2019
ANNUAL REPORT
ABN: 69 150 791 290
2019 Highlights
ANNUAL GENERAL MEETING
The Company’s Annual General Meeting
will be held 1.00pm, Friday, 29 May 2020
at Level 2, 175 Flinders Lane Melbourne
Victoria and Teleconference.
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 capitalizing on other Asia –
Pacific opportunities
2019 HIGHLIGHTS
December 2019
Awak Mas Gold Project Funding - Strategic Partner to invest in
the project
November 2019
Option to Cancel Awak Mas Gold Project royalty
October 2019
Step-out drilling at Awak Mas Gold Project intersects 63.7m at
2.12g/t gold
August 2019
Mr Neil Whitaker appointed Chief Executive Officer, based in
Jakarta
June 2019
Metallurgical test work increases overall recovery assessment
for Project from 91.1% to 93.3%
March 2019
Initial sounding completed with a group of international banks
January 2019
Shareholders approve introduction of strategic partner PT
Indika Energy Tbk to share register
2 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
Contents
Executive Chairman Report
Chief Executive Officer Report
Review of Activities
Company Background
Project Tenure
Project Update
Permitting
Exploration Activity
Mineral Resource
Ore Reserve
Environment
Community
Safety, Quality and Security
People
Finance and Corporate
Corporate Governance
Board of Directors
Annual Financial Report
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NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
3
EXECUTIVE CHAIRMAN REPORT
Dear Shareholders,
AUD11M equity raising to ensure we cover our share of
funding.
Firstly I would like
to wish all of our
stakeholders and
their families a safe
and healthy 2020 as
Indonesia, Australia
and the world
continues to deal
with the COVID-19
pandemic impact.
We understand
this is a time of
uncertainty, volatility
and challenge. Business and personal plans will continue
to adapt and evolve. At Nusantara, and our subsidiary
Masmindo, our Executive is first and foremost focused
on the wellbeing of our people and communities as we
formulate and implement policy and response.
As a board and executive, we are tasked with looking
forward and an Annual report is an opportunity for
reflection of achievements. I am extremely proud of our
2019 outcomes. Nusantara continues to advance the Awak
Mas Gold Project to development. The key highlight of
2019 was finishing the year with a clear funding pathway
and a work program to start Early Capital works in 2020.
We have the people, money, vison and commitment to
bring Indonesia’s next new gold mine to development and
production. The foundations of our success are with our
strategic partner and shareholders. The relationship with
our partner Indika has moved to another level, evolving
into a JV partnership. As we move forward, Nusantara,
Indika, and contractor Petrosea will look to leverage the
best of their skills and experience to deliver an outstanding
project.
In 2020 we have a terrific gold price tailwind, trading
over USD1,700/oz, that we expect will provide strong
support which will see our Project banked and developed.
Our 2020 budget, notwithstanding potential impact from
COVID-19, is circa USD30M to complete Early Capital
activities and satisfy conditions for bank debt. With a
dedicated Project team, we are creating momentum and
we are clearly building the bridge to development and
prosperity for our communities and stakeholders.
Finally, I would like to thank the board, executive and our
team for their continued dedication, commitment and hard
work.
Stay safe - tetap aman
At the project level, we are well funded with Indonesian
partner Indika to invest USD40M for a 40% project interest
and Petrosea to spend up to USD40M on Engineering
(FEED) and Construction (EPC). At the Nusantara
corporate level, we finished the 2019 year with an
Greg Foulis
Executive Chairman
NUSANTARA VISION
Vision
Gold
Focus
Multi-mine
portfolio
Asia-Pacific
Region
Execution
Experienced
Board
Support of
strategic
shareholders
Funded to
deliver on
partnerships
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
5
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.
EXCELLENCE
We strive to achieve superior outcomes by focusing
on action, continual improvement, and challenge the
way we do things.
CHIEF EXECUTIVE OFFICER REPORT
Dear Shareholders,
There could have
been no better
time to join the
Company and to
be leading from
our small dynamic
office in Jakarta.
Following the
release of our
Awak Mas Gold
Project DFS in late
2018, the step
change in our
business has been
the development of a strong strategic relationship with our
partner PT Indika Energy Tbk and their staged investment of
USD40M project equity in our subsidiary PT Masmindo DWI
Area, the project vehicle to deliver the Awak Mas gold mine.
The proposal provides for an additional USD40M on
deferred payment terms by their subsidiary PT Petrosea Tbk
with the first staged investment linked to award of a Front
End Engineering Design (FEED Services) contract. This
contract was awarded in the first quarter of 2020.
In December we appointed Mr Matthew Timbrell as Project
Director who will also relocate to Jakarta. Matt brings over
25 years’ experience in study and major project delivery, the
most recent being the Toka Tindung Gold Project Expansion
in North Sulawesi.
Corporate establishment has also been strengthened by
the early engagement of an experienced in-house team
with established capabilities in areas of finance, legal and
regulatory compliance, external relations, human resources,
information and communication technology.
‘’Our Systems’’ development has seen the effective
migration of management accounting to Pronto and
the launch of a program to further develop our human
resource systems to support effective HR ‘end to end’
people processes. Regulatory compliance, job grading,
remuneration benchmarking and on-boarding have been
priorities.
In the interim, while recruiting an in-house capability for
project controls, the Project engaged an experienced
team of industry renowned, legal, commercial / contracts
and project systems specialists. This ensured the early
engagement with Petrosea, independent audit and
negotiation for the FEED Services contract to commence
early 2020.
With our subsequent Placement of AUD7.3M and major
shareholder commitment for a further AUD3.6M we are
funded to deliver the next phase in project establishment
during 2020 that includes engineering design, land
compensation, permitting for a Tailings Storage Facility
(TSF) and development of an effective contracting strategy
for construction in 2021.
‘’Our bottom line’’ has been enhanced with further
metallurgical test-work increasing estimated gold recovery
from 91.1% to 93.1% gold. Based on a gold price of
USD1250/ oz, the DFS estimates an NPV of USD152M with
low capital intensity (USD146M initial capital + US$D16M
pre-production development) and low cost (AISC USD758/
oz).
I am pleased to report a safe year with no serious injury
or loss, driven by a demonstration of our values and safe
behavior. At the time of writing, our COVID-19 Policy and
the triggering of stages in our pandemic management
plan, has ensured that safety comes first, we minimize
transmission and are progressing all critical aspects of our
business continuity plan.
Our Project team has been proactive with scenario planning
and are maintaining site activity through longer rosters,
additional medical services and an industry standard
quarantine process for any people returning to work.
Our External Affairs team have been active in
communication within the Luwu Regency in SE Sulawesi
and we have the support of our local communities in
maintaining ‘’Our License to Operate’’.
Further, our exploration program has focused on the Awak
Mas Ridge expansion which had previously identified
>220Koz gold outside of the 2018 Mineral Resources
Estimate (MRE) USD1400/oz reporting shell.
We are now looking forward to 2020 and a positive MRE
based equally on discovery and improved gold price.
We have engaged technical consultants AMC, Golder
Associates, Coffey Services and, with the award of the
Petrosea FEED services, their direct engagement with DRA
Global for processing plant design.
With a strategy to maintain momentum and prioritize work
activities throughout the pandemic, I am proud of our Board
commitment and team dedication to maintain our progress
towards delivering our first gold mine.
A focus on ‘’Our People’’ and a well-planned recruitment
effort has attracted exceptional talent, who fit the culture
of a dynamic lean organization respectful of diversity when
operating in a remote environment.
Neil Whitaker
Chief Exectutive Officer
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
7
Review of Activities
COMPANY BACKGROUND
Nusantara Resources Limited (Nusantara) is an Australian
mining company listed on the Australian Securities Exchange.
The Company is focused 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 (Project), located in the Luwu Regency of South
Sulawesi Province, Indonesia.
PROJECT TENURE
Awak Mas is held under a 7th generation Contract of Work
(CoW) signed with the Government of Indonesia (GoI) in
1998 and Amended in March 2018. 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).
The amendment reaffirmed 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 accordance
with the prevailing laws and regulations.
The most notable amendments to the Masmindo CoW were
adopting the prevailing rates for taxes, prevailing royalty rates
and an extension of the time requirement for divestment
of at least 51% of the shares in Masmindo to Indonesian
participants, to the 10th year of commercial production at fair
market value.
In November 2019 PT Indika Energy group agreed to
acquire up to a 40% interest in Masmindo for USD40M.
This arrangement should largely satisfy the divestment
requirements noted above.
8 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
The amended CoW provides long-term tenure and investment
stability for the development of the Project. 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;
process, refine, store, and transport, by any means,
minerals extracted; and
• 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.
PROJECT UPDATE
The Company completed the necessary follow up test-work
and establishment planning required in preparation for the
development of it Awak Mas Gold Project. This work followed
on from a Definitive Feasibility Study (DFS) completed in
2018, and included:
•
•
a review of tailings storage management for the
Project. The aim was to provide the Company with an
independent evaluation of this critical aspect of
the Project ahead of commitment to Detailed Design
Phase and was completed by GHD Global.
a Red Flag Review of the DFS technical work was
undertaken by SRK Consulting (Australasia) Pty Ltd
(SRK) with the aim to support the Company in seeking
potential project financiers and investment partners in
the Project. The objectives were:
°
to confirm the technical inputs are realistic
and achievable, and to advise on sensitivity
parameters;
°
Identify areas of risk and, where possible,
identify mitigating factors; and
Review of Activities
° Recommend additional or alternative work which
is considered necessary to complete the (DFS) to
a level that enables prospective lenders to make
a funding decision.
•
follow up metallurgical test work was coordinated
by DRA Global (formally Minnovo) to support the
gravity and whole ore leach flowsheet and provided
confirmation of key parameters for detail design.
