2018 ANNUAL REPORT
ABN: 69 150 791 290
ANNUAL GENERAL MEETING
The Nusantara Annual General Meeting will be
held 10:00am, Friday, 31 May 2019 at the
Rendezvous Hotel Melbourne.
All shareholders are invited to attend.
CORPORATE VISION
To generate returns to its shareholders by demonstrating
commitment to our values in delivering:
• Successful development and operation of the Awak Mas
Gold Project;
• Organic growth through exploration, to realise the true
value of the Awak Mas Gold Project; and
• Greenfield growth capitalising on other Asia - Pacific
opportunities
2018 HIGHLIGHTS
February 2018
• Mineral Resource increased to 2.0 Moz gold
March 2018
• Contract of Work amendment signed providing tenure certainty and investment stablity
April 2018
• Maiden Ore Reserve of 1.0 Moz gold confirmed
May 2018
• 89% of Project Mineral Resource identified as reporting to the Indicated Resource category
July 2018
• Fully underwritten rights issue completed
September 2018
• Ore Reserve increased by 11% to 1.1 Moz gold
October 2018
• Definitive Feasibility Study completed
• Significant near mine mineralisation identified
December 2018
• Strategic Partner PT Indika Energy Tbk invests in Company
• AustralianSuper commits to increase shareholding to 14% in January 2019
2 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
2018 ANNUAL REPORT
CONTENTS
Chairman's report
Managing Director’s report
Review of activities
Annual Financial Report
Additional information
Corporate Directory
05
07
09
19
64
69
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
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CHAIRMAN'S REPORT
NUSANTARA VISION
Vision
Gold
Focus
Multi-mine
portfolio
Asia-Pacific
Region
Execution
Experienced
Board
Support of
strategic
shareholders
Funded to
deliver on
partnerships
4 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
of the +300,000oz/year Matarbe Gold mine to
Pamapersada.
Nusantara in partnership with Indika aims to be at the
forefront of this exciting dynamic.
On gold, recent price improvements make the Awak Mas
project even more compelling and will assist ongoing
financing discussions. The Awak Mas economics were
presented based on a US$1,250/oz gold price. Pleasingly,
the gold price has traded above $1,300/oz in recent
months, fuelled by a backdrop of growing global political
and financial market uncertainty. We believe our project
and share valuation will deliver significant leverage to
higher gold prices.
As a relatively new company, less than two years old,
we continue to grow and build capability. As part of
Indika’s investment, we welcomed Mr Richard Ness to the
Nusantara Board. Mr Ness is a mining executive with over
30 years of Indonesian experience in the energy, mineral
resources and mining sectors including senior roles with
Freeport, Newmont and Merdeka.
In closing, on behalf of the Board, I would like to thank
our executives, employees, contractors and communities
all of whom have contributed to our success.
Greg Foulis
Chairman
CHAIRMAN'S REPORT
Dear Shareholders,
I am pleased to report
that outstanding progress
was achieved in 2018 and
Nusantara is now in the
prime position to finance
and develop the Awak Mas
gold project in Indonesia.
Our team delivered on
all important milestones;
we confirmed tenure,
delivered a comprehensive
and robust Feasibility
Study, outlined exciting exploration upside, secured a
credentialed strategic partner, and maintained our strong
community support. The year ahead is promising as
we accelerate towards financing Awak Mas, prepare for
development and test high potential exploration targets.
Your directors would like to thank shareholders, big and
small alike, for their loyalty through the often-challenging
phase of project feasibility, and we look forward to
delivering the rewards as the project is financed and
developed. In December 2018 we welcomed Indika
Energy as our strategic Indonesian partner. Indika
is a Jakarta listed US$1 billion energy and service
conglomerate and brings a wealth of Indonesian
operating and financing experience through its extensive
resources and energy activities. Indika joins cornerstone
shareholders Lion Selection and AustralianSuper, aligned
with the aim of developing Awak Mas.
I would like to reflect on two key macro - backdrops to our
business: gold and Indonesia. The Nusantara Board have
a positive outlook on both.
Indonesia is an exciting place to do mining business.
It has exceptional geological potential that is relatively
under-explored. It affords a low-cost base, excellent
infrastructure, and with a long history of mining, it has
access to a skilled workforce and contractors. The
Indonesian landscape of mining ownership, capability and
competition is changing rapidly. In the gold industry, there
are new players, new mines and new transactions. By way
of example:
• New players – Emerging large scale companies include
Pamapersada, Merdeka, Indika
• New mines – Tujuh Bukit is Indonesia’s newest gold
mine. It was commissioned in 2017 and delivered
167,000 ounces at <$500/oz cash costs in 2018.
• New transactions – the most recent scale transaction
was the US$1.2 billion sale in 2018 by EMR Capital
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
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MANAGING DIRECTOR’S REPORT
NUSANTARA VALUES
CARING
We care about people first, ensure a safe work place
for our people, are environmentally responsible and
support the communities in which we operate.
INTEGRITY
We set high standards of ethics (doing what is
right), honouring our commitments, and seeking
relationships that are mutually beneficial.
TEAMWORK
We know that we are stronger when we collaborate,
we value the views of others, we all strive to reach our
potential and embrace diversity.
ACCOUNTABILITY
We take responsibility, doing what we say we will do,
and are measured on the outcomes of our decisions
and actions.
6 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
EXCELLENCE
We strive to achieve superior outcomes by focusing
on action, continual improvement, and challenge the
way we do things.
MANAGING DIRECTOR’S REPORT
Dear Shareholders,
During 2018, Nusantara
significantly advanced
development of our
flagship Awak Mas Gold
Project (‘Awak Mas’) in
South Sulawesi, Indonesia.
Our work in 2018
demonstrated that Awak
Mas is a high value project
with significant exploration
potential. We confirmed
tenure, delivered a robust
Feasibility Study, outlined exploration upside, secured a
strategic partner and maintained our community support.
We remain confident that Awak Mas will offer a strong
foundation for the future growth of the Company.
Early in 2018, Nusantara signed of an amendment to
our Contract of Work (‘CoW’) with the Government of
Indonesian. The CoW now secures project tenure until
2050 with options for two ten-year extensions under
the IUPK system. The amendment also confirmed that
Nusantara’s local subsidiary, PT Masmindo Dwi Area, is
the sole holder of the CoW.
The completion of the Definitive Feasibility Study (DFS) in
October marked an important milestone for the Project.
The DFS reported that Awak Mas has a Mineral Resource
of 2.0 million ounces and an initial Ore Reserve of 1.1
million ounces which will support an 11-year operation
delivering approximately 100,000 ounces of gold per
year. The project is financially robust with an initial capital
cost of US$146 million, an All-in-Sustaining Cost of
US$758 per ounce, a NPV5% of US$152M and an IRR
of 20% based on a gold price of US$1250 per ounce.
Importantly, the DFS outlined a range of opportunities
that have the potential to enhance the value of Awak Mas
and these will be evaluated as the project is developed.
Of note, the project has economic leverage to gold prices,
and pleasingly we have seen gold break back through
US$1300 per ounce in early 2019.
Our geological team have redirected their efforts to
exploration with the objective of identifying opportunities
to increase the mineral resource. The initial results of
this work have been extremely promising, and we will
continue exploration with a focus on the near mine areas
and developing a deeper understanding of the CoW area
geology.
In December, we welcomed the investment by Indonesian
energy company, PT Indika Energy Tbk (‘Indika’) (IDX:
INDY) in Nusantara. Indika now owns 20% of Nusantara
and brings Indonesian operating experience to the
development of Awak Mas. Indika’s investment was also
supported by AustraliaSuper, who have increased their
holding to 14%.
As part of Indika’s investment, we welcomed Mr Richard
Ness to the Nusantara Board. Mr Ness is a mining
executive with over 38 years of experience in the energy,
mineral resources and mining sectors including senior
Indonesian roles with Freeport and Newmont. We look
forward to his valuable contribution in advancing the Awak
Mas Project.
We remain committed to demonstrating our five core
values of Caring, Integrity, Teamwork, Accountability
and Excellence. The drilling program and other site
activities were completed in 2018 without any health,
safety and environmental incidents; this is an outstanding
achievement and indicative of the culture within our
business.
We continue to provide community support through
health, training, education and employment initiatives.
This assistance has been welcomed by the local people
and is an important step in ensuring a robust future for
Awak Mas and the Indonesian community.
Despite the milestones completed in 2018, the Board has
been disappointed that our share price has not reflected
the strong underlying project value. We remain vigilant in
improving this position and focused on communicating
to all potential investors, the value of the project and
the growth opportunities of Awak Mas through further
exploration of the CoW area. With all approvals in
place, the Project is well positioned for development
and reinforced by good local, provincial and federal
government support. We believe Indonesia offers low
investment risk given its long history of mining; a robust
legal, regulatory and political environment; and supported
by good infrastructure.
The Nusantara team looks forward to an active and
successful 2019 as the Company strives to deliver
shareholder value. With strong support we are well funded
to deliver on the 2019 objectives; securing project finance
and enhancing project value through exploration.
Mike Spreadborough
Managing Director
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
7
8 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
REVIEW OF ACTIVITIES
Company Background
Nusantara Resources Limited (Nusantara) is an Australian
mining company listed on the Australian Securities
Exchange.
The Company is focussed on growing shareholder value
by developing and operating gold projects within the Asia-
Pacific region. Nusantara owns a 100% interest in the
Awak Mas Gold Project (Awak Mas), located in the Luwu
Regency of South Sulawesi Province, Indonesia.
Project Background
Awak Mas has had over 135 km of drilling, with over
1,100 holes now completed. The Project has a 2.0 million
ounce Mineral Resource1, containing a 1.1 million ounce
Ore Reserve2.
A Definitive Feasibility Study was completed in October
2018, confirming a robust, long-life, low cost project.
Project Tenure
Awak Mas is held under a 7th generation Contract of Work
(CoW) signed with the Government of Indonesia (GoI) in
1998. The CoW covers an area of 14,390 hectares and
is held by Nusantara’s 100% owned local subsidiary
company, PT Masmindo Dwi Area (Masmindo).
On the 14 March 2018, Masmindo signed an amendment
to the CoW, with the GoI.
The amendment reaffirms Masmindo as the legal holder
of the CoW with the sole rights to explore and exploit
mineral deposits within the CoW area until 2050. After this
period, the operations under the CoW may be extended
in the form of a special mining operation and production
business license (IUPK-OP), in accordance with the
prevailing laws and regulations, which allows for two ten-
year extensions.
1 ASX Announcement Project Mineral Resource grows to 2.0 Moz Au, 27 February 2018
2 ASX Announcement Ore Reserve increased by 11% to 1.1 Moz Gold, 13 September 2018
9 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
9
REVIEW OF ACTIVITIES
Upon conversion of the CoW in 2050 into an IUPK-OP the
license could be further extended until 2070.
The most notable amendments to the Masmindo CoW
were:
• Adopting the prevailing rates for taxes and royalties
featuring:
* Indonesian corporate tax of 25%; and
* gold royalty rate currently levied at 3.75%.
• Divestment of at least a 51% share in Masmindo (CoW
holder) to Indonesian participants at fair market value
according to internationally accepted practice in the
10th year of commercial production. Based on the
current mine development schedule, divestment is
not anticipated to be required before 2030, although
Nusantara may elect to sell any percentage interest to
Indonesian participants prior to this.
The amended CoW provides long-term tenure and
investment stability for the development of Awak Mas. It
stipulates that Masmindo shall be granted the sole rights
to:
• explore for minerals and mine any deposit of minerals
found in the CoW area (Figure 1);
• process, refine, store, and transport, by any means,
minerals extracted;
• market, sell, or dispose of such products from the
mines (inside and outside Indonesia) after carrying out
processing and refining domestically; and to
• perform all other operations and activities necessary.
Exploration Activity
In January 2018, the Company completed a 12-hole
resource definition diamond drilling program at the
satellite Salu Bulo deposit, which forms part of the Awak
Mas Gold Project3. This program followed the completion
of the Awak Mas deposit resource drilling program in late
2017, that involved 9,400 metres of drilling.
The assay results of the program confirmed the
continuity and strike potential of Salu Bulo, along with the
identification of shallow dipping mineralisation north of
a controlling structure. Consequently, the Indicated and
Inferred Resource was upgraded with a 65% increase
in contained gold to 3.7 Mt at 1.53 g/t Au for 180,000
contained ounces. This led to a lift in the overall project
mineral resource to 45 Mt at 1.38 g/t Au for 2.0 Moz. This
was a significant outcome for the Company, highlighting
the immense upside potential of the Awak Mas Gold
Project4.
A six-hole exploration program was subsequently carried
out into the Awak Mas Highwall area and in March 2018
potential upside was identified along the untested 2 km
corridor between Awak Mas and Salu Bulo deposits5.
The drilling program was completed in April 2018 and the
results verified considerable mineralisation extensions of
the Awak Mas deposit along the under-explored corridor
between the two deposits (Figure 2)6.
In May 2018, the final resource definition and
metallurgical diamond holes were completed. Upon
finalisation, the Mineral Resource achieved 89% in the
Indicated Resource category, providing strong confidence
in the geological model and suggesting a mine life beyond
10 years (Table 1)7.
Classification Tonnes
(Mt)
Au Grade
(g/t)
Contained
Gold
(Moz)
Awak Mas
Measured
-
Indicated
36.4
Inferred
3.1
Sub-total
39.5
Salu Bulo
Measured
Indicated
Inferred
Sub-total
Measured
Indicated
Inferred
Sub-total
Measured
Tarra
Total
-
2.9
0.6
3.6
-
-
2.3
2.3
-
Indicated
39.3
Inferred
6.0
Total
45.3
-
1.4
1.0
1.4
-
1.7
1.1
1.6
-
-
1.3
1.3
-
1.4
1.1
1.4
-
1.62
0.10
1.72
-
0.16
0.02
0.18
-
-
0.10
0.10
-
1.78
0.22
2.00
Table 1: Awak Mas Mineral Resource estimates (May 2018)
by deposit at 0.5 g/t Au cut-off and constrained within a
US$1400/oz optimisation shell.
3 ASX Announcement High Grade Drill results from Salu Bulo, 16 January 2018
4 ASX Announcement Project Mineral Resource grows to 2.0 Moz Au, 27 February 2018
5 ASX Announcement Eastern extension to Awak Mas deposit confirmed, 8 March 2018
6 ASX Announcement Significant results from Awak Mas extension drilling, 4 April 2018
7 ASX Announcement Indicated resource grows by a further 0.2 Moz, 8 May 2018
10 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
REVIEW OF ACTIVITIES
Figure 1: Awak Mas Contract of Work Area
Figure 2: Significant mineralisation discovered in the Awak Mas highwall suggests extension into the
Puncak Selatan prospect and indication of repitition across the corridor to Salu Bulo
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 11
REVIEW OF ACTIVITIES
In the second half of 2018, a new exploration program
commenced which focussed on the near-mine prospects
at Salu Kombong, Puncak Utara and Puncak Selatan
(Figure 3).
