More annual reports from OM Holdings Limited:
2023 ReportIncorporated in Bermuda
(ARBN 081 028 337)
(Malaysian Registration No. 202002000012 (995782-P))
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
GRI CONTENT INDEX
CORPORATE GOVERNANCE
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
ASX & BURSA SECURITIES ADDITIONAL INFORMATION
01
02
04
05
06
07
08
10
14
17
24
25
34
70
74
92
95
98
99
100
101
103
162
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
74
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 Dear Shareholders,
2022 started on a strong note, with markets still running on a
post-COVID stimulus rush carried over from 2021. The sentiment
for ferroalloy pricing was also lifted with the outbreak of the
war in Ukraine, before settling down as weaker global demand
weighed in on markets. The anticipated shortage of ferroalloys
caused by the war did not materialize, with Russia still an exporter
of ferrosilicon, and with Ukraine’s output largely displaced by the
continued growth in production and exports from India.
These factors, acting in conjunction with a weak global macro
environment in the second half of the year given energy prices
in Europe and general lethargy in China, led ferroalloy prices to
fall by 11% from 2021 to 2022. Nevertheless, as we previously
shared, the Company was able to secure strong contracts in Q4
2021 which were subsequently delivered in 2022, allowing us to
grow profit after tax by 10.2%. Prices further corrected towards
the end of 2022, with ferroalloy markets in attrition mode, marked
by strong price competition and with weaker producers reducing
production or closing. This will be the dominant theme of 2023,
exacerbated by inventory being released by traders (partly due
to elevated costs of holding given high interest rates). It will be a
challenging year but will also set in motion the conditions for the
next market rally.
Energy security remains a dominant theme, viewed against the
backdrop of current geopolitical uncertainty and Europe’s power
situation last winter. We believe that any company able to lock in
power costs to produce a basic commodity efficiently and cleanly
will be creating value, and OM Sarawak is in a unique position to
do so.
Our production at OM Sarawak for the year was 357,000 tonnes,
well within the guidance we gave at the beginning of the year.
As previously mentioned, production was frontloaded to capture
better prices in the first half of the year before macroeconomic
conditions deteriorated. Consequently, major maintenance was
pushed to commence in June 2022, and we are pleased to share
that all maintenance for our manganese alloy furnaces has been
completed as of April 2023. From production we generated an
EBITDA of US$163 million, and US$197.0 million in cashflow from
operations. Cash generation was elevated largely due to changes
in working capital, with the unwinding (i.e. consumption) of raw
material safety stock maintained during the COVID period when
supply chains were considerably more fragile. Depreciation and
amortisation as a share of EBITDA has also come down, with the
accelerated depreciation of our mining assets in 2021 with the
closure of the Bootu Creek mine in that year.
The cash generated from our operations was largely used to
finance our acquisition of the remaining 25% of OM Sarawak
from our former joint venture partner in December 2022 for
US$120 million. We are pleased to have completed the acquisition
and remain confident that this will allow us to focus growing
organically at OM Sarawak through further investments in our
final expansion phase. Besides the acquisition, we also repaid
US$26 million to project finance lenders as part of our objective
to continue lowering our gearing ratio.
CHAIRMAN’S REPORT
After a series of engagement sessions with institutional investors
in 2022, we recently formally implemented a dividend policy for
2023 onward. While a A$1.5 cents dividend was declared for
FY2022, going forward the Company will target a distribution of
10-30% of net profit after tax, subject to the board’s approval. As
we continue working on reinvigorating our register, the dividend
policy will allow us to pay a sustainable dividend even as we grow,
and most importantly, allow institutional investors to forecast
their returns. After our expansion and growth projects at OM
Sarawak, we will be able to distribute more of our earnings to
shareholders.
While we have been able to successfully complete the modification
of two silicon metal furnaces, one furnace was suspended as of
12 April 2023 as it was not operating as anticipated within the
framework of the Engineering, Procurement and Construction
contract. A review is now underway in relation to rectification.
In addition, we have also made significant progress in our efforts
to promote diversity and inclusion in our workforce. We firmly
believe that a diverse and inclusive workplace is essential for our
success and are committed to creating an environment where
everyone feels valued and respected.
This year, we made advancements in obtaining assurances for
our greenhouse gas (GHG) emissions. The level of assurance
obtained required site visits with inspectors to verify data
collection methods, ensuring that accurate and reliable numbers
are reported. To have a comprehensive understanding of our
products’ total footprint, a cradle-to-gate Life Cycle Analysis (LCA)
was also conducted on manganese ore and manganese alloy,
in collaboration with the International Manganese Institute.
Information gathered allowed us to provide transparent data to
customers while assessing our emission impact.
I am confident that our continued focus on sustainability
and responsible business practices will not only benefit our
Company but also contribute to building a better world for future
generations.
I would like to express my gratitude to our shareholders,
customers, and employees for their unwavering support, which
has been critical to our success. We remain committed to creating
value for our stakeholders and contributing to the betterment
of society, growing as a sustainable ferroalloy producer to the
world’s steelmakers.
LOW NGEE TONG
Executive Chairman
01
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 DIRECTORS
Mr Low is a qualified Mechanical Engineer, having graduated from the National
University of Singapore. He has over 42 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
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.
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 31
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.
ZAINUL ABIDIN RASHEED
Independent
Deputy Chairman
JULIE ANNE WOLSELEY
Non-Executive Director &
Joint Company
Secretary
02
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 DIRECTORS
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.
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, another financial institution group owned by the
largest unit trust fund in Malaysia then.
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 (and major shareholder) of
Symphony House Sdn Bhd, a privately owned investment holding company.
Other directorships outside Malaysia include Maybank IBG 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 the Chairman of the Company’s Audit
Committee.
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 from 1 April 2023, she has been redesignated as a non-
independant non-executive director of Tune Protect Group Berhad (companies listed
on Bursa Malaysia) and Tune Insurance Malaysia Berhad, a subsidiary of Tune Protect
Group Berhad.
03
TAN PENG CHIN
Independent
Non-Executive
Director
DATO’ ABDUL HAMID
BIN SH MOHAMED
Independent
Non-Executive
Director
TAN MING-LI
Independent
Non-Executive
Director
OM HOLDINGS LIMITED | ANNUAL REPORT 2022
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
04
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 CORPORATE DIRECTORY
Directors
Low Ngee Tong
Zainul Abidin Rasheed
Julie Anne Wolseley
Tan Peng Chin
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)
Name of Principal Bankers
Bank of China
Citibank N.A., Singapore Branch
Commonwealth Bank of Australia
Export-Import Bank of Malaysia Berhad
Malayan Banking Berhad
RHB Bank Berhad
Standard Chartered Bank
United Overseas Bank Limited
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)
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
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
: (603) 2783 9299
05
OM HOLDINGS LIMITED | ANNUAL REPORT 2022
CORPORATE STRUCTURE
as at 31 December 2022
(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) Limited
(Incorporated in B.V.I)
100%
(OMH MU)
OMH (Mauritius) Corp.
(Incorporated in Mauritius)
99.99%
(OMR HK)
OM Resources (HK) Limited
(Incorporated in Hong
Kong)
26%
(NMPL)
Ntsimbintle Mining
Proprietary Limited
(Incorporated in South Africa)
50%
(Tshipi Mines)
Tshipi e Ntle Manganese
Mining (Pty)
(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)
100%
(OMMP)
OM Property
Development Sdn Bhd
(Incorporated in Malaysia)
100%
(OMSM)
OM Materials (Samalaju) Sdn.Bhd.
(Incorporated in Malaysia)
100%
(OMSA)
OM Materials (Sarawak) Sdn Bhd
(Incorporated in Malaysia)
100%
(OMQ)
OM Materials (Qinzhou) Co Ltd
(Incorporated in China)
80%
(OMA)
OM Hujin Science & Trade
(Shanghai) Co Ltd
(Incorporated in China)
33.33%
(OMJ)
OM Materials Japan Co.,Ltd
(Incorporated in Japan)
06
100%
(OMQT)
OM Materials Trading
(Qinzhou) Co Ltd
(Incorporated in China)
100%
(OMML)
OM Materials & Logistics
(M) Sdn Bhd
(Incorporated in Malaysia)
50%
(WOSL)
Wen Ocean Shipping
& Logistics Sdn. Bhd.
(Incorporated in Malaysia)
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 FINANCIAL HIGHLIGHTS
as at 31 December 2022
5 YEAR’S GROUP FINANCIAL HIGHLIGHTS
Financial years ended
31 December
2022
US$'million
2021
US$'million
2020
US$'million
2019
US$'million
2018
US$'million
Revenue
856.6
779.9
543.9
714.6
1,125.6
Profit/(loss) before
income tax
Profit attributable
to owners of the
Company
105.6
84.5
(3.5)
41.0
176.5
67.8
61.5
3.5
39.4
120.5
Total assets
886.0
943.6
874.0
842.6
902.2
1,125.6
714.6
543.9
779.9
Shareholders'
funds
396.1
368.0
309.3
297.7
274.3
856.6
Net tangible assets
399.7
443.7
361.7
355.8
318.4
Revenue
(US$’million)
FY2021
FY2022
779.9
856.6
FY2018
FY2019
FY2020
FY2021
FY2022
Total Assets Per Share
(US$)
FY2021
FY2022
1.28
1.20
FY2018
FY2019
FY2020
FY2021
FY2022
1.23
1.14
1.19
1.28
1.20
Gross Profit
(US$’million)
FY2021
FY2022
206.0
206.9
US$
US$
US$
US$
US$
Total assets per
share
1.20
1.28
1.19
1.14
1.23
Net asset backing
per share
Basic profit per
share
Gross profit
(US$ millions)
Gross profit
margin (%)
US$ cents US$ cents US$ cents US$ cents US$ cents
54.3
60.2
49.1
48.3
43.4
9.2
8.4
0.5
5.3
16.4
2022
2021
2020
2019
2018
206.9
206.0
66.7
106.2
263.3
24.2
26.4
12.3
14.9
23.4
SALES BY INTERNATIONAL REGIONS
Region
2022
2021
2020
2019
2018
%
%
%
%
%
Asia Pacific
77.4
86.4
86.1
83.6
82.1
FY2018
263.3
Americas
13.7
3.7
1.7
4.6
2.6
FY2019
106.2
FY2020
66.7
Europe
6.1
6.3
5.5
7.7
9.8
Middle East
2.7
3.6
6.3
3.9
5.5
FY2021
FY2022
206.0
206.9
Africa
Total
0.1
0.0
0.4
0.2
0.1
100.0
100.0
100.0
100.0
100.0
07
OM HOLDINGS LIMITED | ANNUAL REPORT 2022
OMH 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 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. Production ceased in 2022 due
to elevated power-tariffs in China.
08
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 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 2022 OM Holdings Limited (“OMH” or the “Company”) and its subsidiaries (collectively the “Group”) has
an established track record of over 25 years in exploration, project development, operations and
marketing and trading. The Group’s core businesses comprise the 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
120,000 to 126,000 tonnes of ferrosilicon, and
approximately 333,000
tonnes of
manganese alloys and 21,000 to 24,500 tonnes of
silicon metal 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.
to 400,000
OMH (Mauritius) Corp (“OM 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.
OM (Manganese) Ltd (“OMM”)
OMM owns the Bootu Creek manganese mine
located 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. The mine was placed under
care and maintenance mode since the end of
January 2022.
09
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 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
140,355 tonnes
216,813 tonnes
Ferrosilicon
Manganese Alloys
146,646 tonnes
216,604 tonnes
Ferrosilicon
Manganese Alloys
10
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
11
PROCESSING AND SMELTING OPERATIONAL REVIEW
SAMALAJU SMELTING COMPLEX
Casting of silicon metal production
OVERVIEW
OPERATIONS
OM Materials (Sarawak) Sdn Bhd (“OM Sarawak”) owns 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 6 furnaces were allocated for the
production of ferrosilicon, 8 units to produce manganese alloys
and 2 units to produce silicon metal. The Plant has a design
production capacity of 120,000 to 126,000 tonnes of ferrosilicon,
333,000 to 400,000 tonnes of manganese alloys and 21,000 to
24,500 tonnes of silicon metal per annum upon completion of
conversion works. The Plant also consists of a sinter plant that
has a design capacity to produce 250,000 tonnes of sinter ore
per annum.
In transitioning to the COVID-19 endemic phase, numerous
countries have loosened their border policies and eased COVID-19
restrictions, including Malaysia, which reopened its international
borders on 1 April 2022.
Despite the reopening of borders, Malaysia
immigration
authorities maintained strict regulations on issuing work permits
for foreigners. Similarly, as part of their COVID-19 control
measures, the Chinese government continued to enforce strict
border crossing control between the provinces and countries,
which affected the recruitment of Chinese workers by OM
Sarawak in 2022.
PLANT CONSTRUCTION & DEVELOPMENT
In July 2022, the Plant successfully converted two of its ferrosilicon
furnaces to produce manganese alloys. Commercial production
was achieved in August 2022, increasing the total manganese
alloys furnaces from 6 units to 8 units, bringing the Plant’s
manganese alloys production capacity to 330,000 to 400,000
tonnes per annum. The sinter plant also achieved commercial
production in Q4 2022 following contractors’ onsite rectification
and fine-tuning works. Training was provided to local operators
to ensure smooth operation of the sinter plant.
The Plant commenced hot commissioning and performance
testing for the first silicon metal furnace on 20 December 2022. The
production team has been collaborating with onsite contractors
to refine and acquaint themselves with the production processes
to meet the standard specifications for silicon metal.
As of 12 April 2023, production for the silicon metal furnace
was suspended as it was not operating as anticipated within the
framework of the Engineering, Procurement and Construction
contract.
Major scheduled maintenance works commenced in June 2022,
beginning with manganese alloy furnaces followed by FeSi
furnaces. The ongoing major maintenance works alleviated the
manpower constraints, and were conducted in stages to minimise
disruptions to ongoing operations. As at 31 December 2022, 10
out of 16 furnaces were in operation with 5 furnaces producing
ferrosilicon, 4 furnaces producing manganese alloys and 1
furnace producing silicon metal. Of the remaining 6 furnaces, 5
were shut down for major maintenance while 1 was undergoing
the conversion process to produce silicon metal.
The annual production of ferrosilicon and manganese alloys (which
included silicomanganese and high carbon ferromanganese)
amounted to 140,355 tonnes of 216,813 tonnes respectively.
There was a 7.1% increase in ferrosilicon production and slight
0.1% increase in manganese alloy production compared to 2021.
The manganese alloys production fell short of the intended
annual capacity design due to furnace shutdowns in stages as
part of the major maintenance program.
12
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 PROCESSING AND SMELTING OPERATIONAL REVIEW
SAMALAJU SMELTING COMPLEX
Sales volumes for ferrosilicon and manganese alloys increased by 28.9% and 6.2% respectively in 2022. The increase in ferrosilicon sales
volumes were mainly attributed to the shipments delays from 2021 being carried over to 2022, along with an increase in ferrosilicon
production volumes.
Product
(tonnes)
Production
Years ended 31 December
2022
2021
2020
2019
2018
Ferrosilicon (FeSi)
140,355
131,059
167,443
230,735
220,515
Manganese Alloys
(SiMn, HCFeMn)
216,813
216,539
227,406
248,163
242,341
Manganese Sinter Ore
112,711
99,824
24,125
-
-
Sales
Ferrosilicon (FeSi)
146,646
113,783
171,502
219,828
225,749
Manganese Alloys
(SiMn, HCFeMn)
216,604
203,938
231,129
240,280
241,166
Manganese Sinter Ore
-
7,132
-
-
-
In 2022, several operational milestones were
achieved, which included:
•
Signing of a Memorandum of Understanding with
the Universiti of Malaysia (Sarawak) in February
2022
in Manufacturing
Technology (Smelting) program
the Certificate
for
• Commencement of the accreditation program
for ISO 14001: 2015 Environmental management
system and ISO 45001: 2018 Occupational health
and safety management system in August 2022
•
Signing of a Memorandum of Understanding
with the Sarawak Forestry Corporation (SFC) in
November 2022 for the rewilding of Sarawak’s
Urban Totally Protected Areas through habitat
restoration at Similajau National Park program.
• Receiving the Merit Awards for the 10th Premier of
Sarawak Environmental Award (PSEA) 2021/2022.
As at 31 December 2022, OM Sarawak had a total workforce
of 1,539 employees, of which 74% were local Sarawakians. In
an effort to localise manpower, a Memorandum of Agreement
was signed with Universiti Malaysia Sarawak (UNIMAS) in
February 2022 for the Certificate in Manufacturing Technology
(Smelting) Program. The programme aims to nurture a skilled
smelting workforce in Sarawak, and reduce reliance on foreign
skilled manpower for core furnace skilled positions. A total
of 12 candidates successfully completed the program, and a
graduation ceremony was conducted on 5th December 2022.
For more
Internship and Career Exposure Opportunities Pg.61
information, refer to Sustainability Statement:
13
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 MARKETING & TRADING
OPERATIONAL REVIEW
2
2
0
2
1
2
0
2
1,447,897 tonnes
Ores and Alloys
2,367,957 tonnes
Ores and Alloys
14
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
15
MARKETING & TRADING
OPERATIONAL REVIEW
For the Group, by forging strong relationships with major steel
conglomerates, regional sales in the Asia Pacific market has
remained stable despite supply chain disruption. On the other
hand, the Group has swiftly expanded its reach to the Western
market during the year to fill the void caused by turmoil in
Eastern Europe.
Sailing through the first half of the year, we faced challenging
conditions in the second half of 2022. The focus for 2023 is to
strengthen longer term relationships with end users to weather
through the cycle and to be prepared for unforeseen incidents
in a fast-changing world.
OVERVIEW AND UPDATE IN 2022
With COVID-19 vaccinations rolled out globally since 2021, most
countries lifted restrictions and there was a return to normality.
Global trading activities tracked the pick up in both Western
and Asian countries during the year.
The conflict between Ukraine and Russia created uncertainty
in the global supply of ferroalloys. Both countries are majors
in commodity export, as a result, trade flow of certain
commodities, including steel, metals, grain, ferroalloy, ores,
among others were greatly disrupted. This led to a temporary
rise in prices in the first half of 2022, however the anticipated
shortage of ferroalloys caused by the war did not materialize as
Russia was still an exporter of ferrosilicon and Ukraine’s output
was displaced by India. Prices eventually stabilized as global
demand weakened.
2022 SALES BY GEOGRAPHICAL SEGMENT
2022
2021
2020
2019
2018
Region
%
%
%
%
%
Asia Pacific
77.4
86.4
86.1
83.6
82.1
Americas
13.7
3.7
6.3
3.6
0.0
1.7
5.5
6.3
0.4
4.6
7.7
3.9
0.2
2.6
9.8
5.5
0.1
6.1
2.7
0.1
100.0
100.0
100.0
100.0
100.0
Europe
Middle East
Africa
Total
16
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 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
18,071 tonnes
an average grade of 28.69% Mn
191,696 tonnes
an average grade of 28.66 % Mn
*The tonnages reflected in the quarterly announcement of 144,352
tonnes (dated 30 January 2023) excluded 1 vessel tonnage sold of
47,344 tonnes sold.
6.86 million tonnes
13.18% Mn as at 31 December 2022
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
OPERATIONAL REVIEW BOOTU CREEK MINE
OVERVIEW
OM (Manganese) Ltd (“OMM”) is a wholly owned subsidiary
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.
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
processing plant (SPP) commissioned
in December 2009
abutted the PPP and selectively processed drum plant rejects
and washed fines from the PPP and previously stockpiled drum
plant rejects.
