Incorporated in Bermuda
(ARBN 081 028 337)
(Malaysian Registration No. 202002000012 (995782-P))
68
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 CONTENTS
CHAIRMAN’S REPORT
DIRECTORS
KEY MANAGEMENT
CORPORATE DIRECTORY
CORPORATE STRUCTURE
FINANCIAL HIGHLIGHTS
GROUP OVERVIEW
PROCESSING AND SMELTING OPERATIONAL REVIEW
MARKETING AND TRADING OPERATIONAL REVIEW
BOOTU CREEK MINE
TSHIPI É NTLE MANGANESE MINING (PTY) LTD
ASX LISTING RULE 5.8.1
SUSTAINABILITY STATEMENT
DIRECTORS’ STATEMENT
INDEPENDENT AUDITOR’S REPORT
STATEMENTS OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
ASX & BURSA SECURITIES ADDITIONAL INFORMATION
GRI CONTENT INDEX
01
03
06
07
08
09
10
12
16
19
26
27
36
61
64
67
68
69
70
71
134
152
155
WHO WE ARE
OM Holdings Limited is a manganese and silicon smelting company, with vertical exposure in mining and trading. We are engaged in
the business of trading raw ores, smelting, and marketing of processed ferroalloys. With over 25 years in the industry, we are listed on
both the ASX and Bursa Malaysia, and have operations across Australia, China, Malaysia, Singapore and South Africa.
Today, the Group is one of the world’s leading suppliers of manganese ores and ferroalloys and seeks to be the main ferroalloy supply
partner to major steel mills and other industries.
OUR PURPOSE
Our purpose is to create sustainable value for our shareholders and stakeholders through developing and acquiring cost competitive
resource assets, managing them in a safe and optimised manner, and realizing their full potential by marketing effectively.
OUR VALUES
We will fulfil our purpose by adhering to the following values:
• Safety and Wellbeing • Care and Respect • Integrity and Accountability • Innovation and Entrepreneurial • Collaboration
66
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 CHAIRMAN’S REPORT
“Finally, this year we are pleased to launch our inaugural Sustainability
Statement. We conducted our first materiality assessment, engaging eight
stakeholder groups and invited them to participate in our assessment survey.
From this, we identified and prioritized thirteen material matters critical
to stakeholders, and have formulated our first Sustainability Statement,
attached to this Annual Report, outlining our current performance with
respect to these matters. Sustainability is a journey, especially in an energy
intensive basic material industry like ours, and we welcome all stakeholders
to use this statement to track our progress, targets, and milestones as we
embark on this journey. This Sustainability Statement has been prepared
in accordance with the Global Reporting Initiatives (GRI) Standards, as
well as Bursa Malaysia’s main market listing requirements with respect to
sustainability reporting. ”
Dear Shareholders,
2021 started strong, with rising prices and firm market demand
as steelmakers sought to ramp up production after a long COVID
induced slump in the preceding year. While the optimism on the
COVID front wore out quickly, looser monetary conditions and
stimulus supported demand through the year, and fragile supply
chains created inventory demand as mills and traders increased
stocks. In spite of some price pressures, ferroalloy prices went on
to surge to their highest ever levels in September 2021, driven
by energy scarcity and an acute shortage of thermal coal in
various parts of the world, notably in China. Since then, prices
corrected to more rational levels in early Q1 of 2022, before being
supported again by the recent conflict in Ukraine.
Our own production in Sarawak was affected by COVID as well,
with the smelting plant closing for just over a month from the
end of May to early July. Upon recovery, production resumed
quickly, but as a result we recorded an overall capacity utilization
of approximately 75% in 2021. In spite of these conditions, the
positive market environment allowed us to generate A$204.0
million in underlying EBITDA, with the highest ever contribution
from smelting in the history of the company. A corresponding
A$94.2 million of cash was generated from operations, with
the increase in working capital attributed to higher value of raw
materials, and power in Sarawak paid for in advance and taken
into inventory. As per the company’s policy to continue reducing
debt, A$51.1 million of debt was repaid, with A$25.8 million going
towards the Sarawak project finance and A$14 million worth of
convertible notes (with a strike price of A$0.80) redeemed early
in the year. With earnings per share of approximately A$0.11, we
have also resumed paying dividends, and declared A$0.02 per
share. We will continue to optimize our capital structure going
forward, improving the stability of the company against future
price cycles by continuing to lower debt, and paying a sustainable
dividend to shareholders.
In 2021, mining drew to a close with the end of mine life at
Bootu Creek. Performance in our final year of mining was
disproportionately affected by freight costs, with high freight
rates in early 2021 sustained through the year. As with all
operations that take a considerable amount of time and capital
to stop and restart, it did not make sense to cease mining earlier
until the mine reached its natural end of life as determined by
fundamental market prices. While rehabilitation is now taking
place, we are also concurrently completing trials and rectification
works for the ultra-fines plant (UFP) to fully recover the remaining
units of manganese in ore tailings from over 15 years of mining.
While we expect a limited contribution in 2022 from Bootu Creek
with the aforementioned works, we will continue to explore the
best way of unlocking value from our portfolio of assets and
projects in Australia.
With the cessation of mining, we have every confidence that
the underlying economics of smelting, given strong operational
know-how and locked-in power, will not be affected by the end of
mining at Bootu Creek.
In June 2021, we also completed our secondary listing on Bursa
Malaysia. First announced on 31st October 2019, the listing has
allowed us to broaden our investor reach, and has created an
additional platform for fundraising. While no new shares have
been
issued, reassuringly, 104,092,986 shares representing
14.09% of the issued share capital have been moved by individual
shareholders to Bursa Malaysia, and the fungibility of shares and
relatively short settlement period between exchanges benefits all
shareholders. Our objective to increase institutional shareholding
has not changed, and we will seek to build this with time while
considering opportunities in the market, all the while taking into
consideration dilution.
This year, we aim to complete the conversion of four ferrosilicon
furnaces to the production of manganese alloys and silicon
metal. These furnaces will be progressively converted, starting
with manganese alloys which will be completed by the third
quarter of 2022, and silicon metal, targeting the fourth quarter
of 2022. We will also seek to complete the rectification works
for the UFP to allow us to bring it into efficient production, and
exiting care and maintenance when we find the best structure
to launch it. Besides organic growth and development at our OM
Sarawak plant, we will also explore future opportunities related
to the manganese supply chain, such as manganese sulphate
with applications in the renewable energy transition.
01
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 CHAIRMAN’S REPORT
A dominant theme this year is energy security, viewed against
the backdrop of current geopolitical uncertainty and the longer-
term renewables transition. We believe that any company that
is able to lock in power costs to efficiently and cleanly produce a
basic commodity will be creating value, and OMH is in a unique
position to do so.
Finally, this year we are pleased to launch our inaugural
Sustainability Statement. We conducted our first materiality
assessment, engaging eight stakeholder groups and invited them
to participate in our assessment survey. From this, we identified
and prioritized thirteen material matters critical to stakeholders,
and have formulated our first Sustainability Statement, attached
to this Annual Report, outlining our current performance with
respect to these matters. Sustainability is a journey, especially
in an energy intensive basic material industry like ours, and
we welcome all stakeholders to use this statement to track our
progress, targets, and milestones as we embark on this journey.
This Sustainability Statement has been prepared in accordance
with the Global Reporting Initiatives (GRI) Standards, as well as
Bursa Malaysia’s main market listing requirements with respect
to sustainability reporting.
While we are in early days of our sustainability journey, we strongly
believe that because what we do is essential to the modern world,
producing ferroalloys with the lowest net carbon footprint is a net
positive compared against fossil fuel based competition. Going
forward, we will continue our engagement with stakeholders
to set out clear sustainable targets and work towards them to
contribute to a better shared future, while strengthening our
position in becoming a leading ferroalloy supplier.
Moving into 2022, I would like to thank my fellow directors,
management team, staff and workers who made last year’s
results possible. As home leave rotation begins, I would like to
share my appreciation to our staff and workers at our operation
sites who stayed with us throughout the COVID-19 lockdown, in
spite of tough operating conditions and restrictions.
LOW NGEE TONG
Executive Chairman
02
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 DIRECTORS
Mr Low is a qualified Mechanical Engineer, having graduated from the National
University of Singapore. He has over 41 years of experience in the steel, ferro
alloy and building materials industries in Asia. That experience was gained with
Chiyoda Limited, a global Japanese civil engineering group, Intraco Limited,
Intraco Resources Pte Limited, and C Itoh Limited, a significant Japanese metals
trading house. Mr Low has demonstrated a significant network for marketing in
China and internationally. He was the Chief Executive Officer of OMH since its
incorporation and subsequent listing in 1998. In October 2008, Mr Low became
the Executive Chairman of OMH. Mr Low’s business relationships and reputation
with several large multinational corporations in Asia have enabled OMH to
successfully establish its profitable operations based in Singapore and extending
to China, Malaysia, South Africa and Australia.
LOW NGEE TONG
Executive Chairman
and Chief Executive
Officer
Mr Zainul Abidin graduated with a Bachelor of Arts (Honours) in Economics and
Malay Studies from the University of Singapore. Mr Zainul was a Member of
Parliament (from 1997-2011) and served as the Senior Minister of the State for
the Ministry of Foreign Affairs of the Government of Singapore, a position he held
since 2006. Prior to serving in government service, Mr Zainul had an illustrious
career in journalism which included the positions of Editor of Berita Harian, The
Singapore Business, The Sunday Times and Associate Editor of The Straits Times.
Mr Zainul currently serves as the Ambassador to Kuwait (Non-Resident) and was
formerly the Foreign Minister’s Special Envoy to the Middle East. Mr Zainul also
used to serve as a Corporate Adviser to Singapore’s Temasek International Pte
Ltd, and is now a member of the Temasek Foundation Cares Board of Directors.
He is a member of the Nanyang Technological University Board of Trustees and
Board of Directors of Mediacorp.
Mr Zainul served numerous government agencies, councils and civic organizations
including Executive Secretary of the Singapore Port Workers’ Union, a member
of the Board of Directors of the Port of Singapore Authority, President of the
Singapore Islamic Religious Council, Chairman of the Malay Heritage Foundation,
Chief Executive Officer of the Council for the Development of the Malay/Muslim
Community (MENDAKI), the Council for Security Co-operation in the Asia Pacific,
the National University of Singapore Council as well as being the Patron of the
Singapore Rugby Union and Adviser to the Hockey Federation.
Mr Zainul Abidin is a member of the Company’s Remuneration Committee.
ZAINUL ABIDIN RASHEED
Independent
Deputy Chairman
03
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 Ms Wolseley holds a Bachelor of Commerce degree and is a Chartered
Accountant. She is the Principal of a corporate advisory company and has over 30
years of experience as Company Secretary to a number of ASX-listed companies
operating primarily in the resources sector. Previously Ms Wolseley was an Audit
Manager both in Australia and overseas for an international accounting firm. Her
expertise includes corporate secretarial, management accounting, financial and
management reporting in the mining industry, IPOs, capital raisings, cash flow
modelling and corporate governance. Ms Wolseley is also a board member of
Aquinas College, an independent school for boys in Perth, Western Australia. Ms
Wolseley is a member of the Company’s Audit and Remuneration Committees.
Mr Tan Peng Chin was the founder, managing director and consultant of Tan Peng Chin
LLC until he retired from the firm on 31 December 2015. Mr Tan was also a Notary
Public and Commissioner for Oaths from 1995 to 2015. He was an Accredited Mediator
with the Singapore Mediation Center. Mr Tan’s legal expertise includes corporate
finance, banking, company and commercial laws, international trade, joint ventures
and issues concerning shareholders and directors. In addition, Mr Tan has acted in
numerous cross border transactions in the course of his legal career spanning more
than 37 years. Mr Tan has served as an Independent Director in numerous Singapore-
listed companies since 1996.
He was also a member of the Institutional Review Board of the Singapore National
Cancer Center from 2007 to 2014. Mr Tan was instrumental in setting up Clarity
Singapore Limited in 2010, a charity under the auspices of Caritas (the Catholic Church)
to assist persons suffering from mental illnesses and was Chairman / Vice Chairman of
the Board until his retirement from the Board in Oct 2021. Mr Tan has also volunteered
with various charities including Christian Outreach for the Handicapped and the
Roman Catholic Prison Ministry. He is also a director of Orchestra of Music Makers Ltd.
With his board experience in various companies in Asia and his legal expertise, Mr Tan
is able to assist the Company in its strategic pursuits. He has been a Non-Executive
Director since 14 September 2007. Mr Tan is the Chairman of the Remuneration
Committee.
Mr Teo holds a Master of Business in Information Technology from the Royal
Melbourne Institute of Technology and a Bachelor of Accountancy degree from
the National University of Singapore. He is also a fellow member of the Institute of
Singapore Chartered Accountants. Mr Teo is the Executive Director and Chief Financial
Officer of G.K. Goh Holdings Limited, a diversified Singapore-listed investment group.
Mr Teo’s executive responsibilities include financial and investment management as
well as board representation on various subsidiaries and associates. Mr Teo joined
the Board on 17 July 2008. Mr Teo is the Chairman of the Audit Committee and a
member of the Remuneration Committee.
DIRECTORS
JULIE ANNE WOLSELY
Non-Executive Director &
Joint Company
Secretary
TAN PENG CHIN
Independent
Non-Executive
Director
THOMAS TEO LIANG HUAT
Independent
Non-Executive
Director
04
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 DIRECTORS
Dato’ Abdul Hamid Bin Sh Mohamed is a Fellow of the Association of Chartered Certified
Accountant. He started off his career in an accounting firm before joining Bumiputera
Merchant Bankers Berhad, a merchant and investment bank, and subsequently
Amanah Capital Malaysia Berhad.
He eventually joined the Kuala Lumpur Stock Exchange (“KLSE”), now known as Bursa
Malaysia, where he rose from Senior Vice President Strategic Planning & International
Affairs, subsequently to Deputy President (Strategy and Development) and finally
to the position of Chief Financial Officer. During his 5 years with KLSE, he led several
major projects including the acquisition of Kuala Lumpur Options and Financial Futures
Exchange, Commodity and Monetary Exchange of Malaysia and the subsequent
merger of both exchanges to form the Malaysian Derivatives Exchange, as well as the
acquisition of Malaysian Exchange of Securities Dealing and Automated Quotation. He
also led KLSE’s demutualisation exercise.
He holds directorships in various companies in Malaysia including Lembaga Tabung
Haji (the National Pilgrims Fund Board), MMC Corporation Berhad (a listed company
on Bursa Malaysia which was recently privatised), Maybank Investment Bank Berhad (a
subsidiary and investment banking arm of Malayan Banking Berhad which is also listed
on Bursa Malaysia), and Ekuiti Nasional Berhad (a Malaysian government-linked private
equity company). He is currently the Executive Director of Symphony House Sdn Bhd, a
privately owned investment holding company.
Other directorships outside Malaysia include Maybank Kim Eng Holdings Limited in
Singapore and PT Maybank Sekuritas Indonesia where both companies are involved
with dealings in securities.
Dato’ Abdul Hamid Bin Sh Mohamed is a member of the Company’s Audit Committee.
DATO’ ABDUL HAMID
BIN SH MOHAMED
Independent
Non-Executive
Director
Ms Tan Ming-li is currently a partner of the Malaysian legal firm, Chooi & Company +
Cheang & Ariff. She graduated with a double degree in Law (Hons) and Science from
the University of Melbourne. She was called to the Malaysian Bar in 1994 and has
been in legal practice for over 26 years. Her areas of expertise include corporate
and securities laws where she is involved in advising on capital market transactions,
mergers and acquisitions, corporate restructuring and corporate finance related
work.
She currently serves as an independent director for CapitaLand Malaysia Trust, BP
Plastics Holding Berhad and Tune Protect Group Berhad (companies listed on Bursa
Malaysia) and Tune Insurance Malaysia Berhad, a subsidiary of Tune Protect Group
Berhad.
TAN MING-LI
Independent
Non-Executive
Director
05
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 KEY MANAGEMENT
NAME
POSITION
Heng Siow Kwee
Director, Group HR , Joint Company Secretary
Daphne Ang
Eugene Tan
Joint Group Financial Controller
Joint Group Financial Controller
Chen Xiao Dong
Managing Director, OM Sarawak
Dai Han Ping
Deputy Managing Director, OM Sarawak
Adrian Low
Managing Director, OMS
Fanie Van Jaarsveld
Managing Director, OMM
Don Heng
Managing Director, OMML
Goh Ping Choon
General Manager, Corporate, OMS
Mustapha Bin Ismuni
Director, OM Sarawak
Lisa Chee
General Manager, HR, OM Sarawak
Choi Pik Choing
Deputy General Manager, Finance, OM Sarawak
Liu Xian Feng
General Manager, OMQ
Pu Guo Liang
General Manager, Engineering, OMA
Chen Hui Zhi
General Manager, Trades, OMQT
06
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 CORPORATE DIRECTORY
Directors
Low Ngee Tong
Zainul Abidin Rasheed
Julie Anne Wolseley
Tan Peng Chin
Thomas Teo Liang Huat
Dato’ Abdul Hamid
Bin Sh Mohamed
Tan Ming-li
(Executive Chairman)
(Independent Deputy Chairman)
(Non-Executive Director)
(Independent Non-Executive Director)
(Independent Non-Executive Director)
(Independent Non-Executive Director)
(Independent Non-Executive Director)
Name of Bankers
Bank of China
Commonwealth Bank of Australia
Export-Import Bank of Malaysia Berhad
Malayan Banking Berhad
RHB Bank Berhad
Standard Chartered Bank
United Overseas Bank Limited
Company Secretaries
Heng Siow Kwee
Julie Anne Wolseley
Conyers Corporate Services (Bermuda) Limited
ADDRESS OF COMPANY AND REGISTRIES
The address of the Corporate Office of the Company:
10 Eunos Road 8
#09-03A Singapore Post Centre
Singapore 408600
Telephone
Facsimile
Email
: (65) 6346 5515
: (65) 6342 2242
: om@ommaterials.com
The address of the Bermuda Registered Office:
Clarendon House
2 Church Street, Hamilton HM 11
Bermuda
Name and Address of Auditors
Foo Kon Tan LLP
Public Accountants and Chartered Accountants
24 Raffles Place , #07-03
Clifford Centre
Singapore 048621
Name and Address of Appointed Australian
Agent and Australian Registered Office:
OM Holdings (Australia) Pty Ltd
102 Angelo Street
South Perth, WA 6151
Name of Bermuda Resident Representative
Conyers Corporate Services (Bermuda) Limited
Website
: www.omholdingsltd.com
ASX Code
: OMH
Bursa Code : OMH(5298.KL)
The address of the Company’s
Principal Share Registry in Bermuda:
Conyers Corporate Services (Bermuda) Limited
Clarendon House
2 Church Street, Hamilton HM 11
Bermuda
The address of the Company’s
Branch Share Registry in Australia:
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
Perth, Western Australia 6000
Telephone
Facsimile
Website
: (618) 9323 2000
: (618) 9323 2033
: www.computershare.com
The address of the Company’s
Branch Share Registry in Malaysia:
Tricor Investor & Issuing House Services Sdn Bhd
Unit 32-01, Level 32
Tower A, Vertical Business Suite
Avenue 3, Bangsar South
No. 8 Jalan Kerinchi
59200 Kuala Lumpur
Malaysia
Telephone
Facisimile
: (603) 2783 9299
: (603) 2783 9222
07
OM HOLDINGS LIMITED | ANNUAL REPORT 2021
CORPORATE STRUCTURE
as at 31 December 2021
(Incorporated in Bermuda)
(Malaysia Registration No.) 202002000012 (995782-P)
Listed on ASX on 19 March 1998
Listed on Bursa Malaysia on 22 June 2021
100%
(OMM)
OM (Manganese) Ltd
(Incorporated in Australia)
100%
(OMH BVI)
OM Holdings (B.V.I) Ltd
(Incorporated in B.V.I)
100%
(OMH MU)
OMH (Mauritius) Corp.
(Incorporated in Mauritius)
100%
(OMR HK)
OM Resources (HK)
Limited (Incorporated in
Hong Kong)
26%
(NMPL)
Ntsimbintle Mining (Pty) Limited
(Incorporated in South Africa)
50.1%
(Tshipi Mines)
Tshipi e Ntle Manganese
Mining (Pty) Limited
(Incorporated in South Africa)
100%
(OMMY)
OM Resources (M) Sdn.Bhd.
(Incorporated in Malaysia)
100%
(OMS)
OM Materials (S) Pte Ltd
(Incorporated in
Singapore)
100%
(OMST)
OM Materials Trade (S) Pte Ltd
(Incorporated in Singapore)
Subsidiaries
Associates
60%
(OMMR)
OM (ANR)
Resources Sdn.Bhd.
(Incorporated in Malaysia)
100%
(OMME)
OM Engineering
Tech (M) Sdn Bhd
(Incorporated in
Malaysia)
75%
(OM Samalaju/OMSM)
OM Materials (Samalaju) Sdn.Bhd.
(Incorporated in Malaysia)
75%
(OM Sarawak/OMSA)
OM Materials (Sarawak) Sdn.Bhd.
(Incorporated in Malaysia)
100%
(OMML)
OM Materials & Logistics (M) Sdn Bhd
Formerly known as OM Materials (M) Sdn. Bhd.
(Incorporated in Malaysia)
08
100%
(OMQT)
OM Materials Trading
(Qinzhou) Co Ltd
(Incorporated in China)
100%
(OMQ)
OM Materials (Qinzhou) Co Ltd
(Incorporated in China)
70%
(OMA)
OM Hujin Science & Trade
(Shanghai) Co Ltd
(Incorporated in China)
33.33%
(OMJ)
OM Materials Japan Co.,Ltd
(Incorporated in Japan)
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 FINANCIAL HIGHLIGHTS
5 YEAR’S GROUP FINANCIAL HIGHLIGHTS
Financial years ended
31 December
2021
A$'million
2020
A$'million
2019
A$'million
2018
A$'million
2017
A$'million
Revenue
1,040.8
784.6
1,026.5
1,510.4
988.2
Profit/(loss) before
income tax
Profit attributable
to owners of the
Company
112.6
(4.7)
58.9
236.9
72.6
81.9
5.4
56.6
161.7
92.7
Total assets
1,299.3
1,133.4
1,202.7
1,278.2
1,177.1
988.2
1,510.4
1,026.5
784.6
Shareholders' funds
505.3
399.6
424.9
388.6
228.0
1,040.8
Net tangible assets
610.3
468.2
507.9
451.1
287.7
Revenue
(A$’million)
FY2020
FY2021
784.6
1,040.8
FY2017
FY2018
FY2019
FY2020
FY2021
Total Assets Per Share
(A$)
FY2020
FY2021
1.54
1.76
FY2017
FY2018
FY2019
FY2020
FY2021
1.61
1.74
1.63
1.54
1.76
Gross Profit
(A$’million)
FY2020
FY2021
96.3
274.5
FY2017
FY2018
209.6
353.3
A$
A$
A$
A$
A$
Total assets per
share
1.76
1.54
1.63
1.74
1.61
A$ cents A$ cents A$ cents A$ cents A$ cents
Net asset backing
per share
82.84
63.56
68.94
61.24
39.34
Basic profit per share
11.11
0.73
7.69
22.05
12.67
2021
2020
2019
2018
2017
Gross profit
(A$ million)
Gross profit margin
(%)
274.5
96.3
152.5
353.3
209.6
26.4
12.3
14.9
23.4
21.2
SALES BY INTERNATIONAL REGIONS
Region
2021
2020
2019
2018
2017
%
%
%
%
%
Asia Pacific
86.4
86.1
83.6
82.1
77.0
Europe
6.3
5.5
7.7
9.8
12.2
Middle East
3.6
6.3
3.9
5.5
6.1
FY2019
152.5
FY2020
96.3
FY2021
274.5
Africa
Others
Total
0.0
0.4
0.2
0.1
0.7
3.7
1.7
4.6
2.5
4.0
100.0
100.0
100.0
100.0
100.0
09
OM HOLDINGS LIMITED | ANNUAL REPORT 2021
GROUP OVERVIEW
KEY OPERATING ENTITIES OF OM
HOLDINGS GROUP
OMH is the investment holding company
of the Group. The main operating entities
within the Group are outlined below.
OM Materials (Qinzhou)
Trading Co Ltd (“OMQT”)
OMQT is the distribution arm of OMS in China.
This company supports the operations of OMS and
distributes and trades materials in China.
OM Materials Qinzhou Co Ltd (“OMQ”)
OMQ owns and operates a manganese alloy smelter
in Qinzhou, Guangxi province, China. The smelter
is located approximately 1km from the Qinzhou
port, providing OMQ a competitive advantage with
respect to ease of access to seaborne manganese
ore. OMQ also provides the Group with intangible
benefits such as market intelligence and insights into
smelter economics in China.
10
OM Materials (S) Pte Ltd (“OMS”)
OMS, based in Singapore is the strategic trading hub
of the Group. It handles the logistics, marketing,
product flow and distribution activities of the Group.
Core businesses of OMS include equity ore sales
from Bootu Creek, marketing of OM Sarawak’s alloy
production, as well as the distribution of third party
ores to the Group’s global network of customers.
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 OM Holdings Limited (“OMH” or the “Company”) and its subsidiaries (collectively the “Group”)
have an established track record of over 25 years in exploration, project development, operations
and marketing and trading. With vertically integrated operations globally in exploration, mining,
smelting, sintering and marketing and trading, the Group is able to capture significant value and
margins along the entire value chain.
The Group’s three core businesses comprise the exploration and mining of manganese ore,
production of manganese alloys and ferrosilicon and the marketing and trading of manganese ore
and ferroalloys.
Today, the Group is one of the world’s major ferrosilicon and manganese alloy producers.
OM Materials (Sarawak) Sdn Bhd
(“OM Sarawak / OMSA”)
OM Sarawak owns and operates a ferrosilicon and
manganese alloy smelter in Sarawak, East Malaysia,
with an annual production capacity of approximately
200,000 to 210,000 tonnes of ferrosilicon, and
approximately 250,000
tonnes of
manganese alloy. The plant also consists of a sinter
plant that has a design capacity to produce 250,000
tonnes of sinter ore per annum.
to 300,000
OMH (Mauritius) Corp (“OMH MU”)
OM Mauritius has a 13% effective interest in the
Tshipi Borwa Manganese mine located in the
world-class Kalahari Manganese field located in the
Northern Cape of South Africa. The Tshipi Borwa
Manganese mine currently has a production rate of
approximately 3.3 to 3.6 million tonnes per annum
and the Group also markets its 13% effective
interest of the mine’s annual production.
located
OM (Manganese) Ltd (“OMM”)
OMM owns and operates the Bootu Creek manganese
mine
in Northern Territory, Australia.
The Bootu Creek mine is located approximately
110km north of Tennant Creek. Mining operations
commenced in November 2005 and the first batch of
ore was processed in April 2006. Mining operations
ceased on 13 December 2021.
11
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 PROCESSING AND SMELTING OPERATIONAL REVIEW
SAMALAJU SMELTING COMPLEX
L
A
U
N
N
A
N
O
I
T
C
U
D
O
R
P
D
N
A
D
L
O
S
D
E
T
R
O
P
X
E
131,059 tonnes
216,539 tonnes
Ferrosilicon
Manganese Alloys
113,783 tonnes
203,938 tonnes
Ferrosilicon
Manganese Alloys
12
O M H O L D I N G S L I M I T E D | A N N UA L R E P O R T 2 0 2 1
O M H O L D I N G S L I M I T E D | A N N UA L R E P O R T 2 0 2 1
13
PROCESSING AND SMELTING OPERATIONAL REVIEW
SAMALAJU SMELTING COMPLEX
Aerial View of OM Sarawak
OVERVIEW
OM Materials (Sarawak) Sdn Bhd (“OM Sarawak”) and OM
Materials (Samalaju) Sdn Bhd (“OM Samalaju”) are entities which
are held 75%:25% respectively by OMH and Cahya Mata Sarawak
Berhad, a conglomerate listed on the Main Market of Bursa
Malaysia. OM Materials (Sarawak) Sdn Bhd is the owner of the
Ferroalloy Smelting Project in Sarawak, Malaysia (the “Plant”).
The Plant consists of 8 main workshops with a total of 16 units
of 25.5 MVA furnaces, of which 10 furnaces are allocated for the
production of ferrosilicon and 6 units have been modified to
produce manganese alloys. The Plant has a design production
capacity of 200,000 to 210,000 tonnes of ferrosilicon and 250,000
to 300,000 tonnes of manganese alloys per annum. The Plant also
consists of a sinter plant that has a design capacity to produce
250,000 tonnes of sinter ore per annum.
PLANT CONSTRUCTION & DEVELOPMENT
Final performance testing and hot commissioning of the sinter
plant has been deferred to 2022 due to the absence of onsite
experienced contractors as a result of the COVID-19 pandemic
and travel restrictions imposed. The sinter plant was in trial
production phases throughout 2021 while awaiting final technical
commissioning.
Similarly, the project to convert 2 ferrosilicon furnaces to
produce manganese alloy was also impacted with the completion
date deferred to 2022. The majority of the ancillary works
comprising of civil and structure modification works performed
by local contractors was completed in 2021 while equipment
installation works only commenced with the gradual arrival of
Chinese contractors in December 2021. Continuous engagement
with relevant authorities to manage the immigration approval
processes for contractors is ongoing. This project is targeted to
be commissioned by the third quarter of 2022.
To further extend the existing product range by diversifying
into aluminium, chemicals and solar downstream industries,
OM Sarawak initiated another conversion project in December
2021, to convert 2 ferrosilicon furnaces to produce silicon metal.
Dismantling and demolishing of equipment and civil structure
are in progress. Barring any unforeseen circumstances, the
hot commissioning and testing works are expected to occur in
December 2022.
14
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 PROCESSING AND SMELTING OPERATIONAL REVIEW
SAMALAJU SMELTING COMPLEX
OPERATIONS
The COVID-19 pandemic has negatively affected the business
operations of many countries and impacted on the global
economy. COVID-19 cases in Sarawak reached a peak, registering
4,709 cases on 15 September 2021. The outbreak was gradually
controlled and daily COVID-19 cases dropped drastically to
less than 50 cases per day by the end of 2021 following high
vaccination rates achieved in Sarawak in Q4 2021.
OM Sarawak was placed under temporary suspension to halt all
production activities from 28 May 2021 to 25 June 2021 following
directions from relevant Government Authorities after an active
COVID-19 case detection exercise was carried out.
With the resurgence of COVID-19 cases in Malaysia, strict travel
restrictions with additional COVID-19 protocols continued to
be imposed, impeding the hiring of foreign skilled workforce to
complement the local workforce. The lack of skilled manpower
continued to impact the Plant’s ability to operate at full capacity.
In 2021, 12 out of 16 furnaces were in operation with 6 furnaces
producing ferrosilicon and 6 furnaces producing manganese
alloys. Of the remaining 4 ferrosilicon furnaces, 2 furnaces were
undergoing conversion to produce manganese alloys while the
remaining 2 furnaces were idled due to manpower constraints.
The hiring of new Chinese skilled workers remains a challenge due
to strict COVID-19 protocols imposed in both Malaysia and China.
The long mobilisation lead time due to the slow pace of approvals
and the resumption of home leave rotations for foreign workers
thus continued to impact the Plant’s total realisable capacity.
Annual production of 131,059 tonnes of ferrosilicon and 216,539
tonnes of manganese alloys, which comprised silicomanganese
and high carbon ferromanganese, were recorded during the year
2021. Ferrosilicon production reduced by 22% compared to 2020
due to the reduction of production capacity with 4 furnaces not
in operation for the entire 2021. Manganese alloy production
volumes decreased by 5%, mainly attributed to the change in
the product mix where 95% of the manganese alloy production
output was for silicomanganese, a product with lower daily
production output compared to high carbon ferromanganese.
in 2021 for ferrosilicon and
Consequently, sales volumes
manganese alloys dropped by approximately 34% or 57,719
tonnes and 12% or 27,191 tonnes respectively mainly attributed
to the lower inventory of finished goods available for shipment
due to the temporary suspension of the Plant and reduced
production output in Q2 2021.
Product
(tonnes)
Production
Years ended 31 December
2021
2020
2019
2018
2017
Ferrosilicon (FeSi)
131,059
167,443
230,735
220,515
174,540
Manganese Alloys (SiMn, HCFeMn)
216,539
227,406
248,163
242,341
173,911
Manganese Sinter Ore
(trial production)
Sales
99,824
24,125
–
–
–
Ferrosilicon (FeSi)
113,783
171,502
219,828
225,749
182,316
Manganese Alloys (SiMn, HCFeMn)
203,938
231,129
240,280
241,166
159,533
Manganese Sinter Ore
(trial production)
7,132
–
–
–
–
15
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 MARKETING & TRADING
OPERATIONAL REVIEW
1
2
0
2
0
2
0
2
2,367,957 tonnes
Ores and Alloys
1,958,507 tonnes
Ores and Alloys
16
O M H O L D I N G S L I M I T E D | A N N UA L R E P O R T 2 0 2 1
O M H O L D I N G S L I M I T E D | A N N UA L R E P O R T 2 0 2 1
17
MARKETING & TRADING
OPERATIONAL REVIEW
OVERVIEW AND UPDATE IN 2021
Global trading activities have been reshaped due to the COVID-19
pandemic. Countries affected by COVID-19 implemented various
lockdown measures, which caused significant slowdown of
industrial activities. Sales orders flowed towards countries that
were less severely affected by COVID-19, particularly China and
the Far East region.
Throughout 2021, freight rates from the Far East remained
high, posing challenges to all exporters. The Group maintained
a strong focus in Asia leveraging relative freight rates.
Ferroalloy prices surged as a result of supply concerns from
China in Q3 2021. This was mainly due to government policies
in China related to the on-going domestic power shortages,
with power rationing imposed on energy-intensive industries.
By leveraging on a reliable hydropower supply and a stable cost
structure, the Group was able to maintain its cost advantage
and tap into the opportunity of the spike in ferroalloy prices,
especially in 2H 2021.
With the easing of the energy crunch in China, ferroalloy
prices have since moderated to a reasonable support level
from historical peaks in 2021. Nonetheless, the impact may
be prolonged given the elevated cost of power around the
world. This structural change in ferroalloy markets effectively
strengthens the Group’s cost competitiveness.
2021 SALES BY GEOGRAPHICAL SEGMENT
2021
2020
2019
2018
2017
%
86.4
6.3
3.6
0.0
3.7
%
86.1
5.5
6.3
0.4
1.7
%
83.6
7.7
3.9
0.2
4.6
%
82.1
9.8
5.5
0.1
2.5
%
77.0
12.2
6.1
0.7
4.0
100.0
100.0
100.0
100.0
100.0
Region
Asia Pacific
Europe
Middle East
Africa
Others
Total
18
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 MINING OPERATIONAL REVIEW
BOOTU CREEK MINE
L
A
U
N
N
A
N
O
I
T
C
U
D
O
R
P
S
E
L
A
S
L
A
R
E
N
M
I
S
E
C
R
U
O
S
E
R
854,487 tonnes
an average grade of 28.42% Mn
697,328 tonnes
an average grade of 28.49% Mn
6.92 million tonnes
13.18% Mn as at 31 December 2021
O M H O L D I N G S L I M I T E D | A N N UA L R E P O R T 2 0 2 1
19
MINING OPERATIONAL REVIEW
BOOTU CREEK MINE
OVERVIEW
OM (Manganese) Ltd (“OMM”) is a wholly owned subsidiary of
OMH with its main activities being exploration and mining (up
until December 2021) of manganese ore at the Bootu Creek
Mine. The Bootu Creek Mine is located 110 km north of Tennant
Creek in the Northern Territory of Australia. OMM’s principal
administration office is in Perth, Western Australia.
The exploration and subsequent development of the Bootu
Creek Project commenced
in September 2001. Mining
operations commenced in November 2005 and the first batch
of ore was processed in April 2006.
The main mineral lease (ML24031) is in the Bootu Creek area
on pastoral leases, where the mining and processing operations
were based and where the currently defined Mineral Resources
(excluding Renner West deposit, located on EL28041) have been
identified.
A preliminary feasibility study including metallurgical test work
and mine assessment of the Renner West Inferred Resource
commenced in 2020 with the view of upgrading the deposit to
Ore Reserve status. The Renner Springs Project area is located
approximately 70 km northwest of the Bootu Creek mine site,
covering an extensive dolomite-siltstone sequence which hosts
several shallow dipping and flat lying manganese occurrences.
The Bootu Creek Project area contains several manganese
deposits located along the western and eastern limbs of
the Bootu syncline. The individual mineralised horizons are
generally strata-bound in character and can persist over strike
lengths of up to 3 km. The Mineral Resources defined to date at
the project are long shallow, gently dipping deposits amenable
to open-pit mining.
Mining at the Bootu Creek Mine was carried out using a
conventional open-cut method of mining, blasting and
excavation using hydraulic excavators and dump trucks.
The Bootu Creek plant was a relatively simple crushing and
screening operation, followed by heavy media separation
(HMS) to concentrate the manganese minerals. The plant
comprised of three separately built processing plants. The
original primary processing plant (PPP) was commissioned in
2006 and processed the Run of Mine (ROM) ore. The secondary
in December 2009
processing plant (SPP) commissioned
Figure 1. Locality Plan
abutted the PPP and selectively processed drum plant rejects
and washed fines from the PPP and previously stockpiled drum
plant rejects.
The Ultra Fines Plant (UFP) abuts the SPP and processes the PPP
scrubber tails, recovered rejects and historical tailings deposits.
The PPP was designed to produce a nominal 550,000 tonnes of
product per annum, comprising about 420,000 tonnes of lump
and about 130,000 tonnes of fines. Numerous capital upgrades
and improvements increased the PPP’s production capacity
to approximately 800,000 tonnes of product per annum. The
commissioning of the SPP in 2009 added a further capacity
of approximately 200,000 tonnes bringing the combined
production capacity from the two plants to approximately 1
million tonnes per annum dependent upon the characteristics
of the ore being fed.
The addition of the UFP (i.e., the third plant) in March 2020, was
designed to treat the tailings streams and produce a nominal
250,000 tonnes per annum. There has been a number of start-
up issues associated with the UFP including poor screening
efficiencies which affected the downstream separation and
optimisation of the classifiers. This contributed to lower product
grades and yields. Several screen media have been trialled to
improve the screening efficiencies and rectification works are
ongoing with measures implemented aimed at optimising the
performance of the UFP.
Figure 2. Bootu Processing Facility
20
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 The processing of manganese ore is described diagrammatically below:
MINING OPERATIONAL REVIEW
BOOTU CREEK MINE
Figure 3. Bootu Creek Manganese Processing Plant Schematic
Figure 4. Bootu Creek location and Tenement plan
Manganese product produced on the mine site was transported 60 km to the Muckaty Rail Siding on a sealed private road and then
approximately 800 km to the Darwin Port via the Alice Springs to Darwin rail line.
Manganese product was stockpiled at the rail head at the Darwin Port prior to being transported to the port ship loader and loaded
onto vessels for shipping to overseas markets. OMM achieved production of 854,487 tonnes at an average grade of 28.42% Mn for
the year ended 31 December 2021. The mining strategy was centred around 2 digger fleets which focused on the completion of the
Chugga Far North E and F and Shekuma 8 pits located on the Eastern Limb of the Bootu Creek Syncline. Open pit mining ceased on
13 December 2021.
During the 2021 financial year, a total of 697,328 tonnes of manganese product was exported through the Darwin Port.
21
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 MINING OPERATIONAL REVIEW
BOOTU CREEK MINE
Unit
2021
2020
2019
2018
2017
Years ended 31 December
Mining
Total Material Mined
Ore Mined - Tonnes
Ore Mined - Mn Grade
Production
Lump - Tonnes
bcms
dt
%
dt
%
Lump - Mn Grade
dt
Fines/SPP/UFP - Tonnes
%
Fines/SPP/UFP - Mn Grade
dt
Total Production - Tonnes
Total Production - Mn Grade %
Sales
Lump - Tonnes
Lump - Mn Grade
Fines/SPP/UFP - Tonnes
Fines/SPP/UFP - Mn Grade
Total Sales - Tonnes
Total Sales - Mn Grade
dt
%
dt
%
dt
%
4,737,723
1,131,066
20.85
7,411,431
1,008,015
19.19
5,748,339
1,034,190
20.48
8,426,107
1,819,012
21.94
5,970,784
1,587,630
21.32
678,337
27.25
176,150
32.95
854,487
28.42
551,448
27.09
145,879
33.77
697,328
28.49
607,411
26.72
130,608
34.51
738,019
28.10
553,976
26.56
88,755
35.34
642,731
27.78
438,509
32.83
131,581
36.62
570,090
33.71
452,774
32.91
168,772
36.40
621,546
33.86
622,279
35.50
191,761
36.64
814,040
35.77
593,778
35.66
203,238
36.62
797,015
35.90
465,235
35.60
190,914
36.50
656,149
35.87
462,234
35.61
184,385
36.60
646,619
35.89
Table 1. Production and Sales FY2017 – FY2021
Annual Manganese Production
’
s
t
d
e
r
O
n
M
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
-
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016*
2017
2018
2019
2020
2021
*Note – No production and mining activity conducted in FY2016
Year
Annual Total Material Mined
’
s
M
C
B
s
n
o
i
l
l
i
M
14.00
12.00
10.00
8.00
6.00
4.00
2.00
-
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016*
2017
2018
2019
2020
2021
*Note – No production and mining activity conducted in FY2016
Year
Annual Manganese Shipments
’
s
t
d
e
r
O
n
M
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-
22
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Year
OM HOLDINGS LIMITED | ANNUAL REPORT 2021
MINING OPERATIONAL REVIEW
BOOTU CREEK MINE
Bootu Creek Mineral Resource
The 31 December 2020 Mineral Resource of 9.43 million tonnes was depleted in 2021 by the processing of 2.52 million tonnes
of mined ore and stockpiled ore tonnes, the mined ore mainly sourced from the now completed Chugga Far North E and F and
Shekuma 8 pits. Ore stockpile tonnes decreased by 1.64 million tonnes at the end of 2021 when compared to 31 December 2020.
Undiluted
Deposit:
CFN
Masai 5
Tourag
ZuluSouth
Renner West
Insitu Resource*
ROM Stocks
SPP Stocks
UFP Rejects
UFP Tailings
Total Resource*
Measured
Mt
%Mn
0.00
0.00
0.00
0.00
Indicated
Mt
0.35
0.13
0.67
0.23
0.28
1.66
0.16
0.04
2.07
2.99
6.92
%Mn
23.09
26.47
22.69
20.91
22.26
22.75
13.50
14.50
12.10
8.59
13.18
Inferred
Mt
%Mn
0.00
0.00
0.00
0.00
Combined*
Mt
0.35
0.13
0.67
0.23
0.28
1.66
0.16
0.04
2.07
2.99
6.92
%Mn
23.09
26.47
22.69
20.91
22.26
22.75
13.50
14.50
12.10
8.59
13.18
*Rounding gives rise to unit discrepancies in this table
Table 2. Bootu Creek Mineral Resource as at 31 December 2021
Figure 5. Location Plan for the Bootu Creek Mineral Resources as at 31
December 2021
CFN
Masai
Shekuma
Tourag
Zulu South
Renner West
Insitu Total*
ROM Stocks
SPP Stocks
UFP Rejects
UFP Tailings
Grand Total*
31 Dec 2020 at 15% Mn cutoff
31 Dec 2021 at 15% Mn cutoff
Change*
Mined
Pit Base
195
245
220
230
255
Pit Base
195
245
170
220
230
255
Mt
0.75
0.09
0.51
0.67
0.23
0.28
2.53
0.16
0.47
3.18
3.09
9.43
%Mn
22.91
26.85
24.54
22.69
20.91
22.26
23.07
14.31
15.76
13.97
10.99
15.53
Mt
0.35
0.13
0.00
0.67
0.23
0.28
1.66
0.16
0.04
2.07
2.99
6.92
%Mn
23.09
26.47
0.00
22.69
20.91
22.26
22.75
13.50
14.50
12.10
8.59
13.18
Mt
-0.40
0.04
-0.51
0.00
0.00
0.00
-0.87
0.00
-0.43
-1.11
-0.10
-2.52
Mt
-0.60
0.00
-0.53
0.00
0.00
0.00
-1.13
-1.13
Table 3: 31 December 2021 Mineral Resource vs 31 December 2020 Mineral Resource
The above Indicated Mineral Resources for Tourag, Chugga Far North G and H, Masai 5 and Zulu South deposits will be revised,
subject to satisfactory geotechnical assessment and optimised pit designs.
23
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 MINING OPERATIONAL REVIEW
BOOTU CREEK MINE
2021 Bootu Creek Exploration Program
The Renner Springs exploration program planned for 2021 was
deferred to 2022, due to delays arising from COVID-19 travel
restrictions and pending Heritage surveys.
Drilling at Bootu Creek was limited to 12 RC infill resource
delineation holes at Masai 5 deposit, and 5 geotechnical
diamond drill holes including 2 at Zulu South deposit and 3
at Masai 5 deposit. The infill drilling at Masai 5 has increased
confidence in ore continuity and grade.
Exploration – Bryah Basin (OMM – 40%, Bryah
Resources Limited – 60% as of 31 December
2021)
In April 2019 OMM entered into a Farm-In and Joint Venture
Agreement with Bryah Resources Limited (Bryah) for the
manganese rights in approximately 660 km2 of exploration
tenements in the Bryah Basin, located approximately 150
km north of the town of Meekatharra in central Western
Australia. The agreement includes the historic Horseshoe South
Manganese mine which has been the largest, and highest grade,
manganese mine in the region.
Under the terms of the agreement, OMM paid Bryah A$500,000
in two cash instalments and funded an additional A$500,000
of exploration expenditure in the initial exploration program to
earn an initial 10% Joint Venture interest at the end of August
2019 (first tranche of Stage 2).
The results of the initial exploration drilling were sufficiently
encouraging for OMM to proceed with Stage 2 of the Joint
Venture whereby OMM elected to fund an additional A$2.0
million (in 4 tranches of $0.5 million) in manganese exploration
by 30 June 2022 to earn an additional 41% Joint Venture interest
which would take OMM’s shareholding to 51% of the project.
The funding requirement under this joint venture has been
completed and OMM‘s interest in the joint venture increased to
51% with effect from 17 February 2022. With OMM taking 51%
ownership of the joint venture, OMM will also take overall joint
venture management control.
Induced Polarisation
Following a Gradient Array
(GAIP)
geophysical survey, RC drilling was completed in September
2021, with assay results received. The GAIP survey identified
anomalous targets south of the previously drilled Brumby
West deposit and a newly defined area called Redrum to the
southeast of Area 74.
Brumby West results included –
BRRC152
BRRC156
BRRC157
BRRC164
BRRC165
BRRC166
BRRC167
BRRC170
BRRC174
BRRC176
BRRC178
8m @ 27.1% Mn & 19.4% Fe from 3m
12m @ 27.5% Mn & 16.0% Fe from 12m
3m @ 22.6% Mn & 19.0% Fe from 16m
6m @ 23.2% Mn & 21.8% Fe from 12m
10m @ 29.4% Mn & 16.3% Fe from 13m
7m @ 21.7% Mn & 23.2% Fe from 17m
14m @ 26.0% Mn & 15.9% Fe from 22m
17m @ 23.2% Mn & 17.9% Fe from 13m
3m @ 23.9% Mn & 21.2% Fe from 1m
3m @ 21.1% Mn & 23.3% Fe from 5m
12m @ 27.0% Mn & 18.1% Fe from 13m
Results are located to the east and extend 80 metres to the
south of the previously defined deposit and remain open to the
south and down dip to the east.
The results have been modelled and included in the Mineral
Resource published in ASX Announcement – “Maiden Bryah
Basin Mineral Resource” on 3rd March 2022. Refer to that
announcement for estimation details included in the ASX
Summary Information document and JORC (2012 Edition)
Tables.
24
The total Inferred and Indicated JORC 2012 compliant Mineral
Resources are 1.84 million tonnes (MT) at 21% Mn and includes
0.65 Mt at 20% Mn on granted Mining Lease M52/806.
•
•
Total Indicated Mineral Resources are 1.08Mt at 22% Mn,
and
Total Inferred Mineral Resources are 0.79MT at 20% Mn
Mineral Resources were estimated over 6 prospect areas
including Area 74, Brumby Creek East, Brumby Creek West,
Black Hill, Horseshoe South and Horseshoe Extended.
Figure 6. Location Plan for the Bryah Basin Manganese Farm-In.