GHD confirmed a downstream tailings storage facility
(TSF) was a pragmatic and practical solution. They found
no merit in any of the alternatives assessed as part of the
DFS. Further, Phase 2 detailed metallurgical testing was
completed in July with the following key conclusions:
•
•
gold recovery estimate increased from 91.1% to 93.1%
gold; and
requirement for an oxygen plant replaced with low
pressure air blowers
This test work validated the design parameters selected for
the DFS and provides a more robust basis for the prediction
of gold recovery. Some of the benefit of the improvement in
recovery was offset by the identification of small increases
in some reagent consumptions increasing estimated
processing cost by USD1.04 per tonne of plant feed.
In the last quarter of the year the Engineering and
Construction (E&C) division of Petrosea Tbk (Petrosea)
provided a proposal to complete an expanded scope of work
in Front-End Engineering Design (FEED) for the Project.
This was supported in principle following an initial review by
the Company and year end engagement with Petrosea with
commitment to negotiate settlement of a FEED contract in
early 2020. Planning and actions to expedite delivery of a
FEED contract centred around:
•
•
•
•
•
commercial terms and pricing;
Petrosea’s capability;
a project execution plan (PEP) preparations;
expandability; and
our capability to perform as the ‘Project
Owner’.
The principal workshop attendees, in addition to the key
members of the Nusantata’s existing leadership team,
included several industry leaders with specialist skills.
The Company, in parallel with planning to settlement of a
FEED contract in 2020, geared up for project readiness with
the establishment of project controls and recruitment of key
roles. At year-end the Project team formation included the
appointment of Matthew Timbrell as Project Director. Matt
is a proven leader, study and project development manager
with over 25-years’ experience in mining and processing in
Australia and Indonesia. Matt has managed multiple major
projects in Gold and other commodities with most recent
being the Toka Tindung Gold Project Expansion in North
Sulawesi, Indonesia.
To support the Project Director, Taufiqur Rahman was
appointed as the Manager - Permitting and Reporting,
to lead the Project’s permitting and reporting obligations.
Taufiq has extensive Indonesian experience in Indonesian
government relations and licensing compliance, most
recently including 16 years with Newcrest subsidiary, PT
Nusa Halmahera Minerals.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
9
Review of Activities
Figure 1: Cross section showing the successful 2019 Exploration drilling results from Awak Mas Ridge and at Salu Bulo.
Jakarta based human resource consultants, SKI-HR, were
engaged to support organisational design and further develop
the HR Management System and for the wider business in
2020.
PERMITTING
All major Project permitting is in place with the exception of
the TSF. Based on the DFS, the Company submitted Project
updates to the Indonesian government to address regulatory
processes. This included submitting an addendum to the
Indonesian environmental impact assessment report referred
to as the AMDAL. The Company has received approval of the
Addendum to the AMDAL and the Project has received its new
environmental permit (the Izin Lingkungan).
EXPLORATION ACTIVITY
During Quarter 1 2019 the Company continued a focused
exploration program at several near-mine areas to enhance
the developing geological model. This work included drilling
test holes at Puncak Selatan, ongoing surface sampling at the
Kandeapi and Puncak Utara prospects and preparation for
the upcoming ground geophysics program at Salu Bulo. In
addition, first test drilling of the proposed Quarry site at North
Kandeapi was undertaken with two holes completed.
Quarter 2 saw further development of the geological model
with the Salu Bulo area geophysics program generating
exciting drill targets. Several previously recognised satellite
prospects and possible orebody extensions were identified
over a +3km strike.
During this second quarter, an exploration benching exercise
was completed within the Awak Mas Gold Project Rante
starter pit area to map and sample the exposed high-grade
subvertical vein structures within the deposit. Trench
sampling results were positive, and a drill program followed in
September quarter. Results from this program that provide a
better understanding of the subvertical high-grade structures
and definition between ore and waste boundaries, will be used
by CUBE Consultants in the preparation of the 2020 mineral
resource estimate.
A possible porphyry style hydrothermal copper-gold system
discovery at the Salu Kombong prospect is consistent with the
evolving geophysics concept of Awak Mas being part of a large
scale Intrusive Related Gold System.
During Quarter 3 2019 an exploration step-out drill hole
(HWD006), at Awak Mas successfully extended and enhanced
the previous discovery of the Highwall mineralisation – Figure
1. The significance of the main intersection, indicates that
substantial new mineralisation could be added to the proposed
Awak Mas deposit open pit by this expansion drilling:
•
HWD006: 63.7m @ 2.12g/t gold from 201.1
metres down hole
Further resource modelling will be undertaken in 2020 to
quantify the extent of this important discovery.
To improve ore-body knowledge at a mining scale, a close-
spaced exploration drill program was conducted at the Awak
Mas deposit, Rante Starter Pit area, designed to follow-up
the previous successful benching program. Modelling and
interpretation of the close-spaced drilling was undertaken
as a ‘proof of concept’ exercise to validate potential grade
uplift anticipated to be realised when the ore body is mined.
10 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
Review of Activities
Outcomes of this exercise will be incorporated into the 2020
modelling process for Awak Mas.
ORE RESERVE
Quarter 4 2019 saw follow-up drilling to the Geophysics
program resulting in the discovery of new mineralised
structures and the extension of existing ones at Salu Bulo.
The exploration drilling program tested several geophysics
targets with anomalous assays received for most of the
holes. The more significant results included:
•
SBD149: 13.5m @ 1.33g/t gold including 4.5m @
3.42g/t gold and 5m @ 1.04g/t gold; and
SBD150: 9.5m @ 1.05g/t gold including 1m @
•
5.14g/t gold and 18.9m @ 1.04g/t gold including
3.6m @ 2.51g/t gold.
These results show the prospectivity of the corridor between
Salu Bulo and Awak Mas as having the potential for further
satellite orebody discoveries. Figure 1 also shows these two,
more significant drill results from the successful geophysics
program. A further, expanded program of geophysics is
proposed for the 2020 exploration budget year.
In May 2018, the Company announced its latest Mineral
Resource estimate. 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)1.2
MINERAL RESOURCE
Classification Tonnes
Awak Mas Measured
Indicated
Inferred
Sub-total
Salu Bulo Measured
Tarra
Total
Indicated
Inferred
Sub-total
Measured
Indicated
Inferred
Sub-total
Measured
Indicated
Inferred
Total
(Mt)
-
36.4
3.1
39.5
-
2.9
0.6
3.6
-
-
2.3
2.3
-
39.3
6.0
45.3
Au Grade
(g/t)
Contained
Gold
(Moz)
-
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
USD1400/oz optimisation shell.
In September 2018, the Company announced an updated
1.1 million ounce gold Ore Reserve that formed the basis of
the DFS (Table 2)2.
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
Sub-total
Total
Proved
Probable
Total
-
2.8
2.8
-
26.9
26.9
-
-
1.67
0.15
1.67
0.15
-
1.32
1.32
-
1.14
1.14
Table 2: Awak Mas Ore Reserve estimates (September 2018)
by deposit.
Additions to the mineral inventory from 2019 exploration
discovery and revised assumptions to be used for resource
and reserve will be reflected in updated MRE and Reserve
statements in 2020.
ENVIRONMENT
The Company’s environmental plan complies with prevailing
laws and regulations on environmental protection.
The Company actively seeks to protect the environment in
which it operates, with 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 continued to evaluate areas for improvement.
Several environmental baseline studies have been
completed in the past and the Company continually updates
its environmental database for the CoW 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.
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
1 ASX Announcement Indicated resource grows by a further 0.2 Moz, 8 May 2018
2 ASX Announcement Ore Reserve increased by 11% to 1.1 Moz Gold, 13 September 2018
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 11
Review of Activities
REVIEWOF ACTIVITIES
relative humidity, while rainfall is conducted by a manual rain
gauge and evaporation rates assessed and recorded. Ambient
Air Quality and Noise are assessed at 4 monitoring points, Flora
and Fauna assessment is conducted every 6 months from 3
locations. Aquatic Ecology monitoring is undertaken every 6
months from 3 locations.
committed to meet the requirements of International Good
Mining Practice during all phases of project development
including mine safety, environment management, mineral
conservation, planning construction, mine and mineral
processing, design and operations as well as post-mine
management.
The Company continues its agricultural replantation program
to replace crops disturbed during site activities as well as a
hazardous waste removal system.
COMMUNITY
Nusantara holds routine industry standard toolbox and safety
meetings with our people to reinforce our safety framework.
We are constantly lifting our standards and we have introduced
a new light vehicle standard and continue to improve our
inductions.
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 support to the
neighbouring community, including the elementary school in
Boneposi village, the construction of which, was supported by
Masmindo.
The Company continues to purchase local supplies, recruit
local people and contractors where possible, and to produce
important employment opportunities which support the ongoing
and collective growth of Indonesia.
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.The Company
employees 3 paramedics and a GP for the site in SE Sulawesi.
Nusantara has continually been developing its the HSE
Management System and standard operating procedures for
health and safety that encourages workers to be vigilant at
work, risk aware and highlights the notion that anyone has the
right to stop any unsafe act, at any time.
Due to the recent COVID-19 pandemic our Incident and
Business Continuity Management Plan triggered the activation
of our Crisis Management Team (CMT) and the formation of
policy. Through evaluation, scenario planning and proactive
leadership, we are managing stakeholder expectations in
providing for the safety and wellbeing of all our people,
assisting local communities and maintaining business
continuity with proactive actions to Minimise Operational Risk
Exposure (MORE).
Our Head of MSE (Mine Safety and Environment) obtained
a First Class KTT (Chief Mine Technical) certification under
Indonesian mines regulations through panel examinations at
the Ministry of Energy and Mineral Resources. Nusantara is
12 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
All site activities are assessed for risk and controls with
increased supervison as required. Nusantara maintains
an onsite medical clinic and 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 are in place 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.