Figure 1. Locality Plan
The Ultra Fines Plant (UFP) abuts the SPP and is designed to
process 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, is
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.
The processing of manganese ore is described diagrammatically below:
Figure 2. Bootu Creek Manganese Processing Plant Schematic
Figure 3. Bootu Creek location and Tenement plan
18
OM HOLDINGS LIMITED | ANNUAL REPORT 2022
OPERATIONAL REVIEW BOOTU CREEK MINE
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 Port of Darwin via the Alice Springs to Darwin rail line.
Manganese product was stockpiled at the rail head at the Port of Darwin prior to being transported to the port ship loader and
loaded onto vessels for shipping to overseas markets. OMM achieved production of 18,071 tonnes at an average grade of 28.69%
Mn for the year ended 31 December 2022.
Production ceased on 25 January 2022 and the Bootu Creek Mine was placed on Care and Maintenance.
Rehabilitation Activities conducted during Care and Maintenance
During Care and Maintenance, OMM utilised available resources to rehabilitate Waste Rock Dump’s (WRD) and satellite Run of
Mine (ROM’s) stockpile areas. The primary focus was to make ready, survey, and cross-rip designated areas in preparation for the
forecasted early rainfall by mid-October and complete aerial seeding by the end of November.
At the end of October 2022, 243ha (WRD and ROM) was ready to be seeded, due to limited seed stock only 98 ha was revegetated
using a drone. Harvesting of the additional seed has commenced and the remaining 143ha will be seeded ahead of the normal
seasonal wet season during October/November 2023.
Figure 4: Profiling, topsoil spread, drainage and cross-rip completed.
19
OM HOLDINGS LIMITED | ANNUAL REPORT 2022
OPERATIONAL REVIEW BOOTU CREEK MINE
During the 2022 financial year, a total of *191,696 tonnes of manganese product was exported through the Port of Darwin.
*The tonnages reflected in the quarterly announcement of 144,352 tonnes on 30 January 2023 excluded 1 vessel of 47,344 tonnes sold.
Unit
2022
2021
2020
2019
2018
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
Total Production - Tonnes
dt
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
%
–
–
–
12,643
29.27
5,608
26.82
18,071
28.69
164,400
28.28
27.296
33.2
191,696
28.66
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
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
Table 1. Production and Sales FY2018 - FY2022
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
2022
*Note – No production and mining activity conducted in FY2016 and FY2022
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
2022
*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
-
20
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016*
2017
2018
2019
2020
2021
2022
Year
OM HOLDINGS LIMITED | ANNUAL REPORT 2022
OPERATIONAL REVIEW BOOTU CREEK MINE
Bootu Creek Mineral Resource
There was no ore mined at Bootu Creek in 2022. The 31 December 2022 Mineral Resource of 6.86 million tonnes was derived by
depleting the 31 December 2021 Mineral Resource by the processing of 32,325 tonnes of stockpiled ROM ore prior to the closure of
the HMS plant on 25 January 2022. A further trial of 37,318 tonnes of tailings was processed through the UFP plant in January 2022.
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
0.13
0.05
2.07
2.95
6.86
%Mn
23.09
26.47
22.69
20.91
22.26
22.75
13.50
14.50
12.10
8.55
13.19
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
0.13
0.05
2.07
2.95
6.86
%Mn
23.09
26.47
22.69
20.91
22.26
22.75
13.50
0.00
12.10
8.55
13.19
Table 2. Bootu Creek Mineral Resource as at 31 December 2022
Figure 5. Location Plan for the Bootu Creek Mineral Resources as at 31
December 2022
Dec 2021 at 15% Mn cutoff
Dec 2022 at 15% Mn cutoff
Change
CFN
Masai
Tourag
Zulu South
Renner West
Insitu Total
ROM Stocks
SPP Stocks
UFP Rejects
UFP Tailings
Grand Total
Pit Base
195
245
220
230
255
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
Pit Base
195
245
220
230
255
Mt
0.35
0.13
0.67
0.23
0.28
1.66
0.13
0.05
2.07
2.95
6.86
%Mn
23.09
26.47
22.69
20.91
22.26
22.75
13.50
14.50
12.10
8.55
13.19
Table 3: 31 December 2022 Mineral Resource vs 31 December 2021 Mineral Resource
There is no current Life of Mine Plan or Ore Reserve for Bootu Creek.
Mt
0.00
0.00
0.00
0.00
0.00
0.00
-0.03
0.01
0.00
-0.04
-0.06
21
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 OPERATIONAL REVIEW BOOTU CREEK MINE
2022 Bootu Creek Exploration Program
The Bootu Creek and Renner Springs exploration programs
planned for 2022 were deferred to 2023, owing to the Bootu
Creek operation being placed on Care and Maintenance in
January 2022.
Exploration – Bryah Basin Manganese Joint
Venture (OMM 51%, Bryah 49%)
In April 2019 OMM entered into a Farm-In and Joint Venture
Agreement with Bryah Resources Limited (ASX:BYH) (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 Murchison 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.
The results of the initial exploration drilling were sufficiently
encouraging for OMM to proceed with Stage 2 of the Joint
Venture. OMM funded a further A$2.0 million (in 4 separate
tranches of A$0.5 million each) on exploration, to eventually
earn a 51% interest in the Joint Venture in March 2022. OMM
assumed management of the Joint Venture in July 2022. OMM
and Bryah co-contributed A$700,000 on a 51%:49% basis up to
the end of September 2022. OMM is currently sole funding the
next A$1.8 million in exploration to earn a 60% interest in the
Joint Venture.
Bryah released a maiden Joint Venture Inferred and Indicated
JORC 2012 compliant Mineral Resource estimate totalling 1.84
million tonnes at 21.0% Mn1 covering the Horseshoe South,
Horseshoe Extended, Brumby Creek East, Brumby Creek West,
Area 74, and Black Hill deposits in March 2022.
Two Gradient Array Induced Polarisation (GAIP) geophysical
programs, covering 6km of strike length, were completed in
April and November 2022, and together with outcrop mapping
and rock chip sampling have identified several new targets
which are currently waiting on Heritage survey clearance
before drill testing. 3 Reverse Circulation (RC) exploration drill
programs were completed in 2022 including 64 holes (2,498
metres) in March 2022, 39 holes (1,458 metres) in June 2022 and
41 holes (1,557 metres) in December 2022.
Assay results from the March 2022 RC drill program2,3 confirmed
a southern extension of Brumby West deposit and the Redrum
GAIP target as a new deposit. Assay intersections at a 15% Mn
cut off included:-
Brumby West:
• BBRC185 – 7m at 24.6% Mn from 18m
• BBRC185 – 4m at 30.2% Mn from 31m
• BBRC186 – 5m at 25.1% Mn from 17m
• BBRC187 – 18m at 23.3% Mn from 11m
• BBRC188 – 9m at 22.2% Mn from 21m
• BBRC189 – 12m at 23.4% Mn from 13m
• BBRC192 – 10m at 21.3% Mn from 20m
Redrum:
• RRRC030 – 15m at 24.8% Mn from 4m
• RRRC031 – 5m at 23.0% Mn from 10m
• RRRC032 – 4m at 25.7% Mn from 12m
• RRRC033 – 3m at 29.7% Mn from 15m
• RRRC036 – 6m at 22.0% Mn from 11m
• RRRC037 – 4m at 25.2% Mn from 11m
22
Assay results for the June 2022 RC drill program testing selected
geophysical buried channel targets in the Black Hill, Black
Beauty, Brumby Creek, and Horseshoe South areas which
returned isolated low-grade intersections, though full access
was restricted by limited Heritage survey coverage.
The December 2022 RC drill program further extends the
Brumby Creek West deposit to the south and the infill drilling at
Redrum deposit will be used for Mineral Resource delineation.
An update of the current Joint Venture Inferred and Indicated
Mineral Resource estimate will be undertaken following receipt
of assay results from the December 2022 drill program.
1
2
3
4
Refer Bryah Resources Limited (ASX: BYH) ASX announcement dated
3 March 2022 “Maiden Bryah Basin Manganese Mineral Resource”
Refer Bryah Resources Limited (ASX: BYH) ASX announcement
dated 1 August 2022 “New Manganese mineralisation identified at
Redrum Prospect”
Refer Bryah Resources Limited (ASX: BYH) ASX announcement dated
31 August 2022 “Continued Manganese drilling Success at Redrum
and Brumby West”
Refer Bryah Resources Limited (ASX: BYH) ASX announcement
dated 22 December 2022 “Manganese RC Drilling Completed”
Figure 6. Deposit Location Plan for the Bryah Basin Manganese
Joint Venture
Bulk Ore Sorter trials were undertaken with Steinert Australia
Pty Ltd in Q1 2022. Three composite samples were selected
from 7 PQ diamond core holes to represent 3 different styles
of Bryah Basin manganese mineralisation. The bulk test work
proved that a colour-based sort program, together with XRT-3D
for low density rejection can be used to upgrade + 8mm feed
material. Product grades ranged from 36.6% Mn, 32.2% Mn and
29.3% Mn for composites 1,2 and 3 respectively.
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 OPERATIONAL REVIEW BOOTU CREEK MINE
701 Mile Manganese Project with Great Sandy
Pty Ltd
OMM executed a Farm-in and Exploration
Joint Venture
Agreement with Great Sandy Pty Ltd (“701 Mile JV Agreement”)
in April 2021. The 701 Mile Manganese Project is located
approximately 90km southeast of Newman
in Western
Australia, on E52/3587.
Ethnographic and Archaeological surveys were completed
in November 2021. The area was cleared of any significant
Aboriginal sites. A Land Access Agreement with the pastoral
lease owner was executed in March 2022.
An initial wide spaced drill program of 56 RC holes (1,393m) was
completed in June 2022. Assay results have outlined a wide area
of mineralisation with manganese grades typically associated
with other manganese shale deposits in the East Pilbara.
Drill hole locations and assay results were listed in the OMH
September 2022 Quarterly Production and Market Update
(refer to ASX Announcement dated 26 October 2022).
The A$0.25 million “Due Diligence” phase of the 701 Mile JV
Agreement has been completed and an Option Fee of A$50,000
paid by OMM in October 2022 to advance to the Stage 1
Exploration phase. Stage 1 Exploration phase comprise an
expenditure budget requirement of A$1.25 million within the
next 3 years for OMM to earn a 51% interest in the 701 Mile
Manganese Joint Venture.
The proposed initial Stage 1 RC drill program is intended to infill
and extend the mineralised areas of interest. The Plan of Works
(“PoW”) to extend the project area has been approved by the
Department of Mines, Industry Regulation and Safety (DMIRS)
and a request for further Heritage Clearance was submitted in
September 2022 and is scheduled for March 2023.
Figure 7. Proposed Initial 70-hole RC drill program
Weelarrana Project Area
E52/3892 is a 100% Exploration Licence owned by OMM located approximately 5km to the west of the 701 Mile Manganese Project
area. The Exploration Licence was granted in September 2021 has since been trimmed to 30 blocks.
Geological mapping has commenced, and a 90 square kilometre high resolution image and Lidar aerial survey was completed in
May 2022. A PoW for the proposed initial RC drill program was submitted to the DMIRS in August 2022 and approved in November
2022, and a request for Heritage Clearance of the proposed drill area and access track was submitted in September 2022 and is
pending approval.
Competent Person Statement
The information in this announcement that relates to Exploration Results and Mineral Resource estimation is based on
information compiled by Mr Craig Reddell, who is a Member of the Australian Institute of Geoscientists. Craig Reddell is an
employee of OM (Manganese) Ltd. Craig Reddell has sufficient experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity which is undertaken to qualify as a Competent Person as defined
in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.
Craig Reddell consents to the inclusion in this report of the matters based on information in the form and context in which
it appears.
23
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 TSHIPI É NTLE MANGANESE MINING PROPRIETARY LTD
(“TSHIPI”)
Tshipi Project Location
TSHIPI EXPORTS TOTALLED
3,333,767 tonnes
2022
• 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
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.
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 2022, Tshipi Borwa Mine has a total Mineral Resource Estimation of circa 423 million tonnes in
accordance with JORC Code (2012). In 2022, Tshipi exported a total of 3,333,767 tonnes of manganese ore.
Tshipi Ownership Structure
OM Holdings Limited
100%
OMH Mauritius Corp
26%
Ntsimbintle Holdings
Proprietary Limited
74%
Jupiter Mines Limited
49.9%
Ntsimbintle Mining
Proprietary Limited
50.1%
Tshipi é Ntle Manganese
Mining Proprietary Limited
Tshipi Borwa Mine
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 multi-purpose terminal, including Coega; (ii) the Saldanha multi-
purpose terminal; (iii) the Luderitz port in Namibia; or (iv) the Durban Bulk Connections terminal.
24
OM HOLDINGS LIMITED | ANNUAL REPORT 2022 ASX LISTING RULES 5.8.1 &
5.9.1 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 30° 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 TSF1, TSF2 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
of 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
25
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, TSF2 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 2022 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.
26
OM HOLDINGS LIMITED | ANNUAL REPORT 2022ASX LISTING RULES 5.8.1 & 5.9.1 SUMMARY INFORMATION 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 2022 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.
27
OM HOLDINGS LIMITED | ANNUAL REPORT 2022ASX LISTING RULES 5.8.1 & 5.9.1 SUMMARY INFORMATION 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).
28
OM HOLDINGS LIMITED | ANNUAL REPORT 2022ASX LISTING RULES 5.8.1 & 5.9.1 SUMMARY INFORMATION 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
•
There was no exploration or resource delineation drilling undertaken in 2022.
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
the 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 2023.
29
OM HOLDINGS LIMITED | ANNUAL REPORT 2022ASX LISTING RULES 5.8.1 & 5.9.1 SUMMARY INFORMATION
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
30
OM HOLDINGS LIMITED | ANNUAL REPORT 2022ASX LISTING RULES 5.8.1 & 5.9.1 SUMMARY INFORMATION
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 2022 and reported above
a cut-off grade of 15% Mn.
There was no mining activity in 2022.
•
Moisture
• All tonnage is estimated on a dry tonne’s basis.
Cut-off parameters
Mining factors or
assumptions
Metallurgical factors
and assumptions
•
•
•
•
•
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
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.
• 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, TSF2 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.
31
OM HOLDINGS LIMITED | ANNUAL REPORT 2022ASX LISTING RULES 5.8.1 & 5.9.1 SUMMARY INFORMATION Criteria
Explanation
Environmental factors
or assumptions
Bulk Density
Classification
• 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.
• 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 2022 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.
32
OM HOLDINGS LIMITED | ANNUAL REPORT 2022ASX LISTING RULES 5.8.1 & 5.9.1 SUMMARY INFORMATION
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
33
OM HOLDINGS LIMITED | ANNUAL REPORT 2022ASX LISTING RULES 5.8.1 & 5.9.1 SUMMARY INFORMATION
SUSTAINABILITY STATEMENT
CONTENTS
ABOUT THIS REPORT
SUSTAINABILITY GOVERNANCE
SUSTAINABLE GOALS LEAD THE WAY
SUSTAINABLE ECONOMIC GROWTH
Our Solutions Shape the Future
ENTERING A GOLDEN AGE OF COMMODITIES
RESPONSIBLE SUPPLY CHAIN
Building Tomorrow's Supply Chain
FOCUS ON ETHICS AND COMPLIANCE
Corruption
Anti-Bribery and Corruption Committee
Political Contributions
GRIEVANCE MECHANISMS
Whistleblowing
MANAGING SUSTAINABILITY RISK
Climate Scenario Analysis
Risks & Opportunities
ENVIRONMENT
ENVIRONMENTAL POLICY
ENVIRONMENTAL MANAGEMENT SYSTEM
USING LIFECYCLE ANALYSIS TO ADDRESS ENVIRONMENTAL CONCERNS
CLIMATE CHANGE MANAGEMENT
The Importance of Steel in a Zero-Emission Society
Emissions Management
RAW MATERIALS (CIRCULARITY MEASURES)
ENERGY MANAGEMENT AND CONSUMPTION
BIODIVERSITY
WASTE MANAGEMENT
WATER MANAGEMENT & EFFLUENTS MANAGEMENT
LAND REMEDIATION, CONTAMINATION OR DEGRADATION
SOCIETY
COMMUNITY RELATIONS
TACKLING FOOD SYSTEM WASTE
SUPPORTING LOCAL ENTREPRENEURS
SPONSORSHIP FOR BINTULU SINGLE MOTHER ASSOCIATION
FIRE EXTINGUISHERS SPONSORSHIP
COMMUNITY GIVING
OUR PEOPLE
A DIVERSE AND EQUITABLE ORGANISATION
Gender Diversity
INVESTING IN TALENT
Helping Our Employees Level Up
Internship and Career Exposure Opportunities
ENGAGING EMPLOYEES
FAIR REMUNERATION AND BENEFITS
HEALTH AND SAFETY
Occupational Health And Safety Management Systems
Health and Safety Compliance
Health And Safety Governance
Safety Training
Safety Performance
Collaboration, Engagement and Other Safety Initiatives
HUMAN RIGHTS
OPERATING RESPONSIBLY
PRODUCT SAFETY
PRODUCT QUALITY
CYBERSECURITY AND DATA PRIVACY
GROUP SUSTAINABILITY PERFORMANCE DATA
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT ABOUT THIS REPORT
Scope & Boundary
This annual Sustainability Statement (“Statement”) outlines a consolidation of OMH’s Economic, Environmental, Social and
Governance (“EESG”) information for the financial year 2022 (“FY2022”) from 1 January to 31 December 2022. It is a progression for
the Company in its corporate reporting and strengthening of its reporting transparency.
Unless stated otherwise, the Statement covers the major subsidiaries of OMH, including OM (Manganese) Ltd. (“OMM”) – Australia,
OM Materials (S) Pte. Ltd. (“OMS”) – Singapore and OM Materials (Sarawak) Sdn. Bhd. (“OM Sarawak”) - Malaysia. Please refer to the
Corporate Structure section in this Annual Report for more detailed information on OMH’s subsidiaries and the Group’s primary
business streams.
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
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.
OM (Manganese) Ltd. (“OMM”) -
Australia
OMM owns 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 ceased
mining operations in December 2021.
Reporting Framework
OMH aligned this Statement with the Bursa Malaysia Sustainability Reporting Guide (3rd Edition) and the Global Reporting Initiative
(“GRI”) Universal Standard (Core Option). The Company has also considered other sustainability guidelines and principles, such as the
United Nations Sustainable Development Goals (“UNSDGs”) and Task Force on Climate-Related Financial Disclosures (“TCFD”), while
preparing this Statement.
This Statement complies with Bursa Malaysia Securities Berhad Listing Requirements. Meanwhile, unless stated otherwise, the
Corporate Governance Statement outlines governance practices for FY2022 in compliance with the ASX Corporate Governance Council
recommendations.
References to ‘OMH’, ‘the Group’, ‘the Company’ and ‘the Organisation’ refer to OMH or its operating companies.
The Group Sustainability Committee reviewed the accuracy of this Sustainability Statement content before presenting it to the Board
for approval.
External Assurance
BSI Services Malaysia was engaged to provide an independent verification of the Greenhouse Gas (“GHG”) emissions calculations in
FY2022 for OM Sarawak in accordance with ISO 14064-1:2018 and the principles of ISO 14065. The scope of verifications included:
•
•
•
Category 1 – Direct emissions: fuel consumption and industrial process
Category 2 – Imported electricity
Category 3 – Employees commuting
Feedback
OMH welcomes stakeholder support and feedback for improvements as it progresses on its sustainability journey. Please direct queries
and comments to investor.relations@ommaterials.com
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT Stakeholder Engagement
OMH’s stakeholders are individuals and groups impacted by its business practices and those influencing its business decisions. We
understand that stakeholders are essential to the Group’s long-term success. We have continuously engaged relevant stakeholder
groups, keeping them apprised and obtaining feedback on their priorities. By understanding their concerns and expectations, we can
prioritise more effectively as we develop strategies to create value for our stakeholders.