The Redrum results were generally narrower, but are still open
to the west and include:
RRRC016
RRRC020
RRRC022
RRRC023
7m @ 18.7% Mn & 25.3% Fe from 6m
6m @ 21.9% Mn & 17.6% Fe from 11m
4m @ 21.3% Mn & 20.6% Fe from 22m
2m @ 22.6% Mn & 25.0% Fe from 36m
These intersections are not incorporated into the recent Mineral
Resource but the target area remains open along strike to the
west and to the east.
Bulk ore sorter trials have recently been undertaken with
Steinert and visual results look encouraging. The sorting
included discrimination by colour, density, and
induction
(chargeability).
Assay results are yet to be received. The bulk ore samples (3 x
approximately 200kg each) were sourced from PQ diamond core
drilled at Area 74, Brumby East, Brumby West and Horseshoe
Extended.
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 MINING OPERATIONAL REVIEW
BOOTU CREEK MINE
701 Mile Manganese Project with Great Sandy
Pty Ltd (“701 Mile Manganese Project”)
OMM executed a Farm-in and Exploration
Joint Venture
Agreement with Great Sandy Pty Ltd for the 701 Mile Manganese
Project, located approximately 90km southeast of Newman.
The manganese outcrop area has not been drill tested to date
and there is no existing mineral resource estimate for the 701
Mile Manganese Project.
Activity to date has been limited to a drone survey for geology
mapping and drill site planning. A Plan of Works (POW) has been
approved by the Department of Mines, Industry Regulation and
Safety (DMIRS). Ethnographic and Archaeological surveys were
completed in November 2021 and have cleared the proposed
drill area of any Aboriginal Heritage or sacred sites. An initial
wide spread 70 RC drill hole program is planned for Q2 2022
with proposed drill grid spacing of 200m x 100m.
Figure 7. Proposed Initial 70-hole RC drill program
The information in this report which relates to Reporting of Exploration Results and Mineral Resources and Ore Reserves
estimation is based on information compiled and checked by Mr Craig Reddell, an employee of OM (Manganese) Limited.
Mr Reddell is a Member of the Australian Institute of Geoscientists (AIG) and has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify
as a Competent Person as defined in the JORC 2012 Edition of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”. Mr Reddell consents to the inclusion in the report of the matters based on this
information in the form and context in which it appears.
25
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 TSHIPI É NTLE MANGANESE MINING PROPRIETARY LTD
(“TSHIPI”)
Tshipi Project Location
TSHIPI EXPORTS TOTALLED
3,225,727 tonnes
2021
• A world-class low cost long-life manganese
asset.
• Largest manganese mine in South Africa in
terms of production and export and one of
the five largest manganese mines globally.
• Tshipi commenced exporting manganese ore
in 2012.
• Total exports included both lump and fines.
Overview
OMH has an effective 13% interest in Tshipi through its 26% strategic partnership with Ntsimbintle Holdings Proprietary Limited,
the majority 50.1% owner of Tshipi. The remaining 49.9% share is owned by Jupiter Mines Limited.
Tshipi owns a manganese property in the world-class Kalahari Manganese Field located in the Northern Cape of South Africa. The
Kalahari Manganese Field, which stretches for 35km long and is approximately 15km wide, hosts a significant portion of the world’s
economically mineable high grade manganese ore resources.
The Tshipi Borwa mine is an open pit manganese mine with an integrated ore processing plant which commenced production
in October 2012. As of 28 February 2021, Tshipi Borwa Mine has a total Mineral Resource Estimation of circa 423 million tonnes
in accordance with JORC Code (2012). In 2021, despite a challenging year due to mining and COVID-19 related restrictions, Tshipi
exported a total of 3,225,727 tonnes of manganese ore.
The Tshipi Borwa Mine is located on the south western outer rim of the Kalahari Manganese Field making the ore resources
shallower and more amenable to open pit mining.
The Tshipi Borwa ore body commences at a depth of 70m below the surface and the ore body is contained within a 30m to 45m thick
mineralised zone which occurs along the entire Borwa Property. The ore layer dips gradually to the north-west at approximately 5
degrees.
Tshipi’s strategy is to mine and process the lower 15m of the mineralised zone, commonly known as the bottom cut, as it bears a
higher grade ore. A portion of the upper 15m mineralised zone, referred to as the top cut, is planned to be stockpiled for possible
use later.
Mining of Tshipi Borwa is a relatively simple truck and shovel open cast operation. Once exposed the manganese ore is drilled,
blasted and loaded onto trucks and hauled to the main ROM stockpile.
The ROM stockpile feeds the processing plant which is designed to treat approximately 3.3 to 3.6 million tonnes per annum of
manganese ore.
These products are stockpiled before loading through a state-of-the art load-out station onto railway trains or road trucks.
Inland transportation of manganese products from the mine site is carried out by rail, and complemented by a combination of road
and rail solutions to increase logistics capacity.
Tshipi’s product is then exported through (i) the Port Elizabeth bulk terminal; (ii) the Port Elizabeth multi-purpose terminal; or (iii)
the Saldanha multi-purpose terminal.
Tshipi Ownership Structure
OM Holdings Limited
100%
OMH (Mauritius) Corp
26%
Ntsimbintle Holdings
Proprietary Limited
74%
26
Jupiter Mines Limited
49.9%
Ntsimbintle Mining
Proprietary Limited
50.1%
Tshipi é Ntle Manganese
Mining Proprietary Limited
Tshipi Borwa Mine
OM HOLDINGS LIMITED | ANNUAL REPORT 2021 ASX LISTING RULE 5.8.1
SUMMARY INFORMATION
Mineral Resource estimation summary:
The Bootu Creek manganese deposits are strata-bound, located at the contact between the underlying dolomite-siltstone Attack
Creek Formation and the overlying ridge forming sandstone of the Bootu Formation in the Tomkinson Group, within the Ashburton
Province of the Palaeozoic Tennant Creek Inlier. The mineralised manganese bearing sandstone horizon is folded around the gentle
NNW plunging Bootu Syncline, can be traced for 24km and dips around 30o towards the fold axis.
The manganese ore is supergene enriched within a deeply weathered profile. The Bootu Creek pre-mining manganese resource
models have a combined strike length of 16 km, with deposit models ranging from 0.7 km to 2.9 km in length. Mineralisation widths
vary from 3 m to 15 m and ore mineralogy consists predominately of Pyrolusite and Cryptomelane in a silica rich gangue within the
supergene zone, overlaying a Rhodochrosite and Braunite unweathered zone at depths of greater than 90m from surface.
All Bootu Creek resource models, other than Renner West, are located within Mineral Lease ML24031, located 120 km north of
Tennant Creek, Northern Territory, Australia. The Renner West Inferred Mineral Resource is located on EL28041 and located 70 km
NW of the Bootu Creek mine site. Both tenements are granted, 100% owned by OMM and have no security of tenure issues at the
time of reporting.
Resources at Bootu Creek (“BC”) are predominantly sampled by vertical 5.5” face sampling Reverse Circulation (RC) drilling (91% of
total drilled), HQ3 diamond (DD) drilling (2%) and open percussion (PC) drilling (7%), based on a nominal 50 m x 25 m spaced grid.
Hole depths range from 12 m to 156 m and collar locations are picked up by Mine Surveyors using MGA94 co-ordinates. The 31
December 2021 BC resource delineation dataset for Bootu Creek (trimmed to remaining resource models) comprised 390 drill holes
for 25,338 metres and the Renner West (RW) dataset had 145 drill holes for 6,284 metres. Tailings in TSF 1, TSF 2 and TSF 3 at Bootu
Creek were sampled by 49 core holes for 455 metres, drilled utilising a track mounted Power Probe earth core drill. The 17 diamond
holes drilled at Bootu Creek and Renner Springs in 2019-2021, within current or since mined resource models, were drilled to
provide core in order to assess geotechnical parameters and metallurgical characteristics. All recovered drill core is photographed.
Sampling of RC holes is done on 1 metre downhole intervals and rotary split to produce approximately 3 kg samples. Intervals
selected for analysis are generally limited to visible manganese mineralisation and adjacent host rock. Mineralised diamond core
is quarter sawn to obtain 1 metre or geological intervals, with half core retained for density determination and metallurgical test
work. Earth core samples were at 1.2 metre downhole intervals and split lengthways for assay and metallurgical samples. All drill
samples are crushed, dried and pulverised (total prep) to produce a sub sample for XRF analysis. Field quality control procedures
involve the use of field duplicates, certified BC standards (at an insertion rate of approx. 1:130) and use of a number of commercial
laboratories for analysis.
The sample preparation of RC and earth core samples involve oven drying and full pulverisation before splitting off an XRF assay
sub-sample. Diamond core assay samples are quarter sawn, jaw crushed and follow the same sample preparation technique. A
pulp sub-sample is collected for analysis by XRF for the following elements: Mn, Fe, Al2O3, SiO2, P, Pb, S, TiO2, MgO, K2O, BaO, CaO, Cu,
Zn and Co3O4. LOI (loss on ignition) is assessed by thermo-gravimetric determination. Laboratory QAQC involves the use of internal
laboratory standards using certified reference material, blanks, splits and replicates as part of the in house procedures.
OM (Manganese) Ltd (“OMM”) developed 6 reference standards in 2007 and 2010 for a range of manganese grade values, using
blends of Mn, Fe and quartz material. These were sent to 10 commercial laboratories with returned values in the +-2% range against
the mean value. BC standards are submitted with each assay batch and results monitored to maintain an independent check on
laboratory assays.
There is a high degree of confidence in the geological interpretation of the Bootu Creek manganese deposits gained through
extensive close spaced drill testing, a relatively planar strata-bound geological setting and several years of active mining at this
mature mining operation. Ore mineralogy was determined by XRD analysis and optical petrology on selected drill core, RC chip and
lump product (gravity concentrate) samples.
Resource models were digitised and wire-framed from updated interpreted geological and assay drill cross sections prepared by
OMM. These wireframes were used to select resource drill intersections and composite data was extracted for Mn, Fe, SiO2, Al2O3,
BaO and P based on one metre sample increments. The nugget effect from variography represented only 20% - 30% of the total
variability, suggesting low inherent random behaviour for the manganese mineralisation, and did not warrant grade capping.
The models were estimated using the Ordinary Kriging (OK) estimation technique with Surpac resource estimation software, and
coded with attributes for material type, resource classification, model domain and against OMM survey pit pickups. Block Model
Parent Cells are 25 m (Y) by 10 m (X) by 5 m (Z) and compare favourably with maximum drill spacing of 50 m by 25 m or 40 m by 20
m. The along strike search radius varied from 130 m in the shorter or faulted models through to 290 m for the highly continuous
Chugga-Gogo. The number of samples was set at a minimum of 15 and a maximum of 32 for passes 1 & 2. Pass 3 used a minimum
of 2 samples to fill model extents. Search ranges varied from 130 m up to 290 m in the deposits of up to 3 km strike length. The
search ellipsoids were flattened disc shapes in the plane of the mineralisation with varying anisotropic ratios designed to model
shallowly plunging manganese trends within the domains.
Current bulk density regression formulae are based on 366 waxed (or waxed equivalent) HQ3 core samples selected from 52
metallurgical composites distributed through all deposits included in the Ore Reserve. The bulk density measurements were
determined in 2009 by Amdel (Perth) using the wet and dry methodology. Six density regressions were determined for Chugga/
Gogo, Shekuma, Xhosa, Masai/Tourag, Yaka and Zulu deposits. Renner West, Foldnose and Zulu South use the Yaka (most
conservative) regression option. Bulk density of Tailings is estimated at 1.60 kg/m3 and Rejects at 1.73 kg/m3 on a dry tonnes’ basis,
both assessed on historical site data.
O M H O L D I N G S L I M I T E D | A N N UA L R E P O R T 2 0 2 1
27
The mineralised domains have demonstrated continuity in both geology and grade to support the definition of Mineral Resource
and Ore Reserves, and the classifications applied under the JORC Code (2012 edition). The nominal drillhole spacing of 50 m
by 25 m was considered to provide adequate geological and grade continuity definition to assign an Indicated Mineral Resource
classification to the majority of the deposits at Bootu Creek. Measured Mineral Resources were restricted to closely drilled resource
blocks within 15 m vertically of a mined pit floor, reflecting the high level of geological and grade confidence.
Metallurgical assumptions are based on test work conducted on 93 composites selected from 79 diamond holes drilled into all
deposits included in Ore Reserves. The test work consists largely of individual particle pyknometry (IPP) on lump ore and Heavy
Liquid Separation (HLS) test work on fines (+1 mm). The heavy media treatment plant reconciliation factors, product yield and
recovery are reviewed annually. The Inferred Mineral Resource at Renner West was upgraded to an Indicated Mineral Resource
following encouraging inhouse HLS metallurgical test work conducted on 3 diamond core holes drilled in late 2019.
Heavy Liquid Separation (HLS) and screened assay analysis, washability and process simulation test work (conducted by Nagrom)
on earth core sampling of the Tailing Storage Facilities TSF 1, TSF 2 and TSF 3 has been utilised to justify the newly constructed Ultra
Fines Plant (UFP). The UFP Rejects Mineral Resource is based surveyed stockpiles and the same metallurgical test work as used to
assess the UFF Tailings.
The input data is comprehensive in its coverage of the mineralisation and does not favour or misrepresent in-situ mineralisation.
Bootu Creek manganese deposits are located within a well-defined geological setting and this allows definition of mineralised zones
based on a high level of geological understanding. The Mineral Resource models have been validated by open pit mining since 2006
which reconcile well against the resource estimates.
Mineral Resource estimates are economically constrained within optimised pit shells, utilising Whittle mining software, based on
current mining, processing and logistics costs, projected sales revenue, geotechnical and deposit specific analysis of yield and
recovery parameters.
Ore Reserve estimation summary:
No 31 December 2021 Ore Reserve is quoted for the Bootu Creek Operation as it was placed under Care and Maintenance following
suspension of mining on 13 December 2021 and processing of Run of Mine (ROM) ore was completed on 7 January 2022.
There is no current mine plan for the Bootu Creek Operation. Any future re-estimation of the Bootu Creek Ore Reserve will require
re-optimisation of the remaining Mineral Resource based on updated product prices and specifications, production costs and
geotechnical parameters.
28
ASX LISTING RULE 5.8.1SUMMARY INFORMATIONOM HOLDINGS LIMITED | ANNUAL REPORT 2021 JORC (2012 Edition) Table 1
Section 1 Sampling Techniques and Data
Criteria
Explanation
Sampling Techniques -
Nature and quantity of
sampling
• Mineral Resources at Bootu Creek (“BC”) were sampled by 91% Reverse Circulation (RC), 2%
Diamond Drill (DD) and 7% open percussion (PC) drilling on a nominal 50m x 25m spaced grid.
The 31 December 2021 BC Bootu Creek resource dataset (trimmed to remaining resource models)
comprised a total of 390 drill holes for 25,338 metres, and the Renner West dataset comprised a
total of 145 drill holes for 6384 metres.
•
• Collar locations are picked up by Mine Surveyors using MGA94 co-ordinates and by DGPS or
handheld GPS at the Renner Springs project.
• RC holes are sampled at 1 metre intervals, rotary split to produce 2-3 kg samples. Sample intervals
selected for analysis are generally limited to visible manganese mineralisation and adjacent host
rock. Diamond core is submitted for assay as half or quarter core intervals selected by geology and
intensity of mineralisation.
• All drill samples are crushed, dried and pulverised (total prep) to produce a sub sample for XRF
analysis. Mineralised diamond core is quarter sawn to obtain 1 metre or geological intervals for
XRF analysis, with half core retained for density determination and metallurgical test work.
Sampling is carried out under OM (Manganese) Ltd (“OMM”) protocols to ensure the representivity
of drill samples.
Tailings sampling in TSF1, TSF2 and TSF3 at Bootu Creek was undertaken by drilling 49 earth core
holes varying in depth from 7 to 12 metres.
•
•
Drilling Technique
• RC drilling with 4.5” drill rods and a 5.5” face sampling drill bit.
• Diamond core generally drilled using a HQ3 core barrel.
• Drilling is predominately vertical, and diamond core drilled prior to 2019 was not oriented.
• Holes range from 12 to 156 metres in depth.
•
Tailings sample holes were drilled utilised a track mounted Power Probe earth core drill.
Drill Sample Recovery
• RC drill sample recovery is visually estimated and recorded in geology drill log. Diamond core
recovery is measured and recorded.
• RC rods and the sample cyclone are cleared as frequently as required to maintain satisfactory drill
sample recovery and representivity.
• DD holes use HQ3 size triple tube core barrels to maximise sample recovery.
•
The mineralisation style and consistency of mineralised intervals are considered to preclude any
issue of sample bias due to recovery.
Tailings drill core samples were recovered from 1.2m length sample casings.
•
Logging
• RC chip and diamond drill core samples are geologically logged to the level of detail required
to support the Mineral Resource estimate. Logging records lithology, mineralogy, weathering,
mineralisation, alteration, colour and other features of the samples.
• Geotechnical information is collected from the BC operations open pits and from specifically
drilled Geotechnical diamond drill core holes.
• All diamond drill core and tailings earth core photographed and logged for geology and geotechnical
core holes are logged for geotechnical parameters.
The total length of all exploration and resource delineation drilling is logged.
•
Sub-sampling
• Diamond core assay samples are quarter sawn, oven dried, jaw crushed and fully pulverised
before splitting off an XRF assay sub-sample.
• RC samples are rotary split to produce a sample of an approximately 3 kg in weight. High volume,
high pressure air is used when RC drilling to ensure the sample return is kept as dry as possible.
• RC samples submitted for assay are oven dried, jaw crushed and fully pulverised before splitting
off an XRF assay sub-sample.
• QAQC procedures involve the use of field duplicates, certified BC standards (insertion rate of
approx. 1:130) and commercial laboratories standards.
• Appropriate industry standard sample preparation techniques and quality control procedures
(ISO4296/2) are utilised by the onsite laboratory and offsite commercial laboratories to maximise
sample representivity.
• Drill sample field duplicates are taken to ensure sampling is representative of the in-situ sample
•
•
material collected.
Sample sizes are appropriate for the grain size of the material being sampled based on the
mineralisation style, intersection thickness and percent assay ranges for the primary elements.
Tailings earth core samples were cut in half lengthways for assay, with the remaining half retained
for metallurgical test work.
29
ASX LISTING RULE 5.8.1SUMMARY INFORMATIONOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Criteria
Explanation
Quality of assay data
and laboratory tests
Verification of
sampling and assaying
•
The analytical techniques use a mine site laboratory XRF multi element suite, assaying for Mn, Fe,
Al2O3, SiO2, P, Pb, S, TiO2, MgO, K2O, BaO, CaO, Cu, Zn and Co3O4. LOI (loss on ignition) is assessed
by thermo-gravimetric determination technique.
• No geophysical tools were used to determine any element concentrations used in any of the
•
resource estimates.
Laboratory QAQC involves the use of internal laboratory standards using certified reference
material, blanks, splits and replicates.
• BC independently developed 6 reference standards in 2007 and 2010 for a range of grade values,
using blends of Mn, Fe and quartz material. These were sent to 10 commercial laboratories with
returned values in the +/-2% range against the expected value. The BC standards are submitted
with each assay batch and monitored to maintain an independent check on laboratory assays.
•
•
Significant drill intersections are verified by alternative company personnel, generally the Geology
Manager for OMM.
Twined holes were used in initial exploration/pre-feasibility phase but are not considered
necessary in the current mature mining phase.
• Data entry, verification and storage protocols are in place and were managed by a dedicated GIS/
Database Manager and recently by the Geology Manager.
• No adjustments of primary assay data (high grade cuts, etc.) are considered necessary.
Location of data points
• Drill collars used for Mineral Resource delineation are surveyed using the mine based DGPS survey
Data spacing and
distribution
equipment.
• All locations are picked up and quoted in MGA94 grid format.
• Mine lease topography is based on ortho-rectified aerial photography (2013) to produce a DTM
based on a 5 m x 5 m centred grid with +/- 0.5 m RL accuracy.
• Data spacing is generally based on a 50 m x 25 m drill grid within the Mineral Resource boundaries.
The data spacing and distribution is close enough to establish the degree of geological and grade
•
continuity appropriate for the Mineral Resource classification being quoted and for the Ore
Reserve estimate.
Sample support is consistent with 1 m RC composite sample length applied and utilised for Mineral
Resource estimate.
•
Orientation of data in
relation to geological
structure
•
The manganese deposits at Bootu Creek are shallow dipping (average dip 30o–40o), strata-bound
and relatively planar.
• Drill orientation is predominately vertical and any interaction with local faults or fold structures is
not considered to introduce bias to the sampling results.
Sample Security
Sample security is not considered a significant risk.
•
• Most exploration samples are processed by the mine site laboratory and results are validated
against the drill hole geology logs.
Audit or reviews
• No recent audits or reviews of sampling techniques, other than ongoing internal review, have been
conducted. The database was last reviewed by Optiro for the 31 December 2012 Mineral Resource
estimate.
• Minor infill delineation drilling conducted since that audit (within the remaining resource models)
included 5 RC holes in CFN and 30 RC holes in Masai 5.
• 6 new diamond core holes drilled in 2019 were for geotechnical assessment of the Shekuma and
CFN pits.
• 3 new diamond core holes drilled in 2019 were for metallurgical test work at the Renner West
deposit.
• 8 new diamond core holes drilled in 2020 and 2021 were for geotechnical assessment of the
Tourag, Zulu South and Masai 5 proposed pits
Section 2 Reporting of Exploration Results
Criteria
Explanation
Mineral tenement and
land tenure status
•
•
The relevant tenements for 2021 exploration are EL28041 and EL28604, collectively referred to as
the Renner Springs project.
The tenements were granted in 2010 and 2011 respectively and are 100% owned by OMM with no
security of tenure issues at the time of reporting.
Exploration done by
other parties
• Keys Resources NL were the last to explore the Renner Springs area, intersecting 9m @ 36.7%Mn
in percussion hole W38. (Ferenczi, 2001).
30
ASX LISTING RULE 5.8.1SUMMARY INFORMATIONOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Criteria
Geology
Explanation
•
•
•
The Renner Springs project is predominately located within the Namerinni Group in the Ashburton
Province of the Tennant Creek Inlier. The favourable manganese bearing horizon is hosted
principally by the Shillinglaw Formation.
The Renner Springs manganese horizons are generally shallow dipping and present with a breccia/
conglomerate texture in low outcrops.
The Bootu Creek manganese deposits are strata-bound, located at the contact between the
underlying dolomite-siltstone Attack Creek Formation and the overlying ridge forming sandstone
of the Bootu Formations in the Tomkinson Group, within the Ashburton Province of the Palaeozoic.
Drill hole Information
• 3 diamond core holes were drilled at the Renner West deposit and 6 RC holes were drilled at the
recently discovered Carruthers North prospect in 2019.
• Refer accompanying Table 2 for sample locations and assay results.
Data aggregation
methods
• Reported assays are length weighted with no top-cuts applied.
• No metal equivalents are used for reporting exploration results.
Relationship between
mineralisation width
and intercept length
Diagrams
•
•
•
•
•
The 3 diamond drill program was undertaken to provide core for metallurgical test work at the
Renner West Mineral Resource.
The 6 RC drill program at Carruthers North prospect was a first pass test of a low laying manganese
outcrop, discovered while ground checking a gradient array IP anomaly.
The RC intersections are quoted as drill intersection lengths, as the dip of the mineralisation is yet
to be confirmed.
The Renner West Mineral Resource is located at R6 in figure below.
The Carruthers North prospect referred in this announcement is located midway between
prospects R8 and R10 shown in the figure below.
Balanced reporting
• All results are reported when publishing exploration reports.
Further work
•
Follow up RC drilling is planned for the Carruthers North and Renner Central prospects in 2022.
31
ASX LISTING RULE 5.8.1SUMMARY INFORMATIONOM HOLDINGS LIMITED | ANNUAL REPORT 2021
Section 3 Estimation and Reporting of Mineral Resources
Criteria
Explanation
Database integrity
Location data was imported from DGPS export files.
•
• Assay data was imported from the original laboratory issued csv files.
• All exploration drill data was moved to an Access database in 2017 and all new drill hole data is
uploaded to that database.
• Geology logs are validated for errors on import, locations checked, and assay data quality is
ensured by use of lab and field standards. Further internal validation for duplication, overlaps, etc
is carried out using Surpac software prior to any resource estimation.
Site visits
Geological
Interpretation
•
•
The Mineral Resource is located within an active mine camp and is visited regularly by OMM
Competent Persons.
There is a high degree of confidence in the geological interpretation of the Bootu Creek manganese
deposits gained through extensive close spaced drill testing, a relatively planar strata-bound
geological setting and over 15 years of active mining at this mature mining operation.
• Ore mineralogy was determined by XRD analysis and optical petrology on selected drill core, RC
chip and mineral product (gravity concentrate) samples.
The geological controls at BC are well understood from ongoing mining activity and form the basis
for the resource interpretations.
Factors affecting continuity of grade and geology include local high and low angle faulting, local
internal and adjacent high Fe associated with faulting, and the intensity and depth of supergene
alteration from weathering.
The geological interpretation is refined on an ongoing basis following the review of close spaced
grade control sampling and in pit observation and mapping of second order fault structures not
modelled in the original broader spaced resource delineation drilling.
This figure is inserted for reference to geological setting and deposit locations at Bootu Creek.
•
•
•
•
•
The Bootu Creek manganese resource models have a combined strike length of 16km, with
individual models ranging from 0.7km to 2.9km
• Bootu Creek resource models are generally limited in vertical depth by economic constraints
(imposed by strip ratios and cost of mining), by faulting or by the depth of weathering and
supergene alteration, rather than a depth termination of the mineralisation.
Individual resource model depth extents range from 50m to 120m below surface. All mining is by
open pit.
•
• Bootu Creek resource model widths (true width) range from the minimum width of 3m to a
•
maximum of around 15m.
The Renner West manganese deposit extends over a strike length of 450m and to a depth of
around 25m below surface.
Dimensions
32
ASX LISTING RULE 5.8.1SUMMARY INFORMATIONOM HOLDINGS LIMITED | ANNUAL REPORT 2021
Criteria
Explanation
Estimation and
modelling techniques
•
Estimation and modelling undertaken by independent resource consultants Optiro Pty Ltd, and
since updated by OMM technical staff.
•
• Resource models are digitised and wire-framed from interpreted geological and assay drill
cross sections prepared by OMM. These wireframes are used to select resource intersections
and composite data is extracted for Mn, Fe, SiO2, Al2O3, BaO and P based on one metre sample
increments.
‘Supervisor’ geostatistical software was used for continuity analysis to determine variograms for
grade estimation. Optiro found that the 10% Mn population generated more robust variograms
with lower nugget effects that were applied to the resource composite data during estimation.
The nugget effect from variography was found to represent only 20-30% of the total variability,
suggesting a low inherent random behaviour for the manganese mineralisation and no grade
capping is warranted.
•
• Block models are estimated using Ordinary Kriging (OK), using Surpac resource estimation
software, and coded with attributes for material type, resource classification, model domain and
for OMM survey pit pickups.
•
• Block Model Parent Cells are 25m (Y) by 10m (X) by 5m (Z) and compare favourably with maximum
drill spacing of 50m x 25m or 40m x 20m and with along strike search radius varying from 130m in
the shorter or faulted models through to 290m for the highly continuous Chugga-Gogo.
The number of samples is set at a minimum of 15 and a maximum of 32 for passes 1 & 2. The pass
3 minimum was set to 2 samples to fill model extents.
Search ranges varied from 130 m up to 290 m in deposits of up to 2.9 km strike length. The search
ellipsoids are flattened disc shapes in the plane of the mineralisation with varying anisotropic
ratios designed to model shallowly plunging manganese trends within the domains.
•
• Geological interpretation prepared by OMM has been used to construct digital wireframes and
control assay extraction from the database but are not otherwise used to control the resource
estimate.
The only assumed correlation between variables is that used for the density regression calculated
against manganese grade. There is a noted inverse relationship between manganese vs SiO2 or
Al2O3. There is a variable relationship between manganese and iron and correlations between
other elements were poor.
•
• No selective mining units were assumed in the estimates.
• Graphical 3D validation of block grades versus composite samples, used to compare modelled
grade trends against the spatial distribution of the samples, demonstrated that estimated low
and high grades were consistent with the composite samples. Density was also checked to confirm
interpolated block values honour the regression formulas.
• Validation swathe plots by Optiro show that the block model estimated grades honoured local
•
grades. All volumetric checks are within 1% of wireframes.
The significant elements specific to product quality are assayed and modelled with the only
potential issue being high Fe content in product, which is managed in the mine plan by local grade
control.
• Mineral Resource estimates are depleted for mining up to 31 December 2021 and reported above
a cut-off grade of 15% Mn.
Moisture
• All tonnage is estimated on a dry tonne’s basis.
Cut-off parameters
•
The existing 15% Mn cut-off grade had been affirmed after several years of processing Bootu
Creek ore for target product grades of plus 33% Mn.
• Manganese product derived from the DMS (gravity) plant is not linear in relation to head grade
Mining factors or
assumptions
•
•
•
and product yield and/or product grade decreases rapidly below the 15% Mn cut-off grade.
Since 2020, low grade mineralisation (10%-15% Mn) defined by in pit grade control has been mined
outside of the 15% Mineral Resource models.
It has been possible to process this lower grade material by reducing the target product grade to
around 28% Mn.
The Mineral Resource estimates were optimised by OMM technical staff utilising Whittle mining
software to limit economic open pit extents based on long term revenue, mining, processing and
logistic parameters set by OMM.
• All mining is by open pit mining methods.
• Parameters for determining economic extraction are based on data derived from the current
mining and processing operations at Bootu Creek.
33
ASX LISTING RULE 5.8.1SUMMARY INFORMATIONOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Criteria
Explanation
Metallurgical factors
and assumptions
Environmental factors
or assumptions
Bulk Density
Classification
• Metallurgical assumptions are based on test work conducted on 93 composites selected from 79
diamond holes drilled into all deposits included in Ore Reserves. The test work consists largely of
individual particle pyknometry (IPP) on lump ore and Heavy Liquid Separation (HLS) on fines.
• More recent HLS and screened assay analysis, washability and process simulation test work
(conducted by Nagrom) on earth core sampling of the Tailing Storage Facilities TSF 1, TSF 2 and TSF
3 has been utilised to justify the newly constructed Ultra Fines Plant (UFP).
The UFP Rejects Mineral Resource is based on surveyed stockpiles and the same metallurgical test
work as used to assess the UFP Tailings.
•
• Plant factors including product grade, yield and recovery are reviewed annually.
• Product yield assumptions for resource optimisation are now based on statistical analysis of the
resource delineation drill sample grade distribution, on a pit by pit basis, with due attention to the
extent of weathering.
• Average grade is no longer considered a reliable indicator of product yield.
• Bootu Creek was an operating mine site and processing plant up to the end of 2021, with Mine
Management Plans submitted and approved for waste rock and tailings storage by the Northern
Territory Department of Industry, Tourism and Trade (DITT).
• Bootu Creek is currently operating on Care and Maintenance basis and continuing with the
rehabilitation of mine waste dump, open pit surrounds and associated infrastructure.
• No significant sulphides are present in the ore or mine-waste.
• Current bulk density regression formulae are based on 366 waxed (or waxed equivalent) HQ3 core
samples selected from 52 metallurgical composites distributed through all deposits included in
the 31 December 2020 Ore Reserve.
The bulk density measurements were determined in 2009 by Amdel (Perth) using the wet and dry
methodology. Six individual density regressions were determined for Chugga/Gogo, Shekuma,
Xhosa, Masai/Tourag, Yaka and Zulu deposits. Renner West, Foldnose and Zulu South use the Yaka
(most conservative) regression option.
•
•
• Measured Mineral Resource – this classification is restricted to well drilled resource blocks located
within 15m (vertical) of a mined pit floor, reflecting a high level of geological and grade confidence.
No Measured Mineral Resources are quoted in the 31 December 2021 Mineral Resource.
Indicated Mineral Resource – classified based on established grade and geological continuity
defined by the tabular nature of the Bootu Creek mineralised zones, the regular drill spacing of
50m x 25m or better, estimation parameters such as kriging efficiency and the demonstrated
mining history in most of the deposits.
The Mineral Resource estimate appropriately reflects the view of the Competent Person.
•
• All OMM Mineral Resources are economically constrained on an annual basis by optimised
pit shells using updated OMM cost, revenue and physical parameters (see Mining Factors and
Assumptions).
Audits and reviews
•
Independent resource consultant Optiro Pty Ltd conducted a Client Review of wireframes, block
models, classification criteria, volumetric comparison, composite versus block model grades and
XYZ plots on the Mineral Resource estimate for 31 December 2013.
• Only a limited amount of additional resource delineation drilling has occurred since 2013, with 23
•
•
Discussion of relative
accuracy/confidence
RC infill holes drilled in 2017 and 2018 and a further 27 RC infill holes in 2020 and 2021.
The more significant changes applied in recent Mineral Resource estimation process account
Mineral Resource depletion by mining and/or pit backfill, updated pit optimisation parameters,
product yield estimation, and to update geological interpretation based on minor faults observed
during mining activity since 2013.
The relative accuracy of the Mineral Resource estimate is reflected in the reporting of the Mineral
Resource as per the guidelines of the 2012 JORC Code.
This statement relates to the global estimates of tonnes and grades.
•
• Annual reconciliation compares mine production with pre-mining Mineral Resource estimates,
and to update mining factors and assumptions.
Section 4 Estimation and Reporting of Ore Reserves
Criteria
Explanation
No Ore Reserve
quoted for 31
December 2021
•
•
The Bootu Creek Operation was placed under Care and Maintenance following suspension of
mining on 13 December 2021 and processing of ROM ore was completed on 7 January 2022.
There is no current Mine Plan for the Bootu Creek Operation.
34
ASX LISTING RULE 5.8.1SUMMARY INFORMATIONOM HOLDINGS LIMITED | ANNUAL REPORT 2021
Table 2.
Drilling Results - Renner West (using a cut-off grade of 15% Mn)
Hole ID
Easting
mE
Northing
mN
RL (m)
approx.
Azimuth
& Dip
RSDD001
358071
7971873
279
-90
Hole
Depth
(m)
26.9
RSDD002
358022
7971998
278
-90
27.6
RSDD003
358008
7972120
275.5
-90
17.1
Interval
From
(m)
Interval
To
(m)
Interval
Width
(m)
2.90
4.00
10.00
20.40
4.60
10.20
15.50
18.10
0.00
2.60
6.80
12.60
3.30
8.80
11.00
21.20
7.30
11.20
15.60
21.30
2.20
6.80
11.10
13.40
0.40
4.80
1.00
0.80
2.70
1.00
0.10
3.20
2.20
4.20
4.30
0.80
Table 2.
Drilling Results - Carruthers North Prospect (using a cut-off grade of 15% Mn)
Hole ID
Easting
mE
Northing
mN
RL (m)
approx.
Azimuth
& Dip
Hole
Depth
(m)
Interval
From
(m)
Interval
To
(m)
Interval
Width
(m)
RSRC0321
366096
7965923
275
-90
RSRC0322
366112
7965924
RSRC0323
366089
7965979
RSRC0324
366106
7965983
RSRC0325
366083
7966016
RSRC0326
366120
7965955
275
275
275
275
275
-90
-90
-90
-90
-90
nsv – no significant value
61
56
67
55
61
49
0
15
38
0
14
6
7
16
40
5
15
7
7
1
2
5
1
1
Mn
%
22.39
27.63
30.15
20.75
28.20
42.10
49.17
33.65
19.79
26.81
33.98
39.54
Mn
%
27.67
25.16
37.41
nsv
24.22
18.75
nsv
26.84
Fe
%
1.74
4.76
1.51
20.88
11.88
2.00
0.76
3.11
4.18
4.81
3.60
0.96
Fe
%
5.5
21.4
5.5
7.4
9.1
13.4
35
ASX LISTING RULE 5.8.1SUMMARY INFORMATIONOM HOLDINGS LIMITED | ANNUAL REPORT 2021
Introduction
OM Holdings Limited (OMH or the Group) is pleased to present our inaugural Sustainability Statement (“Statement”) for the 2021
financial year. This statement details the Group’s efforts to cultivate a culture of sustainability, manage our economic, environmental
and social (EES) impacts, while strengthening our position in becoming a leading ferroalloy and manganese ore group globally.
Despite the COVID-19 pandemic challenges, OMH remains determined to enhance sustainability performance across the Group.
This year, we conducted our maiden materiality assessment where we identified 13 material matters. Management’s approach for
each of the matters are disclosed in this Statement. Through this process, we have also identified OMH’s key stakeholder groups
and prioritised their concern and inputs with respect to OMH’s EES impacts.
To better contextualise our sustainability efforts, this statement should be read in tandem with other statements in this Annual
Report.
Scope and Boundary
This Statement encompasses our EES performance from the following entities for the 2021 financial year, which spans from 1
January 2021 to 31 December 2021 (“FY2021”), unless stated otherwise. The data disclosed within this Statement are derived from
the following entities:
OM (Manganese) Ltd.
(“OMM”) - Australia
OMM owns and operates the
Bootu Creek manganese mine.
There is a particular focus on
this entity when managing and
addressing Land Remediation,
Contamination or Degradation,
as well as Community
Development with a focus
on the Rights of Indigenous
Peoples. The entity has also
ceased mining operations in
December 2021.
OM Materials (S) Pte. Ltd.
(“OMS”) - Singapore
OMS primarily manages the
logistics, marketing, product
flow and distribution of OMH’s
products. There is a focus on
the management of Supply
Chain Management and
Product Quality and Safety.
OM Materials (Sarawak)
Sdn. Bhd.
(“OM Sarawak”) – Malaysia
OM Sarawak is OMH’s
flagship ferrosilicon and
manganese alloy smelter in
Malaysia. Performance data
for environmental and social
matters will primarily come
from this entity.
For more information regarding the Group’s subsidiaries and primary business streams, please refer to pages 10 to 11 of our Annual
Report 2021 (AR2021).
Reporting Framework
This Statement was prepared in accordance with Bursa Malaysia Securities Berhad’s (“Bursa Malaysia”) Main Market Listing
Requirements, with reference to the Global Reporting Initiative (“GRI”) Standards (Core Option) and Bursa Malaysia’s Sustainability
Reporting Guide (2nd Edition).
The Sustainability Statement has been integrated into our AR2021 alongside our FY2021 financial statements and disclosures. Unless
otherwise stated, all material topics disclosed in this report relates to material operating segments reported in our financial statements
for the year ended 31 December 2021.
External Assurance
We are committed to supporting the transparency of non-financial reporting. While the sustainability performance data has been
compiled by various departments across the Group in this inaugural report without third party verification, OMH will seek to obtain
external assurance for future reporting.
36
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Feedback
We hope you will find the information disclosed beneficial to you as a stakeholder of OMH. If you would like to provide feedback or
require further clarification, please contact us at: investor.relations@ommaterials.com.
Stakeholder Engagement
The Group identified stakeholders to be individuals and groups that are impacted by our business practices and those who have
influence over OMH’s business decisions. We understand that stakeholders play an important role in the Group’s long-term success,
and have made continuous efforts to engage various relevant stakeholder groups, keeping them apprised and obtaining feedback
on their priorities. By understanding their concerns and expectations, we are better able to prioritize as well as develop complete
strategies to improve outcomes and create value for our stakeholders.
As part of our inaugural materiality assessment process, we conducted a stakeholder identification and prioritisation exercise by
engaging internal and external stakeholders to identify OMH’s material EES topics:
1.
2.
Identification and Prioritisation of Stakeholders
Through an internal exercise and leveraging insights from previous engagements with various stakeholders, we
identified the level of influence and dependence of key stakeholders on the Group. At the end of the process, we
identified and prioritised eight key stakeholder groups as shown on page 37.
Materiality Assessment
In the next phase, these selected internal and external stakeholders were invited to participate in our inaugural
materiality assessment, which helped us identify the Group’s most pertinent EES matters. Through this process, we
identified and prioritized thirteen material matters.
Stakeholder Engagement
The table below illustrates the methods and frequency of engagement for each stakeholder group. We have also detailed the key
interests and concerns raised by stakeholders in FY2021 and their associated material matters.
Legend for engagement frequency
Annually
Semi-annually
Quarterly
Ongoing
As needed
Key
Stakeholders
Methods of Engagement &
Frequency of Engagement
Areas of Interest
Link to Material Matter
Board of
Directors and
Employees
Board meetings
Meetings and briefings
Employee performance
appraisals
Trainings and developments
Team building and activities
Townhall sessions
• Group’s performance, direction,
and strategy
• Corporate governance
• Occupational health and safety
•
• Workplace and accommodation
Trainings and career advancement
environment
Economic performance
•
• Occupational health and
safety
Talent management
•
• Human rights
Government and
Regulators
Regular compliance report
Ad-hoc surveys and reports
• Compliance with laws and
regulations
Economic impact
•
• Compliance
•
• Business ethics
Economic performance
Customers
Regular communication via
• Maintaining customer
• Product quality and safety
Suppliers
Financial
Communities
telephones and emails
Ad-hoc visits
relationships
• Potential collaborations
• Quality of products supplied
Supplier surveys
Regular communications via
telephones and emails
Ad-hoc visits
• Maintaining supplier relationships
• Potential collaborations
• Quality of products procured
Financial statements
ASX and Bursa Malaysia
announcements
Compliance reporting
Annual reports
Company presentations
• Business and financial
•
•
performance
Future prospects and plans
Environmental, Social and
Governance (“ESG”) and
sustainable matters
•
Supply chain management
Economic performance
Energy and emissions
•
•
• Waste management
• Water and effluents
Land remediation,
•
contamination or
degradation
37
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021
Key
Stakeholders
Methods of Engagement &
Frequency of Engagement
Areas of Interest
Link to Material Matter
Investors /
Investment
Community
Annual General Meeting
Annual reports
Company presentations
ASX and Bursa Malaysia
announcements
Analyst and retail briefings
• Business and financial
performance
Future prospects and plans
ESG and sustainable matters
•
•
Economic performance
Energy and emissions
•
•
• Waste management
• Water and effluents
Land remediation,
•
contamination or
degradation
• Occupational health and
safety
Local
Communities
Regular community projects
Annual back to school
programmes
Sponsorships and donations
• Community development
•
•
Employment opportunities
Environmental preservation
• Community development
• Human rights
• Waste management
JV Partners
Regular communications via
• Maintaining partnerships
•
Economic performance
telephones and emails
ASX and Bursa Malaysia
announcements
Internal Board meetings
Joint venture reporting and
meetings
Sustainability Governance
Good governance is crucial to ensure sound decisions are made regarding OMH’s sustainability direction and strategies. The Board
of Directors (“Board”) sets the strategic direction of the organisation, ensuring sustainability is embedded across the Group. The
Sustainability Management Committee sets out the execution plans and oversees the implementation of strategies approved by the
Board.
Working groups at each material subsidiary have been set up to manage the environmental, social and governance aspects of the
business with a specific focus on ensuring the successful delivery and implementation of the respective strategies and initiatives. These
working groups comprise of relevant representatives from the material subsidiaries and relevant departments.
OMH Board
of Directors
Sustainability
Management
Committee
OMH Board of Directors
Sets the strategic roadmap, reviews and approves the
Group’s Sustainability Statement.
Sustainability Management Committee
1. Sets out the execution plans, oversees and reviews
the implementation of sustainability strategies
approved by the Board.
2. Responsible to review and update the materiality
matrix when required.
3. Reports to the Board.
OMM
OM
Sarawak
OMS
Other
Subsidiaries
ESG Working
Group
ESG Working
Group
ESG Working
Group
ESG Working
Group
Subsidiaries
1.
2. Responsible
Implements and delivers sustainability strategies.
for monitoring and providing
quantitative reporting as well as identifying key
improvement areas.
3. Reports
to
the Sustainability Management
Committee.
Business Ethics
OMH is committed to the highest level of integrity and ethical standards in all business practices and aspires to be a leader in its field
while operating openly with honesty, integrity, and responsibility. All Directors, key executives and employees are guided by the Code
of Ethics and Conduct alongside other key policies and protocols. Our practices are aligned with our Corporate Governance, Section 3
Ethical Standards.
38
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021
Corporate Governance Framework:
The OMH Corporate Governance Statement has been prepared in line with the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations 4th Edition (February 2019).
The Board’s primary role is to govern the Group. In executing its responsibilities, the Board must act in the best interests of the Group
as a whole. It is the role of senior management to manage the Group in accordance with the directions of the Board and it is the
responsibility of the Board to oversee the activities of senior management in carrying out these delegated duties. The following policies
are in place to guide the ethical business practices within OMH:
•
•
•
•
•
Code of Conduct and Ethics
Code of Conduct for Directors and Key Executives
Anti-Bribery and Corruption Standard
Policy for Risk Management
Whistleblower Protection Standard
Code of Conduct and Ethics
The Board, management and all employees of OMH are committed to implementing the OMH’s core principles and values when
dealing with third parties including customers, government authorities, creditors, contractors, joint venture partners and the
community as a whole as well as other employees.
Any breach of the code is considered as serious misconduct. Employees who have become aware of any misconduct must report the
matter immediately to their line manager or the Company Secretary. The line manager or Company Secretary has the responsibility to
report the breach to the appropriate senior management to advise the relevant employee of the outcome and actions implemented.
Any employee who in good faith, reports a breach or a suspected breach will not be subject to any retaliation or recrimination
for making that report. Employees who breach the policies may be subject to disciplinary action, including in the case of serious
breaches, dismissal.
Read more on our Code of Ethics and Conduct on our website: http://www.omholdingsltd.com/aboutus/corporate-governance/.
Code of Conduct for Directors and Key Executives
The Board has adopted a Code of Conduct for Directors and key executives to promote ethical and responsible decision making. The
code is based on a code of conduct prepared by the Australian Institute of Company Directors.
Read more on our Code of Conduct for Directors and Key Executives on our website: http://www.omholdingsltd.com/aboutus/corporate-governance/.
Anti-Bribery and Corruption Standard
Bribery and corruption are strictly prohibited within the Group when dealing with all business transactions. In line with our Corporate
Governance, section 7.8 Anti-Bribery and Corruption, OMH is committed to the fight against bribery and corruption and expects all
employees and representatives to comply with both the letter and spirit of the laws that govern the Group’s operations in Australia,
Malaysia, China, South Africa and Singapore. This Standard applies to all Directors, full-time and part-time employees of the Group,
as well as agents, suppliers, contractors, business partners and any other party acting for or representing the Group.
Subject to confidentiality obligations, the reporting of any such incidents, where necessary, will be provided to the Board annually
and half-yearly to the Audit Committee. If incidents are considered to be material or potentially involve a breach of any law, the
matter will be immediately referred to the Chairman of the Audit Committee.
Read more on our Anti-Bribery and Corruption Standard on our website: http://www.omholdingsltd.com/aboutus/corporate-governance/ and our Corporate
Governance Report integrated into this Annual Report
Policy for Risk Management
The Board is responsible for approving OMH’s policies on risk oversight and satisfying itself that management has developed and
implemented a sound system of risk management and internal control.
OMH’s risk management system is evolving. It is an on-going process and it is recognised that the level and extent of the risk
management system will evolve to commensurate with the development and growth of the Group’s activities.
Read more on our Policy for Risk Management on our website: http://www.omholdingsltd.com/aboutus/corporate-governance/.
Whistleblowing Protection Standard
Any suspected unlawful, unethical, or improper conduct can be reported through OMH’s Whistleblowing Protection Standard.
Disclosures under this standard can be made by an officer or employee of OMH, contractor and supplier of goods and services to
OMH, current and former employees, associates of OMH, or family member of an individual mentioned above.
Disclosures can be made in writing or by telephone to OMH’s Whistleblower Protection Officers. The identity of the whistleblower
will be kept confidential unless the whistleblower has consented to forgo anonymity.
This Standard is publicly available on our website and is in line with our Corporate Governance, section 3.3 Whistleblower Policy.
Read more on our Whistleblowing Protection Standard on our website: http://www.omholdingsltd.com/aboutus/corporate-governance/ and our Corporate
Governance Report integrated into this Annual Report
39
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 The Board’s role and the Group’s corporate governance practices and policies are reviewed regularly, and improvements and
enhancements to these practices and policies are formalised for adoption as the Group’s business expands.
In conjunction with the amendment made to Section 17A of the Malaysian Anti-Corruption Commission (“MACC”) Act 2009, OM Sarawak
has enhanced the entity’s anti-corruption policy, and intends to communicate the updated policy to all employees and business
associates through compulsory training sessions. OM Sarawak’s employees are expected to familiarise themselves with the policy
which will be made available on OM Sarawak’s intranet. Any queries on the policy should be communicated to their respective Head of
Department or during the training sessions that will be conducted.