PEOPLE
The Company fully understands that our employees are our
greatest asset and having talented employees in the right
roles is critical to the success of Nusantara’s operations. The
Company further recognises the importance of employing
skilled people throughout Indonesia and from the local
communities in which we operate. Nusantara employs those
with the experience, competencies, character and attributes
needed to meet the requirements of the positions in which they
are to hold and the Company’s business goals.
Recruitment of key roles for the project development phase
and critical support functions is in advanced stages as at Q4
2019 with personnel commencing early Q1 2020.
The low turnover rate of employees in Nusantara is one of
the outcomes of the Company’s strategy to attract – motivate
– retain and develop the skills of our employees. Further,
Nusantara are committed to maintaining effective and
congruent relations amongst all employees, with open two-way
Review of Activities
communication proving to be effective in engaging and
motivating employees in addition to maintaining harmonious
relations, resulting in zero significant industrial relations
issues throughout 2019.
In 2019 Nusantara continued the process of developing the
Human Resources Management System, standard operating
procedures and policies covering all aspects of Human
Resources Management.
HR Gap Analysis was conducted in 2019 that prioritised
the improvement of existing HR programs covering
Planning, Acquiring, Developing, Maintaining and Retaining.
Emphasis is on developing strategies to Attract – Motivate –
Retain skilled employees.
Placement and Share purchase Plan were conducted at
AUD0.34 per share.
At 31 December 2019 the Company had USD 6,557,000
cash on hand, with 190,159,752 fully paid shares on issue,
18,034,307 listed options (exercisable at AUD0.30 each
and expiring 31 July 2020) and 29,036,477 unlisted options
(exercisable between AUD0.35 and AUD0.61 and expiring
between 2 August 2020 and 26 August 2022) 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.
Nusantara prides itself on compliance with the national,
regional and local Manpower regulations, covering
compensation and benefits, social security, working and rest
time, health and safety, training and others.
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 avaliable on the Company’s website at:
www.nusantararesources.com
Nusantara continues to enhance the employee performance
management systems, training and needs analysis, reward
and recognition programs and is looking forward positively
to the opportunity to build on the foundation established in
2019.
FINANCE AND CORPORATE
The financial statements reflect a USD4,050,000 investment
in exploration and evaluation during 2019. The major focus
of this investment was the Project with focus on ensuring
the Project is ready for financing and development.
The Company engaged an independent technical expert to
review the 2018 (DFS) to identify any areas for additional
work required ahead of formal engagement with banks.
At the same time the Company engaged with a group
of international banks to complete initial project debt
soundings.
The main corporate focus for 2019 was the negotiation of
arrangements to introduce IDX listed PT Indika Energy Tbk
(Indika Energy) into the Project company PT Masmindo
Dwi Area. In November 2019 the two entities agreed a
process for Indika Energy group to invest up to USD40M
into Masmindo to secure up to a 40% interest in Masmindo.
In February 2020 formal binding agreements were executed
reflecting these arrangements.
With this strong Indonesian-based joint venture partner the
Company enters 2020 well-funded to pursue FEED, and
project debt towards commencing construction in 2021.
In December 2019, the Company announced an AUD11M
placement (AUD3.57M subject to shareholder approval
in April 2020) and a Share Purchase Plan. Both the
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 13
Board of Directors
Board Committee Meetings
The memberships of each Board committee are indicated below:
a.
b.
Audit and Budget Committee
Financing Committee
Greg Foulis
Chairman
Executive Director
(b)
Rob Hogarth
Independent
Non-Executive Director
(a)
Robin Widdup
Non-Executive Director
(a and b)
Boyke Abidin
Executive Director
Neil Whitaker
Chief Executive Officer &
Director
Richard Ness
Non-Executive Director
(a and b)
14 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
Annual Financial Report
for the year ended 31 December 2019
• 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 2019 ANNUAL REPORT 15
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 2019.
The presentation currency for the Group is United States dollars (USD). The closing exchange rate applied to convert
Australian dollar (AUD) balances to USD at 31 December 2019 was 0.701 (2018: 0.706) and the average exchange rate
applied for the year ended 31 December 2019 was 0.695 (2018: 0.748).
Directors
The following persons held the office of Director during the year ended 31 December 2019 and to the date of this report
unless otherwise stated:
Greg Foulis
Neil Whitaker (appointed as a Director 24 September 2019)
Boyke Abidin
Robert Hogarth
Richard Ness1
Robin Widdup 2
Chairman
Director
Director
Director
Director
Director
Michael Spreadborough (resigned as a Managing Director 1 May 2019)
Director
1 – Mr Kamen Palatov is alternate Director for Mr Richard Ness
2 – Mr Craig Smyth is alternate Director for Mr Robin Widdup
Directors interests in the shares and options of the Company and related bodies corporate
As at 31 December 2019, 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
Neil Whitaker
Boyke Abidin
Robert Hogarth
Richard Ness1
Robin Widdup2
Kamen Palatov4
(Alternate director to Mr Ness)
Craig Smyth5
(Alternate director to Mr Widdup)
284,993
53,786
165,235
-
-
1,366,068
100,000
574,984
1,049,162
1,700,000
442,500
295,000
-
641,4603
-
58,935
1 Mr Ness is a Commissioner of PT Indika Energy Tbk which at 31 December 2019 held 35,438,230 ordinary shares and 16,693,711
unlisted options
2 Mr Widdup is a Director of Lion Manager Pty Ltd which at 31 December 2019 held 945,831 options (including 295,0003 incentive
options granted to Mr Widdup and reported above). Mr Widdup is also a director of Lion Selection Group Limited which at 31
December 2019 held 44,899,584 ordinary shares and 3,750,000 listed options
3 295,000 incentive options were granted to Mr Widdup’s nominee Lion Manager Pty Ltd in 2018 and included in the above total
4 Mr Palatov is Chief Portfolio Management Officer at PT Indika Energy Tbk which at 31 December 2019 held 35,438,230 ordinary
shares and 16,693,711 unlisted options
5 Mr Smyth is a Director of Lion Manager Pty Ltd which at 31 December 2019 held 945,831 options. Mr Smyth is Chief Executive
Officer of Lion Selection Group Limited which at 31 December 2019 held 44,899,584 ordinary shares and 3,750,000 listed options
Company Secretary
Mr Derek Humphry held the office of company secretary during the year ended 31 December 2019 and to the date of this
report.
16 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
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 USD 2,398,821 after providing for income tax (2018: loss of USD 2,343,243).
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”).
Major milestones achieved during the year included:
•
•
•
•
•
the completion of the post DFS work including confirmation of the development quarry location, and Phase 2
metallurgical test work program, estimating yield of 93.1% as compared to the 91.1% employed in the DFS;
appointment of a new Jakarta based Chief Executive Officer, Mr Neil Whitaker, to transition the project into
development;
Exploration success including a drill intersection at the Awak Mas Ridge of 63.7m at 2.12g/t gold;
acquisition of an option to extinguish the third-party royalty over the Project; and
execution of a non-binding term sheet with major shareholder and Indonesian based strategic partner PT Indika
Energy Tbk to provide the pathway for project funding and development of the Project.
Financial Position
The net assets of the Group have increased by USD 4,864,685 from USD 38,603,250 at 31 December 2018 to USD
43,467,935 as at 31 December 2019.
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 2019.
Significant Events After Reporting Date
On 24 January 2020, the Company announced the results of the Share Purchase Plan offer as announced on 13 December
2019. As a result, the Company issued and allotted 1,866,151 fully paid ordinary shares at AUD 0.34 each, on 28 January
2020, raising AUD 634,500.
On 9 December 2019, the Company announced signing of a non-binding and conditional term sheet (Term Sheet) with
strategic partner PT Indika Energy Tbk group companies (Indika Group) regarding, amongst other matters, an investment
by Indika Group in Nusantara’s Indonesian subsidiary (Project Company) of up to USD 40 million for up to 40% of the
Project Company in two stages (Indika Investment). The Term Sheet included a proposal for Nusantara and Indika Group
joint venturing the Project and provided a pathway for project funding and development of the 2.0 million oz Project. On
25 February 2020 the Project equity arrangements contemplated under the Term Sheet were executed by the
appropriate group companies. These agreements consist of a Project Company shareholders agreement, a Project
Company subscription agreement and Nusantara unlisted option subscription agreements for Indika Group and PT
Petrosea Tbk (Petrosea). The first stage USD 15 million investment by Indika Group, to earn a 25% Project interest, is
subject to Nusantara shareholder approval and standard regulatory approvals, and is conditional on Nusantara investing
USD 6 million towards the Project. The second stage USD 25 million investment, to earn a further 15% Project interest
remains subject to Nusantara shareholder approval and conditional on milestones as set out in the Term Sheet including
Nusantara investing a further USD 4 million towards the Project. The Term Sheet also provided for USD 40 million in
deferred payment arrangements, through Front End Engineering Design USD 10 million (FEED) and Engineering
Procurement Contract (USD 30 million) (EPC). The award of the FEED contract is a condition of the stage 1 investment.
The COVID-19 pandemic announced by the World Health Organisation post year end is having a negative impact on World
stock markets, currencies and business activity. The Company has developed a policy and is evolving procedures to
address the health and wellbeing of employees, consultants and contractors in relation to COVID-19. The timing and
extent of the impact and recovery from COVID-19 is unknown but it may have an impact on activities and potentially a
post balance date impact.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 17
2
DIRECTORS’ REPORT (CONTINUED) DIRECTORS’ REPORT
DIRECTORS’ REPORT (Continued)
Other than these matters, 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.
Information on Directors
Greg Foulis
Qualifications and
experience
Neil Whitaker
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 USD 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.