We conducted a stakeholder identification and prioritisation exercise as part of our inaugural materiality assessment process. We
engaged internal and external stakeholders to identify OMH’s material Economic, Environmental and Social (“EES”) topics. The following
table summarises OMH’s engagement with these key stakeholders.
Legend for engagement frequency
Annually
Semi-annually
Quarterly
Ongoing
As needed
Key
Stakeholders
Methods of Engagement &
Frequency of Engagement
Board of
Directors and
Employees
Board meetings
Meetings and briefings
Employee performance
appraisals
Training and development
Team building and activities
Townhall sessions
Areas of Interest
Link to Material Matter
• Group’s performance, direction, and
strategy
• Corporate governance
• Occupational health and safety
•
• Workplace and accommodation
Training 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
Customers
Regular communication via
telephone and emails
Ad-hoc visits
• Maintaining customer relationships
• Potential collaborations
• Quality of products supplied
• Compliance
•
• Business ethics
Economic performance
• Product quality and
safety
Suppliers
Supplier surveys
Regular communications via
telephone and emails
Ad-hoc visits
Financial
Communities
Financial statements
ASX and Bursa Malaysia
announcements
Compliance reporting
Annual reports
Company presentations
Annual General Meeting
Annual reports
Company presentations
ASX and Bursa Malaysia
announcements
Analyst and retail briefings
Investors /
Investment
Community
• Maintaining supplier relationships
• Potential collaborations
• Quality of products procured
•
Supply chain
management
• Business and financial performance
•
•
Future prospects and plans
Environmental, Social and
Governance (“ESG”) and sustainability
matters
• Business and financial performance
•
•
Future prospects and plans
ESG and sustainability matters
Economic performance
Energy and emissions
•
•
• Waste management
• Water and effluents
Land remediation,
•
contamination or
degradation
Economic performance
Energy and emissions
•
•
• Waste management
• Water and effluents
Land remediation,
•
contamination or
degradation
• Occupational health and
safety
• Community development
• Human rights
• Waste management
Local
Communities
Regular community projects
Annual back to school
programmes
Sponsorships and donations
• Community development
•
•
Employment opportunities
Environmental preservation
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JV Partners
Regular communications via
• Maintaining partnerships
•
Economic performance
telephone and emails
ASX and Bursa Malaysia
announcements
Internal Board meetings
Joint venture reporting and
meetings
OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT
Materiality Matrix
In 2021, OMH conducted a comprehensive materiality assessment. The Group identified 13 material matters for generating its first
materiality matrix. This matrix focused on the most critical sustainability topics for stakeholders and operations. It focused on topics
that potentially affect or affected OMH’s business. An external advisor conducted an extensive data study of the emerging industry
trends, comparing them against the material issues of OMH’s main peers, customers and suppliers.
OMH’s senior management team and the OMH Board validated and approved the matrix. This year, we reviewed the matrix and found
it still relevant. It serves as a guide for shaping the Company’s future sustainability priorities, initiatives and strategies.
Primarily, OMH’s work related to sustainability focuses on the following four goals:
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
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT The Value Creation Model provides a holistic overview on how OMH deploys its capital resources, connecting the purpose and strategies
of the Company, and the value creation process across relevant capitals, outcomes and impacts.
RESOURCE INPUTS
VISION, STRATEGY, VALUES,
SUSTAINABILITY TARGETS
FINANCIAL CAPITAL:
Appropriate cash, equity and debt levels for organic
growth
•
•
• Debt: US$254.7m
Share Capital: US$32.0m
Equity: US$399.7m
INTELLECTUAL CAPITAL
• More than two decades of know-how in the
manganese ore and ferroalloy industry
• Continuous innovation and improvements
through internal processes, maintenance,
systems and controls
MANUFACTURING & SUPPLY CHAIN CAPITAL
• Owns and operates a ferroalloy and silicon metal
smelter complex in Sarawak, Malaysia, the core
asset of the Group.
Supplies manganese ore to China, and
ferroalloys to over 10 countries
•
HUMAN CAPITAL
• Over 553 talents hired across the Group
• By Geography
Malaysia
98.0%
China
0.7%
Singapore
1.1%
Australia
0.2%
PURPOSE & STRATEGY
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
S a f e t y
d
n
e ll b
a
W
g
e i n
C
a
r
ea
R
n
d
e
s
p
e
c
t
C
o
l
l
a
b
o
r
a
t
i
o
n
GLOBAL
VALUES
Innovation and
Entrepreneurial
Innovation and
Entrepreneurial
y
d
bilit
n
y a
a
rit
t
n
g
u
e
o
t
n
c
c
I
A
STRATEGIC OBJECTIVES
SOCIAL & RELATIONSHIP CAPITAL
Strive to deliver stable margins
• Over 600 suppliers engaged
• Diversified customer base
• Community engagement
• Collaboration with local universities
•
Industry and government participation
NATURAL CAPITAL
Electricity: 7.8 million GJ
•
• Water: 1.32 million m3
Grow as a sustainable ferroalloy producer to the
world’s steelmakers
Continue to optimize the capital structure by
balancing total debt and sustainable dividends
Strive to achieve highest purity grade for silicon
metal to diversify into the polysilicon industry
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT OUTPUTS
OUTCOME
PRODUCTION
Ferrosilicon: 140,355 tonnes
•
• Manganese alloy: 216,813 tonnes
Europe
6.1%
Middle East
2.7%
Africa
0.1%
America
13.7%
SALES
1,447,897
tonnes of ores
and alloys
traded globally
DIRECT ECONOMIC VALUE CREATED &
DISTRIBUTED TO STAKEHOLDERS
Direct Economic Value Generated:
Revenue: US$856.6m
Economic Value Distributed:
• Operating Costs (excluding employee wages and
benefits) : US$697.0m
•
Employee wages and benefits: US$47.7m
• Payments to providers of capital: US$28.6m
•
• Donations to and sponsor of local activities: US$17k
Taxes paid: US$6.6m
Economic Value Retained:
US$ 76.7m
SUSTAINABLE OFFERING
Asia
Pacific
77.4%
•
Ferroalloys produced have lower GHG emissions
as a result of lower Scope 2 emissions
EMISSIONS AND WASTE
Emissions into the air: 1,187.2 kilotonnes of CO2-eq
•
•
Solid Waste: 0.35 kilo tonnes
• Hazardous Waste: 151 kilo tonnes
Scheduled Waste: 18.1 kilo tonnes
•
• Recycled Waste: 157.8 kilo tonnes
HIGH SOCIO-ECONOMIC RETURN
• RM73 million per month contributed to Sarawak
economy in FY2022 through purchases of raw
materials, goods and services
SUSTAINABLE OPERATIONS
•
Smelter complex powered predominantly by
hydropower
• Continuous optimization of smelter processes
resulting in less than 1% of unscheduled
downtime in FY2022 over total operational hours
RESPONSIBLE PARTNER
• A safe, healthy and diverse work environment
for OMH’s employees and contractors
• Opportunities for competence and career
•
development for employees
Long-term contracts and relationships with
suppliers
• Creation of local employment through own
operations and local sourcing
Local sponsorships and internships
•
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT SUSTAINABILITY GOVERNANCE
OMH’s highest governance level, the Board of Directors (“Board”),
oversees the development and adoption of sustainability
strategies and related policies. The Sustainability Management
Committee sets out the execution plans and oversees the
implementation of strategies approved by the Board.
Establishing working groups at each material subsidiary helps
manage the business’s environmental, social and governance
aspects, explicitly focusing on delivering and implementing
the respective strategies and initiatives. These working groups
comprise relevant representatives from the material subsidiaries
and relevant departments. A dedicated Environmental Regulatory
Compliance Monitoring Committee
Environmental
Performance Monitoring Committee monitor the implementation
and effectiveness of environmental policies and formulate
additional implementation if necessary.
and
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
SUSTAINABLE GOALS LEAD THE WAY
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.
UN Sustainable Development Goals reflect three dimensions:
• Climate and environment
• Economy
• Social conditions
The Sustainable Development Goals adopted by all United Nations member
states provide a shared blueprint for people and the planet to eliminate
poverty, fight inequality and stop climate change before 2030.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT OMH’s work relating to sustainability focuses on the following four goals:
OMH practices advocate an excellent ethical framework, emphasising health and safety for employees, supply chain
partners and all other workers and contractors. Our employment practices protects human rights, the environment
and other determined requirements. Together, we deliver inclusive and sustainable economic growth.
OMH contributes to this goal by supplying manganese ores and ferroalloys, essential components required in the
manufacturing of high quality steel required for infrastructure and new industrial operations. OMH also contributes
to economic growth based on sustainable industrialisation through research and development to continuously
create cleaner and environmentally-friendly production technologies. Steadily upgrading infrastructure meets
future sustainability challenges. Innovation and prioritising science and technology are requirements for sustainable
industrialisation and economic growth.
OMH continues to invest in research and development, continuous improvement and reducing resource consumption
and emissions. Responsible consumption and production involve doing more with less: reducing resource use,
avoiding climatic emissions and limiting adverse environmental effects while creating economic growth.
OMH increases energy utilisation by optimising its process performances and operational activities by exploring
energy recovery and utilisation solutions.
OMH Short-term Sustainability Targets
Economic
Environmental
Social
Supply Chain Management
Energy & Emissions
Occupational Health & Safety
•
•
Extend current Supplier
Performance Evaluations
by 90% of suppliers
Establish 1 Local Vendor
Programme
• Achieve ISO 14001 (Environmental
Management System) in FY2023
Enhance Air Pollution Control
System performance
•
• Commit to Zero Workplace Fatality
Cases
• Achieve ISO 45001 (Occupational
Health & Safety Management
System) in FY2023
Waste Management
Talent Management
• Repurpose at least 80% of
scheduled waste generated by
FY2030
•
•
•
To provide internship opportunities
for at least 5 students from local
universities or collages
To complete a minimum of 700
manhours of training under
the Management Development
Programme
To ensure that a minimum of 80%
of employees receive at least one
performance review a year
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT
Material Topics
Major Targets set in 2022
Progress
Supply Chain Management
Prepare and send Suppliers a Code of
Conduct
Audit 5 suppliers for quality control, child
or forced labour, workplace health & safety,
conditions at work and dormitory
Occupational Health & Safety
Commit to Zero Workplace Fatality Cases
OM Sarawak distributed its Supplier
Code of Conduct, which 34% out of
294 eligible suppliers acknowledged
Due to travel restrictions, OM
Sarawak has opted for an
assessment conducted through
a questionnaire sent via email
to suppliers. Six key suppliers
responding to the Supplier Code of
Conduct Questionnaire.
Zero workplace fatality reported in
FY2022 for the Group
Achieve ISO 45001 (Occupational Health &
Safety Management System) in FY2023
Ongoing work in progress
Talent Management
Energy & Emissions
60 local employees trained to replace foreign
staff at OM Sarawak
A total of 72 local employees were
trained to replace foreign staff
Comply with Malaysian Ambient Air Quality
Guideline (“MAAAQG”)
OM Sarawak complies with MAAAQG
Waste Management
Water & Effluents
Achieve ISO 14001 (Environmental
Management System) in FY2023
Ongoing work in progress
Complete tapping de-duster pilot plant trials
by 1H 2023
Ongoing work in progress
Repurpose at least 80% of scheduled waste
generated each year
In 2022, 93% scheduled waste was
recycled
Ensure effluent water monitoring
parameters are within the permissible limits
Complied. Weekly inspection of
sedimentation pond with sample
collected and analysed on a monthly
basis to establish trend line for
better modelling
SUSTAINABLE ECONOMIC GROWTH
OMH faces the future with ambitions of further growth and increased value creation, which will benefit customers, owners and
employees and respond to the demands for a greener future.
OMH is proud to be one of the most efficient manganese and silicon companies in the region in terms of economic competitiveness and
climate and environmental standing, a position acquired through years of systematic knowledge building, targeted investments and
continuous organisational development. This work is ongoing as all operations set, and work towards, new ambitious improvement
goals in technology and working methods.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT
OUR SOLUTIONS SHAPE THE FUTURE
Our flagship smelter in Sarawak produces ferrosilicon and manganese alloys, additives essential to steelmaking and other industrial
applications. There are no substitutes for these ferroalloys and they are required to produce the most basic steel products – a vital
element for transitioning to a low-carbon economy and support sustainable solutions globally. Our operations contribute significantly
to Sarawak’s economy through considerable expenditures and investments.
HIGH SOCIO-ECONOMIC RETURN
RM73 million per month
contributed to
Sarawak economy in FY2022
Medical,
Insurance,
Security & Welfare
Raw Materials
Consumables
- Hardware, PPE
Stationery,
Uniforms, IT
Crushing &
Logistics
- Imports &
Exports
Salaries
Utilities
- Electricity,
Water,
Internet, etc
Food,
Accommodation,
Transportation,
Rental of
Equipment
Legal &
Professional,
Training
Plant &
Infrastructure
Maintenance
RM 73
Million
Mining & Exploration
Marketing & Trading
• Manganese is one of the world’s most commonly used
industrial metals, with no available substitutes. The Group
previously mined manganese ore from its wholly-owned
Bootu Creek mine in Australia, which ceased production
in December 2021. OMH has a 13% interest in the Tshipi
Borwa mine in South Africa through a strategic partnership
local partner. The Group undertakes various
with a
exploration projects to secure a long-term material pipeline
for its customers and smelters.
• With origins
in marketing and distributing ores and
ferroalloys, the Group has retained its extensive distribution
network and edge in connecting raw materials with buyers
and users. Based in Singapore, the division is active in ore
and ferroalloy markets and leverages economies of scale
of the Group’s operations to streamline raw material
procurement and product sales. The division also operates
in China, distributing manganese ore domestically since
1994.
Smelting & Sintering
Investments
•
Smelting converts raw ores mined from the ground into
semi-finished alloys used in various industrial applications.
Sintering is the process of heating and fusing powdered ore
into higher-grade, semi-processed ores. The Group owns
and operates two smelting plants in Samalaju (Sarawak,
Malaysia) and Qinzhou (Guangxi, China). The flagship
ferrosilicon,
smelter complex
silicomanganese
ferromanganese,
while the smelter
in Qinzhou produces high-carbon
ferromanganese and sintered ore. Production at the
Qinzhou plant ceased in December 2021 due to high power
tariffs in China.
in Samalaju produces
and high-carbon
• We constantly evaluate opportunities on the horizon to
expand our resource base and build a pipeline of quality
materials, from investments in greenfield projects to farm-
in partnerships with proven resource companies. Our long
history and experience influences our investment strategy
in marketing ores and ferroalloys. We only invest in assets
that produce products we can price and market effectively.
In addition, exports help develop the nation. Exports facilitate international trade and stimulate domestic economic activity by creating
employment, production and revenues. OM Sarawak exports approximately 90% of its products to Japan, South Korea, Taiwan and
South East Asia.
Today, the Group supplies manganese ore, manganese alloys and ferrosilicon and seeks to be the leading ferroalloy supply partner to
distributors and major steel mills globally. We supply products from our Asia-Pacific base to customers worldwide through our global
trading network.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT OMH attributes its success to decades of continuous focus on talent development, improvement, change, harvesting the benefits of
economies of scale and increased process efficiencies, from purchasing raw materials through to production to selling of finished
products.
We minimise the adverse impacts of our activities by building partnerships to support sustainable development and growth. OMH is a
member of the International Manganese Institute (“IMnI”), which facilitates transformative change in the manganese industry through
collaborative efforts with industry peers.
What is steel made from? Many people know that steel is made of iron, but fewer realise it contains manganese and silicon. Although the
amount of manganese and silicon used to create a tonne of steel is minimal (approximately 3 to 4 kilograms per tonne of regular carbon
steel), it is just as essential as iron to produce this fundamental building block of modern industrial societies. Simply put, you can’t make
steel without manganese and silicon.
ENTERING A GOLDEN AGE OF COMMODITIES
Eco-friendly OMH is one of the world’s lowest-quartile ferroalloy smelting operators. Economic recovery and a structural supply
disruption caused by global decarbonisation have created significant demand. These conditions place OMH as a prime beneficiary of
the commodities supercycle.
Aluminium, silicone, semiconductor and solar applications consume silicon as silicon metal. Primarily consumed by the aluminium and
silicones sectors, the consumption growth of silicon metal is anticipated to grow with a surge in demand from the solar industry. We
aim to produce the highest grade possible for silicon metal, as higher purity levels result in higher profit margins.
Energy costs account for a substantial share of smelting costs. Silicon metal production requires twice as much energy as ferrosilicon
production. OM Sarawak’s access to clean and renewable energy contracted at fixed prices over a 20-year Power Purchase Agreement
(valid until 2033) strengthens the average long-term margins compared to other producers. Access to clean, renewable and competitive
energy also lowers the smelter’s total carbon footprint compared to our peers.
WHAT’S IN THE PIPELINE
OMH plans to expand its future manganese alloy production capacity. This year, the Group is progressing with plans to extend
its existing product range to produce silicon metal to diversify into applications for electronic, chemical and solar industries. The
OMH Development Plan 2022 & Beyond involves:
Converting two of four idling FeSi furnaces to produce manganese alloy
Converting the remaining two FeSi furnaces to produce silicon metal 30ktpa
Building two new 33MVA manganese alloy furnaces
Maintaining existing core products for the steel industry with diversification into electronic, chemical and solar industries
Metals for today and tomorrow
Ferroalloys
Silicon Metal
TODAY
TOMORROW
• First quartile cost
producer
• Large demand
base
• Hydropower
green credentials
• Solar a key renewable, fully
dependent on the supply of
silicon metal
• Supply security concerns
Supplying
Supplying
Steel Mills + Foundries
Polysilicon + Silicone + Aluminum Plants
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT RESPONSIBLE SUPPLY CHAIN
OM Sarawak has standard operating procedures for annual performance evaluations for spare parts, auxiliary and service providers.
The review covers five criteria: Price, Delivery, Quality, Technical and Responsiveness. We perform performance evaluations for raw
material suppliers at OMS, our Singapore subsidiary, which handles the Group’s overall product and trade flow.
Considerations of Our Risk-Based Responsible Sourcing Strategy
The production and sourcing
of metals and minerals
The procurement of goods
and services
We support our sustainable operations by incorporating social, ethical and environmental considerations in relationships with our
suppliers and customers. We are committed to understanding and addressing the risk of human rights violations, environmental
impacts and other concerns in our supply chain.
Risk-based due diligence, part of our responsible sourcing approach, identifies and assesses risks relating to Conflict-Affected and
High-Risk Areas (“CAHRAs”). We take a collaborative approach to managing and mitigating risk to the identified human rights risks
within our supply chain.
Since 2018, all raw material suppliers must provide a Declaration Letter of Compliance concerning the employment of sustainable
practices and the non-employment of child and forced labour.
Due to travel restrictions imposed by some governments due to COVID-19, OM Sarawak has opted for an assessment conducted
through a questionnaire sent via email to suppliers.
