreement signed in October 2017 with ITSS guaranteeing to take supply of 50,000 wmt per month until 30 November
2018, with a cut-off grade of 1.60% nickel.
Inventories are measured at the lower of cost and net realisable value. The cost of goods for the year ended 30 June 2018 totalling $10,693,574
(2017: $7,683,830) included employee expenses of $1,132,787 (2017: $962,339).
32
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 11 - PROPERTY, PLANT AND EQUIPMENT
Furniture and fittings
Furniture and fittings – cost
Accumulated depreciation
Net book value
Mine infrastructure assets
Mine infrastructure assets – cost
Accumulated depreciation
Net book value
Buildings
Buildings– cost
Accumulated depreciation
Net book value
Mining properties
Mining properties– cost
Accumulated amortisation
Net book value
Office equipment
Office equipment – cost
Accumulated depreciation
Net book value
Plant and machinery
Plant and machinery – cost
Accumulated depreciation
Net book value
Motor vehicles
Motor vehicles – cost
Accumulated depreciation
Net book value
2018
$
2017
$
37,541
(34,826)
2,715
36,357
(33,877)
2,480
2,404,029
(705,194)
1,698,835
2,403,900
(600,579)
1,803,321
250,682
(64,623)
186,059
243,732
(53,771)
189,961
24,996,168
24,524,947
(553,855)
(411,367)
24,442,313
24,113,579
288,485
(168,726)
119,759
661,949
(629,730)
32,219
147,367
(1,633)
145,734
253,580
(128,528)
125,052
653,033
(611,351)
41,682
-
-
-
Total property, plant and equipment
26,627,634
26,276,076
Impairment
After consideration of both internal and external factors, the Directors believe that no indicators of impairment existed at 30 June 2018 and have
therefore not completed an impairment assessment over the carrying value of the Group’s property, plant and equipment assets at 30 June 2018.
33
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 11 - PROPERTY, PLANT AND EQUIPMENT (Con’t)
Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below.
Furniture and fittings
Carrying amount at beginning of year
Additions
Depreciation
Net book value
Mine infrastructure assets
Carrying amount at beginning of year
Additions
Depreciation
Net book value
Buildings
Carrying amount at beginning of year
Additions
Depreciation
Net book value
Mining properties
Carrying amount at beginning of year
Additions
Amortisation
Net book value
Office equipment
Carrying amount at beginning of year
Additions
Depreciation
Net book value
Plant and machinery
Carrying amount at beginning of year
Additions
Depreciation
Net book value
Motor vehicles
Carrying amount at beginning of year
Additions
Depreciation
Net book value
34
2018
$
2017
$
2,480
1,184
(948)
2,716
5,685
677
(3,882)
2,480
1,803,321
1,910,283
129
(104,615)
1,698,835
567
(107,529)
1,803,321
189,961
6,950
(10,852)
186,059
196,103
4,783
(10,925)
189,961
24,113,579
24,271,598
471,221
(142,488)
29,647
(187,666)
24,442,312
24,113,579
125,052
34,905
(40,198)
119,759
41,682
8,916
(1,633)
48,965
-
147,367
(1,633)
145,734
13,661
139,627
(28,236)
125,052
77,245
17,563
(53,126)
41,682
-
-
-
-
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 12 - TRADE AND OTHER PAYABLES
Current
Creditors
Deferred project acquisition payments
Agency fee payable
Accruals
Deferred project acquisition payments
2018
$
2017
$
2,533,155
-
-
322,230
2,855,385
4,516,276
2,800,000
3,801,501
1,197,229
12,315,006
Through various amendments to the original agreement entered into in December 2009 for the Company to acquire 80% of the share capital
of PT Hengjaya Mineralindo (‘PT Hengjaya’) in Indonesia, the transfer of 80% of PT Hengjaya to Nickel Mines was effected in March 2012 with
deferred payments totalling $7.35 million to be paid to the sellers based on the achievement of certain milestones. These deferred payments were
payable to PT Hengjaya Sukses Pratama (‘HSP’), the Company’s Indonesian partner in the Hengjaya project upon achievement of various project
milestones. At 30 June 2017 all milestones had been met except for the third and final milestone payment.
The final deferred payment of $2,800,000 ($3,000,000 less $200,000 paid in advance prior to 30 June 2017) became due and payable one month
following the conversion of the HL protected forest area into Other Utilisation Area and the granting of all other licences, approvals and steps as
deemed necessary to allow the exploitation, open cut mining and production operation in that area. Confirmation of the downgrade of the HL
protected forest area into Other Utilisation Area was received in August 2014. Before production can commence from this area a ‘Pinjam Pakai’
forestry permit must be obtained.
In February 2018 the Group received confirmation that the forestry permit for the area previously classified HL protected forest area had been
granted and consequently in February 2018 the third and final milestone payment of $2,800,000 ($3,000,000 less $200,000 paid in advance) was
paid to HSP’s nominee, completing the Company’s deferred project acquisition obligations.
Agency fee payable
The Agency fee was payable to PT Hengjaya Sukses Pratama’s (‘HSP’) nominated entity, Swift Capital Limited (“Swift”). Under a scope of work
HSP earns the Agency Fee for: sales and marketing requirements in relation to the first 440,000 wmt of nickel ore produced by Hengjaya; assisting
in negotiating the terms of sales contracts with all potential customers and connected parties in relation to or connected with the sale and
marketing of nickel ore produced or developed by Hengjaya; and HSP is responsible for obtaining for PT Hengjaya all federal, provincial and local
government approvals, including but not limited to forestry, mining, export, port, land access and community relations permits and approvals, and
all other approvals as may be required by PT Hengjaya for PT Hengjaya to develop and operate the Hengjaya mine.