In October 2018, significant gold and copper results from
surface and trench samples enhanced the exploration
prospectivity of the near-mine area8.
This was further affirmed in December 2018, when the
near-mine exploration program continued to demonstrate
positive outcomes9. The proximity of the mineralisation at
Puncak Selatan, to the Awak Mas deposit (if proven and
dependent on quality and grade) provides the possibility
of increasing the overall value of the Project10.
The Company will continue to explore the geological
setting of the Awak Mas deposit and the CoW area, to
allow improved definition of the CoW exploration area.
Ore Reserve
In September 2018, the Company announced an updated
1.1 million ounce gold Ore Reserve that formed the basis
of the Definitive Feasibility Study (Table 2)10.
Classification Tonnes
(Mt)
Au Grade
(g/t)
Contained
Gold
(Moz)
Awak Mas
Proved
-
-
-
Probable
24.1
1.28
0.99
Sub-total
24.1
1.28
0.99
Salu Bulo
Proved
-
-
-
Probable
2.8
1.67
0.15
Sub-total
3.6
Total
Proved
-
Probable
Total
26.9
26.9
1.6
-
1.32
1.32
0.18
-
1.14
1.14
Table 2: Awak Mas Ore Reserve estimates (September 2018)
by deposit.
Feasibility Study
In October 2018, Nusantara completed a Definitive
Feasibility Study (DFS) into the proposed development of
Awak Mas.
The DFS confirmed a financially robust, technically low
risk and long-life project with a processing rate of 2.5
Mtpa, low strip ratio of 3.5 and a high gold recovery of
91% through a conventional Carbon-In-Leach processing
plant.
The activities associated with the DFS included:
• completion of plant design, engineering and
preparation of a detailed engineering cost estimate for
the process plant;
• preparation of cost estimates for project infrastructure
and facilities including power and water supplies, site
road access, site accommodation camp and site offices
(Figure 4);
• completion of a TFS cost estimate;
• work to compile the overall Project schedule;
• completion of environmental and social impact studies;
• preparation of capital and operating cost estimates and
financial modelling for the Project; and
• completion of a process to identify, evaluate and select
of value improvements for inclusion in the DFS.
The financial evaluation of the Project demonstrated a
high gross margin with considerable exploration upside.
The key financial outcomes are shown in Table 3:
Description
Outcome
Net Present Value (Post Tax) US$152 Million
Internal Rate of Return
20.3%
Initial Capital cost
US$146 Million
Pre-production mining
expenditure
C1 cash cost
AISC cost
US$16 Million
US$643 per ounce
US$758 per ounce
Table 3: Definitive Feasibility Study Financial Outcomes
8 ASX Announcement Significant near mine mineralisation identified, 4 October 2018
9 ASX Announcement High grade results from near mine exploration, 19 December 2018
10 ASX Announcement Ore Reserve increased by 11% to 1.1 Moz Gold, 13 September 2018
12 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
REVIEW OF ACTIVITIES
Figure 3: Near mine prospects including the priority exploration prospects of Puncak Selatan, Puncak
Utara and Kandeapi
Figure 4: Awak Mas planned site layout
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 13
REVIEW OF ACTIVITIES
Nusantara continues to reach key milestone
objectives, including completion of
the Awak Mas Gold Project Definitive
Feasibility Study in October 2018 and
securing strategic partner, Indika Energy
in December 2018. Both mark significant
achievements for the business and the
Project, as we look ahead to complete the
project financing and progress towards
development.
Safety, Quality and Security
Safety remains our first priority and we attach great
importance to the health of our employees. Employees
must pass a full medical check-up before they are
recruited and throughout their work, their health and
fitness are monitored.
Nusantara has developed standard operating procedures
for health and safety that reinforces workers to be vigilant
at work and highlights the notion that anyone has the right
to stop any unsafe act, at any time.
Nusantara holds daily morning safety meetings with
employees to reinforce our safety framework. Among
other factors, the safety framework at Awak Mas includes
vehicle inspections regimes, project training, competency
assessment and safety inspections.
All consultants coming to site first undertake a safety
induction program and site activities are supported by
qualified medical providers. All site activities are assessed
for high risk tasks and increased supervision is applied as
required.
Nusantara maintains an onsite medical clinic, an all-wheel
drive ambulance to undertake medical support services at
site. A number of local paramedics have been recruited
to ensure that all site activities have medical support
available.
We are proud that during the year, there were no serious
safety or health incidents. The year was ‘Recordable
Injury-free’ (defined as Medical Treatment or Lost
Injuries). This success was driven by our strong safety
culture and the regime applied to all working procedures,
personnel and temporary visitors to site.
As part of our safety framework, we strive to ensure that
our workplace remains safe by implementing appropriate
security measures. Qualified security personnel have
been recruited and security posts have been constructed
to monitor and check all incoming personnel and visitors
to site. All people coming to and from site are formally
reported and documented.
We will continue to strive to meet our very high operating
standard to achieve a safe and healthy working
environment at site.
Community
We are committed to working with local communities to
achieve mutual benefits and positive outcomes from our
operations. The Company has developed four main areas
for community engagement and support: education;
health; infrastructure; and economic empowerment.
During the year, the Company provided various support
to the neighbouring community, including continued
support to the elementary school in Boneposi village; the
construction of which, was supported by Masmindo.
14 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
REVIEW OF ACTIVITIES
Surface Water Quality samples are undertaken at 13
monitoring points for dissolved metals, anions, nutrients,
organics, microbiological and physicals. Hydrology
monitoring is undertaken at 12 monitoring points to assess
stream velocity and stream cross sections. Meteorology
monitoring is conducted through an automated weather
station for temperature; wind speed and direction; and
relative humidity, while rainfall is conducted by a manual
rain gauge and evaporation rates assessed and recorded.
Ambient Air Quality and Noise is assessed at 4 monitoring
points while Flora and Fauna assessment is conducted
every 6 months from 3 locations. Aquatic Ecology
monitoring is undertaken every 6 months from 3 locations.
The Company continues its agricultural replantation
program to replace crops disturbed during site activities as
well as a hazardous waste removal system.
Additionally, the Company delivered emergency aid
provisions to the areas impacted by disaster events,
including the devastating Sulawesi earthquake and
tsunami that effected Palu.
The Company continues purchase local supplies and
recruit local people and contractors where possible, to
produce important employment opportunities which
support the ongoing and collective growth of Indonesia.
Environment
The Company’s environmental plan complies with
prevailing laws and regulations on environmental
protection. Nusantara actively seeks to protect the
environment in which it operates, implementing a number
of environmental monitoring activities and programs
including rainfall data collection; ground and surface water
monitoring; revegetation programs; and waste removal.
During the year the Company maintained regular
monitoring programs and continues to evaluate areas
for improvement. A number of environmental baseline
studies have been completed in the past and the Company
continually updates its environmental database for the
CoW area and surrounding area. Environmental monitoring
is conducted for Surface Water quality; Hydrology;
Meteorology; Ambient Air Quality and Noise; Terrestrial
Flora and Fauna; and Aquatic Ecology.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 15
REVIEW OF ACTIVITIES
Finance and Corporate
The Company continued to advance the Awak Mas Gold
Project. The financial statements reflect a $7.0 million
investment in exploration and evaluation in 2018. The
major focus of this investment during the year was geology
and feasibility costs.
Of the $7.0 million investment, $2.1 million related to
exploration and geology reflecting:
• work conducted to upgrade Mineral Resources and
deliver a maiden and then updated Ore Reserve; and
•
costs associated with developing and maintaining the
exploration team and advancing the wider Contract of
Work exploration program.
The delivery of the October 2018 DFS resulted in costs
incurred of $3.1 million relating to expert consultants and
the Company.
The remaining $1.8 million relates to maintaining the site
operations (including camp facilities) and the Jakarta
administration activities (including maintaining tenure
arrangements and advancing permitting and approvals).
The Company held cash of USD6.4 million (AUD9.0
million) as at 31 December 2018.
In December 2018, the Company achieved another
significant milestone, securing a strategic Indonesian
cornerstone investor to advance the Project. This was
accomplished through a two-stage capital raising for
AUD10.25M. During the first phase, PT Indika Energy Tbk
(‘Indika’), through its wholly owned subsidiary PT Indika
Mineral Investindo, subscribed for 30,607,162 shares at
AUD0.23 to obtain a 19.9% interest in the Company.
In the second phase, which secured shareholder
approval at the January 2019 General Meeting, existing
shareholder, AustralianSuper Pty Ltd (AustralianSuper),
increased their holding to 14.0% after subscribing for
11,190,895 shares (and 5,595,448 unlisted options with
an exercise price of AUD0.35 expiring 30 November 2020)
at 23 cents per share and Indika maintained their 19.9%
interest by subscribing for a further 2,780,260 shares
(and 16,693,711 unlisted options exercisable at AUD0.35,
expiring 30 November 2020) at 23 cents per share.
In December 2018, the Company welcomed Mr Richard
Ness as a Director. Mr Ness is a representative of Indika
and has extensive gold mining and Indonesian mining
experience.
As at 31 January 2019, the significant shareholding of the
Company can be represented by the following pie chart:
Top Shareholders (%)
23
20
37
21
3
14
Lion Selection
Macquarie
Other
Indika Energy
Zhaojin
AustralianSuper
Gravitas
PT Indika Energy Tbk (IDX: INDY) is a leading integrated
energy company in Indonesia through its strategic
investments in the areas of Energy Resources, Energy
Services, and Energy Infrastructure. Its Energy Resources
business pillar focusses on exploration, production
and processing of coal. Its Energy Services business
provides contract mining, engineering, procurement and
construction (EPC) as well as operations and maintenance
(O&M) in the oil and gas sector, and offshore supply base
services. The Energy Infrastructure segment operates coal-
fired power plants and provides marine transportation,
ports & logistics for bulk goods and natural resources.
The investment and ongoing support from AustralianSuper
and Lion Selection Group, reasserts the value potential of
the project and marks an important step in the progression
towards development.
Also, during the year 32,508,392 listed loyalty options
expired.
At 31 January 2019, Nusantara had 167,775,990
fully paid ordinary shares, 18,034,307 listed options
(exercisable at AUD0.30 each), 22,289,159 unlisted
options (exercisable at AUD0.35 each) and 6,317,318
other unlisted options on issue.
Corporate Governance
The Company is committed to maintaining high standards
of corporate governance in the performance of our duties
and upholding investor confidence in the operations of the
business.
The Company’s corporate governance statement can also
be viewed at the following URL: http://nusantararesources.
com/corporate-governance/
Complete details of the Company's corporate governance
policies are available on the Company's website at:
www.nusantararesources.com
16 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 17
BOARD OF DIRECTORS
Board Committee Meetings
The memberships of each Board committee are indicated below:
a. Board Committee
b. Audit and Budget Committee
c. Financing Committee
Greg Foulis
Chairman &
Independent
Rob Hogarth
Independent
Richard Ness
Non-Executive Director
Non-Executive Director
(A, B & C)
Non-Executive Director
(A & B)
(A & C)
Robin Widdup
Non-Executive Director
(A, B & C)
Mike Spreadborough
Managing Director &
Chief Executive Officer
(A, B & C)
Boyke Abidin
Executive Director
(A)
18 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
Annual Financial Report
for the year ended 31 December 2018
• Directors’ Report
• Auditor’s Independence Declaration
• Consolidated Statement of Comprehensive Income
• Consolidated Statement of Financial Position
• Consolidated Statement of Changes in Equity
• Consolidated Statement of Cash Flows
• Notes to the Financial Statements
• Director’s Declaration
• Auditor’s Report
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 19
DIRECTORS’ REPORT
The Directors present their report together with the financial statements for Nusantara Resources Limited (“Nusantara”
or “the Company”) and its controlled entities (collectively the “Group”), for the financial year ended 31 December 2018.
Directors
The following persons held the office of Director during the year ended 31 December 2018 and to the date of this report
unless otherwise stated:
Greg Foulis (appointed 29 March 2018)
Michael Spreadborough
Boyke Abidin
Robert Hogarth
Robin Widdup (appointed 28 February 2018)1
Richard Ness (appointed 13 December 2018)2
Martin Pyle (resigned 30 May 2018)
Chairman
Managing Director
Director
Director
Director
Director
Director
1 – Mr Craig Smyth was appointed alternate director for Mr Robin Widdup
2 – Mr Kamen Palatov was appointed alternate director for Mr Richard Ness
Directors have been in office since the start of the financial year unless otherwise stated in this report.
Directors interests in the shares and options of the Company and related bodies corporate
As at 31 December 2018, the interests of the Directors in the shares and options of Nusantara Resources Limited were:
Director Name
Number of Ordinary shares
Number of options
Greg Foulis
Michael Spreadborough
Boyke Abidin
Robert Hogarth
Robin Widdup1
Richard Ness3
174,993
180,000
165,235
-
917,223
-
549,162
2,065,000
442,500
295,000
641,4602
-
1 Mr Widdup is a Director of Lion Manager Pty Ltd which at 31 December 2018 held 1,378,544 ordinary shares in the Company
(1,128,547 escrowed till 2 August 2019) and 650,831 options (including 295,0002 incentive options granted to Mr Widdup and
reported above). Mr Widdup is also a director of Lion Selection Limited which at 31 December 2018 held 39,017,231 ordinary shares
(20,802,944 escrowed till 2 August 2019) and 3,750,000 options)
2 295,000 incentive options were granted to Mr Widdups nominee Lion Manager Pty Ltd and included in the above total
3 Mr Ness is a Commissioner of PT Indika Energy Tbk which at 31 December 2018 held 30,607,162 ordinary shares
Company Secretary
Mr Derek Humphry was appointed company secretary 29 March 2018. Ms Jane Rose resigned as company secretary on
31 May 2018.
20 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
1
1
DIRECTORS’ REPORT
DIRECTORS’ REPORT (Continued)
Principal Activities and Significant Changes in the Nature of Activities
The principal activities of the Group during the financial year continued to be gold exploration and evaluation focusing on
the Awak Mas Gold Project in South Sulawesi, Indonesia.
Operating Results
The consolidated loss of the Group was $2,343,243 after providing for income tax (2017: loss of $2,240,873).
During the year the Group continued its ongoing exploration and evaluation work on the 100%-owned Awak Mas Gold
Project (Project) under a Contract of Work (“CoW”). A Definitive Feasibility Study of the Project was completed and the
exploration program continued to yield success with an expanded number of targets identified for exploration activities in
2019.