Topics in Supplier Code of Conduct Self-Assessment Questionnaire
Business
Integrity &
Ethics
Child Labour
and Young
Workers
Non-
discrimination
Wages &
Benefits
Harassment
and Abuse
Freedom of
Association
& Collective
Bargaining
Forced Labour
Dormitories
Environmental
Protection
Health &
Safety
Currently, OM Sarawak is incorporating ISO 14001 and ISO 45001 requirements in the Supplier Code of Conduct. The Group has
appointed consultants and aims to be certified with these standards by December 2023.
In FY2022, 34% out of 294 eligible suppliers signed the Supplier Code of Conduct declaration, with six key suppliers responding to the
Supplier Code of Conduct Questionnaire. OMH has not disqualified any suppliers due to ethical and human rights violations.
OMH prioritises procuring goods and services from local suppliers whenever possible to support the local economy. Auxiliary materials
suppliers and service providers are primarily domestic. In FY2022, we engaged 526 suppliers, of which approximately 94% were local.
However, given the highly specialised nature of ferroalloy production, specific feedstock, such as ore or metallurgical coke, are only
available in particular geographies. As such, bulk raw materials are often purchased from foreign suppliers as they are unavailable
locally.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT As at 31 December 2022, the Group has 526 suppliers for its production entities, providing raw materials, energy, goods, services and
logistics. OMH monitors supplier and purchasing information for all production entities.
Company
No. of Suppliers
Supplier Location (%)
Purchase Location (%)
OMM (Australia)
OM Sarawak (Malaysia)
OMQ (China)
130
353
43
Building Tomorrow’s Supply Chain
Local
100%
91%
98%
Foreign
-
9%
2%
Local
100%
8%
73%
Foreign
-
92%
27%
The COVID-19 pandemic was not the first disruption to the supply chain, and the recent crisis between Russia and Ukraine makes
it clear that it won’t be the last either. Tensions between Russia and Ukraine, the trade conflict between China and the US, and the
ongoing pressure on supply chains will cause an imbalance between supply and demand, as well as rising inflation and stagnation of
the economy.
OMH introduced a contingency plan in FY2022, increasing its safety stock to sustain supply chains during unforeseen events as part of
its risk management strategy. During the year, OMH enhanced its relationships with second-tier suppliers, as relying on one supplier
for a critical resource can be disastrous.
FOCUS ON ETHICS AND COMPLIANCE
OMH relies on employees and business partners to know and follow the ethical, legal and policy requirements specific to their jobs
and report any suspected violations of the law or the Group’s Code of Conduct. The Company creates a working environment where
everyone is empowered to speak up and perform to the highest standards. This empowerment is instrumental in consistently delivering
excellence to stakeholders while complying with relevant laws and regulations.
OMH’s Code of Conduct details its standards and legal responsibilities and guides expected behaviours. It covers various topics such
as business ethics, conflicts of interest, fair competition, sustainability, human rights and community care. Business partners sign an
acknowledgement to the Code of Conduct before entering an agreement.
OM Sarawak issued an Anti-Bribery and Anti-Corruption Policy in FY2022 to seek to keep the Company:
•
•
Corruption and bribery-free
In compliance with all applicable laws and regulations in Malaysia, including the Malaysian Anti-Corruption Commission Act
2009, the Companies Act 2006 and the Penal Code
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT Corruption
OMH is committed to conducting its operations and business affairs ethically, complying with all applicable laws and regulations, and
has zero tolerance towards bribery and corruption.
OMH Anti-Bribery and Corruption Standard sets personnel’s responsibilities, including dealing with and through third parties.
Protecting
personnel seeking
to comply with
this standard
Deals with false
reports
Investigations
Consequences for
breaches
Examples of
improper conduct
(including red
flags)
Contact with
government
officials
Donations,
noncash gifts
and corporate
hospitality
Political and
charitable
contributions and
sponsorships
Facilitation
payments
Secret
commissions
Money
laundering
OMH - ANTI-BRIBERY AND CORRUPTION STANDARD
OM Sarawak introduced a new anti-corruption policy in FY2022 which is consistent with the Malaysian Anti-Corruption Commission
(MACC) guidelines. This policy reinforces OM Sarawak’s position on bribery and corruption, gifts, entertainment, corporate hospitality,
facilitation payments and dealing with suppliers, business partners and public officials.
The policy applies to all employees at all levels. Employees must read, understand and comply with the policy at all times during work,
outside work and in their personal lives. This policy also applies to business associates and all parties who have dealings with the
company.
Responsibilities of Employees and Business Associates
Employees
Business Associates
• Read and comply with the policy, seeking guidance for
• Must act in a way that is consistent with the policy at all
any unclear matters
• Attend mandated anti-bribery and corruption training
• Report any suspected violations of laws through the
•
whistleblowing hotline
The Managing Director, Board and Department Heads
must familiarise themselves with the policy and ensure
it is available and adhered to by all employees
times
• Acknowledge and agree to read and comply with the
•
policy as part of their contractual agreements
Sign a declaration form to abide by the terms of the
policy
• Report any suspected violations of laws through the
whistleblowing hotline
The policy also lists some red flags: unusual payments, bypassing the usual process, unusual behaviour, illogical decision-making, no
checks and balances and non-beneficial contracts.
OM Sarawak delivered anti-bribery and corruption training to its employees in FY2022. Over 80% of middle and senior management
completed this training, which covered what constitutes bribery and provided information about improper practices and likely risk
areas.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT ANTI-BRIBERY AND CORRUPTION COMMITTEE
MANAGING SUSTAINABILITY RISK
The Company has formalised its approach to risk in its Policy
for Risk Management. This policy aims to mitigate ESG risks,
including sustainability risks from the environment, human
capital, sustainability, occupational health and safety, and ethical
conduct.
OMH considers the reasonable expectations of stakeholders,
particularly to preserve the business’s reputation and success.
The Company’s risk management system is evolving. It is an
ongoing process and will will grow to commensurate with the
development and growth of the Company’s activities.
OMH – POLICY FOR RISK MANAGEMENT
Climate Scenario Analysis
OMH performs climate scenario analysis using the World Bank’s
Climate Change Knowledge Portal, with reference, particularly to
the Third Biennial Update Report (2020) and Malaysia Climate Risk
Country Profile. Malaysia has diverse climate conditions across
its regions, with Peninsular Malaysia differing from East Malaysia
due to the influence of maritime weather. This analysis focuses
solely on Sarawak, where the Company’s primary smelting asset
is located. The reliability and sustainability of an electricity supply
are critical to ensure production continuity for our smelting
operations.
Sarawak is located along the northwest coast of Borneo, covering
an area of 124,449.51 square kilometres. According to the
analysis, Sarawak’s average annual temperature and rainfall
will increase from 2021 to 2030. A preliminary assessment also
indicated Sarawak may be experiencing a rise in sea level by 2030
and 2050.
Projected Average Annual Temperature and Average Annual Rainfall
for Regions in Sarawak
Parameter
Average Annual
Temperature
Observed
(1970 - 2000)
24.8 – 26.2°C
Average Annual
Rainfall
3551 – 3907
mm
Projected for
2030
Projected for
2050
25.6 – 26.8°C
(0.6 to 0.8°C
increase)
3597 – 4144
mm
(1 to 6 %
increase)
26.4 – 27.5°C
(1.3 to 1.6 °C
increase)
3574 – 4124
mm
(1 to 5 %
increase)
Observed and Projected Climate Change and Sea Level Rise
Parameter
Observed Rate
(1993 - 2010)
Projected for
2030
Projected for
2050
Sea Level Rise
3.82 – 5.11
mm/year
0.04 – 0.12m
0.15 – 0.22 m
OM Sarawak is planning to establish an Anti-Bribery and
Corruption Committee (“ABCC”) to monitor, review, communicate,
implement and enforce the Anti-Bribery and Corruption
policy. The ABCC will comprise personnel with the appropriate
qualifications, skills, authority, independence, competencies and
experience.
The ABCC will aim to conduct operations risk assessments
periodically in the form of a due diligence audit. This audit will
cover all areas of operations, identifying risk areas in internal
processes, dubious financial transactions and adherence to
processes and procedures regulating OM Sarawak’s dealings
with business associates and third parties. The ABCC will deliver
regular training and communication to employees.
The ABCC will provide information, guidance and advice on all
anti-bribery and corruption issues. It will also be responsible for
consistently monitoring, measuring, analysing and evaluating
the anti-bribery and compliance programme, providing regular
reports to the Board on effectiveness, performance and
enforcement.
Political Contributions
Often considered bribes in disguise, OM Sarawak does not
donate to political parties locally or overseas. OM Sarawak always
avoid political affiliations and controversies. For as long as OM
Sarawak employs them, employees should also not make political
donations in a personal capacity.
GRIEVANCE MECHANISMS
All operations have
legitimate, accessible, predictable and
transparent grievance processes that follow the effectiveness
criteria of the United Nations Guiding Principles (“UNGP”).
These processes encourage employees and stakeholders to
raise concerns without fear of recrimination. We are committed
to investigating all matters in a manner that respects the
complainant’s rights.
induction. Displaying posters
OMH briefs all new employees on the Group’s Grievance Policy,
including during
in multiple
languages (English, Mandarin and Malay) in offices and plant
buildings raises employees’ and contractors’ awareness of the
grievance mechanism. OMH resolved all of the 32 cases received
in FY2022.
Whistleblowing
OMH is committed to delivering outstanding performance for
shareholders and employees and aspires to be the leader in
its field while operating openly, with honesty, integrity and
responsibility and maintaining a strong sense of corporate social
responsibility. In defending its corporate social responsibility,
OMH conducts business ethically and according to its values,
encourages community initiatives, considers the environment
and provides a safe, equal and supportive workplace.
We rely on and encourage our employees, officers and contractors
to speak up about any unlawful, improper or unethical conduct
within our organisation. OMH adopted a comprehensive
Whistleblowing Standard to provide a safe and confidential
environment where whistleblowers can raise concerns without
fear of reprisal or detrimental treatment.
This policy covers who is eligible for making a disclosure and
matters protected. It also contains a detailed process for reporting
breaches and types of protection accorded to the whistleblowers
against victimisation.
OMH – WHISTLEBLOWER PROTECTION STANDARD
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT Projected Average Annual Temperature and Average Annual Rainfall for the Regions in Malaysia
Northern Sarawak
Average Annual Air
Temperature:
Historical: 25.3 °C
2023: 26.1 °C (+3.1%)
2050: 26.9 °C (+6.0%)
Average Annual Rainfall:
Historical: 3538 mm
2030: 3628 mm (+2.6%)
2050: 3574 mm (+1.0%)
Southern Sarawak
Average Annual Air
Temperature:
Historical: 26.2 °C
2030: 26.8 °C (+2.6%)
2050: 27.5 °C (+5.3%)
Average Annual Rainfall:
Historical: 3907 mm
2030: 4144 mm (+6.1%)
2050: 4124 mm (+5.5%)
Risks & Opportunities
Central Sarawak
Average Annual Air
Temperature:
Historical: 24.8 °C
2030: 25.6 °C (+3.4%)
2050: 26.4 °C (+6.3%)
Average Annual Rainfall:
Historical: 3551 mm
2030: 3597 mm (+1.3%)
2050: 3578 mm (+0.8%)
Based on the climate scenario analysis, the following table summarises the transitional physical risks and opportunities and climate-
related risks, mainly related to our core smelting asset in Sarawak.
Physical Risks
Acute - Climate-related risk can increase the frequency and intensity of extreme weather events such
as hurricanes, floods and wildfires. Unfavourable weather, climatic conditions and natural disasters may
damage the company’s infrastructure, disrupt operations, reduce productivity and increase operational
costs. Climate-related risk can also affect the availability of raw materials and energy sources, disrupting
OMH’s supply chain and increasing costs.
Climate-Related Risks
Physical - Longer-term shifts in climate patterns, such as chronic heat waves, can disrupt labour productivity,
especially among workers at our manufacturing plant with constant outdoor exposure. Periods of low rainfall
may affect the water level at the dam and the capacity to generate electricity.
Transitional Risks
Regulatory Risks
Governments may introduce policies and regulations to reduce greenhouse gas emissions, such as
carbon pricing or trading schemes. These policies can increase the Company’s compliance costs and affect
competitiveness.
The entire supply chain costs can increase significantly as companies from various stages throughout the
supply chain work towards increased disclosure and transparency on GHG emissions and climate-related
risk management and compliance.
Reputation Risks
Companies perceived as contributing to climate change or taking insufficient action to address such issues
may face reputational damage, harming OMH’s brand and customer loyalty.
Market Risks
As steel mills try to reduce indirect emissions, they may demand and prioritise sourcing from low-carbon
ferroalloys producers. Such a move would cascade down the entire supply chain.
Transitional Opportunities
Innovation and
technology
Climate-related opportunities for the smelting industry to develop and implement new technologies and
processes that reduce greenhouse gas emissions and potentially increase resource and energy efficiency,
such as installing an energy recovery system that recycles waste heat to preheat feedstock before smelting.
Low climate
footprint ferroalloys
The ability to produce ferroalloys with high resource and energy efficiency will have a competitive advantage
as it is greener, more attractive and improves profitability.
Access to Capital
Increasingly, investors and the financial institutions and lenders seek companies that address climate change
and may be more willing to invest in companies with lower climate footprints.
Improved
stakeholder relations
Companies that take climate change seriously and take action to address it may enjoy improved stakeholder
relations with customers, employees and communities.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT ENVIRONMENT
The carbothermic reduction of metal oxides in manganese alloy and ferrosilicon production generates carbon dioxide (CO2) emissions.
These emissions cannot be reduced beyond their physical limit and represent incompressible CO2 emission levels resulting from the
chemical reactions. The current CO2 emission levels are very close to the theoretical chemical and physical limits.
OMH remains committed to protecting the environment by systematically improving its operational performance, implementing
sustainable practices and reducing its carbon footprint. We recognise the importance of responsible stewardship of our natural
resources and continually strive to improve our environmental performance through innovation and best practices.
OM Sarawak was recognised for its environmental
sustainability initiatives at the 10th Premier of Sarawak
Environmental Award (“PSEA”) 2021/2022.
ENVIRONMENTAL POLICY
is committed
OMH
to ensuring effective environmental
management across all its operations. The Group established
an Environmental Policy for OMH to achieve high environmental
performance across all functions by:
•
•
•
•
•
•
•
•
applicable
environmental
Complying with
laws,
regulations, codes, corporate and industry standards and
other legal and contractual requirements;
Identifying, assessing and managing all environmental
risks and impacts related to Group operations;
Implementing
industry practices and environmental
management systems at all levels, including exploration,
development, operations, decommissioning, closure and
rehabilitation;
Preventing and mitigating pollution
operations;
Regularly reviewing environmental performance;
Reporting environmental performance transparently;
Establishing grievance mechanisms for all stakeholders
where environmental complaints can be received and
addressed; and
Ensuring all personnel are aware of this policy and their
environmental-related responsibilities, raising awareness
and minimising the potential environmental impacts of
the Group’s operations.
from Group
The Executive Chairman/Chief Executive Officer is accountable
to the Board for effectively implementing this policy. The Group
delivers training and awareness sessions on this policy as
required.
OMH – ENVIRONMENTAL POLICY
ENVIRONMENTAL MANAGEMENT SYSTEM
Responsible environmental management within the resources
sector is essential for delivering sustainability in all operating
regions. OMH’s operating subsidiaries demonstrate solid
performance in managing and minimising the environmental
impact of all mining and smelting projects. The Group complies
with
legislative requirements while working closely with
stakeholders to meet community expectations.
OMH’s operating subsidiaries have implemented Environmental
to deliver consistent and optimal
Management Systems
environmental management across their mining and smelting
projects. Every project undertaken involves careful planning
from inception throughout all operational stages to identify
environmental obligations and set management procedures.
Engaging environmental professionals to monitor compliance
with these obligations encourages positive behaviours and
delivers high-quality outcomes. Aligning all OMH operating
subsidiaries with
ISO 14001 Environmental
Management Systems and industry best practices ensures
operations adopt the highest environmental standards. External
legislation,
agencies monitor compliance with applicable
standards and site-specific authorisations regularly. These best
practices demonstrate management’s commitment to improving
the Company’s environmental performance and business
efficiency.
international
OM Sarawak engaged a consultant to help implement
an Environmental Management System following
ISO
14001:2015 standards.
USING LIFECYCLE ANALYSIS TO ADDRESS
ENVIRONMENTAL CONCERNS
In FY2022, the Company conducted a ‘cradle-to-gate’ Life Cycle
Analysis (“LCA”) on manganese ore and manganese alloys in
collaboration with the International Manganese Institute (IMnI).
This LCA helped us understand our environmental footprint more
clearly and benchmark ourselves against other producers in the
industry. The LCA covered all processes inside the plant gate,
such as the extraction of resources and processing (smelting).
We submitted data to the appointed consultant to run LCA
modelling using GaBi software. We will also conduct LCA on
ferrosilicon alloys in the future. These assessments help customers
and major steel mills in the region, make environmentally
beneficial decisions as they enhance sustainability in their supply
chains.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT CLIMATE CHANGE MANAGEMENT
is
facing a green
The world
industrial revolution. The
Intergovernmental Panel on Climate Change has declared that
a 2° Celsius increase in the Earth’s average temperature is the
maximum nature can withstand to control climate change.
Greenhouse gas emissions must reduce by 95 per cent by 2050 for
the world to achieve this goal. Greenhouse gas emissions should
reduce in our industry within the next 35 years, so “business as
usual” is no longer an option.
The Importance of Steel in a Zero-Emission Society
The world requires a drastic reduction of air and water emissions
to prevent major climate changes and significant biodiversity
loss. Despite being resource-intensive, steel, manganese alloy
and ferrosilicon production are crucial for society’s zero-emission
vision.
A Continuous Emissions Monitoring System (“CEMS”) is installed
in the plant to monitor the total particulate matter (“TPM”)
emissions through the stacks. TPM and gas analysers installed at
emission stacks continuously track stack emissions. Readings are
recorded and stored in the CEMS and automatically sent to the
Department of Environment Malaysia.
A quarterly Relative Response Audit (“RRA”) is performed on the
CEMS to ensure:
•
•
is complete, accurate, precise,
Its generated data
traceable and reliable
The total PM analysers are operating within their
accuracy criteria and are representative of the pollutant
concentrations in the dust stream
Quarterly Stack Emission Monitoring (“SEM”) ensures compliance
with the Malaysian Ambient Air Quality Standard Concentration
Limit. OM Sarawak uses this data to:
Steel is 100% recyclable and can be recycled indefinitely without
losing its properties. In 2021, the global steel industry recycled
around 680 million tonnes of scrap, saving nearly 1 billion
tonnes of CO2 emissions that would have been emitted from the
production of virgin steel*.
•
•
•
Assess the environmental impact of the production
processes
Identify potential pollution sources
Implement measures to minimise emissions and improve
air quality
One tonne of steel consumes approximately 3 to 4 kg of
ferrosilicon and 10 kg of manganese alloy. Highly valued due to
its durability and resistance to torsion, majority of the world’s
ferrosilicon and manganese alloy production are used in steel
production.
Steel consumption has increased sevenfold since 1950; by 2050,
it will grow an estimated 50 per cent compared to today’s levels*.
Steel is a crucial component to achieve the goals of the green
paradigm shift and satisfy the zero emissions vision.
The ferrosilicon and manganese alloy production furnaces are
integrated with an air pollution control system (“APCS”) consisting
of thrombone air coolers, twin cyclones, baghouse systems,
extraction fans, and chimneys to preserve the air quality of the
environment. OM Sarawak installs fibreglass filter bags with
expanded polytetrafluoroethylene (“ePTFE”) membrane in the
baghouse.