Materiality Assessment
In FY2021, we engaged an external consultant to conduct our inaugural materiality assessment. The objective of the assessment
was to identify and prioritise the Group’s material EES matters. This involved a three-step process, consisting of the Identification,
Prioritisation and Validation stages. The materiality assessment was guided by Bursa Malaysia’s Sustainability Reporting Guide and
Toolkits, as well as the GRI Standards.
To ensure we capture a holistic view of our key EES impacts, we engaged internal and external stakeholders during the identification
stage via a Materiality Assessment Survey. A total of 39 responses were collected and analysed. A workshop was then conducted to
shortlist and prioritise material matters based on the significance of OMH’s impact and impact on stakeholders. This workshop was
attended by key internal stakeholders, including senior management. The findings of this workshop were utilised to generate OMH’s
first materiality matrix. This matrix will be used as a compass to guide our future sustainability priorities, initiatives and strategies.
Identification
Prioritisation
Validation
•
•
•
•
•
•
Deploy Materiality Assessment Survey to selected internal and external stakeholders
to shortlist OMH’s most relevant material matters
Create an inventory of material matters
Identify and prioritise OMH’s eight (8) key stakeholder groups
Rank shortlisted material matters based on the significance of the impact to OMH
and impact to stakeholders
Develop a materiality matrix
The materiality matrix was validated by the OMH’s senior management team and
approved by the Board
We aim to review our materiality matrix annually and update it when necessary as the Group’s business grows. Macroeconomic factors
will be included for consideration to reflect business and market conditions and to align with stakeholders’ needs.
The materiality matrix was validated and approved by OMH’s senior management team and the OMH Board.
40
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Materiality Matrix
Legend:
Economic
Environmental
Social
l
a
c
i
t
i
r
C
l
s
r
e
d
o
h
e
k
a
t
S
H
M
O
o
t
t
c
a
p
m
I
i
m
u
d
e
M
Occupational Health and
Safety
Business Ethics
Compliance
Energy and Emissions
Human Rights
Waste Management
Water and Effluents
Economic Performance
Land Remediation,
Contamination or Degradation
Supply Chain Management
Community Development
Talent Management
Product Quality and Safety
Medium
Importance to Business
Critical
41
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021
Summary of OMH’s Material Matters
The following are the 13 material matters identified and mapped by OMH in FY2021:
Our Business
‘Economic’
Our People
‘Social’
Our Environment
‘Environmental’
Occupational
Health & Safety
Maintaining a safe
work environment
and culture
through focused
and continued
investments
to anticipate,
recognise, evaluate
and control hazards
arising in or from
the workplace
that could impair
the health and
well-being of
employees, workers
and customers
Community
Development
Voluntary
contributions
made toward
the surrounding
communities across
OMH’s operations,
including
engagement and
activities to create
a positive social
and environmental
impact
Human Rights
Measures that are
implemented to
protect employees’
and workers’ right
across OMH’s
operations and
supply chains.
This encapsulates
matters such as
child labour, labour
rights, freedom
from slavery and
torture
Talent
Management
Initiatives that
are undertaken
to attract and
retain diverse
talents through
fair treatment and
employment as
well as providing
opportunities for
capability building
and upskilling
Energy &
Emissions
Initiatives
implemented
to minimise the
discharge of
environmentally
hazardous
substances and
greenhouse
gases into the
atmosphere
through
efficient use and
consumption of
energy generated
from renewable
and non-renewable
sources
Waste
Management
Efforts that
are taken to
minimise OMH’s
environmental
impact through
the management
of hazardous and
non-hazardous
waste
Water & Effluents
Steps taken to
manage water
consumption
across OMH’s
operations. This
includes efficiently
utilising water for
smelting processes
and general
purposes, as well
as discharging
wastewater in
accordance with
discharge limits
stipulated
Land
Remediation,
Contamination or
Degradation
Efforts undertaken
to manage
soil quality
and initiatives
implemented to
remediate land
contamination
across OMH’s
operations
Business Ethics
Actions that are
taken to safeguard
ethical business
conduct and
eliminate all forms
of corruption and
anti-competitive
behaviour within
the organisation
Compliance
Measures
implemented
to ensure OMH
complies fully with
all applicable laws
and regulations
within the
jurisdiction in which
it operates
Economic
Performance
Sustained
business growth
through sound
management and
distribution of
economic value
generated by OMH
Product Quality
& Safety
Systematic efforts
undertaken to
ensure high
quality production
of goods and to
minimise health
and safety impacts
of OMH’s products
Supply Chain Management
Management of supply chain activities
which include actions taken to support local
suppliers, and to ensure OMH’s supply chain
continuously adheres to environmental and
social best practices
Major Targets for 2022
Supply Chain Management
Occupational Health & Safety
Energy & Emissions
Prepare and send Supplier’s a Code of
Conduct
Commit to Zero Workplace Fatality
Case
Comply with Malaysian Ambient Air
Quality Guideline (“MAAAQG”)
Audit 5 suppliers for quality control,
child or forced labour, workplace
health & safety, conditions at work and
dormitory
Achieve ISO 45001 (Occupational
Health & Safety Management System)
in FY2023
Talent Management
Achieve ISO 14001 (Environmental
Management System) in FY2023
Complete tapping de-duster pilot plant
trials by 1H 2023
60 local employees trained to replace
foreign staff at OM Sarawak
Waste Management
Repurpose at least 80% of scheduled
waste generated each year
Water & Effluents
Ensure effluent water monitoring
parameters are within the permissible
limit
42
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 ECONOMIC
Compliance
laws and regulations,
Full compliance with the applicable
alongside adopted standards, are essential for maintaining OMH’s
license to operate. OMH focuses strongly on compliance-related
activities and works towards continuous improvement. OMH is
governed by the following policies, including but not limited to:
•
•
•
•
•
Risk and Internal Control Policy
Code of Conduct for Directors and Key
Executives
Code of Ethics and Conduct
Environmental Policy
Anti-Bribery and Corruption Standard
In relation to compliance matters, the Board and management
are responsible for reviewing and ratifying the systems of risk
management, internal compliance and controls, codes of conduct
and compliance according to applicable legislative requirements.
We also ensure policies and compliance systems are consistent
with OMH’s objectives, and that OMH and its officers act legally,
ethically and responsibly at all times.
Read more on the policies on our website: http://www.omholdingsltd.com/aboutus/
corporate-governance/ and our Corporate Governance Report integrated into this Annual
Report
The implementation of the Code of Ethics and Conduct serves
as a guideline for maintaining the highest ethical standards as
well as compliance with legal obligations across the Group. As a
general rule, all Directors, senior executives and employees are
expected to adhere to the Code of Ethics and Conduct to ensure
compliance across the Group’s operations. The Code of Ethics
and Conduct can be found on OMH’s website.
In addition to complying with applicable legal requirements, such
as the Occupational Safety and Health Act 1994, Environmental
Quality Act 1974, Company Act 2016 and Employment Act
1955, OM Sarawak is also subject to annual environmental
audits against the International Finance Corporation’s (“IFC”)
Environmental and Social Performance Standards imposed by
our project lenders. The project lenders consist of a syndicate of
leading local and international bankers listed on our Corporate
Directory that funded OM Sarawak’s construction which started
in 2012.
To keep up with changes in the regulatory landscape, we consult
with our in-house and third-party legal consultants or advisors on
a case-by-case basis. We also engage with the relevant authorities
regularly to ensure our business operations are in compliance
with laws and regulations. Other regulatory updates are received
through newsletter subscriptions, where applicable, and are
circulated internally to the relevant departments.
Environmental Compliance
OM Sarawak has the following committees established to monitor
and ensure compliance with the Environmental Quality Act 1974
and its regulations:
a)
b)
Environmental Regulatory Compliance Monitoring
Committee (“ERCMC”); and
Environmental Performance Monitoring Committee
(“EPMC”)
The ERCMC comprises of OM Sarawak’s Managing Director, Deputy
Chief Engineer, Deputy General Manager (Finance & Costing),
Senior Manager Commercial, General Manager (Production),
General Manager (HR & Admin) and Environmental Manager. It was
established to review and decide on environmental improvement
approaches. The EPMC implements the approved environmental
plans, improvement approaches, monitors the effectiveness of
the executed plans and reports back to the ERCMC. Furthermore,
environmental, health and safety performance is reported on a
periodic basis to an Independent Technical Engineer appointed
by our project lenders as required by the Equator Principles
(“EPs”). Environmental compliance audits are conducted by
external parties and findings are consolidated in a compliance
assessment which is incorporated in an Environmental Report
submitted to our project lenders.
In FY2021, OM Sarawak recorded zero cases of non-compliance
against environmental, health and safety laws and regulations,
and achieved a target of zero incidents of non-compliance set by
the Department of the Environment (“DOE”).
Socioeconomic Compliance
There were no incidents of non-compliance with socioeconomic
laws and regulations recorded, and OMH was not subject to any
significant fines or non-monetary sanctions.
In the years 2019 to 2021, OMH has acted in accordance with
all applicable laws and regulations regarding tax compliance in
all our jurisdictions where we have a presence in and was not
subject to any significant fines or monetary sanctions for non-
compliance with tax laws and regulations.
However, it should be noted that OMM, OMH’s mining subsidiary
in Australia, has been served a summons to attend court during
this reporting period. This was in relation to a fatal accident
which occurred on-site at Bootu Creek mine in August 2019.
Investigations are still ongoing and will be updated through our
disclosures to the ASX when available.
Forward-looking Plans
To further improve compliance monitoring and environmental,
health and safety performance, we will be pursuing ISO
ISO
14001:2015
45001:2018 (Occupational Health & Safety Management System)
accreditation for our smelting operations in Sarawak.
(Environmental Management System) and
Read more on our Code of Ethics and Conduct on our website: http://www.omholdingsltd.
com/aboutus/corporate-governance/ and our Corporate Governance Report integrated
into this Annual Report
Economic Performance
OMH believes that our long-term success hinges on strong
economic growth that does not compromise on our social and
environmental performance. We are committed to delivering
favourable results and
long-term value creation to our
shareholders and stakeholders, at the same time ensuring that
our economic success is balanced with our environmental and
social responsibilities.
To this end, each business unit has adopted a policy of responsible
and proactive environmental management, and will work to
ensure continued compliance with relevant legislative obligations
in its business operations while ensuring sustainable financial
returns.
Climate Risks and its Financial Implications
Regulatory (Transition) Risks
Our operations in each country that we operate in are bounded
by national and local environmental laws and regulations.
Changes in these laws and regulations will have a direct impact
on our operations.
These laws and regulations set various standards regulating
certain aspects of health and environmental quality, providing
risks of penalties and other liabilities for the violation of such
standards, and establishing, under certain circumstances,
obligations to remediate current or former facilities where
operations are or have been conducted.
43
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021
In meeting the requirements from the national and/or local
environmental departments in each country that we operate in,
we conduct regular in-house compliance monitoring and periodic
environmental assessments.
Physical Risks
Smelting is fundamentally an energy intensive process and
the production of ferrosilicon and manganese alloys consume
substantial amounts of energy. The reliability, adequacy, and
sustainability of the supply of electricity are critical to ensure
production continuity for these operations.
Our Sarawak plant’s power supply is predominantly from
hydropower, and given the continuous nature of production, any
unexpected disruption to power supply could disrupt the smelting
process. For example, this may occur during unexpectedly dry
periods induced by long-term climate change effects, which may
lead to lower water levels in hydropower plants. An increase in
cost arising from such disruption might be material and may not
be fully compensated by our service providers.
Read more on our Sustainability Statement, Environmental – Energy & Emission
integrated into this Annual Report.
COVID-19 Response
Safeguarding the health and safety of our employees whilst
maintaining operational resilience remain our top priority. During
the reporting period, the Group formulated and implemented
the necessary measures to mitigate the financial impacts of the
COVID-19 pandemic. We also strive to maintain stable production
through constantly updating our business continuity plans in
response to actual market conditions and logistic constraints to
position the Group effectively against business continuity risks.
Key initiatives implemented include:
1.
2.
3.
Stockpiling critical raw materials to avoid unforeseen
supply chain disruptions, which could potentially disrupt
production and increase costs;
Deferring intensive capital expenditure since the start
of the pandemic to preserve liquidity for working capital
changes; and
Encouraging employees’ active participation in vaccination
drives to safeguard our workforce.
OMH has been strengthening our position within the region
and seeks to be the ferroalloy supply partner of choice to major
steel mills globally. With the Sarawak plant benefiting from
competitively priced and reliable hydropower supply, the Group
has long-term strategic plans in place to expand production
sustainably.
Read more on our financial performance outlined in the following reports:
1.
2.
Financial Statements section of this Annual Report; and
2021 Full Year Result Announcement and Appendix 4E for further financial
analysis on our website: http://www.omholdingsltd.com/wp-content/
uploads/2022/02/2022.02.28-ASX-Appendix-4E.pdf
Products being sampled at the quality inspection centre in OM Sarawak.
We have established quality inspection centres at our smelting
plants, which oversee the quality control procedures at different
stages of production. The process begins with raw materials, which
undergo a series of sampling, laboratory analysis, and physical
inspections. Our plants are fully equipped with the requisite
laboratory equipment to carry out sampling and analysis on raw
materials and finished products, as well as multiple sampling and
analysis throughout the smelting process.
Product Safety Information (“PSI”) are provided for all our
products to customers and logistic service providers upon
request, with tests in accordance with relevant chapters from the
UN Recommendations on the Transport of Dangerous Goods,
Manual of Tests and Criteria, and also in accordance with UN
Globally Harmonized System of Classification and Labelling of
Chemicals to provide relevant health, safety and environmental
(“HSE”) information. Our ores also meet the requisite regulatory,
safety, and environmental standards where they are marketed.
All ferroalloys produced by OMH are highly commoditised.
Accordingly, there are minimal differences between ferroalloys
produced in different plants of the world, and are therefore
fungible. As long as a product meets a standard set of
specifications, it is deemed to be of the same grade and quality.
Manganese ore on the other hand is largely determined by
geology, with each region producing a unique product that
cannot be altered substantially. Consequently, research and
development on product quality and safety are not relevant
as ferroalloys are a group of relatively well-defined industrial
products with fixed specifications, while manganese ore
specifications are determined by geological factors and only need
to comply with relevant safety and environmental standards.
Across the Group, we strive to produce products that comply with
contractual requirements. We provide a direct primary channel
of feedback via our marketing department, and any cases of
product non-compliance are addressed jointly with the relevant
quality inspection centres.
Product Quality & Safety
Supply Chain Management
At our Bootu Creek Mine, product quality inspection through
sampling and analysis are carried out at our on-site laboratory.
Assaying is also independently conducted by a reputable surveyor
at the Darwin Port at the time the product is loaded onto vessels.
As the largest producer of ferroalloys in South East Asia, OMH
strives to produce commodity grade products that comply with all
relevant standards, and specialty products that satisfy customers’
requirements. This is accomplished by a thorough approach to
production and logistics, with multiple sampling points along
the production process. All our products are shipped with an in-
house laboratory certificate, with independent certification from
reputable international surveyors and laboratories which are
available on request.
•
•
Prepare and send Supplier’s a Code
of Conduct
Audit 5 suppliers for quality control,
child or forced labour, workplace
health & safety, conditions at work
and dormitory
Responsible and sustainable supply chain management
is
important to encourage suppliers to responsibly build
sustainable businesses themselves, with a net positive impact on
communities and the environment.
44
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021
Supply Chain Assessment
Across the Group, our value chain consists of over 600 suppliers
globally, comprising suppliers of raw materials, energy, goods,
services, and logistics.
OM Sarawak currently has standard operating procedures in
place for annual performance evaluations for raw material
suppliers, and these procedures are compliant with the IFC
Environmental and Social Performance Standards. From 2018 to
date, all raw material suppliers under evaluation were required
to provide a Declaration Letter of Compliance in relation to the
employment of sustainable practices and the non-employment
of child and forced labour.
Based on these evaluations, a contractor or supplier may
be disqualified as a vendor if it does not meet the required
standards. In 2021, all major raw material suppliers completed
these declarations and evaluations and none were disqualified.
To support the local economy, we actively procure our products
and services within the countries our business operates in. Given
the highly specialized nature of ferroalloy production, it is not
uncommon for bulk raw materials, such as ore or metallurgical
coke, to be only available in certain geographies. As such, bulk
raw materials are often purchased from foreign suppliers as they
are not available locally.
Procurement Spending (FY2021)
Foreign
93%
Local
7%
Note: Aggregate data from OM Sarawak
Conversely, auxiliary material suppliers and service providers are
mostly domestic, and these small to medium enterprises account
for the majority share of our suppliers. For our operations
in Sarawak, we engaged a total of 298 suppliers, of which
approximately 89% were local suppliers and 11% were foreign.
Suppliers Contracted (FY2021)
Local
89%
Foreign
11%
Note: Aggregate data from OM Sarawak
Forward-looking Plans
We aim to improve on our existing guideline by establishing a
Supplier Code of Conduct in 2022. In the next two (2) years we
have set the following objectives:
SOCIAL
Occupational, Health and Safety
•
•
Commit to Zero Workplace Fatality
Case
Achieve ISO 45001 in FY2023
Occupational Health and Safety (“OHS”) is intrinsically linked to
the way we work and is of utmost importance to OMH, given
the nature of the industry we operate in. As a Group, we are
committed to achieving the highest possible performance when
managing OHS-related matters across all business operations,
with a target to eliminate all incidents and injuries.
In line with the Group’s values, the safety and wellbeing of our
employees is of critical priority, as reflected in our materiality
matrix. Our operating subsidiaries manage risk through a
planned and careful approach focusing on hazard identification,
minimisation and monitoring.
Compliance
Our mining operations in Australia and smelting operations in
Malaysia and China are required to comply with national and
local occupational health and safety laws and regulations.
OMM, our mining entity that owns and operates the Bootu Creek
Mine in Northern Territory, Australia, must comply with the OHS
requirements found in the Work Health and Safety (National
Uniform Legislation) Act 2011 that sets out the legislative
health and safety requirements of a mine site and the activities
associated with mining. Regular safety inspections are conducted
at the Bootu Creek Mine to assess compliance with the Work
Health and Safety Act. OMM also has a Risk Management Plan in
place to safeguard the health and safety of employees at the mine
site. All employees are required to report all accidents, incidents
and injuries to their supervisors immediately when they occur.
Our smelting operations in Sarawak, Malaysia is required to
comply with the Occupational Safety and Health Act 1994 and
its regulations, Guidelines and Code of Practices as enforced
by the Department of Occupational Safety and Health (“DOSH”)
under the Ministry of Human Resources Malaysia. These laws,
regulations and guidelines cover the general safety, health and
welfare of employees. We are also governed by the Factories
and Machinery Act 1967 under which periodical inspections of
our lifting and hoisting equipment, unfired pressure vessels and
general installation in our Sarawak plant are conducted by the
DOSH officers. These laws and regulations are communicated
to employees through Health and Safety Committee meetings,
toolbox meetings and social media platforms (such as working
group chats). Other forms of communication include distribution
of internal memos, induction training and refresher training.
Similarly, our China operations are subject to the Law on
Production Safety, which requires us to implement standards to
ensure work safety and satisfy conditions set by applicable laws,
administrative regulations and national industrial standards.
Health and Safety Governance
•
•
To align and incorporate the ISO 14001 and ISO 45001
requirements in the Supplier Code of Conduct, which align
with the Group’s initiatives on environmental protection,
and compliance with human rights, labour and social
standards; and
At OM Sarawak, we recognise the importance of a robust and
comprehensive health and safety management system. The OHS
management system emphasises the importance of managing
the hazard risks and involves all levels of employees and non-
employees. The management system is supported by an OHS
To establish policies to conduct ad-hoc supplier audits
internally by
reviewing supplier documents and
conducting random site audits, where feasible.
45
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Policy which communicates OM Sarawak’s aims of achieving
zero work-related fatalities and creating a safe and conducive
environment where everyone has full ownership of implementing
good OHS practices. The policy emphasises that safety is a shared
responsibility and accountability for maintaining a safe work
environment falls on all levels of management and employees.
OM Sarawak established a Health and Safety Committee that
meets on a quarterly basis to discuss OHS matters. The committee
is chaired by top-level management including OM Sarawak’s
Managing Director and Deputy Chief Engineer, assisted by the
Health and Safety Manager as secretary, and a balanced quorum
of employees comprising of representatives from management
and non-managerial levels. The committee’s primary function
is to assist with the development of OHS policies and initiatives,
review the effectiveness of OHS programmes implemented,
as well as recommend improvements to OHS procedures and
the existing OHS management system. The committee also
investigates OHS incidents that occur and recommends suitable
control measures to prevent recurrence.
In addition to the Health and Safety Committee, OM Sarawak
has in place a Health Team, an integral part of the Health and
Safety Department. The team organises health awareness
talks and programmes for employees which cover topics such
as infectious diseases and general health. The Health Team
comprises experienced medical personnel that are well-equipped
to manage employees’ occupational health matters. The team
develops yearly health programmes (e.g., health check-ups for
all levels of employees) and provides 24 hours on-site treatment.
The Health and Safety Department has also established a Fire
Protection Team that comprises trained personnel to manage
plant fire safety. The Fire Protection Team is responsible for
maintaining the plant fire protection equipment and conducting
emergency and fire drills. These drills are performed periodically
in collaboration with OM Sarawak’s other health and safety
departments and teams, as well as the local fire department.
OM Materials (Sarawak) conducted a Fire Drill in collaboration with
Sarawak Fire and Rescue Department (Bomba) Samalaju at the Samalaju
Lodge (Local Camp) on November 16, 2021
OM Sarawak also provides its employees with the following health
services that are included as part of their employment benefits:
General
hospitalisation
scheme
General
personal
accident
On-site health
care facility
for early
treatment
Panel clinic
and in-house
ambulance
Yearly
health check
programme
Dedicated health
team with
24 hours onsite
treatment
46
Hazard Identification, Risk Assessment and Risk
Control (“HIRARC”)
Hazard
Identification,
Risk Assessment,
and Risk Control
(“HIRARC”)
HIRARC is a process methodology
that is a fundamental component
of OM Sarawak’s OHS management
activities
All
system.
are
in
adequately
accordance with
the prescribed
HIRARC procedures and findings
are communicated to all relevant
parties. The HIRARC procedures are coherent with
the
corresponding work instructions and are reviewed if gaps are
identified.
evaluated
work
Incident investigation processes are also in place to swiftly
investigate incidents by identifying causal factors, providing
control measures and a lesson learned process to avoid similar
recurrence. For example, in FY2021, an incident was logged due to
extreme heat. In response, controls around permissible number
of employees exposed to a heat source and degree of heat
exposure were reviewed and updated to prevent reoccurrence.
Additional initiatives that are currently in place to ensure OHS
matters are well-managed include:
Accident
Prevention Starts
from Me (“APM”)
Guidelines
APM is a proactive tool to identify
and eliminate unsafe acts and
unsafe working conditions. It solicits
employees’ participation in the early
detection of hazardous situations
without any reprisal if the act or
condition is reported in good faith.
Health and Safety Grievance
There are numerous channels and platforms for employees to
report any unsafe acts or unsafe conditions in the workplace.
Among them is the APM guidelines which provides a form for
employees to fill and submit to the Health and Safety Department.
Employees can also raise OHS-related concerns through daily
toolbox briefings and Health and Safety Committee meetings.
A total of 40 unsafe acts and conditions for improvement were
reported in FY2021 by employees via the APM guidelines.
A safe mobile hotline service has also been made available as a
communication channel for employees to report unsafe acts or
conditions in the workplace.
Health and Safety Inspections and Audits
OM Sarawak conducted internal health, safety and environmental
(HSE) audits as well as site and furnace inspections throughout
FY2021, and will continue to do so and report all findings
and rectifications in OM Sarawak’s Safety Improvement and
Management of Hazards Campaign (SIMHAC) forms.
The primary objective of the internal inspection and audit function
is to assist and assure OM Sarawak exercises a systematic and
disciplined approach to evaluate and improve the effectiveness
of health and safety management and governance.
The SIMHAC audit team comprises members from relevant
disciplines with expertise in the following: production, equipment
and engineering, safety and health, as well as environment. The
audit is conducted at least once a year. The Health and Safety
Department have also conducted a total of 1,452 recorded site
inspections in FY2021.
Protecting Our People During the COVID-19 Crisis
The smelting operations at our Sarawak plant was adversely
impacted by the COVID-19 pandemic as outlined
in our
Processing and Smelting Operational Review section. In response
to the pandemic, OM Sarawak established a COVID-19 Task Force
Committee to safeguard the safety and wellbeing of employees,
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 in the
and actively supported and participated
Industry
Vaccination Administration Centre programme conducted by
the government. In collaboration with Pejabat Kesihatan Bintulu
(Bintulu Health Office), a COVID-19 Low-Risk Quarantine and
Treatment Centre, or commonly known as Pusat Kuarantin
dan Rawatan COVID-19 (“PKRC”), was also set up as a close
contact quarantine centre to cater for cases within the Samalaju
Industrial Park (“SIP”) area. We also continue to ensure there is a
strict adherence to the COVID-19 standard operating procedure
in our operations.
Health and Safety Training
To minimise risks, all employees and non-employees are
required to undergo relevant OHS briefings and trainings. This
year, we recorded 55,782 OHS-specific training hours recorded
by 644 employees, while 307,692 induction training hours were
recorded by 1,782 new employees and contractors.
As part of OM Sarawak’s contractor management procedures,
contractors are required to provide their commitment towards
providing a safe workplace by signing a Health and Safety
Agreement. The contractual agreement comprises OHS
requirements such as the provision of personal protective
equipment and maintaining equipment to ensure a safe
workplace. OM Sarawak’s OHS Policy is also affixed to the
agreement.
Safety Performance
Lost Time Injury Frequency Rate
1.37
1.06
0.61
FY 2019
FY 2020
FY 2021
Note: Aggregate data from OM Sarawak
In 2021, a total of five (5) lost time injury cases were recorded
across the 3,660,594 man-hours worked at OM Sarawak. The
Lost Time Injury Frequency Rate (LTIFR) for the reporting year
was 1.37, an increase of 0.31 compared to the previous year.
Lost time injury includes fatality, permanent disability or serious
bodily injury as described in the Occupational Safety and Health
Act under Notification of Accidents, Dangerous Occurrence,
Occupational Poisoning and Occupational Disease Regulation
2004 First Schedule.
Incident investigation techniques widely used at OM Sarawak
include the root cause analysis and the ‘5 Whys and 1 How’
technique. These techniques allow OM Sarawak to identify
contributing and underlying factors and formulate appropriate
control measures.
Key Initiatives and Forward-looking Plans
In 2022, we will resume annual health check-ups for employees
and our Chemical Health Surveillance for selected employees
who are deemed to be at higher risk to chemical exposure.
These had been temporarily discontinued due to the COVID-19
pandemic. Safety improvements and a Management of Hazards
Campaign will also be launched in 2022. A longer-term target will
be established to align the current OHS Management System
with ISO 45001:2018 (Occupational Health & Safety Management
Systems) with plans to obtain certification by the end of 2023.
Finally, our on-site healthcare facility will be upgraded in 2022
and will be equipped with a sterilisation machine, medical grade
air filter, cardiac monitor, additional treatment beds and includes
the acquisition of a new ambulance. A Road Safety Campaign
will also be carried out in 2022, along with the construction of
a pedestrian walkway to ensure improved safety for employees
moving around the plant’s compound.
Community Development
The Group believes that our activities can play a key role in
sustainable community development, by serving as a catalyst for
positive economic and social change.
As a Group, OMH’s main focus is to support the local community
with a better quality of life by improving standards of living for
underprivileged communities. Our efforts are unique to regions
we operate in as they vary based on local needs.
Read more on our policies in relation to community development on our website:
http://www.omholdingsltd.com/aboutus/corporate-governance/
1.
2.
3.
Code of Ethics and Conduct
Diversity and Inclusivity Policy
Community Relations Policy
Supporting Our Local Community
OM Sarawak
We actively engage with stakeholders that are impacted by OM
Sarawak’s activities. To contribute meaningfully to the wellbeing
and development of the local community, dialogue sessions are
conducted to understand their perspectives, needs and concerns.
Over the years, OM Sarawak has implemented initiatives and
support programmes to give back to the community. These include
educational programmes, fundraising dinners for sports and
recreation programmes, and local infrastructure improvement
projects. These activities, however, were temporarily halted in
2020, following the COVID-19 pandemic, and will resume once
the situation permits.
Some of the beneficiaries, programmes and events that OM
Sarawak supports are:
•
•
•
•
•
Villages surrounding SIP
Sports and recreational associations
Back-to-school programmes
COVID-19 sponsorship for medical apparel
Local government agencies – health division offices, fire
department and ex-police association
We also provide employment opportunities, and constantly
seek to increase the local share of employment. This is further
elaborated under Talent Management.
Donations and sponsorships are provided in a transparent
manner and must undergo internal approval processes. In 2021,
OM Sarawak made donations and sponsorships totalling AUD
126,978 (equivalent to USD 92,770) to the local community. The
majority of the contributions comprised of personal protective
equipment donated to the Bintulu Division Health Office to
facilitate the COVID-19 vaccination programmes and various case
detection activities within the Bintulu Division.
47
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 is also required to conduct annual engagements with relevant
stakeholders to share the latest environmental updates. Other
initiatives implemented to manage environmental impacts are
further elaborated under the Environmental section.
Forward-looking Plans
To enhance our community outreach programmes, OM Sarawak
plans to organise the following activities in the near future:
•
•
Community projects in collaboration with schools and
non-governmental organisations (“NGOs”); and
Establish platforms to sell goods produced by groups
and NGOs to support local economic growth
Human Rights
Human rights are fundamental principles of personal dignity
and universal equality. Respect for human rights fosters social
progress, better standards of living and greater freedom for
individuals. OMH is committed to respecting human rights across
our business and to upholding the laws and regulations of the
countries in which we operate.
OMH’s Human Rights Policy was established to help protect
the human rights of our stakeholders, and to prevent all forms
of violation. Our key commitments towards human rights are
outlined below:
•
•
•
•
Respect the rights and dignity of employees, contractors,
partners, local communities and those affected by our
businesses;
Provide equal opportunity and an environment free
from discrimination including support for the principles
of freedom of association and collective bargaining;
Not condone or use forced, compulsory or child labour;
and
Protect personnel and assets in a secure environment in
which business operations can be conducted efficiently
and successfully.
Read more on our Human Rights Policy and other relevant policies, standards and codes
on our website: http://www.omholdingsltd.com/aboutus/corporate-governance/
1.
2.
3.
4.
Human Rights Policy
Diversity and Inclusion Policy
Code of Ethics and Conduct
Whistleblower Protection Standard
OM Sarawak donated laptops and Personal Protective Equipment (PPE) to Bintulu
Division Health Office. The donated items which consist of laptops, disposable
coveralls, latex gloves, medical gowns, and hand sanitisers, will be used to facilitate
the COVID-19 vaccination programmes within Sarawak, as well as various active case
detection activities within Bintulu division
OMM
For our mining entity in Australia, OMM actively engages with
traditional landowners and other persons who may be directly
affected by the operations at the Bootu Creek Mine. These
engagements are conducted through regular meetings with
community representatives.
The protection of significant cultural and heritage sites has
been widely promoted among employees. As a contribution to
traditional landowners, several community projects including
fencing of sacred sites, road maintenance and minor rehabilitation
programmes were carried out.
To support the
upskilling opportunities are also provided to
candidates through various training programmes.
Indigenous community, employment and
Indigenous
Negative Impacts on the Local Communities
OM Sarawak operates within a dedicated industrial park and the
nearest local community is situated approximately 10 km away
from the plant. Notwithstanding this, the following have been
identified as potential impacts that could negatively affect the
livelihood of the local communities.
•
•
Traffic Generation Impact – The key impact on the main
road network is the trucking of containers via the Bintulu-
Miri Coastal Road. However, bulk raw materials and bulk
export products are transported between OM Sarawak
and the Samalaju Port by trucks via the Site Access or
Coastal Road and are not anticipated to have a significant
traffic impact on external road networks. Most workers
stay within the Samalaju New Township which is located
within the SIP. To prevent traffic congestion, in-house bus
services to transport workers to and from our Sarawak
plant to Samalaju New Township are provided.
Socio-Economic Impact – negative impact to the local
community in terms of increase in traffic flow, number
of foreign workers and health and safety concerns. To
address this, OM Sarawak has established a mechanism
to manage grievances and expectations from
local
stakeholders.
All personnel and applicable external parties will be provided with access to a copy of this
policy via OMH’s website.
Human Rights Risks Assessment and
Management
At OM Sarawak, we ensure strict compliance with our Labour
Policy which prohibits the employment of children and young
persons, where ‘child’ is defined as a person under 15 years of
age and ‘young persons’ as those above 15 years but below 18
years of age, based on the Sarawak Labour Ordinance.
As explained in Supply Chain Management, we also ensure
that all raw material suppliers comply with these human rights
standards. Suppliers are required to sign an annual declaration
to confirm that they do not employ children or use forced
labour. If any forms of child or forced labour are discovered
through visits or site audits otherwise made known to us, OM
Sarawak will take prompt steps to remedy the situation.
All other key environmental impacts are identified and documented
in the Detailed Environmental Impact Assessment (“DEIA”) Report
and mitigation measures are also listed for execution. Under the
EPs and IFC Performance Standard requirements, OM Sarawak
48
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 All officers, employees and contractors of OMH must comply
with this standard, which is aligned with our Corporate
Governance, section 3 Ethical Standards, 3.3 Whistleblower
Policy.
Read more on our Whistleblower Protection Standard on our website:
http://www.omholdingsltd.com/aboutus/corporate-governance/
OM Sarawak also has a Grievance Policy in place. All new
employees are briefed on the policy during induction. Posters
in multiple languages (English, Mandarin, and Malay) are made
available in offices and plant buildings to increase awareness
among employees and contractors on the grievance mechanism
in place.
Employees can scan the QR code provided on the posters and log
their grievances through an online form. A team is appointed to
act upon and resolve grievances that are submitted. In FY2021,
seven (7) grievances were recorded and resolved.
Forward-looking Plans
To enhance the protection of human rights across our business
operations, we are looking to conduct the following:
•
•
•
•
ISO14001 and
Obtain
for
environmental management system and occupational
health and safety management system respectively by
the end of 2023;
ISO45001 certification
Provide copies of employment contract terms in the
native language of foreign employees;
Conduct awareness briefings for employees on the
Grievance Policy; and
Establish standard operating procedures for supplier
social compliance which includes the development of
a Supplier Code of Conduct to ensure suppliers meet
international human rights standards.
Talent Management
•
local employees trained to
60
replace foreign staff
Human capital plays a pivotal role in driving the achievement
of OMH’s business objectives. We believe in building and
strengthening our workforce, mentoring a versatile talent pool,
and empowering our employees through various upskilling
programmes to create an effective and resilient workforce.
Step 1:
Request suppliers to provide
improvement plan with identified root
causes, and containment and preventive
actions.
Step 2:
Visit supplier’s factory to conduct site
audit. Interview workers and conduct
documentation checks to verify corrective
action taken to remediate child and/or
forced labour issues.
Step 3:
If audit findings are unsatisfactory:
Suspend supplier
1.
Remove supplier from OM
2.
Sarawak’s supplier list (instantly
or within a definite timeline)
Re-qualify supplier by conducting
a second site audit and ensure
that zero incidents of non-
conformance or violation of
human rights are found
3.
OM Sarawak’s Supplier Assessment and Management
Key Initiatives
Supplier
Performance
Evaluation
Annual performance evaluations, which
include compliance with human rights
standards, are conducted for all raw
material suppliers. Preferred vendors
will be rated “A” if they achieve an overall score of 80% and
above. If the supplier is rated “D”, they will be disqualified as a
vendor. OM Sarawak is looking to extend these evaluations to
other key suppliers in the near future.
Overall Score
Grade
Condition
80.00% and above
Grade A
Preferred Vendor
Below 79.99% until
Grade B
Generally Acceptable Vendor
65.00%
Below 64.99% until
Grade C
Conditionally Acceptable Vendor
40.00%
(with minor areas of concerns)
Below 40.00%
Grade D
Non Recommended Vendor
Note: OM Sarawak’s Scoring Evaluation
Equal
Opportunities
OMH does not condone the unfair
treatment of individuals based on factors
such as age, gender, and beliefs, among
other factors. Equal opportunities are
offered to all qualified individuals in recruitment, compensation,
promotion, training and other employment practices based on
merit, ability, performance and potential.
Grievance Mechanism
Cases of human rights violations can be reported using
the whistleblowing channel outlined in the Whistleblower
Protection Standard.
Employees in the OM Sarawak’s Office
49
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Employment
As at 31 December 2021, we had 2,086 employees within the
Group, of which 83% are employed at our smelting operations in
Malaysia followed by China (12%), Australia (3%) and Singapore
(2%).
Total number of employees within the Group
Malaysia
83%
China
12%
Australia
3%
Singapore
2%
Note: Aggregate data from OMH
Due to the scale of our operations in Malaysia, the rest of
this section will focus solely on OM Sarawak. Disclosures may
extend to the entire Group as our sustainability reporting
practices mature.
In FY2021, we recruited 297 new hires equivalent to a hiring rate
of 18.6%. Our employee turnover rate was 30.9%, significantly
higher than our historic hiring rate as a consequence of the
COVID-19 pandemic (Refer to the Processing and Smelting
Operational Review section).
New Hires By
Gender
New Hires By
Age Group
Female
81%
Male
19%
Above
50 years
old
40%
Below
30 years
9%
30 to
50 years
51%
Employee Turnover
by Gender
Employee Turnover
By Age Group
•
•
Internal hiring to provide career development and
upskilling opportunities to our existing employees; and
Job advertising on online job portals, online professional
networking sites, newspapers and social media.
We support our new talents by conducting a one-day New
Employee Induction Programme to introduce OM Sarawak’s
culture and inform them on important company and Group
policies and procedures, such as grievance processes, safety,
security, and disciplinary policies.
Diversity and Equality
Employees in discussion at OM Sarawak’s meeting room
We value employing people of varying gender, age, skills,
cultural backgrounds, ethnicities, nationalities, religions, and
lived experiences. A diverse workforce, within the local context,
is essential for resilient growth, improved productivity, and
stronger engagement.
Recruiting and retaining the right people from a diverse pool of
talented candidates enables the Group to:
•
•
Make better informed decisions, innovate better, draw
on a wider range of ideas, experiences, and approaches;
and
Better represent the diversity of local communities and
stakeholders.
As outlined in our Corporate Governance Report on Diversity,
the total representation of women employees across the
Group, including women holding senior executive positions and
those on the OMH Board, is as follows:
Male
88%
Female
12%
Below
30
years
37%
Above 50
years
old
11%
30 to
50 years
52%
OMH Personnel
OMH Board of Directors
Senior Executives
Total of OMH Group
employees
Note: Aggregate data from OMH
Number of
Women
2
4
346
%
28.57
25.00
17.03
As at 31 December 2021, approximately 9.59% of OMH’s mining
subsidiary workforce consisted of Indigenous employees.
During FY2021, it was also observed that the majority of OM
Sarawak’s workforce were male (85%) and aged 50 years and
below (91%). Various ethnic groups are also represented at
our smelting operations – 41% of OM Sarawak’s employees are
Chinese (which comprises both local Malaysians of Chinese
ethnicity and foreign Chinese nationals), followed by 37% who
are Iban.
Note: Aggregate data from OMH
During the year, OM Sarawak utilised several channels and
collaborated with various organisations
for recruitment
purposes:
Open interviews in collaboration with the Social Security
Organisations;
Open interviews at polytechnics and universities;
Virtual career talks at local polytechnics and universities
(such as Curtin University Sarawak, Swinburne
University, Polytechnic Mukah);
•
•
•
50
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Employee
Diversity
Workforce Diversity
(Age Group)
Female
15%
Male
85%
Below
30 years
43%
Workforce Diversity
(Racial Group)
Above
50 years
old
9%
30 to
50 years
48%
Iban 37%
Chinese 41%
Melanau 10%
Malay 3%
Indian 2%
*Others 7%
*Others - Refers to several minor ethnic groups placed collectively under
‘Others’ such as Begetan, Bidayuh, Bisaya, Kajang, Kayan, Kedayan,
Kegaman, Kenyah, Lahanan, Lun Bawar, Penan, Punan and others.
Note: Aggregate data from OM Sarawak
Read more on our Diversity Policy on our website: http://www.omholdingsltd.com/
aboutus/corporate-governance/ and our Corporate Governance Report integrated into
this Annual Report
Fair Remuneration and Benefits
OMH acknowledges that the provision of fair remuneration and
benefits is essential for attracting and retaining employees.
Therefore, we strive to provide competitive remuneration
packages to our workforce. We also adhere to the minimum
local wage standards that are applicable to our businesses (e.g.,
OM Sarawak adheres to the Sarawak Labour Ordinance and
Minimum Wages Order 2018).
Annual leave and retirement contributions are mandatory
for all employees. Additional benefits such as maternity and
paternity leave entitlements, additional allowances, subsidies,
and reimbursements vary depending on where our businesses
operate.
Retirement
Benefits
Retirement benefits for employees are
provided through defined contribution
plans, as provided by the laws of the
countries in which the Group operates
in:
a)
b)
c)
Singapore: Central Provident Fund (“CPF”)
Australia: Employee Superannuation Plans “(SUPER”)
Malaysia: Employees Provident Fund (“EPF”)
In response to the COVID-19 pandemic, flexible work-from-
home arrangements were rolled out across the Group with the
aim to keep all employees safe and reduce the risk of employees
getting infected with COVID-19. Employees who were required
to be on-site were segregated into non-overlapping teams with
staggered shifts to ensure minimal physical contact.
Performance-based Remuneration
Within the Group, remuneration is predicated on job function
and requirements, employee qualifications and working
experience. No other distinctions are made based on gender
or other diversity criteria. Variable performance-based
compensation is determined based on the annual performance
appraisal system in place which is conducted at least annually.
We also prioritise internal promotions and hire to retain
employees, providing suitable career progression based on
their strengths and demonstrated abilities. At OM Sarawak,
we have a standard pay scale for technical operators and
staff, and a structured competency-based career tracking
and assessment programme for stoking operators as well as
production engineers.
As at 31 December 2021, we recorded 152 promotions and
internal hires, equivalent to a promotion or internal hire rate
of 9.5%
Investing in Our People
Efforts in Hiring Local Employees
Since entering its operational phase, OM Sarawak has worked
to reduce its reliance on foreign employees. In 2014, Chinese
nationals accounted for 80% of the entity’s workforce, but this
has reduced to 32% in FY2021.
As smelting is a relatively new industry in Sarawak, skilled core
positions (currently mostly helmed by foreign manpower from
China), generally require 10 to 15 years of on-site experience to
acquire the necessary level of competency.
Percentage of Malaysian vs Foreigners
Foreigners
32%
Malaysian
68%
Initiatives implemented include:
•
•
•
•
Creation of local management and trainee positions
via training programmes
Deployed semi-skilled local manpower to positions
within the core furnace and maintenance operations
through upskilling to skilled or technical roles
Intensified localisation programmes
Collaborated with the local university to enhance
training programmes for local operators
Note: Aggregate data from OM Sarawak
51
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 In 2021, as part of the continuous localization effort, we successfully trained 50 local employees to replace some of the roles that
were previously filled by foreign manpower. This was made possible through our smelting operator development programmes,
which helped to mitigate further production disruptions due to a shortage of skilled foreign labour as a result of COVID-19 related
travel restrictions.
Worker at OM Sarawak takes product sample to be tested by soaking or splashing it with water.
As mentioned previously, upskilling our workforce is crucial to sustaining continued growth and improvements in productivity and
performance for the Group. We invest in our workforce through a variety of training programmes.
Internal and external training programmes conducted by OM Sarawak in FY2021:
Training Programmes Conducted
Technical programmes
Stoking Apprentice I
•
Training
• Casting Training
• Power Distribution
Training
Smelter Lifting Training
•
Safety programmes
• Kempen Pergi and Balik
Kerja (Go and Return
Campaign)
• Conveyor Belt Safety
Training
• Basic Fire Safety Training
Smelter Safety Refresher
•
Training
• Chemical Handling and
Safety Training
Competency training
• Authorised Entrant and
Standby Person
• Occupational Health Nurse
Development training
• KAIZEN
• Domestic Inquiry
• Understanding of HACCP
52
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Training programmes conducted in FY2021 included Technical Programmes, Safety Programmes, Competency Training and
Development Training. These programmes were conducted to upskill the existing workforce, address competency gaps, as well as
motivate and increase engagement among employees. In FY2021, we recorded the average training hours according to gender and
employment category as follows:
Training Hours
Training Hours
41
40
4.2
4.1
2.1
2.0
Male
Female
i v e
N o n - e x e c u t
i v e
E x e c u t
M a n a g e m e n t
S e n i o r
M a n a g e m e n t
Note: Aggregate data from OM Sarawak
Employee Engagement
Employee
surveys
Virtual online
training
Virtual online
Townhall
session
Festive
celebrations
Annual
dinner
Sports
activities
In FY2021, employee engagement activities were limited due to COVID-19 and were largely conducted virtually to minimise physical
contact. Employee activities that are usually carried out annually, such as festive celebrations, annual dinners and sports activities,
were postponed to reduce the risk of employees getting infected with COVID-19. These activities will resume in the future when
feasible and safe to do so.
Forward-looking Plans
OM Sarawak will continue training local operators at the highest rate possible, to provide sufficient manpower buffer in core
operations and continue the localization process. We will also sponsor local workers to obtain the Certificate in Manufacturing
Technology (Smelting), a joint venture upskilling programme with Universiti Malaysia Sarawak (“UNIMAS”) which we announced in
February 2022. At OM Sarawak, our long-term goal is to employ a workforce of at least 80% local employees. We also aim to roll out
our Managerial Development Programme in the near future, to cultivate leadership and managerial talent.
53
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 ENVIRONMENTAL
o
Energy & Emissions
•
•
•
Comply with Malaysian Ambient Air
Quality Guideline (MAAAQG)
Achieve ISO 14001 in FY2023
Complete tapping de-duster pilot
plant trials by 1H 2023
We believe the protection of the environment
is a key
responsibility of the Group. Hence, maintaining responsible
practices in energy consumption and emissions management
is crucial to protect the environment and to demonstrate good
stewardship of natural resources.
Energy management practices at our flagship smelter complex
in Sarawak, Malaysia, are implemented in accordance with
the plant’s Environmental Management System which was
formulated in line with the ISO 14001:2004 standard. OM
Sarawak is also pursuing ISO 14001:2004 certification.
Energy Management
The conversion of raw materials into ferroalloys involves high
temperature smelting processes that consume large amounts
of electricity. The electric arc furnace operates at varying
temperatures, in excess of 1000°C, depending on the type of
metal oxide reduction required for various ferroalloys.
54
OM Materials (Sarawak) Sdn. Bhd. (“OM Sarawak”), one of the largest ferroalloy plants in
the region, the Group’s flagship smelter complex in Samalaju, Sarawak.
OM Sarawak occupies 202.35 hectares within the SIP which
caters specifically for energy-intensive industries. Since the
inception of the Sarawak plant, we have entered into a 20-
year power purchase agreement (“PPA”) (until the year 2033)
with the State’s power company for the continuous supply of
competitively priced electricity at an initial capacity of 350 MW.
Electricity supplied is predominantly generated from renewable
sources.
While the main smelting operations consumes electricity,
diesel fuel is also used for our logistics operations and for the
transportation of raw materials and finished goods.
Electricity Consumption
Electricity Consumption
(Million GJ)
10.69
11.07
8.80
7.51
FY 2018
FY 2019
FY 2020
FY 2021
Note: Aggregate data from OM Sarawak
OM Sarawak consumed 7.51 million gigajoules (GJ) of electricity
in FY2021. Electricity consumption was reduced by 14.6% in
FY2021 when compared to FY2020 - mainly due to reduced
production during the COVID-19 pandemic, where only 12 out
of 16 furnaces were in operation.
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Breakdown of FY2021 Electricity
Consumption
Breakdown of FY2021 Energy
Consumption
APCE, Production
Equipment
and Ancillary
Equipment and
Services
6.8%
Smelting
Process
93.2%
Fuel (Diesel)
0.75%
Electricity
99.25%
Note: Aggregate data from OM Sarawak
Note: Aggregate data from OM Sarawak
Out of the total electricity consumed in FY2021, 93.2% was used
to power our smelting processes while the remaining 6.8%
was consumed to operate the Air Pollution Control Equipment
(“APCE”), production equipment and ancillary equipment and
services.