During the year ended 30 June 2018 the activities in relation to the final approval required by PT Hengjaya to develop and operate the Hengjaya
mine were completed and the remaining balance of Agency Fee totalling $1,800,000 was recognised as an expense for the period and the total
owing, including interest charges was settled in full, along with the Loan payable to Swift as detailed in Note 13 by the payment on 30 January
2018 of $12,400,000 and the issue of 10,000,000 fully paid ordinary shares in the Company at $0.16 per share to Swift’s nominee.
35
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 13 - BORROWINGS AND CONVERTIBLE NOTES
Current
Convertible note
Loans from related parties
Non-current
Loan – Swift Capital Limited
Borrowings
2018
$
2017
$
-
-
-
-
-
4,020,859
1,360,166
5,381,025
8,151,024
8,151,024
During the year ended 30 June 2018 loans from related parties were settled in full, see Note 17 for details.
In September 2017 the Company entered into a Collaboration and Subscription agreement with Shanghai Decent. A condition precedent of the
agreement for this JV to occur was for the Company to become ‘debt-free’. An agreement was reached to repay the loan payable to Swift Capital
Limited and this was settled in full on 30 January 2018, along with the agency fee payable to Swift as detailed in Note 12, by the payment on 30
January 2018 of $12,400,000 and the issue of 10,000,000 fully paid ordinary shares in the Company at $0.16 per share to Swift’s nominee.
Convertible notes
Liabilities measured at fair value through profit and loss
Opening balance
Net change in fair value of financial liabilities at fair value
Repayment
2018
$
4,020,859
407,782
(4,428,641)
2017
$
3,900,000
120,859
-
-
4,020,859
The PT Hengjaya and Woodburn Holdings Limited (‘Woodburn’) Convertible Loan Facility Agreement (‘Convertible Note Facility’) was due to mature
on 21 July 2017. During the year the entities were renegotiating the facility agreement and on 29 January 2018 an agreement was reached for a
total $4,428,641 to be paid to Woodburn as final settlement of the Convertible Note Facility. The final payment represented the principal totalling
$3,000,000 and accrued interest and other charges of $1,428,641.
36
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 14 - ISSUED CAPITAL
Number of shares
$
Ordinary shares on issue at 30 June 2016 - fully paid
316,580,516
26,103,169
Issue of shares
Ordinary shares on issue at 30 June 2017 - fully paid
Issue of shares - cash
Issue of shares - share based payments
Costs of issue
Ordinary shares on issue at 30 June 2018 - fully paid
2018
750,000
317,330,516
455,793,411
35,358,303
84,836
26,188,005
73,908,362
5,678,967
-
(2,670,206)
808,482,230
103,105,128
During the year ended 30 June 2018 the Group issued 455,793,411 shares for cash totalling $73,908,362. There were no amounts unpaid on the
shares issued and share issue costs amounted to $2,670,206. In addition to the cash issues the Group had the following share based payment
arrangements:
Settlement of liabilities
29,408,347 shares were issued as full settlement of liabilities owing totalling $4,726,974. This included the following:
Repayment of Swift Capital loan and related liabilities: $1,600,000 settled through the issue of 10,000,000 $0.16 shares (see note 12).
•
• Repayment of related party loans: $1,396,788 settled through the issue of 8,594,681 shares. This includes 6,898,239 $A0.213 shares
and 1,696,442 $0.16 shares (see note 17)
Payment of creditors: $1,730,187 of creditor balances were settled through the issues of 10,813,666 $0.16 shares.
•
Director and employee payments
As noted in Note 17 the Directors received a one-off payment in recognition of their efforts in respect of the pre-IPO capital raise in December
2017. The approved payment totaled A$976,000 (excluding GST). The payment of A$1,057,600 (including GST) was converted to $851,368 using
the rate of 80.5c and settled through the issue of shares on 31 January 2018 at the pre-IPO capital raising price of US$0.16 per share.
Bonus payments totalling $100,625 were granted to employees of the Group in recognition of their efforts in respect of the pre-IPO capital raise in
December 2017. The payments were settled through the issue of 628,906 shares with an issue price of $0.16.
2017
During the year ended 30 June 2017 the Group issued 750,000 shares at A$0.15 each for cash totalling A$112,500. There were no amounts
unpaid on the shares issued.
Options
There were no options granted, exercised or lapsed unexercised during the year ended 30 June 2018 or year ended 30 June 2017.
Dividends
There were no dividends paid or declared during the year ended 30 June 2018 or year ended 30 June 2017.
Ordinary shares
The Company does not have authorised capital or par value in respect of its issued shares. All issued shares are fully paid. The holders of ordinary
shares are entitled to receive dividends as declared from time to time.
37
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 15 - INVESTMENT IN HENGJAYA HOLDINGS PRIVATE LIMITED
In April 2018, following successful completion of the Company’s pre-IPO capital raising, the Group acquired 25% of the issued share capital of
Hengjaya Holdings Private Limited (Hengjaya Holdings), a Singaporean holding company which holds 100% of the shares (directly and indirectly)
of PT Hengjaya Nickel Industry (Hengjaya Nickel), which is an Indonesian PMA Company which will own and operate the RKEF Project once
completed (subject to relevant regulatory approvals).