Benefits of ePTFE Membrane
*Worldsteel Association: Sustainable Steel
Emissions Management
involves optimising
OM Sarawak’s emissions management
production processes to minimise emissions, waste, and energy
consumption and using pollution control technologies such as
bag filter systems to reduce emissions.
OM Sarawak complies with the Environmental Quality Act 1974,
the Environmental Quality (Clean Air) Regulations 2014, and the
Malaysia Ambient Air Quality Standard 2020.
OM Sarawak conducted Ambient Air Quality Monitoring for
ambient air quality, which consists of Particulates Matter 10 m
(PM10), Particulates Matter 2.5 m (PM2.5), Carbon Monoxide
(CO), Sulphur Dioxide (SO2), and Nitrogen Dioxide (NO2). Our
readings during the FY2022 monitoring period were well below
the Malaysian Ambient Air Quality Standard Concentration Limit.
Better dust
filtration
efficiency
Extended
filter bag life
Minimimal bag
changeouts
Chemical
resistance
Thermal stability
up to 260°C
Reduced stack
emissions well
within limits
The Utilities and Dedusting System Department (“UDSD”),
supervised by competent personnel, operate and maintain
OM Sarawak’s APCS. All operators are Certified Environmental
Professionals in Bag Filter Operations (“CePBFO”) endorsed by
Department of Environment (“DOE”). The UDSD personnel also
perform daily inspections, preventive maintenance, and filter bag
changeouts when necessary to manage air pollution sources.
OM Sarawak is committed to reducing fugitive fume emissions
and began upgrading one ferrosilicon tapping dedusting system
with a more efficient alternative. OM Sarawak awarded this
project to an equipment contractor in December 2022 and
expects the project to be completed by November 2023.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT RAW MATERIALS (CIRCULARITY MEASURES)
Most of our by-products are recycled and reused as raw materials for production to reduce waste.
Products
Ferrosilicon (FeSi)
Generated By-products
Recycling and Repurposing
FeSi Slag
Silica Fume or Micro silica
Silicomanganese (SiMn)
SiMn dust
High Carbon Ferromanganese
(HCFeMn)
Mn-rich Slag
Sinter Ore
Manganese ore fines
Recycled as Si unit for the SiMn smelting
process, with a total of 6,085.9 tonnes
recycled as at December 2022
Reused for ingot tray preparation before
casting
from
Collected
the SiMn production
process’s de-duster and fed into sintering
lines to agglomerate into sintered ore
lumps and recycled in manganese alloys
production
Recycled as Mn unit feed for the SiMn
smelting process
from manganese
alloy
Collected
production for reuse as raw materials for
manganese alloys
The Company repurposes wood from broken wooden pallets and other wood waste materials to preheat the start-up furnace following
major maintenance.
SILICA FUME – A SUCCESS STORY
Silica fume, a by-product of silicon and ferrosilicon production, is a success story resulting from decades of investment, research,
innovation and applications of the ferroalloy and silicon industry. These combined initiatives have contributed to the growth of
construction industries and provided many jobs to the local communities.
A dust collection system (baghouse filters) captures silica fume and reduces atmospheric emissions, significantly improving
workplace conditions while keeping valuable materials from landfill.
Several hundred thousand tonnes of silica fume, or microsilica, are used worldwide. Several different industrial applications
use this internationally-tradable product. It improves buildings’ sustainability by reducing their carbon footprint and achieving a
circular economy. This success story helps to meet the objectives of industrial emissions, carbon footprint, resource efficiency,
circular economy, workplace legislation, industrial specifications, waste, air and innovation policies.
ENERGY MANAGEMENT AND CONSUMPTION
OM Sarawak occupies 202.35 hectares of land within the Samalaju Industrial Park (“SIP”), which was developed specifically for energy-
intensive industries. We have secured a 20-year power purchase agreement (“PPA”) with the State’s power company during the plant’s
inception. This PPA will run until 2033 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 primary smelting operations consume electricity,
diesel fuel is also used for logistics operations and for on-land transportation of raw materials and finished goods.
Examples of OM Sarawak’s Energy-Efficiency Initiatives
Implementing a
Supervisory Control and
Data Acquisition (“SCADA”)
system to monitor and
optimise energy use
Replacing outdated
equipment with new,
energy-efficient models
Installing an energy
efficient lighting system
Scheduled maintenance also ensures equipment efficiency, which helps reduce energy loss from unplanned downtime.
Our operations require a constant electricity supply for the high-temperature smelting processes to convert raw materials into
ferroalloys. The electric arc furnace operates at temperatures over 1200°C, depending on the required metal oxide reduction for
various ferroalloys. The electricity for production operations is predominantly from hydropower which significantly reduces our carbon
footprint. We monitor our energy consumption monthly and review our performance targets annually.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT The total consumption of diesel fuel in FY2022 was 31,536 GJ. Diesel fuel is mainly used to power the sinter plant, for logistics operations
and for on-land transportation of raw materials and finished goods.
Electricity Consumption
(Million GJ)
8.80
Diesel Consumption
(million GJ)
0.06
7.51
7.78
0.04
0.03
FY2020
FY2021
FY2022
FY2020
FY2021
FY2022
Energy consumption (million GJ)
Energy intensity (GJ/Tonne of Ferrosilicon)
Energy intensity (GJ/Tonne of Manganese Alloy)
GHG emissions (Kilotonnes of CO2-eq)
- Scope 1
- Scope 2
Total GHG Emissions (Scope 1 + 2)
GHG emission intensity by product (CO2-eq of per tonne product produced)
- Ferrosilicon
- Manganese Alloy
2020
8.84
31.22
13.69
2021
7.57
31.97
13.89
2022
7.81
31.78
13.86
894.00
498.00
724.00
759.51
*413.08
*427.64
1392.00
1137.08
1187.15
5.27
2.66
4.92
2.50
5.28
2.20
*Note: Emissions factors for FY2020 to FY2022 are based on figures provided by Sarawak Energy Berhad. FY2021 Scope 2 calculation was reassessed and
revised based on Sarawak Energy Berhad’s 2021 emission factor. Emission factor in 2021 was also used as a basis for FY2022 figure and this will be reassessed
in the coming year once data is available.
BIODIVERSITY
Biodiversity conservation through rewilding is critical for restoring degraded habitats and combating climate change while preserving
the original flora and fauna of the land. It reflects our commitment to the United Nations Sustainable Development Goal 15 to halt and
reverse land degradation and biodiversity loss through forest management.
OMH signed a Memorandum of Understanding (“MoU”) with Sarawak Forestry Corporation (“SFC”) to undertake a rewilding project at
the Similajau National Park. The project will restore 10 hectares of degraded ecosystems in Totally Protected Areas (“TPAs”) by planting
10,000 native tree species, including indigenous food trees, that can help wildlife survive and restore the ecosystem of the degraded
areas.
OMH will contribute RM482,600 over three years, from 2022 to 2025; SFC will contribute RM396,000 over 19 years to collect and
monitor plant growth and biomass data to assess its effectiveness in restoring degraded areas. Botanists and other SFC experts will
guide the process in line with the SFC Restoration Framework.
OMH collaborates with Sarawak Forestry Corporation
for Re-wilding
Initiative, contributed RM482,600
towards tree planting operations at Similajau National
Park
SARAWAK
FORESTRY
C O R P O R A T I O N
PARKS WILD LIFE
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT WASTE MANAGEMENT
forms an
Waste management
integral part of OMH’s
environmental responsibility. The Group embedded the Reduce,
Reuse and Recycle (“3R”) concept within waste management
procedures. OM Sarawak also established an open scrap yard to
manage and recycle scrap and minimise paper usage by:
•
•
•
Favouring electronic forms
Reusing scrap paper
Developing Google Forms for easy data entry
In December 2022, OM Sarawak introduced a 3R Centre Project
to manage waste segregation.
OM Waste Management Highlights
✓
✓
✓
A DOE-certified third-party auditor conducts an annual
Silica fume Compliance Audit
Developed Guidelines for Silica Fume (SW104) Special
Management for on-site recovery
Perform weekly self-regulated inspections and audits
Scheduled waste management is regulated. Guided by its
Environmental Management System, OM Sarawak manages its
waste following the Environmental Quality (Scheduled Wastes)
Regulations 2005. Waste generated is recorded in the Electronic
Scheduled Waste Information System (“eSWIS”) and submitted
monthly to the DOE. Scheduled waste storage facilities are also
available on-site, designed to contain and prevent waste from
contaminating the environment. In FY2022, we generated 18.14
kilotonnes of scheduled waste, an 11.8% reduction from FY2021.
SIRIM Behad (“SIRIM”), a national
industrial research and
technology organisation in Malaysia, has conducted tests for
silicomanganese slag and silica fume according to DOE Guidelines
for Application of Special Management of Scheduled Waste under
Regulation 7 (1). SIRIM certified both silicomanganese slag and
silica fume as non-reactive and unlikely to endanger human health
except through oral and nasal consumption. Both by-products are
within the threshold limits for organics and inorganics based on
the Toxicity Characteristic Leaching Procedure (“TCLP”) analysis.
At the Bootu Creek Mine in Australia, waste rock and processing
tails are stored on-site and are not acid generating. We manage
these wastes following Waste Management Plans for waste
rock and tailings storage approved by the Northern Territory
Department of Industry, Tourism and Trade.
WATER MANAGEMENT & EFFLUENTS
MANAGEMENT
Water forms an essential component of our business. OMH
works to manage water resources adequately across operations.
OM Sarawak is committed to optimising water usage and treating
effluent to meet the regulatory water quality standards before
being released into the environment.
OM Sarawak’s municipal water supply is not extracted from
sensitive or protected water bodies. The Company’s water
reservoir stores up to 48 hours of continuous water flow for plant
operations in case of water supply disruption from the Municipal
Water Supply Board.
Primarily, plant production operations consume water for
furnace system cooling and silica quartz washing. The cooling
water for the furnace system is a closed-loop system, with most
cooling water loss being due to vaporisation from the cooling
tower. A dedicated sediment pond treats water from silica quartz
washing. Heavier particles and sediments settle, making clean
water available for washing the silica quartz.
Domestic wastewater generated mainly from the sanitary system
and canteen operations is piped directly to SIP’s centralised
sewage treatment plant for treatment that meets the limits under
Standard B of the Environmental Quality (Sewage) Regulations
2009.
is generated
Typically, effluent
from surface runoff. A
sedimentation pond removes suspended solids and reduces the
overall environmental impact. During FY2022, the discharged
effluent was within permissible
limits as stated by the
Environmental Quality (Industrial Effluent) Regulations, 2009.
Other Water Management Initiatives
Solid Waste Disposed
(kilotonnes)
0.35
0.29
0.21
FY2020
FY2021
FY2022
Hazardous Waste Generated
(kilotonnes)
148.76
150.96
137.71
FY2020
FY2021
FY2022
Scheduled waste disposed (kg)
23.23
20.56
18.14
FY2020
FY2021
FY2022
*Aggregate data from OM Sarawak
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Recording
daily water
consumption
Limiting pressure
for hydrant pump
piping
Inspecting piping
daily to detect
leakage
Limiting water
consumption to
less than 3800m3/
month from the
water pump
station
Implementing a
water recirculation
(closed-loop water
cooling) system
Installing
flowmeters to
monitor daily
water withdrawal
Utilising dual-flush
in some buildings
Water Consumption (million m3)
1.47
1.22
1.32
FY2020
FY2021
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT LAND REMEDIATION, CONTAMINATION AND
DEGRADATION
SOCIETY
Land and soil management is an integral component of mining
in the semi-arid temperate climate of the Northern Territory,
Australia. Mining can adversely affect the environment; identifying
and managing these impacts is vital when managing business
operations. Implementing appropriate objectives, strategies and
targets to achieve good soil and land management ensures that
OMM can maintain high levels of environmental performance,
ensure compliance with its regulators and governing acts, and
benefit stakeholders, including landowners and shareholders.
This section focuses on the land remediation and rehabilitation
processes for our mining entity, OMM, the owner of the Bootu
Creek Mine located in the Northern Territory, Australia. Mining
activities ceased in December 2021, and the final ore processing
occurred in January 2022.
Rehabilitation of disturbed areas is a key closure criterion upon
completion of mining activities and returning the lease area to
landowners. OMM rehabilitated infrastructure areas pre-closure
and will remediate tracks, roads and exploration areas when
operations no longer use them.
OMM progressively rehabilitated and revegetated various
waste rock dumps across the site to minimise erosion, weed
introduction and waterway pollution.
OMM’s timeline for land remediation at the Bootu Creek Mine.
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”)
2022
All Hydrocarbon contaminated areas
successfully remediated
OMM conducted overarching environmental aspects and an
impact assessment before commencing operations at the Bootu
Creek Mine. OMM’s Environmental Management Plan presented
the outcomes and management strategies for rehabilitation of
the mine site, and this was reviewed by the Northern Territory
Department of Industry, Tourism and Trade (“DITT”).
OMH envisages a better-shared future for the local communities
where we live and work. Community involvement is vital as it
brings positive, measurable change to local communities and
businesses.
We aim to drive local community development by improving the
living standards of underprivileged communities. Our efforts at
every region are unique as they vary based on local needs.
COMMUNITY RELATIONS
Exploration, mining, smelting, marketing and trading activities
are central to sustainable community development by acting as a
catalyst for positive economic and social change.
in various
When operating
jurisdictions, we
understand that we work in a “visitor” capacity and must
respectfully engage in all interactions with the local community.
OMH balances the economic, environmental and social needs in
all phases of its projects.
international
OMH introduced a Community Relations Policy, providing a
framework for working with the communities where it operates.
OMH achieves its community relations objectives by:
•
•
•
•
•
•
•
•
•
•
•
Following the laws and regulations of host countries;
Considering how our decisions impact the community;
Respecting and responding to local customs, traditions
and cultures unless they conflict with OMH policies and
standards;
Contributing to the economic development of the local
communities;
Being open and transparent in all communications and
dealings with local communities and responding in a
timely fashion to any community-based grievances;
Establishing grievance mechanisms for all stakeholders
where community-related complaints can be received
and addressed;
Investing in projects that are mutually beneficial to OMH
and the local community;
Ensuring that any unavoidable resettlement complies with
local laws and such that resettled parties are constructively
engaged and fairly treated with the principles of free prior
informed consent and consultation;
Embracing sound principles of local procurement and
employment practices that contribute to local economic
development;
Encouraging, where practical, suppliers and contractors
to adopt the same or similar policies, standards and
practices; and
Undertaking activities that help ensure the local operating
company remains a responsible community member.
OMH – COMMUNITY RELATIONS POLICY
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT
TACKLING FOOD SYSTEM WASTE
OUR PEOPLE
Food loss and waste is a global crisis, with one-third of all food
produced lost or discarded. OM Sarawak launched the Food Waste
Recycling Project with a third-party local food waste processing
entity. The recycling project converts food waste into organic
fertiliser. In FY2022, we produced 310 kg of organic fertiliser from
6,200 kg of food waste. This initiative helped minimise food waste
disposal at our plant.
SUPPORTING LOCAL ENTREPRENEURS
OM Sarawak supports local entrepreneurs by providing trading
space to local vendors at the Ramadan Bazaar at its factory
canteen. Four local vendors participated in this Bazaar from 23
March to 21 April 2022.
SPONSORSHIP FOR BINTULU SINGLE MOTHER
ASSOCIATION
OM Sarawak sponsored the purchase of school necessities, such
as uniforms, school bags and stationery, for children of Sarawak
Single Mother’s Association or Persatuan Ibu Tunggal Sarawak
(“PITSA”) under the Back-to-School programme. Seventy-seven
children benefited from this community giving. The Company
hopes this sponsorship program will ease the single mothers’
burden and excite these children before the new school term.
FIRE EXTINGUISHERS SPONSORSHIP
OM Sarawak donated 21 fire extinguishers to Rumah Jacub and
Rumah Banggu to develop a fire safety culture in the Samalaju
villagers. The fire department (BOMBA) demonstrated using the
fire extinguishers to residents.
COMMUNITY GIVING
OMH has a clear focus on sustainability and corporate social
responsibility. We continue to support causes that benefit
the community and those closely linked to our beliefs, such
as education, philanthropy, sports, culture and heritage, and
community building.
In FY2022, we donated approximately US$17,000 to non-profit
organisations and good causes benefiting mainly the local
communities where our Sarawak plant operates.
Examples of Sponsorships and Donations
Sports
sponsorships
Donation to
homes
Blood
donations
Sponsorship
to support
non-profit
organisations
and government
bodies
Our employees are fundamental to our success. We foster a
supportive environment where we value the diverse backgrounds,
cultures and beliefs of our employees and stakeholders. We
strongly discourage and do not tolerate any form of racial
and sexual discrimination, and workplace harassment of our
employees. Treating people with fairness, dignity, and respect
ensures we protect and uphold fundamental human rights within
the Company.
We value employing people of any gender, age, cultural
background, ethnicities, nationalities and religion. The Company
recognizes and upholds our employee’s right to a work
environment that is safe, free from association, where they can be
collectively represented and fairly compensated, and be provided
with job security and personal development opportunities.
A DIVERSE AND EQUITABLE ORGANISATION
Global operations require us to understand and adapt to different
cultures and customs while maintaining our corporate culture
and standards. Diversity encompasses gender, race, ethnicity,
disability, age, sexual orientation, gender identity, marital or
family status, and religious or cultural background. The Group’s
commitment to diversity at all levels forms part of its merit-based
organisational culture dedicated to recruiting and retaining the
best available talent at all levels, including the Board. Embracing
workplace diversity helps achieve our corporate objectives and
enhances the Company’s reputation. It enables the Group to
recruit and retain the right people from a diverse pool of talented
candidates.
Formalising its commitment, and OMH’s Diversity and Inclusion
Policy aims to:
•
•
•
Foster an inclusive workplace that embrace and values
diversity
Upholds the principle of meritocracy
Supports and facilitates an inclusive work environment
that embraces differences and recognises the benefits
that such differences provide to the business and its
people.
OMH’s Commitment to Diversity
Providing
access to equal
opportunities at
all levels of work
based on merit
Welcoming
people from
diverse
backgrounds
Operating
as an equal-
opportunity
employer
Fostering a
corporate culture
that embraces
diversity
Not tolerating
workplace
discrimination,
harassment,
vilification and
victimisation
Respect the
diversity of its
customers, clients
and stakeholders.
Underprivileged community
-Single mothers
-Less fortunate children.
OMH – DIVERSITY AND INCLUSION POLICY
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT Workforce Breakdown by Gender
Workforce Breakdown by Age Group
15.4%
84.6%
17.3%
82.7%
43.6%
47.7%
8.7%
45.6%
45.1%
9.3%
2021
2022
2021
2022
Male
Female
> 50 years
30-50 years
< 30 years
Workforce Breakdown by
Employment Type in 2022
Workforce Breakdown by
Employment Arrangement
24.1%
75.9%
32.0%
68.0%
20.9%
79.1%
2021
2022
Permanent
Contract
Local Hires
Foreign Hires
Workfoce Breakdown by Ethnicity
0.9%
35.8%
13.6%
49.7%
2.0%
41.0%
13.0%
44.0%
2021
2022
Other Races &
Indigenous Groups
Malay/
Melanau
Chinese
(including local
and foreign)
Indian
*Please refer to the Group Performance Data Table on page 68-69 of this Report for the Group’s detailed workforce statistics
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT Gender Diversity
OMH is committed to equitable and fair representation of people of different genders. The Group’s Diversity and Inclusion Policy
contains provisions for gender diversity.