Director (appointed 24 September 2019)
Neil has over 40 years’ experience in the mining sector and has held operating and senior executive
roles with companies such as Anglo American, Western Mining Corporation, Clough Indonesia
(Petrosea Tbk) and Newcrest Mining. Neil has extensive international operating experience with a
demonstrated background in leading resource companies through the transitional stages of the full
project life cycle. Having previously worked in the Asia-Pacific region and more specifically as the
Chief Operating Officer for PT Petrosea Tbk (a subsidiary of our Indonesian strategic partner), Neil
has relevant experience which will place him in good stead to drive the Awak Mas Gold Project into
the next phase towards development.
Boyke Abidin
Qualifications and
experience
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 TAFE Gippsland, Nustream Investments
Limited 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.
18 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
3
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ REPORT (Continued)
Richard Ness
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.
Robin Widdup
Qualifications and
experience
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 (appointed
January 2011), and Chairman of Celamin Holdings Limited.
Michael
Spreadborough
Managing Director (ceased 1 May 2019)
Meetings of the Board
The Board of Directors held 10 meetings during the year ended 31 December 2019. Attendances of Directors at these
meetings are shown in the table below:
Meetings Attended
Number eligible to attend
Mr Greg Foulis
Mr Rob Hogarth
Mr Robin Widdup
Mr Richard Ness
Mr Michael Spreadborough
Mr Boyke Abidin
Mr Neil Whitaker
10
10
9
9
4
8
3
10
10
10
10
4
10
3
In addition fourteen (14) 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.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 19
4
DIRECTORS’ REPORT (CONTINUED) 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 2019, the unissued ordinary shares of Nusantara under option are as follows:
Grant Date
06/11/2019
06/11/2019
06/11/2019
25/01/2019
31/08/2018
04/07/2018
04/06/2018
17/04/2018
28/07/2017
28/07/2017
Expiry Date
11/07/2022
26/08/2022
26/08/2022
30/11/2020
31/07/2020
31/07/2020
27/07/2021
02/08/2021
02/08/2021
02/08/2020
Exercise Price (AUD)
Listed Options
Unlisted Options
$0.35
$0.35
$0.42
$0.35
$0.30
$0.30
$0.61
$0.61
$0.61
$0.42
-
-
-
-
249,999
17,784,308
-
-
-
-
500,000
566,610
1,133,390
22,289,159
-
-
740,000
975,318
2,360,000
472,000
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.
Shares issued as a result of the exercise of options
During the year 1,770,000 options were forfeited 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 BDO for non-audit services provided during the year ended 31 December 2019.
Prior year auditors Ernst and Young received USD 10,274 for Payroll & Employment tax advice, and review of Indonesian
tax treaties for the banking financial model (31 December 2018: no fees were paid for non-audit services)
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 2019 is set out on page 12 and forms part of this report.
20 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
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 2019. 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 2019:
Key Management Person
Position
Term as KMP
Non Executive Directors
Greg Foulis
Rob Hogarth
Robin Widdup
Richard Ness
Executive Directors
Greg Foulis
Neil Whitaker
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
Executive Chairman
Appointed 1 May 2019
Chief Executive Officer
Appointed 26 August 2019
Director
Appointed 24 September 2019
Boyke Abidin
Executive Director
Appointed 11 April 2017
Mike Spreadbrough
Managing Director
Ceased 1 May 2019
Other Key Management
Personnel
Colin McMillan
Derek Humphry
General Manager
Geology
Appointed 1 February 2017
Chief Financial Officer
Company Secretary
Appointed 16 February 2018
Appointed 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 AUD
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 2019 ANNUAL REPORT 21
6
6
DIRECTORS’ REPORT (CONTINUED) - REMUNERATION REPORT (AUDITED)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 Board having regard to
performance, relevant comparative information and expert advice.
The Board’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 2019
2019
Key Management Person
Short Term
Benefits
Salaries/Fees
USD
Post-
Employment
Superannuation
USD
Share Based
Payment –
Options
USD
Performance
Related
Total
USD
%
Directors
Rob Hogarth
Robin Widdup
Richard Ness
Executive Directors
Greg Foulis1
Boyke Abidin
Neil Whitaker2
Mike Spreadborough3
Other Key Management
Personnel
Colin McMillan
Derek Humphry
31,734
34,750
34,568
3,015
-
-
8,868
3,352
-
43,617
38,102
34,568
20.3
8.8
-
138,868
1,507
67,179
207,554
32.4
99,977
83,564
191,962
159,317
173,250
947,990
-
-
8,324
13,302
17,134
-
113,279
100,698
200,286
14,433
17,375
44,654
17,736
10,947
191,486
201,572
138,518
1,131,162
11.7
17.0
-
9.3
5.4
1 Mr Foulis became temporary Executive Chairman 1 May 2019 following the resignation of the Managing Director
2 Mr Whitaker commenced as Chief Executive Officer on 26 August 2019 and as a Director on 24 September 2019
3 Mr Spreadborough resigned as a Director 1 May 2019
22 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
7
7
DIRECTORS REPORT - REMUNERATION REPORT (AUDITED) (CONTINUED)
DIRECTORS’ REPORT - Remuneration Report (Audited) (Continued)
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
Performance
Related
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
-
25.5
36.7
23.8
-
28.7
33.2
23.6
18.8
15.3
100.0
-
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 AUD 17,500 (plus GST), ceasing on 31 March 2018. The fees for 2018 amounted to USD 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.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 23
8
8
DIRECTOR’S REPORT REMUNERATION REPORT (AUDITED) (CONTINUED)DIRECTORS REPORT - REMUNERATION REPORT (AUDITED) (CONTINUED)
DIRECTORS’ REPORT - Remuneration Report (Audited) (Continued)
Details of Shares Held by Key Management Personnel
2019
Key Management Person
Opening Balance
1/1/2019
Resignation
Shares
Acquired 2019
Shares
Disposed 2019
Closing Balance
31/12/2019
Neil Whitaker1
Boyke Abidin
Rob Hogarth
Greg Foulis
Robin Widdup
Richard Ness
165,235
-
174,993
917,223
-
Mike Spreadborough2
180,000
(180,000)
Colin McMillan
Derek Humphry
-
-
53,786
-
-
110,000
448,845
-
-
-
1,437,451
(180,000)
612,631
-
-
-
-
-
-
-
-
-
53,786
165,235
-
284,993
1,366,068
-
-
-
1,870,082
1 Mr Whitaker commenced as Chief Executive Officer on 26 August 2019 and as a Director on 24 September 2019
2 Mr Spreadborough resigned as a Director 1 May 2019. There were no movements between 31 December 2018 and 1 May 2019
Details of Options Held by Key Management Personnel
2019
Key Management
Person
Opening
Balance
1/1/2019
Resignation
Neil Whitaker1
Boyke Abidin
Rob Hogarth
Greg Foulis
Robin Widdup
Richard Ness
442,500
295,000
549,162
641,4603
-
Mike Spreadborough4
2,065,000
(2,065,000)
Colin McMillan
Derek Humphry
767,000
975,318
Unlisted
Incentive Options
granted as
compensation
1,700,0005
-
-
500,0002
-
-
-
-
-
Closing Balance
as at 31/12/19
Vested and
exercisable at
31/12/19
1,700,000
442,500
295,000
1,049,162
641,460
-
-
767,000
975,318
-
-
-
500,000
-
-
-
177,000
-
5,735,440
(2,065,000)
2,200,000
5,870,440
677,000
1 Mr Whitaker commenced as Chief Executive Officer on 26 August 2019 and as a Director on 24 September 2019
2 During the year Mr Foulis was granted 500,000 options exercisable at AUD0.35 each, expiring in July 2022 as a performance incentive
in taking on an executive role following the resignation of the Managing Director and during the transitition to the new Chief
Executive Officer.
3 Includes 295,000 Incentive options granted during 2018 to Mr Widdup’s nominee Lion Manager Pty Ltd
4 Mr Spreadborough resigned as a Director 1 May 2019. There were no movements between 31 December 2018 and 1 May 2019
5 Mr Whitaker was granted incentive options with vesting conditions tied to the delivery of the Awak Mas Gold Project
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.
24 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
9
9
DIRECTORS REPORT - REMUNERATION REPORT (AUDITED) (CONTINUED)
DIRECTORS’ REPORT - Remuneration Report (Audited) (Continued)
The Terms and Conditions of all options granted in any year which affected or will affect compensations is as follows.
Item
November 2019
November 2019
November 2019
Assessed fair value at
grant date (AUD)
$0.179
Number of options
500,000
$0.182
566,610
$0.168
1,133,390
Vesting Conditions
Fully Vested
Achieving project FID
Exercise Price (AUD)
$0.35
Grant Date
Expiry Date
Item
Assessed fair value at
grant date (AUD)
06/11/2019
11/07/2022
July 2017
$0.21
$0.35
06/11/2019
26/08/2022
April 2018
$0.064
One half on commencing
construction at the Awak Mas
Gold Project
One half on 3 months
commercial production at the
Awak Mas Gold Project
$0.42
06/11/2019
26/08/2022
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 AUD
0.525 or greater.
One third on the later of
28/07/2018 and when the
Company is listed and the 45
day VWAP of the Shares is AUD
0.525 or greater.