Major milestones were achieved during the year as announced to the ASX on:
•
•
•
•
•
•
15 March 2018, the Company reached agreement with the Government of Indonesia on several amendments to
the CoW, securing long-term tenure to the Project;
31 January, 27 February and 8 May 2018, the Company released updates to the Project Mineral Resource
Estimate which now stands at 2.0 Moz;
18 April 2018, the Company released its Inaugural Ore Reserve for the Project and followed this on 13
September 2018 with an updated Ore Reserve of 1.1 Moz;
4 July 2018, the Company completed a Fully Underwritten Rights Entitlement Offer;
4 October 2018, the Company completed and announced the results of a Definitive Feasibility Study of the
Project; and
12 December 2018, the Company secured an Indonesian based strategic partner investment in the Company
from a leading integrated energy company in Indonesia, PT Indika Energy Tbk.
Financial Position
The net assets of the Group have increased by $6,080,575 from $32,522,675 at 31 December 2017 to net assets
$38,603,250 as at 31 December 2018.
Significant Changes in State of Affairs
There are no significant changes in the state of affairs of the Group during the financial year, other than as disclosed in
the Directors’ Report.
Dividends Paid or Recommended
No dividend has been declared or paid by the Group. The Directors do not recommend the payment of a dividend for the
year ended 31 December 2018.
Significant Events After Balance Date
On 23 January 2019 the Company held a General Meeting at which two placements were approved. These placements
were made resulting in the issuance of 13,971,155 shares and 22,289,159 unlisted options, exercisable at A$0.35 each
and expiring 30 November 2020 raising $2,293,000 (A$3,213,366) before costs. Other than this matter, no matters have
arisen since the end of the financial year to the date of this report of a material and unusual nature likely, in the opinion
of the Directors, 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.
Likely Future Developments
The Group’s primary strategy will continue to focus on exploration and evaluation activities at the Awak Mas Gold Project.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 21
2
2
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ REPORT (Continued)
Information on Directors
Greg Foulis
Qualifications and
experience
Chairman (Appointed 29 March 2018)
Greg is a resource sector - finance executive with over 30 years of diverse international
experience across a variety of roles ranging from senior executive, business development and
investment advisory.
Greg’s most recent position was Chief Executive Office of Kingsgate Consolidated Limited, an
ASX-listed gold mining and development company. Greg led the restructuring, divestment and
re-focus of the business, including the elimination of a debt burden of over US$100 million.
Greg received an M.Comm (Finance) from the University of NSW in 1992 and a B.AppSc.
(Hons) in Geology from the NSW Institute of Technology in 1984. He is a Graduate Member of
the Australian Institute of Company Directors and a Fellow of the Australian Institute of Mining
and Metallurgy.
Michael Spreadborough Director (Appointed 16 February 2017)
Qualifications and
experience
Boyke Abidin
Qualifications and
experience
Mike Spreadborough is a mining engineer with extensive experience in the development and
operation of mineral resources projects spanning a range of commodities including copper,
gold, uranium, lead, zinc and iron ore. Over the past 20 years Mike has held senior executive
roles with a number of mining companies including Chief Operating Officer of Sandfire
Resources and Inova Resources Ltd (formerly Ivanhoe Australia), General Manager, Coastal
Operations for Rio Tinto and General Manager, Mining for WMC and later Vice President,
Mining for BHP Billiton at the world-class Olympic Dam mine in South Australia.
Mike holds a Bachelor of Mining Engineering from the University of Queensland and an MBA
from Deakin University, as well as a WA First Class Mine Manager’s Certificate of Competency.
He is also a Non-Executive Director of Clean TeQ Holdings Limited (appointed December 2016).
Director (Appointed 11 April 2017)
Boyke holds a Bachelor of Science in Business Administration from International University
Europe – London. He has more than 25 years’ experience in Indonesian management.
Previously a Government Liaison Officer for Rawas Gold Mine in South Sumatra, Boyke has
extensive in-country expertise. He is President Director of Indonesian Operations for One Asia
and has been a Director of the Company’s subsidiary PT Masmindo DWI Area since 2000. He is
also a Director of PT Pani Resources Indonesia, PT Dwinad Nusa Sejahtera and PT Sorikmas
Mining.
Rob Hogarth
Director (Appointed 17 February 2017)
Qualifications and
experience
Rob Hogarth built his mining industry expertise during a 37-year career with KPMG where he
was leader of KPMG's Energy and Natural Resources and Major Projects Advisory Practices and
lead partner for many of the firm's listed mining clients working with large and small
companies in the Asia Pacific region. He has been involved with Indonesia since 1983. Since
retiring from KPMG in 2009 he has become a Non-Executive Director of a range of companies,
including AMC Consultants, and sits on a number of audit committees.
Rob is also the Independent Chair of the Risk and Audit Committee of the Environment
Protection Authority of Victoria and a Non-Executive Director of Federation Training and PR
Exploration Pty Ltd. He was a Non-Executive Director of Dart Mining NL from February 2014 to
June 2015.
Rob holds a Bachelor of Economics (Accounting and Business Law) and is a Fellow, Institute of
Chartered Accountants in Australia.
22 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
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3
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ REPORT (Continued)
Richard Ness
Qualifications and
experience
Robin Widdup
Qualifications and
experience
Director (Appointed 13 December 2018)
Richard is a mining executive based in Indonesia, with over 38 years of professional experience
in the energy, mineral resources and mining sectors. Richard has held senior executive
positions at Newmont Indonesia and Freeport Indonesia; and currently serves as the President
Commissioner of PT Petrosea Tbk and Commissioner of PT Indika Energy Tbk. Richard is also
the Vice President and Chief Executive Officer at PT Merdeka Copper Gold Tbk, which recently
commissioned, and now runs, the successful Tujuh Bukit gold project in Java, Indonesia; and is
the Chairman-Mining Division at American Chamber of Commerce in Indonesia.
Director (Appointed 28 February 2018)
Robin is the Founder and a Director of the Company’s largest shareholder, Lion Selection
Group Limited. Robin has 40 years of mining industry and equity market experience. Following
working in a range of operations in the United Kingdom, Zambia and Australia, Robin joined
the J B Were & Sons Resource Research team, prior to founding Lion Selection Group and Lion
Manager in 1997. He is currently Managing Director of Lion Manager, Director of Lion
Selection Group Limited, Chairman of Celamin Holdings NL and a Non-Executive Director of
One Asia Resources Limited.
Meetings of the Board
The Board of Directors held 14 meetings during the year ended 31 December 2018. Attendances of Directors at these
meetings are shown in the table below:
Meetings Attended
Number eligible to attend
Mr Martin Pyle
Mr Greg Foulis
Mr Rob Hogarth
Mr Robin Widdup
Mr Richard Ness
Mr Michael Spreadborough
Mr Boyke Abidin
5
9
14
10
1
14
13
6
9
14
11
1
14
14
In addition thirteen (13) circular resolutions were resolved during the year. All circular resolutions were ratified at
subsequent Board meetings.
Indemnification of Directors and Officers
Under the Constitution of the Company every officer (and former officer) of the Company is indemnified, to the extent
permitted by law, against all costs expenses and liabilities incurred as such by an officer providing it is in respect of a
liability to another person (other than the Company or a related body corporate) where such liability does not arise out of
conduct involving a lack of good faith and is in respect of a liability for costs and expenses incurred in defending
proceedings in which judgment is given in favour of the officer or in which the officer is acquitted or is granted relief
under the Law.
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify the auditors, Ernst & Young, as part of the terms of
its audit engagement agreement against claims by third parties arising from the audit. No payment has been made to
indemnify Ernst & Young during or since the financial year.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 23
4
4
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ REPORT (Continued)
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings.
Share Options
At 31 December 2018, the unissued ordinary shares of Nusantara under option are as follows:
Grant Date
31/08/2018
04/07/2018
04/06/2018
17/04/2018
28/07/2017
28/07/2017
Expiry Date
31/07/2020
31/07/2020
27/07/2021
02/08/2021
02/08/2021
02/08/2020
Exercise Price
Listed Options
Unlisted Options
$0.30
$0.30
$0.61
$0.61
$0.61
$0.42
249,999
17,784,308
-
-
-
-
-
-
740,000
975,318
4,130,0001
177,000
295,0002
02/08/2020
28/07/2017
1 2,507,500 escrowed until 2 August 2019
2 escrowed until 2 August 2019
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any
related body corporate.
$0.42
-
Shares issued as a result of the exercise of options
During the year 295,000 options expired and no options were exercised.
Non – Audit services
The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that any
services disclosed below did not compromise the external auditor’s independence for the following reasons:
•
all non-audit services are reviewed and approved by Directors prior to commencement to ensure they do not
adversely affect the integrity and objectivity of the auditor; and
•
the nature of the services provided do not compromise the general principles relating to auditor independence in
accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical
Standards Board.
During the year, no fees were paid to Ernst & Young for non-audit services provided during the year ended 31 December
2018 (31 December 2017: Ernst and Young acted as the investigating accountant for the Company IPO and were paid
$33,955 for the services provided).
Environmental Regulations and Performance
The Group’s operations are subject to significant environmental regulation under the laws of Indonesia. The Directors are
not aware of any breaches of the legislation during the financial year that are material in nature.
Auditor’s Independence Declaration
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 for the year ended
31 December 2018 is set out on page 11 and forms part of this report.
24 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
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5
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ REPORT (Continued) - Remuneration Report (Audited)
Remuneration Report (Audited)
The Directors of Nusantara present the Remuneration Report (the Report) for the Company and its controlled entities for
the year ended 31 December 2018. This Report forms part of the Directors’ Report and has been audited in accordance
with section 300A of the Corporations Act 2001. The Report details the remuneration arrangements for Nusantara’s key
management personnel (KMP):
• Non-executive directors
•
Executive directors and senior executives (collectively the executives).
KMP are those persons who, directly or indirectly, have authority and responsibility for planning, directing and controlling
the major activities of the Company and Group. The table below outlines the KMP of the Group and their movements
during 2018:
Key Management Person
Position
Term as KMP
Non Executive Directors
Greg Foulis
Rob Hogarth
Robin Widdup
Richard Ness
Martin Pyle
Executive Directors
Mike Spreadbrough
Boyke Abidin
Other Key Management
Personnel
Colin McMillan
Derek Humphry
Craig Smyth
Jane Rose
Non-Executive Chair
Appointed 29 March 2018
Non-Executive Director Appointed 17 February 2017
Non-Executive Director Appointed 28 February 2018
Non-Executive Director Appointed 13 December 2018
Non-Executive Chair
Retired 30 May 2018
Managing Director
Appointed 16 February 2017
Executive Director
Appointed 11 April 2017
General Manager
Geology
Appointed 1 February 2017
Chief Financial Officer
Company Secretary
Appointed 16 February 2018
Appointed 29 March 2018
Chief Financial Officer
Ceased 31 March 2018
Company Secretary
Ceased 29 March 2018
Remuneration Policy
The full Board fulfils the roles of remuneration committee and is governed by the Group’s adopted remuneration policy
This policy governs the operations of the Board. The Board shall review and reassess the policy at least annually and
obtain the approval of the Board.
General Director Remuneration
Shareholder approval must be obtained in relation to the overall limit set for Non Executive Directors’ fees, currently
A$250,000 per year. The Directors shall set individual Board fees within the limit approved by shareholders.
Shareholders must also approve the framework for any broad-based equity based compensation schemes and if a
recommendation is made for a Director to participate in an equity scheme, that participation must be approved by the
shareholders.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 25
6
6
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ REPORT - Remuneration Report (Audited) (Continued)
Executive Remuneration
The Group’s remuneration policy for Executive Directors and senior management is designed to promote superior
performance and long-term commitment to the Group. Executives receive a base remuneration which is market related,
and may be entitled to performance based remuneration at the ultimate discretion of the Board.
Overall remuneration policies are subject to the discretion of the Board and can be changed to reflect competitive market
and business conditions where it is in the interests of the Group and shareholders to do so.
Executive remuneration and other terms of employment are reviewed annually by the Remuneration Committee having
regard to performance, relevant comparative information and expert advice.
The Committee’s reward policy reflects its obligations to align executive’s remuneration with shareholders’ interests and
to retain appropriately qualified executive talent for the benefit of the Group. The main principles of the policy are:
(a) Reward reflects the competitive market in which the Group operates;
(b) Individual reward should be linked to performance criteria; and
(c) Executives should be rewarded for both financial and non-financial performance.
Details of Remuneration for Year Ended 31 December 2018
The remuneration for each Director and the senior Executive of Nusantara during the year was as follows:
2018
Key Management Person
Short Term
Benefits
Salaries/Fees
USD
Post-
Employment
Superannuation
USD
Share Based
Payment –
Options
USD
Total
USD
Directors
Greg Foulis1
Rob Hogarth
Robin Widdup2
Richard Ness3
Martin Pyle4
Executive Directors
Mike Spreadborough
Boyke Abidin
Other Key Management
Personnel
Colin McMillan
Derek Humphry5
Craig Smyth6
Jane Rose6
39,016
34,154
31,167
1,810
22,440
246,488
104,966
171,688
162,665
-
-
3,707
3,245
-
-
-
14,654
21,652
9,715
-
9,022
57,377
59,051
40,882
1,810
31,462
15,312
129,910
-
32,477
391,710
137,443
15,312
13,240
-
-
43,303
31,724
32,476
-
230,303
207,629
32,476
-
814,394
50,816
324,933
1,190,143
1 Mr Foulis commenced 29 March 2018
2 Mr Widdup commenced 28 February 2018
3 Mr Ness commenced 13 December 2018
4 Mr Pyle retired as a director on 30 May 2018
5 Mr Humphry commenced 16 February 2018
6 Services Agreement with Lion Manager Pty Ltd which commenced on 1 July 2017 to provide accounting and corporate secretarial
services. Monthly fee of A$17,500 (plus GST), ceasing on 31 March 2018. The fees for 2018 amounted to $39,290. No additional fee
was payable with respect to Mr Smyth’s role as Chief Financial Officer or Ms Jane Rose as Company Secretary of the Company.