The overall energy consumption for FY2021 was 7.57 million
GJ. 99.25% of the energy consumed was electricity and the
remaining 0.75% was diesel fuel. The total energy consumption
decreased by 14.4% as compared to FY2020 due to reduced
production in FY2021.
Fuel Consumption
Energy Intensity
Diesel Consumption
(Million GJ)
Energy Intensity
(GJ/Tonne of Ferrosilicon)
0.06
31.15
31.81
31.99
31.66
31.22
31.97
0.04
0.04
0.04
FY 2018
FY 2019
FY 2020
FY 2021
Note: Aggregate data from OM Sarawak
OM Sarawak consumed 0.06 million GJ of diesel in FY2021. The
increase of 36.6% in diesel consumption was attributed to the
trial operations of the sinter plant. The sintering trial operation
accounted for 47% of the overall diesel usage for FY2021.
FY 2016
FY 2017
FY 2018
FY 2019
FY 2020
FY 2021
Energy Intensity
(GJ/Tonne of Manganese Alloy)
12.16
12.51
13.39
13.69
13.89
Breakdown of FY2021 Electricity
Consumption
Sintering
Operation
47%
Logistic
Vehicles &
Machineries
53%
Note: Aggregate data from OM Sarawak
Energy Consumption
Total Energy Consumption
(Million GJ)
10.73
11.11
8.84
7.57
FY 2018
FY 2019
FY 2020
FY 2021
Note: Aggregate data from OM Sarawak
FY 2017
FY 2018
FY 2019
FY 2020
FY 2021
Note: Aggregate data from OM Sarawak
In FY2021, the energy intensity to produce a tonne of ferrosilicon
and a tonne of manganese alloy was 31.97 GJ and 13.89 GJ
respectively, which was a 2.4% and 2.2% increase from FY2020.
The marginal increase in energy intensity for ferrosilicon was
due to variations in raw material proportions and grades, a
consequence of supply chain disruptions during the COVID-19
pandemic. The increase in energy intensity for manganese
alloys was due to changes in the product mix, with lower energy
intensive products being reduced from the product mix in
FY2021.
55
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 Key Initiatives and Forward-looking Plans
As part of our continuous efforts to improve energy management
and facilitate sustainable production, the following optimisation
plans are to be carried out on a continuous basis:
•
•
•
Selecting better raw materials, better pre-processing of
raw materials, and reusing sintered ore;
Utilising improved instruments and process controllers
to optimise the production processes; and
scheduled
Performing
equipment maintenance
and using improved process equipment to improve
equipment reliability and provide higher operating
efficiency.
In 2022, in collaboration with the International Manganese
Institute (IMnI), a ‘cradle-to-gate’ Life Cycle Analysis (“LCA”)
will be conducted on manganese ore and manganese alloys to
better understand our environmental footprint and benchmark
ourselves against other producers in the industry. The scope
of the LCA will cover processes from extraction of resources
to processing (smelting), and stops at our plant gate. This
assessment will assist our customers, who are major steel
mills within the region, in making decisions that will benefit the
environment as they lean towards enhancing sustainability in
their supply chains.
The total GHG emissions in FY2021 were 1,151 kilotonnes of
carbon dioxide equivalent (CO2-eq). Over the past three years,
we have observed a decrease in total GHG emissions, with a
17.4% reduction recorded between FY2021 and FY2020. This
decrease in emissions was mainly due to lower production
activities. GHG emissions are calculated based on the
Greenhouse Gas Protocol and 2006 Intergovernmental Panel
on Climate Change (“IPCC”) Guidelines.
Out of the total 1,151 kilotonnes CO2-eq emitted in FY2021, 724
kilotonnes CO2-eq were direct Scope 1 GHG emissions, and 427
kilotonnes CO2-eq were indirect Scope 2 GHG emissions. Both
Scope 1 and Scope 2 emissions decreased by 19.0% and 14.3%,
respectively, compared to FY2020. As reiterated previously, this
was due to a lower capacity utilization.
Scope 1 Emissions
(Kilotonnes of CO2-eq)
1,103
1,098
894
724
Greenhouse Gases (GHG) and Other Significant
Air Emissions
Note: Aggregate data from OM Sarawak
FY 2018
FY 2019
FY 2020
FY 2021
We are fully committed to ensuring that air quality remains
within the permissible
level set out by the respective
environmental regulatory bodies in the countries that the
Group operates in. Continuous research and development on
air quality improvements remain a long-term goal for OMH.
Our Sarawak plant in Malaysia is required to abide by the
Environmental Quality (Clean Air) Regulations 2014 and the
Malaysia Ambient Air Quality Standard 2020.
During the production of ferroalloys, the use of carbonaceous
materials is required as reducing agents during the chemical
conversion process, leading to the inevitable emissions of
carbon dioxide (CO2). Such emissions can potentially be reduced
but cannot be eliminated completely with currently available
technology.
Total GHG Emissions
(Kilotonnes of CO2-eq)
1,678
1,789
1,393
1,151
Scope 1 emissions are mainly derived from smelting processes.
These emissions are the result of metallic oxide reduction and
consumption of carbonaceous material during the reduction
process. Scope 1 emissions disclosed exclude the combustion of
fuel by company vehicles as the distance travelled to transport
raw materials, products and by-products to the storage yard
are not material.
Scope 2 emissions are associated with the consumption of
electricity from the power grid, which is predominantly powered
by the hydroelectric dams in Sarawak.
Scope 2 Emissions
(Kilotonnes of CO2-eq)
692
575
498
427
FY 2018
FY 2019
FY 2020
FY 2021
Note: Emissions factor for 2018 to 2020 are based on figures provided by Sarawak Energy
Berhad. The emission factor used for FY2021 Scope 2 Emission calculation is based on
FY2020 provided by Sarawak Energy Berhad.
FY 2018
FY 2019
FY 2020
FY 2021
Note: Aggregate data from OM Sarawak
56
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 GHG Emission Intensity
(CO2-eq of per tonne Ferrosilicon Produced)
5.31
5.48
5.27
5.22
FY 2018
FY 2019
FY 2020
FY 2021
GHG Emission Intensity
(CO2-eq of per tonne Manganese Alloy Produced)
3.10
2.66
2.63
Resources are also being allocated to carry out research and
feasibility studies to improve the filtration efficiency of the
main furnace de-dusting systems, and to upgrade the current
de-dusting systems used during the tapping process for
ferrosilicon furnaces. OM Sarawak has performed trial tests
using filter bags from various reputable manufacturers and
has started utilising higher quality filter bags, with improved
filtration media, to improve the filtration efficiency.
Improvement plans for upgrading the plant’s ferrosilicon
tapping de-duster systems were finalised in FY2021 and a pilot
project is lined up for execution in 2022.
The new system designs will take into consideration various
parameters, including the characteristics of dust, production
processes and the on-site operating conditions to meet
production requirements. The project design will include
upgrading the current de-duster system, as well as modifying
the extraction hood system and fume control dampers system.
With the utilisation of a pulsejet system, the upgraded de-duster
system will have a higher filtration efficiency and is expected
to significantly reduce dust and fume emissions during the
tapping process.
2.09
Waste Management
FY 2018
FY 2019
FY 2020
FY 2021
Note: Aggregate data from OM Sarawak
The GHG Scope 1 emissions intensity ratio for FY2021 was
3.16 CO2-eq per tonne of FeSi produced, a 3.9% reduction from
FY2020. For manganese alloy, the FY2021 GHG Scope 1 emissions
intensity ratio was 1.74 CO2-eq per tonne of manganese alloy
produced, a 2.8% reduction from FY2020.
in the plant. The CEMS system
Total Particulate Matter (“TPM”) is monitored continuously
through a Continuous Emissions Monitoring System (“CEMS”)
is periodically
installed
audited and calibrated to ensure accuracy and reliability and
is connected to the DOE of Malaysia in real-time. Quarterly
Relative Response Audit (“RRA”) tests are also carried out for
all stacks at each furnace to ensure the validity of particulate
matter readings. During routine maintenance of the CEMS,
OM Sarawak will carry out hourly stack opacity observations
according to OM Sarawak’s standard operating practices.
Additionally, ambient air quality monitoring is performed to
monitor SO2, NO2, and PM10 levels across all OM Sarawak’s plant
operations.
In FY2021, it was reported that all air quality parameters (i.e.,
total suspended particulate (TSP), particulate matter (PM10),
carbon monoxide (CO), nitrogen dioxide (NO2) and sulphur
dioxide (SO2)) met the limits prescribed under the Malaysian
Ambient Air Quality Guidelines (“MAAQG”).
Key Initiatives and Forward-looking Plans
The Utilities and De-dusting System (“UDS”) Department
operates and maintains the APCE. The APCE are a series of
equipment that work to prevent pollutants from entering the
atmosphere. The operation is supervised by several competent
personnel who are Certified Environmental Professionals in Bag
Filter Operation (“CePBFO”) and are acknowledged by the DOE.
The UDS Department personnel perform daily inspections of
the APCE and scheduled replacements of aged filter bags to
reduce dust emissions.
As part of our ongoing initiatives, OM Sarawak also organises
annual knowledge sharing sessions with industry peers to share
sustainability practices especially when it comes to managing
operations within SIP.
•
Repurpose at least 80% of scheduled
waste generated each year
Waste management
integral part of OMH’s
environmental responsibility. It is also a requirement that we
comply with applicable laws and regulations, and that waste
management strategies implemented are sustainable.
forms an
Across the Group, the Reduce, Reuse and Recycle (“3R”) concept
is embedded within waste management procedures.
There are no significant waste-related impacts arising from
mining or processing activities at the Bootu Creek Mine in
Australia. Waste rock and processing tails are stored on-site
and are not acid generating. These wastes are managed in
accordance with the Waste Management Plans for waste rock
and tailings storage that was submitted to and approved by
the Northern Territory Department of Primary Industry and
Resources.
Read more on our ASX Listing Rules 5.8.1 & 5.9.1 Summary Information integrated into
this Annual Report.
At OM Sarawak, waste management practices and initiatives
are performed in accordance with the Environmental Quality
(Scheduled Wastes) Regulations 2005 and are guided by the
Environmental Management System. Waste generated
is
recorded in the Electronic Scheduled Waste Information System
(“eSWIS”) which was developed by the DOE.
Silicomanganese slag is a green coarse glassy by-product of the
silicomanganese smelting process, and is often repurposed for
use in cement, or as an aggregate for use in construction. Silica
fume is a fine powder-like by-product of ferrosilicon smelting and
is recovered from our de-duster systems. It is often densified
for use in the construction industry. Both by-products have
been tested by SIRIM Behad (“SIRIM”), a national standards and
quality organization in Malaysia, and have been certified to be
non-reactive and are not expected to present danger to human
health except through oral and nasal consumption. Based on
the Toxicity Characteristic Leaching Procedure (“TCLP”) analysis
conducted by SIRIM, both by-products are well within the
threshold limits for both organics and inorganics.
In FY2021, OM Sarawak generated 149 kilotonnes of scheduled
waste, which was a 6.6% increase from FY2020. Both silica fume
and silicomanganese (SiMn) slag are classified as SW104 by the
DOE, being dusts and slags respectively, and constitute the
57
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021
In addition, experiments for the potential use of SiMn slag
to partly substitute clinker in Portland cement are currently
ongoing too. OM Sarawak is collaborating with a local cement
producer for trial studies. Studies on the application of SiMn
slag as raw material for brick making, concrete block and road
construction is also currently in the research and development
stage.
OM Sarawak also took the initiative to launch its Food Waste
Recycling Project in collaboration with a third-party local food
waste processing entity, with the aim of converting food waste
into organic fertiliser. In FY2021, 17,000 kg of food waste was
collected and successfully converted to 850kg of fertiliser. This
will be an ongoing activity to minimise disposal of food waste
at the plant.
majority of scheduled waste generated. 96.3% of the scheduled
waste generated was repurposed in FY2021 and not disposed.
Hazardous waste storage facilities are also available on-site,
and have been properly designed to contain and prevent the
waste from contaminating any nearby water bodies with the
following key handling and management practices in place:
•
•
•
•
Stored in containers or waste bags that are compatible
and durable to prevent spillage or
leakage and
segregated according to the types of waste;
Containers and waste bags clearly
for
identification with warning signs, waste code and name
indicated;
labelled
All scheduled wastes are transported to a DOE-approved
treatment facility for final disposal or recovery; and
Domestic and non-hazardous wastes generated are
collected by government-authorised solid waste
management contractors for disposal to approved
landfill sites
Schedule Waste Breakdown
(kilotonnes)
170
157
140 138
149
144
139
109
33
32
23
21
OM Sarawak collaborates with Ex-Community in food waste recycling project.
FY 2018
FY 2019
FY 2020
FY 2021
2.
3R Concept
Generated
Repurposed
Disposed
Non-Schedule Waste Breakdown
(Tonnes)
500 500
356 356
318 318
225 225
FY 2018
FY 2019
FY 2020
FY 2021
Generated
Disposed
Note: Aggregate data from OM Sarawak
Non-schedule waste generated for FY2021 was 225 tonnes, a
29.2% decrease from FY2020.
Key Initiatives and Forward-looking Plans
1.
Collaboration with External Parties
OM Sarawak is currently collaborating with external parties to
research and develop ways to repurpose waste generated by
the plant.
The entity has been collaborating with a local higher learning
institution under the Sarawak Research and Development
Council Grant to study the potential usage of silica fume as raw
material. The feasibility study is currently ongoing.
58
All waste generated by plant operations is managed by OM
Sarawak and third-party contractors are only engaged for
disposal and recycling. We work hard to reduce the amount
of waste disposed and incorporate the 3R concept across
the subsidiary – this not only minimises our environmental
footprint, but also promotes cost savings.
Non-hazardous wastes with commercial value, such as jumbo
bags, heavy vehicle batteries, and used tyres, are segregated
and sold to third-party recyclers. In addition, wood waste
generated across the operations, mainly from used broken
pallets and other wood-based materials, are repurposed as
reductants for smelting.
OM Sarawak repurposes SiMn slag for internal use as an
aggregate for roads and ground levelling works. Spent lubricant
oil from on-site vehicles is sold to DOE-registered recyclers for
biodiesel production.
OM Sarawak is also currently collaborating with a local higher
institution under the Sarawak Research Department Council
Grant, to reuse silica waste generated as a stabilising agent in
peat soil. Preliminary results from the research project have
demonstrated positive outcomes.
Furthermore, OM Sarawak has been granted a special permit by
the DOE to recover silica fume to produce micro-silica products.
Silica fume is recovered through a densification process to
produce micro-silica for sale to construction industries. It is
widely accepted as filling material in the concrete and cement
industry. This grey coloured powder is categorised as a
supplementary cementitious material and is used to harden
concrete through hydraulic or pozzolanic activity.
OM Sarawak currently runs a silica fume densification process
and aims to ensure that silica fume generated meets industry
saleable requirements and targets to increase the saleable
silica fume to reduce wastage and waste disposal costs.
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 3.
Training
To ensure employees are aware of waste management practices,
waste management plans for both industrial and hazardous
waste have been developed for employees’ reference. OM
Sarawak plans to conduct waste management briefings and
increase training frequency in the coming years.
Water and Effluents
Water forms an essential component of our business and OMH
works to ensure water resources are adequately managed
across our operations.
As iterated earlier, OM Sarawak is bound by legal requirements
of the Environmental Quality Act 1974, specifically the
Environment Quality (Industrial Effluent) Regulations 2009,
Fifth Schedule.
Water and Effluent Management
•
Ensure effluent water monitoring
parameters
the
permissible limit
are within
OM Sarawak’s
furnaces run high-temperature smelting
processes and water is used primarily for furnace cooling
purposes. Chemical additives are added to cooling water to
minimise pipe scaling and corrosion.
The plant’s cooling system was designed to be a closed-loop
water circulation cooling system. It is mainly used to cool
furnace equipment and furnace transformers. The water is lost
via evaporation from the cooling towers and water blowdown
process. The blowdown water is channelled to the blowdown
water pond, where water is recycled and reused for general
cleaning.
OM Sarawak utilises municipal water that is not extracted
from sensitive or protected water bodies (i.e., not part of the
Ramsar Wetlands list). To mitigate unforeseen water supply
interruption from the Municipal Water Supply Board, OM
Sarawak is equipped with a water reservoir that can store up to
48 hours’ worth of continuous water flow for plant operations.
Water Consumption
(Million m3)
2.00
1.79
1.47
1.22
FY 2018
FY 2019
FY 2020
FY 2021
Note: Aggregate data from OM Sarawak
In FY2021, 1.22 million m3 of water was consumed by OM
Sarawak. The water consumption for FY2021 reduced by 17% as
compared to FY2020 due to the reduction of furnace operations
in FY2021.
All key water quality impacts are identified and documented
in OM Sarawak’s DEIA Report along with the corresponding
mitigation measures. Periodic environmental monitoring is
carried out by a third-party consultant and any incidents of non-
compliance are reported and rectified immediately. Internal
laboratory analysis is conducted on wastewater for selected
parameters such as manganese content.
Industrial effluent or liquid waste generated from the plant’s
operations will be treated prior to discharge to meet the
regulatory standards for water quality. Wastewater quality is
monitored on a regular basis and incidents where the water
quality does not meet the compliance standards or permissible
limits/parameters are flagged and addressed immediately.
In FY2021, the effluent quality was found to be compliant with
the Environmental Quality (Industrial Effluent) Regulation 2009,
with the exception of one sampling point. The manganese
content of effluent was observed to be 1.33 parts per million
(ppm), exceeding the permissible limit of 1 ppm (Q4 2021
result showed improvement with a reading of 0.85 ppm).
This observation, however, was deemed acceptable due to
the abundance of manganese in the local soil. Nevertheless,
OM Sarawak will make all efforts to minimize the manganese
content in effluent.
All production areas within the boundary of the plant,
including the raw material open storage yard, are equipped
with a perimeter drainage system and sedimentation system
to capture suspended solids and mineral particles in surface
runoff discharged.
Sanitary water is piped directly to SIP’s centralised sewage
treatment plant. The wastewater discharge is treated to meet
the limits under Standard B of the Environmental Quality
(Sewage) Regulations 2009.
Key Initiatives and Forward-looking Plans
The following initiatives outline OM Sarawak’s continuous
efforts to ensure good water and effluent management:
•
•
•
•
•
•
Water chemical treatment system was introduced to
the plant’s close-loop water cooling system in 2017. The
system mitigates water pipeline corrosion and scaling,
and hence, reduces the amount of blowdown water in
the circulation system which significantly reduces water
consumption for cooling purposes;
The plant’s water reservoir tank and water tanks at
cooling stations were designed and constructed in
an enclosed manner. This conserves more water by
reducing evaporation rates compared to non-enclosed
water tanks;
Best practices have been introduced under the Daily
and Weekly Water Quality Monitoring Programme which
was implemented to ensure water quality does not
exceed pH and conductivity limits;
Standard operating procedures have been established
at the pump station to manage and reduce unnecessary
water usage;
A total of 34 water flowmeters were installed at key
locations across the plant to effectively monitor daily
water consumption. Installation of flowmeters will
continue in 2022; and
Sarawak
communicates
OM
the
management team of the Municipal Water Board to
ensure the main flow meter is calibrated to provide
accurate readings.
closely with
Other
include
improvement plans for the coming year
enhancing reporting on runoff water from plant areas, installing
59
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 flow meters at fire hydrants to identify leakages from fire
hydrant pillars and installing additional online water treatment
controllers at the water pump station to optimise chemical
usage and water consumption.
Land Remediation, Contamination or
Degradation
This section focuses on the land remediation and rehabilitation
processes for our mining entity, OMM, the owner and operator
of the Bootu Creek Mine located in the Northern Territory,
Australia. Mining activities have ceased at the end of 2021.
OMM – Bootu Creek Mine
Land and soil management is an integral component of mining
in the semi-arid temperate climate of the Northern Territory.
Mining can have adverse
impacts on the environment.
Identifying and managing these impacts is an important aspect
when managing business operations as a whole. Implementing
appropriate objectives, strategies and targets to achieve good
soil and land management ensures that OMM can continue
to maintain high
levels of environmental performance,
ensure compliance with its regulators and governing acts,
while benefiting stakeholders,
landowners and
shareholders.
including
Rehabilitation of disturbed areas is identified as a key closure
criterion upon completion of mining activities and upon
returning of the lease area to landowners. Rehabilitation of
infrastructure areas will be conducted pre-closure, while
other areas such as tracks, roads and exploration areas will be
remediated as and when they are no longer used in operations.
Various waste rock dumps across the site have been
progressively rehabilitated and revegetated to decrease
environmental impacts from erosion, introduction of weed
species, and waterway pollution.
2019
Bioremediation of
hydrocarbon-contaminated areas
2020
Trial to small test areas
2021
A wider bioremediation campaign
commenced in FY2021 to treat contained
contaminated areas which resulted in
successful remediation, confirmed by
laboratory analysis of Total Recoverable
Hydrocarbons (TRH)
OMM’s timeline for land remediation at the Bootu Creek Mine.
The bioremediation of hydrocarbon-contaminated areas
commenced in 2019 and 2020, which included trials of small
test areas. A wider bioremediation campaign commenced in
FY2021 to treat contained contaminated areas which resulted
in successful remediation, as confirmed by laboratory analysis
of Total Recoverable Hydrocarbons (“TRH”).
OM Sarawak – Sarawak Ferroalloy Smelting Complex
OM Sarawak’s operational site is located in a designated
industrial zone that is situated away from any sensitive
receptors. Prior to the construction of the smelting plant, a
DEIA was prepared in accordance with the Sarawak State’s
Natural Resources and Environment Order, 1997 and Malaysia’s
Environmental Quality Act 1974. The DEIA was submitted to and
approved by the DOE.
In Malaysia, we are bounded by the legal requirement of
Environmental Quality Act 1974 and the Environmental Impact
Assessment (“EIA”) Approval Condition that stipulates the
requirement to monitor soil quality as part of the quarterly
environmental monitoring assessment conducted by a third-
party consultant.
Key Initiatives and Forward-looking Plans
OMM’s soil and land management targets at the Bootu Creek
Mine comprise of compliance with all management strategies
outlined in OMM’s Environmental Management Plan. These
strategies include the following:
•
•
•
•
•
•
•
•
Limiting areas of disturbance;
Conserving environmental resource stockpiles for site
rehabilitation and long-term use (i.e., topsoil and quarry
rock);
Constructing waste rock dumps to minimise erosion and
landform instability;
Minimising wind and water erosion on disturbed
and constructed surfaces by conducting progressive
rehabilitation;
Preventing the introduction of soil-borne diseases and
weeds;
Minimising adverse
activities;
impacts on adjacent pastoral
Preventing
hydrocarbon management; and
land contamination by
implementing
Site-wide training to ensure all employees operate
within OMM’s environmental values and objectives.
OMM is committed to meet these targets and satisfy all land
management criteria upon closure. Upon completing land
remediation processes, the mineral lease will be released back
to its landowners. The highlights during FY2021 operations at
the Bootu Creek Mine include the progressive rehabilitation of
the Chugga West and Chugga North waste landforms. These
areas have been profiled and shaped with topsoil application
and are planned to be seeded in 2022.
The bioremediation campaign of hydrocarbon contaminated
materials also proved to be successful, signalling positive
land clean-up efforts at the
expectations for continued
workshop and fuel facility areas. Large scale hydrocarbon-
contaminated soil at pre-closure will be remediated in situ
using microorganism bioremediation. The remaining smaller
scale contaminated consumable waste will be incinerated
or alternatively transferred offsite to a suitable facility. The
remaining waste will be removed and disposed of within the
inert onsite landfill.
An overarching environmental aspects and impacts assessment
was performed prior to operations commencing at Bootu
Creek Mine, and outcomes and management strategies were
presented in OMM’s Environmental Management Plan. This
plan was reviewed and approved by the Northern Territory
Department of Industry, Tourism and Trade (“DITT”).
OMM has scheduled extensive environmental operations for
2022. Machinery works will focus on rehabilitating all waste
rock landforms, encompassing approximately 245 hectares on
the Bootu Creek Mine site. Local environmental consultants will
be engaged to conduct a Land Function Analysis (LFA) to assess
existing rehabilitation throughout 2022.
60
SUSTAINABILITY STATEMENTOM HOLDINGS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
The Directors are pleased to present their statement to the members together with the audited consolidated financial statements
of OM Holdings Limited (“the Company”) and its subsidiaries (collectively, the “Group”) for the financial year ended 31 December
2021 and the statement of financial position of the Company as at 31 December 2021.
In the opinion of the Directors,
(a)
(b)
the consolidated financial statements of the Group and the statement of financial position of the Company are drawn up so as
to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2021 and the financial
performance, changes in equity and cash flows of the Group for the financial year ended on that date; and
at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they fall due.
The Board of Directors has on the date of this statement, authorised these financial statements for issue.
Names of Directors
The Directors of the Company in office at the date of this statement were:
Low Ngee Tong
Zainul Abidin Rasheed
Julie Anne Wolseley
Tan Peng Chin
Thomas Teo Liang Huat
Dato’ Abdul Hamid Bin Sh Mohamed
Tan Ming-Li
(Executive Chairman and Chief Executive Officer)
(Independent Deputy Chairman)
(Non-Executive Director and Joint Company Secretary)
(Independent Non-Executive Director)
(Independent Non-Executive Director)
(Independent Non-Executive Director) (Appointed on 10 May 2021)
(Independent Non-Executive Director) (Appointed on 10 May 2021)
In accordance with Bye-law 88(1) of the Company’s Bye-laws, one-third of the Directors (excluding the Chief Executive Officer) retire
at the forthcoming annual general meeting and, being eligible, offer themselves for re-election.
Arrangements to enable Directors to acquire shares or debentures
During and at the end of the financial year, neither the Company nor any of its subsidiaries was a party to any arrangement of which
the object was to enable the Directors to acquire benefits through the acquisition of shares in or debentures of the Company or
any other corporate body.
61
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
DIRECTORS’ STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
Directors’ interests in shares
None of the Directors who held office at the end of the financial year had any interests in the shares of the Company or its related
corporation, except as follows:
The Company -
Low Ngee Tong
Julie Anne Wolseley
Tan Peng Chin
Holdings registered
in the name of
director or nominee
Holdings in which
director is deemed
to have an interest
As at
1.1.2021
As at
31.12.2021
As at
1.1.2021
As at
31.12.2021
Number of ordinary shares fully paid
68,110,631
68,110,631
5,562,002
5,562,002
(1) 2,020,000
(1) 2,035,200
–
–
–
–
–
–
Note:
(1)
2,035,200 (2020 - 720,000) shares are held by bank brokerage firms on behalf of Mr Tan Peng Chin.
Shares Options
No options were granted during the financial year to take up unissued shares of the Company or any corporation in the Group.
No shares of the Company or any corporation in the Group were issued during the financial year by virtue of the exercise of options.
There were no unissued shares of the Company or any corporation in the Group under option at the end of the financial year.
Audit Committee
The Audit Committee at the end of the financial year comprised the following members:
Thomas Teo Liang Huat (Chairman)
Julie Anne Wolseley
Dato’ Abdul Hamid Bin Sh Mohamed
The Audit Committee performs the functions set out in the Audit Committee Charter available on the Company’s website. The
Company has also considered the fourth edition of the Corporate Governance Principles and Recommendations with relevant
amendments developed by the ASX Corporate Governance Council. In performing those functions, the Audit Committee has
reviewed the following:
overall scope of both the internal and external audits and the assistance given by the Company’s officers to the auditors. It
has met with the Company’s internal and external auditors to discuss the results of their respective examinations and their
evaluations of the Company’s system of internal accounting controls;
the audit plan of the Company’s independent auditor and any recommendations on internal accounting controls arising from
the statutory audit; and
the half-yearly financial information and the statement of financial position of the Company and the consolidated financial
statements of the Group for the financial year ended 31 December 2021 as well as the auditor’s report thereon.
i.
ii.
iii.
62
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 DIRECTORS’ STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
Audit Committee (Cont’d)
The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full
authority and the discretion to invite any Director or executive officer to attend its meetings. The Audit Committee also recommends
the appointment of the external auditor and reviews the level of audit and non-audit fees.
The Audit Committee is satisfied with the independence and objectivity of the external auditor and has recommended to the Board
of Directors that the auditor, Foo Kon Tan LLP, be nominated for re-appointment as auditor at the forthcoming Annual General
Meeting of the Company.
Independent auditor
The independent auditor, Foo Kon Tan LLP, Public Accountants and Chartered Accountants, has expressed its willingness to accept
the re-appointment.
On behalf of the Directors
LOW NGEE TONG
Executive Chairman
Dated: 18 March 2022
63
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF OM HOLDINGS LIMITED
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of OM Holdings Limited (the “Company”) and its subsidiaries (collectively,
the “Group”), which comprise the statements of financial position of the Company and the Group as at 31 December 2021, and the
consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement
of cash flows of the Group for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying consolidated financial statements of the Group and the statement of financial position of the
Company are properly drawn up in accordance with the International Financial Reporting Standards (IFRSs) so as to give a true and
fair view of the financial position of the Company and the consolidated financial position of the Group as at 31 December 2021 and
of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group for the year
ended on that date.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Professional
Conduct and Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our
audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter:
Risk:
Our response and work performed:
Our audit procedures included among others,
assessing appropriateness of CGUs
identified
by management, evaluating management’s
assessment for impairment indications, reviewing
the valuation model and assumptions used, and
challenging management’s assumptions in our
evaluation of the model.
from
experts
independent
in the external and
We evaluated whether there had been significant
changes
internal factors
considered by the Group in assessing whether
indicators of impairment exist. In the assessment
of impairment, the Group takes into account the
indicative open market prices of the finished
products
and
publication reports, and uses inputs, such as
market growth rate, weighted average cost of
capital and other factors, typical of similar mining
and smelting industries. Senior management has
applied its knowledge of the business in its regular
review of these estimates. We also focused on the
adequacy of disclosures about key assumptions
and sensitivities. The disclosures about the
Group’s property, plant and equipment, land use
rights, exploration and evaluation costs, mine
development costs and right-of-use assets are
included in Notes 4, 5, 6, 7 and 9 to the financial
statements respectively.
tested
The Group’s non-financial assets comprise
property, plant and equipment,
land use
rights, exploration and evaluation costs, mine
development costs and right-of-use assets
amounting to A$633.7 million as at 31 December
for
2021. Non-financial assets are
impairment whenever events or changes
in
circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
The recoverable amount is based on certain
key assumptions, such as cash flow projections
covering a five-year period and the perpetual
growth rate and discount rate per cash generating
unit (CGU). A CGU is defined as the smallest
identifiable group of assets that generates cash
inflows that are largely independent of the cash
inflows from other assets or groups of assets.
These assumptions which are determined by
management, including the impact from the
COVID-19 pandemic, are judgmental.
level, the
In determining appropriate CGU
Group has considered whether there are: active
markets for intermediate products; external
users of the processing assets; mining or
smelting operations through the use of shared
infrastructure; stand-alone mines or smelting
plants operated on a portfolio basis. Significant
judgement
is required by management to
determine whether multiple assets should be
grouped to form a CGU.
Due to the uncertain global economic environment,
there are higher inherent risks relating to the
impairment of the Group’s non-financial assets.
Impairment of non-
financial assets
64
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF OM HOLDINGS LIMITED
Key Audit Matters (Cont’d)
Key audit matter:
Risk:
Our response and work performed:
Recognition of deferred
tax assets
The Group recognised deferred tax assets based
upon unutilised tax losses and other temporary
differences. The Group exercised its judgement to
determine the amount of deferred tax assets that
can be recognised, to the extent that it is probable
that future taxable profit will be available against
which the temporary differences can be utilised.
As at 31 December 2021, the Group recognised
deferred tax assets and deferred tax liabilities of
A$18.5 million and A$1.3 million respectively.
In addition, the Group has unrecorded deferred
tax assets of A$2.5 million as at 31 December
2021.
Our audit procedures included among others,
review of the component auditors’ audit working
papers to understand the local tax regulations
and their work performed on the recognition of
deferred tax assets. We have also assessed the
profit forecast to evaluate the reasonableness of
the recognition of deferred tax assets.
We discussed with the Group’s key management
and considered their views on the Group’s
recoverability of deferred tax assets, including
the impact from the COVID-19 pandemic, to the
extent that it is probable that future taxable
income will be available against which the
temporary differences can be utilised. We also
focused on the adequacy of disclosures about key
assumptions and sensitivities. The disclosures
about the Group’s deferred tax assets and
liabilities are included in Note 10 to the financial
statements.
Other Information
Management is responsible for the other information. The other information comprises the information included in the annual
report, but does not include the financial statements and our auditor’s report thereon, which we obtained prior to the date of this
auditor’s report. The annual report is expected to be made available to us after that date.
Our opinion on the financial statements does not cover the other information and we will not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the
matter to those charged with governance and take appropriate actions in accordance with ISAs.
Responsibilities of Management and Those Charged With Governance for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with IFRSs, and
for such internal controls as management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The responsibilities of those charged with governance include overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are 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 ISAs 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 these financial
statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
•
•
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
65
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF OM HOLDINGS LIMITED
Auditor’s Responsibilities for the Audit of the Financial Statements (Cont’d)
•
•
•
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Mr Ho Teik Tiong.
Foo Kon Tan LLP
Public Accountants and
Chartered Accountants
Singapore,
18 March 2022
66
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
The Company
The Group
31 December
2021
A$’000
31 December
2020
A$’000
31 December
2021
A$’000
31 December
2020
A$’000
Note
Assets
Non-Current
Property, plant and equipment
Land use rights
Exploration and evaluation costs
Mine development costs
Investment property
Right-of-use assets
Deferred tax assets
Interests in subsidiaries
Interests in associates
Other investment
Current
Inventories
Trade and other receivables
Capitalised contract costs
Prepayments
Cash and bank balances
Total assets
Equity
Capital and Reserves
Share capital
Treasury shares
Reserves
Non-controlling interests
Total equity
Liabilities
Non-Current
Borrowings
Lease liabilities
Trade and other payables
Provisions
Deferred tax liabilities
Deferred capital grant
Current
Borrowings
Lease liabilities
Trade and other payables
Provisions
Deferred capital grant
Contract liabilities
Income tax payables
Total liabilities
Total equity and liabilities
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
10
25
21
22
23
24
25
26
-
-
-
-
-
-
-
143,667
-
-
143,667
-
9,417
-
125
44
9,586
153,253
36,931
(2,330)
50,581
85,182
-
85,182
-
-
-
-
-
-
-
-
-
68,071
-
-
-
-
68,071
68,071
153,253
-
-
-
-
-
-
-
142,117
-
-
142,117
-
12,553
-
88
42
12,683
154,800
36,931
(2,330)
48,308
82,909
-
82,909
-
-
-
-
-
-
-
14,003
-
57,888
-
-
-
-
71,891
71,891
154,800
610,684
9,308
2,955
2,689
599
8,073
18,478
-
119,311
-
772,097
353,308
56,362
1,484
3,671
112,334
527,159
1,299,256
36,931
(2,330)
470,665
505,266
105,033
610,299
296,129
4,174
54,325
7,973
1,292
10,609
374,502
112,895
3,535
176,727
1,915
778
9,686
8,919
314,455
688,957
1,299,256
The annexed notes form an integral part of and should be read in conjunction with these financial statements.
612,684
8,922
2,326
16,726
574
1,992
13,788
-
126,832
1,888
785,732
216,307
62,992
1,856
3,528
63,031
347,714
1,133,446
36,931
(2,330)
365,042
399,643
68,596
468,239
288,279
415
54,791
10,869
1,229
10,730
366,313
126,766
1,255
155,760
1,806
736
6,064
6,507
298,894
665,207
1,133,446
67
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
Revenue
Cost of sales
Gross profit
Other income
Distribution costs
Administrative expenses
Other operating expenses
Finance costs
Profit/(loss) from operations
Share of results of associates
Profit/(loss) before income tax
Income tax
Profit/(loss) for the year
Other comprehensive income/(loss), net of tax:
Items that may be reclassified subsequently to profit or loss
Currency translation differences arising from foreign subsidiaries
(attributable to owners of the Company)
Cash flow hedges
Items that will not be reclassified subsequently to profit or loss
Currency translation differences arising from foreign subsidiaries
(attributable to non-controlling interests)
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income/(loss) for the year
Profit/(loss) attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income/(loss) attributable to:
Owners of the Company
Non-controlling interests
Profit per share
- Basic
- Diluted
Year ended
Year ended
31 December
31 December
2021
A$’000
2020
A$’000
Note
3
27
28
28
29
30
31
31
1,040,810
784,633
(766,292)
(688,371)
274,518
14,301
(68,742)
(21,706)
(71,397)
(19,774)
107,200
5,412
112,612
(3,281)
109,331
21,576
2,854
24,430
5,302
5,302
29,732
139,063
81,907
27,424
109,331
105,623
33,440
139,063
Cents
11.11
11.11
96,262
6,756
(41,661)
(15,924)
(37,787)
(28,827)
(21,181)
16,525
(4,656)
1,718
(2,938)
(24,160)
1,253
(22,907)
(6,417)
(6,417)
(29,324)
(32,262)
5,352
(8,290)
(2,938)
(17,868)
(14,394)
(32,262)
Cents
0.73
0.73
The annexed notes form an integral part of and should be read in conjunction with these financial statements.
68
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 -
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69
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
Note
5, 28
25, 28
7, 28
4, 28
9, 28
8, 28
28
28
28
27
27
28
30
14, 28
27
6, 28
15, 28
28
27
6
4
Year ended
31 December
2021
A$’000
Year ended
31 December
2020
A$’000
112,612
(4,656)
193
(756)
12,835
38,745
5,876
10
18
-
7,341
-
(799)
84
2,854
3,775
(9,219)
153
646
19,774
(298)
(5,412)
188,432
(123,999)
3,498
327
(3,275)
3,178
26,848
2,752
(4,701)
93,060
1,157
94,217
(754)
(8,243)
(20)
2,631
-
12,934
298
6,846
206
(817)
6,505
43,285
5,644
11
-
296
36
(1,388)
-
268
1,253
3,397
-
-
-
28,827
(691)
(16,525)
65,651
4,196
(11,397)
(534)
(631)
765
28,605
(2,049)
(1,646)
82,960
(6,401)
76,559
(1,363)
(15,490)
-
-
(500)
6,048
691
(10,614)
Cash Flows from Operating Activities
Profit/(loss) before income tax
Adjustments for:
Amortisation of land use rights
Amortisation of deferred capital grant
Amortisation of mine development costs
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Depreciation of investment property
Loss on disposal of property, plant and equipment
Lease modification
Write-off of property, plant and equipment
Fair value gain on other investment
Gain on disposal of other investment
Unwinding of discount on non-current trade payables
Reclassification from hedging reserve to profit or loss
Write-down of inventories to net realisable value
Gain from derecognition of financial liabilities
Write-off of exploration and evaluation costs
Impairment loss on trade and other receivables
Interest expense
Interest income
Share of results of associates
Operating profit before working capital changes
(Increase)/Decrease in inventories
Decrease/(Increase) in trade receivables
Decrease/(Increase) in capitalised contract costs
Increase in prepayments, deposits and other receivables
Increase in contract liabilities
Increase in trade payables
Increase/(Decrease) in other payables
Decrease in provisions
Cash generated from operations
Income tax refund/(paid)
Net cash generated from operating activities
Cash Flows from Investing Activities
Payments for exploration and evaluation costs
Purchase of property, plant and equipment
Purchase of right-of-use asset
Proceeds from disposal of other investment
Purchase of other investment
Dividends received from an associate
Interest received
Net cash generated from/(used in) investing activities
70
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
Cash Flows from Financing Activities
Repayment of bank and other loans (Note A)
Proceeds from bank and other loans (Note A)
Principal repayment of lease liabilities (Note A)
Capital contribution by non-controlling interest shareholder
Decrease/(Increase) in cash collateral
Dividend paid
Interest paid (Note A)
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Exchange difference on translation of cash and cash equivalents at beginning of
the year
Year ended
31 December
2021
A$’000
Year ended
31 December
2020
A$’000
Note
20(viii)
(51,145)
21,140
(5,611)
2,997
913
-
(21,902)
(53,608)
47,455
45,951
2,761
(33,185)
12,972
(6,241)
-
(2,268)
(7,367)
(30,013)
(66,102)
(157)
48,900
(2,792)
Cash and cash equivalents at end of the year
17
96,167
45,951
Note A Reconciliation of liabilities arising from financing activities
The following is the disclosure of the reconciliation of items for which cash flows have been, or will be, classified as financing activities,
excluding equity items:
1
January
2021
A$’000
1,670
Cash
inflows
A$’000
Cash
outflows
A$’000
Interest
paid
A$’000
Derecognition
of financial
liabilities
A$’000
New
leases
A$’000
Foreign
exchange
difference
A$’000
Interest
expense
A$’000
31
December
2021
A$’000
-
(5,611)
(330)
-
11,601
44
335
7,709
Non-cash changes
415,045
21,140
(51,145)
-
(10,050)
3,692
-
-
(21,572)
-
-
-
32,711
1,323(1)
409,024
-
18,116
236
1
January
2020
A$’000
7,092
Cash
inflows
A$’000
Cash
outflows
A$’000
Interest
paid
A$’000
Lease
modification
-
(6,241)
(306)
(64)
Non-cash changes
New
leases
A$’000
960
Foreign
exchange
difference
A$’000
Interest
expense
A$’000
31
December
2020
A$’000
(77)
306
1,670
473,918
12,972
(33,185)
-
7,112
-
-
(29,707)
-
-
-
-
(40,894)
2,234(1)
415,045
-
26,287
3,692
Lease liabilities
Borrowings - bank
and other loans
Trade and other
payables - Interest
payables
Lease liabilities
Borrowings - bank
and other loans
Trade and other
payables - Interest
payables
(1)
This is related to the amortisation of borrowing cost classified as “finance cost” in the Consolidated Statement of Comprehensive Income.
The annexed notes form an integral part of and should be read in conjunction with these financial statements.
71
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
1
General information
The financial statements of the Company and of the Group for the financial year ended 31 December 2021 were authorised
for issue in accordance with a resolution of the Directors on the date of the Directors’ Statement.
The Company is incorporated as a limited liability company listed on both the Australian Securities Exchange and Bursa
Malaysia, and is domiciled in Bermuda.
The registered office is located at Clarendon House, 2 Church Street Hamilton, HM11 Bermuda.
2(a) Basis of preparation
The financial statements are prepared in accordance with International Financial Reporting Standards (“IFRSs”), which
collectively includes all applicable individual IFRSs and Interpretations approved by the International Accounting Standard
Board (“IASB”), and all applicable individual International Accounting Standards (“IASs”) and Interpretations as originated by
the Board of the International Accounting Standards Committee and adopted by the IASB.
The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting
policies below.
The financial statements are presented in Australian Dollar which is the Company’s functional currency. All financial
information is presented in Australian Dollar, unless otherwise stated.
As at 31 December 2021, the Company has net assets of A$85,182,000 (2020 - A$82,909,000) and net current liabilities of
A$58,485,000 (2020 - A$59,208,000). Included in the Company’s current liabilities as at 31 December 2021 are a non-trade
amount owing to OM Materials (S) Pte Ltd (“OMS”), a wholly-owned subsidiary, of A$64,543,000 (2020 - A$55,093,000).
OMS has provided a letter of undertaking that it shall provide continuing financial support to the Company, including not
demanding immediate repayment for debts owing to OMS. Therefore, the Company is of the view that the preparation of
financial statements on a going concern basis is appropriate.
Impact of COVID-19
The ongoing and evolving Coronavirus Disease (“COVID-19”) pandemic has had a significant impact on the global economy
and the economies of the countries in which the Group operates. There is significant uncertainty as to the duration of
the pandemic and its impact on those economies. In regard to the Group, the consideration of COVID-19 has been in the
following areas:
•
•
•
Impairment of non-financial assets (Notes 4, 5, 6, 7 and 9)
Recognition of deferred tax assets (Note 10)
Allowance for expected credit losses of trade and other receivables (Note 15)
Significant accounting estimates and judgements
The preparation of the financial statements in conformity with IFRS requires the use of judgements, estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the financial year. Although
these estimates are based on management’s best knowledge of current events and actions, actual results may differ from
those estimates.
The critical accounting estimates and assumptions used and areas involving a high degree of judgement are described
below.
Significant judgements in applying accounting policies
Income taxes (Note 29)
The Group has exposures to income taxes in numerous jurisdictions. Significant judgement is involved in determining
the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax
determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues
based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences
will impact the income tax and deferred tax provisions in the period in which such a determination is made.
Determination of functional currency
The Group measures foreign currency translation in the respective currencies of the Company and its subsidiaries. In
determining the functional currencies of the entities in the Group, judgement is required to determine the currency that
mainly influences sales prices for goods and services and of the country whose competitive forces and regulations mainly
determines the sales prices of its goods and services. The functional currencies of the entities in the Group are determined
based on management’s assessment of the economic environment in which the entities operate and the entities’ process
of determining sales prices.
72
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(a) Basis of preparation (Cont’d)
Significant accounting estimates and judgements (Cont’d)
Significant judgements in applying accounting policies (cont’d)
Allowance for expected credit losses (ECL) of trade and other receivables (Note 15)
Allowance for ECL of trade and other receivables are based on assumptions about risk of default and expected loss rates. The
Group uses judgement in making these assumptions and selecting the inputs to the ECL calculation, based on the Group’s
past collection history, existing market conditions as well as forward looking estimates at each reporting date. Probability
of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a
given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions.
The Company and the Group adopt a simplified approach and use a provision matrix to calculate ECL for receivables which
are trade in nature. The provision rates are based on days past due for groupings of various customer segments that have
similar loss patterns. The provision matrix is initially based on the Group’s historical observed default rates. The Group will
calibrate the matrix to adjust historical credit loss experience with forward-looking information. The assessment of the
correlation between historical observed default rates, forecast economic conditions and ECL is a significant estimate. The
amount of ECL is sensitive to changes in circumstances and forecast economic conditions.
The Company and the Group apply the 3-stage general approach to determine ECL for receivables which are non-trade in
nature. ECL is measured as an allowance equal to 12-month ECL for stage-1 assets, or lifetime ECL for stage-2 or stage-3
assets. An asset moves from stage-1 to stage-2 when its credit risk increases significantly and subsequently to stage-3 as
it becomes credit-impaired. In assessing whether credit risk has significantly increased, the Company considers qualitative
and quantitative reasonable and supportable forward looking information. Lifetime ECL represents ECL that will result from
all possible default events over the expected life of a financial instrument whereas 12-month ECL represents the portion of
lifetime ECL expected to result from default events possible within 12 months after the reporting date.
Deferred tax assets (Note 10)
The Group reviews the carrying amount of deferred tax assets at the end of each reporting period. Deferred tax assets
are recognised to the extent that it is probable that future taxable income will be available against which the temporary
differences can be utilised. This involves judgement regarding future financial performance of the particular legal entity or
tax group in which the deferred tax asset has been recognised. Management has assessed that it is reasonable to recognise
deferred tax assets based on probable future taxable income.
Determination of cash-generating units (CGU) for non-financial assets
A CGU is defined as the smallest identifiable group of assets that generates cash inflows that are largely independent of
the cash inflows from other assets or groups of assets. In determining appropriate CGU level, the Group has considered
whether there are: active markets for intermediate products; external users of the processing assets; mining or smelting
operations through the use of shared infrastructure; stand-alone mines or smelting plants operated on a portfolio basis.
Significant judgement is required by management to determine whether multiple assets should be grouped to form a CGU.
Management has identified the appropriate CGU level to be the mine or smelting plant together with their direct processing
assets at the same location.
Critical assumptions used and accounting estimates in applying accounting policies
Impairment of non-financial assets
Non-financial assets comprise property, plant and equipment (Note 4), land use rights (Note 5), exploration and evaluation
costs (Note 6), mine development costs (Note 7) and right-of-use assets (Note 9). Determining whether the carrying value
is impaired requires an estimation of the value in use of the cash-generating units. This requires the Group to estimate
the future cash flows expected from the cash-generating units and an appropriate discount rate in order to calculate the
present value of cash flows. The carrying amounts of non-financial assets are disclosed in the consolidated statement of
financial position.
Mine development costs (Note 7)
The fair value of the mine development costs was determined based on the property’s highest and best use, using the income
approach. If the fair value of the mine development costs increases/decreases by 10% from management’s determination,
the Group’s profit for the year will decrease/increase by approximately A$269,000 (2020 - A$1,673,000).