One third on the later of
28/07/2018 and when the
Company is listed and the 45
day VWAP of the Shares is AUD
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 (AUD)
$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 2019 included:
Item
a. Consideration
November 2019 November 2019 November 2019
$nil
$nil
$nil
b. Share price at grant date
AUD 0.34
AUD 0.34
AUD 0.34
c. Expected price volatility of the company’s shares
d. Expected dividend yield
e. Risk-free interest rate
87.6%
0%
0.93%
87.6%
0%
0.93%
87.6%
0%
0.93%
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 25
10
10
DIRECTOR’S REPORT REMUNERATION REPORT (AUDITED) (CONTINUED)DIRECTORS REPORT - REMUNERATION REPORT (AUDITED) (CONTINUED)
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY NEIL SMITH TO THE DIRECTORS OF NUSANTARA RESOURCES LIMITED
As lead auditor of Nusantara Resources Limited for the year ended 31 December 2019, I declare that,
to the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Nusantara Resources Limited and the entities it controlled during the
period.
Neil Smith
Director
BDO Audit (WA) Pty Ltd
Perth, 17 March 2020
26 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
11
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian
company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international
BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
DIRECTORS REPORT - REMUNERATION REPORT (AUDITED) (CONTINUED) 11 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 Annual Director’s fee AUD Wages, salaries and/or bonuses Greg Foulis1 75,000 AUD 1,500 per day Robert Hogarth 50,000 - Robin Widdup 50,000 - Richard Ness 50,000 - Neil Whitaker2 - USD 250,000 Boyke Abidin3 - USD 94,440 Michael Spreadborough4 - AUD 350,000 1 Mr Foulis was a Non- Executive Director from 1 January 2019 to 30 April 2019 (paid the Annual Director’s fee above on a prorate basis for this period), and Executive Chairman from 1 May 2019 to 31 December 2019 (paid AUD 1,500 per day worked). This executive role is transitioning to the new CEO during 2020. 2 Mr Whitaker is employed by a wholly owned subsidiary of the Company. Mr Whitaker commenced as Chief Executive Officer on 26 August 2019 and as a Director on 24 September 2019 3 Mr Abidin is employed by a wholly owned subsidiary of the Company 4 Mr Spreadborough resigned as a Director 1 May 2019 Non Executive Directors may be reimbursed for expenses reasonably incurred in attending to the Group’s affairs The Managing Director and executives’ termination provisions are as follows: Executive Termination payment Termination cause Resignation Neil Whitaker 12 months None 3 months Boyke Abidin 12 months None None Colin McMillan 12 months None 3 months Derek Humphry 3 months None 3 months During the reporting period there were no occurrences of the following: • Loans to Key Management Personnel or related entities • Other transactions with Key Management Personnel or related entities • Strikes against the remuneration report at the most recent Annual General Meeting This concludes the remuneration report, which has been audited. This Directors’ Report, is signed in accordance with a resolution of the Board of Directors. Neil Whitaker Chief Executive Officer 17 March 2020 JAKARTA
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY NEIL SMITH TO THE DIRECTORS OF NUSANTARA RESOURCES LIMITED
As lead auditor of Nusantara Resources Limited for the year ended 31 December 2019, I declare that,
to the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Nusantara Resources Limited and the entities it controlled during the
period.
Neil Smith
Director
BDO Audit (WA) Pty Ltd
Perth, 17 March 2020
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian
company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international
BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 27
DIRECTOR’S REPORT REMUNERATION REPORT (AUDITED) (CONTINUED)DIRECTORS REPORT - REMUNERATION REPORT (AUDITED) (CONTINUED)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
Income
Interest Income
Expenses
Employee and Directors benefits expense
Share based remuneration
Professional fees and consultants
Depreciation and amortisation
Other expenses
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income
Note
2019
USD
2018
USD
24
45,413
3,105
(1,087,976)
(169,515)
(587,271)
(119,817)
(479,655)
(698,901)
(368,312)
(586,098)
(61,032)
(632,005)
(2,398,821)
(2,343,243)
3
-
-
(2,398,821)
(2,343,243)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences
18(b)
(110,556)
(535,025)
Total Comprehensive Loss for the year attributable to owners of the
parent
(2,509,377)
(2,878,268)
Loss per share
From continuing operations:
Basic loss per share (cents)
Diluted loss per share (cents)
19
19
(1.4)
(1.4)
(2.1)
(2.1)
The financial statements should be read in conjunction with the accompanying notes
28 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
13
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2019
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Exploration and evaluation expenditure
Other assets
Right-of-use assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions
Lease liabilities
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2019
USD
2018
USD
6
7
11
12
13
14
15
16
17
6,557,031
391,005
6,948,036
6,364,317
171,743
6,536,060
80,506
78,984
36,986,515
32,936,707
61,484
40,864
37,169,369
44,117,405
52,684
-
33,068,375
39,604,435
570,139
37,266
42,065
649,470
649,470
935,746
65,439
-
1,001,185
1,001,185
43,467,935
38,603,250
18(a)
18(b)
47,360,131
5,255,416
(9,147,612)
43,467,935
40,155,584
5,196,457
(6,748,791)
38,603,250
The financial statements should be read in conjunction with the accompanying notes
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 29
14
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2019CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2019
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
Issued
Capital
Other
Reserves
Accumulated
Losses
Note
USD
USD
USD
Total
USD
At 1 January 2019
40,155,584
5,196,457
(6,748,791) 38,603,250
Loss for the period attributable
to members of the Company
Other comprehensive income
18
Total comprehensive loss
-
-
-
-
(2,398,821)
(2,398,821)
(110,556)
-
(110,556)
(110,556)
(2,398,821)
(2,509,377)
Shares issued during the period
18
7,462,323
Costs associated with the issue
of shares
Shares based payment
18
24
(257,776)
-
169,515
-
-
-
7,462,323
(257,776)
169,515
Balance as at 31 December 2019
47,360,131
5,255,416
(9,147,612) 43,467,935
Issued
Capital
Other
Reserves
Accumulated
Losses
Note
USD
USD
USD
Total
USD
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
18
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
18
8,886,458
Costs associated with the issue
of shares
Shares based payment
18
24
(295,927)
-
368,312
-
-
-
8,886,458
(295,927)
368,312
-
-
-
-
Balance as at 31 December 2018
40,155,584
5,196,457
(6,748,791) 38,603,250
The financial statements should be read in conjunction with the accompanying notes
30 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
15
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2019
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Interest income
Payments to suppliers and employees
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment and intangible assets
Payments for exploration expenditure
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payment for share issue expenses
Net cash provided by financing activities
Net increase/(decrease) in cash held
Effect of exchange rates
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
18
6
Note
2019
USD
2018
USD
45,413
(2,179,841)
(2,134,428)
3,105
(1,863,947)
(1,860,842)
21
(130,140)
(4,636,709)
(4,766,849)
(35,968)
(7,228,045)
(7,264,013)
7,462,323
(257,776)
7,204,547
303,270
(110,556)
6,364,317
6,557,031
8,886,458
(295,927)
8,590,531
(534,324)
(535,025)
7,433,666
6,364,317
The financial statements should be read in conjunction with the accompanying notes
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 31
16
CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2019CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2019
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 2019 was authorised for issue in accordance with a resolution of the Directors
on 17 March 2020.
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 2019.
The presentation currency for the Group is United States dollars (USD). The closing exchange rate applied to convert
Australian dollar (AUD) balances to USD at 31 December 2019 was 0.701 (2018: 0.706) and the average exchange rate
applied for the year ended 31 December 2019 was 0.695 (2018: 0.748).
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.
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 2019, the Group current assets exceeded current liabilities by USD 6,298,566 (2018: USD
5,534,875). For the year ended 31 December 2019 the Group incurred a loss of USD 2,398,821 (2018: USD
2,343,243) and experienced net cash outflows from operating and investing activities of USD 6,901,276 (2018:
USD 9,124,855).
As announced to ASX on 9 December 2019, the Company signed a non-binding term sheet with major
shareholder and strategic partner PT Indika Energy Tbk (Indika Energy), establishing a pathway for Indika Energy
to invest directly in the Project vehicle PT Masmindo DWI Area and to advance the Project to a decision to mine.
The terms sheet contemplated (subject to Nusantara shareholder approval and other conditions) among other
actions, Indika Energy investing up to USD 40 million into Nusantara’s wholly owned subsidiary PT Masmindo
DWI Area (Project Company), in two stages and subject to conditions, to secure up to 40% interest in the Project
Company:
•
•
an initial tranche of USD 15 million for 25% ownership is to be paid into the Project Company; and
a further USD 25 million can be invested to acquire an additional 15% ownership subject to conditions
including a decision to mine.
As announced to ASX 13 December 2019, the Company completed a Placement and commenced a Share
Purchase Plan which closed in quarter 1, 2020. The Placement raised AUD 11 million (including AUD 3.5 million
to Indika Energy, deferred until Shareholder Approval).
32 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
17
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
At 31 December 2019 Nusantara Resources Limited group had cash of USD 6.56 million and payables of USD 0.57
million and lease obligations of USD0.04 million. As noted above Indika Energy has executed a binding
subscription agreement to secure placement shares at a price of AUD 0.34 per share for AUD 3.5 million net of
costs, that is subject to Nusantara shareholder approval at a meeting to be called (quarter 2, 2020). In addition,
the Company’s share price at 31 December 2019 was AUD 0.325 per share and the Company had 18,034,307
options exercisable at AUD 0.30 per option on or before 31 July 2020.
The Group continues to focus on exploration, evaluation and development activities at the Project and is
currently without an operating cash inflow. The Group may need to raise additional capital to advance the
Project and its ongoing working capital requirements which results in 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, and the Company has established a non-binding
pathway to fund near term Project activities. The Directors believe the Company, given the quality of the Project,
can raise future funds to pursue its business strategy and meet its obligations as and when they fall due.
The COVID-19 pandemic announced by the World Health Organisation post year end is having a negative impact
on World stock markets, currencies and business activity. The Company has developed a policy and is evolving
procedures to address the health and wellbeing of employees, consultants and contractors in relation to COVID-
19. The timing and extent of the impact and recovery from COVID-19 is unknown but it may have an impact on
activities and potentially a post balance date impact.