26 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
7
7
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ REPORT - Remuneration Report (Audited) (Continued)
Details of Remuneration for Year Ended 31 December 2017
2017
Key Management Person
Directors
Martin Pyle
Rob Hogarth
Rob Thomson1
Executive Directors
Mike Spreadborough
Boyke Abidin
Other Key Management
Personnel
Craig Smyth2
Adrian Rollke3
Jane Rose2
Short Term
Benefits
Salaries/Fees
USD
Post-
Employment
Superannuation
USD
Share Based
Payment –
Options
USD
Total
USD
42,859
31,133
-
107,273
77,118
-
81,484
-
339,867
-
2,959
-
12,679
12,679
-
55,538
46,771
-
6,369
125,590
239,232
-
-
-
-
19,019
96,137
19,019
12,679
-
19,019
94,163
-
9,328
201,665
550,860
1 Mr Thomson ceased as a director 23 February 2017
2 Services Agreement with Lion Manager Pty Ltd which commenced on 1 July 2017 to provide accounting and corporate secretarial
services. Monthly fee of A$17,500 (plus GST) . No additional fee is payable with respect to Mr Smyth’s role as Chief Financial Officer
or Ms Jane Rose as Company Secretary of the Company
3 Mr Rollke remuneration related to his position as Country Manager Indonesia. Mr Rollke ceased as a director 10 April 2017
Details of Shares Held by Key Management Personnel
2018
Key Management Person
Mike Spreadborough
Boyke Abidin
Rob Hogarth
Greg Foulis1
Robin Widdup2
Richard Ness3
Colin McMillan
Derek Humphry4
Craig Smyth5
Martin Pyle6
Opening Balance
1/1/2018
Held at time of
appointment
Shares
Acquired 2018
Shares
Disposed 2018
Closing Balance
31/12/2018
180,000
165,235
-
-
1,417,543
657,143
2,419,921
-
-
-
-
474,303
174,993
442,920
-
-
-
-
-
-
474,303
617,913
-
-
-
-
-
-
-
-
-
180,000
165,235
-
174,993
917,223
-
-
-
1,437,451
1 Mr Foulis commenced 29 March 2018
2 Mr Widdup commenced 28 February 2018
3 Mr Ness commenced 13 December 2018
4 Mr Humphry commenced 16 February 2018
5 Mr Smyth ceased as a Key Management Person on 31 March 2018. There were no movements between 31 December 2017 to 31
March 2018
6 Mr Pyle retired as a director 30 May 2018. There were no movements between 31 December 2017 and 30 May 2018.
8
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 27
8
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ REPORT - Remuneration Report (Audited) (Continued)
Details of Options Held by Key Management Personnel
2018
Key Management
Person
Opening
Balance
1/1/18
Held at time
of
appointment
Unlisted
Incentive
Options
granted as
compensation
July 2018
Listed
Options
Listed Loyalty
Options
expired
14/11/18
Closing
Balance as at
31/12/18
Mike Spreadborough
2,125,000
497,578
295,000
Boyke Abidin
Rob Hogarth
Greg Foulis
Robin Widdup4
Richard Ness
Colin McMillan
767,000
Derek Humphry
Martin Pyle5
Craig Smyth5
514,049
915,014
-
-
-
-
-
-
-
158,101
445,000
295,0003
104,162
346,460
-
-
-
-
-
975,318
-
-
-
(60,000)
(55,078)
-
-
(158,101)
-
-
-
2,065,0001
442,5002
295,0002
549,162
641,460
-
767,000
975,318
1 295,000 options escrowed until 2 August 2019, expiry 2 August 2020, exercise price A$0.42, 1,770,000 escrowed until 2 August 2019,
5,113,641
158,101
1,715,318
450,622
(273,179)
5,735,440
expiry 2 August 2021, exercise price A$0.61
2 Escrowed until 2 August 2019, expiry 2 August 2021, exercise price A$0.61
3 Incentive options granted to Mr Widdup’s nominee Lion Manager Pty Ltd
4 Mr Widdup commenced 28 February 2018
5 No movement in holding from 31 December 2018 to end of service
The sign-on and incentive options lapse or are deemed to be forfeited 90 days after the option holder ceases to be an
executive of Nusantara, unless the Board determines otherwise.
The Terms and Conditions of all options granted in any year which affected or will affect compensations is as follows.
Item
Assessed fair value at
grant date (A$)
July 2017
$0.21
April 2018
$0.064
June 2018
$0.065
Number of options
4,425,000
975,318
740,000
Vesting Conditions
One third on the later of
28/07/2018 and when the
Company is listed and the 45
day VWAP of the Shares is
A$0.525 or greater.
One third on the later of
28/07/2019 or a Decision to
mine at the Awak Mas Gold
Project.
One third on the later of
28/07/2018 and when the
Company is listed and the 45
day VWAP of the Shares is
A$0.525 or greater.
One third on the later of
28/07/2019 or a Decision to
mine at the Awak Mas Gold
Project.
One third on the later of
28/07/2018 and when the
Company is listed and the 45
day VWAP of the Shares is
A$0.525 or greater.
One third on the later of
28/07/2019 or a Decision to
mine at the Awak Mas Gold
Project.
One third on the later of
28/07/2020 or Commencement
of commercial production at
the Awak Mas Gold Project
One third on the later of
28/07/2020 or Commencement
of commercial production at
the Awak Mas Gold Project
One third on the later of
28/07/2020 or Commencement
of commercial production at
the Awak Mas Gold Project
Exercise Price (A$)
Grant Date
Expiry Date
$0.61
28/07/2017
02/08/2021
$0.61
12/04/2018
02/08/2021
$0.61
04/06/2018
27/07/2021
28 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
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9
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ REPORT - Remuneration Report (Audited) (Continued)
Employment agreements
Executives are employed under a open ended employment contract which can be terminated with notice by either the
Company or the executive.
The table below summarises amounts payable to Directors (inclusive of superannuation):
Director
Greg Foulis
Robert Hogarth
Robin Widdup
Richard Ness
Michael Spreadborough
Annual Director’s fee
AUD
Wages, salaries and/or
bonuses
75,000
50,000
50,000
50,000
-
-
-
-
-
AUD350,000
Boyke Abidin1
1 Mr Abidin is employed by a wholly owned subsidiary of the Company.
Non Executive Directors may be reimbursed for expenses reasonably incurred in attending to the Group’s affairs
USD94,440
-
The Managing Director and executives’ termination provisions are as follows:
Executive
Michael Spreadborough
Boyke Abidin
Colin McMillan
Derek Humphry
Termination
payment
12 months
12 months
12 months
3 months
Termination
cause
Resignation
None
None
None
None
3 months
None
3 months
3 months
This concludes the remuneration report, which has been audited.
This Directors’ Report, is signed in accordance with a resolution of the Board of Directors.
Michael Spreadborough
MANAGING DIRECTOR
29 March 2019
PERTH
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 29
10
10
DIRECTORS’ REPORT (CONTINUED)
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GPO Box 2646 Sydney NSW 2001
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Auditor’s Independence Declaration to the Directors of Nusantara
Resources Limited
Auditor’s Independence Declaration to the Directors of Nusantara
As lead auditor for the audit of Nusantara Resources Limited for the financial year ended 31 December
Resources Limited
2018, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
As lead auditor for the audit of Nusantara Resources Limited for the financial year ended 31 December
2018, I declare to the best of my knowledge and belief, there have been:
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of the financial report of Nusantara Resources Limited and the entities it
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
controlled during the financial year.
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of the financial report of Nusantara Resources Limited and the entities it
controlled during the financial year.
Ernst & Young
Ernst & Young
Scott Jarrett
Partner
29 March 2019
Scott Jarrett
Partner
29 March 2019
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
30 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
11
11
11
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
Note
AND CONTROLLED ENTITIES
2018
USD
2017
USD
Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2018
Interest Income
3,105
214
Expenses
Employee and Directors benefits expense
Income
Share based remuneration
Interest Income
Professional fees and consultants
Expenses
Depreciation and amortisation
Employee and Directors benefits expense
Write off of fixed assets
Share based remuneration
Community and social
Professional fees and consultants
Other expenses
Depreciation and amortisation
Loss before income tax
Write off of fixed assets
Income tax expense
Community and social
Loss for the year
Other expenses
Change to Foreign Currency Translation
Loss before income tax
Items that may be reclassified subsequently to profit or loss
Income tax expense
Total Comprehensive Loss for the year attributable to owners of the
Loss for the year
parent
Change to Foreign Currency Translation
Loss per share
Items that may be reclassified subsequently to profit or loss
From continuing operations:
Total Comprehensive Loss for the year attributable to owners of the
Basic loss per share (cents)
parent
Diluted loss per share (cents)
Loss per share
From continuing operations:
Basic loss per share (cents)
Diluted loss per share (cents)
Note
22
22
3
3
17
17
17
17
2018
USD
(698,901)
(368,312)
3,105
(586,098)
(61,032)
(698,901)
-
(368,312)
-
(586,098)
(632,005)
(61,032)
(2,343,243)
-
-
-
(2,343,243)
(632,005)
(2,343,243)
(535,025)
-
(2,878,268)
(2,343,243)
2017
USD
(759,443)
(269,412)
214
(504,622)
(51,599)
(759,443)
(102,885)
(269,412)
(40,016)
(504,622)
(513,110)
(51,599)
(2,240,873)
(102,885)
-
(40,016)
(2,240,873)
(513,110)
(2,240,873)
(139,454)
-
(2,380,327)
(2,240,873)
(535,025)
(139,454)
(2,878,268)
(2.1)
(2,380,327)
(5.3)
(2.1)
(5.3)
(2.1)
(2.1)
(5.3)
(5.3)
The financial statements should be read in conjunction with the accompanying notes
The financial statements should be read in conjunction with the accompanying notes
12
12
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 31
12
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
Note
2018
USD
2017
USD
Income
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018
3,105
Interest Income
Expenses
Employee and Directors benefits expense
ASSETS
Share based remuneration
CURRENT ASSETS
Professional fees and consultants
Cash and cash equivalents
Depreciation and amortisation
Other receivables
Write off of fixed assets
TOTAL CURRENT ASSETS
Community and social
Note
22
6
7
Other expenses
NON-CURRENT ASSETS
Loss before income tax
Property, plant and equipment
Income tax expense
Exploration and evaluation expenditure
Loss for the year
Other assets
Change to Foreign Currency Translation
TOTAL NON-CURRENT ASSETS
Items that may be reclassified subsequently to profit or loss
TOTAL ASSETS
Total Comprehensive Loss for the year attributable to owners of the
parent
LIABILITIES
Loss per share
CURRENT LIABILITIES
From continuing operations:
Trade and other payables
Basic loss per share (cents)
Provisions
Diluted loss per share (cents)
TOTAL CURRENT LIABILITIES
11
3
12
13
14
15
17
17
2018
USD
(698,901)
(368,312)
(586,098)
6,364,317
(61,032)
171,743
-
6,536,060
-
(632,005)
(2,343,243)
78,984
-
32,936,707
(2,343,243)
52,684
33,068,375
(535,025)
39,604,435
(2,878,268)
935,746
(2.1)
65,439
(2.1)
1,001,185
1,001,185
214
2017
USD
(759,443)
(269,412)
(504,622)
7,433,666
(51,599)
260,928
(102,885)
7,694,594
(40,016)
(513,110)
(2,240,873)
83,310
-
25,922,423
(2,240,873)
73,421
26,079,154
(139,454)
33,773,748
(2,380,327)
1,108,186
(5.3)
142,887
(5.3)
1,251,073
1,251,073
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
38,603,250
32,522,675
16(a)
16(b)
40,155,584
5,196,457
(6,748,791)
38,603,250
31,565,053
5,363,170
(4,405,548)
32,522,675
The financial statements should be read in conjunction with the accompanying notes
The financial statements should be read in conjunction with the accompanying notes
32 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
12
13
13
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2018
Income
Note
2018
USD
2017
USD
Interest Income
Expenses
Employee and Directors benefits expense
Note
Share based remuneration
At 1 January 2017
Professional fees and consultants
Loss for the period attributable
Depreciation and amortisation
to members of the Company
Write off of fixed assets
Other comprehensive income
Community and social
Total comprehensive loss
Other expenses
Shares issued during the period
Loss before income tax
Income tax expense
Costs associated with the issue
of shares
Loss for the year
16
16
16
Issued
Capital
USD
1
-
-
-
32,766,956
(1,201,904)
Intercompany loan forgiveness
Change to Foreign Currency Translation
22
Shares based payment
Items that may be reclassified subsequently to profit or loss
Other
Reserves
Accumulated
Losses
3,105
Total
USD
22
-
USD
(2,164,675)
(2,164,674)
(698,901)
USD
(368,312)
(586,098)
-
(2,240,873)
(2,240,873)
(61,032)
(139,454)
(139,454)
-
-
3
5,233,212
269,412
(2,240,873)
-
-
(139,454)
-
(2,380,327)
(632,005)
- 32,766,956
(2,343,243)
-
(1,201,904)
-
(2,343,243)
-
5,233,212
-
(535,025)
269,412
(4,405,548) 32,522,675
(2,878,268)
214
(759,443)
(269,412)
(504,622)
(51,599)
(102,885)
(40,016)
(513,110)
(2,240,873)
-
(2,240,873)
(139,454)
(2,380,327)
Balance as at 31 December
Total Comprehensive Loss for the year attributable to owners of the
2017
parent
31,565,053
5,363,170
Loss per share
From continuing operations:
Basic loss per share (cents)
Diluted loss per share (cents)
Issued
Capital
Other
Reserves
17
Accumulated
Losses
Note
USD
17
USD
USD
(2.1)
Total
(2.1)
USD
(5.3)
(5.3)
At 1 January 2018
31,565,053
5,363,170
(4,405,548) 32,522,675
Loss for the period attributable
to members of the Company
Other comprehensive income
16
Total comprehensive loss
-
-
-
-
(2,343,243)
(2,343,243)
(535,025)
-
(535,025)
(535,025)
(2,343,243)
(2,878,268)
Shares issued during the period
16
8,886,458
Costs associated with the issue
of shares
Shares based payment
Balance as at 31 December
2018
16
22
-
-
(295,927)
-
368,312
-
-
-
8,886,458
(295,927)
368,312
40,155,584
5,196,457
(6,748,791) 38,603,250
The financial statements should be read in conjunction with the accompanying notes
The financial statements should be read in conjunction with the accompanying notes
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 33
14
12
14
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
2017
USD
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2018
2018
USD
NUSANTARA RESOURCES LIMITED
Note
AND CONTROLLED ENTITIES
Income
Interest Income
Expenses
Employee and Directors benefits expense
CASH FLOWS FROM OPERATING ACTIVITIES
Share based remuneration
Interest income
Professional fees and consultants
Payments to suppliers and employees
Depreciation and amortisation
Net cash used in operating activities
Write off of fixed assets
Community and social
CASH FLOWS FROM INVESTING ACTIVITIES
Other expenses
Purchase of property, plant and equipment and intangible assets
Loss before income tax
Payments for exploration expenditure
Income tax expense
Net cash used in investing activities
Loss for the year
Change to Foreign Currency Translation
CASH FLOWS FROM FINANCING ACTIVITIES
Items that may be reclassified subsequently to profit or loss
Proceeds from issue of shares
Total Comprehensive Loss for the year attributable to owners of the
Payment for share issue expenses
parent
Loan proceeds from related body corporate
Loss per share
Net cash provided by financing activities
From continuing operations:
Basic loss per share (cents)
Net increase/(decrease) in cash held
Diluted loss per share (cents)
Effect of exchange rates
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Note
22
19
3
17
17
16
6
3,105
2018
USD
(698,901)
(368,312)
3,105
(586,098)
(1,863,947)
(61,032)
(1,860,842)
-
-
(632,005)
(35,968)
(2,343,243)
(7,228,045)
-
(7,264,013)
(2,343,243)
(535,025)
8,886,458
(2,878,268)
(295,927)
-
214
2017
USD
(759,443)
(269,412)
214
(504,622)
(2,308,094)
(51,599)
(2,307,880)
(102,885)
(40,016)
(513,110)
(166,797)
(2,240,873)
(2,575,790)
-
(2,742,587)
(2,240,873)
(139,454)
12,935,742
(2,380,327)
(1,201,904)
790,000
8,590,531
12,523,838
(2.1)
(534,324)
(2.1)
(535,025)
7,433,666
6,364,317
(5.3)
7,473,371
(5.3)
(145,979)
106,274
7,433,666
The financial statements should be read in conjunction with the accompanying notes
The financial statements should be read in conjunction with the accompanying notes
34 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
12
15
15
CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: CORPORATE INFORMATION
The financial report of Nusantara Resources Limited (“Nusantara” or “the Company”) and its controlled entities (“the
Group”) for the year ended 31 December 2018 was authorised for issue in accordance with a resolution of the Directors
on 29 March 2019.