As governed by the Collaboration and Subscription Agreement (CSA), the Company has provided the aggregate of $50 million received from
Shanghai Decent and Wanlu by way of a shareholder loan to Hengjaya Holdings. Hengjaya Holdings has in turn advanced these funds to Hengjaya
Nickel for construction of the RKEF Project. There are no repayment terms and the Group does not intend to charge interest on the shareholder
loan advanced to Hengjaya Holdings. As such, the monies advanced have been accounted for as part of the cost of acquiring the 25% interest in
Hengjaya Holdings.
The construction of the RKEF plant has commenced. Under the CSA the balance of the capital costs shall be funded by Shanghai Decent through
shareholder loans. The total cost has been guaranteed by Shanghai Decent to not exceed $200 million. At 30 June 2018 there were no funds
advanced by Shanghai Decent.
At 30 June 2018 the investment is accounted for as an equity accounted investment. There was no profit or loss incurred by the associate for the
period 27 April 2018 to 30 June 2018.
Hengjaya Holdings Private Limited – 25%
2018
$
50,000,025
50,000,025
2017
$
-
-
Following successful completion of the Company’s IPO the Board has approved the acquisition of a further 35% interest in Hengjaya Holdings to
increase its interest to 60%. The Company will pay $70 million to Shanghai Decent in cash to acquire the additional 35% interest. The acquisition
of the additional 35% interest was approved by the Board on 31 August 2018, see note 24.
NOTE 16 - CONTROLLED ENTITIES
Particulars in relation to controlled entities:
Parent entity
Nickel Mines Limited
Controlled entities
Ordinary shares – Group
interest
2018
$
Ordinary shares – Group
interest
2017
$
PT Hengjaya Mineralindo (incorporated in Indonesia)
80
80
38
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 17 - RELATED PARTIES
Key Management Personnel compensation
Short term employee benefits
Share based payments
2018
$
213,131
761,476
974,607
2017
$
113,130
-
113,130
The key management personnel compensation comprises the following:
•
• The directors, Justin Werner, Peter Nightingale and Norman Seckold were compensated $213,131 for their services during the year
ended 30 June 2018 (2017 – Justin Werner, $113,131) for directors fees. At 30 June 2018 $13,263 remained outstanding (2017:
$324,719 outstanding).
Peter Nightingale, Norman Seckold and James Crombie received a one-off payment following the successful capital raise. The total
approved payment was for A$976,000 (excluding GST) in recognition of the services they have provided leading up to the pre-IPO
capital raise. The expense of $761,476 was accrued at 31 December 2017 and converted to USD using a rate of 78c. The payment of
A$1,057,600 (including GST) was converted to $851,368 using the rate of 80.5c and settled through the issue of shares on 31 January
2018 at the pre-IPO capital raising price of US$0.16 per share.
No other key management personnel were remunerated for their services during the year ended 30 June 2018 or year ended 30 June 2017.
Key Management Personnel transactions
A number of key management persons, or their related parties, hold positions in other entities that result in them having control or joint control
over the financial or operating policies of those entities.
A number of these entities transacted with the Group during the year. The aggregate value of transactions and outstanding balances (excluding
the compensation noted above) relating to key management personnel and entities over which they have control or joint control were as follows:
Key management personnel
Norman Seckold
Transaction
Loan and interest
Justin Werner
Peter Nightingale
Loan and interest
Loan and interest
(i)
(ii)
(iii)
Expense
2018
$
14,149
7,727
6,257
28,133
2017
$
-
189,078
64,669
253,747
Balance outstanding
2018
$
-
2017
$
549,476
-
-
-
385,185
158,909
1,093,570
39
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 17 - RELATED PARTIES (Con’t)
(i)
(ii)
(iii)
At 30 June 2017 the loans owing by the Company to entities related to Norman Seckold comprised principal and accrued interest of
A$114,048 and $246,977. The loans were unsecured and at call. Interest on the funds advanced to the Company were calculated at
a rate of 10% p.a. from the date funds were advanced. In addition at 30 June 2017 $186,710 was owed by the Group’s subsidiary, PT
Hengjaya which had an applicable interest a rate of 15% p.a.. On 31 December 2017 the loans payable were settled in full through the
issue of 3,472,776 shares in the Company on the same terms as the pre-IPO raising.
At 30 June 2017 the loans owing by the Company to an entity related to Justin Werner comprised principal and accrued of A$33,000
and $169,977. The loans were unsecured and at call. Interest on the funds advanced to the Company were calculated at a rate of
10% p.a. from the date funds were advanced. In addition, $186,710 was owed by the Group’s subsidiary PT Hengjaya which had an
applicable interest rate of 15% p.a. On 31 December 2017 the loans payable were settled in full through the issue of 2,416,806 shares
in the Company on the same terms as the pre-IPO raising.
At 30 June 2017 the loan owing by the Company to an entity related to Peter Nightingale, had a principal and accrued interest balance
of A$176,000. The loan was unsecured and at call. Interest on the funds advanced to the Company were calculated at a rate of 10%
p.a. from the date funds were advanced. On 31 December 2017 the loan payable was settled in full through the issue of 1,008,656
shares in the Company on the same terms as the pre-IPO raising.