Impairment of investment in subsidiaries (Note 11)
Determining whether an investment in a subsidiary is impaired requires an estimation of the value-in-use of that investment.
The value-in-use calculation requires the Company to estimate the future cash flows expected from the cash-generating
units and an appropriate discount rate in order to calculate the present value of the future cash flows. Management has
evaluated the recoverability of the investment based on such estimates and assessed that no impairment was required. If
the present value of estimated future cash flows decreased by 1% from management’s estimates, it is not likely to materially
affect the carrying amount.
73
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(a) Basis of preparation (Cont’d)
Significant accounting estimates and judgements (Cont’d)
Critical assumptions used and accounting estimates in applying accounting policies (cont’d)
Net realisable value of inventories (Note 14)
Net realisable value of inventories is the estimated selling price in the ordinary course of business, less the estimated cost
necessary to make the sale. These estimates are based on the current market conditions and historical experiences of
selling products of similar nature. It could change significantly as a result of competitor actions in response to changes in
market conditions. Management reassesses the estimations at the end of each reporting date. The carrying amount of the
inventories carried at net realisable value as at 31 December 2021 is A$20,010,000 (2020 - A$7,455,000). If the net realisable
value of the inventories decreases by 10% from management’s estimates, the Group’s loss for the year will increase by
A$2,001,000 (2020 - A$745,500).
Estimation of the incremental borrowing rate (“IBR”)
For the purpose of calculating the right-of-use asset and lease liability, an entity applies the interest rate implicit in the lease
(“IRIIL”) and, if the IRIIL is not readily determinable, the entity shall use its IBR applicable to the lease asset. The IBR is the rate
of interest that the entity would have to pay to borrow over a similar term, and with a similar security, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in a similar economic environment. For most of the leases whereby
the Group is the lessee, the IRIIL is not readily determinable. Therefore, the Group estimates the IBR relevant to each lease
asset by using observable inputs (such as market interest rate and asset yield) when available, and then making certain
lessee specific adjustments (such as a group entity’s credit rating). The carrying amounts of the Group’s right-of-use assets
and lease liabilities are disclosed in Note 9 and 22 respectively. An increase/decrease of 50 basis points in the estimated IBR
will not significantly decrease/increase the Group’s right-of-use assets and lease liabilities.
2(b) Adoption of new and revised standards effective for the current financial year
On 1 January 2021, the Group and the Company have adopted all the new and revised IFRS, IFRS Interpretations (“IFRS INT”) and
amendments to IFRS, effective for the current financial year that are relevant to them. The adoption of these new and revised IFRS
pronouncements does not result in significant changes to the Group’s and the Company’s accounting policies and has no material
effect on the amounts or the disclosures reported for the current or prior reporting periods:
Reference
Description
Amendments to IFRS 16
COVID-19 Related Rent Concessions
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4,
Interest Rate Benchmark Reform - Phase 2
IFRS 16
Effective date
(Annual periods
beginning on
or after)
1 June 2020
1 January 2021
2(c) New and revised IFRS in issue but not yet effective
The following are not expected to have any financial impact, being the new or amended IFRS and Interpretations issued as of 2021
that are relevant to the Group and the Company and which are not yet effective but may be early adopted for the current financial
year:
Reference
Description
Effective date
(Annual periods
beginning on
or after)
Amendments to IFRS 16
COVID-19-Related Rent Concessions beyond 30 June
1 April 2021
2021
Amendments to IAS 16
Property, Plant and Equipment - Proceeds before
1 January 2022
Intended Use
Amendments to IAS 37
Onerous Contracts - Cost of Fulfilling a Contract
1 January 2022
Amendments to IFRS 9
Fees in the ‘10 per cent’ Test for Derecognition of
1 January 2022
Financial Liabilities
Amendments to IAS 1
Classification of Liabilities as Current or Non-current
1 January 2023
Amendments to IAS 1 and IFRS Practice
Disclosure of Accounting Policies
1 January 2023
Statement 2
Amendments to IAS 12
Deferred Tax related to Assets and Liabilities arising
1 January 2023
from a Single Transaction
74
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(c) New and revised IFRS in issue but not yet effective (Cont’d)
Amendment to IFRS 16 COVID-19-Related Rent Concessions beyond 30 June 2021
As a result of the evolving COVID-19 situation, rent concessions continue to be granted to lessees. Such concessions might
take a variety of forms, including payment holidays and deferral of lease payments. The amendment provides lessees with an
option to treat qualifying rent concessions in the same way as they would if they were not lease modifications. The application
period of the above practical expedient has been extended by one year to help lessees accounting for COVID-19-related rent
concessions.
The practical expedient only applies to rent concessions occurring as a direct consequence of the COVID-19 pandemic, and
only if all of the following conditions are met:
a)
b)
c)
the change in lease payments results in revised consideration for the lease that is substantially the same as, or less
than, the consideration for the lease immediately preceding the change;
any reduction in lease payments affects only payments due on or before 30 June 2022; and
there is no substantive change to other terms and conditions of the lease.
Entities applying the practical expedient must disclose this fact, whether the expedient has been applied to all qualifying
rent concessions, and the nature of the contracts to which it has been applied, as well as the amount recognised in profit or
loss arising from the rent concessions.
Amendments to IAS 16 Property, Plant and Equipment - Proceeds before Intended Use
The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling
items produced before that asset is available for use, i.e. proceeds while bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management. An entity shall recognise such sales
proceeds and related costs in profit or loss and measure the cost of those items in accordance with IAS 2 Inventories.
The amendments also clarify the meaning of ‘testing whether an asset is functioning properly’ and specify this as assessing
whether the technical and physical performance of the asset is such that it is capable of being used in the production or
supply of goods or services, for rental to others, or for administrative purposes.
The amendments are effective for annual periods beginning on or after 1 January 2022, with early application permitted.
The amendments are applied retrospectively, but only to items of property, plant and equipment that are brought to the
location and condition necessary for them to be capable of operating in the manner intended by management on or after the
beginning of the earliest period presented in the financial statements in which the entity first applies the amendments. The
entity shall recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of
retained earnings (or other component of equity, as appropriate) at the beginning of that earliest period presented.
Amendments to IAS 37 Onerous Contracts – Cost of Fulfilling a Contract
The amendments specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’.
Costs that relate directly to a contract consist of both the incremental costs of fulfilling that contract (e.g. direct labour or
materials) and an allocation of other costs that relate directly to fulfilling contracts (e.g. depreciation charge for an item of
property, plant and equipment used in fulfilling the contract).
The amendments are effective for annual periods beginning on or after 1 January 2022, with early application permitted.
The amendments apply to contracts for which the entity has not yet fulfilled all its obligations at the beginning of the annual
reporting period in which the entity first applies the amendments. Comparatives are not restated. Instead, the entity shall
recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained
earnings (or other component of equity, as appropriate) at the date of initial application.
Amendments to IFRS 9 Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities
The amendments clarify that in applying the ‘10 per cent’ test to assess whether to derecognise a financial liability, an entity
shall include only fees paid or received between the entity (the borrower) and the lender, including fees paid or received
by either the entity or the lender on the other’s behalf. The amendments are applied prospectively to modifications and
exchanges that occur on or after the date the entity first applies the amendments. The amendments are effective for annual
periods beginning on or after 1 January 2022, with early application permitted.
Amendments to IAS 1 Classification of Liabilities as Current or Non-current
The amendments affect only the presentation of liabilities as current or non-current in the statement of financial position
and not the amount or timing of recognition of any asset, liability, income or expenses, or the information disclosed about
those items.
The amendments clarify that the classification of liabilities as current or non-current is based on the rights that are in
existence at the end of the reporting period, specify that classification is unaffected by expectations about whether an
entity will exercise the right to defer settlement of a liability, explain that rights are in existence if covenants are complied
with at the end of the reporting period, and introduce a definition of ‘settlement’ to make clear that settlement refers to the
transfer of cash, equity instruments, other assets or services to the counterparty.
The amendments are applied retrospectively for annual periods beginning on or after 1 January 2023, with early application
permitted.
75
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(c) New and revised IFRS in issue but not yet effective (Cont’d)
Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies
The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. Applying the
amendments, an entity discloses its material accounting policies instead of its significant accounting policies. Accounting
policy information is material if, when considered together with other information included in an entity’s financial statements,
it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make
on the basis of those financial statements.
The amendments also clarify that accounting policy information that relates to immaterial transactions, other events or
conditions is immaterial and need not be disclosed. However, accounting policy information may be material because of
the nature of the related transactions, other events or conditions, even if the amounts are immaterial. In addition, if an
entity discloses immaterial accounting policy information, such information shall not obscure material accounting policy
information. In support of the amendments to IAS 1, amendments are also made to IFRS Practice Statement 2 to illustrate
how an entity could judge whether information about an accounting policy is material to its financial statements.
The amendments to IAS 1 are effective for annual periods beginning on or after 1 January 2023 and are applied prospectively.
Earlier application is permitted. The amendments to IFRS Practice Statement 2 do not contain an effective date or transition
requirements.
Amendments to IAS 8 Definition of Accounting Estimates
The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under
the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement
uncertainty”. Accordingly, an entity develops accounting estimates if the accounting policies require items in financial
statements to be measured in a way that involves measurement uncertainty.
The amendments clarify that a change in accounting estimate that results from new information or new developments is
not a correction of an error, and that the effects of a change in an input or a measurement technique used to develop an
accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors.
Illustrative examples are also added to help entities understand and apply the amendments.
The amendments are effective for annual periods beginning on or after 1 January 2023 and are applied prospectively to
changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Earlier
application is permitted.
Amendments to SFRS(I) 1-12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The amendments specify how companies should account for deferred tax on transactions such as leases and decommissioning
obligations.
IAS 12 Income Taxes specifies how a company accounts for income tax, including deferred tax, which represents tax payable
or recoverable in the future.
In specified circumstances, companies are exempted from recognising deferred tax when they recognise assets or liabilities
for the first time. Previously, there had been some uncertainty about whether the exemption applied to transactions such
as leases and decommissioning obligations – transactions for which companies recognise both an asset and a liability.
The amendments clarify that the exemption does not apply and that companies are required to recognise deferred tax
on such transactions. The aim of the amendments is to reduce diversity in the reporting of deferred tax on leases and
decommissioning obligations.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023, with early application
permitted.
2(d) Summary of significant accounting policies
Group accounting
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the end
of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidated financial
statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like
transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intragroup transactions and
dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control and continues
to be consolidated until the date that such control ceases.
76
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Group accounting (Cont’d)
Basis of consolidation (Cont’d)
Losses and other comprehensive income are attributable to the non-controlling interest even if that results in a deficit
balance.
Transactions with Non-controlling interest
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the
Company, and are presented separately in the consolidated statement of comprehensive income and within equity in the
consolidated statement of financial position, separately from equity attributable to owners of the Company.
Changes in ownership interests in subsidiaries without change of control
Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted
for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are
adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the
non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity
and attributed to owners of the Company.
Changes in ownership interests in subsidiaries resulting in loss of control
When the Group loses control over a subsidiary, it:
-
-
-
-
-
-
-
de-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts as at that date
when control is lost;
de-recognises the carrying amount of any non-controlling interest;
de-recognises the cumulative translation differences recorded in equity;
recognises the fair value of the consideration received;
recognises the fair value of any investment retained;
recognises any surplus or deficit in the profit or loss; and
re-classifies the Group’s share of components previously recognised in other comprehensive income to the profit or
loss or retained earnings, as appropriate.
When the Group loses control of a subsidiary, a gain or loss is recognised in the profit or loss and is calculated as the
difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained
interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any
non-controlling interest. All amounts previously recognised in other comprehensive income in relation to that subsidiary
are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified
to the profit or loss or transferred to another category of equity as specified/permitted by applicable IFRSs). The fair value
of any investment retained in the former subsidiary at the date when the control is lost is regarded as the fair value on the
initial recognition for subsequent accounting under IFRS 9, when applicable, the cost on initial recognition of an investment
in an associate or a joint venture.
Business combinations
Business combination is accounted for using the acquisition method when the acquired set of activities and assets meets
the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and
assets is a business, the Group assesses whether it includes, as a minimum, an input and substantive process, and whether
the acquired set has the ability to produce outputs.
The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of
activities and assets is not a business. The optional ‘concentration test’ is met, and the acquired set of activities and assets
is not a business, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset
or group of similar identifiable assets.
The consideration for each acquisition is measured at the aggregate of the acquisition date fair values of assets given,
liabilities incurred by the Group to the former owners of the acquiree, and equity interests issued by the Group in exchange
for control of the acquiree. Acquisition-related costs are recognised in the profit or loss as incurred.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be
recognised in the profit or loss. The Group elects for each individual business combination, whether non-controlling
interest in the acquiree (if any), that are present ownership interests and entitle their holders to a proportionate share of
net assets in the event of liquidation, is recognised on the acquisition date at fair value, or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets. Other components of non-controlling interests are measured
at their acquisition date fair value, unless another measurement basis is required by another IFRS.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling
interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net
fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. In instances where the latter amount exceeds
the former, the excess is recognised as a gain on bargain purchase in the profit or loss on the acquisition date.
77
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Subsidiaries
In the Company’s separate financial statements, investments in subsidiaries are stated at cost less the allowance for any
impairment losses on an individual subsidiary basis.
A subsidiary is an investee that is controlled by the Group. The Group controls an investee when it 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.
Thus, the Group controls an investee if and only if the Group has all of the following:
-
-
-
power over 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.
The Group reassesses whether or not it controls an investee if the facts and circumstances indicate that there are changes
to one or more of the three elements of control listed above.
When the Group has less than a majority of the voting rights of an investee, it has power over the investee when the voting
rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Group
considers all relevant facts and circumstances in assessing whether or not the Group’s voting rights in an investee are
sufficient to give it power, including:
-
-
-
-
the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
potential voting rights held by the Group, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct
the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’
meetings.
Joint operations
A joint arrangement is an arrangement in which two or more parties have joint control. Joint control is the contractually
agreed sharing of control such that decisions about the relevant activities of the arrangement (those that significantly affect
the returns) require the unanimous consent of the parties sharing control.
A joint operation is a joint arrangement in which the parties that share joint control have rights to the assets, and obligations
for the liabilities, relating to the arrangement. This includes situations where the parties benefit from the joint activity
through a share of the output, rather than by receiving a share of the results of trading. In relation to its interest in a joint
operation, the Group recognises: its share of assets and liabilities; revenue from the sale of its share of the output and
its share of any revenue generated from the sale of the output by the joint operation; and its share of expenses. All such
amounts are measured in accordance with the terms of the arrangement, which is in proportion to the Group’s interest in
the joint operation. These amounts are recorded in the Group’s consolidated financial statements on the appropriate line
items.
Associates
An associate is an entity over which the Group has the power to participate in the financial and operating policy decisions of
the investee but not control or joint control over those policies.
The Group accounts for its investments in associates using the equity method from the date on which it becomes an
associate.
On acquisition of the investment, any excess of the cost of the investment over the Group’s share of the net fair value
of the investee’s identifiable assets and liabilities is accounted as goodwill and is included in the carrying amount of the
investment. Any excess of the Group’s share of the net fair value of the investee’s identifiable assets and liabilities over the
cost of the investment is included as income in the determination of the entity’s share of the associate’s profit or loss in the
period in which the investment is acquired.
Under the equity method, the investments in associates are carried in the Group’s statement of financial position at cost plus
post-acquisition changes in the Group’s share of net assets of the associates. The profit or loss reflects the share of results of
operations of the associates. Distributions received from associates reduce the carrying amount of the investment. Where
there has been a change recognised in other comprehensive income by the associates, the Group recognises its share of
such changes in other comprehensive income. Unrealised gains and losses resulting from transactions between the Group
and the associate are eliminated to the extent of the interest in the associates.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the associate.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Associates (Cont’d)
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment
loss, on the Group’s investment in the associate. The Group determines at the end of each reporting period whether there
is any objective evidence that the investment in the associate is impaired.
If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the
associate and its carrying value and recognises the amount in the profit or loss.
The financial statements of the associates are prepared as the same reporting date as the Company. Where necessary,
adjustments are made to bring the accounting policies in line with those of the Group.
Upon loss of significant influence or joint control over the associate, the Group measures any retained interest at fair value.
Any difference between the fair value of the aggregate of the retained interest and proceeds from disposal and the carrying
amount of the investment at the date the equity method was discontinued is recognised in the profit or loss.
The Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate on
the same basis as would have been required if that associate or joint venture had directly disposed of the related assets or
liabilities.
When an investment in an associate becomes an investment in a joint venture, the Group continues to apply the equity
method and does not re-measure the retained interest.
If the Group’s ownership interest in an associate is reduced, but the Group continues to apply the equity method, the Group
reclassifies to the profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive
income relating to that reduction in ownership interest if that gain or loss would be required to be reclassified to the profit
or loss on the disposal of the related assets or liabilities.
Intangible assets
Intangible assets are accounted for using the cost model with the exception of goodwill. Capitalised costs are amortised on
a straight-line basis over their estimated useful lives for those considered as finite useful lives. After initial recognition, they
are carried at cost less accumulated amortisation and accumulated impairment losses, if any. In addition, they are subject
to annual impairment testing. Indefinite life intangibles are not amortised but are subject to annual impairment testing.
Intangible assets are written off where, in the opinion of the Directors, no further future economic benefits are expected
to arise.
Goodwill
Goodwill on the acquisition of subsidiaries on or after 1 January 2010 represents the excess of the consideration transferred,
the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest
in the acquiree over the fair value of the net identifiable assets acquired.
Goodwill on acquisition of subsidiaries prior to 1 January 2010 and on acquisition of joint ventures and associated companies
represents the excess of the cost of the acquisition over the fair value of the Group’s share of the net identifiable assets
acquired.
Goodwill on subsidiaries and joint ventures is recognised separately as intangible assets and carried at cost less accumulated
impairment losses.
Goodwill on associated companies is included in the carrying amount of the investments.
Gains and losses on the disposal of subsidiaries, joint ventures and associated companies include the carrying amount of
goodwill relating to the entity sold, except for goodwill arising from acquisition prior to 1 January 2001. Such goodwill was
adjusted against retained profits in the year of acquisition and is not recognised in the profit or loss on disposal.
Exploration and evaluation costs
Exploration and evaluation costs relate to mineral rights acquired and exploration and evaluation expenditures capitalised
in respect of projects that are at the exploration/pre-development stage.
Exploration and evaluation assets are initially recognised at cost. Subsequent to initial recognition, they are stated at cost
less any accumulated impairment losses. These assets are reclassified as mine development costs upon the commencement
of mine development, when technical feasibility and commercial viability of extracting mineral resources becomes
demonstrable.
Exploration and evaluation expenditures in the relevant area of interest comprises costs which are directly attributable
to acquisition, surveying, geological, geochemical and geophysical, exploratory drilling, land maintenance, sampling, and
assessing technical feasibility and commercial viability.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Intangible assets (Cont’d)
Exploration and evaluation costs (Cont’d)
Exploration and evaluation expenditures also include the costs incurred in acquiring mineral rights, the entry premiums paid
to gain access to areas of interest and amounts payable to third parties to acquire interests in existing projects. Capitalised
costs, including general and administrative costs, are only allocated to the extent that these costs can be related directly to
operational activities in the relevant area of interest, where the existence of a technically feasible and commercially viable
mineral deposit has been established.
The carrying amount of the exploration and evaluation assets is reviewed annually and adjusted for impairment in
accordance with IAS 36 Impairment of Assets whenever one of the following events or changes in facts and circumstances
indicate that the carrying amount may not be recoverable (the list is not exhaustive):
(a)
(b)
(c)
(d)
the period for which the Group has the right to explore in the specific area has expired during the period or will expire
in the near future, and is not expected to be recovered;
substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither
budgeted nor planned;
exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially
viable quantities of mineral resources and the Group has decided to discontinue such activities in the specific area; or
sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by
sale.
An impairment loss is recognised in the profit or loss whenever the carrying amount of an asset exceeds its recoverable
amount.
Mine development costs
Costs arising from the development of the mine site (except for the expenditures incurred for building the mine site and the
purchase of machinery and equipment for the mining operation which are included in property, plant and equipment) are
accumulated in respect of each identifiable area of interest and are capitalised and carried forward as an asset to the extent
that they are expected to be recouped through the successful mining of the areas of interest.
Accumulated costs in respect of an area of interest subsequently abandoned are written off to the profit or loss in the
reporting period in which the Directors’ decision to abandon is made.
Amortisation is not charged on the mine development costs carried forward in respect of areas of interest until production
commences. Where mining of a mineral deposit has commenced, the related exploration and evaluation costs are transferred
to mine development costs. When production commences, carried forward mine development costs are amortised on a
unit of production basis. The unit of production basis results in an amortisation charge proportional to the depletion of the
estimated economically recoverable mineral resources.
Pre-production operating expenses and revenues were accumulated and capitalised into the Bootu Creek mine development
costs until 31 August 2006 as the mine was involved in the commissioning phase which commenced in November 2005.
Subsequent to 31 August 2006, the Directors of the Company determined that the processing plant was in the condition
necessary for it to be capable of operating in the manner intended so as to seek to achieve design capacity rates. These
costs were carried forward to the extent that they are expected to be recouped through the successful mining of the area
of interest.
The amortisation of capitalised mine development costs commenced from 1 September 2006 and continues to be amortised
over the life of the mine according to the rate of depletion of the economically recoverable mineral resources.
Property, plant and equipment
Property, plant and equipment, other than construction in progress (“CIP”), are stated at cost less accumulated depreciation
and accumulated impairment losses, if any. Depreciation is computed using the straight-line method to allocate the
depreciable amount of these assets over their estimated useful lives as follows:
Buildings and infrastructure
Plant and machinery
3 to 20 years
3 to 20 years
Computer equipment, office equipment and furniture
1 to 10 years
Motor vehicles
5 to 10 years
Plant and equipment - Process facility, stated at cost less accumulated depreciation and accumulated impairment losses, if
any. Depreciation is computed using the unit of production method to allocate the depreciable amount of these assets over
the estimated useful lives as follows:
Plant and equipment - Process facility
Life of mine
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Property, plant and equipment (Cont’d)
CIP represents assets in the course of construction for production or for its own use purpose. CIP is stated at cost less any
impairment loss and is not depreciated. Cost includes direct costs incurred during the periods of construction, installation
and testing plus interest charges arising from borrowings used to finance these assets during the construction period.
CIP is reclassified to the appropriate category of property, plant and equipment and depreciation commences when the
construction work is completed and the asset is ready for use.
The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the items.
Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipment if the
obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the asset.
Subsequent expenditures relating to property, plant and equipment that have been recognised are added to the carrying
amount of the asset when it is probable that future economic benefits, in excess of the standard of performance of the
asset before the expenditure was made, will flow to the Group and the cost can be reliably measured. Other subsequent
expenditure is recognised as an expense during the financial period in which it is incurred.
For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisition to the month
before disposal respectively. Fully depreciated property, plant and equipment are retained in the books of accounts until
they are no longer in use.
The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and
adjusted as appropriate, at the end of each reporting period. The effects of any revision are recognised in the profit or loss
when the changes arise.
Investment property
Investment property comprises leasehold property that is held for long-term rental yields and for capital appreciation.
Investment property is not occupied by the Group.
The Group applies the cost model. Investment property is initially recognised at cost and subsequently carried at cost less
accumulated depreciation, less any impairment in value similar to that for property, plant and equipment. Such costs include
costs of renovation or improvement of the existing investment property at the time that cost is incurred if the recognition
criteria are met; and excludes the costs of day to day servicing of an investment property. Depreciation is computed using
the straight-line method over the estimated useful lives of the investment property of 73 years.
Investment property is de-recognised when either it has been disposed of or when the investment property is permanently
withdrawn from use and no future economic benefit is expected from its disposal. On disposal or retirement of an investment
property, the difference between any disposal proceeds and the carrying amount is recognised in the profit or loss.
The carrying value of investment property is reviewed for impairment when events or changes in circumstances indicate
the carrying value may not be recoverable. If such indication exists and where the carrying values exceed the estimated
recoverable amounts, the assets are written down to their recoverable amounts.
Transfers are made to investment property when, and only when, there is a change in use, evidenced by ending of owner-occupation
or commencement of an operating lease to another party. Transfers are made from the investment property when and only when,
there is a change in use, evidenced by the commencement of owner-occupation or commencement of development with a view to
sell.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs include all direct expenditure and production
overheads based on the normal level of activity. The costs incurred in bringing each product to its present location and
conditions are accounted for as follows:
(a)
(b)
Raw materials at purchase cost on a weighted average basis; and
Finished goods and work in progress at cost of materials and labour and a proportion of manufacturing overheads
based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to
make the sale.
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.
Financial assets and financial liabilities are recognised when and only when the Group becomes a party to the contractual
provisions of the instruments.
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the Group currently has a legally enforceable right to set off the recognised amounts; and intends either to
settle on a net basis, or to realise the asset and settle the liability simultaneously.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Financial assets
Classification
Financial assets are classified, at initial recognition, in the following measurement categories: amortised cost; fair value
through other comprehensive income (FVOCI); and fair value through the profit or loss (FVTPL). The classification depends
on the Group’s business model for managing the financial assets and the contractual terms of their cash flows determining
whether those cash flows represent ‘solely payment of principal and interest’ (SPPI).
For assets measured at fair value, gains and losses will either be recorded in the profit or loss or other comprehensive
income (OCI). For investments in equity instruments that are not held for trading, this will depend on whether the Group
has made an irrevocable election at the time of initial recognition to account for the equity instruments at FVOCI. The Group
reclassifies debt instruments when and only when its business model for managing those assets changes.
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to
purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets
have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL,
transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets
carried at FVTPL are expensed in the profit or loss. Financial assets with embedded derivatives are considered in their
entirety when determining whether their cash flows are SPPI.
Trade receivables are measured at the amount of consideration to which the Group expects to be entitled in exchange for
transferring promised goods or services to a customer, excluding amounts collected on behalf of a third party, if the trade
receivables do not contain a significant financing component at initial recognition.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the
cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt
instruments:
•
•
•
Amortised cost: Financial assets that are held for the collection of contractual cash flows where those cash flows
represent SPPI are measured at amortised cost. Financial assets are measured at amortised cost using the effective
interest method, less impairment. Gains and losses are recognised in the profit or loss when the assets are derecognised
or impaired, and through the amortisation process. The Company’s and the Group’s debt instruments at amortised cost
include trade and other receivables, and cash and cash equivalents (including cash collateral).
FVOCI: Financial assets that are held for collection of contractual cash flows and for selling the financial assets, where
the assets’ cash flows represent SPPI, are measured at FVOCI. Financial assets measured at FVOCI are subsequently
measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other
comprehensive income, except for impairment losses, foreign exchange gains and losses and interest calculated using
the effective interest method are recognised in the profit or loss. The cumulative gain or loss previously recognised
in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the
financial asset is de-recognised.
FVTPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through the profit or
loss. A gain or loss on debt instruments that are subsequently measured at fair value through the profit or loss and are
not part of a hedging relationship is recognised in the profit or loss in the period in which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group has elected to present fair value
gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to the
profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in
the profit or loss when the Group’s right to receive payments is established. Impairment losses (and reversal of impairment
losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value. The Group’s
equity instrument at FVTPL includes other investment.
Impairment
The Group assesses on a forward-looking basis the expected credit losses (ECL) associated with its debt instruments carried
at amortised cost and FVOCI. ECL are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective
interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements
that are integral to the contractual terms.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Financial assets (Cont’d)
Impairment (Cont’d)
The impairment methodology applied depends on whether there has been a significant increase in credit risk. ECL are
recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial
recognition, ECL are provided for credit losses that result from default events that are possible within the next 12-months
(a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial
recognition, a loss allowance is recognised for credit losses expected over the remaining life of the exposure, irrespective
of timing of the default (a lifetime ECL).
For receivables which are trade in nature, the Group applies a simplified approach in calculating ECL. Therefore, the Group does
not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECL at each reporting date. The Group
has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors
specific to the debtors and the economic environment.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group
compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default
occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group considers
both quantitative and qualitative information that is reasonable and supportable, including historical experience and
forward-looking information that is available without undue cost or effort. The Group presumes that the credit risk on a
financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past
due, unless the Group has reasonable and supportable information that demonstrates otherwise.
In particular, the following information is taken into account when assessing whether credit risk has increased significantly
since initial recognition:
•
•
•
•
existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a
significant decrease in the debtor’s ability to meet its debt obligations;
an actual or expected significant deterioration in the operating results of the debtor;
significant increases in credit risk on other financial instruments of the same debtor; and
an actual or expected significant adverse change in the regulatory, economic, or technological environment of the
debtor that results in a significant decrease in the debtor’s ability to meet its debt obligations.
Credit-impaired financial asset
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash
flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about
the following events:
•
•
•
•
•
significant financial difficulty of the issuer or the borrower;
a breach of contract, such as a default or past due event;
the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having
granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
the disappearance of an active market for that financial asset because of financial difficulties.
Definition of default
The Group considers the following as constituting an event of default for internal credit risk management purposes, as
historical experience indicates that receivables that meet either of the following criteria are generally not recoverable:
•
•
when there is a breach of financial covenants by the counterparty; or
information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its
creditors, including the Group, in full (without taking into account any collaterals held by the Group).
The Group considers that default has occurred when a financial asset is more than 90 days past due unless the Group has
reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
Measurement of expected credit losses
The measurement of ECL is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a
default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical
data adjusted by forward-looking information. As for the exposure at default, for financial assets, this is represented by the
assets’ gross carrying amount at the reporting date; for loan commitments and financial guarantee contracts, the exposure
includes the amount drawn down as at the reporting date, together with any additional amounts expected to be drawn
down in the future by the default date determined based on historical trend, the Group’s understanding of the specific
future financing needs of the debtors, and other relevant forward-looking information.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Financial assets (Cont’d)
Impairment (Cont’d)
Write-off policy
The Group writes off a financial asset when there is information indicating that the counterparty is in severe financial
difficulty and there is no realistic prospect of recovery, e.g. when the counterparty has been placed under liquidation or has
entered into bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the
Group’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in
the profit or loss.
Determination of fair value of financial assets
The fair values of quoted financial assets are based on quoted market prices. If the market for a financial asset is not active,
the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions,
reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models,
making maximum use of market inputs. Where fair value of unquoted instruments cannot be measured reliably, fair value
is determined by the transaction price.
Financial liabilities
The Company’s and the Group’s financial liabilities include borrowings, lease liabilities, trade and bill payables, accruals and
other payables.
All interest-related charges are recognised as an expense in “finance cost” in the profit or loss. Financial liabilities are de-recognised
if the Company’s and the Group’s obligations specified in the contract expire or are discharged or cancelled.
Borrowings
Borrowings are recognised initially at the fair value of proceeds received less attributable transaction costs, if any.
Borrowings are subsequently stated at amortised cost which is the initial fair value less any principal repayments. Any
difference between the proceeds (net of transaction costs) and the redemption value is taken to the profit or loss over the
period of the borrowings using the effective interest method. The interest expense is chargeable on the amortised cost over
the period of the borrowings using the effective interest method.
Gains and losses are recognised in the profit or loss when the liabilities are de-recognised as well as through the amortisation
process.
Borrowings which are due to be settled within 12 months after the end of the reporting period are included in current
borrowings in the statements of financial position even though the original terms were for a period longer than twelve months
and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the end of the reporting
period. Borrowings to be settled within the Company’s and the Group’s normal operating cycle are classified as current. Other
borrowings due to be settled more than twelve months after the end of reporting period are included in non-current borrowings
in the statements of financial position.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are
capitalised as part of the cost of the related asset. Otherwise, borrowing costs are recognised as expenses when incurred.
Borrowing costs consist of interest and other financing charges that the Company and the Group incur in connection with
the borrowing of funds.
Capitalisation of borrowing costs commences when the activities to prepare the qualifying asset for its intended use are
in progress and the expenditures for the qualifying asset and the borrowing costs have been incurred. Capitalisation of
borrowing costs cease when substantially all the activities necessary to prepare the qualifying assets are substantially
completed for their intended use.
Foreign exchange differences arising from foreign currency borrowings are capitalised to the extent that they are regarded
as an adjustment to interest costs.
Trade and bill payables/accruals and other payables
Trade and bill payables/accruals and other payables are initially measured at fair value, and subsequently measured at
amortised cost, using the effective interest method.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Financial liabilities (Cont’d)
5% Convertible Note
Convertible notes are initially recorded at fair value. The fair value of the liability portion is determined using a market
interest rate for an equivalent non-convertible bond; this amount is then recorded as a non-current liability on an amortised
cost basis until extinguished on conversion, redemption or maturity of the bonds. The remainder of the proceeds is
allocated to the conversion option, which is recognised and included as a current liability as the convertible note is issued
in a currency that is not the functional currency of the issuer and hence, cannot be classified as equity. As the economic
characteristics and risks of the redemption option are closely related to the host contract, the redemption option is not
accounted for separately from the host contract.
Financial guarantees
The Company has issued corporate guarantees to banks for bank borrowings of its subsidiaries. These guarantees are
financial guarantee contracts as they require the Company to reimburse the banks if the subsidiaries fail to make principal
or interest payments when due in accordance with the terms of their borrowings.
Financial guarantee contracts are initially recognised at their fair value plus transaction costs in the statement of financial
position. The fair value of financial guarantees is determined based on the present value of the difference in cash flows
between the contractual payments required under the debt instrument and the payments that would be required without
the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.
Financial guarantee contracts are subsequently measured at the higher of the amount determined in accordance with the
ECL model under IFRS 9 and the amount initially recognised less, where appropriate, the cumulative amount of income
recognised in accordance with the principles of IFRS 15.
Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured
at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a
hedging instrument, and if so, the nature of the item being hedged.
There are 3 types of hedges as follows:
(a)
(b)
(c)
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);
hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash
flow hedge); or
hedges of a net investment in a foreign operation (net investment hedge).
However, the Group only designates certain derivatives as cash flow hedge.
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged
items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also
documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in
hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.
Movements on the hedging reserve in other comprehensive income are shown in Note 20. The full fair value of a hedging
derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12
months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading
derivatives are classified as a current asset or liability.
Cash flow hedges
For cash flow hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges are recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised
immediately in the profit or loss. For hedging instruments used to hedge bank borrowings that finance the construction
of a subsidiary’s ferrosilicon production facility, any ineffective portion is capitalised as part of the cost of the ferrosilicon
production facility (“construction-in-progress”).
Amounts accumulated in equity are reclassified to the profit or loss in the periods when the hedged item affects the profit
or loss (for example, when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of
interest rate swaps which hedge variable rate borrowings is recognised in the profit or loss within ‘finance income/cost’.
However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example,
inventory or fixed assets), the gains and losses previously deferred in equity are transferred from equity and included in the
initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in cost of goods sold in the
case of inventory or in depreciation in the case of the fixed assets.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is
ultimately recognised in the profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain
or loss that was reported in equity is immediately transferred to the profit or loss.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Derivative financial instruments and hedging activities (Cont’d)
Derivative financial instruments not designated as hedging instrument
Derivative financial instruments are not designated as hedging instruments, in individual contracts or separated from
hybrid financial instruments, are initially recognised at fair value on the date of the derivative contract is entered into
and subsequently re-measured at fair value. Such derivative financial instruments are accounted for as financial assets or
financial liabilities at fair value through the profit or loss. Gains or losses arising from changes in fair value are recorded
directly in the profit or loss for the year.
The changes in fair value of the derivative financial instruments not designated as hedges are capitalised as part of the cost
of the ferrosilicon production facility (“construction-in-progress”) if these derivatives are used to hedge the bank borrowings
that finance the construction of the ferrosilicon production facility.
Cash and cash equivalents
Cash and cash equivalents include cash at bank and balances on hand, demand deposits with banks and highly liquid
investments with original maturities of 3 months or less which are readily convertible to cash and which are subject to an
insignificant risk of changes in value.
Share capital and treasury shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are
deducted against the share capital account.
When any entity within the Group purchases the Company’s ordinary shares (“treasury shares”), the consideration paid
including any directly attributable incremental cost is presented as a component within equity attributable to the Company’s
equity holders, until they are cancelled, sold or reissued.
When treasury shares are subsequently cancelled, the cost of treasury shares are deducted against the share capital
account if the shares are purchased out of capital of the Company, or against the retained earnings of the Company if the
shares are purchased out of earnings of the Company.
When treasury shares are subsequently sold or reissued pursuant to the employee share option scheme, the cost of treasury
shares is reversed from the treasury share account and the realised gain or loss on sale or reissue, net of any directly
attributable incremental transaction costs and related income tax, is recognised in the capital reserve of the Company.
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable
costs is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in
the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is recognised as
an increase in equity and the resulting surplus or deficit on the transaction is presented within share premium.
Share premium
Any excess of the proceeds received over the par value of the shares is recorded in share premium.
Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received and all attaching
conditions will be complied with. Where the grant relates to an asset, the fair value is recognised as deferred capital grant
on the statement of financial position and is amortised to the profit or loss over the expected useful life of the relevant asset
by equal annual instalments.
Provisions and contingent liabilities
Provisions are recognised when the Company and the Group have a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation. Present obligations arising from onerous contracts
are recognised as provisions.
The Directors review the provisions annually and where in their opinion, the provision is inadequate or excessive, due
adjustment is made.
Where the time value of money is material, provisions are discounted using a current pretax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in provision due to the passage of time
is recognised as finance costs.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Provisions and contingent liabilities (Cont’d)
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably,
the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible
obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future uncertain
events not wholly within the control of the Group are also disclosed as contingent liabilities unless the probability of outflow
of economic benefits is remote.
Contingent liabilities are not recognised in the statements of financial position of the Group, except for contingent liabilities
assumed in a business combination that are present obligations and which the fair values can be reliably measured.
Contingent liabilities are recognised in the course of the allocation of the purchase price to the assets and liabilities acquired
in a business combination. They are initially measured at fair value at the date of acquisition and subsequently measured at
the higher of the amount that would be recognised in a comparable provision as described above and the amount initially
recognised less any accumulated amortisation, if appropriate.
Leases
(i)
The Group as lessee
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use
asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term
leases (defined as leases with a lease term of twelve months or less) and leases of low value assets. For these leases, the Group
recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another
systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
(a)
Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses the
incremental borrowing rate specific to the lessee. The incremental borrowing rate is defined as the rate of interest that the
lessee would have to pay to borrow over a similar term and with a similar security the funds necessary to obtain an asset of
a similar value to the right-of-use asset in a similar economic environment.
Lease payments included in the measurement of the lease liability comprise:
•
•
•
•
•
fixed lease payments (including in-substance fixed payments), less any lease incentives;
variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement
date;
the amount expected to be payable by the lessee under residual value guarantees;
exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the
lease.
Variable lease payments that are not based on an index or a rate are not included as part of the measurement and initial
recognition of the lease liability. The Group shall recognise those lease payments in the profit or loss in the periods that
trigger those lease payments.
For all contracts that contain both lease and non-lease components, the Group has elected to not separate lease and non-
lease components and account these as one single lease component.
The lease liabilities are presented as a separate line item in the statement of financial position.
The lease liability is subsequently measured at amortised cost, by increasing the carrying amount to reflect interest on the
lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (with a corresponding adjustment to the related right-of-use asset or to the profit
or loss if the carrying amount of the right-of-use asset has already been reduced to nil) whenever:
•
•
•
the lease term has changed or there is a significant event or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised
lease payments using a revised discount rate;
the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed
residual value, in which case the lease liability is remeasured by discounting the revised lease payments using the initial
discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised
discount rate is used); or
a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease
liability is remeasured by discounting the revised lease payments using a revised discount rate at the effective date of
the modification.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Leases (Cont’d)
(i)
The Group as lessee (Cont’d)
(b)
Right-of-use asset
The right-of-use asset comprises the initial measurement of the corresponding lease liability, lease payments made at
or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is
located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is
recognised and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in
the related right-of-use asset, unless those costs are incurred to produce inventories.
Depreciation on right-of-use assets is calculated using the straight-line method to allocate their depreciable amounts over
the shorter period of lease term and useful life of the underlying asset, are as follows:
Leasehold buildings
Plant and machinery
Office equipment
Motor vehicles
:
:
:
:
over lease term of 1 to 2 years
1 to 2 years
5 years
5 to 10 years
If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects
to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The
depreciation starts at the commencement date of the lease.
Costs prepaid for the usage of land in the PRC and Malaysia under leasing agreements form part of the Group’s right-of-use
assets and are presented as land use rights in the statement of financial position. Amortisation of land use rights is calculated
on a straight-line method over the term of use being 50 to 60 years.
The right-of-use assets, except for land use rights, are presented as a separate line item in the statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment
loss.
(ii)
The Group as lessor
Generally, the accounting policies applicable to the Group as a lessor in the comparative period were not different from IFRS
16, except for the classification of the sublease entered into that resulted in a finance lease classification.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks
and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then
it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for
the major part of the economic life of the asset.
At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease component on the basis of their relative stand-alone prices. If an arrangement contains lease and
non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract.
The Group applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease. The Group
further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.
The Group recognises lease payments received from investment property under operating leases as income on a straight-
line basis over the lease term within “other income” in the profit or loss.
Income taxes
Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the
tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting
period.
Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements except when deferred income tax arises from the initial recognition of
goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting or taxable
profit or loss at the time of the transaction.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Income taxes (Cont’d)
A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, associates
and joint ventures, except where the Group is able to control the timing of the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable future.
A deferred income tax asset is recognised to the extent that it is probable that a future taxable profit will be available against
which the deductible temporary differences and tax losses can be utilised.
Deferred income tax is measured:
(i)
(ii)
at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the
end of reporting period; and
based on the tax consequence that will follow from the manner in which the Group expects, at the end of reporting
period, to recover or settle the carrying amounts of its assets and liabilities.
Current and deferred income taxes are recognised as income or expense in the profit or loss, except to the extent that
the tax arises from a business combination or a transaction which is recognised either in other comprehensive income or
directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.
Current tax assets and current tax liabilities are presented net if, and only if,
(a)
(b)
the Group has the legally enforceable right to set off the recognised amounts; and
intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
The Group presents deferred tax assets and deferred tax liabilities net if, and only if,
(a)
(b)
the Group has a legally enforceable right to set off deferred tax assets against deferred tax liabilities; and
the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on
either:
(i)
(ii)
the same taxable entity; or
different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of
deferred tax liabilities or assets are expected to be settled or recovered.
Royalties and Special Mining Taxes
Other tax expense includes the cost of royalty and special mining taxes payable to governments that are calculated on
a percentage of taxable profit whereby profit represents net income adjusted for certain items defined in applicable
legislation.
Employee benefits
Defined contribution plan
Retirement benefits to employees are provided through defined contribution plans, as provided by the laws of the countries
in which it has operations. The Singapore incorporated companies in the Group contribute to the Central Provident Fund
(“CPF”). The Australian subsidiary in the Group is required to contribute to employee superannuation plans and such
contributions are charged as an expense as the contributions are paid or become payable.
The Australian subsidiary contributes to individual employee accumulation superannuation plans at the statutory rate of
the employees’ wages and salaries, in accordance with statutory requirements, so as to provide benefits to employees on
retirement, death or disability. Contributions are made based on a percentage of the employees’ basic salaries.
The employees of the Group’s subsidiaries which operate in the PRC are required to participate in a central pension scheme
operated by the local municipal government. These subsidiaries are required to contribute a certain percentage of its
payroll costs to the central pension scheme.
These contributions are charged to the profit or loss in the period to which the contributions relate. The Group’s obligations
under these plans are limited to the fixed percentage contributions payable.
89
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Employee benefits (Cont’d)
Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. Accrual is made for the unconsumed
leave as a result of services rendered by employees up to the end of the reporting period.
Key management personnel
Key management personnel are those persons having the authority and responsibility for planning, directing and controlling
the activities of the entity. Directors and certain general managers are considered key management personnel.
Related parties
A related party is defined as follows:
(a)
A person or a close member of that person’s family is related to the Company and the Group if that person:
(i)
(ii)
(iii)
has control or joint control over the Company;
has significant influence over the Company; or
is a member of the key management personnel of the Company or the Group or of a parent of the Company.
(b)
An entity is related to the Company and the Group if any of the following conditions applies:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
the entity and the Company are members of the same group (which means that each parent, subsidiary and
fellow subsidiary is related to the others);
one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a
group of which the other entity is a member);
both entities are joint ventures of the same third party;
one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
the entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity
related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the
Company;
the entity is controlled or jointly controlled by a person identified in (a);
a person identified in (a) (i) has significant influence over the entity or is a member of the key management
personnel of the entity (or of a parent of the entity); or
the entity, or any member of a group which is a part, provides key management personnel services to the
reporting entity or to the parent of the reporting entity.
Impairment of non-financial assets
The carrying amounts of the Company’s and the Group’s non-financial assets subject to impairment are reviewed at the
end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the
asset’s recoverable amount is estimated.
If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of the cash-generating
unit to which the assets belong will be identified.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at
cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies
of the related business combination and represent the lowest level within the company at which management controls the
related cash flows.
Individual assets or cash-generating units that include goodwill and other intangible assets with an indefinite useful life or
those not yet available for use are tested for impairment at least annually. All other individual assets or cash-generating
units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable.
An impairment loss is recognised for the amount by which the assets or cash-generating units’ carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell
and value-in-use, based on an internal discounted cash flow evaluation. Impairment losses recognised for cash-generating
units, to which goodwill has been allocated, are credited initially to the carrying amount of goodwill. Any remaining
impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets
are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.
90
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Impairment of non-financial assets (Cont’d)
Any impairment loss is charged to the profit or loss unless it reverses a previous revaluation in which case it is charged to
equity.
With the exception of goodwill,
•
•
•
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount
or when there is an indication that the impairment loss recognised for the asset no longer exists or decreases.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined if no impairment loss had been recognised.
A reversal of an impairment loss on a revalued asset is credited directly to equity under the heading revaluation surplus.
However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense
in the profit or loss, a reversal of that impairment loss is recognised as income in the profit or loss.
An impairment loss in respect of goodwill is not reversed, even if it relates to an impairment loss recognised in an interim
period that would have been reduced or avoided had the impairment assessment been made at a subsequent reporting or
the end of a reporting period.
Revenue recognition
Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring
promised goods or services to a customer, excluding amounts collected on behalf of third parties. Revenue is recognised
when the Group satisfies a performance obligation by transferring a promised good or service to the customer, which is
when the customer obtains control of the good or service. A performance obligation may be satisfied at a point in time or
over time. The amount of revenue recognised is the amount allocated to the satisfied performance obligation.
Sale of goods
Revenue from the sale of goods is recognised when the goods are delivered to the customer and all criteria for acceptance
have been satisfied and the customer obtains control of the goods. Control of an asset refers to an entity’s ability to direct
the use of and obtain substantially all of the remaining benefits (that is, the potential cash inflows or savings in outflows)
from the asset. The amount of revenue recognised is based on the estimated transaction price, which comprises the
contractual price, net of the estimated volume discounts and adjusted for expected returns.
The Group supplies ores into the China market and international shipments. For the China market, transfer of goods and
control is passed to the customers upon full payment and notification to take deliveries. For international shipments, as
the Group does not have the right to re-direct shipments and the risk of shipments loss in transit and at destination ports
is covered by the buyers’ insurance, the transfer of goods and control is passed to the customers upon loading of the goods
onto the relevant carrier at the port of shipment. The majority of customers are required to make full payment before the
loading of goods at the port of shipment.
Transportation of goods sold on CFR or CIF Incoterms
Revenue from rendering service for transportation of goods sold is on Cost & Freight (CFR) or Cost, Insurance & Freight
(CIF) Incoterms and is recognised over the period of transportation to the customer. A significant proportion of the Group’s
products are sold under CFR or CIF Incoterms, in which the Group is responsible for providing transportation of the goods
after the date that the Group transfers control of the goods to the customers at the loading port.
The Group’s provision of transportation service for contracts under CFR and CIF Incoterms is a distinct service and, therefore,
a separate performance obligation. The total sales price or transaction price is allocated to the separate performance
obligations comprising of: (a) the product sold; and (b) the transportation service including insurance and freight. Revenue
earned from transportation of goods is recognised over time as the customer simultaneously receives the benefits provided
as the Group performs the transportation service.
Interest income
Interest income is recognised on a time-apportioned basis using the effective interest rate method.