Nusantara is a listed public company effective from 2 August 2017 limited by shares incorporated in Australia.
The Directors have the power to amend and reissue the financial report.
The nature of the operations and principal activities of the Company and the Group are described in the Directors’
Report.
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
This consolidated financial report includes the consolidated financial statements and notes and financial information
relating to Nusantara as an individual parent entity (“Parent Entity” or “Company”) for the year ended
31 December 2018.
The presentation currency for the Group is US dollars.
Basis of preparation
The financial report is a general-purpose financial report which has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards set out accounting policies
that the AASB has concluded would result in a financial report containing relevant and reliable information about
transactions, events and conditions. The financial report also complies with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board. Material accounting policies adopted in the preparation
of this financial report are presented below and have been consistently applied unless otherwise stated.
The financial report covers the consolidated financial statements of Nusantara Resources Limited and its subsidiaries.
The financial report has been prepared on an accruals basis and is based on historical costs basis modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
The financial report is presented in US dollars unless otherwise stated.
a.
Going concern basis of accounting
The financial statements have been prepared on a going concern basis, which contemplates the continuity of
normal business activity and the realisation of assets and the settlement of liabilities in the normal course of
business.
As at 31 December 2018, the Group current assets exceeded current liabilities by $5,534,875 (2017: $6,443,521).
For the year ended 31 December 2018 the Group incurred a loss of $2,343,243 (2017: $2,240,873) and
experienced net cash outflows from operating and investing activities of $9,124,855 (2017: $5,050,467).
On 23 January 2019 the Company held a General Meeting at which two placements were approved. These
placements were made resulting in the issuance of 13,971,155 shares and 22,289,159 unlisted options,
exercisable at A$0.35 each and expiring 30 November 2020 raising $2,293,000 (A$3,213,366) before costs.
The Group continues to focus on exploration, evaluation and development activities at the Awak Mas Gold
Project and is currently without an operating cash inflow. The Group will need to raise additional capital to
advance the Awak Mas Gold Project and its ongoing working capital requirements which results in a material
uncertainty in relation to going concern. While no assurances can be given about future ability to finance the
Group’s activities, Nusantara has a proven past ability to raise funds and invest in the Group, the Directors
believe the Company, given the quality of the Awak Mas Gold Project, can raise future funds to pursue its
business strategy and meet its obligations as and when they fall due.
The financial report does not include any adjustments relating to the recoverability and classification of recorded
asset amounts or to the amounts and classification of liabilities that might be necessary should the company not
continue as a going concern.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 35
16
16
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
b.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at
31 December 2018. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
•
•
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of
the investee);
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
•
The contractual arrangement with the other vote holders of the investee;
• Rights arising from other contractual arrangements;
•
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. A list of controlled entities is contained in Note 10 to
the financial statements. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of
a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income
from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the
parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests
having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to
bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities,
equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated
in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill),
liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognised
in profit or loss. Any investment retained is recognised at fair value.
c.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax
liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax
liability balances during the year as well unused tax losses. Current and deferred income tax expense (income) is
charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited
or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available.
No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities
are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is
settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their
measurement also reflects the manner in which management expects to recover or settle the carrying amount of
the related asset or liability.
36 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
17
17
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset
can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches,
associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the
foreseeable future. Current tax assets and liabilities are off set where a legally enforceable right of set-off exists
and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are off set where a legally enforceable right of set-off exists,
the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur in future periods in which significant
amounts of deferred tax assets or liabilities are expected to be recovered or settled.
d.
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost less any accumulated depreciation and impairment
losses.
Plant and equipment
Plant and equipment are measured on a cost basis. Indicators of impairment of the carrying amount of plant and
equipment are reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these
assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received
from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to
their present values in determining recoverable amounts. The cost of property, plant and equipment
constructed within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate
proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the statement of comprehensive income during the financial period in which they
are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life to the
Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over
the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The
depreciation rates used for each class of depreciable assets are:
•
Plant and equipment 17% - 33%.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are
determined by comparing proceeds with the carrying amount. These gains and losses are included in the
statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation
surplus relating to that asset are transferred to retained earnings.
e.
Exploration and Development Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development or sale of the area or where activities in the area have not yet reached a
stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated
costs in relation to an abandoned area are written off in full against profit in the period in which the decision to
abandon the area is made. When production commences, the accumulated costs for the relevant area of interest
are amortised over the life of the area according to the rate of depletion of the economically recoverable
reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest. There are currently no material restoration
requirements for the area of interest held.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 37
18
18
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f.
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but
not the legal ownership that is transferred to entities in the Group, are classified as finance leases. Finance leases
are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the
leased property or the present value of the minimum lease payments, including any guaranteed residual values.
Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the
period. Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or
the lease term. Lease payments for operating leases, where substantially all the risks and benefits remain with
the lessor, are charged as expenses in the periods in which they are incurred. Lease incentives under operating
leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.
g.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
Internally generated intangible assets, excluding capitalised development costs, are not capitalised and
expenditure is reflected profit and loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is
recognised in the income statement as the expense category that is consistent with the function of the intangible
assets. The useful life for each class of intangible assets are:
•
Software: 4 years.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to
determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite
to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the
asset is derecognised.
i) Financial Instruments – initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has applied the practical expedient, the
Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component
or for which the Group has applied the practical expedient are measured at the transaction price determined
under IFRS 15.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to
give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation
or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the
Group commits to purchase or sell the asset.
h.
38 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
19
19
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
•
•
•
Financial assets at amortised cost (debt instruments)
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments)
•
Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of
the following conditions are met:
•
The financial asset is held within a business model with the objective to hold financial assets in order to
collect contractual cash flows, and
•
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are
subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified
or impaired.
The Group’s financial assets at amortised cost include security deposits and other receivables included under
current receivable assets.
Financial assets at fair value through OCI (debt instruments)
The Group measures debt instruments at fair value through OCI if both of the following conditions are met:
•
The financial asset is held within a business model with the objective of both holding to collect contractual
cash flows and selling, and
•
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for
financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI. Upon
derecognition, the cumulative fair value change recognised in OCI is recycled to profit or loss.
The Group currently does not have debt instruments classified as financial assets at fair value through OCI.
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the definition of equity under AASB 132 Financial
Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-
instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other
income in the statement of profit or loss when the right of payment has been established, except when the
Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such
gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment
assessment.
The Group currently does not have equity instruments classified as financial assets at fair value through OCI.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets
designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to
be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of
selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also
classified as held for trading unless they are designated as effective hedging instruments. Financial assets with
cash flows that are not solely payments of principal and interest are classified and measured at fair value through
profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be
classified at amortised cost or at fair value through OCI, as described above, debt instruments may be designated
at fair value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an
accounting mismatch.
20
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 39
20
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value
with net changes in fair value recognised in the statement of profit or loss.
This category includes derivative instruments and listed equity investments which the Group had not irrevocably
elected to classify at fair value through OCI. Dividends on listed equity investments are also recognised as other
income in the statement of profit or loss when the right of payment has been established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the
host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related
to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of
a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives
are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if
there is either a change in the terms of the contract that significantly modifies the cash flows that would
otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.
A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately.
The financial asset host together with the embedded derivative is required to be classified in its entirety as a
financial asset at fair value through profit or loss.
The Group currently does not have financial assets at fair value through profit and loss.
The rights to receive cash flows from the asset have expired, or
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
•
•
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a ‘pass-through’
arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or
(b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but
has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of
the asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In
that case, the Group also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
ii) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the
near term. This category also includes derivative financial instruments entered into by the Group that are not
designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives
are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the
initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The Group has not designated any
financial liability as at fair value through profit or loss.
40 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
21
21
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as
well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of profit or loss.
iii) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement
of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Impairment of Non-Financial Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be
impaired. The assessment will include the consideration of external and internal sources of information including
dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition
profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s
carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement
of comprehensive income. Where it is not possible to estimate the recoverable amount of an individual asset,
the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Impairment
testing is performed annually for goodwill and intangible assets with indefinite lives.
i.
j.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in United States
dollars. Parent entity’s functional currency is Australia dollars, consistent with last year. Its presentational
currency remains in United States dollars.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-
monetary items measured at historical cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair
values were determined. Exchange differences arising on the translation of monetary items are recognised in the
statement of comprehensive income, except where deferred in equity as a qualifying cash flow or net
investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly
in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is
recognised in the statement of comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s
presentation currency are translated as follows:
•
•
•
assets and liabilities are translated at year-end exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign
currency translation reserve in the statement of financial position. These differences are recognised in the
statement of comprehensive income in the period in which the operation is disposed.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 41
22
22
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
k.
l.
Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
balance date. Employee benefits that are expected to be settled within one year have been measured at the
amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have
been measured at the present value of the estimated future cash outflows to be made for those benefits. In
determining the liability, consideration is given to employee wages increases and the probability that the
employee may satisfy vesting requirements. Those cash outflows are discounted using market yields on
corporate bonds with terms to maturity that match the expected timing of cash flows.
Share-based payments
Employees (including senior executives) of the Group receive remuneration in the form of share-based
payments, whereby employees render services as consideration for equity instruments (equity-settled
transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using
an appropriate valuation model, further details of which are given in Note 22.
That cost is recognised in employee benefits expense, together with a corresponding increase in equity (Share
Based Payment Reserves), over the period in which the service and, where applicable, the performance
conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at
each reporting date until the vesting date reflects the extent to which the vesting period has expired and the
Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the
statement of profit or loss for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair
value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate
of the number of equity instruments that will ultimately vest. Market performance conditions are reflected
within the grant date fair value. Any other conditions attached to an award, but without an associated service
requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value
of an award and lead to an immediate expensing of an award unless there are also service and/or performance
conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or
service conditions have not been met. Where awards include a market or non-vesting condition, the transactions
are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all
other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair
value of the unmodified award, provided the original terms of the award are met. An additional expense,
measured as at the date of modification, is recognised for any modification that increases the total fair value of
the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled
by the entity or by the counterparty, any remaining element of the fair value of the award is expensed
immediately through profit or loss.
m.
n.
o.
The dilutive effect of outstanding options (if any) is reflected as additional share dilution in the computation of
diluted loss per share (further details are given in Note 17).
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less that are readily convertible to a known amount of
cash and subject to an insignificant risk of change in value.
Revenue and Other Income
Interest income is recognised using the effective interest rate method, which, for floating rate financial assets, is
the rate inherent in the instrument. All revenue is stated net of the amount of goods and services tax (GST).
42 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
23
23
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
p.
q.
Trade and Other Payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and
service received by the Group during the reporting period which remains unpaid. The balance is recognised as a
current liability with the amount normally paid within 30 days of recognition of the liability.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost
of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of
financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross
basis, except for the GST component of investing and financing activities, which are disclosed as operating cash
flows.
r.
Comparative Figures
When required by Accounting Standards, comparative amounts have been adjusted to conform to changes in
presentation for the current financial year. When the Group applies an accounting policy retrospectively, makes
a retrospective restatement or reclassifies items in its financial statements, a statement of financial position as at
the beginning of the earliest comparative period will be disclosed. The Group has not changed its accounting
policies other than the adoption of new accounting standards which had no significant impact on the Group.
s.
Key estimates
i.
ii.
Impairment
The Group assesses impairment at the end of each reporting period by evaluating conditions and events
specific to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant
assets are reassessed using value in-use calculations which incorporate various key assumptions. These
assumptions are disclosed in each of the notes to the financial report where applicable.
Exploration and Evaluation Expenditure
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to
be recoverable or where the activities have not reached a stage which permits a reasonable assessment
of the existence of reserves.
t.
New Accounting Standards for Application in Future Periods
PART A - Changes in accounting policy, new and amended standards and interpretations
There was no material impact of any new accounting policies adopted during the period including in relation to
AASB 9 Financial Instruments and AASB 15 Revenue from Contracts with Customers.
PART B – Accounting standards issued but not yet effective
Australian Accounting Standards and Interpretations that are issued, but are not yet effective for the period
ending 31 December 2018 are disclosed below. The Group intends to adopt these new standards and
interpretations, if applicable, when they become effective.
AASB 16 Leases
AASB 16 was issued in January 2016 and it replaces AASB 117 Leases, AASB Interpretation 4 Determining whether
an Arrangement contains a Lease, AASB Interpretation-115 Operating Leases-Incentives and AASB Interpretation
127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. AASB 16 sets out the principles
for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all
leases under a single on-balance sheet model similar to the accounting for finance leases under AASB 117. The
standard includes two recognition exemptions for lessees – leases of ’low-value’ assets (e.g., personal computers)
and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease,
a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the
right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to
separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use
asset.
Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change
in the lease term, a change in future lease payments resulting from a change in an index or rate used to
determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease
liability as an adjustment to the right-of-use asset.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 43
24
24
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Lessor accounting under AASB 16 is substantially unchanged from today’s accounting under AASB 117. Lessors
will continue to classify all leases using the same classification principle as in AASB 117 and distinguish between
two types of leases: operating and finance leases.