Other related parties
Transaction
MIS Corporate Pty Limited
Loan and interest
MIS Corporate Pty Limited
Administration services
(iv)
(iv)
Expense
2018
$
11,199
219,431
230,630
2017
$
21,600
280,055
301,655
Balance outstanding
2018
$
2017
$
266,596
483,568
750,164
-
37,950
37,950
(iv)
Peter Nightingale and Norman Seckold hold an interest in an entity, MIS Corporate Pty Limited (‘MIS’), which provided full administrative
services, including administrative, accounting and investor relations staff both within Australia and Indonesia, rental accommodation,
services and supplies, to the Group. On 1 July 2017 MIS agreed to provide these services for a fee of A$15,000 per month. This fee
will be reviewed quarterly by the Company and MIS. Fees charged by MIS during the year amounted to A$279,452 (2017 - A$371,325)
which included the agreed monthly fee and the reimbursement of consultant expenses incurred by MIS on behalf of the Group. At 30
June 2018 A$51,346 (30 June 2017: A$629,236) remained outstanding and was included in the creditor’s balance. In addition to the
creditor balance the Company had outstanding loan balance owing to MIS at 30 June 2017 of $266,596. The loan was denominated
in Australian dollars, unsecured and at call. Interest was calculated at a rate of 10% p.a. from the date funds were advanced. On 31
December 2017 the loan balance was repaid in full through the issue of 1,696,442 shares in the Company on the same terms as the
pre-IPO raising.
Apart from the details disclosed in this note, no Director or other related party has entered into a material contract with the Group during the year
and there were no material contracts involving director’s interests subsisting at year end.
40
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 18 - STATEMENT OF CASH FLOWS
(a) Reconciliation of cash and cash equivalents
Cash and cash equivalents at the end of the year as shown in the Statements of Cash Flows is
reconciled to the related items in the Balance Sheets as follows:
Bank balances
(b) Reconciliation of net loss from ordinary activities after tax to net cash used
in operating activities
Loss from ordinary activities after tax
Non-cash items
Depreciation and amortisation
Foreign exchange loss/(gain)
Interest expense and loss on extinguished liabilities
Net change in fair value of financial liabilities
Changes in assets and liabilities
Trade receivables and other assets
Inventory
Provisions
Trade and other payables
Net cash used in operating activities
2018
$
2017
$
806,574
278,775
(2,926,833)
(3,738,494)
64,425
(620,213)
642,213
407,782
(731,737)
370,608
197,546
(5,651,832)
(8,248,041)
50,337
14,903
417,133
120,859
545,871
(529,108)
163,721
3,039,457
84,679
(c) Reconciliation of movements of liabilities to cash flows arising from financing activities
Opening balance at 1 July 2017
Changes from financing activities
Proceeds from issue of shares
Costs of issue
Liabilities
Loans and
borrowings
Convertible
notes
Equity
Share
capital
Total
9,511,190
4,020,859
26,188,005
-
-
-
-
73,908,362
(1,770,206)
73,908,362
(1,770,206)
Repayment of borrowings and convertible notes
Total changes from financing cash flows
(8,753,905)
(8,753,905)
(4,428,641)
(4,428,641)
-
(13,182,546)
72,138,156
58,955,610
Other changes
The effect of changes in foreign exchange rates
Costs of issue (settled in shares)
Finance expenses
Creditors settled in shares
Related party borrowings settled in shares
Director and employee payments settled in shares
Total other changes
Closing balance at 30 June 2018
(2,710)
-
642,213
-
(1,396,788)
-
757,285
-
-
-
407,782
-
-
-
407,782
-
(900,000)
-
3,330,187
1,396,788
951,992
4,778,967
-
103,105,128
41
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 19 - FINANCIAL INSTRUMENTS DISCLOSURE
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Risk management
policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and
adherence to limits. These policies are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The main risks arising from the Group’s financial instruments are credit risk, liquidity risk, currency risk and interest rate risk. The summaries
below presents information about the Group’s exposure to each of these risks, their objectives, policies and processes for measuring and
managing risk, the management of capital and financial instruments.
Credit risk
Credit risk arises mainly from the risk of counterparties defaulting on the terms of their agreements. The carrying amounts of the following assets
represent the Group’s maximum exposure to credit risk in relation to financial assets:
Cash and cash equivalents
Trade and other receivables
2018
$
806,574
387,412
1,193,986
2017
$
278,775
288,689
567,464
18
6
The Group mitigates credit risk on cash and cash equivalents by dealing with regulated banks in Australia and Indonesia. Credit risk of trade and
other receivables is low as it consists predominantly of nickel ore sales receivable from one customer, amounts recoverable from the Australian
Taxation Authority and interest receivable from call deposits held with regulated banks.
Impairment losses
None of the Group’s material trade and other receivables are past due.