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.
b.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at
31 December 2019. 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.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 33
18
18
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTS
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
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.
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.
34 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
19
19
NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 and right of use
assets 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 is, 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.
e.
Exploration and Evaluation Expenditure
Exploration and evaluation 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.
f)
i) Financial Instruments
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 AASB 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 marketplace (regular way trades) are recognised on the trade date, i.e., the date that the
Group commits to purchase or sell the asset.
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
The Group currently has only financial assets at amortised cost.
20
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 35
20
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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 rights to receive cash flows from the asset have expired, or
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.
ii) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as at amortised cost, or as at fair value through profit or
loss.
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 amortised cost
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.
The Group currently has only financial liabilities at amortised cost.
Financial liabilities at amortised cost
After initial recognition, financial liabilities at amortised cost 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.
21
36 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
21
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
g.
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.
h.
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. 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
equity is 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.
i.
Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
reporting 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.
j.
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 24.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 37
22
22
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
That cost is separately recognised in the Consolidated Statement of Comprehensive Income, 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.
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 19).
k.
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.
l.
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.
m.
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.
n.
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.
o.
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.
38 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
23
23
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
p.
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.
q.
Key estimates
i.
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.
ii.
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.
r.
New or Amended Accounting Standards and interpretations Adopted
AASB 16 Leases
This note explains the adoption of the adoption of AASB 16 Leases on the Group’s financial statements as applied
from 1 January 2019.
The Group has adopted AASB 16 retrospectively from 1 January 2019 but has not restated comparatives for the
2018 reporting period, as permitted under the specific transitional provisions in the standard. The
reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening
Statement of Financial Position on 1 January 2019.
The Group previously had no leases classified as finance leases at 31 December 2018.
a) The Group’s leasing activities and how these are accounted for:
The Group leases various offices and equipment. Lease terms are negotiated on an individual basis and
contain a range of terms and conditions. Until the 2018 financial year, the Group only had operating leases.
Payments under operating leases were charged to Statement of Profit or Loss on a straight-line basis over
the period of the lease.
From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date
at which the leased asset is available for use by the Group. Each lease payment is allocated between the
liability and the finance cost. The finance cost is charged to Statement of Profit or Loss over the lease period.
The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a
straight-line basis.
Assets and liabilities arising from a lease are initially measure on a present value basis. Lease liabilities
include the net present value of the fixed payments due under the lease.
The lease payments are discounted using the interest rate implicit in the lease or where that cannot be
determined , an estimate of the lessee’s incremental borrowing rate is used (being the rate that the lessee
would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability.
Payments associated with short-term leases and leases of low value assets are recognised on a straight-line
basis as an expense in the Statement of Profit or Loss. Short-term leases are leases with a lease term of 12
months or less. Low-value assets comprise of office equipment.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 39
24
24
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
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% (2018:
30%)
Tax effect of:
–
Non-deductible expenses
Deferred tax asset not brought to account
Income Tax Expense
2019
USD
2018
USD
(2,398,821)
(2,343,243)
(719,646)
(702,973)
719,646
702,973
-
-
-
-
-
-
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. 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 – refer Note 24
Total compensation
b)
Other Key Management Personnel Transactions
2019
USD
2018
USD
947,990
44,654
138,518
814,394
50,816
324,933
1,131,162
1,190,143
There have been no other Key Management Personnel transactions involving equity instruments. For details of
other transactions with Key Management Personnel refer to Note 23 Related Parties.
NOTE 5: AUDITORS’ REMUNERATION
BDO – audit services
Ernst & Young Australia - audit services
Ernst & Young Australia – non-audit services
2019
USD
2018
USD
30,650
-
-
99,738
10,274
40,924
-
99,738
During the 2019 year, BDO were appointed as the Company’s Auditor, replacing Ernst and Young in Australia. The
Company’s Indonesian subsidiary PT Masmindo Dwi Area prepares financial statements which are audited for regulatory
purposes, the auditor is also BDO. During the year ended 31 December 2019 Ernst and Young received fees for some
audit services relating to financial year 2018 Audit, and received fees of USD 10,774 for Payroll and Employment tax
advice, and review of Indonesian tax treaties for the banking financial model (2018: Nil) .
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank
40 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
2019
USD
6,557,031
2018
USD
6,364,317
6,557,031
6,364,317
25
25
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 7: OTHER RECEIVABLES
CURRENT
Prepayments
Security Deposits1
Other receivables
2019
USD
171,326
205,327
14,352
391,005
2018
USD
16,957
114,372
40,414
171,743
1 AUD60,000 is held as security for a credit card facility and bears interest at 0.535%
AUD42,000 is held as security for the office lease and bears interest at 0.565%
USD133,825 is set aside as security for the reclamation bond and bears interest at 1.45%
NOTE 8: SEGMENT INFORMATION
The Group operates predominantly in the minerals exploration sector, with the principal 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
2019
USD
6,515,140
2018
USD
6,387,831
37,217,508
39,022,421
264,713
264,713
419,171
419,171
47,360,131
40,155,584
5,421,322
5,362,363
(9,313,518)
(6,914,697)
43,467,935
38,603,250
(2,398,821)
(2,343,238)
(2,398,821)
(2,343,238)
The parent entity has not entered into any contractual commitments for the acquisition of property plant and equipment
as at 31 December 2019.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 41
26
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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
Nusantara Holdings Pty Ltd (registered 03 July 2019)
Indonesia
Australia
Barbados
Australia
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
2019
%
2018
%
100
100
100
100
100
100
100
-
2019
USD
2018
USD
440,315
401,249
(359,809)
(322,265)
80,506
78,984
78,984
39,066
83,310
28,818
(37,544)
(33,144)
-
-
80,506
78,984
2019
USD
2018
USD
36,986,515
32,936,707
32,936,707
25,922,423
4,049,808
7,014,284
36,986,515
32,936,707
42 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
27
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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
Carrying amount of intangible asset at end of
year
NOTE 14: RIGHT OF USE ASSETS
Office lease
At cost
Accumulated amortisation
Total Right of use asset
Reconciliation of the carrying amounts are set out below:
Office lease
Carrying amount at beginning of year
Additions
Depreciation
Carrying amount of right of use asset at end
of year
NOTE 15: TRADE AND OTHER PAYABLES
Trade payables and accrued expenses
VAT payables
Trade and other payables
NOTE 16: PROVISIONS
Provisions – current
2019
USD
2018
USD
406,578
368,247
(345,094)
(315,563)
61,484
52,684
52,682
38,333
73,421
7,152
(29,531)
(27,889)
61,484
52,684
2019
USD
2018
USD
94,061
(53,197)
40,864
-
94,061
(53,197)
40,864
-
-
-
-
-
-
-
2019
USD
555,560
14,579
570,139
2018
USD
928,153
7,593
935,746
2019
USD
2018
USD
37,266
65,439
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 43
28
28
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 17: LEASE LIABILITIES
Office lease – current
Carrying amount at beginning of year
Lease liabilities arising during year – AASB16
Lease payments made
Interest
Carrying amount at end of year
NOTE 18: ISSUED CAPITAL AND RESERVES
a. Issued Capital
190,159,752 (2018: 153,804,835) 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
2019
USD
2018
USD
-
94,062
(53,707)
1,710
42,065
-
-
-
-
-
2019
USD
2018
USD
47,360,131
40,155,584
Shares
153,804,835
Shares
97,531,763
36,354,917
56,273,072
190,159,752
153,804,835
2019
USD
2018
USD
40,155,584
31,565,053
7,462,323
8,886,458
(257,776)
(295,927)
47,360,131
40,155,584
44 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
29
29
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 18: ISSUED CAPITAL AND RESERVES (CONTINUED)
Movements in options
At the beginning of the reporting period
Incentive Options issued during the year
Incentive Options forfeited during the year
Listed Loyalty Options expiring during the year
Unlisted Placement options issued during the year
Listed Rights issue Options issued during the year
At the end of the reporting period
b. Reserves
2019
2018
Options
24,351,625
2,200,000
(1,770,000)
Options
37,405,392
1,715,318
(295,000)
-
(32,508,392)
22,289,159
-
-
18,034,307
47,070,784
24,351,625
Foreign Currency
Translation
Debt
Forgiveness
Share Based
Payment
Total Other
Reserves
USD
USD
USD
USD
At 1 January 2018
(139,454)
5,233,212
269,412
5,363,170
Currency translation differences
Shares based payment
Balance as at 31 December 2018
At 1 January 2019
Currency translation differences
Shares based payment
(535,025)
-
(674,479)
(674,479)
(110,556)
-
-
-
5,233,212
5,233,212
-
-
-
(535,025)
368,312
368,312
637,724
5,196,457
637,724
5,196,457
-
(110,556)
169,515
169,515
Balance as at 31 December 2019
(785,035)
5,233,212
807,239
5,255,416
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.
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 24 for further details of
these plans.
Debt Forgiveness
In 2017 a convertible loan agreement between the Company and its previous parent company was converted into shares
in the Company to settle loans payable to related body corporates. The fair value of the shares issued was determined
with reference to the IPO price of AUD 0.42. As the fair value of shares provided as consideration was less than the
balance of the loans, the difference of USD 5,233,212 was recognised as a reserve.
c.