AASB 16, which is effective for annual periods beginning on or after 1 January 2019, requires lessees and lessors
to make more extensive disclosures than under AASB 117.
Transition to AASB 16
The Group is intending to use the modified retrospective method when transitioning to AASB 16.
The Group will elect to use the exemptions proposed by the standard on lease contracts for which the lease
terms ends within 12 months as of the date of initial application, and lease contracts for which the underlying
asset is of low value. The Group has leases of certain office equipment (i.e. printing and photocopying machines)
that are considered of low value. The Group is currently in the process of assessing the impact of these changes,
however does not expect AASB 16 to have a significant impact on the financial statements.
AASB 17 Insurance Contracts
This standard is not applicable to the Group.
AASB Interpretation 23 Uncertainty over Income Tax Treatment
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that
affects the application of AASB 112 and does not apply to taxes or levies outside the scope of AASB 112, nor does
it specifically include requirements relating to interest and penalties associated with uncertain tax treatments.
The Interpretation specifically addresses the following:
• Whether an entity considers uncertain tax treatments separately
• The assumptions an entity makes about the examination of tax treatments by taxation authorities
• How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
• How an entity considers changes in facts and circumstances
An entity has to determine whether to consider each uncertain tax treatment separately or together with one or
more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should
be followed. The interpretation is effective for annual reporting periods beginning on or after 1 January 2019, but
certain transition reliefs are available. The Group will apply the interpretation from its effective date. Since the
Group operates in a complex multinational tax environment, applying the Interpretation may affect its
consolidated financial statements. In addition, the Group may need to establish processes and procedures to
obtain information that is necessary to apply the Interpretation on a timely basis.
AASB 2017-6 Amendments to Australian Accounting Standards – Prepayment Features with Negative
Compensation
Under AASB 9, a debt instrument can be measured at amortised cost or at fair value through other
comprehensive income, provided that the contractual cash flows are ‘solely payments of principal and interest on
the principal amount outstanding’ (the SPPI criterion) and the instrument is held within the appropriate business
model for that classification. The amendments to AASB 9 clarify that a financial asset passes the SPPI criterion
regardless of the event or circumstance that causes the early termination of the contract and irrespective of
which party pays or receives reasonable compensation for the early termination of the contract.
The amendments should be applied retrospectively and are effective from 1 January 2019, with earlier
application permitted. These amendments have no impact on the consolidated financial statements of the Group.
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
44 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
25
25
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
The amendments address the conflict between AASB 10 and AASB 128 in dealing with the loss of control of a
subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that the gain or
loss resulting from the sale or contribution of assets that constitute a business, as defined in AASB 3, between an
investor and its associate or joint venture, is recognised in full. Any gain or loss resulting from the sale or
contribution of assets that do not constitute a business, however, is recognised only to the extent of unrelated
investors’ interests in the associate or joint venture. The IASB and AASB have deferred the effective date of these
amendments indefinitely, but an entity that early adopts the amendments must apply them prospectively. The
Group will apply these amendments when they become effective.
AASB 2018-2 Amendments to Australian Accounting Standards – Plan Amendment, Curtailment or Settlement
This standard is not applicable to the Group.
AASB 2017-7 Amendments to Australian Accounting Standards – Long-term Interests in Associates and Joint
Ventures
The amendments clarify that an entity applies AASB 9 to long-term interests in an associate or joint venture to
which the equity method is not applied but that, in substance, form part of the net investment in the associate or
joint venture (long-term interests). This clarification is relevant because it implies that the expected credit loss
model in AASB 9 applies to such long-term interests.
The amendments also clarified that, in applying AASB 9, an entity does not take account of any losses of the
associate or joint venture, or any impairment losses on the net investment, recognised as adjustments to the net
investment in the associate or joint venture that arise from applying AASB 128 Investments in Associates and
Joint Ventures.
The amendments should be applied retrospectively and are effective from 1 January 2019, with early application
permitted. Since the Group does not have such long-term interests in its associate and joint venture, the
amendments will not have an impact on its consolidated financial statements.
AASB 2018-1 Amendments to Australian Accounting Standards – Annual Improvements 2015–2017 Cycle
These improvements include:
• AASB 3 Business Combinations
The amendments clarify that, when an entity obtains control of a business that is a joint operation, it applies the
requirements for a business combination achieved in stages, including remeasuring previously held interests in
the assets and liabilities of the joint operation at fair value. In doing so, the acquirer remeasures its entire
previously held interest in the joint operation.
An entity applies those amendments to business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after 1 January 2019, with early application
permitted. These amendments will apply on future business combinations of the Group.
• AASB 11 Joint Arrangements
A party that participates in, but does not have joint control of, a joint operation might obtain joint control of the
joint operation in which the activity of the joint operation constitutes a business as defined in AASB 3. The
amendments clarify that the previously held interests in that joint operation are not remeasured.
An entity applies those amendments to transactions in which it obtains joint control on or after the beginning of
the first annual reporting period beginning on or after 1 January 2019, with early application permitted. These
amendments are currently not applicable to the Group but may apply to future transactions.
• AASB 112 Income Taxes
The amendments clarify that the income tax consequences of dividends are linked more directly to past
transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity
recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity
according to where the entity originally recognised those past transactions or events.
An entity applies those amendments for annual reporting periods beginning on or after 1 January 2019, with
early application permitted. When an entity first applies those amendments, it applies them to the income tax
consequences of dividends recognised on or after the beginning of the earliest comparative period. The Group
does not expect any effect on its consolidated financial statements.
26
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 45
26
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
• AASB 123 Borrowing Costs
The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to
develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended
use or sale are complete.
An entity applies those amendments to borrowing costs incurred on or after the beginning of the annual
reporting period in which the entity first applies those amendments. An entity applies those amendments for
annual reporting periods beginning on or after 1 January 2019, with early application permitted. The Group does
not expect any effect on its consolidated financial statements.
NOTE 3: INCOME TAX EXPENSE
a. The prima facie tax on profit from ordinary activities
before income tax is reconciled to the income tax as
follows:
Loss before tax
Total income tax benefit calculated at 30% (2017:
30%)
Tax effect of:
–
Non-deductible expenses
Deferred tax asset not brought to account
Income Tax Expense
2018
USD
2017
USD
(2,343,243)
(2,240,873)
(702,973)
(672,262)
702,973
672,262
-
-
-
-
-
-
The Group has available tax losses carried forward in Indonesia. These tax losses have not been recognised due to the
uncertainty of their recoverability in future periods. Indonesian tax losses can be carried forward for 5 years under the
Awak Mas Contract of Work (as amended) under prevailing Indonesian tax legislation. Deductible temporary differences
do not expire under Australian current tax legislation. Deferred tax assets have not been recognised in respect of these
items because it is not yet considered probable that future taxable income will be available to utilise them.
NOTE 4: INTERESTS OF KEY MANAGEMENT PERSONNEL
Compensation for Key Management Personnel
a)
Short term employee benefits
Post-Employment
Share Based Transactions
Total compensation
2018
USD
814,394
50,816
324,933
1,190,143
2017
USD
339,867
9,328
201,665
550,860
b)
Other Key Management Personnel Transactions
There have been no other Key Management Personnel transactions involving equity instruments. For details of
other transactions with Key Management Personnel refer to Note 21 Related Parties.
NOTE 5: AUDITORS’ REMUNERATION
Ernst & Young Australia - audit services
Ernst & Young Australia – non-audit services
2018
USD
60,094
-
60,094
2017
USD
54,548
33,955
88,503
During the 2017 year, Ernst and Young acted as the investigating accountant for the Company IPO and were paid $33,955
for the services provided. The Company’s Indonesian subsidiary PT Masmindo Dwi Area prepares financial statements
which are audited for regulatory purposes. The auditor is BDO. For the year ended 31 December 2018 BDO performed
some audit services to support the Ernst and Young audit of the Group and will receive fees of $5,000 (2017: Nil).
27
46 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
27
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 7: OTHER RECEIVABLES
CURRENT
Prepayments
Security Deposits1
Other receivables
2018
USD
6,364,317
2017
USD
7,433,666
6,364,317
7,433,666
2018
USD
16,957
114,372
40,414
171,743
2017
USD
10,532
126,360
124,036
260,928
1 A$120,000 is held as security for a credit card facility and bears interest at 1.6433%
A$42,000 is held as security for the office lease and bears interest at 1.6433%
NOTE 8: SEGMENT INFORMATION
The Group operates predominantly in the minerals exploration sector, with the principle activity of the Group being the
exploration and evaluation of gold projects. The Group classifies these activities under a single operating segment; the
Indonesian exploration and development activities.
Regarding the exploration and evaluation operating segment, the Chief Operating Decision Maker (determined to be the
Board of Directors) receives information on the exploration and evaluation expenditure incurred. This information is
disclosed in note 12 of the financial report. No segment revenues are disclosed as the exploration tenement is not at a
stage where revenues have been earned. Furthermore, no segment costs are disclosed as all segment expenditure is
capitalised, with the exception of expenditure written off. The non-current assets of the Group, attributable to the parent
entity, are located in Indonesia.
NOTE 9: PARENT ENTITY DISCLOSURES
The following information has been extracted from the records of the parent entity:
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Reserves
Accumulated losses
Net equity
Loss of the parent entity
Total comprehensive loss of the parent entity
2018
USD
6,387,831
2017
USD
7,585,473
39,022,421
32,879,868
419,171
419,171
357,193
357,193
40,155,584
31,565,054
5,362,363
5,529,080
(6,914,697)
(4,571,459)
38,603,250
32,522,675
(2,343,238)
(4,541,459)
(2,343,238)
(4,541,459)
The parent entity has not entered into any contractual commitments for the acquisition of property plant and equipment
as at 31 December 2018.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 47
28
28
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 10: CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of Nusantara Resources Limited and the
subsidiaries listed in the following table:
Controlled Entities consolidated
Country of Incorporation
Percentage Owned
PT Masmindo Dwi Area
Salu Siwa Pty Limited
Vista Gold (Barbados) Corp
Indonesia
Australia
Barbados
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Total plant and equipment
Reconciliation of the carrying amounts are set out below:
Plant and equipment
Carrying amount at beginning of year
Additions
Depreciation
Write off plant and equipment
Carrying amount of plant and equipment at end of year
NOTE 12: EXPLORATION AND EVALUATION EXPENDITURE
Costs carried forward in respect of areas of interest in:
– exploration and evaluation phases at the end of year
Reconciliations
Carrying amount at the beginning of year
Expenditure incurred during current year
Carrying amount at the end of year
2018
%
2017
%
100
100
100
100
100
100
2018
USD
2017
USD
401,249
372,431
(322,265)
(289,121)
78,984
83,310
83,310
28,818
(33,144)
-
78,984
60,412
90,831
(8,365)
(59,568)
83,310
2018
USD
2017
USD
32,936,707
25,922,423
25,922,423
22,851,800
7,014,284
3,070,623
32,936,707
25,922,423
48 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
29
29
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 13: OTHER ASSETS
Intangible asset – computer software
At cost
Accumulated amortisation
Total intangible asset
Reconciliation of the carrying amounts are set out below:
Intangible asset
Carrying amount at beginning of year
Additions
Amortisation
Write off intangible assets
Carrying amount of intangible asset at end of year
NOTE 14: TRADE AND OTHER PAYABLES
Trade payables and accrued expenses
VAT payables
Trade and other payables
NOTE 15: PROVISIONS
Provisions
NOTE 16: ISSUED CAPITAL AND RESERVES
a. Issued Capital
153,804,835 (2017: 97,531,763) fully paid ordinary shares. The shares
have no par value.
Movements in ordinary share capital
At the beginning of the reporting period
Shares issued during the year
At the end of the reporting period
Movements in ordinary share capital
Balance at beginning of the reporting period
Shares issued during the year
Costs associated with shares issued during the year
At the end of the reporting period
2018
USD
2017
USD
368,247
361,095
(315,563)
(287,674)
52,684
73,421
73,421
7,152
(27,889)
-
84,003
75,969
(43,234)
(43,317)
52,684
73,421
2018
USD
928,153
7,593
2017
USD
1,071,080
37,106
935,746
1,108,186
2018
USD
65,439
2017
USD
142,887
2018
USD
2017
USD
40,155,584
31,565,053
Shares
97,531,763
Shares
1
56,273,072
97,531,762
153,804,835
97,531,763
2018
USD
2017
USD
31,565,053
1
8,886,458
32,766,956
(295,927)
(1,201,904)
40,155,584
31,565,053
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 49
30
30
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 16: ISSUED CAPITAL AND RESERVES (CONTINUED)
Movements in options
At the beginning of the reporting period
Sign and Incentive Options issued/(expiring) during the year
Listed Loyalty Options issued/(expiring) during the year
Listed Loyalty Options exercised
Listed Rights issue Options issued during the year
At the end of the reporting period
2018
Options
37,405,392
2017
Options
-
1,420,318
4,897,000
(32,508,392)
32,510,059
-
(1,667)
18,034,307
-
24,351,625
37,405,392
b. Reserves
At 1 January 2017
Currency translation differences
Intercompany loan forgiveness
Shares based payment
Foreign Currency
Translation
Debt
Forgiveness
Share Based
Payment
Total Other
Reserves
USD
USD
USD
USD
-
(139,454)
-
-
-
-
5,233,212
-
-
-
-
(139,454)
5,233,212
-
269,412
269,412
Balance as at 31 December 2017
(139,454)
5,233,212
269,412
5,363,170
At 1 January 2018
(139,454)
5,233,212
269,412
5,363,170
Currency translation differences
Shares based payment
(535,025)
-
-
-
-
(535,025)
368,312
368,312
Balance as at 31 December 2018
(674,479)
5,233,212
637,724
5,196,457
Nature and purpose of reserves
Foreign Currency Translation
Exchange differences between the functional currency and presentation currency of the parent are recognised in other
comprehensive income as described in note 2(j) and accumulated in a separate reserve within equity. The cumulative
amount is reclassified to profit or loss when the differences are realised.
Debt Forgiveness
In prior financial year Nusantara entered into a convertible loan agreement with its previous parent company, One Asia,
in relation to outstanding funding amounts provided by to the Group. On 26 July 2017 One Asia converted its outstanding
loan amounts owed by Nusantara and its subsidiaries, in exchange for the issue of 58,969,875 Nusantara shares to settle
loans payable to related body corporates. The fair value of the shares issued was determined with reference to the IPO
price of A$0.42. As the fair value of shares provided as consideration of A$24,767,348 (US$19,831,215) was less than the
balance of the loans, the difference of US$5,233,212 was recognised as a reserve.