OMH is committed to establishing appropriate and measurable objectives for achieving gender diversity and requires relevant senior
management to report on their achievement. OMH also implements policies and programmes that address impediments to gender
workplace diversity, such as parental leave and flexible working arrangements that assist all employees in fulfilling their domestic
responsibilities. The Group is also committed to reviewing, assessing and reporting against the measurable objectives for achieving
gender diversity and its progress on an annual basis.
INVESTING IN TALENT
We review our Company’s training and development programs to ensure they deliver business value and opportunities for our people.
Maintaining a solid pool of talent remains our focus.
Training
Total time
Average hours of training per year per employee
Unit
hours
hours
FY2020
19,701
11.55
FY2021
74,510
46.63
FY2022
93,680
60.87
All employees should be able to learn new skills, grow and build their careers as they develop along their professional journey. OM
collaborates with local universities to improve training content for local operators.
Examples of Internal and External Training Programmes in FY2022
Rigging and
slinging
Fire safety
Radiation safety
awareness
ISO 17025:
Internal Audit
Risk management
and continuous
improvement
Basic knowledge of
chemical reactions
in producing
ferrosilicon and
manganese alloy
Overhead
crane training
programme
Machinery safety
ISO14001:2015
and
ISO45001:2018
training
Thermal hazard
assessment
Understanding
wastewater
quality analysis in
industrial effluent
During the year, the Company introduced the Managerial Development Programme, which includes Leadership Development,
Managing Disruptive Behaviours and Workplace Coaching Skills and Managing Performance.
Helping Our Employees Level Up
Every employee should pursue their passion and goals. Upskilling programmes help employees gain in-demand skill sets that propel
them into the next phase of their career. Upskilling creates pathways to careers in fields that will continue growing. This commitment
allows us to offer different skills training and education programmes, including helping trainees progress in their careers.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT Internship and Career Exposure Opportunities
OM Sarawak collaborates with Universiti Malaya Sarawak (“UNIMAS”) in a Certificate in Manufacturing Technology (Smelting)
programme. Graduates from this programme have a well-rounded, holistic knowledge and experience including theoretical modules
and industrial training. 12 trainees completed this programme in FY2022.
Graduation Ceremony for the Certificate in Manufacturing
Technology (Smelting) program by UNIMAS and OM Sarawak
ENGAGING EMPLOYEES
OMH organised various activities and engagement sessions to create a vibrant working environment, including festive celebrations
such as Gawai in Sarawak, sports tournaments, sports carnivals, annual dinners and other get-togethers.
OMS Neon Pop themed Annual Dinner and OM Sarawak’s
Winter Wonderland Annual Dinner 2022
FAIR REMUNERATION AND BENEFITS
OMH established a fair and transparent process for remuneration, ensuring that the Group evaluates employees’ performance on
merit. Providing workers with a good living wage supports economies and fosters growth. Our Human Resources Team regularly
assesses the fixed compensation paid to all our full-time direct employees to ensure it exceeds the minimum legal requirements. In
2022, OM Sarawak revised the salaries of 257 employees to comply with the Malaysian Minimum Wages Order FY2022.
Leave:
Annual, maternity and paternity
Retirement benefits
Flexible working arrangements
Transportation and
accommodation
Allowances, subsidies and
reimbursements
Medical benefits
• General hospitalisation scheme
• General personal accident
• On-site healthcare facility and
treatment
• Yearly health check programme
(for employees who have
served at least one year)
• Panel clinic and in-house
ambulance
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT HEALTH AND SAFETY
Our industrial and mining activities employ complex technical processes and operations, which require constant anticipation and strict
vigilance to prevent incidents and deliver good health and safe working conditions for all employees, contractors and third parties.
Safety of our employees and stakeholders is out top priority. Reflected in our Occupational Health and Safety Policy, this philosophy
extends to all operations under management control. We have implemented this policy by rigorously managing our activities and
following the highest standards in occupational risk prevention. We also undertake regular risk assessments and verify our regulatory
compliance.
OM Sarawak adequately evaluated all work activities in the prescribed Hazard Identification, Risk Assessment, and Risk Control
(“HIRARC”) procedures. OM Sarawak is working towards implementing a Safety Management System following ISO 45001:2018
standards by December 2023.
Occupational Health and Safety Management Systems
Occupational Health and Safety Management Systems at all our operating subsidiaries comply with national work health and safety
legislation, code of practice and applicable International Standards. Our operations are subject to continuous audits by external
auditors and compliance officers. The OMH operating subsidiaries manage risk through:
•
•
A planned and careful approach focusing on hazard identification, assessment, monitoring and control procedures; and
Continuously reviewing and improving safety procedures and performance.
Through our health and safety management systems, we aim to create a risk-free environment for all employees and stakeholders
involved in our business and operations. We also strive to minimise the number of workplace incidents/accidents based on shared
responsibility, in which each person plays a crucial role in creating a safe working environment.
Implementing specific prevention plans before starting relevant service contracts with third party contractors and service providers
and requesting to inspect service personnel and contractor’s staff’s work permits protects our contractors. We also provide customised
briefings, especially for new workers and contractors, including specific safety training for different safety risks. We also provide our
employees with effective PPE of the required standard to ensure their safety and well-being while they carry out their responsibilities.
Personal Protective Equipment (“PPE”) and have made myriad ergonomic improvements.
OMH continues to apply the COVID-19 preventive and safety recommendations and measures of the respective health authorities.
The Company’s safety team assesses the effectiveness of the implemented COVID-19 measures, such as wearing face masks, physical
distancing, regular self-tests and and flexible work-from-home arrangements to curb and minimise the spread of COVID-19 within the
work environment and local community.
Health and Safety Compliance
Australia
• Despite being in care and maintenance, OMM, our mining entity that owns the Bootu Creek Mine in Northern Territory, Australia,
must comply with the Occupational Health and Safety (“OHS”) requirements 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.
Malaysia
• Our smelting operations in Sarawak, Malaysia, must 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.
• We are also governed by the Factories and Machinery Act 1967, under which DOSH officers periodically inspect our lifting and
•
hoisting equipment, unfired pressure vessels and general installations in our Sarawak plant.
Three safety audits were conducted as part of the Safety Improvement and Management Hazards Campaign (SIMHAC) in FY2022.
Upon receiving the report on significant findings, corrective actions relating to electrical hazards and water intrusions were taken.
China
• Although production ceased in 2021, 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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT Health and Safety Governance
OM Sarawak established a Health and Safety Committee that meets quarterly to discuss OHS matters. The committee provides a
platform for consultation and cooperation between employers, management and employees in developing and implementing safety
and health measures and monitoring programmes. OM Sarawak’s Managing Director and Deputy Chief Engineer chair the committee
assisted by the Health and Safety Manager as secretary and a balanced quorum of employees from management and non-managerial
levels.
Health and Safety Committee Primary Functions
Developing
•
Safety and
health rules and
procedures
Incident trends
Analysing
•
• Unsafe acts,
conditions or
practices
Recommending
• Corrective action to
the management
• Any revisions to
the Occupational
Safety and Health
Policy
Reviewing
•
The effectiveness
of the Occupational
Safety and Health
Management
System
The Occupational
Safety and
Health Policy
•
Various Committee Functions
Medical Team
• Comprises professional medical personnel
• Organises health awareness talks and programmes for employees
• Provides 24-hour on-site treatment
Fire Protection and
Rescue Team
• Maintains the plant fire protection equipment
• Conducts emergency and fire drills with 11 emergency drills undertaken in FY2022
and the gaps, findings and recommendations being rectified immediately
Emergency
Response Team
• Maintains a current and accurate accounting of emergency response activities
• Responds to accidents and incidents in accordance with the Emergency Response
Plan (“ERP”)
Recovery Team
• Monitors affected areas, such as asset damage by fire, hazardous chemical spillage,
natural disasters and structural failure
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT
SAFETY TRAINING
OM Sarawak delivers extensive coaching and training to its employees and contractors and provides safety refresher training for all
workers.
FY2022 Safety Training Highlights
Types of Training
Safety induction
Internal OSH training:
Topics include confined space entry training, machine crushing safety awareness, smelting
front liner refresher training, forklift training, rigging and slinging training, noise exposure
awareness, fire safety, health talk and excavator training.
Health talks
External OSH training:
Topics include rigging and slinging training, Construction Industry Development Board
(“CIDB”) training, first aid, radiation safety, authorised gas tester and entry supervisor,
HIRARC training and ISO 45001:2018 awareness.
No. of Training
Sessions
No. of Training
Hours
491
3,954
95
3
40
101
4.5
642
Safety and Performance
Description
Fatality Cases
Lost Time Injury Cases
Lost Time Injury Frequency Rate
Total Manhours Worked
FY2020
FY2021
FY2022
0
5
1
4
1.06
1.37
0
5
1.37
4,728,852
3,660,593
3,661,227
COLLABORATION, ENGAGEMENT AND OTHER SAFETY INITIATIVES
A safe and healthy culture is a critical component of good science. Various initiatives promoting a collaborative safety and health
culture include:
• Collaborating with external agencies (General Hospital Bintulu (BGH) and Fire Department’s HAZMAT team) on a joint emergency
drill. We were the first company in SIP to organise a joint emergency drill.
• Collaborating with Bintulu General Hospital on a blood donation drive at OM Sarawak Plant on 16 June 2022
• Collaborating with the National Institute of Occupational Safety and Health Malaysia, a Ministry of Human Resources government
body, on developing a National Institute of Occupational Safety and Health (“NIOSH”) OM Safety Passport (“NOMSP”)
• Completed installation, testing and commissioning of the fire sprinkler system for the B07-B08 warehouse on 24 May 2022
OM Sarawak conducted an emergency drill
in
collaboration with Bintulu General Hospital and the
Bintulu and Samalaju Fire departments.
The drill involved a scenario of spillage of hazardous
chemical substances
laboratory, causing
in the
toxic fume contamination in the building and gas
intoxication of employees working in the building.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT HUMAN RIGHTS
Human rights are moral principles or norms for certain standards of human behaviour and are regularly protected in municipal and
international law. These rights are inherent to all human beings and they guide our conduct in all aspects of our operations. OMH
strives to be a fair and responsible employer and recognises its responsibility to respect, fulfil and support human rights in all our
business activities.
OMH formalised its approach to human rights by implementing a Human Rights Policy. This policy demonstrates the Group’s
commitment to respecting human rights throughout the business and upholding the laws and regulations of the countries in which
we operate.
Human rights are fundamental principles of personal dignity and universal equality. Respect for human rights foster social progress,
better standards of living and greater freedom for all individuals.
The policy is a framework that helps protect stakeholders’ human rights and prevents human rights violations from occurring. The
Company commits to:
•
•
•
•
Respecting the rights and dignity of employees, contractors, partners, local communities and those affected by the Group’s
businesses;
Providing equal opportunity and an environment free from discrimination, including support for the principles of freedom of
association and collective bargaining;
Neither condoning nor using forced, compulsory, or child labour;
Protecting personnel and assets in a secure environment for business operations.
The Company supports and respects, where applicable, international guidance documentation on human rights and seeks to conduct
business following the relevant spirit and intent. OMH holds training or awareness sessions on this policy when required. All employees
and stakeholders must comply with the terms of the Human Rights Policy and communicate any human rights incidents or violations
to management.
OMH is responsible for protecting the human rights of our employees and stakeholders, including our suppliers, communities,
indigenous people and other members of society. Our human rights responsibilities include equality and non-discrimination, decent
wages, humane working hours, fair employee representation, security, primary health care, supply chain labour rights and informed
consultation. We specifically concentrate on the impact of our activities on the human rights of vulnerable groups, such as indigenous
people, women and children.
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. We ensure that our suppliers, business partners, and all parties we engage with do not use child or
forced labour in their operations. Where applicable, all new and existing suppliers and business partners must undergo human rights
risk assessment as part of the Company’s due diligence in managing and assessing human rights risks.
OPERATING RESPONSIBLY
Change and continuous improvement are essential for improving our competitiveness and long-term sustainability. In FY2022, we
enhanced our sustainability efforts by collaborating with the International Manganese Institute (“IMnI”) on a ‘cradle-to-gate’ Life Cycle
Analysis (“LCA”) of manganese ore. This collaboration helped us understand our environmental footprint more clearly and benchmark
ourselves against other producers in the industry. The scope of the LCA covered processes from extracting resources to processing
(smelting) within our operations. This assessment helps customers, who are major steel mills within the region, make environmentally
sound decisions as they enhance sustainability in their supply chains.
PRODUCT SAFETY
Our products (ferrosilicon, silicomanganese and high carbon ferromanganese) are tested according to the “United Nations
Recommendations on the Transport of Dangerous Goods, Manual of Tests and Criteria Part III – 33.4.1.4”. Our products are not
classified as Class 4.3 Dangerous Goods, but we have various safety measures in place to ensure employee safety, including first-aid,
firefighting, handling and storage.
PRODUCT QUALITY
OM Sarawak’s Quality Inspection Center (“QIC”) oversees product quality management at the smelting plant. The QIC is responsible
for developing the quality control management system, including monitoring the weighing, sampling and issuing analysis reports for
all incoming feedstock and finished products. The QIC delivers natural blocks to the respective crushing areas based on their grade.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT Quality and Inspection Procedures For Raw Materials and Finished Products
Raw materials
•
The QIC samples and analyses each raw material upon arrival and sends the analysis report to the Raw Materials
Warehouse (“RMW”) and relevant department
• A third-party surveyor performs additional sampling and analysis at the loading and discharging port to ensure the
accuracy of product volumes and tracking of any variances recorded.
Finished product
•
•
The QIC takes ladle sampling, analyses and grades the natural block from each tapping. Different grades are
processed separately based on product grading. The QIC inspects the crushing process to ensure quality.
Third-party surveyors conduct sampling and analysis before shipping.
In FY2022, OM Sarawak’s laboratory participated in a round-robin test with other laboratories to:
• Compare analysis results and assess the accuracy
• Maintain close communication with other laboratories to learn and improve
Product testing conducted by the QIC is done using advance equipment, which includes but is not limited to an X-ray fluorescence
Spectrometer (“XRF”) and Inductively Coupled Plasma Spectrometer (“ICP”).
CYBERSECURITY AND DATA PROTECTION AND PRIVACY
The privacy and security of the information of our customers, employees and stakeholders provided to the Company is of paramount
importance to us.
Our Group-wide Data Protection and Privacy practices deliver a robust approach to securing information assets across the Group.
Employees receive regular training and communication on cybersecurity best practices, updates on new cyber threats and regular
updates and refresher sessions on the Company’s policies.
IMPLEMENTATION, UPGRADING AND MAINTENANCE WORKS DONE IN FY2022 INCLUDE:
Implemented Two-Factor Authentication for email accounts and mandatory password resets for email accounts every six months
Installed Microsoft Defender on all employee email accounts
✓ Upgraded the firewall
✓
✓
✓ Performed Monthly IT maintenance
✓ Auto-synced and backed-up files from company servers to cloud servers
✓
✓ Purchased Endpoint Security Software
Introduced software to control the accessibility of removable devices to prevent data loss
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT GROUP SUSTAINABILITY PERFORMANCE DATA
Economic
Sustainable Procurement
Local suppliers engaged (%)
Foreign suppliers engaged (%)
Local supplier purchases (%)
Foreign supplier purchases (%)
Anti-Corruption & Anti-Bribery
Percentage of employees who have received training on anti-corruption in FY2022, for each employee category
Non-executive
Executive
Management
C-Suite (including Managing Director)
Note: Aggregate data from OM Sarawak
Environment
Energy
Electricity consumption (Million GJ)
Diesel consumption (Million GJ)
Total energy consumption (Million GJ)
Energy intensity (GJ/Tonne of Ferrosillicon)
Energy intensity (GJ/Tonne of Manganese Alloy)
Water
Water consumption (million m3)
Emissions (CO2-eq of per tonne product produced)
- Ferrosilicon
- Manganese Alloy
Waste (kilotonnes)
Total solid waste disposed
Total hazardous waste generated
Non-recyclable waste
Waste recycled
Total scheduled waste disposed
Water (effluent) discharge
Recycled Waste
Note: Aggregate data from OM Sarawak
2021
2022
94.3%
5.7%
6.5%
93.5%
93.7%
6.3%
12.0%
88.0%
0.2%
5.4%
`81.3%
80.0%
2020
2021
2022
8.80
0.04
8.84
31.22
13.69
1.47
5.27
2.66
0.29
137.71
0.00
0.00
23.23
0.00
137.80
7.51
0.06
7.57
31.97
13.89
1.22
4.92
2.50
0.21
148.76
0.00
0.00
20.56
0.00
143.74
7.78
0.03
7.81
31.78
13.86
1.32
5.28
2.20
0.35
150.96
0.00
0.00
18.14
0.00
157.75
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT Social
Workforce Strength
Total number of employees
Number of New Hires
Percentage of Contractors/Temporary Staff (%)
Workforce Breakdown by Nationality
Malaysian
Non-Malaysian
Workforce Breakdown by Gender
Male
Female
Workforce Breakdown by Age Group
>50 years old
39- 50 years old
<30 years old
Workforce Breakdown by Employment Type
Permanent
Contract
Workforce Breakdown by Ethnicity
Other races & indigeneous groups
Malay / Melanau
Chinese (including local and foreign)
Indian
New Hires
Male
Female
>50 years old
30 – 50 years old
<30 years old
Employee Turnover
Total employee turnover
Employee turnover rate
Male
Female
>50 years old
30 – 50 years old
<30 years old
2021
2022
2,086
297
NA
1,990
553
24.1%
1,418 (68.0%)
1,574 (79.0%)
668 (32.0%)
416 (21.0%)
1,773 (85.0%)
1,646 (82.7%)
313 (15.0%)
344 (17.3%)
188 (9.0%)
185 (9.3%)
1,001 (48.0%)
898 (45.1%)
897 (43.0%)
907 (45.6%)
NA
NA
1,511 (75.9%)
479 (24.1%)
918 (44.0%)
989 (49.7%)
271 (13.0%)
270 (13.6%)
855 (41.0%)
712 (35.8%)
42 (2.0%)
19 (0.9%)
241 (81.1%)
464 (83.9%)
56 (18.9%)
12 (4.0%)
89 (16.1%)
20 (3.6%)
71 (23.9%)
180 (32.6%)
214 (72.0%)
353 (63.8%)
493
23.6%
434
59
57
255
181
733
36.8%
637
96
71
372
290
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OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT Social
Health and Safety
Number of work-related fatalities
Lost-time incident rate
Training
Total hours of training
Human Rights
Number of substantiated complaints concerning human rights violations
Data Privacy and Cybersecurity
Number of substantiated complaints concerning breaches of customer privacy and loss of
customer data
2021
2022
1
1.37
0
1.37
74,510
93,680
0
0
0
0
Note: The Group’s Sustainability Statement was first published in FY2021, with aggregate data collected from its major operating subsidiaries
(OMS, OMSA, OMM). Social data from FY2022 reflects Group data which included all subsidiaries.
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69
OM HOLDINGS LIMITED | ANNUAL REPORT 2021SUSTAINABILITY STATEMENT GRI CONTENT INDEX
Statement of use: OM Holdings Limited
GRI 1 used:
GRI 1: Foundation 2021
CODE
DISCLOSURE
LOCATION
GRI 2: General Disclosures 2021
2-1
2-2
2-3
2-4
2-5
2-6
2-7
2-8
2-9
2-10
2-11
2-12
2-13
2-14
2-15
2-16
2-17
2-18
2-19
2-20
2-21
2-22
2-23
2-24
2-25
2-26
2-27
2-29
Organizational details
Entities included in the organization’s sustainability reporting
Reporting period, frequency and contact point
Restatements of information
External assurance
8-9
6,36
36
No restatement of information
in this report
The Sustainability Statement has
not undergone any verification
by an external assurer.