42
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 19 - FINANCIAL INSTRUMENTS DISCLOSURE (Con’t)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing
liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The following are the contractual maturities of financial liabilities, including estimated interest payments:
Carrying
amount
$
Contractual
cash flows
$
Less than
one year
$
Between one
and five years
$
More than
five years
$
Consolidated
30 June 2018
Trade and other payables
3,512,856
3,512,856
3,512,856
3,512,856
3,512,856
3,512,856
30 June 2017
Trade and other payables
Loan – Swift Capital Limited
Loans from related parties
Convertible note
Deferred project acquisition payments
9,887,311
8,151,024
1,360,166
4,020,859
2,800,000
9,887,311
8,151,024
1,437,510
4,262,111
2,800,000
9,887,311
-
8,151,024
1,437,510
4,262,111
2,800,000
-
-
-
Total liabilities
26,219,360
26,537,956
18,386,932
8,151,024
-
-
-
-
-
-
-
-
-
-
-
Ultimate responsibility for liquidity management rests with the Board of Directors. The Group manages liquidity risk by maintaining adequate
funding where possible and monitoring of future rolling cash flow forecasts of its operations, which reflect management’s expectations of
expected settlement of financial assets and liabilities.
Currency risk
The Group functional currency in 2018 was assessed as being United States dollars. The Group is exposed to foreign currency risks due to the
fact that the domestic ore sales of its subsidiary PT Hengjaya are in Indonesian Rupiah, liabilities of the Group are denominated in both Indonesian
Rupiah and Australian dollars and the rights issue to shareholders and an additional placement during the year were denominated in Australian
dollars.
43
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 19 - FINANCIAL INSTRUMENTS DISCLOSURE (Con’t)
The Group’s gross financial position exposure to foreign currency risk at 30 June is as follows:
IDR
Cash at bank
Accounts receivable
Other current assets
Provisions
Taxes payable
Trade and other payables
AUD
Cash at bank
Receivables
Prepayments
Borrowings
Trade and other payables
Tax provisions payable
2018
2017
Foreign currency
USD
Foreign currency
USD
IDR 10,220,318,341
IDR 5,295,797,056
IDR 4,082,905,254
IDR 10,999,001,109
IDR 6,095,274,009
IDR 6,013,820,947
A$24,969
A$15,248
A$652,870
-
A$545,340
-
$709,547
$367,662
$283,456
($763,607)
($423,165)
($417,510)
$18,489
$11,291
$483,451
-
($403,824)
-
IDR 3,625,004,373
IDR 3,237,502,516
IDR 1,753,618,468
IDR 7,541,074,684
IDR 3,384,324,705
IDR 59,935,532,760
A$267
A$5,258
-
A$726,660
A$1,308,429
A$514,986
$272,107
$243,019
$131,633
($566,062)
($254,040)
($4,498,989)
$205
$4,041
-
($558,438)
($1,005,528)
($395,767)
The following significant exchange rates applied during the year:
USD
IDR
AUD
Average
rate
Reporting date
spot rate
2018
13,608
1.2913
2017
13,258
1.3259
2018
14,404
1.3504
2017
13,322
1.3012
The following sensitivity analysis is based on the exchange rate risk exposures at balance date.
At 30 June if the exchange rate between the United States dollar and the Indonesian Rupiah and the Australian Dollar had moved, as illustrated in
the table below, with all other variables held constant, the post-tax loss and equity would have been affected as follows:
Judgement of reasonable possible movements:
Post tax loss
(Higher)/Lower
2018
$
Total equity (Higher)/
Lower
2018
$
Post tax loss
(Higher)/Lower
2017
$
Total equity (Higher)/
Lower
2017
$
+ 10% higher USD to IDR exchange rate
- 5% lower USD to IDR exchange rate
+ 10% higher USD to AUD exchange rate
- 5% lower USD to AUD exchange rate
128,359
(64,180)
19,952
(9,976)
128,359
(64,180)
19,952
(9,976)
467,233
(233,617)
191,789
(95,895)
467,233
(233,617)
191,789
(95,895)
44
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 19 - FINANCIAL INSTRUMENTS DISCLOSURE (Con’t)
Interest rate risk
The Group’s exposure to market interest rate relates to cash assets.
At balance date, the Group had the following mix of financial assets and liabilities exposed to variable interest rate risk:
Financial assets
Cash and cash equivalents
Sensitivity analysis
2018
2017
19
806,574
278,775
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) loss for the period by the amounts shown
below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for the comparative period.
Loss for the year
Capital management
2018
$
2017
$
(5,427)
(2,485)
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business.
The Board ensures, where possible, costs are not incurred in excess of available funds and will seek to raise additional funding through issues of
shares for the continuation of the Group’s operation. There were no changes in the Group’s approach to capital management during the year.
The Group is not subject to externally imposed capital requirements.
45
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 20 - PARENT ENTITY DISCLOSURE
As at, and throughout the financial year ended 30 June 2018 the parent entity of the Group was Nickel Mines Limited.
Result of the parent entity
Net profit/(loss)
Other comprehensive income
Total comprehensive profit/(loss)
Financial position of the parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets/(Liabilities)
Equity
Share Capital
Accumulated losses
Total Equity
At balance sheet date the company has no capital commitments or contingencies (2017 - $nil).
Parent Entity
2018
$
Parent Entity
2017
$
(4,850,295)
(4,204,832)
-
-
(4,850,295)
(4,204,832)
597,847
64,468,529
65,066,376
494,917
-
494,917
4,398
10,590,822
10,595,220
9,939,565
8,151,024
18,090,589
64,571,459
(7,495,369)
103,105,128
(38,533,669)
64,571,459
26,188,005
(33,683,374)
(7,495,369)
46
Nickel Mines Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 21 - SEGMENT INFORMATION
Segment information is presented in respect of the Group’s management and internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise interest bearing loans, borrowings and expenses, and corporate assets and expenses.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one
period in that geographic region.