Options
On 12 December 2018 the Company announced securities placements subject to shareholder approval. On 25 January
2019 the Company completed the securities placements which included issuing one unlisted option for every two shares
taken up, totalling 22,289,159 unlisted options. These options are exercisable at AUD 0.35 each and expire 30 November
2020.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 45
30
30
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 19: LOSS PER SHARE
a. Reconciliation of loss
Loss for the year
Loss used in the calculation of basic and dilutive EPS
2019
USD
2018
USD
(2,398,821)
(2,343,243)
(2,398,821)
(2,343,243)
Number
b. Weighted average number of ordinary shares outstanding during the year used in
167,809,381
111,967,115
calculating basic Loss per share
Weighted average number of ordinary shares outstanding during the year used in
185,843,688
111,967,115
calculating diluted Loss per share
Weighted average number of dilutive options outstanding
c. Anti-dilutive options (not used in dilutive loss per share calculation)
18,034,307
-
38,248,697
38,248,697
d. Loss per share (basic)
Loss per share (diluted)
2019
Cents
(1.4)
(1.4)
2018
Cents
(2.1)
(2.1)
NOTE 20: COMMITMENTS AND CONTINGENT LIABILITIES
(a)
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 November 2019, by paying consideration of USD 100,000
and 666,667 ordinary shares issued to the holder of the net Smelter Returns Royalty Agreement, the Company
secured an option to extinguish this royalty . Specifically the Company may cancel 50% of the Royalty by giving
notice prior to 30 April 2020 and paying USD 2.4M; and may cancel the remaining 50% of the Royalty by giving
notice prior to 30 April 2021 and paying USD 2.5M.
(b)
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 USD 57,560 annually (USD 4.00 per hectare on the
14,390 hectares of the CoW) and Building Tax of approximately USD 8,000 annually.
(c) On 13 February 2019, the Company received a Decision on Reclamation Guarantee from the Indonesian Ministry of
Energy and Mineral Resources, stating the requirement of the Company to place a reclamation guarantee of USD
1,338,252 in the form of bank guarantees and time deposits. The company has placed 10% of the total reclamation
guarantee in the form of time deposits (USD 133,825, see Note 7), and the company is in the process of submitting a
bank guarantee application of 90% of the total reclamation guarantee.
(d) On 9 December 2019, the Company announced signing of a non-binding and conditional term sheet (Term Sheet)
with strategic partner PT Indika Energy Tbk group companies (Indika Group) regarding, amongst other matters, an
investment by Indika Group in Nusantara’s Indonesian subsidiary (Project Company) in two stages (Indika
Investment). On 25 February 2020 the Project equity arrangements contemplated under the Term Sheet were
executed by the appropriate group companies. These agreements consist of a Project Company shareholders
agreement, a Project Company subscription agreement and Nusantara unlisted option subscription agreements for
Indika Group and PT Petrosea Tbk (Petrosea). The first stage USD 15 million investment by Indika Group, to earn a
25% Project interest, is subject to Nusantara shareholder approval and standard regulatory approvals, and is
conditional on Nusantara investing USD 6 million towards the Project. The second stage USD 25 million investment,
to earn a further 15% Project interest remains subject to Nusantara shareholder approval and conditional on
milestones as set out in the Term Sheet including Nusantara investing a further USD 4 million towards the Project.
The Term Sheet also provided for USD 40 million in deferred payment arrangements, through Front End Engineering
Design USD 10 million (FEED) and Engineering Procurement Contract (USD 30 million) (EPC). The award of the FEED
contract is a condition of the stage 1 investment.
46 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
31
31
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 20: COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
(e) 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 21: 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 Statement of
Financial Position 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
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 in lease liabilities
Increase/(Decrease) in payables
Increase in provisions
Net cash (used) in operating activities
c.
Non-Cash Financing
There were nil non-cash financing events during the year.
2019
USD
81,776
5,571
-
2018
USD
151,013
74,511
-
87,347
225,524
2019
USD
2018
USD
6,557,031
6,557,031
6,364,317
6,364,317
(2,398,821)
(2,343,243)
119,817
169,515
61,032
368,312
(219,262)
89,185
42,065
57,538
94,720
-
(81,570)
45,442
(2,134,428)
(1,860,842)
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 47
32
32
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 22: EVENTS SUBSEQUENT TO REPORTING DATE
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
(a) On 24 January 2020, the Company announched the results of the Share Purchase Plan offer as announced on 13
December 2019. As a result, the Company issued and allotted 1,866,151 fully paid ordinary shares on 28 January
2020, raising AUD634,500.
(b) The Group is subject to tax audits by the Indonesian Tax Office and in 2018 had been issued with a revised
assessment with respect to VAT paid in 2012. The Group disputed the assessment and paid IDR1.9 billion as a
deposit to advance to the Tax Court. On 5 December 2019, the Group was advised its appeal had been successful
and on 13 February 2020 the Group received a refund from the Indonesian Tax Office of IDR1.9 billion (USD145,000)
in resolution of the matter.
(c) On 9 December 2019, the Company announced signing of a non-binding and conditional terms sheet (Term Sheet)
with strategic partner PT Indika Energy Tbk group companies (Indika Group) regarding, amongst other matters, an
investment by Indika Group in Nusantara’s Indonesian subsidiary (Project Company) of up to USD 40 million for up to
40% of the Project Company in two stages (Indika Investment). The Term Sheet included a proposal for Nusantara
and Indika Group joint venturing the Project and provided a pathway for project funding and development of the 2.0
million ounce Project. On 25 February 2020 the Project equity arrangements contemplated under the Term Sheet
were executed by the appropriate group companies. These agreements consist of a Project Company shareholders
agreement, a Project Company subscription agreement and Nusantara unlisted option subscription agreements for
Indika Group and PT Petrosea Tbk (Petrosea). The first stage USD 15 million investment by Indika Group, to earn a
25% Project interest, is subject to Nusantara shareholder approval and standard regulatory approvals, and is
conditional on Nusantara investing USD 6 million towards the Project. The second stage USD 25M investment, to
earn a further 15% Project interest remains subject to Nusantara shareholder approval and conditional on milestones
as set out in the Term Sheet including Nusantara investing a further USD 4 million towards the Project. The Term
Sheet also provided for USD 40M in deferred payment arrangements, through Front End Engineering Design USD 10
million (FEED) and Engineering Procurement Contract (USD 30 million) (EPC). The award of the FEED contract is a
condition of the stage 1 investment.
(d) The COVID-19 pandemic announced by the World Health Organisation post year end is having a negative impact on
World stock markets, currencies and business activity. The Company has developed a policy and is evolving
procedures to address the health and wellbeing of employees, consultants and contractors in relation to COVID-19.
The timing and extent of the impact and recovery from COVID-19 is unknown but it may have an impact on activities
and potentially a post balance date impact.
Other than these matters, 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 23: 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)1
Mr Robert Hogarth (appointed 17 February 2017)
Mr Boyke Abidin (appointed 11 April 2017)
Mr Robin Widdup (appointed 28 February 2018)
Mr Richard Ness (appointed 13 December 2018)
Chairman –Director
Non-Executive Director
Executive Director
Non-Executive Director
Non-Executive Director
Mr Neil Whitaker (appointed 24 September 2019)
Executive Director
Mr Michael Spreadborough (resigned as a director 1 May 2019)
Executive Director
1 Mr Foulis was appointed as a Non-Executive Director and Chairman on 29 March 2018 and acted in this role for the period since
appointment to 30 April 2019). On 1 May 2019 when Managing Director Mr Spreadborough resigned, Mr Foulis was appointed as
Executive Chairman and remains in that role for a transitional period following appointment of the new Chief Executive Officer.
48 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
33
33
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 23: RELATED PARTIES (CONTINUED)
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.
NOTE 24: 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 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 AUD 0.61 per share
- exercisable at AUD 0.42 per share
- exercisable at AUD 0.35 per share
Options exercised during the reporting period
Options Forfeited during the reporting period
At the end of the reporting period
2019
Options
6,317,318
2018
Options
4,897,000
-
1,715,318
1,133,390
1,066,610
-
-
-
-
(1,770,000)
(295,000)
6,747,318
6,317,318
The expense recognised for employee services received during the year is shown in the following table:
Share Based Payment Expense
Key Management Personnel
Employees
Expense from equity-settled share-based payment transactions
2019
USD
138,518
30,997
169,515
2018
USD
324,933
43,379
368,312
34
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 49
34
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 24: SHARE-BASED PAYMENTS (CONTINUED)
Fair value of options granted
The assessed fair value at grant date of options granted during the reporting year is set out in the table below.
Item
November 2019
November 2019
November 2019
Assessed fair value
at grant date (AUD)
$0.179
Number of options
500,000
$0.182
566,610
$0.168
1,133,390
Vesting Conditions
Fully Vested
Achieving project FID
One half on commencing
construction at the Awak
Mas Gold Project
One half on 3 months
commercial production at
the Awak Mas Gold Project
Exercise Price
(AUD)
Grant Date
Expiry Date
$0.35
$0.35
$0.42
06/11/2019
11/07/2022
06/11/2019
26/08/2022
06/11/2019
26/08/2022
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 2019 included:
Item
November 2019
November 2019
November 2019
a. Consideration
b. Share price at
grant date (AUD)
c. Expected price
volatility of the
company’s
shares
d. Expected
dividend yield
e. Risk-free
interest rate
$nil
$0.34
87.6%
0%
0.93%
$nil
$0.34
87.6%
0%
0.93%
$nil
$0.34
87.6%
0%
0.93%
50 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
35
35
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 25: 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
15
2019
USD
2018
USD
6,557,031
6,364,317
391,005
171,743
6,948,036
6,536,060
570,139
935,746
935,746
Total Financial Liabilities
The carrying values of these assets and liabilities approximates the fair values due to their short-term nature.
570,139
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
2019
USD
504,962
121,925
5,930,144
2018
USD
6,310,765
36,956
16,596
6,557,031
6,364,317
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 0.9% (31 December 2018: 0.8%). Receivables and
Trade and other payables are non-interest bearing. At 31 December 2019 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.
36
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 51
36
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED
AND CONTROLLED ENTITIES
NOTE 25: 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.