Dividend income
Dividend income is recognised when the right to receive the dividend has been established.
Contract liabilities
Contract liabilities relate to the Group’s obligation to perform services for which the Group has received advances from
customers. Contract liabilities are recognised as revenue as the Group performs the service under the contract.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Capitalised contract costs
Costs to fulfil a contract are capitalised if the costs relate directly to the contract, generate or enhance resources used
in satisfying the contract and are expected to be recovered. Capitalised contract costs are subsequently amortised on a
systematic basis as the Group recognises the related revenue. An impairment loss is recognised in the profit or loss to the
extent that the carrying amount of the capitalised contract costs exceeds the remaining amount of consideration that the
Group expects to receive in exchange for the services to which the contract costs relate, less the costs that relate directly to
providing the services and that have not been recognised as expense.
Functional currencies
Items included in the financial statements of each entity in the Group are measured using the currency of the primary
economic environment in which the entity operates (“functional currency”). The financial statements of the Company and
the Group are presented in Australian Dollar, which is also the functional currency of the Company.
Conversion of foreign currencies
Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency
using the exchange rates at the dates of the transactions. Currency translation differences from the settlement of such
transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing
rates at the end of the reporting period are recognised in the profit or loss.
However, in the consolidated financial statements, currency translation differences arising from borrowings in foreign
currencies and other currency instruments designated and qualifying as net investment hedges and net investment in
foreign operations, are recognised in other comprehensive income and accumulated in the currency translation reserve.
When a foreign operation is disposed of or any borrowings forming part of the net investment of the foreign operation are
repaid, a proportionate share of the accumulated translation differences is reclassified to the profit or loss, as part of the
gain or loss on disposal.
All other foreign exchange gains and losses impacting the profit or loss are presented in the consolidated statement of
comprehensive income within “other operating expenses”.
Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when
the fair values are determined.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rates at the date of the transactions.
Group entities
The results and financial position of all the entities within the Group that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
(i)
(ii)
(iii)
Assets and liabilities are translated at the closing exchange rates at the end of the reporting period;
Income and expenses for each statement presenting the profit or loss and other comprehensive income (i.e. including
comparatives) shall be translated at exchange rates at the dates of the transactions; and
All resulting currency translation differences are recognised in other comprehensive income and accumulated in the
exchange fluctuation reserve.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of
the foreign operations and are translated at the closing rates at the reporting date. For acquisitions prior to 1 January 2010,
the goodwill and fair value adjustments are translated at the exchange rates at the dates of acquisition.
Operating segments
The Group identifies operating segments and prepares segment information based on the regular internal financial
information reported to the executive Directors for their decisions about resources allocation to the Group’s business
components and for their review of the performance of those components. The business components in the internal
financial information reported to the executive Directors are determined following a review of the Group’s major products
and services.
The Group has identified the following reportable segments:
Mining
Smelting
Exploration and mining of manganese ore
Production of manganese ferroalloys, ferrosilicon and manganese sinter ore
Marketing and trading
Trading of manganese ore, manganese ferroalloys, ferrosilicon, sinter ore, chrome ore and
iron ore
92
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2(d) Summary of significant accounting policies (Cont’d)
Operating segments (Cont’d)
Each of these operating segments is managed separately as they require different resources as well as operating approaches.
The reporting segment results exclude the change in fair value of derivative financial instruments, finance income and
costs, share of results of associate, income tax and corporate income and expenses which are not directly attributable to
the business activities of any operating segment, and are not included in arriving at the operating results of the operating
segment.
Segment assets include property, plant and equipment, land use rights, mine development costs, inventories, receivables
and operating cash and mainly exclude available-for-sale financial assets, deferred tax assets, interest in an associate,
goodwill and corporate assets which are not directly attributable to the business activities of any operating segment, which
primarily applies to the Group’s headquarters.
Segment liabilities comprise operating liabilities and exclude corporate liabilities which are not directly attributable to
the business activities of any operating segment and are not allocated to a segment. These include income tax payables,
deferred tax liabilities and corporate borrowings.
3
Principal activities and revenue
The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are as stated
in Note 11.
Revenue is turnover derived from activities related to the sales of ore and ferroalloy products and related services which
represent the invoiced value of goods or services sold, net of discounts, goods and services tax and other sales taxes.
93
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
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94
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
4
Property, plant and equipment
Construction
-in-progress
A$’000
Buildings and
infrastructure
A$’000
Plant and
machinery
A$’000
Computer
equipment,
office
equipment
and
furniture
A$’000
Motor
vehicles
A$’000
Total
A$’000
74,148
14,164
(65,847)
-
(1,425)
23,594
67
1,968
-
(897)
768,547
549
63,879
(42)
(70,337)
5,683
708
-
-
(368)
2,095
2
-
(5)
(121)
874,067
15,490
-
(47)
(73,148)
21,040
4,310
(11,911)
(6,257)
984
8,166
24,732
319
307
(78)
2,139
27,419
762,596
6,023
2,447 1,105
(6)
11,529
(442)
(1,861)
299
44,360
819,071 6,979
1,971
62
-
(289)
218
1,962
816,362
8,243
(81)
(8,927)
48,000
863,597
344
-
(344)
-
-
12,662
157,171
3,669
1,815
175,661
1,292
-
-
(500)
41,058
344
(6)
(14,438)
861
-
-
(214)
74
-
(5)
(105)
43,285
-
(11)
(15,257)
-
13,454
184,129
4,316
1,779
203,678
-
-
-
-
-
1,428
225
(3)
1,185
16,289
36,568
682
24
(250)
(872)
(424)
170
10,511
230,360 4,494
67
-
(287)
211
1,770
38,745
(1)
(1,586)
12,077
252,913
The Group
Cost
At 1 January 2020
Additions
Transfers
Written off
Exchange realignment
At 31 December 2020 and
1 January 2021
Additions
Transfers (Note 9)
Written off
Exchange realignment
At 31 December 2021
Accumulated depreciation
and impairment loss
At 1 January 2020
Depreciation for the year
(Note 28)
Transfers
Written off
Exchange realignment
At 31 December 2020 and
1 January 2021
Depreciation for
the year (Note 28)
Transfers (Note 9)
Written off
Exchange realignment
At 31 December 2021
Net book value
At 31 December 2021
8,166
11,130
588,711 2,485
192
610,684
At 31 December 2020
21,040
11,278
578,467
1,707
192
612,684
Buildings are located in the PRC.
As of 31 December 2021, property, plant and equipment with a total net carrying amount of A$586,403,000 (2020 -
A$576,099,000) had been pledged for banking facilities granted to subsidiaries (Note 21.1).
The Group evaluates any indication of impairment in the property, plant and equipment at the end of each reporting period.
Cash flow projections used in these calculations are based on financial budgets approved by management. Cash flows
beyond the budget period are useful life of the property, plant and equipment are extrapolated using the estimated growth
rates stated below. The growth rate does not exceed the long-term average growth rate of the industry in which the CGU
operates.
These assumptions are used for the analysis of each CGU within the business segment. Management determines budgeted
gross margins based on past performance and its expectations of market developments. The weighted average growth
rates used are consistent with forecasts included in industry reports. The discount rates used are pre-tax and reflect specific
risks relating to the relevant segments. A further decrease in the budgeted gross margin by 1% (2020 - 1%) would not result
in indication of impairment of the carrying amount of property, plant and equipment.
95
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
4
Property, plant and equipment (Cont’d)
Key assumptions used for value-in-use calculations:
2021
2020
People’s
Republic
of China
Malaysia
Australia
People’s
Republic
of China
Malaysia
Australia
Smelting operations
Smelting operations
Gross margin1
Growth rate2
3.18%
18%
29%
11%
21%
15%
0% before
2026,
0% after 2026
2% - 3% before
2026, 0% after
2026
0% before
2026, 0% after
2026
0% before 2025,
0% after 2025
2% - 5% before
2025,
0% after 2025
0% before 2025,
0% after 2025
Discount rate3
4.9%
6.3%
12.8%
5.9%
6.1%
12.3%
1
2
3
Budgeted gross margin. The gross margin differs due to the different operating efficiencies of the various subsidiaries located in different
geographical locations.
Weighted average growth rate used to extrapolate cash flows beyond the budget period.
Pre-tax discount rates applied to the pre-tax cash flow projections. The discount rates vary due to the geographical locations of the
businesses.
5
Land use rights
The Group
At beginning of the year
Amortisation for the year (Note 28)
Exchange realignment
At end of the year
2021
A$’000
8,922
(193)
579
9,308
2020
A$’000
9,920
(206)
(792)
8,922
The land use rights, that form part of the Group’s right-of-use assets, are for leasehold land located in the PRC and Malaysia.
The land use rights for leasehold land located in Malaysia had a net carrying value of A$7,918,000 (2020 - A$7,608,000) and
were pledged as security for borrowings referred to in Note 21.1(c).
Information about the Group’s leasing activities are disclosed in Note 34.
6
Exploration and evaluation costs
The Group
At beginning of the year
Costs incurred during the year
Written off during the year (Note 28)
Exchange realignment
At end of the year
2021
A$’000
2,326
754
(153)
28
2,955
2020
A$’000
963
1,363
-
-
2,326
The Group has a 40% (2020 – 30%) interest in a joint arrangement in Australia which is involved in the exploration of
manganese. This interest in the joint arrangement is accounted for as a joint operation. In 2021 and 2020, the expenditure
capitalised during the year relate to the Group’s share of exploration expenditure invested in the joint operation. The joint
operation has no contingent liabilities or commitments as at 31 December 2021 and 2020.
Subsequent to the reporting period, the funding requirement under this joint arrangement has been completed and the
Group’s interest in the joint arrangement has increased to 51% with effect from 17 February 2022.
96
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
7
Mine development costs
The Group
At beginning of the year
Adjustments to rehabilitation provisions (Note 24)
Amortisation for the year (Note 28)
At end of the year
8
Investment property
The Group
Cost
Balance at beginning of year
Exchange realignment
Balance at end of year
Accumulated depreciation
Balance at beginning of year
Depreciation for the year (Note 28)
Exchange realignment
Balance at end of year
Net book value
Rental income
Direct operating expenses arising from investment property that generates rental
income
Gross profit arising from investment property
The following are details of the investment property of the Group:
2021
A$’000
16,726
(1,202)
(12,835)
2,689
2020
A$’000
23,363
(132)
(6,505)
16,726
2021
A$’000
2020
A$’000
735
45
780
161
10
10
181
599
128
(23)
105
808
(73)
735
166
11
(16)
161
574
126
(25)
101
Property Name
Parkway Parade
Fair value hierarchy
2021
2020
Location
Description
Total net lettable
area
(sq m)
80 Marine Parade Road,
#08-08 Parkway Parade,
Singapore 449269
Office premises
148
Tenure
73-year leasehold
commenced from
31 August 2005
Fair value measurements using
Quoted prices in active
markets for identical assets
(Level 1)
Significant other observable
inputs
(Level 2)
Significant unobservable
inputs
(Level 3)
A$’000
A$’000
-
-
-
-
A$’000
2,950
2,535
Valuation techniques used to derive fair values
As of 31 December 2021, the fair value of investment property amounted to approximately A$2,950,000 (2020 - A$2,535,000)
as determined by management with reference to recent market transactions of comparable properties in close proximity,
adjusted for differences in key attributes such as property size, which is based on the property’s highest and best use.
97
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
9
Right-of-use assets
The Group
Cost
At 1 January 2020
Exchange realignment
Lease modification
Write-off
Additions
At 31 December 2020 and
at 1 January 2021
Leasehold
buildings
A$’000
Plant and
machinery
A$’000
Office
equipment
A$’000
Motor
vehicles
A$’000
7,059
(419)
(276)
(1,120)
28
10,258
(505)
(320)
-
932
5,272
10,365
37
(3)
-
-
-
34
521
(46)
-
-
-
475
16,146
Total
A$’000
17,875
(973)
(596)
(1,120)
960
Exchange realignment
421
303
1
28
753
Transfers (Note 4)
(55)
136
-
Write-off
Additions
(3,415)
-
-
8,118
3,503
-
-
-
-
81
(3,415)
11,621
At 31 December 2021
10,341
14,307
35
503
25,186
Accumulated depreciation and impairment
At 1 January 2020
Exchange realignment
Lease modification
Write-off
Depreciation
At 31 December 2020 and
at 1 January 2021
3,719
(411)
(214)
(1,120)
2,828
4,802
6,800
(440)
(22)
-
2,750
9,088
9
(2)
-
-
9
16
216
(25)
-
-
57
10,744
(878)
(236)
(1,120)
5,644
248
14,154
Exchange realignment
205
275
1
16
497
Transfers (Note 4)
Write-off
Depreciation
-
(3,415)
1
-
-
-
-
-
1
(3,415)
2,186
3,633
8
49
5,876
At 31 December 2021
3,778
12,997
25
313
17,113
Carrying amount
At 31 December 2021
6,563
1,310
10
190
8,073
At 31 December 2020
470
1,277
18
227
1,992
Leasehold buildings are located in Malaysia, Singapore and Australia.
Information about the Group’s leasing activities are disclosed in Note 34.
98
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
10 Deferred taxation
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset deferred income tax assets
against deferred income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The amounts,
determined after appropriate offsetting in similar tax legislations, are shown on the statement of financial position as
follows:
The Group
Deferred tax assets
At gross
Less: Set off of tax in similar legislations
At net
Deferred tax liabilities
At gross
Less: Set off of tax in similar legislations
At net
Deferred tax assets
To be recovered within one year
To be recovered after one year
Deferred tax liabilities
To be settled within one year
To be settled after one year
2021
A$’000
2020
A$’000
84,932
(66,454)
18,478
(1,292)
-
(1,292)
-
18,478
18,478
-
(1,292)
(1,292)
89,785
(75,997)
13,788
(1,229)
-
(1,229)
-
13,788
13,788
-
(1,229)
(1,229)
Deferred tax assets (at gross) comprise tax on the following deductible temporary differences:
Excess of tax written down
value over net book value
of qualifying property, plant
and equipment
A$’000
Provisions
A$’000
Tax losses
A$’000
Others
A$’000
Total
A$’000
-
6,097
78,166
1,256
85,519
1,186
(448)
12,394
(1,030)
12,102
-
-
(7,836)
1,186
5,649
82,724
406
(1,292)
(8,471)
-
1,592
-
4,357
4,378
78,631
-
226
126
-
352
(7,836)
89,785
(9,231)
4,378
84,932
The Group
At 1 January 2020
Credited/(charged) to
profit or loss (Note 29)
Exchange difference on
translation
At 31 December 2020
and 1 January 2021
Credited/(charged) to
profit or loss (Note 29)
Exchange difference on
translation
At 31 December 2021
99
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
10 Deferred taxation (Cont’d)
Deferred tax liabilities (at gross) comprise tax on the following taxable temporary differences:
Excess of net book
value over tax written
down value of
qualifying property,
plant and equipment,
and mine
development costs
A$’000
Provisions
A$’000
Others
A$’000
Total
A$’000
(71,602)
(11,050)
7,168
(75,484)
20,391
(10,510)
(65,603)
(2,950)
2,266
-
(684)
(83)
-
(767)
(812)
(246)
-
(1,058)
(318)
-
(1,376)
(75,364)
(9,030)
7,168
(77,226)
19,990
(10,510)
(67,746)
The Group
At 1 January 2020
(Charged)/credited to profit or loss (Note 29)
Exchange difference on translation
At 31 December 2020 and 1 January 2021
(Charged)/credited to profit or loss (Note 29)
Exchange difference on translation
At 31 December 2021
Unrecognised deferred tax assets
Deferred tax assets of A$2,501,000 (2020 - A$2,914,000) have not been recognised in respect of the following items:
The Group
Tax losses
2021
A$’000
2020
A$’000
10,423
12,032
The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries
in which certain subsidiaries operate. The deductible temporary differences have an expiry term of 7 years. Deferred tax
assets have not been recognised in respect of these items because it is not probable that future taxable income will be
available against which the Group can recognise the benefits.
11
Subsidiaries
The Company
2021
A$’000
2020
A$’000
Unquoted equity investments, at cost
8,013
8,013
Amounts due from subsidiaries
Less: Accumulated impairment losses
At beginning and end of the year
Total
219,071
217,521
(83,417)
135,654
143,667
(83,417)
134,104
142,117
The amounts due from subsidiaries are loans to subsidiaries, representing an extension of its investments in the subsidiaries.
These amounts are unsecured with indeterminate repayment terms.
The Group evaluates any indication of impairment on the investment in subsidiaries at the end of each reporting period.
The Group carries out a review of the recoverable amount of its investment in subsidiaries based on the higher of its fair
value less cost to sell and value in use.
100
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
11
Subsidiaries (Cont’d)
Cash flow projections used in these calculations are based on financial budgets approved by management. Cash flows
beyond the budget period are extrapolated using the estimated growth rates stated below. The growth rate does not
exceed the long-term average growth rate of the industry in which the CGU operates.
These assumptions are used for the analysis of each CGU within the business segment. Management determines budgeted
gross margins based on past performance and its expectations of market developments. The weighted average growth
rates used are consistent with forecasts included in industry reports. The discount rates used are pre-tax and reflect specific
risks relating to the relevant segments. A further decrease in the budgeted gross margin by 1% (2020 - 1%) would not result
in indication of impairment of the carrying amount of the investments in subsidiaries.
Key assumptions used for value-in-use calculations:
2021
2020
People’s
Republic
of China
Malaysia
Australia
People’s
Republic
of China
Malaysia
Australia
Smelting operations
Smelting operations
Gross margin1
Growth rate2
3.18%
18%
29%
11%
21%
15%
0% before
2026,
0% after 2026
2% - 3%
before 2026,
0% after 2026
0% before
2026, 0%
after 2026
0% before
2025,
0% after 2025
2% - 5%
before 2025,
0% after 2025
0% before
2025,
0% after 2025
Discount rate3
4.9%
6.3%
12.8%
5.9%
6.1%
12.3%
1
2
3
Budgeted gross margin. The gross margin differs due to the different operating efficiencies of the various subsidiaries located in different
geographical locations.
Weighted average growth rate used to extrapolate cash flows beyond the budget period.
Pre-tax discount rate applied to the pre-tax cash flow projections. The discount rates vary due to the geographical locations of the
businesses.
Details of the Group’s material subsidiaries at the end of the reporting period are set out below:
Proportion of
Place of
ownership interest
incorporation/
and voting rights
Name
operation
held by the Group
Principal activities
Held by the Company
OM (Manganese) Ltd. (1)
Australia
2021
%
100
2020
%
100
Operation of manganese
mine
Held by OM Resources (HK) Limited
OM Materials (S) Pte. Ltd. (2)
Held by OM Materials (S) Pte. Ltd.
OM Materials (Sarawak) Sdn. Bhd. (3)
OM Materials (Qinzhou) Co. Ltd. (4)
Held by OM Materials Trade (S) Pte. Ltd.
OM Materials Trading (Qinzhou) Co. Ltd (4)
Singapore
100
100
Investment holding and
trading of metals and
ferroalloy products
Malaysia
75
75
Sales and processing of
ferroalloys and ores
PRC
PRC
100
100
Sales and processing of
ferroalloys and ores
100
100
Sales and processing of
ferroalloys and ores
Note:
(1)
(2)
(3)
(4)
audited by Grant Thornton Audit Pty Ltd
audited by Foo Kon Tan LLP
audited by Ernst & Young, Malaysia
audited by Guangxi JiaHai Accountant Affairs Office Co. Ltd. for statutory purposes and reviewed by Foo Kon Tan LLP for group
consolidation
101
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
11
Subsidiaries (Cont’d)
At the end of the reporting period, the Group has other subsidiaries that are not material to the Group. The principal
activities of these subsidiaries are summarised as follows:
Principal activities
operation
Number of subsidiaries
Place of incorporation/
2021
2020
Investment holding
Investment holding
Investment holding
Investment holding
Logistics services and rental of machinery
Engineering, procurement and construction
services, and trading of metals and ferroalloy
products
The British Virgin Islands
Mauritius
Hong Kong
Singapore
Malaysia
PRC
Project development and project management
Malaysia
services
Exploration and mining of minerals
Engineering services
Malaysia
Malaysia
1
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
2
1
10
10
Additional investment in OM Materials (Sarawak) Sdn. Bhd. (“OM Sarawak”)
On 4 March 2021, pursuant to the Equity Injection Notice dated 24 February 2021 from OM Sarawak, OM Materials (S)
Pte Ltd (“OMS”) contributed shares of US$6,839,250 (A$9,425,000) of the additional capital injection in OM Sarawak by
subscribing 27,685,284 ordinary shares at an issue price of RM1.00 per share.
The table below shows details of a non-wholly owned subsidiary of the Group that has material non-controlling interests:
Place of
Incorporation
and
principal place
of business
Proportion of
ownership
interests and
voting rights
held by non-
controlling interests
Profit/(loss) allocated to
non-controlling
interests
Accumulated non-
controlling interests
2021
%
2020
%
2021
A$’000
2020
A$’000
2021
A$’000
2020
A$’000
Malaysia
25
25
29,356
(8,139)
94,757
56,967
Name
OM Materials
(Sarawak) Sdn. Bhd.
102
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
11
Subsidiaries (Cont’d)
Summarised financial information in respect of the above subsidiary that has material non-controlling interests (“NCI”) is
set out below.
2021
A$’000
2020
A$’000
OM Materials (Sarawak) Sdn. Bhd.
Summarised Statement of Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity attributable to owners of the Company
Non-controlling interests
Summarised Statement of Comprehensive Income
Revenue
Expenses
Profit/(loss) for the year
Profit/(loss) attributable to owners of the Company
Profit/(loss) attributable to NCI
Profit/(loss) for the year
Other comprehensive income attributable to owners of the Company
Other comprehensive income attributable to NCI
Other comprehensive income for the year
Total comprehensive income/(loss) attributable to owners of the Company
Total comprehensive income/(loss) attributable to NCI
Total comprehensive income/(loss) for the year
Other summarised information
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash outflow from financing activities
Net cash inflow/(outflow)
12
Interests in associates
The Group
Cost of investment in associates (1)
Share of post-acquisition profits and reserves, net of dividends
388,899
591,284
(238,673)
(362,475)
284,278
94,757
582,353
(469,045)
113,308
84,981
28,327
113,308
2,178
726
2,904
87,159
29,053
116,212
44,746
(6,652)
(27,426)
10,668
2021
A$’000
77,669
41,642
119,311
228,907
583,058
(227,511)
(352,327)
175,160
56,967
521,940
(554,497)
(32,557)
(24,418)
(8,139)
(32,557)
768
256
1,024
(23,650)
(7,883)
(31,533)
77,404
(8,038)
(61,585)
7,781
2020
A$’000
77,672
49,160
126,832
(1)
Comprised unquoted equity shares at cost and advances to associates net of repayments. The advances to associates represent
extensions of the investment in associates which are unsecured with indeterminate repayment terms.
103
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
12
Interests in associates (Cont’d)
Details of the Group’s material associate at the end of the reporting period was as follows:
Proportion of effective
ownership interest
Country of
and voting rights
Name
incorporation
held by the Group
Principal activities
Ntsimbintle Mining Proprietary Limited
South Africa
(“NMPL”) (1)
Held by NMPL (2)
Tshipi é Ntle Manganese Mining
Proprietary Limited (“Tshipi Mining”) (1)
South Africa
2021
2020
%
26
13
%
26
13
Investment holding
Exploration and
exploitation of
minerals
(1)
(2)
audited by KPMG Inc.
NMPL holds a 50.1% interest joint venture in Tshipi Mining whose results are equity-accounted in NMPL.
Shares in the Group’s material associate are held by a wholly-owned subsidiary of the Group, OMH (Mauritius) Corp.
All of the Group’s associates are accounted for using the equity method in the Group’s consolidated financial statements.
The financial year end date of NMPL is 28 February. For the purposes of applying the equity method accounting, the
management accounts of NMPL for the year ended 31 December 2021 have been used and appropriate adjustments have
been made as necessary.
Summarised financial information in respect of the Group’s material associate are set out below. The summarised financial
information below represents amounts shown in the associate’s financial statements prepared in accordance with IFRS.
Current assets
Non-current assets (1)
Current liabilities
Non-current liabilities
Net assets/(liabilities)
Income (1)
Profit for the year
Total comprehensive income for the year
Dividends received from associate
(1)
Inclusive of equity-accounted results of Tshipi Mining.
Ntsimbintle Mining
Proprietary Limited
2021
A$’000
4,705
176,290
(76)
(156,233)
24,686
40,043
20,883
20,883
12,934
2020
A$’000
3,556
193,787
(11)
(368,290)
(170,958)
64,146
63,649
63,649
6,048
104
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
12
Interests in associates (Cont’d)
Reconciliation of the above summarised financial information to the carrying amount of the interest in the associate
recognised in the consolidated financial statements:
Net assets/(liabilities) of the associate
Shareholder loans
Proportion of the Group’s ownership interest
in the associate
Goodwill
Currency translation difference
Carrying value
Add:
Carrying value of individually immaterial
associates
Carrying value of Group’s interest in associates
Ntsimbintle Mining
Proprietary Limited
Total
2021
A$’000
24,686
156,233
180,919
47,039
59,842
12,417
119,298
2020
A$’000
(170,958)
368,290
197,332
51,306
59,842
15,655
126,803
2021
A$’000
24,686
156,233
180,919
47,039
59,842
12,417
119,298
2020
A$’000
(170,958)
368,290
197,332
51,306
59,842
15,655
126,803
13
29
119,311
126,832
Aggregate information of associates that are not individually material
The summarised financial information of the immaterial associate not adjusted for in the Group’s share of equity interest
is as follows:
- Loss for the year
- Total comprehensive loss for the year
2021
A$’000
(53)
(53)
2021
A$’000
2020
A$’000
(71)
(71)
2020
A$’000
The Group’s share of loss
(18)
(24)
13 Other investment
The Group
Non-current
Equity investments at FVTPL
- Quoted equity shares
2021
A$’000
2020
A$’000
-
1,888
The investment in quoted equity shares offer the Group the opportunity for return through dividend income and fair value
gains. They have no fixed maturity or coupon rate.
105
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
13 Other investment (Cont’d)
Fair value hierarchy – Recurring fair value measurements
Fair value measurements using
Quoted prices in
active markets for
identical assets
(Level 1)
Significant other
observable inputs
(Level 2)
Significant
unobservable inputs
(Level 3)
A$’000
A$’000
A$’000
2021
2020
-
-
-
1,888
-
-
14
Inventories
The Group
At cost
Raw materials
Work-in-progress
Finished goods
At net realisable value
Work-in-progress
Finished goods
Total
Cost of inventories recognised as an expense and included in
cost of sales (Note 28)
Write-down of inventories to net realisable value (Note 28)
2021
A$’000
2020
A$’000
214,894
18,542
99,862
333,298
953
19,057
20,010
353,308
766,292
3,775
147,354
15,561
45,937
208,852
898
6,557
7,455
216,307
688,371
3,397
106
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
15
Trade and other receivables
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
The Company
The Group
2021
A$’000
2020
A$’000
2021
A$’000
2020
A$’000
Trade receivables (i)
-
-
44,963
48,130
Other receivables:
Amounts due from subsidiaries (non-trade)
9,417
12,553
-
-
Deposits and other receivables:
- third party
- associate
Less: Allowance for impairment
of other receivables:
At beginning of the year
Impairment loss (Note 28)
At end of the year
-
-
-
-
9,417
12,553
12,272
51
12,323
-
-
-
-
-
-
(278)
(646)
(924)
Net other receivables (ii)
Total (i) + (ii)
9,417
9,417
12,553
12,553
11,399
56,362
15,111
29
15,140
(278)
-
(278)
14,862
62,992
The non-trade amounts due from subsidiaries, representing advances, are interest-free, unsecured and repayable on
demand.
Included in the Group’s deposits and other receivables from third parties is tax recoverable of A$459,000 (2020 - A$6,763,000)
from tax authorities.
Trade and other receivables are denominated in the following currencies:
Australian Dollar
Renminbi
United States Dollar
Malaysian Ringgit
Others
The Company
The Group
2021
A$’000
2020
A$’000
9,417
12,553
-
-
-
-
-
-
-
-
9,417
12,553
2021
A$’000
1,540
8,602
42,205
556
3,459
56,362
2020
A$’000
9,171
5,277
44,855
425
3,264
62,992
The credit risk for trade and other receivables based on the information provided by key management is as follows:
By geographical areas
Asia Pacific
Europe
Africa
Others
The Company
The Group
2021
A$’000
2020
A$’000
2021
A$’000
2020
A$’000
9,417
-
-
-
9,417
9,441
-
3,112
-
12,553
40,584
6,249
5,044
4,485
56,362
52,682
4,187
29
6,094
62,992
107
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
15
Trade and other receivables (Cont’d)
Neither past due nor impaired
Trade and other receivables that were neither past due nor impaired amounting to A$9,417,000 (2020 - A$12,553,000) and
A$56,329,000 (2020 - A$62,153,000) for the Company and the Group respectively related to a wide range of debtors for
whom there was no recent history of default.
Past due but not impaired
The ageing analysis of trade and other receivables past due but not impaired is as follows:
Past due 0 to 3 months
Past due 3 to 6 months
Past due over 6 months
The Company
The Group
2021
A$’000
2020
A$’000
2021
A$’000
2020
A$’000
-
-
-
-
-
-
-
-
29
-
4
33
643
-
196
839
Trade and other receivables that were past due but not impaired related to a number of debtors that have a good track
record with the Group. Based on historical default rates, the Group believes that no impairment allowance is necessary in
respect of trade and other receivables not past due or past due over 6 months. These receivables are mainly arising from
debtors that have a good credit record with the Group.
16
Capitalised contract costs
The Group
Costs to fulfil service rendered for transportation of goods sold under
CFR and CIF Incoterms
Amortisation recognised as cost of sales during the year
2021
A$’000
2020
A$’000
1,484
1,856
1,856
1,015
The Group’s capitalised contract costs relate to fulfilment costs of freight and insurance for the transportation of goods
sold under CFR and CIF Incoterms. These costs are charged to the profit or loss on a basis consistent with the pattern of
recognition of the associated revenue.
17
Cash and bank balances
Cash at bank and on hand
Short-term bank deposits
Total cash and bank balances
Less: Cash collateral
Cash and cash equivalents
The Company
The Group
2021
A$’000
2020
A$’000
2021
A$’000
44
-
44
-
44
42
-
42
-
42
109,824
2,510
112,334
(16,167)
96,167
2020
A$’000
58,905
4,126
63,031
(17,080)
45,951
Included in the cash collateral were amounts of A$1,399,000 (2020 - A$2,140,000) and A$14,602,000 (2020 - A$14,553,000)
which were pledged to banks as security for banking facilities and the issuance of environmental bonds (Note 35.4)
respectively.
108
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
17
Cash and bank balances (Cont’d)
Cash and bank balances are denominated in the following currencies:
Australian Dollar
Renminbi
United States Dollar
Malaysian Ringgit
Others
The Company
The Group
2021
A$’000
2020
A$’000
41
-
3
-
-
44
39
-
3
-
-
42
2021
A$’000
19,083
16,275
70,104
5,351
1,521
112,334
2020
A$’000
17,639
15,381
23,637
6,195
179
63,031
The short term bank deposits have an average maturity of 3 months (2020 - 3 months) from the end of the financial year with
the following weighted average effective interest rates:
The Group
United States Dollar
Renminbi
Malaysia Ringgit
18
Share capital
The Company and The Group
Authorised:
2021
Per annum
2020
Per annum
0.06% to 0.16% 0.18% to 0.92%
-
1.15%
1.38%
1.15%
No. of ordinary shares
Amount
2021
’000
2020
’000
2021
A$’000
2020
A$’000
Ordinary shares of A$0.05 (2020 - A$0.05) each
2,000,000
2,000,000
100,000
100,000
Issued and fully paid:
Ordinary shares of A$0.05 (2020 - A$0.05) each
At 1 January and 31 December
738,623
738,623
36,931
36,931
The holders of ordinary shares (excluding treasury shares) are entitled to receive dividends as declared from time to time
and are entitled to one vote per share at meetings of the Company. All shares (excluding treasury shares) rank equally with
regard to the Company’s residual assets.
19
Treasury shares
The Company and The Group
No. of ordinary shares
Amount
2021
’000
2020
’000
2021
A$’000
2020
A$’000
At 1 January and 31 December
1,933
1,933
2,330
2,330
Treasury shares relate to ordinary shares of the Company that are held by the Company. During the year, the Company
acquired Nil shares (2020 - Nil shares) in the Company through on-market purchase on the Australian Securities Exchange.
109
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
20
Reserves
Share premium
Non-distributable reserves
Capital reserve
Contributed surplus
Hedging reserve
Exchange fluctuation reserve
(Accumulated losses)/Retained profits
[Note (i)]
[Note (ii)]
[Note (iii)]
[Note (iv)]
[Note (v)]
[Note (vi)]
[Note (vii)]
Share premium
At 1 January and 31 December
Non-distributable reserve
At 1 January and 31 December
Capital reserve
At 1 January and 31 December
Contributed surplus
At 1 January and 31 December
Hedging reserve
At 1 January
Cash flow hedges
At 31 December
Exchange fluctuation reserve
At 1 January
Currency translation differences
At 31 December
The Company
The Group
2021
A$’000
2020
A$’000
2021
A$’000
178,363
-
-
3,312
-
-
(131,094)
50,581
178,363
-
-
3,312
-
-
(133,367)
48,308
178,363
8,868
16,064
-
(2,771)
27,597
242,544
470,665
2020
A$’000
178,363
8,868
16,064
-
(4,911)
6,021
160,637
365,042
178,363
178,363
178,363
178,363
-
-
-
-
8,868
8,868
16,064
16,064
3,312
3,312
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,911)
2,140
(2,771)
6,021
21,576
27,597
(5,851)
940
(4,911)
30,181
(24,160)
6,021
162,652
5,352
(7,367)
160,637
Retained profits/(Accumulated losses)
At 1 January
Profit/(loss) for the year
Dividends paid
At 31 December
[Note (viii)]
(133,367)
2,273
-
(131,094)
(122,213)
(3,787)
(7,367)
(133,367)
160,637
81,907
-
242,544
110
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
20
Reserves (Cont’d)
Notes:
(i)
(ii)
The share premium reserve comprises the value of shares that have been issued at a premium, meaning the price paid
was in excess of the share’s quotient value. The amount received in excess of the quotient value was transferred to the
share premium reserve.
In accordance with the accounting principles and financial regulations applicable to Sino-foreign joint venture
enterprises, the subsidiaries in the PRC are required to transfer part of their profits after tax to the “Statutory Reserves
Fund”, the “Enterprise Expansion Fund” and the “Staff Bonus and Welfare Fund”, which are non-distributable, before
profit distributions to joint venture partners. The quantum of the transfers is subject to the approval of the board of
directors of these subsidiaries.
The annual transfer to the Statutory Reserves Fund should not be less than 10% of profit after tax, until it aggregates
to 50% of the registered capital. However, foreign enterprises may choose not to appropriate profits to the Enterprise
Expansion Fund.
The Statutory Reserves Fund can be used to make good previous years’ losses while the Enterprise Expansion Fund
can be used for the acquisition of property, plant and equipment and financing daily funds required. The Staff Bonus
and Welfare Fund is utilised for employees collective welfare benefits and is included in other payables under current
liabilities in the statements of financial position.
The capital reserve arose from the capitalisation of various reserves and retained profits in one of the Sino-foreign joint
ventures of the Group. The purpose of the capitalisation is to increase the registered capital of the joint venture.
The contributed surplus of the Company represents the difference between the nominal value of the Company’s shares
issued for acquisition of the subsidiaries and the aggregate net asset value of the subsidiaries acquired. Under the
Companies Act 1981 of Bermuda (as amended), the contributed surplus can be distributable to shareholders under
certain circumstances. At the Group level, the contributed surplus is eliminated against the cost of investment in
subsidiaries.
The hedging reserve represents hedging gains and losses recognised on the effective portion of cash flow hedges. The
cumulative deferred gain or loss on the hedge recognised in other comprehensive income and accumulated hedging
reserves is reclassified to the profit or loss when the forecast transaction is ultimately recognised in the profit or loss.
The translation reserve comprises all foreign exchange differences arising on the translation of the financial statements
of foreign subsidiaries and associates stated in a currency different from the Group’s presentation currency.
Retained earnings comprise the distributable reserves recognised in the preceding year less any dividend declared. The
total of such profits brought forward and the profit derived during the period constitute the total distributable reserves,
that is the maximum amount available for distribution to the shareholders.
(iii)
(iv)
(v)
(vi)
(vii)
(viii) The Group and The Company
Final tax-exempt (one-tier) dividend of 0.01 cents per share for 2019
2021
A$’000
-
-
2020
A$’000
7,367
7,367
111
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
21
Borrowings
Non-current
Bank loans (Note 21.1)
Other loans (Note 21.3)
Structuring and arrangement fee
Current
Bank loans (Note 21.1)
5% Convertible Note (Note 21.2)
Other loans (Note 21.3)
Structuring and arrangement fee
21.1 Bank loans
The Company
The Group
2021
A$’000
2020
A$’000
2021
A$’000
2020
A$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,003
-
14,003
-
14,003
14,003
282,147
14,789
296,936
(807)
296,129
101,345
-
12,138
113,483
(588)
112,895
409,024
275,360
13,893
289,253
(974)
288,279
103,184
14,003
10,177
127,364
(598)
126,766
415,045
The Company
The Group
2021
A$’000
2020
A$’000
2021
A$’000
Bank loans, unsecured
Bank loans, secured [Note (a)]
Bank loans, secured [Note (b)]
Bank loans, secured [Note (c)]
Amount repayable not later than one year
Amount repayable after one year:
Later than one year and not later than five
years
Notes:
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2020
A$’000
3,796
6,764
1,622
366,362
378,544
-
-
8,670
374,821
383,491
101,343
103,184
282,148
383,491
275,360
378,544
(a)
These loans are secured by charges over certain bank deposits as disclosed in Note 17.
(b)
These loans are secured by a charge over land and buildings and certain bank deposits, as disclosed in Note 4 and
Note 17 respectively.
(c)
These loans are secured by:
•
•
•
•
•
•
•
•
•
shares of OM Materials (Sarawak) Sdn Bhd, a company incorporated in Malaysia;
a charge over certain bank accounts;
a charge over land use rights;
a debenture;
a borrower assignment;
an assignment of insurances;
a shareholder assignment;
an assignment of reinsurances; and
a corporate guarantee from OM Holdings Limited and Cahya Mata Sarawak Berhad (holds 25% ownership
interest in OM Materials (Sarawak) Sdn Bhd).
112
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
21
Borrowings (Cont’d)
21.2 5% Convertible Note
The Company
The Group
2021
A$’000
2020
A$’000
2021
A$’000
2020
A$’000
5% Convertible Note:
Due not later than one year
-
14,003
-
14,003
On 7 March 2012, the Company issued to Hanwa Co. Ltd 25,000,000 convertible notes at an aggregate principal amount of
A$19,945,953 (US$21,447,261) with a nominal interest of 5% per annum, due on 6 March 2016 and convertible in accordance
with the terms and conditions of issue including an initial conversion price of A$0.80 per share. On 4 March 2016, the
Company executed an amendment and restatement agreement with Hanwa Co. Ltd to extend the Convertible Note terms
for a further 4 years to 6 March 2020, which was assessed and accounted for as a non-substantial modification of the
original financial liability. The conversion option was not recognised as a derivative financial instrument because the fair
value was assessed to be insignificant.
In March 2018, the convertible notes on issue were reduced from 25,000,000 to 20,000,000 following the redemption of 20%
of the convertible notes for US$4,290,000 (equivalent to approximately A$5,500,000).
In April 2018, the convertible notes on issue were reduced further from 20,000,000 to 17,435,500 following the redemption
by the Company of a further 10.26% of the original convertible notes for US$2,200,000 (equivalent to approximately
A$2,900,000).
In February 2019, the convertible notes on issue were reduced further from 17,435,500 to 12,500,000 following the
redemption by the Company of 19.74% of the original convertible notes for US$4,234,000 (equivalent to approximately
A$5,826,000).
In December 2019, the Company executed an amendment and restatement agreement with Hanwa Co. Ltd to extend the
Convertible Note terms for a further 1 year to 6 March 2021, which was assessed and accounted for as a non-substantial
modification of the original financial liability. The conversion option was not recognised as a derivative financial instrument
because the fair value was assessed to be insignificant.
As of 31 December 2020, the Company had 12,500,000 convertible notes on issue with Hanwa Co. Ltd, due on 6 March 2021.
In March 2021, the 12,500,000 convertible notes were fully redeemed by the Company for A$13,900,000 (approximately
equivalent to US$10,700,000).
21.3 Other loans
The Company
The Group
Shareholder loan, unsecured [Note (a)]
Shareholder loan, unsecured [Note (b)]
Third party loan, secured [Note (c)]
Third party loan, unsecured
Amount repayable not later than one year
Amount repayable after one year:
Later than one year and not later than five
years
Later than five years
2021
A$’000
2020
A$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2021
A$’000
3,075
11,277
11,714
861
26,927
2020
A$’000
2,857
10,177
11,036
-
24,070
12,138
10,177
11,714
3,075
14,789
26,927
11,036
2,857
13,893
24,070
113
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
21
Borrowings (Cont’d)
21.3 Other loans (Cont’d)
Notes:
(a)
These loans are unsecured. None of the shareholders are entitled to demand or receive payment or any distribution in
respect of any shareholders’ loans from the Group. Repayment may be made subject to satisfaction of pre-agreed tests
typical for a project financing of this nature.
(b)
The loan is unsecured and repayable on demand.
(c)
The loan is secured by a corporate guarantee from OM Holdings Limited. As at 31 December 2020, the loan was
repayable on 4 January 2022. In December 2021, the repayment date was extended to 4 January 2023.
21.4 Currency risk
Total borrowings are denominated in the following currencies:
The Company
The Group
United States Dollar
Malaysian Ringgit
Renminbi
Others
21.5 Effective interest rates
-
-
-
-
-
2021
A$’000
2020
A$’000
2021
A$’000
2020
A$’000
337,745
75,678
1,622
-
14,003
399,493
-
-
-
-
8,670
861
14,003
409,024
415,045
The weighted average effective interest rates of total borrowings at the end of the reporting period are as follows:
Bank loans (Note 21.1)
5% convertible note (Note 21.2)
Other loans (Note 21.3)
21.6 Carrying amounts and fair values
The Company
The Group
2021
2020
2021
2020
Per annum
Per annum
-
-
-
-
1.88% to 5.07% 0.41% to 6.87%
9.00%
-
9.00%
-
1.24% to 4.53% 1.53% to 5.95%
The carrying amounts of current borrowings approximate their fair value. The carrying amounts and fair values of non-
current borrowings were as follows:
2021
Bank loans
Other loans
2020
Bank loans
Other loans
The Company
The Group
Carrying
amounts
A$’000
Fair
values
A$’000
Carrying
amounts
A$’000
Fair
values
A$’000
-
-
-
-
-
-
-
-
282,148
14,789
279,221
14,789
275,360
13,893
273,840
13,893
The fair values above are determined from the discounted cash flow analysis, discounted at market borrowing rates (per
annum) of an equivalent instrument at the end of the reporting period which the Directors expect to be available to the
Group.
114
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 22
Lease liabilities
The Group
Undiscounted lease payments due:
- Year 1
- Year 2
- Year 3
- Year 4 and onwards
Less: Unearned interest cost
Lease liabilities
Presented as:
- Non-current
- Current
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2021
A$’000
2020
A$’000
3,479
2,505
2,199
4
8,187
(478)
7,709
4,174
3,535
7,709
1,336
332
103
-
1,771
(101)
1,670
415
1,255
1,670
Interest expense on lease liabilities of A$330,000 (2020 - A$306,000) is recognised within “finance costs” in the profit or loss.
Rental expenses not capitalised in lease liabilities but recognised within “operating expenses” in the profit or loss are set
out below:
The Group
Short-term leases
Leases of low-value assets
2021
A$’000
9,707
19
2020
A$’000
9,865
454
Total cash outflows for all leases in the year amounted to A$5,941,000 (2020 - A$6,547,000).
As at 31 December 2021, the Group’s short-term lease commitments at the reporting date are not substantially dissimilar to
those giving rise to the Group’s short-term lease expense for the year.
The Group’s lease liabilities are secured by the lessors’ title to the leased assets.
Further information about the financial risk management are disclosed in Note 38 and leasing activities in Note 34.
Lease liabilities are denominated in the following currencies:
The Group
Australian Dollar
Malaysian Ringgit
Others
2021
A$’000
743
5,719
1,247
7,709
2020
A$’000
613
730
327
1,670
115
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
23
Trade and other payables
Non-current
Trade payables - third party
Other payables
Retention monies
Current
Trade payables
- third party
Amount due to subsidiaries (non-trade)
Accruals
Other payables
Retention monies
Welfare expense payable
Interest payables
Total
The Company
The Group
2021
A$’000
2020
A$’000
2021
A$’000
2020
A$’000
-
-
-
-
-
65,643
2,234
194
-
-
-
68,071
68,071
68,071
-
-
-
-
-
55,280
1,673
258
-
-
677
57,888
57,888
57,888
54,164
54,530
118
43
232
29
54,325
54,791
139,453
114,433
-
14,867
17,559
1,815
2,797
236
37,274
176,727
231,052
-
9,417
23,103
2,820
2,295
3,692
41,327
155,760
210,551
Non-current trade payables relate to payables to vendors which bear interest of 5.5% (2020 - 5.5%) per annum.
The current amount due to subsidiaries (non-trade) represents advances which are unsecured, interest-free and repayable
on demand.
Trade and other payables are denominated in the following currencies:
Australian Dollar
Renminbi
United States Dollar
Malaysian Ringgit
Others
The Company
The Group
2021
A$’000
39,253
-
28,614
-
204
2020
A$’000
39,884
-
17,622
182
200
68,071
57,888
2021
A$’000
13,473
14,651
45,092
157,463
373
231,052
2020
A$’000
14,340
11,440
37,400
145,121
2,250
210,551
All trade payables are generally on 30 to 120 (2020 - 30 to 120) days’ credit terms.
116
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
23
Trade and other payables (Cont’d)
The carrying amounts of current trade and other payables approximate their fair value. The carrying amounts and fair
values of non-current trade and other payables are as follows:
The Company
The Group
Carrying
amounts
A$’000
Fair
values
A$’000
Carrying
amounts
A$’000
Fair
values
A$’000
2021
Trade payables - third party
Other payables
Retention monies
2020
Trade payables - third party
Other payables
Retention monies
24
Provisions
The Group
Rehabilitation
At beginning of the year
Additions
Adjustments from mine development costs (Note 7)
Utilisation
At end of the year
Non-current
Current
-
-
-
-
-
-
-
-
-
-
-
-
54,164
54,164
118
43
118
43
54,530
54,530
232
29
232
29
2021
A$’000
2020
A$’000
12,675
-
(1,202)
(1,585)
9,888
7,973
1,915
9,888
14,453
-
(132)
(1,646)
12,675
10,869
1,806
12,675
According to the Mine Management and Environmental Management Plans submitted to the Northern Territory Government
in Australia, the wholly-owned subsidiary, OM (Manganese) Ltd is obligated for the rehabilitation and restoration of areas
disturbed arising from mining activities conducted by OM (Manganese) Ltd. Mine rehabilitation costs are provided for at
the present value of future expected expenditure when the liability is incurred. Although the ultimate cost to be incurred is
uncertain, the Group has estimated its costs based on the rates outlined by the Northern Territory Department of Industry,
Tourism and Trade using current restoration standards and techniques.
25 Deferred capital grant
The Group
Government grant
Non-current
Current
2021
A$’000
2020
A$’000
11,387
11,466
10,609
778
11,387
10,730
736
11,466
A government grant was awarded for the construction of certain items of property, plant and equipment. There are no
unfulfilled conditions or contingencies attached. The movement in the deferred capital grant is due to amortisation costs of
A$756,000 (2020 - A$817,000) (Note 28) and foreign currency translation differences.
117
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
26
Contract liabilities
The Group
2021
A$’000
2020
A$’000
Transportation of goods sold under CFR and CIF Incoterms
9,686
6,064
The Group’s contract liabilities relate to the Group’s obligation to transport goods sold to customers under CFR and CIF
Incoterms for which the Group has received advance payments from these customers.
Unsatisfied performance obligations in relation to contract liabilities at the end of the reporting period are:
The Group
Aggregate amount of transaction price allocated to contracts that
are partially or fully unsatisfied at the end of the year
2021
A$’000
2020
A$’000
9,686
6,064
The Group expects that 100% of the transaction price allocated to the unsatisfied performance obligations at the end of the
current year may be recognised as revenue during the next reporting period.