Geographical segments
For the year ended 30 June 2018, the Group had two segments, being mine development in Indonesia and the RKEF Project in Indonesia.
Indonesia -
Mine Development
$
Indonesia -
RKEF Project
$
Unallocated
$
Total
$
30 June 2018
External revenues
13,551,416
Reportable segment loss/(profit) before tax
(2,579,722)
Interest income
Interest expense
Depreciation and amortisation
25,103
21,818
64,401
-
-
-
-
-
-
13,551,416
4,850,294
2,270,572
30,574
293,995
24
55,677
315,813
64,425
Reportable segment assets
28,823,304
50,000,025
597,847
79,421,176
Reportable segment liabilities
(3,781,545)
30 June 2017
External revenues
8,594,750
Reportable segment loss/(profit) before tax
(516,676)
Interest income
Depreciation and amortisation
10,643
50,337
Reportable segment assets
27,935,449
-
-
-
-
-
-
(494,917)
(4,276,462)
-
8,594,750
4,434,518
3,917,842
40
-
10,683
50,337
4,398
27,939,846
Reportable segment liabilities
(25,454,962)
(1,330,460)
(26,785,422)
The Group’s external revenue is generated under the ore supply agreements with Tsingshan Group companies.
47
Annual Report 2018 Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
NOTE 22 - AUDITOR REMUNERATION
During the year ended 30 June 2018 KPMG, the Company’s auditor, has performed other services in addition to their statutory audit duties.
Details of the amounts paid to the auditor of the Group, KPMG, and its related practices for audit and non-audit services provided during the year
are set out below:
Auditors of the Company
Audit and review of financial reports – KPMG Australia
Audit and review of financial reports – KPMG Indonesia
Services other than statutory audit
Taxation services in relation to IPO
Investigating Accountant’s services in relation to IPO
NOTE 23 - SUBSEQUENT EVENTS
2018
$
47,196
41,571
7,545
35,884
132,196
2017
$
66,546
33,430
-
-
99,976
On 20 August 2018 the Group listed on the Australian Stock Exchange (ASX). The ASX listing was on completion of a successful capital raise
which raised A$200 million through the issues of approximately 571.4 million new shares. In accordance with the prospectus dated 7 August
2018 the Company provided notice to Shanghai Decent on 31 August 2018 of its election to acquire an additional 35% interest in share capital
of Hengjaya Holding Private Limited. Consideration is the payment of $70 million to Shanghai Decent. As a consequence of this the Company’s
interest in the RKEF project will also increase by 35% to 60%.
Other than the matters detailed above, there has not arisen in the interval between the end of the financial year and the date of this report any
other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the
operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.
NOTE 24 - COMMITMENTS AND CONTINGENCIES
Under the terms of the Collaboration and Subscription Agreement with Shanghai Decent and Shanghai Wanlu, the Company agreed to purchase
and Decent agreed to sell no less than 26% and not more than 35% of the issued capital of Hengjaya Holding Private Limited. On 30 August 2018
the Company provided notice to Shanghai Decent of its election to acquire an additional 35% interest in share capital of Hengjaya Holding Private
Limited through the payment of $70 million to Shanghai Decent.
There are no contingent liabilities existing at 30 June 2018 (2017: Nil).
48
Nickel Mines Limited Directors’ Declaration
In the opinion of the Directors of Nickel Mines Limited (‘the Company’):
(a)
the consolidated financial statements and notes set out on pages 18 to 48 and the Remuneration report on pages 12 to 15 in the
Directors’ report, are in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance for the year ended on that
date; and
(ii)
complying with Australian Accounting Standards, (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in note 2.
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
Signed at Sydney this 31st day of August 2018
in accordance with a resolution of the Board of Directors:
Robert Neale
Chairman
Norman Seckold
Deputy Chairman
49
Annual Report 2018 Independent Auditor’s Report
Independent Auditor’s Report
Independent Auditor’s Report
To the shareholders of Nickel Mines Limited
Report on the audit of the Financial Report
To the shareholders of Nickel Mines Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Opinion
Nickel Mines Limited (the Company).
In our opinion, the accompanying
Financial Report of the Company is in
accordance with the Corporations Act
2001, including:
• giving a true and fair view of the
Group's financial position as at 30 June
2018 and of its financial performance for
the year ended on that date; and
• complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
• Consolidated Statement of Financial Position as at 30 June
2018;
The Financial Report comprises:
We have audited the Financial Report of
Nickel Mines Limited (the Company).
In our opinion, the accompanying
Financial Report of the Company is in
accordance with the Corporations Act
2001, including:
• Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of Cash
Flows for the year then ended;
• Consolidated Statement of Financial Position as at 30 June
2018;
• Notes including a summary of significant accounting
policies;
• Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of Cash
Flows for the year then ended;
• giving a true and fair view of the
Group's financial position as at 30 June
• Directors' Declaration.
2018 and of its financial performance for
the year ended on that date; and
The Group consists of the Company and the entities it
controlled at the year end or from time to time during the
• complying with Australian Accounting
financial year.
Standards and the Corporations
Regulations 2001.
• Directors' Declaration.
• Notes including a summary of significant accounting
policies;
The Group consists of the Company and the entities it
controlled at the year end or from time to time during the
financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Basis for opinion
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
audit of the Financial Report section of our report.