NOTE 26: COMPANY DETAILS
Nusantara Resources Limited is a company domiciled in Australia and its registered office is located at:
Ground Floor
20 Kings Park Road
West Perth
Western Australia 6005 Australia
52 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
37
37
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 53
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)NUSANTARA RESOURCES LIMITED AND CONTROLLED ENTITIES 38 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) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2019 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations), the Corporations Regulations 2001, and other madatory professional reporting requirements; 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 Neil Whitaker Chief Executive Officer Dated 17 March 2020
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Nusantara Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Nusantara Resources Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31
December 2019, the consolidated statement of comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to
the financial report, 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:
(i)
(ii)
Giving a true and fair view of the Group’s financial position as at 31 December 2019 and of its
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 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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
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(a) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian
company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international
BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Accounting for Capitalised Exploration and Evaluation Expenditure
Key audit matter
How the matter was addressed in our audit
At 31 December 2019 the Group held a significant
carrying value of exploration and evaluation
expenditure as disclosed in Note 12.
As the carrying value of these exploration and
evaluation expenditure represents a significant
asset of the Group, we considered it necessary to
assess whether any factors of circumstances exist
to suggest that the carrying amount of this asset
may exceed its recoverable amount.
Judgement is applied in determining the
treatment of exploration and evaluation
expenditure in accordance with Australian
Accounting Standard AASB 6 Exploration for and
Evaluation of Mineral Resources. In particular:
Whether the conditions for capitalisation
are satisfied;
Which elements of exploration and
evaluation expenditures qualify for
recognition;
Whether facts and circumstances indicate
that the exploration and expenditure
assets should be tested for impairment.
Our procedures included, but were not limited
to:
• Assessing whether the Company’s rights to
tenure of the Awak Mas Gold Project
remained current at balance date;
• Considering the status of ongoing
exploration and evaluation programmes in
the respective area of interest by holding
discussions with management, reviewing the
Group’s exploration and evaluation budgets,
ASX announcements and director’s minutes;
•
Reviewing independently prepared
documentation supporting project viability;
• Considering whether any other facts or
circumstances existed to suggest whether
impairment triggers were present;
•
Verifying, on a sample basis, exploration
and evaluation expenditure capitalised
during the year for compliance with the
recognition and measurement criteria of
AASB 6; and
• Assessing the adequacy of the related
disclosures in Note 2(e), Note 2(q) and Note
12 to the Financial Report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2019, but does not include
the financial report and the auditor’s report thereon.
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 55
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
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 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.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
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 our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit 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 the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 6 to 11 of the directors’ report for the
year ended 31 December 2019.
In our opinion, the Remuneration Report of Nusantara Resources Limited, for the year ended 31
December 2019, complies with section 300A of the Corporations Act 2001.
56 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
ADDITIONAL INFORMATION AS AT 03 APRIL 2020
Responsibilities
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 opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Neil Smith
Director
Perth, 17 March 2020
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 57
ADDITIONAL INFORMATION AS AT 03 APRIL 2020ADDITIONAL INFORMATION AS AT 03 APRIL 2020
Distribution of Ordinary Fully Paid Shareholders
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total Shareholders
Number of
Shareholders
Number of
Shares
103
193
101
264
121
49,178
630,585
821,118
9,870,752
180,654,270
782
192,025,903
Number of ordinary shareholders with less than a marketable parcel was 143.
Twenty Largest Shareholders of Ordinary Shares
Shareholder
Lion Selection Group Limited
PT Indika Mineral Investindo
J P Morgan Nominees Australia Pty Limited
Retzos Executive Pty Ltd
Macquarie Bank Limited
Silver Pine Capital Limited
BNP Paribas Nominees Pty Ltd
Citicorp Nominees Pty Limited
Tuetex Pty Limited
Mr Richard Thomas Hayward Daly + Mrs Sarah Daly
Pasias Holdings Pty Ltd
HSBC Custody Nominees (Australia) Limited
Mr Ross Lindsay McMillan
Mr Robin Anthony Widdup entities
Vista Gold Corp
John Joseph Ryan
Sam Goulopoulos Pty Ltd
DBPC Group Finance Pty Ltd
Swanco PtyLtd
Lido Trading
Substantial Shareholders
Substantial Shareholders
Name
Lion Selection Group Limited
PT Indika Energy Tbk
AustralianSuper Pty Limited
58 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
Number of
Shares
44,899,584
33,387,422
29,834,063
6,750,000
4,991,056
3,571,428
3,456,604
3,247,126
2,425,000
2,350,654
1,750,000
1,729,048
1,588,235
1,454,303
1,333,334
1,323,684
1,200,000
1,190,477
1,190,476
1,190,434
%
23.38
17.39
15.54
3.52
2.60
1.86
1.80
1.69
1.26
1.22
0.91
0.90
0.83
0.76
0.69
0.69
0.62
0.62
0.62
0.62
148,862,928
77.52
Number of Shares
44,899,584
35,437,656
28,288,639
%
23.4%
18.5%
14.7%
ADDITIONAL INFORMATION AS AT 03 APRIL 2020 On-Market Buy Back
There are no current on-market buy back in place.
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.
Distribution of Listed Option Holders
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total Options
Number of listed options with less than a marketable parcel was 87.
Twenty Largest Holders of Listed Options
Name
Lion Selection Group Limited
Mr Richard Thomas Hayward Daly + Mrs Sarah Kay Daly
J P Morgan Nominees Australia Pty Limited
HSBC Custody Nominees (Australia) Limited
Mr Tarecq Aldaoud
Retzos Executive Pty Ltd
Smongo Pty Ltd
RIGI Investments Pty Ltd
Thang Pty Ltd
Magedo Super Pty Ltd
Atlantis MG Pty Ltd
Mr Dominic Paul McCormick
Mr Robin Anthony Widdup entities
Mr Tarecq Elias Aldaoud
BVB Custodian Pty Ltd
Pasias Holdings Pty Ltd
Sam Goulopoulos Pty Ltd
Mr Richard Desmond Reid
Assurance Capital Pty Ltd
Lion Manager Pty Ltd
Number of
Number of
Option Holders
Options
33
33
8
45
30
14,791
101,948
58,685
1,728,940
16,129,943
149
18,034,307
Number of Options
3,750,000
1,422,172
1,320,488
1,301,282
1,000,000
884,020
680,000
589,347
515,206
500,000
450,000
400,000
346,460
300,000
294,674
294,674
294,674
216,798
211,139
208,331
%
20.79
7.89
7.32
7.22
5.54
4.90
3.77
3.27
2.86
2.77
2.50
2.22
1.92
1.66
1.63
1.63
1.63
1.20
1.17
1.16
14,979,265
83.06
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 59
ADDITIONAL INFORMATION AS AT 03 APRIL 2020ADDITIONAL INFORMATION AS AT 03 APRIL 2020
Unlisted Options
These options are unlisted. 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.
Distribution of Unlisted Option Holders
Distribution of Unlisted Option Holders
Range
100,001 and over
Option Holders
Number of
13
Options
29,036,477
Holder of more than 20% of Unlisted Options
Holder of more than 20% of Unlisted Options
Option Holder
Exercisable
at AUD0.35
Expiring 30
November 2020
Transferable
Exercisable
at AUD0.42
Expiring
2 August 2020
Not Transferable
Exercisable
at AUD0.61
Expiring
27 August 2021
Not Transferable
Exercisable
at AUD0.61
Expiring
27 July 2021
Not Transferable
PT Indika Mineral
Investindo
16,693,711
AustralianSuper
5,595,448
Holders less than 20%
Total
22,289,159
472,000
472,000
3,335,318
3,335,318
740,000
740,000
Option Holder
Exercisable
at AUD0.35
Expiring
11 July 2022
Not Transferable
Exercisable
at AUD0.35
Expiring
26 August 2022
Not Transferable
Exercisable
at AUD0.42
Expiring
26 August 2022
Not Transferable
Holders less than 20%
Total
500,000
500,000
566,610
566,610
1,133,390
1,133,390
Share Price
AUD0.325.
The closing share price on the Australian securities Exchange on 31 December 2019 was AUD0.325.
Shareholder 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:
Telelphone:
www.computershare.com.au
1300 850 505 (within Australia)
+61 (0)3 9415 4000
+61 (0)3 9473 2500
Facsimile:
60 NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT
ADDITIONAL INFORMATION AS AT 03 APRIL 2020
Board of Directors
Bankers
Greg Foulis - Chairman - Executive Director
HSBC Bank Australia
Neil Whitaker - CEO - Director
Boykle Abidin - Executive Director
Rob Hogarth - Non-Executive Director
Richard Ness - Non-Executive Director
Robin Widdup - Non-Executive Director
Investor Relations
Mr Greg Foulis
Executive Chairman
Telephone: +61 (0) 438 544 399
or
Company Secretary
Mr David Waterhouse
Derek Humphry
Investor Relations
Registered Office
20 Kings Park Road
Telephone: +61 (0) 407 880 937
Share Registery
West Perth, Western Australia, 6005
Computershare Investor Services Pty Limited
452 Johnson Street
Abbotsford, Victoria, 3067
Telephone:
1300 850 505 (within Australia)
+61 (0)3 9415 4000
Facsimile:
+61 (0)3 9473 2500
PO Box 410
West Perth, Western Australia, 6872
Telephone:
+61 (0)8 9460 8600
Email:
info@nusantararesources.com
Securities Exchange Listing
Shares in Nusantara Resources Limited are
quoted on the Australian Security Exchange
ASX Code: NUS
NUSANTARA RESOURCES LIMITED 2019 ANNUAL REPORT 61
ADDITIONAL INFORMATION AS AT 03 APRIL 2020
Nusantara Resources Limited
ACN 150 791 290
www.nusantararesources.com