However, it was reviewed by the
management and approved by
the Board.
Only external assurance on
GHG emission was undertaken,
disclosed on page 36
Activities, value chain and other business relationships
Employees
Workers who are not employees
Governance structure and composition
Nomination and selection of the highest governance body
Chair of the highest governance body
Role of the highest governance body in overseeing the management of
impacts
Delegation of responsibility for managing impacts
Role of the highest governance body in sustainability reporting
Conflicts of interest
Communication of critical concerns
Collective knowledge of the highest governance body
Evaluation of the performance of the highest governance body
Remuneration policies
Process to determine remuneration
Annual total compensation ratio
Statement on sustainable development strategy
Policy commitments
Embedding policy commitments
Processes to remediate negative impacts
Mechanisms for seeking advice and raising concerns
Compliance with laws and regulations
Approach to stakeholder engagement
8-9
59
68
74-75
79-81
2-4, 74-75
78
76-78
42
78, 81-82
37-38, 84
2-4, 74-76
80
80
80
80, 88
43
40-41, 44-45
40-41, 44-45
44-44
37
44, 47-48
37
2-30
Collective bargaining agreements
OMH does not have an internal
union. Employees are free to join
unions of their choice.
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CODE
DISCLOSURE
LOCATION
GRI CONTENT INDEX
GRI 3: Material Topics 2021
3-1
3-2
3-3
Process to determine material topics
List of material topics
Management of material topics
GRI 201: Economic Performance 2016
38
38
38
40-41, 99
50-51
201-1
201-2
201-3
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
61
GRI 203: Indirect Economic Impacts 2016
203-1
203-2
Infrastructure investments and services supported
Significant indirect economic impacts
GRI 204: Procurement Practices 2016
204-1
Proportion of spending on local suppliers
GRI 205: Anti-corruption 2016
205-2
205-3
Communication and training about anti-corruption policies and
procedures
Confirmed incidents of corruption and actions taken
GRI 301: Materials 2016
301-1
301-2
Materials used by weight or volume
Recycled input materials used
GRI 302: Energy 2016
302-1
302-2
302-3
302-4
Energy consumption within the organization
Energy consumption outside of the organization
Energy intensity
Reduction of energy consumption
GRI 303: Water and Effluents 2018
303-1
303-2
303-5
Interactions with water as a shared resource
Management of water discharge-related impacts
Water consumption
GRI 304: Biodiversity 2016
304-1
304-2
304-3
Operational sites owned, leased, managed in, or adjacent to, protected
areas and areas of high biodiversity value outside protected areas
Significant impacts of activities, products and services on biodiversity
Habitats protected or restored
GRI 305: Emissions 2016
305-1
305-2
305-4
305-5
Direct (Scope 1) GHG emissions
Energy indirect (Scope 2) GHG emissions
GHG emissions intensity
Reduction of GHG emissions
57-58
45, 57-58
47-48, 67
48-50, 84
48-49
54
54
55
55
55
55
56
56
56
55, 57
55, 57
55, 57
55
55
55
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CODE
DISCLOSURE
LOCATION
GRI 306: Waste 2020
306-1
306-2
306-3
306-4
306-5
Waste generation and significant waste-related impacts
Management of significant waste-related impacts
Waste generated
Waste diverted from disposal
Waste directed to disposal
56
56
56
56
56
GRI 308: Supplier Environmental Assessment 2016
308-1
New suppliers that were screened using environmental criteria
47-48
GRI 401: Employment 2016
401-1
401-2
401-3
New employee hires and employee turnover
Benefits provided to full-time employees that are not provided to
temporary or part-time employees
Parental leave
GRI 403: Occupational Health and Safety 2018
403-1
403-2
403-3
403-4
403-5
403-6
403-7
403-8
403-9
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
GRI 404: Training and Education 2016
404-1
404-2
404-3
Average hours of training per year per employee
Programs for upgrading employee skills and transition assistance
programs
Percentage of employees receiving regular performance and career
development reviews
GRI 405: Diversity and Equal Opportunity 2016
68
61
61
62
62
62, 64
63
64
62, 64
63-64
62-63
64
60
60-61
43
405-1
Diversity of governance bodies and employees
59, 68, 82-83
GRI 407: Freedom of Association and Collective Bargaining 2016
407-1
Operations and suppliers in which the right to freedom of association
and collective bargaining may be at risk
GRI 408: Child Labor 2016
408-1
Operations and suppliers at significant risk for incidents of child labor
GRI 409: Forced or Compulsory Labor 2016
409-1
Operations and suppliers at significant risk for incidents of forced or
compulsory labor
47
47
47
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022 GRI CONTENT INDEX
CODE
DISCLOSURE
LOCATION
GRI 411: Rights of Indigenous Peoples 2016
411-1
Incidents of violations involving rights of indigenous peoples
65
GRI 413: Local Communities 2016
413-1
413-2
Operations with local community engagement, impact assessments, and
development programs
Operations with significant actual and potential negative impacts on local
communities
GRI 415: Public Policy 2016
415-1
Political contributions
GRI 416: Customer Health and Safety 2016
416-1
Assessment of the health and safety impacts of product and service
categories
GRI 418: Customer Privacy 2016
57-58
57-58
50
65
418-1
Substantiated complaints concerning breaches of customer privacy and
losses of customer data
66, 69
73
OM HOLDINGS LIMITED | ANNUAL REPORT 2022
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 2022 financial year.
This statement outlines the main corporate governance practices in place during the 2022 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 2022 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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE 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 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 it 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 five 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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE 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 2022.
Domain Area
Board Skills and Experience
As at
31 December 2022
(out of 6 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,
Senior executive expertise in commodities, mining, trading or resources
sector.
Human Resources/
Organisational
Development & Culture
Senior executive management in people management and remuneration
policy development or board remuneration and nomination sub-committee
experience
Finance, Commerce
and Accounting
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
76
6
6
6
2
6
6
6
3
1
4
1
3
4
6
5
5
2
4
4
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE 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 (prior to his retirement on 20 May 2022), Dato Abdul Hamid Bin Sh Mohamed and Ms Tan
Ming-li (both appointed on 10 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 conduct 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 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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE
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 in excess of that 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.
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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE 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 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 2022 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
Dato Abdul Hamid Bin Sh Mohamed
Tan Ming-li
Board of Directors’ Meetings
Held
Attended
4
4
4
1
4
4
4
4
4
4
1
4
3
4
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 20 May 2022, the Audit Committee comprised of three independent
Non-Executive Directors, being Mr Thomas Teo Liang Huat (chairman of the Audit Committee), Ms Julie Wolseley and Dato Abdul
Hamid Bin Sh Mohamed. With effect from 20 May 2022, the Audit Committee comprised of two independent Non-Executive
Directors, being Dato Abdul Hamid Bin Sh Mohamed (chairman of the Audit Committee), Ms Tan Ming-li and Non-Executive
Director Ms Julie Wolseley. All Audit Committee members have sufficient financial expertise and experience to discharge the Audit
Committee’s mandate.
During the financial year ended 31 December 2022, the Audit Committee held two meetings and all committee members were in
attendance.
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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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE
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;
reviewing OMH Group’s half year and annual financial statements; and
review IA reports.
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. The Remuneration committee comprised 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 2022, no Remuneration Committees were held. A Remuneration Committee meeting is planned
to be held in 2023.
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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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE 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.
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; and
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.
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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE 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.
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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE 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 2022 was follows:
Board of Directors
Senior Executives2
Total OMH Group employees
Number of Women
2
4
346
%
33.3%
25.0%
17.3%
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 2022. 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.
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.
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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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE
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 and/or Bursa Malaysia 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.
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.
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 2022 Annual General Meeting was held
physically in Perth, Western Australia. The 2023 Annual General Meeting will be held physically in Kuala Lumpur, Malaysia.
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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE 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.
7.3
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 systems are 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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE 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 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 2022 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.
7.7
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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE 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 OMH Group prepares and publishes a Sustainability Statement in its Annual Report and on its website.
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.
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. Otherwise if material or potentially involves a breach of any law, then the matter 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 2022 financial year. However,
an annual review was undertaken in relation to the composition and skills mix of the Directors.
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.
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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE The Board confirms that a formal review was not conducted in 2022 but is planned for 2023 in accordance with these arrangements,
in relation to the performance of the Company’s Executive Directors and senior management during the 2022 financial year.
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 2022.
Director
Low Ngee Tong(i)
Zainul Abidin Rasheed(ii)
Julie Wolseley(iii)
Tan Peng Chin(iv)
Thomas Teo(v)
Dato Abdul Hamid Bin Sh
Mohamed(vi)
Tan Ming-li(vii)
Base
Remuneration
US$’000
943
-
-
-
-
-
-
943
Primary
Directors
Fees
US$’000
-
90
118(ix)
83
42
83
83
499
Post Employment
Performance
Bonus
Defined
Contributions
US$’000
1,458(viii)
-
-
-
-
-
-
1,458
US$’000
6
-
-
-
-
-
-
6
Total
US$’000
2,407
90
118
83
42
83
83
2,906
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE (i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
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 and restired as at 20 May 2022
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 US$1,458,000 for profit sharing for 2022 that has been accrued and is expected to be paid in 2023.
Inclusive of director’s fee of US$35,000 paid to Directors who are non-executive directors 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 2022, 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.
Recommendation
Reference
Notification of
Departure
Explanation for Departure
1.5
Disclose the
measurable
objectives
for achieving
gender diversity
1.6 and 1.7
Disclose
whether a
performance
evaluation
of the Board
and Senior
Executives
has been
undertaken
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.
A formal performance evaluation process of the Board and Senior Executives was not
performed in 2022 but is planned for 2023. The Executive Chairman does however
informally review the composition of the Board and its committees and does where
required meet with individual Board members.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE Recommendation
Reference
Notification of
Departure
Explanation for Departure
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 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.
2.1
2.5
2.6
90
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE Recommendation
Reference
Notification of
Departure
Explanation for Departure
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.
7.1
8.3
The board of
a listed entity
should have a
committee or
committees to
oversee risk.
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 18 April 2023.
91
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022CORPORATE GOVERNANCE DIRECTORS’ STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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
2022 and the statement of financial position of the Company as at 31 December 2022.
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 2022 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
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)
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
Other than as disclosed in the financial statements, 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.
92
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
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:
DIRECTORS’ STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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
1.1.2022
As at
31.12.2022
As at
1.1.2022
As at
31.12.2022
Number of ordinary shares fully paid
68,110,631
68,861,231
5,562,002
5,562,002
(1) 2,035,200
(1) 2,035,200
–
–
–
–
–
–
Note:
(1)
2,035,200 (2021 - 2,035,200) 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:
Dato’ Abdul Hamid Bin Sh Mohamed (Chairman)
Julie Anne Wolseley
Tan Ming-li
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:
i.
ii.
iii.
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 2022 as well as the auditor’s report thereon.
93
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 DIRECTORS’ STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 and Chief Executive Officer
Dated: 17 March 2023
94
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 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 2022, 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 2022 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:
Impairment of non-
financial assets
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 amounted to US$460.4 million as at 31
December 2022. Non-financial assets 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
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
budgeted gross margin, 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 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.
to
Due
the uncertain global economic
environment, there are higher inherent risks
relating to the
impairment of the Group’s
non-financial assets.
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.
95
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
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 2022, the Group recognised
deferred tax assets and deferred tax liabilities of
US$12.6 million and US$18.4 million respectively.
In addition, the Group has no unrecorded
deferred tax assets as at 31 December 2022.
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, 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.
•
•
•
96
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
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, action taken to eliminate threats or safeguards applied.
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,
17 March 2023
97
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
The Company
31 December 31 December
2021
US$’000
2022
US$’000
Note
The Group
1 January 31 December 31 December
2021
US$’000
2021
US$’000
2022
US$’000
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
10
24
20
21
22
23
24
25
-
-
-
-
-
-
-
102,532
-
-
102,532
-
6,380
-
1
24
6,405
108,937
-
-
-
-
-
-
-
104,245
-
-
104,245
-
6,833
-
91
32
6,956
111,201
-
-
-
-
-
-
-
109,460
-
-
109,460
-
9,668
-
68
32
9,768
119,228
445,556
6,533
2,255
1,878
427
4,163
12,578
-
80,875
-
554,265
235,415
31,783
538
1,620
62,383
331,739
886,004
443,975
6,755
2,142
1,951
434
5,858
13,408
-
86,572
-
561,095
256,376
40,900
1,077
2,664
81,524
382,541
943,636
1 January
2021
US$’000
472,894
6,872
1,791
12,882
442
1,535
10,621
-
97,686
1,454
606,177
166,602
48,519
1,429
2,718
48,560
267,828
874,005
32,035
(2,058)
14,271
44,248
-
44,248
32,035
(2,058)
31,831
61,808
-
61,808
32,035
(2,058)
33,880
63,857
-
63,857
32,035
(2,058)
366,133
396,110
3,624
399,734
32,035
(2,058)
338,009
367,986
75,727
443,713
32,035
(2,058)
279,288
309,265
52,387
361,652
-
-
-
-
-
-
-
-
-
64,689
-
-
-
-
64,689
64,689
108,937
-
-
-
-
-
-
-
-
-
49,393
-
-
-
-
49,393
49,393
111,201
-
-
-
-
-
-
-
10,785
-
44,586
-
-
-
-
55,371
55,371
119,228
204,817
1,753
54,323
4,778
18,393
7,131
291,195
49,923
1,757
126,604
188
567
10,536
5,500
195,075
486,270
886,004
214,866
3,029
39,417
5,786
938
7,698
271,734
81,927
2,565
128,241
1,390
564
7,028
6,474
228,189
499,923
943,636
222,026
320
42,200
8,371
948
8,264
282,129
97,640
967
119,975
1,392
567
4,670
5,013
230,224
512,353
874,005
The annexed notes form an integral part of and should be read in conjunction with these financial statements.
98
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
Year ended
Year ended
31 December
31 December
2022
2021
Note
US$’000
US$’000
856,552
779,893
(649,686)
(573,932)
Revenue
Cost of sales
Gross profit
Other income
Distribution costs
Administrative expenses
Other operating expenses
Finance costs
Profit from operations
Share of results of associates
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income, 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 for the year, net of tax
Total comprehensive income for the year
Profit attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interests
Profit per share
- Basic
- Diluted
3
26
27
27
28
29
30
30
The annexed notes form an integral part of and should be read in conjunction with these financial statements.
206,866
3,966
(48,547)
(15,970)
(30,451)
(18,652)
97,212
8,417
105,629
(23,038)
82,591
(6,014)
(47)
(6,061)
(419)
(6,480)
76,111
67,842
14,749
82,591
61,789
14,322
76,111
Cents
9.21
9.21
205,961
10,719
(51,534)
(16,205)
(53,641)
(14,823)
80,477
4,057
84,534
(2,451)
82,083
(4,393)
2,125
(2,268)
(34)
(2,302)
79,781
61,520
20,563
82,083
58,721
21,060
79,781
Cents
8.35
8.35
99
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 -
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
Cash Flows from Operating Activities
Profit 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
(Gain)/loss on disposal of property, plant and equipment
Write-off of property, plant and equipment
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
Decrease/(increase) in inventories
Decrease in trade receivables
Decrease in capitalised contract costs
-
-
-
-
-
-
-
-
-
-
-
-
Decrease/(increase) in prepayments, deposits and other receivables
Increase in contract liabilities
Increase in trade payables
Decrease in other payables
Decrease in provisions
Cash generated from operations
Income tax 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
Dividends received from an associate
Interest received
Net cash (used in)/generated from investing activities
Note
5, 27
24, 27
7, 27
4, 27
9, 27
8, 27
27
27
26
27
29
13, 27
26
6, 27
14, 27
27
26
6
4
12
Year ended
31 December
2022
US$’000
Year ended
31 December
2021
US$’000
105,629
84,534
143
(564)
392
24,750
2,356
7
(3)
10,052
-
-
(47)
561
-
130
-
18,652
(1,205)
(8,417)
152,436
23,216
4,328
539
5,642
3,508
26,388
(10,111)
(2,398)
203,548
(6,590)
196,958
(395)
(39,402)
(166)
-
7,868
1,205
(30,890)
145
(567)
9,622
28,684
4,405
8
14
5,490
(581)
63
2,125
2,830
(6,681)
114
484
14,823
(223)
(4,057)
141,232
(82,476)
4,928
353
(1,899)
2,358
14,249
(5,111)
(2,585)
71,049
(813)
70,236
(547)
(7,038)
(15)
2,035
9,697
223
4,355
101
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
Cash Flows from Financing Activities
Repayment of bank and other loans (Note A)
Proceeds from bank and other loans (Note A)
Principal repayment of lease liabilities (Note A)
Acquisition of non-controlling interests
Capital contribution by non-controlling interest
Decrease in cash collateral
Dividend paid
Interest paid (Note A)
Net cash used in financing activities
Note
11
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Exchange difference on translation of cash and cash equivalents at beginning of
the year
Cash and cash equivalents at end of the year
16
Note A Reconciliation of liabilities arising from financing activities
Year ended
31 December
2022
US$’000
Year ended
31 December
2021
US$’000
(65,964)
22,826
(2,484)
(109,127)
-
2,610
(10,948)
(17,661)
(180,748)
(14,680)
69,793
(1,851)
53,262
(38,343)
15,830
(4,208)
-
2,280
789
-
(16,501)
(40,153)
34,438
36,040
(685)
69,793
The following is the disclosure of the reconciliation of items for which cash flows have been, or will be, classified as financing activities,
excluding equity items:
1 January
2022
US$’000
5,594
Cash
inflows
US$’000
Cash
outflows
US$’000
Interest
paid
US$’000
New leases
US$’000
Write-off
US$’000
Foreign
exchange
difference
US$’000
Interest
expense
US$’000
31 December
2022
US$’000
-
(2,484)
(171)
567
(7)
(160)
171
3,510
Non-cash changes
296,793
22,826
(65,964)
-
171
-
-
(17,490)
-
-
-
-
26
1,059(1)
254,740
-
17,422
103
Non-cash changes
1 January
2021
US$’000
1,287
Cash
inflows
US$’000
Cash
outflows
US$’000
Interest
paid
US$’000
Derecognition
of financial
liabilities
US$’000
-
(4,208)
(251)
-
New
leases
US$’000
8,696
Foreign
exchange
difference
US$’000
Interest
expense
US$’000
31 December
2021
US$’000
(181)
251
5,594
319,666
15,830
(38,343)
-
(6,681)
2,844
-
-
(16,250)
-
-
-
5,326
995(1)
296,793
-
13,577
171
Lease liabilities
Borrowings – bank
and other
borrowings
Trade and other
payables
- Interest payables
Lease liabilities
Borrowings – bank
and other
borrowings
Trade and other
payables
- Interest payables
(1)
This is related to the amortisation of “borrowing costs” and “finance costs” 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.
102
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
1
General information
The financial statements of the Company and of the Group for the financial year ended 31 December 2022 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 United States Dollars (USD) whilst the functional currency of the Company is
Australian Dollars (AUD). All financial information is presented in USD, unless otherwise stated.