Share-based payments
The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to
employees, including key management personnel, as part of their remuneration. Refer to Note 22 for further details of
these plans.
50 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
31
31
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 16: ISSUED CAPITAL AND RESERVES (CONTINUED)
c.
Options
Attaching options
On 4 July 2018 the Company completed a rights entitlement issue which included issuing one option for every two shares
taken up (totalling 12,832,917 listed options) and 5,201,390 options relating to underwriting of the rights entitlement
issue. These options are exercisable at A$0.30 each and expire 31 July 2020.
Loyalty options
On 14 November 2017 the Company completed a bonus issue to eligible shareholders of one free loyalty option for every
three Nusantara shares held at an exercise price of A$0.42. 32,510,059 loyalty options were allotted, being quoted on the
Australian Securities Exchange (ASX) under trading code NUSO. During the reporting period nil (2017: 1,667) Loyalty
Options were exercised. On 14 November 2018 the 32,508,392 unexercised loyalty options expired in accordance with
their terms.
NOTE 17: LOSS PER SHARE
a. Reconciliation of loss
Loss for the year
Loss used in the calculation of basic and dilutive EPS
2018
USD
2017
USD
(2,343,243)
(2,240,873)
(2,343,243)
(2,240,873)
Number
Number
b. Weighted average number of ordinary shares outstanding during the year used in
111,967,115
42,274,516
calculating basic and dilutive Loss per share
Weighted average number of dilutive options outstanding
-
-
c. Anti-dilutive options (not used in dilutive loss per share calculation)
38,248,697
37,405,392
d. Loss per share (both basic and diluted)
NOTE 18: COMMITMENTS AND CONTINGENT LIABILITIES
2018
Cents
(2.1)
2017
Cents
(5.3)
(a)
(b)
In December 2013 the Company entered into an agreement with Vista Gold Corporation to acquire 100% of Salu
Siwa, PT Masmindo via acquisition of all shares in Vista Gold (Barbados) Inc. In accordance with the terms of the
agreement, as consideration for the transaction, the Company agreed to grant Vista Gold Corporation a royalty of
2.0% of Net Smelter Returns on the first 1,250,000 ounces of gold produced from the Awak Mas Gold Project and
2.5% on the next 1,250,000 ounces of gold produced.
In order to maintain current rights of tenure to tenements the Group is required to advance the Awak Mas Gold
Project through to operation and production. The Awak Mas Gold Project is currently in the Operations and
Production Period and the Group is required to pay Dead Rent of $57,560 annually ($4.00 per hectare on the 14,390
hectares of the CoW) and Building Tax of approximately $10,000 annually.
(c) The Group is subject to a tax audits by the Indonesian tax department and has been issued with a revised
assessment with respect to VAT paid in 2012. This revised assessment amounted to approximately $242,825 (IDR3.3
billion). The Group is disputing the assessment and has paid 60% of this amount as a deposit to advance to the Tax
Court. If the Tax Court issues a negative decision the Group would need to pay approximately $190,000, being the
balance of the assessment plus additional penalties, before it could Appeal to the Supreme Court. The Group
remains confident that the VAT and penalties are not payable, however this is subject to due process and not
beyond doubt. The Group may be subject to tax audits from which additional claims could arise, however is
confident its position is defensible.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 51
32
32
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 18: COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
(d) Operating lease commitments – Group as lessee
The Group has entered into operating leases on certain office premises and office equipment.
Future minimum rentals payable under non-cancellable operating leases as at 31 December are, as follows:
Within one year
After one year but not more than five years
More than five years
Total
NOTE 19: NOTES TO THE CASH FLOW STATEMENT
a.
Reconciliation of Cash
Cash at the end of the financial year as shown in the cash
flow statement is reconciled to items in the balance
sheet as follows:
Cash at bank
b.
Reconciliation of Loss from ordinary activities after
Income Tax to net cash used in operating activities
Loss from ordinary activities after income tax
Add/(less) non-cash items:
Depreciation and amortisation
Write off of fixed assets
Share based transactions
Changes in assets and liabilities, net of the effects of purchase
and disposal of Controlled Entities during the financial year:
(Increase)/Decrease in receivables
Increase/(Decrease) in payables
Increase/(Decrease) in provisions
Net cash used in operating activities
c.
Non-Cash Financing
There were nil non-cash financing events during the year.
2018
USD
151,013
74,511
-
2017
USD
147,742
222,607
-
225,524
370,349
2018
USD
2017
USD
6,364,317
6,364,317
7,433,666
7,433,666
(2,343,243)
(2,240,873)
61,032
-
368,312
89,185
(81,570)
45,442
51,599
102,885
269,412
(193,084)
138,274
(436,093)
(1,860,842)
(2,307,880)
52 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
33
33
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 20: EVENTS SUBSEQUENT TO REPORTING DATE
On 23 January 2019 the Company held a General Meeting at which two placements were approved. These placements
were made resulting in the issuance 13,971,155 shares and 22,289,159 unlisted options, exercisable at A$0.35 each and
expiring 30 November 2020 raising $2,293,000 (A$3,213,366) before costs. Other than this matter, no matters have
arisen since the end of the financial year to the date of this report of a material and unusual nature likely, in the opinion
of the Directors, 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 21: RELATED PARTIES
Transactions between related parties as set out below are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
Directors
The names of each person holding the position of Director of Nusantara during the financial year are:
Mr Greg Foulis (appointed 29 March 2018)
Chairman – Non-Executive Director
Mr Michael Spreadborough (appointed 16 February 2017)
Managing Director
Mr Robert Hogarth (appointed 17 February 2017)
Non-Executive Director
Mr Boyke Abidin (appointed 11 April 2017)
Mr Robin Widdup (appointed 28 February 2018)
Mr Richard Ness (appointed 13 December 2018)
Mr Martin Pyle (retired 30 May 2018)
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Transactions between related parties as set out below are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
Details of Key Management Personnel remuneration are set out in Note 4.
Transactions with related parties:
Directors
In 2017 a services agreement was entered into with Lion Manager Pty Ltd for Company Secretarial and Chief Financial
Officer duties fulfilled by Craig Smyth. Under the services agreement Lion Manager Pty Ltd, an entity affiliated with Mr
Robin Widdup, was paid a monthly fee commensurate with rates charged by third-parties for the provision of accounting
and company secretarial services. These arrangements ended on 31 March 2018.
Apart from the details disclosed in this note, no Directors entered into a material contract with the Company or the Group
since the end of the previous financial year.
Directors’ and Executive Officers’ holdings of shares and options
The aggregate interests of Directors and the Executive Officer of the reporting entity and their Director-related entities in
shares and share options of entities within the Group at year end are set out in the Directors’ Report and at Note 4.
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 53
34
34
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 22: SHARE-BASED PAYMENTS
The Company has established the Nusantara Incentive Plan (Incentive Plan) to provide an opportunity to eligible
participants to participate in the Company’s future growth and provide an incentive to contribute to that growth. The
Incentive Plan is further designed to assist in attracting and retaining employees.
The Company must obtain Shareholder approval under the Listing Rules and/or the Corporations Act before the
participation under the Incentive Plan of any eligible participant who is a Director of or otherwise a related party of the
Company. Subject to the Corporations Act and the Listing Rules, the Board may at such times as it determines, issue
invitations (in such form as the Board decides from time to time) to eligible participants, inviting applications for a grant
of incentive securities up to the number specified in the invitation (Specified Securities) and specifying an acceptance
period.
The number of Specified Securities will be determined by the Board in its absolute discretion, granted free of charge. The
Board may impose performance criteria for the vesting of Specified Securities. The Company has applied for and
obtained confirmation from ASX of waivers from Listing Rule 1.1 (Condition 12) to permit the Company to have options
on issue with an exercise price of less than 20 cents. Although the exercise price of the options to be issued by the
Company under section 11.13 is not less than 20 cents, the terms of the options provide that the option-holder may elect
to use a cashless exercise facility (whereby the option holder can elect to receive a lesser number of Shares on the
exercise of the options).
Set out below are the summaries of options granted under the Incentive Plan:
Balance at beginning of the reporting period
Options issued during the reporting period
– exercisable at $A0.61 per share
- exercisable at A$0.42 per share
Options exercised during the reporting period
Options Forfeited during the reporting period
At the end of the reporting period
2018
Options
4,897,000
2017
Options
-
1,715,318
4,425,000
-
-
(295,000)
472,000
-
-
6,317,318
4,897,000
The expense recognised for employee services received during the year is shown in the following table:
Share Based Payment Expense
Expense from equity-settled share-based payment transactions
2018
USD
368,312
2017
USD
269,412
54 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
35
35
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 22: SHARE-BASED PAYMENTS (CONTINUED)
Fair value of options granted
The assessed fair value at grant date of options granted during the reporting period is set out in the table below.
Item
Assessed fair value
at grant date (A$)
July 2017
$0.21
April 2018
$0.064
June 2018
$0.065
Number of options
4,425,000
975,318
740,000
Vesting Conditions
One third on the later of
28/07/2018 and the 45 day
VWAP of the Shares is
A$0.525 or greater.
One third on the later of
28/07/2018 and the 45 day
VWAP of the Shares is
A$0.525 or greater.
One third on the later of
28/07/2018 and the 45 day
VWAP of the Shares is
A$0.525 or greater.
One third on the later of
28/07/2019 or a Decision to
mine at the Awak Mas Gold
Project.
One third on the later of
28/07/2019 or a Decision to
mine at the Awak Mas Gold
Project.
One third on the later of
28/07/2019 or a Decision to
mine at the Awak Mas Gold
Project.
One third on the later of
28/07/2020 or
Commencement of
commercial production at
the Awak Mas Gold Project
One third on the later of
28/07/2020 or
Commencement of
commercial production at
the Awak Mas Gold Project
One third on the later of
28/07/2020 or
Commencement of
commercial production at
the Awak Mas Gold Project
Exercise Price (A$)
$0.61
Grant Date
Expiry Date
28/07/2017
02/08/2021
$0.61
12/04/2018
02/08/2021
$0.61
04/06/2018
27/07/2021
The fair value at grant date is determined using the Black Scholes Model. The model inputs for options granted during the
year ended 31 December 2018 included:
Item
a. Consideration
b. Share price at
grant date
July 2017
$nil
A$0.42
April 2018
$nil
A$0.265
c. Expected price
77.4%
64.7%
volatility of the
company’s
shares
d. Expected
dividend yield
0%
e. Risk-free interest
2.05%
rate
0%
2.05%
June 2018
$nil
A$0.22
79.5%
0%
2.07%
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 55
36
36
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 23: FINANCIAL RISK MANAGEMENT
The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, trade and other
receivables, trade and other payables. The totals for each category of financial instruments, measured in accordance with
AASB 9 as detailed in the accounting policies to these financial statements, are as follows:
Financial Assets
Cash and cash equivalents
Receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Note
6
7
14
2018
USD
2017
USD
6,364,317
171,743
6,536,060
935,746
7,433,666
260,928
7,694,594
1,108,186
1,108,186
Total Financial Liabilities
The carrying values of these assets and liabilities approximates the fair values due to their short-term nature.
935,746
Financial Risk Management Policies
The Board of Directors is responsible for, amongst other issues, monitoring and managing financial risk exposures of the
Group. The Board monitors the Group’s financial risk management policies and exposures and approves financial
transactions within the scope of its authority. It also reviews the effectiveness of internal controls relating to counterparty
credit risk, currency risk, financing risk and interest rate risk.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the
Group’s operating activities (when revenue or expense is denominated in a currency other than the functional currency).
The Group manages its exposure to fluctuations on the translation into United States dollars by holding cash in several
currencies determined based on the expected cash flow requirements.
Cash and cash equivalents by currency
Australian dollars
Indonesian rupiah
United States dollars
Interest Rate Risk
2018
USD
2017
USD
6,310,765
3,718,038
36,956
16,596
6,364,317
72,479
3,643,149
7,433,666
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to
the Group’s long-term debt obligations with floating interest rates.
The weighted average interest rate of cash and cash equivalents is 0.8% (31 December 2017: 0%). Receivables and Trade
and other payables are non-interest bearing. At 31 December 2018 the Group’s interest rate risk is not considered
material.
Credit Risk
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The Group’s
maximum exposure to credit risk in relation to each class of financial asset is the carrying amount of those assets as
indicated in the Statement of Financial Position.
The Group has in place policies that aim to ensure that counterparties and cash transactions are limited to high credit
quality financial institutions and that the amount of credit exposure to one financial institution is limited as far as is
considered commercially appropriate.
56 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
37
37
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 23: FINANCIAL RISK MANAGEMENT (CONTINUED)
Liquidity Risk
Liquidity risk is the risk that the Company does not have sufficient funds to pay its debts as and when they become due
and payable. The Company currently does not have major funding in place. However, the Company continuously monitors
forecast and actual cash flows and the maturity profiles of financial assets and financial liabilities to manage its liquidity
risk.
The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
loans if and when required with respect to the development of the Awak Mas Gold Project.
Cash at bank and on hand, as set out in Note 6, is available for use by the Company without restrictions.
Financial liabilities of the Company at 31 December 2018 are expected to be settled within 3 months of year end.
NOTE 24: COMPANY DETAILS
Nusantara Resources Limited is a company domiciled in Australia and its registered office and principal office is located at:
Ground Floor
20 Kings Park Road
West Perth
Western Australia 6005 Australia
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 57
38
38
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2018
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
DIRECTOR’S DECLARATION
In accordance with a resolution of the Directors of Nusantara Resources Limited, I state that:
In the opinion of the Directors:
(a)
the financial statements and notes of the consolidated entity are in accordance with the Corporations
Act 2001 including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at
31 December 2018 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
On behalf of the Board
Michael Spreadborough
MANAGING DIRECTOR
Dated 29 March 2019
58 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
39
39
DIRECTOR’S DECLARATION
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
Ernst & Young
GPO Box 2646 Sydney NSW 2001
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent Auditor's Report to the Members of Nusantara Resources
Limited
Independent Auditor's Report to the Members of Nusantara Resources
Limited
Opinion
Opinion
We have audited the financial report of Nusantara Resources Limited (the “Company”) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
31 December 2018, the consolidated statement of comprehensive income, consolidated statement of
We have audited the financial report of Nusantara Resources Limited (the “Company”) and its subsidiaries
changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial
(collectively the Group), which comprises the consolidated statement of financial position as at
statements, including a summary of significant accounting policies, and the directors' declaration.
31 December 2018, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
statements, including a summary of significant accounting policies, and the directors' declaration.