27 Other income
The Group
Interest income from banks
Commission income
Fair value gain on other investment (Note 13)
Government grant
Gain on disposal of other investment
Gain from derecognition of financial liabilities
Sundry income
2021
A$’000
298
1,169
-
506
799
9,219
2,310
14,301
2020
A$’000
691
2,189
1,388
735
-
-
1,753
6,756
118
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
28
Profit/(loss) before income tax
The Group
Note
2021
A$’000
2020
A$’000
Profit/(loss) before income tax has been arrived at after
charging/(crediting):
Depreciation of property, plant and equipment:
- cost of sales
- other operating expenses
Loss on disposal of property, plant and equipment (1)
Write off of property, plant and equipment (1)
Amortisation of land use rights (1)
Write off of exploration and evaluation costs (1)
Amortisation of mine development costs (1)
Depreciation of investment property (1)
Depreciation of right-of-use assets (1)
Cost of inventories recognised as expenses
and included in cost of sales
Write-down of inventories to net realisable value (1)
Impairment loss on trade and other receivables (1)
Unwinding of discount on non-current trade payables (1)
Amortisation of deferred capital grant (2)
Foreign exchange loss/(gain) – net (1)
Lease modification (1)
Rental expenses:
- short-term leases
- leases of low-value assets
Finance costs:
- loans
- lease liabilities
- others
Employee benefits expenses
21,976
16,769
38,745
18
7,341
193
153
12,835
10
5,876
766,292
3,775
646
84
(756)
11,684
-
9,707
19
18,512
335
927
19,774
85,608
4
5
6
7
8
9
14
14
15
25
22
22
32
(1)
(2)
These are included under “Other operating expenses” in the Consolidated Statement of Comprehensive Income.
This is included under “Cost of sales” in the Consolidated Statement of Comprehensive Income.
27,630
15,655
43,285
-
36
206
-
6,505
11
5,644
688,371
3,397
-
268
(817)
(574)
296
9,865
454
27,309
306
1,212
28,827
70,238
119
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
29
Income tax
A provision for enterprise income tax on the subsidiaries operating in the People’s Republic of China (“PRC”) has been made
in accordance with the Income Tax Law of PRC concerning Foreign Investment Enterprises and Foreign Enterprises and
various local income tax laws.
A Global Trader Programme is granted by the Singapore Ministry of Trade and Industry to a Singapore subsidiary, OM
Materials (S) Pte. Ltd., for a concessionary rate of 10% valid up to December 2023, subject to the fulfilment of specific
conditions.
In November 2017, OM Materials (Sarawak) Sdn. Bhd. (“OM Sarawak”) was awarded Pioneer Status by the Malaysian
Investment Development Authority (“MIDA”), which entitles OM Sarawak exemption from tax for a period of 5 years effective
1 December 2017 to 30 November 2021 on 100% of statutory income derived from the production of ferro-silicon, silicon
manganese and high carbon ferromanganese. OM Sarawak is permitted to apply for an additional 5 years exemption on
70% of its statutory income on or before 31 December 2022 subject to the satisfaction of MIDA on pre-agreed criterion.
Taxation has been provided at the appropriate tax rates prevailing in Australia, Singapore, Malaysia, Hong Kong and PRC in
which the Group operates on the estimated assessable profits for the year. These rates generally range from 10% to 30%
for the reporting period.
The Group
Current taxation:
- Singapore income tax (concessionary tax rate of 10%)
- PRC tax (tax rate of 25%)
- Australia income tax (tax rate of 30%)
- Other jurisdictions
Deferred taxation
(Over)/under provision in prior years:
- current taxation
- deferred taxation
Income tax
Other taxation:
- withholding tax
- profits-based royalty and special mining taxes
2021
A$’000
2020
A$’000
2,752
2,832
-
6,810
(11,076)
1,318
(655)
317
(338)
980
663
1,638
3,281
3,292
(127)
-
384
(5,765)
(2,216)
(2,599)
2,693
94
(2,122)
406
(2)
(1,718)
A reconciliation of the income tax applicable to the accounting profit/(loss) at the applicable tax rates to the income tax
expense for the reporting period was as follows:
The Group
Profit/(loss) before income tax
Tax at applicable tax rates
Tax effect of non-taxable revenue(1)
Tax effect of non-deductible expenses(2)
Tax effect of allowances and concessions given by tax jurisdictions
Deferred tax assets on temporary difference not recognised
Utilisation of deferred tax assets on temporary difference not recognised
in previous years
Effects of share of results of associates
Tax rebate
(Over)/under provision in prior years
2021
A$’000
2020
A$’000
112,612
(4,656)
25,053
(22,781)
6,849
(2,003)
-
(4,987)
(813)
-
(338)
980
(2,960)
(317)
3,490
(2,392)
3,173
(714)
(2,480)
(16)
94
(2,122)
(1)
(2)
Non-taxable revenue relates mainly to Pioneer Income contributed by OM Sarawak.
Non-deductible expenses relate mainly to depreciation and amortisation of non-qualifying assets, overseas accrued interest expenses
and provision of expenses.
120
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
2021
A$’000
2020
A$’000
2,854
1,253
30
Cash flow hedges
The Group
Cash flow hedges:
Gain arising during the year
31
Profit per share
The Group
Basic profit per share is calculated based on the consolidated profit attributable to owners of the parent divided by the
weighted average number of shares on issue of 736,690,000 (2020 - 736,690,000) shares during the financial year.
Fully diluted profit per share was calculated on the consolidated profit attributable to owners of the parent divided by
736,690,000 (2020 - 736,690,000) ordinary shares. The number of ordinary shares was calculated based on the weighted
average number of shares on issue during the financial year adjusted for the effects of all dilutive convertible bonds and
warrants. Dilutive potential ordinary shares are deemed to have been converted into ordinary shares at the beginning of
the year or if later, the date of the issue of the potential ordinary shares.
For calculation of diluted earnings per share in 2020 and 2021, the convertible bonds are not included because they are
anti-dilutive.
The following table reflects profit or loss and share data used in the computation of basic and diluted profit per share from
continuing operations for the years ended 31 December:
The Group
Weighted average number of ordinary shares for the purpose of basic profit
per share
Effect of dilutive potential ordinary shares:
Convertible bonds
Weighted average number of ordinary shares for the purpose of
diluted profit per share
Profit figures were calculated as follows:
2021
’000
2020
’000
736,690
736,690
-
-
736,690
736,690
2021
A$’000
2020
A$’000
Profit for the year attributable to owners of the Company
81,907
5,352
Effect of dilutive potential ordinary shares:
Interest on convertible bonds
Profit for the purposes of diluted profit per share
-
81,907
-
5,352
121
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
32
Employee benefits expense
The Group
Directors’ fees
Directors’ remuneration other than fees:
- Directors of the Company
- Directors of the subsidiaries
- Defined contributions plans
Key management personnel (other than Directors):
- Salaries, wages and other related costs
- Defined contributions plans
Other than key management personnel:
- Salaries, wages and other related costs
- Defined contributions plans
2021
A$’000
804
2,980
1,628
79
4,459
400
10,350
69,920
5,338
85,608
2020
A$’000
693
1,540
1,418
76
4,087
376
8,190
57,145
4,903
70,238
33
Related party transactions
In addition to the related party information disclosed elsewhere in the financial statements, the following amounts are
transactions with related parties based upon commercial arm’s length terms and conditions:
The Group
Commission charged to an associate
Commission charged by an associate
Sales of goods to an associate
Purchases of goods from an associate
34
Leases
(i)
The Group as lessee
(a)
Properties
2021
A$’000
2,885
(336)
8,697
2020
A$’000
2,665
(400)
1,691
(100,421)
(86,624)
The Group leases several buildings including a warehouse for operational and storage purposes (Note 9).
The Group makes prepayments for usage of land in the PRC and Malaysia under leasing agreements where the Group
constructs buildings and infrastructure for office and operational use.
There are no externally imposed covenants on these property lease arrangements.
(b)
Plant and machinery, office equipment and motor vehicles
The Group makes monthly lease payments to acquire plant and machinery and office equipment used for manufacturing
and operational activities. The Group also acquires motor vehicles under hire purchase arrangements to render internal
logistics support. These plant and machinery, office equipment and motor vehicles are recognised as the Group’s right-of-use
assets (Note 9). The lease agreements for plant and machinery, office equipment and motor vehicles prohibit the Group from
subleasing them to third parties.
Information regarding the Group’s right-of-use assets and lease liabilities are disclosed in Note 9 and 22 respectively.
122
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
34
Leases (Cont’d)
(ii)
The Group as lessor
Investment property
Operating leases, in which the Group as the lessor, relate to investment property (Note 8) owned by the Group with a
remaining lease term of 13 months. The operating lease contract contains market review clauses in the event that the lessee
exercises its option to renew. The lessee does not have an option to purchase the property at the expiry of the lease period.
The Group’s revenue from rental income received on the investment properties are disclosed in Note 8.
The future minimum rental receivable under non-cancellable operating leases contracted for the reporting date are as
follows:
The Group
Undiscounted lease payments to be received:
- Year 1
- Year 2
35
Commitments
35.1
Capital commitments
The following table summarises the Group’s capital commitments:
The Group
Capital expenditure contracted but not provided for in
the financial statements:
- acquisition of property, plant and equipment
35.2 Other operating commitments
2021
A$’000
2020
A$’000
132
77
209
127
11
138
2021
A$’000
2020
A$’000
16,328
872
Other contracted operating commitments represent the provision of processing services, catering, cleaning and village
management, electrical power services, road haulage and rail haulage. These commitments are contracted for but not
provided for in the financial statements.
The Group
Not later than one year
Later than one year and not later than five years
Later than five years
35.3 Mineral Tenements
2021
A$’000
2,740
-
-
2020
A$’000
3,807
-
-
2,740
3,807
In order to maintain the mineral tenements in which a subsidiary is involved, the subsidiary has committed to fulfil the
minimum annual expenditures in accordance with the requirements of the Northern Territory Department of Industry,
Tourism and Trade for the next financial year, as set out below:
The Group
Mineral tenements annual expenditure commitments
35.4
Environmental bonds
2021
A$’000
153
2020
A$’000
101
A subsidiary had environmental bonds to the value of A$14,602,000 (2020 - A$14,553,000) lodged with the Northern
Territory Government (Department of Industry, Tourism and Trade) to secure environmental rehabilitation commitments.
The A$14,602,000 (2020 - A$14,553,000) of bonds are secured by A$13,054,000 (2020 - A$12,973,000) of bonds issued under
financing facilities and certain cash backed.
123
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
36 Other matters
Sponsor Guarantee issued under the terms of the Power Purchase Agreement with Syarikat Sesco Berhad
Pursuant to the execution of the Amended Power Purchase Agreement (“PPA”) between a subsidiary, OM Materials (Sarawak)
Sdn. Bhd., and Syarikat Sesco Berhad (“SSB”), the Company issued sponsor guarantees to SSB for its 75% interest of the
subsidiary’s obligations under the PPA.
The sponsor guarantees disclosed above do not fall into the category of financial guarantees as they do not relate to debt
instruments. The purpose of these guarantees is essentially to enable SSB to provide the power supply to the subsidiary on
the condition that these guarantees are provided by the Company in the event that there are any unpaid claims arising from
the PPA owed to SSB. There are no bank loans involved in these guarantees. As such, there is no need for the guarantees to
be fair valued.
Project Support guarantee issued under the terms of the Facilities Agreement and the Project Support Agreement
OM Materials (Sarawak) Sdn Bhd, a subsidiary of the Company entered into a project finance Facilities Agreement (“FA”) for
a limited recourse senior project finance debt facility.
Concurrently, the Company also executed a Project Support Agreement (“PSA”) with OM Materials (Sarawak) Sdn Bhd (as
Borrower), and the ultimate shareholders of the Borrower (as Obligors). The PSA governs the rights and obligations of the
Obligors. These obligations and liabilities of the Obligors are severally liable on the basis of its shareholding proportion in
OM Materials (Sarawak) Sdn. Bhd.
The PSA will lapse upon the final payment of the project financing facilities.
37 Operating segments
For management purposes, the Group is organised into the following reportable operating segments as follows:
Mining
Smelting
Exploration and mining of manganese ore
Production of manganese ferroalloys, ferrosilicon and manganese sinter ore
Marketing and Trading
Trading of manganese ore, manganese ferroalloys, ferrosilicon and sinter ore, chrome ore
and iron ore
Each of these operating segments is managed separately as they require different resources as well as operating approaches.
The reporting segment results exclude the finance income and costs, share of results of associate, which are not directly
attributable to the business activities of any operating segment, and are not included in arriving at the operating results of
the operating segment.
Sales between operating segments are carried out at arm’s length.
Segment performance is evaluated based on the operating profit or loss which in certain respects, as set out below, is
measured differently from the operating profit or loss in the consolidated financial statements.
124
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
l
a
t
o
T
s
r
e
h
t
O
d
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125
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
37 Operating segments (Cont’d)
Reconciliation of the Group’s reportable segment profit to the profit before income tax is as follows:
The Group
Reportable segment profit
Finance income
Share of results of associates
Finance costs
(Loss)/profit before income tax
2021
A$’000
126,676
298
5,412
(19,774)
112,612
2020
A$’000
6,955
691
16,525
(28,827)
(4,656)
The Group’s revenues from external customers and its non-current assets (other than deferred tax assets) are divided into
the following geographical areas:
Asia Pacific
Europe
Middle East
Africa
Others
Revenue from
external customers
Non-current assets
2021
A$’000
2020
A$’000
2021
A$’000
2020
A$’000
899,254
65,240
37,649
64
38,603
675,954
634,321
645,141
42,875
49,511
3,220
13,073
-
-
-
-
119,298
126,803
-
-
1,040,810
784,633
753,619
771,944
The geographical location of customers is based on the locations at which the goods were delivered. The geographical
location of non-current assets is based on the physical location of the assets.
38
Financial risk management objectives and policies
The Company and the Group are exposed to financial risks arising from its operations and use of financial instruments.
The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk. The
Company’s and the Group’s overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise adverse effects from the unpredictability of financial markets on the Company’s and the Group’s financial
performance.
Risk management is carried out by the Finance Division under policies approved by the Board of Directors. The Finance
Division identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board
provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign
exchange risk, interest rate risk, credit risk, use of derivative and non-derivative financial instruments and investing excess
liquidity.
There has been no change to the Company’s and the Group’s exposure to these financial risks or the manner in which it
manages and measures the risk. Market risk exposures are measured using sensitivity analysis indicated below.
38.1
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the Group to incur
a financial loss. The Group’s exposure to credit risk arises primarily from trade receivables, cash and cash equivalents and
other financial assets. For trade receivables, the Group adopts the policy of dealing only with customers of appropriate
credit history, and obtaining sufficient security where appropriate to mitigate credit risk. For other financial assets, the
Company and the Group adopt the policy of dealing only with high credit quality counterparties.
The Company’s and the Group’s objective is to seek continual growth while minimising losses incurred due to increased
credit risk exposure.
Credit exposure to an individual counterparty is restricted by credit limits that are approved by management based on
ongoing credit evaluation. The counterparty’s payment profile and credit exposure are continuously monitored at the entity
level by the respective management.
126
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
38
Financial risk management objectives and policies (Cont’d)
38.1
Credit risk (Cont’d)
Exposure to credit risk
As the Company and the Group do not hold any collateral, the maximum exposure to credit risk for each class of financial
instruments is the carrying amount of that class of financial instruments presented on the statements of financial position.
The Company’s and the Group’s major classes of financial assets are bank deposits and trade receivables. Cash is held with
reputable financial institutions. Further details of credit risks on trade and other receivables are disclosed in Note 15.
Guarantees
The Company provides corporate guarantees to its subsidiaries on their bank borrowings. The Company’s maximum
exposure to credit risk in respect of the intra-group corporate guarantees at the reporting date is equal to the facilities drawn
down by the subsidiaries in the amounts of A$485,440,000 (2020 - A$505,000,000). At the reporting date, the Company does
not consider it probable that a claim will be made against the Company under these intragroup corporate guarantees.
There is no impact on the corporate guarantee as there are no differential rates given by the financial institutions.
Undrawn credit facilities
The Group has undrawn credit facilities of approximately A$53,400,000 (2020 - A$11,550,000) at the reporting date.
38.2
Liquidity risk
Liquidity risk is the risk that the Company or the Group will encounter difficulty in raising funds to meet commitments
associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result
from an inability to sell a financial asset quickly at close to its fair value.
The Company’s and the Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial
assets and liabilities. The Company’s and the Group’s objective is to maintain a balance between continuity of funding and
flexibility through the use of stand-by credit facilities.
127
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
38
Financial risk management objectives and policies (Cont’d)
38.2
Liquidity risk (Cont’d)
The table below analyses the maturity profile of the Company’s and the Group’s financial liabilities based on contractual
undiscounted cash flows:
The Group
As at 31 December 2021
Trade and other payables
Borrowings
Lease liabilities
As at 31 December 2020
Trade and other payables
Borrowings
Lease liabilities
The Company
As at 31 December 2021
Trade and other payables
Intragroup financial guarantees
As at 31 December 2020
Trade and other payables
Borrowings
Intragroup financial guarantees
Between
Less than
2 and 5
1 year
A$’000
years
A$’000
Over
5 years
A$’000
Total
A$’000
Total
carrying
amount
A$’000
176,727
54,325
-
231,052
231,052
113,241
340,666
3,075
456,982
409,024
3,478
4,709
-
8,187
7,709
293,446
399,700
3,075
696,221
647,785
155,760
54,874
-
210,634
210,551
128,631
320,346
2,856
451,833
415,045
1,336
435
-
1,771
1,670
285,727
375,655
2,856
664,238
627,266
68,071
68,071
485,440
57,888
14,154
72,042
505,000
-
-
-
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-
-
-
-
-
-
-
-
-
-
68,071
68,071
68,071
68,071
485,440
-
57,888
14,154
72,042
57,888
14,003
71,891
505,000
-
The table analyses the financial instruments of the Group for which contractual maturities are essential for an understanding
of the timing of the cash flows into relevant maturity groupings based on the remaining period from the balance sheet date
to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
The Group has various lines of credit with major financial institutions for the purpose of drawing upon short term borrowings,
through the pledging of bills receivables or inventories. Further, management closely monitors the Group’s capital structure
to ensure that there are adequate funds to meet all its obligations in a timely and cost-effective manner.
The Group manages its liquidity risk by ensuring there are sufficient cash and current assets to meet all their normal
operating commitments in a timely and cost-effective manner and having adequate amount of credit facilities. The Group
has the ability to generate additional working capital through financing from financial institutions.
128
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
38
Financial risk management objectives and policies (Cont’d)
38.3
Interest rate risk (Cont’d)
Interest rate risk is the risk that the fair value of future cash flows of the Company’s and the Group’s financial instruments
will fluctuate because of changes in market interest rates.
The Company’s and the Group’s exposure to interest rate risk arises primarily from their bank borrowings, cash collaterals
and fixed deposits.
Sensitivity analysis for interest rate risk
At the end of the reporting period, if United States Dollar (“USD”), Renminbi (“RMB”) and Malaysian Ringgit (“MYR”) interest
rates had been 75 (2020 - 75) basis points lower/higher with all other variables held constant, the Company’s and the
Group’s profit net of tax would have been higher/lower by the amounts shown below, arising mainly as a result of lower/
higher interest expense on bank borrowings and higher/lower interest income on cash and bank balances.
The Company
Resulting effect:
profit/(loss)
The Group
Resulting effect:
profit/(loss)
2021
A$’000
2020
A$’000
2021
A$’000
2020
A$’000
-
-
-
-
-
-
105
1,852
1,822
(105)
(1,852)
(1,822)
-
-
-
-
(43)
43
(31)
31
(57)
57
396
(396)
United States
Dollar (USD)
- lower 75 basis points
(2020 - 75 basis points)
Renminbi (RMB)
- higher 75 basis points
(2020 - 75 basis points)
- lower 75 basis points
(2020 - 75 basis points)
- higher 75 basis points
(2020 - 75 basis points)
Malaysian Ringgit
(MYR)
- lower 75 basis points
(2020 - 75 basis points)
- higher 75 basis points
(2020 - 75 basis points)
38.4
Foreign currency risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
Currency risk arises when transactions are denominated in foreign currencies.
The Group operates and sells its products in several countries and transacts in foreign currencies. As a result, the Group is
exposed to movements in foreign currency exchange rates arising from normal trading transactions, primarily with respect
to USD, RMB and MYR.
129
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
38
Financial risk management objectives and policies (Cont’d)
38.4
Foreign currency risk (Cont’d)
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity to a reasonably possible change in the USD, RMB and MYR exchange rates
against AUD, with all other variables held constant, of the Company’s and the Group’s profit/(loss) after income tax and
equity.
The Group
2021
2020
Resulting
effect -
profit/
(loss)
A$’000
(Decrease)/
increase in
Equity
A$’000
Resulting
effect -
profit/
(loss)
A$’000
(Decrease)/
increase in
Equity
A$’000
United States Dollar
- strengthened 5% (2020 -
(16,614)
(17,350)
(15,333)
(13,131)
5%)
- weakened 5% (2020 - 5%)
Renminbi
- strengthened 5% (2020 -
5%)
- weakened 5% (2020 - 5%)
Malaysian Ringgit
- strengthened 5% (2020 -
5%)
16,614
78
(78)
(7,864)
17,350
78
(78)
(7,921)
15,333
380
(380)
(10,745)
13,131
376
(376)
(10,512)
- weakened 5% (2020 - 5%)
7,864
7,921
10,745
10,512
The Company
United States Dollar
- strengthened 5% (2020 -
(1,431)
(1,494)
(1,581)
(1,354)
5%)
- weakened 5% (2020 - 5%)
1,431
1,494
1,581
1,354
38.5 Market price risk
The Group is exposed to equity risks arising from its equity investments carried at FVTPL. If equity prices had been 10%
higher/lower, the Group’s net profit for the year ended 31 December 2021 would increase/decrease by A$Nil (2020 -
A$189,000).
39
Capital risk management
The Company’s and the Group’s objectives when managing capital are:
•
•
•
•
to safeguard the Company’s and the Group’s abilities to continue as a going concern;
to support the Company’s and the Group’s stability and growth;
to provide capital for the purpose of strengthening the Company’s and the Group’s risk management capability; and
to provide an adequate return to shareholders.
The Company and the Group actively and regularly review and manage its capital structure to ensure optimal capital
structure and shareholders’ returns, taking into consideration the future capital requirements of the Company and the
Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital
expenditures and projected strategic investment opportunities. The Company and the Group currently do not adopt any
formal dividend policy.
Management reviews its capital management approach on an on-going basis and believes that this approach, given the
relative size of the Company and the Group, is reasonable.
130
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
39
Capital risk management (Cont’d)
The Company monitors capital using a gearing ratio, which is net debt divided by total equity:
Borrowings
Less: Cash and bank balances
Net debt
Total equity
Gearing ratio
The Group
2021
A$’000
409,024
(112,334)
296,690
2020
A$’000
415,045
(63,031)
352,014
610,299
468,239
0.49
0.75
There were no changes in the Company’s and the Group’s approach to capital management during the year.
40
Financial instruments
Accounting classifications of financial assets and financial liabilities
Debt instruments
Equity instruments
Note
(at amortised cost)
A$’000
(at FVTPL)
A$’000
Total
A$’000
31 December 2021
The Group
Financial assets
Trade and other receivables (1)
Cash and bank balances
The Company
Financial assets
Trade and other receivables
Cash and bank balances
31 December 2020
The Group
Financial assets
Other investments
Trade and other receivables (1)
Cash and bank balances
The Company
Financial assets
Trade and other receivables
Cash and bank balances
15
17
15
17
13
15
17
15
17
55,903
112,334
168,237
9,417
44
9,461
-
56,229
63,031
119,260
12,553
42
12,595
-
-
-
-
-
-
1,888
-
-
1,888
-
-
-
55,903
112,334
168,237
9,417
44
9,461
1,888
56,229
63,031
121,148
12,553
42
12,595
131
(1)
Excluded tax recoverable from the trade and other receivables of A$459,000 (2020 - A$6,763,000)
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
40
Financial instruments (Cont’d)
Accounting classifications of financial assets and financial liabilities (Cont’d)
31 December 2021
The Group
Financial liabilities
Borrowings
Lease liabilities
Trade and other payables
The Company
Financial liabilities
Trade and other payables
31 December 2020
The Group
Financial liabilities
Borrowings
Lease liabilities
Trade and other payables
The Company
Financial liabilities
Borrowings
Trade and other payables
Other financial
liabilities
Note
(at amortised cost)
A$’000
Total
A$’000
21
22
23
23
21
22
23
21
23
409,024
7,709
231,052
647,785
409,024
7,709
231,052
647,785
68,071
68,071
68,071
68,071
415,045
1,670
210,551
627,266
14,003
57,888
71,891
415,045
1,670
210,551
627,266
14,003
57,888
71,891
41
Fair value measurement
Definition of fair value
IFRSs define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
Fair value hierarchy
Financial assets and financial liabilities measured at fair value in the statements of financial position are grouped into
three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the
measurement, as follows:
Level 1:
quoted prices (unadjusted) in active markets for identical assets and liabilities;
Level 2:
inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly; and
Level 3:
unobservable inputs for the asset or liability.
•
•
•
132
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
41
Fair value measurement (Cont’d)
Financial assets and liabilities that are not carried at fair value but whose carrying amounts approximate that of fair value
The carrying amounts of trade and other receivables (Note 15), cash and bank balances (Note 17), current trade and other
payables (Note 23), current lease liabilities (Note 22) and current borrowings (Note 21) are reasonable approximations of fair
values due to their short term nature.
The carrying amounts of non-current trade and other payables (Note 23), non-current lease liabilities (Note 22) and non-current
borrowings (Note 21) are reasonable approximations of fair values as their interest rate approximates the market lending rate.
42
Contingencies
Tourag Fatality
On 24 August 2020 a significant wall failure in Tourag pit resulted in the fatality of an employee of OM (Manganese) Ltd.
(“OMM”). The incident was immediately reported to NT Police, the Department of Industry, Tourism and Trade and NT
Worksafe, with mining operations suspended immediately.
OMM has complied with all notices issued by NT Worksafe and continued to work with NT Worksafe and the Coroner to
provide all information to assist with the investigation. At this stage the Coroner’s inquiry is yet to be undertaken and NT
Worksafe has not laid any charges.
On 30 August 2021, NT WorkSafe served the Company with a Summons to Attend Court. The case is ongoing, and an
outcome is expected to be reached late 2022 / early 2023. A reliable estimate of the maximum penalty that could be levied
cannot be determined at this point in time. OMM’s intention is to defend the charges laid.
133
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 OM Holdings Limited (the “Company”) is committed to implementing and maintaining high standards of corporate governance. In
determining what those high standards should involve, the Company has had regard to the fourth edition of the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations 4th Edition (February 2019). The ASX Listing Rules require
the Company to report on the extent to which it has followed those principles and recommendations during its 2021 financial year.
This statement outlines the main corporate governance practices in place during the 2021 financial year, all of which comply with
the ASX Corporate Governance Council recommendations unless stated otherwise.
Further information about the Company’s corporate governance practices is set out on the Company’s website at www.
omholdingsltd.com.
The Company’s Board of Directors (the “Board”) is responsible for corporate governance, that is, the system by which the Company
and its subsidiaries (together, the “OMH Group”) are managed.
For the year ended 31 December 2021 the OMH Group remained resilient throughout the COVID-19 pandemic. The OMH Group
continues to prioritise the health and wellbeing of its employees, contractors and stakeholders by maintaining stringent protocols
to limit the impact of the COVID-19 pandemic at its various operational sites globally.
1.
1.1
BOARD OF DIRECTORS
Role of the Board and Management
The Board’s role is to govern the OMH Group. In governing the OMH Group, the Board must act in the best interests of the OMH
Group as a whole. It is the role of senior management to manage the OMH Group in accordance with the directions and delegations
of the Board and it is the responsibility of the Board to oversee the activities of management in carrying out these delegated duties.
In carrying out its governance role, one of the primary tasks of the Board is to drive the performance of the OMH Group. The Board
must also ensure that the OMH Group complies with all of its contractual, statutory and any other legal obligations, including the
requirements of any relevant regulatory body. The Board has the final responsibility for the successful operations of the OMH
Group.
To assist the Board in carrying out its functions, it has developed a Code of Ethics and Conduct to guide the Company’s directors
(“Directors”), key executives and all employees in the performance of their respective roles. The Code of Ethics and Conduct, along
with a number of the Company’s other policies and protocols, is available on the Company’s website at http://www.omholdingsltd.
com/aboutus/corporate-governance/
The Board represents shareholders’ interests in relation to optimising the Company’s investment in its ferro alloy smelter and
sinter ore facilities, manganese mining operations, marketing and trading businesses. This objective extends to managing its
various strategic investments in the carbon steel materials industry and its development and operational initiatives in Malaysia,
Singapore, Australia, China and South Africa. This integrated strategy seeks to achieve medium to long-term financial returns for
shareholders while seeking to minimise risk. The Board believes that this diversified strategy will ultimately result in the interests
of all stakeholders being appropriately addressed when making business decisions.
The Board is responsible for ensuring that the OMH Group is managed in such a way so as to best achieve this desired result. Given
the comparative size of the OMH Group’s mining, smelting, marketing and trading activities commensurate with its market share,
the Board currently undertakes an active, not passive role in its management of the Company’s business and investment goals.
The Board is responsible for evaluating and setting the strategic direction of the OMH Group, establishing goals for management
and monitoring the achievement of these goals. The Executive Chairman (Chief Executive Officer) is responsible to the Board for
the day-to-day management of the OMH Group.
134
CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 Among other things, the Board has sole responsibility for the following matters:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
appointing (and where appropriate removing) the Chief Executive Officer, any other executive Director and the Company
Secretary and determining their respective remuneration and conditions of employment;
determining the strategic direction of the OMH Group and measuring the performance of management against approved
strategies;
monitor the operational and financial position of the Company specifically and the OMH Group generally;
reviewing the adequacy of resources for management to properly carry out approved strategies and business plans;
adopting operating (including production), capital and development expenditure budgets at the commencement of each
financial year and ensuring adherence to those budgets by monitoring both financial and non-financial key performance
indicators;
monitoring the OMH Group’s medium-term capital, exploration and cash flow requirements;
approving and monitoring financial and other reporting to regulatory bodies, shareholders and other key stakeholders;
determining that satisfactory arrangements are in place for auditing the OMH Group’s financial affairs;
setting the OMH Group’s values and standards;
appointing the external auditors of the OMH Group;
reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct and compliance
with all applicable legislative requirements;
ensuring the health, safety and well-being of employees in conjunction with management, and monitoring and reviewing
the effectiveness of occupational health, safety and environmental practices at each of the OMH Group operations;
authorising the issue of shares, options, equity instruments or other securities;
authorising borrowings, other than in the ordinary course of business, and the granting of any security over the undertakings
of the OMH Group or any of its assets;
approving the acquisition, establishment, disposal or cessation of any significant business of the OMH Group; and
ensuring that policies and compliance systems consistent with the OMH Group’s objectives and best practice are in place
and that the OMH Group and its officers act legally, ethically and responsibly at all times.
The Board’s role, and the OMH Group’s corporate governance practices, are being continually reviewed and improved as the OMH
Group’s businesses further expand.
The Board may from time to time delegate some of its responsibilities listed above to its senior management team.
The Executive Chairman (Chief Executive Officer) is responsible for managing the operations of the OMH Group (in accordance
with the requirements of his Executive Service Agreement) under delegated authority from the Board and for implementing the
policies and strategy set by the Board. In carrying out his responsibilities, the Chief Executive Officer must report to the Board in a
timely manner and ensure all reports to the Board present a true and fair view of the OMH Group’s operational results and financial
position.
The role of management is to support the Executive Chairman (Chief Executive Officer) and implement the running of the general
operations and financial business of the OMH Group, in accordance with the delegated authority of the Board.
1.2
Composition of the Board
To add value to the OMH Group, the Board, which comprises of a majority of independent Directors has been formed so that it has
an effective composition, size and commitment to adequately discharge its responsibilities and duties. The names of the Directors
and their qualifications and experience are disclosed in the ‘Directors’ section of the Annual Report. Directors are appointed based
on the specific governance skills required by the OMH Group and on the independence of their decision-making and judgment. The
OMH Group ensures that each Director and senior executive enters into a written agreement with the OMH Group which sets out
the terms of their appointment.
The current Executive Chairman and six Non-Executive Directors have a mix of legal, commercial, exploration, project development,
mining, commodities processing, ore and alloy trading and financial skills and experience. Accordingly the composition, diversity
of skills and experience is appropriate to effectively review and challenge the performance of management and to exercise
independent judgement in discharging their responsibilities and in making decisions.
135
CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 In addition to the Directors’ experience outlined in the Annual Report, the below table sets out the skills, attributes and experience
of the Directors serving on the Board as at 31 December 2021.
Domain Area
Board Skills and Experience
As at
31 December 2021
(out of 7 Directors)
Legal and Governance
Experience in a large organisation with a strong focus on and adherence to
high governance standards
Listed entity board and/or sub-committee experience
Experience in corporate legal affairs and/or regulatory/governmental
departments
Relevant legal tertiary degree or professional qualification
Constructively challenge and contribute to Board discussions and
communicate effectively with management and other Directors. Build
consensus, negotiate and obtain stakeholder support for Board decisions.
Executive Management Experience as Director, CEO, CFO or other office holder or similar in medium
to large entities
Strategy
Identifying and critically assessing strategic opportunities and threats to
the OMH Group and developing and implementing successful strategies in
context to an organisations policies and business objectives
Mining, Production,
Manufacturing
Resources, Marketing,
Commodity Expertise
Mining, production,
manufacturing,
marketing
or resources
industry executive
management
Technical skills
Health, safety
environment and
community
Capital projects,
engineering and
construction
Government relations
Senior executive, advisory or board experience
in a large mining, production, manufacturing or
resources organisation
Senior executive responsibility for exploration
or production or processing or long-term board
experience
large mining and resources
organisation with exploration, production or
processing as a key part of its business
in a
Executive or board sub-committee experience
in a mining and resources organisation with
responsibility for health and workplace safety,
and/or environmental and social responsibility
Senior executive experience with capital projects
and/or engineering in a mining or resources
environment; tertiary or professional engineering
qualification.
Includes contract negotiations,
project management and projects with long term
investment horizons
Senior executive experience working in diverse
international,
regulatory
business environments
political,
cultural,
Human Resources/
Organisational
Development and
Culture
Finance, Commerce
and Accounting
Senior executive expertise in commodities, mining, trading or resources
sector.
Senior executive management in people management and remuneration
policy development or board remuneration and nomination sub-committee
experience
Financial accounting and reporting, internal financial and risk controls,
corporate finance and, restructuring corporate transactions (eg: joint
ventures, listings etc).
Board audit sub-committee experience
Relevant tertiary degree or professional qualification
Risk Management
Senior executive experience in risk management
Board risk sub-committee experience
136
7
7
7
2
7
7
7
3
1
4
1
3
4
7
6
6
3
4
4
CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 The OMH Group recognises the importance of independent Non-Executive Directors and the external perspective and advice that
such Directors can offer. The Board consists of the following independent Non-Executive Directors: Mr Zainul Abidin Rasheed,
Mr Tan Peng Chin, Mr Thomas Teo Liang Huat, Dato Abdul Hamid Bin Sh Mohamed and Ms Tan Ming-li (both appointed on 10 May
2021) and Mr Peter Church OAM (retired on 6 May 2021). Ms Julie Wolseley is also a Non-Executive Director but is not viewed as
independent due to her also providing company secretarial services to the OMH Group. It should be noted however, that the value
of such services is not considered to constitute a material supply arrangement to the Company.
While the Board strongly believes that boards need to exercise independence of judgment, it also recognises (as noted in Principle
2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 4th Edition) that the need for
independence is to be balanced with the need for skills, commitment and a workable board size. The Board believes it has recruited
members with the skills, experience and character necessary to discharge its duties and that any greater emphasis on independence
would be at the expense of the Board’s effectiveness.
As the OMH Group’s activities increase in size, nature and scope, the size of the Board will be reviewed and the optimum number
of Directors required for the Board to properly perform its responsibilities and functions will continue to be re-assessed. The
Remuneration Committee is responsible for conducting the appropriate checks prior to the appointment of a person as a director of
the Company or prior to putting forward to shareholders a new candidate for election as a director. These processes are governed
by the Group’s Remuneration Committee Charter. Checks undertaken may include checks as to the person’s character, experience,
education, criminal record and bankruptcy history. Material information relevant to a decision on whether to elect or re-elect a
Director is provided to shareholders in all Notices of Meeting which contain director election or re-election resolutions.
Appropriate background checks are also conducted on senior executives before employment, where deemed necessary.
The Company’s current Executive Chairman and Chief Executive Officer, Mr Low, is not considered by the Board to be independent
having regard to the relationships set out in Box 2.3 entitled ‘Factors relevant to assessing the independence of a director’ in the
ASX Corporate Governance Council’s Principles and Recommendations 4th Edition. The Board has regard to the relationships set out
in Box 2.3, among other things, together with the Company’s materiality thresholds, when forming a view as to the independent
status of a Director.
Notwithstanding Recommendation 2.5 of the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations 4th Edition (being the requirement for the Chairman of the Company to be an independent director and for the
position of Chairman to not be fulfilled by the same person who fulfils the position of Chief Executive Officer), the Board considers
that Mr Low’s position as Executive Chairman (and Chief Executive Officer) is appropriate given his world-wide experience and
specialised understanding of the global manganese industry. The Board believes that Mr Low has the range of skills, knowledge,
and experience necessary to effectively govern the Company and understand the industries and market segments in which the
Company operates. Mr Low was a founding Director of the Company and has been a major force in its evolution and success. Mr
Low has been instrumental in advancing the OMH Group’s Malaysian development and operational strategy which represents
a unique opportunity for the OMH Group to be an active participant in one of the world’s lowest cost and strategically located
ferro alloy plants with unparalleled competitive advantages. In particular, Mr Low has proactively sought and secured the
Malaysian smelting project’s unique competitive advantages including, but not limited to, access to competitively priced long term
hydroelectric power supply, identification of coastal industrial land with direct access to dedicated port facilities, geographical
proximity to both raw materials and Asian steel mills and tax incentives and indirect duties as well as comprehensive purpose-built
industrial infrastructure. The Board believes that there are sufficient internal controls in place to ensure adequate accountability,
transparency and effective oversight by the Board such that an appropriate balance of power and authority is exercisable by the
Board for objective decision-making in the best interests of the OMH Group. The Board is therefore of the view that given Mr Low’s
technical, commercial and financial experience and knowledge of the Company, and his continuing contribution to the Board, it is
appropriate that he remain in his current position and that it is currently unnecessary to effect a separation of the role of Executive
Chairman from that of Chief Executive Officer to facilitate the Company’s decision-making and implementation process. Mr Zainul
Abidin Rasheed is the independent Deputy Chairman who has regular and direct contact with the Executive Chairman and seeks to
ensure in conjunction with the Executive Chairman, that the Board is effective, has the right balance of diversity, skills, experience
and independence.
The membership of the Board, together with its activities and composition, are subject to periodic review and renewal. The criteria
for determining the identification and appointment of a suitable candidate for the Board includes the quality of the individual, their
background of experience and achievement, their compatibility with other Board members, their intellectual ability to contribute
to Board duties and their physical ability to undertake Board duties and responsibilities.
The Board believes that renewal is an important responsibility of the Board. The Board recognises the importance of renewal to
facilitate new ideas and independent thinking whilst retaining adequate expertise and corporate knowledge. Additionally, as part of
its assessment, the Board will review its composition and size, to ensure that it is appropriate to support the effective functioning
and decision making ability of the Board and its Committees and remains appropriate for the size, nature, and complexity of the
OMH Group’s operations located in various international jurisdictions.
Directors are initially appointed by the Board subject to re-election by shareholders at the subsequent Annual General Meeting.
Under the Company’s Bye-laws, the tenure of Directors (other than the Chief Executive Officer) is subject to re-appointment by
shareholders not later than the third anniversary following his/her last appointment by shareholders. Subject to the requirements
of the law, the Board does not subscribe to the principle of retirement age and there is no maximum period of service as a Director.
A Chief Executive Officer may be appointed for any period and on any terms the Directors think fit and, subject to the terms of any
agreement entered into, the Board may revoke that appointment.
137
CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
The Company successfully completed a secondary listing on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Malaysia”)
on 22 June 2021 and where required the Company complies with its regulatory requirements, noting that the primary listing remains
on ASX. This has included the requirement to appoint two Malaysian based resident Directors. The two independent Non-Executive
Directors appointed on 10 May 2021 are outlined above in section 1.2.
1.3
Responsibilities of the Board
In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices,
management and operations of the OMH Group. It is required to do all things that may be necessary to be done in order to carry
out the objectives and strategic imperatives of the OMH Group.
Without limiting the authority and role of the Board, the principal functions and responsibilities of the Board include the following:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Leadership of the OMH Group - overseeing the OMH Group and establishing codes, policies and protocols that reflect the
values of the OMH Group and guide the conduct of the Board, management and employees;
Strategy Formulation - working with senior management to set and review the overall strategy and goals for the OMH Group
and ensuring that there are policies in place to govern the operations of the OMH Group;
Overseeing Planning Activities - overseeing the development of the OMH Group’s strategic plans (including operating,
capital, exploration and development programmes and initiatives) and approving such plans as well as the annual budget;
Shareholder Liaison - ensuring effective communications with shareholders through an appropriate communications policy
and promoting participation at general meetings of the Company;
Monitoring, Compliance and Risk Management - overseeing the OMH Group’s risk management, compliance, control and
accountability systems and monitoring and directing the operational and financial performance of the OMH Group;
OMH Group Finances - approving expenditure which falls outside the approved authority matrix, approving expenditure
materially outside the annual budget and approving and monitoring acquisitions, divestments and financial and other
reporting;
Human Resources - appointing, and where appropriate, removing the Chief Executive Officer as well as reviewing the
performance of the Chief Executive Officer and monitoring the performance of senior management in their implementation
of the OMH Group’s strategy;
Ensuring the Health, Safety and Well-Being of Employees - in conjunction with the senior management team, developing,
overseeing and reviewing the effectiveness of the OMH Group’s work health and safety systems to ensure the well-being of
all employees; and
Delegation of Authority - delegating appropriate powers to the Chief Executive Officer to ensure effective day-to-day
management of the OMH Group and establishing and determining the powers and functions of the various Committees of
the Board.
Full details of the Board’s role and responsibilities are contained in the Board Charter, a summary of which is contained on the
Company’s website.
1.4
Board Policies
1.4.1
Directors must:
Conflict of Interest
•
•
disclose to the Board any actual or potential conflict of interest that may or might reasonably be thought to exist between
the interests of the Director and the interests of the OMH Group; and
if requested by the Board, within seven days or such further period as may be permitted, take such necessary and reasonable
steps to remove or mitigate any such conflict of interest.
If a Director cannot or is unwilling to remove a conflict of interest then the Director must, in accordance with the requirements of
the law, remove himself/herself from the boardroom when discussion in relation to or concerning matters relating to that conflict
occur and/or abstain from voting on matters about which the conflict relates.
Commitments
1.4.2
Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director of the
Company.
Confidentiality
1.4.3
In accordance with legal requirements and agreed ethical standards, the Directors, key executives and all employees of the OMH
Group have agreed to keep confidential, information received in the course of the exercise of their duties, and will not disclose non-
public information except where disclosure is authorised or legally mandated.
Independent Professional Advice
1.4.4
The Board collectively and, each Director individually, has the right to seek independent legal, accounting or other professional
advice at the OMH Group’s expense, up to specified limits, to assist it or them (as applicable) in carrying out its or their (as applicable)
responsibilities.
138
CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 Board Access to Information
1.4.5
Subject to the Directors’ Conflict of Interest guidelines referred to in Section 1.4.1 above, Directors have direct access to the
Company’s management and to all Company information in the possession of management.
Related Party Transactions
1.4.6
Related party transactions include any financial transaction between a Director and the OMH Group. Unless there is an exemption
under the Companies Act 1981 of Bermuda or any other relevant laws or regulation (including the ASX Listing Rules) from the
requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction.
1.5
Board Meetings
The Executive Chairman (who is also the Chief Executive Officer), in conjunction with the Company Secretary1 , sets the agenda for
each meeting of the Board. Any Director may request a matter be included on the agenda.
Typically, at Board Meetings the agenda will include:
•
•
•
•
•
•
minutes of the previous Board meeting and matters arising;
the Executive Chairman’s/Chief Executive Officer’s Report;
the OMH Group Financial Controllers’ Report;
operating and financial reports from each key business unit;
reports on major projects and current issues; and
specific business proposals.
All Directors and Committees of OMH have access to the Company Secretary for advice and services.
The number of meetings of the Directors held in the period each Director held office during the 2021 financial year and the number
of meetings attended by each Director were:
Director
Low Ngee Tong
Julie Wolseley
Tan Peng Chin
Thomas Teo
Zainul Abidin Rasheed
Peter Church
Dato Abdul Hamid Bin Sh Mohamed
Tan Ming-li
Board of Directors’ Meetings
Held
Attended
4
4
4
4
4
1
3
3
4
4
4
4
4
1
3
3
During the financial year there were four general Directors’ meetings for which formal notice of meeting was given.
2.
BOARD COMMITTEES
Except for the Committees mentioned in Sections 2.1 and 2.2 below, the Board considers that the affairs of the OMH Group are not
sufficiently complex to justify the formation of numerous special Board committees at this time. The Board as a whole is able to
address the governance aspects relating to the full scope of the OMH Group’s activities and to ensure that it adheres to appropriate
ethical standards.
The Board has however established a framework for the management of the OMH Group, including a system of internal controls, a
business risk management process and the establishment of appropriate ethical standards.
The Board also holds meetings at such times as may be necessary to address any general or specific matters as required.
If the OMH Group’s activities increase in size, scope and nature, the establishment of separate or special Board committees will be
considered and implemented, if appropriate.
2.1
Audit Committee
To ensure the integrity of the financial statements of the OMH Group and the independence of the external auditor, an Audit
Committee has been formally established by the Board. Prior to 10 May 2021, the Audit Committee comprised of three independent
Non-Executive Directors, being Mr Thomas Teo Liang Huat (chairman of the Audit Committee), Mr Zainul Abidin Rasheed and
Mr Peter Church. Ms Julie Wolseley a Non-Executive Director is also a member of the Audit Committee. With effect from 10 May
2021, the Audit Committee comprises of two independent Non-Executive Directors, being Mr Thomas Teo Liang Huat (chairman
of the Audit Committee), Dato Abdul Hamid Bin Sh Mohamed and Non-Executive Director Ms Julie Wolseley. All Audit Committee
members have sufficient financial expertise and experience to discharge the Audit Committee’s mandate.
1
In accordance with Recommendation 1.4, the company secretary of the Company is directly accountable to the Board, through the Executive Chairman, on all
matters to do with the proper functioning of the Board.
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CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 During the financial year ended 31 December 2021, the Audit Committee held two meetings and all committee members were in
attendance.
The Audit Committee is responsible for reviewing the annual and half-yearly financial statements of the Company and any reports
which accompany those financial statements.
The Board, in conjunction with the Audit Committee, considers the appointment of the external auditor and reviews the appointment
of the external auditor, their independence, the audit fee and any questions of resignation or dismissal. The Audit Committee also
reviews the scope of work of the internal audit function and reviews the internal audit reports tabled by the internal auditors. The
Board is responsible for establishing, and ensuring adherence to, policies on risk oversight and management.
The role of the Audit Committee is to assist the Board to meet its oversight responsibilities in relation to the Company’s financial
reporting, compliance with legal and regulatory requirements, internal control structure and the external audit function.
Key activities undertaken by the Audit Committee include:
•
•
•
•
•
approval of the scope, plan and fees for the external audit;
reviewing the independence and performance of the external auditor;
reviewing significant accounting policies and practices;
appointment of the internal auditor and approving the scope, plan and fees for the internal auditor; and
reviewing OMH Group’s half year and annual financial statements.
Members of the Audit Committee and their qualifications are outlined in the Directors’ section of the Annual Report.
The Audit Committee Charter is available on the Company’s website.