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
53
Liability limited by a scheme approved under
Professional Standards Legislation.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
53
Liability limited by a scheme approved under
Professional Standards Legislation.
50
Nickel Mines Limited
(cid:3)
(cid:3)
(cid:3)
post year end and to meet the CSA
Key Audit Matters
obligations relating to the additional interest
in Hengjaya Holdings. The Directors have
The Key Audit Matters we identified are:
concluded that the range of possible
• Accounting for the investment in equity
outcomes considered in arriving at this
accounted associate
conclusion does not give rise to a material
uncertainty casting significant doubt on the
• Going concern basis of accounting
Group’s ability to continue as a going
concern.
Independent Auditor’s Report
documentation, such as repayment agreements and
cash records;
Key Audit Matters are those matters that, in our
(cid:120)
Evaluating the Group’s disclosures in the financial
professional judgement, were of most significance in our
report in relation to the CSA and the subsequent
audit of the Financial Report of the current period.
events by comparing them to our understanding of
the agreement. We assessed the compliance of the
These matters were addressed in the context of our audit
disclosures with the disclosure requirements of the
of the Financial Report as a whole, and in forming our
accounting standards.
opinion thereon, and we do not provide a separate
opinion on these matters.
We critically assessed the levels of
uncertainty, as it related to the Group’s ability
Accounting for the investment in equity accounted associate ($50,000,025)
to continue as a going concern. Our focus
was on:
Refer to Note 15 Investment in Hengjaya Holdings Private Limited
(cid:120)
The key audit matter(cid:3)
the Group’s planned levels of operational
and capital expenditures, and the ability
of the Group to manage cash outflows
within available funding, particularly in
The Group’s investment in the equity
light of the recent investment in
accounted associate, Hengjaya Holdings
Hengjaya Holdings;
Private Limited (Hengjaya Holdings)
represents a significant transaction for the
(cid:120)
Group.
the contractual commitments associated
with the acquisition;
(cid:120)
funds received from the capital raising
This was a key audit matter specifically due
post year end; and
to the following:
(cid:120)
further events occurring subsequent to
(cid:120)(cid:3) Size of the transaction: The Group’s 25%
balance date and the Group’s obligations
interest in Hengjaya Holdings
following the successful listing on the
represented 63% of total assets of the
Australian Stock Exchange.
Group at year end. The transaction
included $50,000,000 advanced to
We also considered the activities undertaken
Hengjaya Holdings by way of shareholder
by the Group as required under the CSA with
loan; and
Shanghai Decent and Wanlu. The CSA
required the Group be debt free and we
(cid:120)(cid:3) Complexity: The acquisition was part of
focused on the settlement of liabilities which
the Collaboration and Subscription
existed at 30 June 2017 through both share
Agreement (CSA) with Shanghai Decent
based payments and cash payments to
Investment (Group) Co., Ltd. (Shanghai
extinguish all obligations under the original
Decent) and Shanghai Wanlu Investment
financing arrangements.
Co., Ltd (Wanlu). The terms and
These conditions required significant audit
conditions of the CSA were complex and
effort and greater involvement by senior
the implications had pervasive impacts
members of the audit team.
on the financial report. We focused on:
(cid:16)(cid:3)
the substance of the transaction,
against the requirements of the
accounting standards, including
assessing the $50,000,000 advanced
as either a loan receivable or equity
accounted associate. The Hengjaya
Holdings Shareholder Loan
Agreement details further terms in
(cid:3)
How the matter was addressed in our audit(cid:3)
Our procedures included:
(cid:120)(cid:3) Reading the CSA to understand the key terms and
conditions of the agreement and the obligations of
each entity party to the contract;
(cid:120)(cid:3) Checking the completeness of the nature of the
Group’s obligations required by the CSA. We
assessed the existence of triggering conditions of the
obligations to underlying events of the Group and our
understanding of the business. We compared these
to the criteria for recording liabilities and recognising
assets in the accounting standards;
(cid:120)(cid:3) Working with our valuation specialists we challenged
the Group’s fair value assessment. Of specific note
was the financial instruments granted under the CSA.
We did this by calculating a fair value using
comparable market data and comparing it to the value
derived by the Group;
(cid:120)(cid:3) Assessing the appropriateness of the Group’s
accounting treatment of its interest in Hengjaya
Holdings against the criteria in the accounting
standards. We read the Shareholder Loan
Agreement to understand the terms under which the
funds were advanced. We assessed the features of
these terms, combined with our understanding of the
terms of the CSA, against the criteria in the
accounting standards for consistency to either loan
receivable or equity accounted associate accounting;
(cid:120)(cid:3) Checking the cash payments for the transaction to
the bank records of the Group agreed to the cost
recorded and the total agreed in the CSA;
(cid:120)(cid:3) Obtaining the accounting records of the equity
accounted associate and recalculating the Group’s
56
(cid:24)(cid:23)(cid:3)
51
Annual Report 2018
Independent Auditor’s Report
relation to the $50,000,000 advanced
to Hengjaya Holdings;
-
further potential accounting
implications, in particular unrecorded
obligations, of the terms and
conditions of the CSA and their
treatment by the Group.
(cid:120)
These conditions required significant audit
effort and greater involvement by senior
team members and KPMG valuation
specialists.
share of the associate’s losses for the period. We
performed additional procedures on the key
underlying accounting records of the associate,
including checking a sample of significant
transactions recorded to the associate’s bank
records;
Evaluating the Group’s disclosures in the financial
report against the requirements of the accounting
standards and our understanding of the terms and
conditions of the CSA and Shareholder Loan
Agreement.