2001, including:
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
giving a true and fair view of the consolidated financial position of the Group as at 31 December 2018
a)
2001, including:
and of its consolidated financial performance for the year ended on that date; and
giving a true and fair view of the consolidated financial position of the Group as at 31 December 2018
complying with Australian Accounting Standards and the Corporations Regulations 2001.
and of its consolidated financial performance for the year ended on that date; and
a)
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
Basis for Opinion
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
of our report. We are independent of the Group in accordance with the auditor independence requirements
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
accordance with the Code.
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
accordance with the Code.
opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
Material Uncertainty Related to Going Concern
We draw attention to Note 2 in the financial report, which describes the principal conditions that raise doubt
about the Group’s ability to continue as a going concern. These events or conditions indicate that a material
uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our
We draw attention to Note 2 in the financial report, which describes the principal conditions that raise doubt
opinion is not modified in respect of this matter.
about the Group’s ability to continue as a going concern. These events or conditions indicate that a material
uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
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NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 59
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Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Key Audit Matters
Independent Auditor's Report to the Members of Nusantara Resources
Key audit matters are those matters that, in our professional judgment, were of most significance in our
Limited
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is
provided in that context.
Opinion
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
We have audited the financial report of Nusantara Resources Limited (the “Company”) and its subsidiaries
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
(collectively the Group), which comprises the consolidated statement of financial position as at
included the performance of procedures designed to respond to our assessment of the risks of material
31 December 2018, the consolidated statement of comprehensive income, consolidated statement of
misstatement of the financial report. The results of our audit procedures, including the procedures
changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial
performed to address the matters below, provide the basis for our audit opinion on the accompanying
statements, including a summary of significant accounting policies, and the directors' declaration.
financial report.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
Carrying value of capitalised exploration and evaluation
2001, including:
a)
b)
Why significant to the audit
giving a true and fair view of the consolidated financial position of the Group as at 31 December 2018
and of its consolidated financial performance for the year ended on that date; and
How our audit addressed the key audit matter
Basis for Opinion
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Our procedures to address the Group’s assessment
of the carrying value of exploration and evaluation
assets included:
Capitalised exploration and evaluation assets are
the Group’s largest asset. The assessment of
exploration and evaluation assets is impacted by
Nusantara Limited’s ability, and intention, to
advance its exploration and evaluation activities.
The results of exploration and evaluation
activities also determines to what extent the
mineral reserves and resources may or may not
be commercially viable for extraction. Due to the
quantum of this asset and the subjectivity
involved in determining if there are indicators of
impairment, this is a key audit matter.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
considering the Company’s right to explore in the
relevant exploration area, which
included
obtaining and assessing relevant documentation
such as the Contract of Work between the
Government of the Republic of Indonesia and PT
Masmindo Dwi Area dated 19 January 1998, along
with subsequent amendments;
•
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Refer to Note 12 – Exploration and Evaluation
Expenditure to the financial statements for the
amounts held on the Balance Sheet by the Group
as at 31 December 2018 and related disclosure.
•
considering the Group’s intention to carry out
significant exploration and evaluation activity in
the relevant exploration area, which included an
assessment of the Group’s cash-flow forecast
models and the intentions and strategy of the
Group; and
Material Uncertainty Related to Going Concern
We draw attention to Note 2 in the financial report, which describes the principal conditions that raise doubt
relating
about the Group’s ability to continue as a going concern. These events or conditions indicate that a material
activities carried out in the relevant license area.
uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
• assessing the commercial viability of results
the exploration and evaluation
to
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Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Information Other than the Financial Report and Auditor’s Report Thereon
Independent Auditor's Report to the Members of Nusantara Resources
The directors are responsible for the other information. The other information comprises the information
Limited
included in the Company’s 2018 Annual Report, but does not include the financial report and our auditor’s
report thereon.
Opinion
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related
assurance opinion.
We have audited the financial report of Nusantara Resources Limited (the “Company”) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
In connection with our audit of the financial report, our responsibility is to read the other information and,
31 December 2018, the consolidated statement of comprehensive income, consolidated statement of
in doing so, consider whether the other information is materially inconsistent with the financial report or
changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial
our knowledge obtained in the audit or otherwise appears to be materially misstated.
statements, including a summary of significant accounting policies, and the directors' declaration.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
information, we are required to report that fact. We have nothing to report in this regard.
2001, including:
Responsibilities of the Directors for the Financial Report
a)
giving a true and fair view of the consolidated financial position of the Group as at 31 December 2018
and of its consolidated financial performance for the year ended on that date; and
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
Basis for Opinion
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
no realistic alternative but to do so.
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
Auditor's Responsibilities for the Audit of the Financial Report
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
opinion.
conducted in accordance with the Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
Material Uncertainty Related to Going Concern
the basis of this financial report.
We draw attention to Note 2 in the financial report, which describes the principal conditions that raise doubt
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment
about the Group’s ability to continue as a going concern. These events or conditions indicate that a material
and maintain professional scepticism throughout the audit. We also:
uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
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Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Independent Auditor's Report to the Members of Nusantara Resources
Limited
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Opinion
•
We have audited the financial report of Nusantara Resources Limited (the “Company”) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
31 December 2018, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial
statements, including a summary of significant accounting policies, and the directors' declaration.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
giving a true and fair view of the consolidated financial position of the Group as at 31 December 2018
manner that achieves fair presentation.
and of its consolidated financial performance for the year ended on that date; and
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
complying with Australian Accounting Standards and the Corporations Regulations 2001.
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
Basis for Opinion
We communicate with the directors regarding, among other matters, the planned scope and timing of the
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
audit and significant audit findings, including any significant deficiencies in internal control that we identify
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
during our audit.
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
We also provide the directors with a statement that we have complied with relevant ethical requirements
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
regarding independence, and to communicate with them all relationships and other matters that may
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
reasonably be thought to bear on our independence, and where applicable, related safeguards.
accordance with the Code.
From the matters communicated to the directors, we determine those matters that were of most
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
significance in the audit of the financial report of the current year and are therefore the key audit matters.
opinion.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
Material Uncertainty Related to Going Concern
to outweigh the public interest benefits of such communication.
a)
•
b)
We draw attention to Note 2 in the financial report, which describes the principal conditions that raise doubt
Report on the Audit of the Remuneration Report
about the Group’s ability to continue as a going concern. These events or conditions indicate that a material
uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our
Opinion on the Remuneration Report
opinion is not modified in respect of this matter.
We have audited the Remuneration Report included in pages 6 to 8 of the directors' report for the year
ended 31 December 2018.
In our opinion, the Remuneration Report of Nusantara Resources Limited for the year ended 31 December
2018, complies with section 300A of the Corporations Act 2001.
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Ernst & Young
200 George Street
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GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Responsibilities
Independent Auditor's Report to the Members of Nusantara Resources
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
Limited
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Opinion
We have audited the financial report of Nusantara Resources Limited (the “Company”) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
31 December 2018, the consolidated statement of comprehensive income, consolidated statement of
Ernst & Young
changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial
statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
Scott Jarrett
a)
Partner
Sydney
29 March 2019
b)
giving a true and fair view of the consolidated financial position of the Group as at 31 December 2018
and of its consolidated financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 in the financial report, which describes the principal conditions that raise doubt
about the Group’s ability to continue as a going concern. These events or conditions indicate that a material
uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
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NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 63
44
ADDITIONAL INFORMATION AS AT 3 APRIL 2019
Use of Cash and Cash Equivalents
In accordance with ASX Listing Rule 4.10.19 the Company notes that from admission to the ASX on 31 July 2017 to 31
December 2018 it applied cash and cash equivalents at the time of admission consistent with its business objectives.
On-Market Buy Back
There is no current on-market buy back in place.
Unlisted Options
These options are unlisted and are not transferable. Until conversion they confer no voting rights to subscribe for new
securities in the Company.
Unlisted options are a separate class of security that may be converted into Company shares once they have vested and
in accordance with specified criteria.
Restricted Securities
Security Type
Ordinary shares
Unlisted options exercisable at A$0.61 expiring 28 July 2021
Unlisted options exercisable at A$0.42 expiring 8 July 2020
Number of Securities Escrow Period Ends
25,446,243
2,802,500
295,000
2 August 2019
2 August 2019
2 August 2019
Distribution of Ordinary Fully Paid Shareholders
Range
1 – 1,000
1,001 – 5,000
5,001 –10,000
10,001 – 100,000
100,001 Over
Total Shareholders
Number of Shareholders Number of Shares
102
197
105
223
95
722
50,469
667,948
881,189
8,856,419
157,319,965
167,775,990
Number of ordinary shareholders with less than a marketable parcel was 161
Distribution of Listed Option Holders
Range
1 – 1,000
1,001 – 5,000
5,001 –10,000
10,001 – 100,000
100,001 Over
Total Option Holders
Number of Option Holders Number of Options
33
34
10
48
29
154
14,791
103,166
70,526
1,991,293
15,854,531
18,034,307
Number of listed option holders with less than a marketable parcel was 85
64 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
ADDITIONAL INFORMATION AS AT 3 APRIL 2019
Distribution of Unlisted Option Holders
Range
100,001 Over
Option Holders Number of Options
12
28,606,477
Holder of more than 20% of Unlisted Options
Option Holder
PT Indika Mineral Investindo
Exerciseable at
A$0.35. Expiring
30 November 2020
Transferable
16,693,711
Exerciseable at
A$0.42. Expiring
2 August 2020
Not Transferable
Exerciseable at
A$0.61. Expiring
27 August 2021
Not Transferable
Exerciseable at
A$0.61. Expiring
27 July 2021
Not Transferable
AustralianSuper Pty Ltd
5,595,448
Holders individually less than 20%
Total
28,606,477
22,289,159
472,000
472,000
5,105,318
5,105,318
740,000
740,000
Twenty Largest Shareholders of Ordinary Shares
Shareholder
Lion Selection Group Limited
PT Indika Mineral Investindo
J P Morgan Nominees Australia Limited
Macquarie Bank Limited
BNP Paribas Nominees Pty Ltd
Silver Pine Capital
BNP Paribas Noms Pty Ltd
Rentzos Executive Pty Ltd
Gravitas Zhaojin Gold Industry Fund LP/C
Mr Richard Thomas Hayward Daly + Mrs Sarah Kay Daly
Mr Gavin Bradley
Aurora Minerals Limited
Lion Manager Pty Ltd
John Joseph Ryan
DBPC Group Finance Pty Ltd
Swanco Pty Ltd
Lido Trading Ltd
HSBC Custody Nominees (Australia) Limited
Adrian Reinhart David Rollke
T E & J Pasias Pty Ltd
Number of Shares
%
39,017,231
33,387,422
24,906,962
4,991,056
4,679,011
3,571,428
3,214,280
2,648,604
2,500,000
2,350,654
2,000,000
1,851,852
1,378,544
1,323,684
1,190,477
1,190,476
1,190,434
1,169,091
1,009,452
1,006,013
23.26
19.90
14.85
2.97
2.79
2.13
1.92
1.58
1.49
1.40
1.19
1.10
0.82
0.79
0.71
0.71
0.71
0.70
0.60
0.60
134,576,671
80.21
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 65
ADDITIONAL INFORMATION AS AT 3 APRIL 2019
Substantial Shareholders
Name
Lion Selection Group Limited
PT Indika Mineral Investindo
AustralianSuper Pty Limited
Number of Shares
%
39,017,231
33,387,422
23,488,639
23.26
19.90
14.00
Twenty Largest Holders of Listed Option
Rank Name
1
Lion Selection Group Limited
Number of Options %
3,750,000
20.79
2 Mr Richard Thomas Hayward Daly + Mrs Sarah Kay Daly
3
4
J P Morgan Nominees Australia Limited
Gravitas Zhaojin Gold Industry Fund LP/C
5 Mr Tarecq Aldaoud
6
Retzos Executive Pty Ltd
7 Melshare Nominees Pty Ltd
8
Rigi Investments Pty Limited
9 Magedo Super Pty Ltd
10 Atlantis MG Pty Ltd
11 BNP Paribas Noms Pty Ltd
12 Mr Robin Anthony Widdup + Mrs Janet Widdup
13 BVB Custodian Pty Ltd
13
13
Sam Goulopoulos Pty Ltd
T E & J Pasias Pty Ltd
16 Mr Allan John Bate
17
Thang Pty Ltd
18 Ryan Constructions Pty Limited
19 Assurance Capital Pty Ltd
20 Mr Richard Desmond Reid
1,422,172
1,320,488
1,250,000
1,000,000
884,020
600,000
589,647
500,000
400,000
373,752
346,460
294,674
294,674
294,674
288,519
265,206
263,733
221,005
216,798
7.89
7.32
6.93
5.54
4.90
3.33
3.27
2.77
2.22
2.07
1.92
1.63
1.63
1.63
1.60
1.47
1.46
1.23
1.20
14,575,522
80.82
66 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
ADDITIONAL INFORMATION AS AT 3 APRIL 2019
Voting Rights
The voting rights attached to the ordinary shares are governed by the constitution. On a show of hands, every person
who is a Member or representative of a Member, shall have one vote and on poll, every Member present in person, or
by proxy, or by attorney, or duly authorised representative, shall have one vote for each share held. None of the options
have any voting rights.
Share Price
The closing share price on the Australian Securities Exchange on 31 December 2018 was A$0.19.
Share Holder Enquiries
Enquiries relating to share holding, tax file number and notification of change of address should be directed to:
Computershare Investor Services Pty Limited
452 Johnson Street, Abbotsford, Victoria, 3067
Website:
www.computershare.com.au
Telephone:
1300 850 505 (within Australia)
+61 (0)3 9415 4000
Facsimile:
+61 (0)3 9473 2500
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 67
REVIEW OF ACTIVITIES
68 NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT
Board of Directors
Bankers
Greg Foulis - Chairman - Non-Executive Director
HSBC Bank Australia
Rob Hogarth - Non-Executive Director
Richard Ness - Non-Executive Director
Robin Widdup - Non-Executive Director
Michael Spreadborough - Managing Director
Boyke Abidin - Executive Director
Share Registery
Computershare Investor Services Pty Limited
452 Johnson Street
Abbotsford, Victoria, 3067
Telephone:
1300 850 505 (within Australia)
Company Secretary
+61 (0)3 9415 4000
Derek Humphry
Facsimile:
+61 (0)3 9473 2500
Registered Office
Securities Exchange Listing
20 Kings Park Road
Shares in Nusantara Resources Limited are
West Perth, Western Australia, 6005
quoted on the Australian Security Exchange
ASX Code: NUS
PO Box 410
West Perth, Western Australia, 6872
Telephone:
+61 (0)8 9460 8600
Email:
info@nusantararesources.com
NUSANTARA RESOURCES LIMITED 2018 ANNUAL REPORT 69
Nusantara Resources Limited
ACN 150 791 290
www.nusantararesources.com
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