2.2
Remuneration Committee
The Remuneration Committee reviews and makes recommendations to the Board on remuneration policies applicable to executive
officers and Directors of the OMH Group. Prior to 10 May 2021, the Remuneration Committee comprised three Non-Executive
Independent Directors, Mr Tan Peng Chin (chairman of the Remuneration Committee), Mr Zainul Abidin Rasheed and Mr Thomas
Teo Liang Huat. Ms Julie Wolseley a Non-Executive Director is also a member of the Remuneration Committee. With effect from 10
May 2021, the Remuneration committee comprises of two Independent Non-Executive Directors, being Mr Tan Peng Chin (chairman
of the Remuneration Committee), Mr Zainul Abidin Rasheed and Non-Executive Director Ms Julie Wolseley.
A copy of the Remuneration Committee Charter is on the Company’s website.
The role of the Remuneration Committee is to assist the Board in reviewing human resources and compensation policies and
practices which:
•
•
enable the Company to attract, retain and motivate employees who achieve operational excellence and create value for
shareholders; and
reward employees fairly and responsibly, having regard to the results of the OMH Group, individual performance and
general remuneration conditions.
The Remuneration Committee works with the Board on areas such as setting policies for senior officers’ remuneration, setting
the terms and conditions of employment for the Executive Chairman and the Chief Executive Officer, reviewing superannuation
arrangements, reviewing the remuneration of Non-Executive Directors and undertaking an annual review of the Chief Executive
Officer’s performance.
The OMH Group is committed to remunerating its senior executives in a manner that is market competitive and consistent with best
practice as well as supporting the interests of shareholders and will continually review and assess the remuneration structure in
place to achieve this in accordance with the Remuneration Charter.
Non-Executive Directors are paid their fees out of the maximum aggregate amount approved by shareholders for the remuneration
of Non-Executive Directors. The annual aggregate maximum amount of remuneration paid to Non-Executive Directors was last
approved by shareholders on 30 May 2019 and is currently A$1,300,000.
During the year ended 31 December 2021, the Remuneration Committee held one meeting and all committee members were in
attendance.
Nomination Committee
The Company does not have a separate nomination committee as the Board as a whole undertakes such duties including the
consideration of potential candidates to the Board or other key positions.
The responsibilities of the Board as a whole include devising criteria for Board membership, regularly reviewing the need for
various skills and experience on the Board and identifying specific individuals for nomination as Directors for review by the Board.
The Board also oversees management succession plans, including the Chief Executive Officer and his direct reports, and evaluates
the Board’s performance and makes recommendations for the appointment and removal of Directors.
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Directors are appointed based on the specific governance skills required by the OMH Group. Given the size of the OMH Group
and the businesses that it operates, the OMH Group aims at all times to have at least one Director with substantial experience
in the metals trading and mining industries. In addition, the Board should consist of members that have a blend of expertise and
professional experience in:
•
•
•
•
accounting and financial management;
legal skills;
technical skills; and
in relation to the Executive Chairman (Chief Executive Officer) - business experience and commercial acumen.
Prior to appointing a director or recommending a new candidate for election as a director the Board ensures that appropriate
checks are undertaken as to the persons character, experience, education, criminal record and bankruptcy history.
On 10 May 2021 two new independent Non-Executive Directors, Dato Abdul Hamid Bin Sh Mohamed and Tan Ming-li were
appointed to the Board. Prior to the appointments the Board was actively involved in the identification and recommendation of
these candidates after considering the necessary and desirable competencies of the two new Board members so as to ensure the
appropriate mix of skills and experience and after the assessment of how the candidates could contribute to the strategic direction
of the OMH Group.
In addition the Board ensures that all material information relevant to a decision on whether or not to elect or re-elect a Director
must be provided to security holders in the Notice of Meeting containing the resolution to elect or re-elect a Director. The Board
will ensure this material information is included in the Company’s 2022 Notice of Annual General Meeting.
3.
ETHICAL STANDARDS
The Board acknowledges the need for continued maintenance of the highest standard of corporate governance and ethical conduct
by all Directors and employees of the OMH Group.
The Board has adopted a Values Statement which articulates its guiding principles that define how the Company wishes to conduct
itself in its relationships with the industry and the communities within which it operates. The Values Statement is disclosed on the
Company’s website.
The Board actively promotes ethical and responsible decision making aiming to maintain the highest standard of ethical behaviour
in business and in all its dealings with customers, clients, shareholders, governments, suppliers, employees and the community.
As a minimum the Board and employees will:
•
•
•
•
•
act within applicable laws;
act with fairness and respect;
encourage co-operation and rational debate with a view to achieving shared goals;
act with courtesy;
foster an environment which encourages diversity in all its forms across the OMH Group.
3.1
Code of Ethics and Conduct for Directors and Key Executives
The Board has adopted a Code of Ethics and Conduct for Directors, key executives and all employees to promote ethical and
responsible decision-making as per Recommendation 3.1 of the ASX Corporate Governance Council’s Principles and Recommendations
4th Edition. This code outlines how the OMH Group expects its Directors, key executives and employees to behave and conduct
business in the workplace on a range of issues. The OMH Group is committed to the highest level of integrity and ethical standards
in all business practices. Directors and employees must conduct themselves in a manner consistent with current community and
corporate standards and in compliance with all applicable legislation. In addition, the Board subscribes to the Statement of Ethical
Standards as published by the Australian Institute of Company Directors.
A summary of the Company’s Code of Ethics and Conduct is available on the Company’s website.
All Directors, key executives and employees are expected to act with the utmost integrity and objectivity, always striving to enhance
the reputation and performance of the Company.
3.2
Code of Ethics and Conduct
As noted above, the OMH Group has implemented a Code of Ethics and Conduct, which provides guidelines aimed at maintaining
the highest ethical standards, corporate behaviour and accountability at all times within the OMH Group.
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CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 All Directors, senior executives and employees are expected to:
•
•
•
•
•
•
•
•
•
respect the law and act in accordance with it;
respect confidentiality and not misuse OMH Group information, assets or facilities;
value and maintain professionalism;
avoid any real or perceived conflict of interests;
act in the best interests of shareholders;
by their actions contribute to the OMH Group’s reputation as a good ‘corporate citizen’ that seeks the respect of the
community and environment in which it operates;
perform their duties in a way that minimises environmental impacts and maximises workplace safety;
exercise fairness, courtesy, respect, consideration and sensitivity in all dealings within their workplace and with customers,
suppliers, community members, indigenous people and the public generally; and
act with honesty, integrity, decency and responsibility at all times.
An employee that breaches the Code of Ethics and Conduct may face disciplinary action. If an employee suspects that a breach
of the Code of Ethics and Conduct has occurred or will occur, he or she must advise that breach to management. No employee
will be disadvantaged or prejudiced if he or she reports in good faith a suspected breach. All reports will be acted upon and kept
confidential.
As part of its commitment to recognising the legitimate interests of stakeholders, the OMH Group has established the Code of
Ethics and Conduct to guide compliance with legal and other obligations to legitimate stakeholders. These stakeholders include
employees, customers, government authorities, creditors and the community as whole. This Code includes the following:
Responsibilities to Shareholders and the Financial Community Generally
The OMH Group complies with the spirit as well as the letter of all laws and regulations that govern shareholders’ rights. The OMH
Group has processes in place to ensure the truthful and factual presentation of the OMH Group’s financial position and prepares
and maintains its accounts fairly and accurately in accordance with the generally accepted accounting and international financial
reporting standards.
Employment Practices
The OMH Group endeavours to provide a safe workplace in which there is equal opportunity for all employees at all levels of
the OMH Group. The OMH Group does not tolerate the offering or acceptance of bribes or the misuse of OMH Group assets or
resources.
Responsibilities to the Community
As part of the community, the OMH Group:
•
•
is committed to conducting its business in accordance with applicable environmental laws and regulations and encourages
all employees to have regard for the environment when carrying out their jobs; and
encourages all employees to engage in activities beneficial to their local community.
Responsibilities to the Individual
The OMH Group is committed to keeping private information confidential which has been provided by employees and investors and
protect such information from uses other than those for which it was provided.
Conflict of Interests
Employees and Directors must avoid conflicts as well as the perception of conflicts between personal interests and the interests
of the OMH Group.
How the OMH Group Monitors and Ensures Compliance with its Code
The Board, management and all employees of the OMH Group are committed to implementing this Code of Ethics and Conduct and
each individual is accountable for such compliance.
Disciplinary measures may be taken for violating the Code of Ethics and Conduct.
The Board is required to be informed of any material breaches to the Code of Ethics and Conduct.
3.3
Whistleblower Policy
In line with the Code of Ethics and Conduct, the Company has a Whistleblower Policy which has been endorsed by the Board
and ensures that persons who make a report in good faith can do so without fear of intimidation, disadvantage or reprisal. The
Whistleblower Policy assists to create a culture within the OMH Group that encourages employees to speak up and raise concerns
regarding breaches of internal rules or policy, or conduct that is illegal, unacceptable or undesirable, or concealment of such
conduct relating to the Company, its subsidiaries, Directors, officers, and employees. It encourages the reporting of behaviour that
may result in financial or non-financial loss, or reputational damage to the Company and plays a key role in detecting reportable
conduct and maintaining good corporate governance.
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CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 The Whistleblower Policy complies with Recommendation 3.3 of the ASX Corporate Governance Council.
Subject to the confidentiality obligations, the Whistleblower protection officer must provide the Board a report on a quarterly basis
of any active whistleblower matters.
4.
DIVERSITY
The OMH Group recognises the value contributed to the group’s operations by employing people with varying skills, cultural
backgrounds, ethnicity and experience. The OMH Group’s diverse workforce is the key to continued growth, improved productivity
and performance. The OMH Group actively values and embraces the diversity of its employees and is committed to creating an
inclusive workplace where everyone is treated equally and fairly, and where discrimination, harassment and inequality are not
tolerated.
Whilst the Company has not stated measurable objectives for achieving gender diversity it is committed to workplace diversity
and to ensuring that a diverse mix of skills and talent exists amongst its Directors, officers and employees to enhance Company
performance. The Board has adopted a Diversity Policy which addresses equal opportunities in the hiring, training and career
advancement of Directors, officers and employees. The Diversity Policy outlines the strategies and processes according to which
the Board will set measurable objectives to achieve the aims of its Diversity Policy, with particular focus on gender diversity within
the Company and representation of indigenous individuals. The Board is responsible for monitoring Company performance in
meeting the Diversity Policy requirements, including the achievement of diversity objectives.
Information relating to the total current representation of women employees in the OMH Group, including those women employees
holding senior executive positions and those women employees on the Board as at 31 December 2021 was follows:
Board of Directors
Senior Executives2
Total OMH Group employees
Number of Women
2
4
346
%
28.6%
25.0%
17.0%
As at 31 December 2021, approximately 9.6% of the OMH Group’s mining subsidiary workforce were Indigenous employees.
A copy of the Company’s Diversity Policy is available on the Company’s website.
4.1 Measurable Objectives
The Board has not set measurable objectives specifically for the financial year ended 31 December 2021. It does however, continually
review the diversity within its workforce and as reported above does have a culturally diverse and gender diverse workforce with
operations in Australia, Malaysia, China and Singapore.
Certain of the Objectives and Outcomes reviewed by the Board are outlined below:
Objective
Outcome
Review and amend where appropriate the Diversity Policy
Undertake a gender general assessment of the current diversity
levels within the OMH Group operations and across jurisdictions.
The Board has reviewed OMH’s Committee Charters and other
policies to reflect the objectives of the Diversity Policy.
The OMH Group undertakes reviews through
its human
resources departments at its operations to establish gender mix
and cultural backgrounds.
Establish procedures to track the gender mix of the OMH Group
over time
The OMH Group has compiled a summary of employees including
gender and cultural diversity and will continue to do so.
Structure recruitment and selection processes to recognise the
value of diversity.
The OMH Group is continually reviewing its practices.
Have clear and transparent governance process around reward
and recognition.
The OMH Group has a Remuneration Charter which encourages
rewards to be transparent.
5.
KEY MANAGEMENT PERSONNEL DEALING IN COMPANY SHARES
The Company has a formal trading policy relating to the trading of securities by key management personnel (including Directors)
of the Company which complies with ASX Listing Rule 12.12. A copy of the Company’s Securities Trading Policy is available on the
Company’s website.
2
A Senior Executive of the OMH Group is a person having the authority and responsibility for planning, directing and controlling the activities of the entity.
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6.
6.1
DISCLOSURE OF INFORMATION
Continuous Disclosure to ASX
The Company has a formal Continuous Disclosure and Information Policy as required by Recommendation 5.1 of the ASX Corporate
Governance Council’s Principles and Recommendations 4th Edition. This policy was introduced to ensure that the Company achieves
best practice in complying with its continuous disclosure obligations under the ASX Listing Rules and also to ensure that the
Company and individual officers do not contravene the ASX Listing Rules.
The Company is committed to ensuring that shareholders and the market are provided with equal and timely access to material
information concerning the Company (including of its financial position, performance, ownership and governance), and that all
stakeholders have equal opportunity to receive externally available information issued by the Company.
The Chief Executive Officer is responsible for interpreting and monitoring the Company’s disclosure policy and, where necessary,
informing the Board. The Company Secretary has been nominated as the person responsible for communications with the ASX.
The Continuous Disclosure Policy requires all executives and Directors to inform the Chief Executive Officer (or, in his absence, the
Company Secretary) of any potentially material information as soon as practicable after they become aware of that information.
Information is material if it is likely that the information is market sensitive information, such as would influence investors who
commonly acquire securities on ASX in deciding whether to buy, sell or hold the Company’s securities, or would otherwise have a
material effect on the price or value of the Company’s securities.
The Company Secretary ensures that all Board members receive copies of all market announcements promptly after they have
been made. Continuous disclosure is discussed at all regular board meetings and on an ongoing basis the Board ensures that all
activities are reviewed to assess the need for disclosure to the market.
On 22 June 2021, the Company also completed a secondary listing on Bursa Malaysia. All announcements lodged on the ASX Market
Announcements Platform are also lodged on the Bursa Malaysia announcements platform as soon as is practicable.
All substantive investor or analyst presentations by the Company are released via the ASX Market Announcements Platform and
Bursa Malaysia announcements platform before the commencement of the relevant presentation.
All information disclosed to the ASX is posted on the Company’s website as soon as it is disclosed to the ASX and released to
the market by the ASX. The Company’s website also includes a “Corporate Governance” landing page that discloses all relevant
corporate governance information, including policies and procedures.
6.2
Communication with Shareholders
The Company places considerable importance on effective communication with shareholders and has adopted a Shareholder
Communications Strategy which sets out the OMH Group’s commitment to effectively communicating with shareholders. A copy
of the Shareholder Communications Strategy is available on the Company’s website. Directors recognise that shareholders, as
the ultimate owners of the Company, are entitled to receive timely and relevant high quality information about their investment.
Similarly, prospective new investors are entitled to be able to make informed investment decisions when considering the purchase
of the Company’s shares.
The Company aims to communicate with shareholders and other stakeholders in an open, regular and timely manner so that the
market has sufficient information to make informed investment decisions on the operations and results of the OMH Group. The
strategy provides for the use of internal processes and protocols that ensures a regular and timely release of information about the
OMH Group is provided to shareholders.
OMH Group’s Continuous Disclosure Policy encourages effective communication with its shareholders by requiring:
•
•
•
•
•
the timely and full disclosure of material information about the OMH Group’s activities in accordance with the disclosure
requirements contained in the ASX Listing Rules;
that all information released to ASX also be released to Bursa Malaysia;
that all information released to the market be placed on the Company’s website following release;
that the Company’s market announcements be maintained on the Company’s website for at least three years; and
that all disclosures, including notices of meetings and other shareholder communications, are drafted clearly and concisely.
The Board encourages full participation of shareholders at Annual General Meetings to ensure a high level of accountability and
understanding of the OMH Group’s strategy and goals. Copies of the addresses by the Executive Chairman are disclosed to the
market and posted to the Company’s website. The meetings are conducted to allow questions and feedback to the Board. All
shareholder meeting documents are in English and all Directors can understand and speak English.
OMH’s practice at all security holder meetings, including the Annual General Meeting, is that all resolutions are decided by a poll
rather than by a show of hands.
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CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 Despite the Company being foreign incorporated in Bermuda, it has in the past and will continue to do so in the future hold its
Annual General Meetings in Australia or Singapore (or at a suitable alternative country where its operations are located) so as
to enable as many shareholders to attend. Despite prevailing COVID-19 restrictions, the 2021 Annual General Meeting was held
physically in Perth, Western Australia. It is expected that the 2022 Annual General Meeting will be held physically in Perth, Western
Australia. However for shareholders holding shares on the Malaysian share register, they will be able to view a live streaming of the
2022 Annual General Meeting managed via the Malaysian based share registrar.
Furthermore, the Company’s external auditor attends the Company’s Annual General Meeting to answer shareholder questions
about the conduct of the audit, the preparation and content of the audit report, the accounting policies adopted by the Company
and the independence of the auditor in relation to the conduct of the audit. The amount of fees paid to the external auditors is
provided in a note to the financial statements.
The Company’s significant briefings with major institutional investors and analysts are lodged with the ASX and Bursa Malaysia and
are made available on the Company’s website.
The Company aims to promote effective communication to and from shareholders. Members are encouraged to register with
the Company’s share registry whether that be in Australia or Malaysia to receive formal notices and material electronically and to
communicate electronically. The Company operates an investor relations department.
7.
7.1
RISK MANAGEMENT
Approach to Risk Management and Internal Control
The Board recognises that risk management and internal compliance and control are key elements of good corporate governance.
The OMH Group’s Risk and Internal Control policy describes the manner in which the Company:
•
•
•
identifies, assesses, monitors and manages business and operational risks;
identifies material changes to the Company’s risk profile; and
designs, implements and monitors the effectiveness of the internal compliance and control framework.
The Company considers that effective risk management is about achieving a balanced approach to risk and reward. Risk management
enables the Company to capitalise on potential opportunities while mitigating potential adverse effects. Both mitigation and
optimisation strategies are considered equally important in risk management.
The Board monitors the adequacy of its risk management framework annually to ensure that it continues to be sound and deals
adequately with contemporary and emerging risks and that the OMH Group is operating with due regard to the risk appetite set by
the Board and discloses that reviews have taken place at the end of each reporting period. Members of the Board have an extensive
range of experience in exploration, mining, smelting, trading, human resource and capital management, legal, finance, financial
reporting, corporate strategy and governance across a range of industries to apply to the risk evaluation process.
7.2
Risk Management Roles and Responsibilities
The Company does not have a risk committee. The Board has decided that no efficiencies will be achieved by establishing a separate
risk committee. The full Board is responsible for reviewing and approving the Company’s risk management strategy, policy and key
risk parameters, including determining the OMH Group’s appetite for country specific risk and major investment decisions.
The Board is also responsible for satisfying itself that management has developed and implemented a sound system of risk
management and internal control. Rather than separately constituting an additional committee of the Board, the Board has
delegated oversight of the risk and internal control policy, including review of the effectiveness of the OMH Group’s internal control
framework and risk management process, to the key executive management team in conjunction with the Board. The Board
considers this structure to be the most effective means of (i) managing the various risks that are relevant to the OMH Group and (ii)
monitoring the OMH Group’s compliance with the Risk and Internal Control policy.
Management is responsible for designing, implementing, reviewing and providing assurance as to the effectiveness of the risk and
internal control policy. This responsibility includes developing business risk identification, implementing appropriate risk mitigation
strategies and controls, monitoring effectiveness of controls and reporting on risk management capability.
Each business unit reports annually to the Board on its business plan, risk profile and management of risk.
The Board is responsible for the oversight of the OMH Group’s risk management and control framework. Responsibility for control
and risk management is delegated to the appropriate level of management within the OMH Group with the Chief Executive Officer
(with the support of the OMH Group’s most senior financial executives) having ultimate responsibility to the Board for the risk
management and control framework.
Risk management is reviewed at Board meetings and risk management culture is encouraged amongst employees and contractors.
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Internal Audit
Since 2009, BDO LLP has been engaged to provide internal audit services to the OMH Group. The internal audit function is tendered
every two years.
The internal audit function is independent of both business management and of the activities it reviews. Internal audit provides
assurance that the design and operation of the OMH Group’s risk management and internal control system is effective. A risk-based
audit approach is used to ensure that the higher risk activities in each business unit are targeted by the internal audit program. All
audits are conducted in a manner that conforms to international auditing standards. The assigned internal audit team has all the
necessary access to OMH Group management and information. The Audit Committee oversees and monitors the internal auditor’s
activities. It approves the annual audit program and receives reports from the internal auditor concerning the effectiveness of
internal control and risk management. The Audit Committee members have access to the internal auditors without the presence of
other management. The internal auditor has unfettered access to the Audit Committee and its Chairman.
Internal audit and external audit are separate and independent of each other.
7.4
Integrity of Financial Reporting
Each year, the OMH Group’s Executive Chairman/Chief Executive Officer and Group Financial Controller report in writing to the
Board that:
•
•
•
the financial statements of the OMH Group for each half and full year present a true and fair view, in all material aspects, of
the OMH Group’s financial condition and operational results and are in accordance with accounting standards;
the above statement is founded on a sound system of risk management and internal compliance and control which
implements the policies adopted by the Board; and
the OMH Group’s risk management and internal compliance and control framework is operating efficiently and effectively
in all material respects.
The Board confirms that such a report was provided by the Executive Chairman and Group Financial Controller for the 2021 financial
year.
The Company provides interim (currently quarterly) updates of the OMH Group’s progress across all areas of its operations. The
Executive Chairman and the OMH senior management team are responsible for all such updates, which are reviewed by the Board.
Individual components are also reviewed by senior management with responsibility for the specific component subject matter.
7.5
Role of External Auditor
The OMH Group’s practice is to invite the external auditor to attend each Annual General Meeting and be available to answer
shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report.
The Board (i) ensures that the appointment of the external auditor is limited in scope so as to maintain the independence of the
external auditor; and (ii) assesses, on a case by case basis, whether the provision of any non-audit services by the external auditor
that may be proposed, is appropriate.
The services considered unacceptable for provision by the external auditor include:
•
•
•
•
•
•
•
•
internal audit;
acquisition accounting due diligence where the external auditor is also the auditor of the other party;
transactional support for acquisitions or divestments where the external auditor is also the auditor of the other party;
book-keeping and financial reporting activities to the extent such activities require decision-making ability and/or posting
entries to the ledger;
the design, implementation, operation or supervision of information systems and provision of systems integration services;
independent expert reports;
financial risk management; and
taxation planning and taxation transaction advice.
It is a requirement that there is a rotation of the external audit partner at least every five years and there is a prohibition in relation
to the re-involvement of a previous audit partner in the audit service for two years following rotation.
7.6
Periodic Corporate Reports
From time to time, OMH releases periodic corporate reports which are not subject to review or audit by OMH’s external auditors.
An example in OMH’s case is the Quarterly Market Update Reports. Where a periodic report is not subject to review/audit, OMH
ensures it employs processes which minimise the chance of error in the report. The processes adopted depend to some extent on
the nature of the report being issued. Generally, this involves engaging with relevant internal stakeholders throughout the report
generation process from start to finish, culminating in internal sign-off by relevant stakeholders that the portion of the report to
which they have contributed is accurate.
All periodic reports are also subject to approval from the Board before release and this approval process includes confirmation
from management to the Directors that the relevant report has been reviewed and is accurate.
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Economic, Environmental and Social Sustainability Risks
The OMH Group undertakes mining, smelting and marketing and trading operations in varying jurisdictions and, as such, faces risks
inherent to its businesses, including financing and economic, environmental and social sustainability risks, which may materially
impact the OMH Group’s ability to create or preserve value for security holders over the short, medium or long term.
The OMH Group believes that long-term success hinges on sustainable development that benefits the business, stakeholders and
the environment. To this end, each business unit has adopted a policy of responsible, proactive environmental management and
will work to ensure compliance with relevant legislative obligations during its exploration and development activity. The OMH
Group is committed to delivering favourable results for shareholders while at the same time ensuring that its economic success is
balanced alongside its environmental and social responsibilities.
The OMH Group appreciates the importance of community consultation and facilitates the involvement and awareness of relevant
communities and their representatives when undertaking any exploration or development activity. Through a proactive policy of
self-regulation, legislative compliance and community involvement, the OMH Group is working hard to deliver on its short and
long-term business objectives while ensuring that relevant social and environmental considerations are included as part of any
decision-making process.
The OMH Group will continue its policy of sustainable development in the interests of meeting the expectations of its shareholders
without compromising the health or vitality of both the natural and social environment.
The Company has adopted an Environmental Policy, a Human Rights Policy and a Community Relations Policy, to assist with
monitoring environmental and social sustainability risks. The Company is committed to respecting Human Rights throughout the
countries in which it operates and to ensuring that sound environmental management and safety practices are carried out in
its operational activities. Resources have been focussed on establishing and maintaining a culture of best practice through the
implementation of Occupational Health and Safety Plans and Environmental Management Plans at each of the key OMH Group
operations. Further detailed information is outlined in the company’s Sustainability Statement in this Annual Report.
7.8
Anti-Bribery and Corruption
Bribery and corruption have a serious impact on the social, economic and political environment of many countries. The effects of
bribery and corruption impact both individuals and businesses in the world’s poorest countries. The Company is committed to the
fight against bribery and corruption and expects all of its employees and representatives to comply with both the letter and spirit
of the laws that govern OMH Group’s operations in Australia, Malaysia, China and Singapore.
The Company has adopted an Anti-Bribery and Corruption Standard Policy in compliance with Recommendation 3.4 of the ASX
Corporate Governance Council. The Policy provides an overview of requirements arising from Foreign Bribery Laws and the various
laws prohibiting fraudulent and corrupt behaviour generally. This Policy is intended to be a common sense manual to enable OMH
employees and representatives to understand and comply with their obligations under these laws.
The Company is committed to ensuring that its corporate culture, in all of its offices and operations worldwide, discourages
fraudulent and corrupt conduct. Notwithstanding laws to the contrary, the fact that bribery and corruption may be tolerated or
encouraged in some of the countries in which OMH operates does not affect a commitment to best business practice.
Subject to confidentiality obligations, the reporting of any such incidents must occur annually to the Board and half yearly to
the Audit Committee. For material incidents or incidents that could potentially involve a breach of any law, such matters will be
immediately referred to the Chairman of the Audit Committee.
The Company’s Anti-Bribery and Corruption Policy can be found on the Company’s website.
8.
ENCOURAGE ENHANCED PERFORMANCE
Board and management effectiveness are dealt with on a continuous basis by management and the Board, with differing degrees
of involvement from various Directors and management, depending upon the nature of the matter.
The Board aims to periodically evaluate its performance and the performance of its Committees and individual directors to
determine whether or not it is functioning effectively by reference to the Board Charter and current best practice. Given the
COVID-19 pandemic, the Board did not conduct a formal review or self-evaluation process during the 2021 financial year. However,
an annual review was undertaken in relation to the composition and skills mix of the Directors, particularly in relation to the two
new Independent Non-Executive Directors appointed during the reporting period.
The performance of all Directors is reviewed by the Executive Chairman on an ongoing basis and any Director whose performance is
considered unsatisfactory may be asked to retire. The Executive Chairman’s performance is reviewed by the other Board members.
The Company has established firm guidelines to identify the measurable and qualitative indicators of the Director’s performance
during the course of the year. Those guidelines include:
•
•
attendance at all Board meetings. Missing more than three consecutive meetings without reasonable excuse will result in
that Director’s position being reviewed; and
attendance at the Company’s shareholder meetings. Non-attendance without reasonable excuse will result in that Director’s
position being reviewed.
147
CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 The performance of each Director retiring at the next annual general meeting is taken into account by the Board in determining
whether or not the Board should support the re-election of each such Director. Board support for a Director’s re-election is not
automatic and is subject to satisfactory Director performance.
Arrangements put in place by the Board to monitor the performance of the OMH Group’s Executive Directors and senior executives
include:
•
•
•
a review by the Board of the OMH Group’s financial performance;
annual performance appraisal meetings incorporating analysis of key performance indicators with each individual; and
regular reporting from the Chief Executive Officer which monitors the performance of the Company’s executives to ensure
that the level of reward is aligned with respective responsibilities and individual contributions made to the success of the
OMH Group.
The Remuneration Committee reviews and makes recommendations to the Board on the criteria for and the evaluation of the
performance of the Executive Chairman and the Chief Executive Officer.
All senior Executives and Directors are encouraged to attend professional education courses relevant to their roles.
Executive Remuneration Policy
The OMH Group’s remuneration policy aims to reward executives fairly and responsibly in accordance with the international market
for executives and ensure that the Company:
•
•
•
•
•
•
provides competitive rewards that attract, retain and motivate executives of the highest calibre;
sets demanding levels of performance which are clearly linked to an executive’s remuneration;
structures remuneration at a level that reflects the executive’s duties and accountabilities and is, where required, competitive
within Australia and, for certain roles, internationally;
benchmarks remuneration against appropriate comparable groups;
aligns executive incentive rewards with the creation of value for shareholders; and
complies with applicable legal requirements and appropriate standards of governance.
Executive remuneration is reviewed annually having regard to individual and business performance (compared against agreed
financial and non-financial performance measures set at the start of the year), relevant comparative information and expert advice
from both internal and independent external sources.
Remuneration consists of the following key elements:
•
•
fixed remuneration (which includes base salary, superannuation contributions or equivalents and other allowances such as
motor vehicle and health insurance); and
variable annual reward (related to the Company’s and/or individual performance dictated by benchmark criteria).
The operational targets for the Executive Directors and senior executives consist of a number of key performance indicators
including safety, production, operating expenditure, return on shareholders’ funds, enhancing corporate credibility and creation
of value for shareholders.
At the end of the calendar year the Board assesses the actual performance of the consolidated entity and an individual against the
key performance indicators previously set. Any cash incentives (including bonuses) and/or options granted require Board approval.
Options proposed to be granted to any Directors also require shareholder approval. The entry into hedging arrangements in
respect of any unvested incentive securities is not permitted.
Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors. The Board seeks
independent advice on the appropriateness of remuneration packages, given trends in comparative companies both locally and
internationally. Remuneration packages include fixed remuneration with bonuses or equity-based remuneration entirely at the
discretion of the Board based on the performance of the OMH Group.
As OMH is incorporated in Bermuda, it is not required to disclose the nature and amount of remuneration for each Director.
However, in the interests of good corporate governance, the following table provides the remuneration details of all Directors of
the Company (and the nature and amount of their remuneration) for the year ended 31 December 2021.
148
CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 Director
Low Ngee Tong(i)
Zainul Abidin Rasheed(ii)
Julie Wolseley(iii)
Tan Peng Chin(iv)
Thomas Teo(v)
Peter Church OAM(vi)
Dato Abdul Hamid Bin Sh
Mohamed(vii)
Tan Ming-li(viii)
Base
Remuneration
A$’000
1,260
-
-
-
-
-
-
-
1,260
Primary
Directors
Fees
A$’000
-
130
170(x)
120
120
110
77
77
804
Post Employment
Performance
Bonus
Defined
Contributions
A$’000
1,779(ix)
-
-
-
-
-
-
-
1,779
A$’000
8
-
-
-
-
-
-
-
8
Total
A$’000
3,047
130
170
120
120
110
77
77
3,851
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
Mr Low Ngee Tong has been the Executive Chairman since October 2008 (and was subsequently appointed as Chief Executive Officer).
Mr Zainul Abidin Rasheed was first appointed as a Director on 3 October 2011.
Ms Julie Wolseley was first appointed as a Director on 24 February 2005.
Mr Tan Peng Chin was first appointed as a Director on 14 September 2007.
Mr Thomas Teo Liang Huat was first appointed as a Director on 17 July 2008.
Mr Peter Church was first appointed as a Director on 12 December 2011, retired on 6 May 2021. Fees also include pro-rata fees earned from being a non-executive
Director of OMM.
Dato Hamid was first appointed as a Director on 10 May 2021.
Ms Tan Ming-li was first appointed as a Director on 10 May 2021.
Inclusive of A$1,680,000 of profit sharing for 2021 that has been accrued and is expected to be paid in 2022.
Inclusive of director’s fee of A$50,000 paid to Director who is a non-executive Director of OMM.
The Non-Executive Directors of the Company do not earn additional fees for undertaking their respective duties on the Audit Committee and Remuneration Committee.
9.
RECOGNISE THE LEGITIMATE INTERESTS OF STAKEHOLDERS
The Company has introduced a formal Privacy Policy. The Company is committed to respecting the privacy of stakeholders’ personal
information. This Privacy Policy sets out the Company’s personal information management practices and covers the application of
privacy laws, personal information collection, the use and disclosure of personal information, accessing and updating stakeholders’
information and the security of stakeholders’ information.
Other than the introduction of a formal Privacy Policy, the Board has not adopted any other additional formal codes of conduct to
guide compliance with legal and other obligations to legitimate stakeholders, as it considers, in the context of the size and nature
of the Company, that it would not improve the present modus operandi.
As at 31 December 2021, the Company complied in all material respects with each of the Corporate Governance Principles and the
corresponding Recommendations as published by the ASX Corporate Governance Council except as noted below:
As the Company’s activities increase in size, scope and/or nature, the Company’s corporate governance principles will continue to
be reviewed by the Board and amended as appropriate.
149
CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 Recommendation
Reference
Notification of
Departure
Explanation for Departure
Disclose the
measurable
objectives
for achieving
gender diversity
A separate
Nomination
Committee
should be
established
The chair
should be an
independent
director and
should not
be the same
person as the
Chief Executive
Officer
A listed entity
should have a
program for
inducting new
directors
The Diversity Policy outlines the strategies and process according to which the Board
will set measurable objectives to achieve the aims of its Diversity Policy, with particular
focus on gender diversity within the Company and representation from indigenous
communities. The Board did not set measurable gender diversity objectives for the
past financial year because the Board considered the application of a measurable
gender diversity objective requiring a specified proportion of women on the Board
and in senior executive roles would, given the relative size of the Company and the
Board, unduly limit the Company from applying the Diversity Policy as a whole and
the Company’s policy of appointing based on skills and merit. The Board is committed
to appointing the best person into any position. The Company also builds strong
relationships with its Indigenous communities and has training and employment
programs in place to encourage greater participation in the Company’s workforce. The
Board is responsible for monitoring Company performance in meeting the Diversity
Policy requirements, including the achievement of diversity objectives. The Board may
establish appropriate measurable objectives and to report progress against them in
future Annual Reports.
The Board of the Company has not formed a separate nomination committee. The
Board as a whole undertakes the process of reviewing the skill base and experience of
existing Directors to enable identification of the attributes required in new Directors.
The Board has decided that no efficiencies will be achieved by establishing a separate
nomination committee. Where appropriate, independent consultants are engaged
to identify possible new candidates for the Board. The Board ensures that prior to
appointing a director or recommending a new candidate for election as a director that
appropriate checks are undertaken as to the persons character, experience, education,
criminal record and bankruptcy history.
The Company’s current Executive Chairman and Chief Executive Officer, Mr Low, is
not considered by the Board to be independent in the light of the factors outlined in
Box 2.5 of the ASX Corporate Governance Council’s Principles and Recommendations 4th
Edition which indicate when a director may not be considered to be an independent
director. Refer Section 1.2 of the Corporate Governance Statement. However the Board
considers that Mr Low’s position as both Executive Chairman and CEO is appropriate
given his world-wide experience and specialised understanding of the global
manganese industry. Furthermore, the Board believes that Mr Low has the range of
skills, knowledge, and experience necessary to effectively govern the Company and
to understand the economic sectors in which the Company operates. In addition, it
should be noted that Mr Low is a substantial and longstanding shareholder of the
Company and, as such, is able to clearly identify with the interests of shareholders as
a whole. Mr Low was instrumental in the formation of the Company and has for over
25 years overseen its rapid growth and success. The dual role of Mr Low is balanced
by the Deputy Chairman Mr Zainul Abidin Rasheed who is an independent Non-
Executive Director. In this role Mr Zainul chairs the discussions of the Non-Executive
Directors. The Board believes that there are sufficient internal controls in place to
ensure adequate accountability, transparency and effective oversight by the Board
such that an appropriate balance of power and authority is exercisable by the Board
for objective decision-making in the best interests of the OMH Group. Accordingly Mr
Low is the best person to undertake the Executive Chairman role and the Board does
not believe it is necessary at this stage to appoint an independent chair of the Board.
The Company does not consider it necessary, in the light of the size of the Board and
the relatively low turn-over of Directors, to have a separate formal induction program
for new Directors. All new Directors are given sufficient support from the Board in
order to familiarise themselves with the Company and its governance protocols as well
as being adequately briefed about the OMH Group’s activities, strategies and actual
and budgeted financial positions. All new Directors are appointed through a written
agreement with the Company that sets out all their duties, rights and responsibilities.
New Directors are also provided with the Board Meeting schedule and have the
opportunity to visit the operations each year on a rotational basis as part of the
familiarisation process.
1.5
2.1
2.5
2.6
150
CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 Recommendation
Reference
Notification of
Departure
Explanation for Departure
7.1
8.3
The board of
a listed entity
should have a
committee or
committees to
oversee risk.
Rather than separately constituting an additional committee of the Board, the entire
Board has delegated oversight of the risk and internal control policy, including review
of the effectiveness of OMH’s internal control framework and risk management
process, to the key executive management team in conjunction with the Board.
The Board considers this structure to be the most effective means of (i) managing
the various risks that are relevant to the OMH Group and (ii) monitoring the OMH
Group's compliance with the Risk and Internal Control policy. In addition from a Board
perspective the following processes occur to oversee the entity’s risk management
framework:
•
•
‘Risk’ is a standing agenda item at each monthly Board meeting; and
Prior to the approval of the Company’s statutory financial statements, the
Audit Committee has the opportunity to meet with the Company’s auditors as
appropriate.
The Company is committed to the identification, monitoring and management of
material business risks of its activities via its risk management framework which
includes health and safety, environmental governance, community, operational risk
management, business risk management and legal and regulatory compliance.
The Company does not currently have an equity-based remuneration scheme in
operation and this recommendation is therefore not applicable.
A listed entity
which has an
equity-based
remuneration
scheme should:
(a) have a policy
on whether
participants
are permitted
to enter into
transactions
(whether
through the use
of derivatives
or otherwise)
which limit the
economic risk of
participating in
the scheme; and
(b) disclose
that policy or a
summary of it.
Approved by the Board 27 April 2022.
151
CORPORATE GOVERNANCEOM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 ASX & BURSA SECURITIES ADDITIONAL INFORMATION
OM Holdings Limited has a primary listing on the Australian Securities Exchange (“ASX”) and also has a secondary listing on Bursa
Malaysia Securities Berhad.
Pursuant to the listing requirements of the ASX, the shareholder information set out below was applicable as at 1 April 2022.
1.
A.
SHAREHOLDER INFORMATION
Distribution of Equity Securities
Distribution schedule and number of holders of equity securities as at 1 April 2022:
Distribution
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
More than 100,000
TOTAL
Fully Paid Ordinary Shares
(OMH)
708
812
289
289
100
2,198
% of Issued Capital
0.05
0.31
0.32
1.76
97.56
100.00
There were 259 holders holding less than a marketable parcel of ordinary shares on ASX.
B.
Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are listed below:
Shareholder Name
Listed Ordinary Shares
Number
Percentage Quoted
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
BNP PARIBAS NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HANWA CO LTD
BNP PARIBAS NOMS PTY LTD
UOB KAY HIAN NOMINEES (ASING) SDN BHD
EXEMPT AN FOR UOB KAY HIAN PTE LTD ( A/C CLIENTS )
CITIGROUP NOMINEES (ASING) SDN BHD
UBS AG FOR NEON LIBERTY LORIKEET MASTER FUND LP
LOW NGEE TONG
MS HENG SIOW KWEE
CITIGROUP NOMINEES (TEMPATAN) SDN BHD
EXEMPT AN FOR AIA BHD.
CITIGROUP NOMINEES (ASING) SDN BHD
EXEMPT AN FOR OCBC SECURITIES PRIVATE LIMITED
(CLIENT A/C-NR)
MS JULIE ANNE WOLSELEY
MS BI LI
MR HAMID MAHDAVI ARDABILI
HSBC NOMINEES (ASING) SDN BHD
EXEMPT AN FOR MORGAN STANLEY & CO. INTERNATIONAL
PLC (CLIENT)
STRATFORD SUN LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITIGROUP NOMINEES (ASING) SDN BHD
EXEMPT AN FOR UBS AG HONG KONG (FOREIGN)
TOTAL HELD BY 20 LARGEST SHAREHOLDERS
OTHERS
TOTAL
152
184,557,046
148,405,613
68,923,386
58,669,348
46,734,291
32,500,000
17,310,613
17,171,836
12,420,045
10,000,000
9,029,800
6,626,400
6,139,900
5,562,002
5,000,000
4,995,000
4,837,100
4,650,000
4,142,367
3,843,000
651,517,747
87,105,590
24.99%
20.09%
9.33%
7.94%
6.33%
4.40%
2.34%
2.32%
1.68%
1.35%
1.22%
0.90%
0.83%
0.75%
0.68%
0.68%
0.65%
0.63%
0.56%
0.52%
88.19%
11.81%
738,623,337
100.00%
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 ASX & BURSA SECURITIES ADDITIONAL INFORMATION
C.
Substantial Shareholders
An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued capital) is set out
below.
Shareholder Name
Huang Gang
Amplewood Resources Ltd
Low Ngee Tong
Heng Siow Kwee
Listed Ordinary Shares
Number of Shares
% of Shares
103,618,830
100,260,653
68,110,631
66,081,669
14.03%
13.57%
9.22%
8.95%
D.
Restricted Securities
There were no restricted securities on issue as at 1 April 2022.
E.
Voting Rights
Subject to the Bye-laws of the Company and to any rights or restrictions attaching to any class of shares, every member
is entitled to be present at a meeting in person, by proxy, representative or attorney. In accordance with the Company’s
Bye-laws, voting rights in respect of ordinary shares are on a show of hands whereby each member present in person or by
proxy or representative shall have one vote and upon a poll each member present in person or by proxy or representative
shall have one vote for every share held.
2.
TAXATION
The Company was incorporated in Bermuda and is not taxed as a company in Australia.
3. ON-MARKET BUY-BACK
The Company is not currently undertaking an on-market buy-back.
4.
INVESTOR INFORMATION
(a)
Stock Exchange Listing
Primary Listing
OM Holdings Limited shares are listed on the Australia Securities Exchange (ASX).
The Company’s ASX code is OMH.
Secondary Listing
OM Holdings Limited shares are listed on the Bursa Malaysia Securities Berhad (Bursa Malaysia).
The Company’s Bursa code is OMH (5298)
(b)
Company Information Contact
For further information about OM Holdings Limited, please contact the Singapore head office:
OM Holdings Limited
#09 – 03A Singapore Post Centre
10 Eunos Road 8
Singapore 408600
Telephone:
Facsimile:
Email:
Website:
(65) 6346 5515
(65) 6342 2242
om@ommaterials.com
www.omholdingsltd.com
153
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
ASX & BURSA SECURITIES ADDITIONAL INFORMATION
(c)
Share Registry Enquiries
Shareholders who require information about their shareholdings, dividend payments, notification of tax file
numbers, changes of name, address or bank account details or related administrative matters should contact the
Company’s share registries:
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
PERTH WA 6000
Postal Address:
GPO Box D182
PERTH WA 6840
Telephone:
Telephone:
Facsimile:
Website:
Email:
(within Australia) 1300 850 505
(outside Australia) (61) 3 9415 4000
(61) 3 9473 2500
www.computershare.com
web.queries@computershare.com.au
Tricor Investor & Issuing House Services Sdn Bhd
Registration No.:
197101000970 (11324-H)
Address:
Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3,
Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur
Telephone:
Facsimile:
Email:
+603-2783 9299
+603-2783 9222
is.enquiry@my.tricorglobal.com
Each enquiry should refer to the shareholder number which is shown on the issuer sponsored holding statements
and dividend statements.
154
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021
GRI Indicator
GRI Content Index
Disclosure
General Disclosures
102-1
102-2
102-3
102-4
102-5
102-6
102-7
102-8
102-9
102-10
102-11
102-14
102-15
102-16
102-17
102-18
102-19
102-20
102-21
102-22
102-23
102-24
102-25
102-26
102-28
102-29
102-30
102-31
102-32
102-35
102-36
102-40
102-42
102-43
102-44
102-45
102-46
102-47
102-50
102-52
102-53
102-54
102-55
103-1
103-2
103-3
Name of organisation
Activities, brands, products and services
Location of headquarters
Location of operations
Ownership and legal form
Markets served
Scale of the organisation
Information on employees and other workers
Supply chain
Significant changes to the organisation and its supply chain
Precautionary Principle or approach
Statement from senior decision-maker
Key impacts, risks and opportunities
Values, princples, standards, and norms of behaviour
Mechanisms for advice and concerns about ethics
Governance structure
Delegating authority
Executive-level responsibility for economic, environmental, and social topics
Consulting stakeholders on economic, environmental, and social topics
Composition of the highest governance body and its committees
Chair of the highest governance body
Nominating and selecting the highest governance body
Conflicts of interest
Role of highest governance body in setting purpose, values, and strategy
Evaluating the highest governance body’s performance
Identifying and managing economic, environmental, and social impacts
Effectiveness of risk management processes
Review of economic, environmental, and social topics
Highest governance body’s role in sustainability reporting
Remuneration policies
Process for determining remuneration
List of stakeholder groups
Identifying and selecting stakeholders
Approach to stakeholder engagement
Key topics and concerns raised
Entities included in the consolidated financial statements
Defining report content and topic Boundaries
List of material topics
Reporting period
Reporting cycle
Contact point for questions regarding the report
Claims of reporting in accordance with the GRI Standards
GRI content index
Management Approach
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Page Number
36
94, 124
7
10-11, 102
8
16, 94, 124
8, 50-51
50-51
44-45
36, 60
Throughout
Annual Report
1-2
126-127
38, 141-142
37
38,134-135
38
38
37-38, 40
136, 139-141
38
140-141
138, 142
136
138
40-41, 147
145-147
38
38
51, 140
51, 140
37-38
37-38
37-38
37-38
100-105
36
42
36
36
37
36
155-156
42
42
42
155
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 GRI Indicator
Disclosure
Economic
Direct economic value generated and distributed
Financial implications and other risks and opportunities due to climate change
Defined benefit plan obligations and other retirement plans
Proportion of senior management hired from the local community
Significant indirect economic impacts
Proportion of spending on local suppliers
Communication and training about anti-corruption policies and procedures
Environmental
Energy consumption within the organisation
Energy intensity
Reduction of energy consumption
Interactions with water as a shared resource
Management of water discharge-related impacts
Water withdrawal
Direct (Scope 1) GHG emissions
Energy indirect (Scope 2) GHG emissions
GHG emissions intensity
Reduction of GHG emissions
Waste generation and significant waste-related impacts
Management of significant waste-related impacts
Waste generated
Waste diverted from disposal
Waste directed to disposal
New employee hires and employee turnover
Social
Benefits provided to full-time employees that are not provided to temporary or part-time
employees
Occupational health and safety management system
Hazard identification, risk assessment, and incident investigation
Occupational health services
Worker participation, consultation, and communication on occupational health and safety
Worker training on occupational health and safety
Promotion of worker health
Prevention and mitigation of occupational health and safety impacts directly linked by
business relationships
Workers covered by an occupational health and safety management system
Work-related injuries
Average hours of training per year per employee
Programs for upgrading employee skills and transition assistance programs
Diversity of governance bodies and employees
Operations and suppliers at significant risk for incidents of child labour
Operations and suppliers at significant risk for incidents of forced or compulsory labour
Operations with local community engagement, impact assessments, and development
programs
Operations with significant actual and potential negative impacts on local communities
New suppliers that were screened using social criteria
201-1
201-2
201-3
202-2
203-2
204-1
205-2
302-1
302-3
302-4
303-1
303-2
303-3
305-1
305-2
305-4
305-5
306-1
306-2
306-3
306-4
306-5
401-1
401-2
403-1
403-2
403-3
403-4
403-5
403-6
403-7
403-8
403-9
404-1
404-2
405-1
408-1
409-1
413-1
413-2
414-1
156
Page Number
68
43-44
51
50-51
47, 50-51
46
39
55
55
55
59-60
59-60
59-60
56
56
57
57
57-59
57-59
57-59
57-59
57-59
50
51
45-47
46
45-47
47
47, 52
45-47
45-47
45-47
46
53
52-53
50-51, 143
48-49
48-49
47-48
47-48
48-49
OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021OM HOLDINGS LIMITED | ANNUAL REPORT 2021 70
OM HOLDINGS LIMITED | ANNUAL REPORT 2021