Going concern basis of accounting
Refer to Note 2 Basis of preparation
The key audit matter
How the matter was addressed in our audit
The Group’s use of the going concern basis
of accounting and the associated extent of
uncertainty is a key audit matter due to the
status of initiatives during the audit, including
the following:
(cid:120)
(cid:120)
(cid:120)
The negative net current asset position of
the Group prior to the completion of the
IPO in August 2018;
The existence of the Group’s conditional
obligation to acquire an additional interest
in Hengjaya Holdings on successful
completion of the IPO and the funding
options to achieve this. This obligation is
outlined in the CSA;
The status and size of the funds from the
IPO.
The above conditions increased our audit
effort in this key audit area.
The Directors have determined that the use
of the going concern basis of accounting is
appropriate in preparing the financial report.
Their assessment of going concern was
based on cash flow projections. The
preparation of these projections incorporated
a number of assumptions and judgements, in
particular as they related to the securing of
additional funding from the IPO proceeds
Our procedures included:
Reading the CSA to understand the key terms of the
agreement and the obligations of each entity party to the
contract, particularly as they relate to forecast cash flows;
(cid:120)
Analysing the cash flow projections by:
-
-
-
-
Evaluating the underlying data used to generate(cid:3)
the projections. We specifically looked for their(cid:3)
consistency with the Group’s intentions, as(cid:3)
outlined in Directors minutes, market(cid:3)
announcements and post year end events (i.e.(cid:3)
the IPO);
checking the receipt of proceeds from IPO post(cid:1)
year end to the Group’s bank records;
Assessing the planned levels of operating(cid:3)
expenditures for consistency of relationships and(cid:3)
trends to the Group’s historical results, impact of(cid:3)
the investment in Hengjaya Holdings, results(cid:3)
since year end, and our understanding of the(cid:3)
business, industry and economic conditions of(cid:3)
the Group in light of the operational changes(cid:3)
post-IPO;
Assessing their consistency with the CSA(cid:3)
regarding the obligation to acquire an additional(cid:3)
interest (cid:76)n Hengiaya;
(cid:120)
Evaluating the Group’s repayment of pre-CSA(cid:3)
liabilities with reference to loan extinguishment
55
52
Nickel Mines Limited Independent Auditor’s Report
documentation, such as repayment agreements and
cash records;
(cid:120)
Evaluating the Group’s disclosures in the financial
report in relation to the CSA and the subsequent
events by comparing them to our understanding of
the agreement. We assessed the compliance of the
disclosures with the disclosure requirements of the
accounting standards.
post year end and to meet the CSA
obligations relating to the additional interest
in Hengjaya Holdings. The Directors have
concluded that the range of possible
outcomes considered in arriving at this
conclusion does not give rise to a material
uncertainty casting significant doubt on the
Group’s ability to continue as a going
concern.
We critically assessed the levels of
uncertainty, as it related to the Group’s ability
to continue as a going concern. Our focus
was on:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
the Group’s planned levels of operational
and capital expenditures, and the ability
of the Group to manage cash outflows
within available funding, particularly in
light of the recent investment in
Hengjaya Holdings;
the contractual commitments associated
with the acquisition;
funds received from the capital raising
post year end; and
further events occurring subsequent to
balance date and the Group’s obligations
following the successful listing on the
Australian Stock Exchange.
We also considered the activities undertaken
by the Group as required under the CSA with
Shanghai Decent and Wanlu. The CSA
required the Group be debt free and we
focused on the settlement of liabilities which
existed at 30 June 2017 through both share
based payments and cash payments to
extinguish all obligations under the original
financing arrangements.
These conditions required significant audit
effort and greater involvement by senior
members of the audit team.
56
53
Annual Report 2018
Independent Auditor’s Report
Other Information
Other Information is financial and non-financial information in Nickel Mines Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date of
this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
(cid:120)
(cid:120)
(cid:120)
preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001;
implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error;
assessing the Group and Company's ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless they either intend to
liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
(cid:120)
(cid:120)
to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the Financial Report.
57
54
Nickel Mines Limited Independent Auditor’s Report
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf.
This description forms part of our Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration
Report of Nickel Mines Limited for the
year ended 30 June 2018, complies
with Section 300A of the Corporations
Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report in
accordance with Section 300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in pages 12
to 15 of the Directors’ report for the year ended 30 June 2018.
Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with
Australian Auditing Standards.
KPMG
Adam Twemlow
Partner
Brisbane
31 August 2018
58
55
Annual Report 2018 Additional ASX Information
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this report is as follows. The
information is current as at 20 August 2018.
Distribution of Equity Securities
Range
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
Above 100,001
ORDINARY SHARES
Number of Holders
Number of Shares
1
6
6
351
313
677
432
15,849
50,355
18,533,829
1,369,395,159
1,387,995,624
The number of shareholders holding less than a marketable parcel is nil.
Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are:
ORDINARY SHARES
SHAREHOLDER
HSBC Custody Nominees (Australia) Limited
Shanghai Decent Investment (Group) Co Ltd
Shanghai Wanlu Investment Co Ltd
Altinova Nominees Pty Limited
Permgold Pty Ltd
Continue reading text version or see original annual report in PDF format above