As at 31 December 2022, the Company has net assets of US$44,248,000 (2021 – US$61,808,000) and net current liabilities of
US$58,284,000 (2021 – US$42,437,000). Included in the Company’s current liabilities as at 31 December 2022 are non-trade
amounts owing to OM Materials (S) Pte Ltd (“OMS”) and OMH (Mauritius) Corp (“OMH MU”), both wholly-owned subsidiaries,
of US$54,513,000 (2021 – US$46,832,000) and US$8,150,000 (2021 – US$737,000) respectively. OMS has provided a letter of
undertaking that it shall provide continuing financial support to the Company, and both OMS and OMH MU have provided a
letter of undertaking that they will not demand immediate repayment for debts owing to them. Therefore, the Company is
of the view that the preparation of financial statements on a going concern basis is appropriate.
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 28)
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.
Allowance for expected credit losses (ECL) of trade and other receivables (Note 14)
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.
103
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 14) (Cont’d)
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 increase/decrease by approximately US$188,000 (2021 – US$195,000).
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.
Net realisable value of inventories (Note 13)
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 2022 is US$162,000 (2021 – US$14,519,000). If the net realisable
value of the inventories decreases by 10% from management’s estimates, the Group’s profit for the year will decrease by
US$16,200 (2021 – US$1,452,000).
104
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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)
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 21 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 2022, the Company and the Group 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
Amendments to IFRS 16
Amendments to IAS 16
Amendments to IAS 37
Amendments to IFRS 3
Amendments to IFRS 9
Description
COVID-19 - Related Rent Concessions beyond 30 June
2021
Property, Plant and Equipment – Proceeds before
Intended Use
Onerous Contracts – Cost of Fulfilling a Contract
Reference to the Conceptual Framework
Fees in the ’10 per cent’ Test for Derecognition of
Financial Liabilities
Effective date
(Annual periods
beginning on
or after)
1 April 2021
1 January 2022
1 January 2022
1 January 2022
1 January 2022
2(c) New and revised IFRS in issue but not yet effective
At the date of authorisation of these financial statements, the Company and the Group have not adopted the new and
revised IFRS, Interpretations and amendments to IFRS that have been issued but not yet effective to them. Management
anticipates that the adoption of these new and revised IFRS pronouncements in future periods will not have a material
impact to the Company’s and the Group’s accounting policies in the period of their initial application:
Reference
Description
Amendments to IAS 1 and IFRS Practice
Statement 2
Disclosure of Accounting Policies
Effective date
(Annual periods
beginning on
or after)
1 January 2023
Amendments to IAS 8
Definition of Accounting Estimates
1 January 2023
Amendments to IAS 12
Deferred Tax related to Assets and Liabilities arising
1 January 2023
from a Single Transaction
Amendments to IAS 1
Classification of Liabilities as Current or Non-current
1 January 2024
Amendments to IAS 1
Non-current Liabilities with Covenants
Amendments to IFRS 16
Lease Liability in a Sale and Leaseback
1 January 2024
1 January 2024
Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an Investor and
To be determined
its Associate or Joint Venture
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 provide guidance and examples to help a reporting entity apply materiality judgement to accounting policy
disclosures. The amendments aim to help the entity to provide accounting policy disclosures that are more useful by replacing
the requirement to disclose ‘significant’ accounting policies with a requirement to disclose ‘material’ accounting policies and by
adding guidance on how the entity applies the concept of materiality in making decisions about accounting policy disclosures.
The amendments to IAS 1 are effective for reporting periods beginning on or after 1 January 2023 and are applied prospectively.
Early application is permitted. The amendments to IFRS Practice Statement 2 do not contain an effective date or transition
requirements.
There is no material impact expected to the financial statements on initial application.
Amendments to IAS 8 Definition of Accounting Estimates
The amendments replace the definition of ‘change in accounting estimates’ with a definition of ‘accounting estimates’.
The amendments clarify the distinction between change in accounting estimates and change in accounting policies and
correction of errors, and that entities use measurement techniques and inputs to develop accounting estimates.
The amendments are effective for reporting periods beginning on or after 1 January 2023 to changes in accounting policies
and changes in accounting estimates that occur on or after the beginning of the period of initial application. Early application
is permitted.
There is no material impact expected to the financial statements on initial application.
Amendments to IAS 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.
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 2024, with early application
permitted.
Amendments to IAS 1 Non-current Liabilities with Covenants
The amendments specify that covenants with which a reporting entity must comply after the reporting date do not affect
the classification of a liability as current or non-current at the reporting date. The amendments require the entity to disclose
information in the notes that enables users of financial statements to understand the risk that non-current liabilities with
covenants could become repayable within twelve months.
The amendments are applied retrospectively for reporting periods beginning on or after 1 January 2024. Early application
is permitted.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2(c) New and revised IFRS in issue but not yet effective (Cont’d)
Amendments to IFRS 16 Lease Liability in a Sale and Leaseback
The amendments add subsequent measurement requirements for sale and leaseback transactions that satisfy the
requirements in IFRS 15 to be accounted for as a sale. The amendments require the seller-lessee to determine ‘lease
payments’ or ‘revised lease payments’ such that the seller-lessee does not recognise a gain or loss that relates to the right
of use retained. The amendments do not affect the gain or loss recognised by the seller-lessee relating to the partial or full
termination of a lease.
The amendments are effective for reporting periods beginning on or after 1 January 2024. Early application is permitted.
The amendments are applied retrospectively to sale and leaseback transactions that have been entered into on or after the
date of initial application of IFRS 16.
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture
The amendments clarify the accounting treatment for sales or contribution of assets between an investor and their associates
or joint ventures. The amendments confirm that the accounting treatment depends on whether the non-monetary assets
sold or contributed to an associate or joint venture constitute a ‘business’ as defined in IFRS 3.
Where the non-monetary assets constitute a business, the investor shall recognise the full gain or loss on the sale or
contribution of assets. If the assets do not meet the definition of a business, the gain or loss is recognised by the investor
only to the extent of the other investor’s interests in the associate or joint venture.
The effective date of the amendments has yet to be set, but early application is permitted. The amendments are applied
prospectively.
2(d) Summary of significant accounting policies
The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those
followed in the preparation of the Group’s consolidated financial statements for the year ended 31 December 2021, except
for the adoption of new standards effective as of 1 January 2022 and change in presentation currency as disclosed below.
Functional and presentation currency
The Company and the Group’s presentation currency has been changed from AUD to USD effective from 1 January 2022. The
change in presentation currency in the consolidated financial statements is to provide more relevant information about the
Company and the Group’s financial positions, and the Group’s financial performance and cashflows, as most of the Group’s
assets, liabilities, revenue and expenses are denominated in USD.
The change in presentation currency is a voluntary change which is accounted for retrospectively. All other accounting
policies are consistent with those adopted in the annual report for the year ended 31 December 2021. The consolidated
financial statements have been restated to USD using the procedures outlined below:
•
•
•
•
•
Consolidated statement of comprehensive income and Consolidated statement of cash flows have been translated
into USD using average foreign currency rates prevailing for the relevant period
Assets and liabilities in the Statements of financial position have been translated into USD at the closing foreign
currency rates on the relevant balance sheet dates
The Equity section of the Statements of financial position, including foreign currency translation reserve, retained
earnings, share capital and the other reserves, have been translated into USD using historical rates
All resulting exchange differences were recognised in Other comprehensive income
Earnings per share and dividend disclosures have also been restated to USD to reflect the change in presentation
currency
The presentation currency of the Company and the Group is now in USD, whilst the functional currency of the Company
remains as AUD and its subsidiaries’ functional currencies remains unchanged.
As this is an accounting policy applied retrospectively, the Company and the Group has presented a third statement of
financial position as at the beginning of the preceding period.
Group accounting
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the
Company (its subsidiaries) made up to the reporting date each year. Control is achieved when the Company:
•
•
•
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control listed above.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2(d) Summary of significant accounting policies (Cont’d)
Group accounting (Cont’d)
Basis of consolidation (Cont’d)
When the Company has less than a majority of the voting rights of an investee, it considers that 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 Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting
rights in an investee are sufficient to give it power, including:
•
•
•
•
the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote
holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Company 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.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in
the profit or loss from the date the Company gains control until the date when the Company ceases to control the subsidiary.
Where necessary, adjustments are made to the financial statements of subsidiaries to ensure conformity with the Group’s
accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members
of the Group are eliminated on consolidation.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Those interests of
non-controlling shareholders that are present ownership interests entitling their holders to a proportionate share of net
assets upon liquidation may initially be measured at fair value or at the non-controlling interests’ proportionate share of
the fair value of the acquiree’s identifiable net assets. The choice of measurement is made on an acquisition-by-acquisition
basis. Other non-controlling interests are initially measured at fair value. Subsequent to acquisition, the carrying amount of
non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of
subsequent changes in equity.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the
non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and
to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions.
The carrying amount of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their
relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted
and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the
Company.
When the Group loses control of a subsidiary, the gain or loss on disposal recognised in the profit or loss 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), less liabilities of the subsidiary and any
non-controlling interests. 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 profit or loss or transferred to another category of equity as required/permitted by applicable IFRS). The fair value of
any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial
recognition for subsequent accounting under IFRS 9 Financial Instruments when applicable, or the cost on initial recognition
of an investment in an associate or a joint venture.
In the Company’s separate financial statements, investments in subsidiaries are carried at cost less any impairment in net
recoverable value that has been recognised in the profit or loss. On disposal of such investments, the difference between
disposal proceeds and the carrying amounts of the investments are recognised in the profit or loss.
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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2(d) Summary of significant accounting policies(Cont’d)
Group accounting (Cont’d)
Business combinations (Cont’d)
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.
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.
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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2(d) Summary of significant accounting policies (Cont’d)
Associates (Cont’d)
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 arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition
date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interest in the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the entity over net of the
acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the
consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s
previously held equity interest in the acquiree (if any), the excess is recognised immediately in the profit or loss as a bargain
purchase gain.
Goodwill arising from acquisition of associates and joint ventures represents the excess of the cost of the acquisition over
the Group’s share of the fair value of the identifiable net assets acquired. Goodwill on associates and joint ventures is
included in the carrying amount of the investments.
Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill
is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination.
Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its
carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment
loss recognised for goodwill is not reversed in a subsequent period.
On disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of 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.
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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2(d) Summary of significant accounting policies (Cont’d)
Intangible assets (Cont’d)
Exploration and evaluation costs (Cont’d)
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 machinery includes Plant and equipment - Process facility. These are 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 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 recognized 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 life of the investment property of 73 years.
Investment property is derecognised 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
condition 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.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2(d) Summary of significant accounting policies (Cont’d)
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.
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 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 recognized in other
comprehensive income, except for impairment losses, foreign exchange gains and losses and interest calculated using
the effective interest method are recognized in the profit or loss. The cumulative gain or loss previously recognized
in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the
financial asset is derecognised.
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 recognized in the profit or loss in the period in which it arises.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2(d) Summary of significant accounting policies (Cont’d)
Financial assets (Cont’d)
Equity instruments
The Group subsequently measures all equity investments at 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.
The impairment methodology applied depends on whether there has been a significant increase in credit risk. ECL are
recognized 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 recognized 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 recognizes 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).
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2(d) Summary of significant accounting policies (Cont’d)
Financial assets (Cont’d)
Impairment (Cont’d)
Definition of default (Cont’d)
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.
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 recognized 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
derecognised 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 derecognised 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 part of the cost of the
related asset are capitalised. Otherwise, borrowing costs are recognized 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 completed for
their intended use.
Foreign exchange differences arising from foreign currency borrowings are capitalized to the extent that they are regarded
as an adjustment to interest costs.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2(d) Summary of significant accounting policies (Cont’d)
Financial liabilities (Cont’d)
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.
Financial guarantees
The Company has issued corporate guarantees to banks for bank borrowings of its subsidiaries and some third-party
suppliers. 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);
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 19. The full fair value of a hedging
derivative is classified as a non-current asset or liability when the remaining 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 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 that 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 recognized 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.
Government grants related to income
Government grants shall be recognised in the profit or loss on a systematic basis over the periods in which the entity
recognises as expenses the related costs for which the grants are intended to compensate. Grants related to income may be
presented as a credit in the profit or loss, either separately or under a general heading such as “Other income”.
Provisions and contingent liabilities
Provisions are recognized 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 recognized 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 recognized as finance costs.
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OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 cases 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 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 4 years
1 to 5 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
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.
119
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 future taxable profits 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.
The Malaysian subsidiaries of the Group participate in the national pension scheme as defined by the laws of Malaysia. These
subsidiaries make contributions to the Employees’ Provident Fund in Malaysia, a defined contribution 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.
120
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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
(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.
121
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 majority of the Group’s
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.
122
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 an 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 United States Dollars whilst the functional currency of the Company is Australian Dollars.
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, silicon metal and manganese sinter ore
Marketing and trading
Trading of manganese ore, manganese ferroalloys, ferrosilicon, and sinter ore
123
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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 finance income and costs and 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.
Segment assets exclude interests in associates which are not directly attributable to the business activities of any operating
segment.
Segment liabilities comprise operating liabilities of each operating segment.
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.
124
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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S
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
4
Property, plant and equipment
Construction
-in-progress
US$’000
Buildings and
infrastructure
US$’000
Plant and
machinery
US$’000
Computer
equipment,
office
equipment
and
furniture
US$’000
Motor
vehicles
US$’000
Total
US$’000
16,262
4,093
(8,926)
(4,678)
(713)
6,038
37,477
(11,455)
-
-
(1,379)
30,681
19,066
239
230
(58)
432
19,909
350
16
-
-
(1,444)
18,831
580,744
1,832
8,641
(1,395)
(1,480)
588,342
969
11,066
(15,464)
-
(3,504)
581,409
4,639
828
(5)
(330)
(69)
5,063
489
373
(56)
(7)
(109)
5,753
1,518
46
-
(216)
75
1,423
117
-
(2)
(100)
(57)
1,381
622,229
7,038
(60)
(6,677)
(1,755)
620,775
39,402
-
(15,522)
(107)
(6,493)
638,055
The Group
Cost
At 1 January 2021
Additions
Transfers (Note 9)
Written off
Exchange realignment
At 31 December 2021 and
1 January 2022
Additions
Transfers
Written off
Disposal
Exchange realignment
At 31 December 2022
Accumulated depreciation and impairment loss
At 1 January 2021
Depreciation for
the year (Note 27)
Transfers (Note 9)
Written off
Exchange realignment
At 31 December 2021 and
1 January 2022
Depreciation for
the year (Note 27)
Transfers
Written off
Disposal
Exchange realignment
At 31 December 2022
Net book value
-
-
-
-
-
-
-
-
-
-
-
-
10,369
134,273
3,319
1,374
149,335
1,068
168
(2)
223
27,042
19
(654)
(252)
522
(188)
(318)
(74)
52
-
(214)
73
28,684
(1)
(1,188)
(30)
11,826
160,428
3,261
1,285
176,800
955
-
-
-
(854)
11,927
23,022
(26)
(5,429)
-
(2,539)
175,456
713
26
(39)
(5)
(44)
3,912
60
-
(2)
(86)
(53)
1,204
24,750
-
(5,470)
(91)
(3,490)
192,499
At 31 December 2022
30,681
6,904
405,953
1,841
177
445,556
At 31 December 2021
6,038
8,083
427,914
1,802
138
443,975
As of 31 December 2022, property, plant and equipment with a total net carrying amount of US$409,746,000 (2021 -
US$425,490,000) had been pledged for banking facilities granted to subsidiaries (Note 20.1).
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 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% (2021 - 1%) would not result
in indication of impairment of the carrying amount of property, plant and equipment.
126
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
4
Property, plant and equipment (Cont’d)
Key assumptions used for value-in-use calculations:
2022
2021
People’s
Republic
of China
Malaysia
Australia
People’s
Republic
of China
Malaysia
Australia
Smelting operations
Smelting operations
Gross margin1
Growth rate2
2%
12%
31%
3%
18%
29%
0 - 1% before
2027,
0% after 2027
1 - 2% before
2027,
0% after 2027
0% before
2027,
0% after 2027
0% before
2026,
0% after 2026
2% - 3% before
2026,
0% after 2026
0% before
2026,
0% after 2026
Discount rate3
4.3%
6.6%
12.8%
4.9%
6.3%
12.8%
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 27)
Exchange realignment
At end of the year
2022
US$’000
2021
US$’000
6,755
(143)
(79)
6,533
6,872
(145)
28
6,755
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 US$5,630,000 (2021 - US$5,745,000)
and were pledged as security for borrowings referred to in Note 20.1(b).
Information about the Group’s leasing activities are disclosed in Note 33.
6
Exploration and evaluation costs
The Group
At beginning of the year
Costs incurred during the year
Written off during the year (Note 27)
Exchange realignment
At end of the year
2022
US$’000
2021
US$’000
2,142
395
(130)
(152)
2,255
1,791
547
(114)
(82)
2,142
The Group has a 51% (2021 – 40%) interest in a joint arrangement in Australia which is involved in the exploration of
manganese. This interest in the joint arrangement is accounted for as a joint operation. In 2022 and 2021, the expenditure
capitalised during the year related to the Group’s share of exploration expenditure invested in the joint operation. The joint
operation has no contingent liabilities or commitments as at 31 December 2022 and 2021.
127
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
7
Mine development costs
The Group
At beginning of the year
Adjustments to rehabilitation provisions (Note 23)
Amortisation for the year (Note 27)
Exchange realignment
At end of the year
8
Investment property
The Group
Cost
Balance at beginning of year and at end of year
Accumulated depreciation
Balance at beginning of year
Depreciation for the year (Note 27)
Balance at end of year
Net book value
Rental income
Direct operating expenses arising from investment property that generates rental
income
Depreciation for the year
Gross profit arising from investment property
The following are details of the investment property of the Group:
2022
US$’000
2021
US$’000
1,951
450
(392)
(131)
1,878
12,882
(901)
(9,622)
(408)
1,951
2022
US$’000
2021
US$’000
566
132
7
139
427
94
(17)
(7)
70
566
124
8
132
434
96
(17)
(8)
71
Property Name
Parkway Parade
Fair value hierarchy
2022
2021
Location
Description
Total net lettable
area (sq m)
80 Marine Parade Road,
#08-08 Parkway Parade,
Singapore 449269
Office premises
148
Tenure
73-year leasehold
commenced from
31 August 2005
Fair value measurements using
Quoted prices in active
markets for identical assets
(Level 1)
Significant other observable
inputs
(Level 2)
Significant unobservable
inputs
(Level 3)
US$’000
US$’000
-
-
-
-
US$’000
2,460
2,140
Valuation techniques used to derive fair values
As of 31 December 2022, the fair value of investment property amounted to approximately US$2,460,000 (2021 –
US$2,140,000) as determined by management with reference to recent market transactions of comparable properties in
close proximity, adjusted for differences in key attributes such as property size, which is based on the property’s highest
and best use.
128
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
Leasehold
buildings
US$’000
Plant and
machinery
US$’000
Office
equipment
US$’000
Motor
vehicles
US$’000
Total
US$’000
9
Right-of-use assets
The Group
Cost
At 1 January 2021
Additions
Transfers (Note 4)
Write-off
Exchange realignment
At 31 December 2021 and
at 1 January 2022
Additions
Write-off
Exchange realignment
At 31 December 2022
Accumulated depreciation and impairment
At 1 January 2021
Depreciation (Note 27)
Transfers (Note 4)
Write-off
Exchange realignment
At 31 December 2021 and
at 1 January 2022
Depreciation (Note 27)
Write-off
Exchange realignment
At 31 December 2022
Carrying amount
At 31 December 2022
At 31 December 2021
4,061
6,085
(42)
(2,560)
(41)
7,984
2,626
102
-
(332)
7,503
10,380
9
-
(63)
7,449
3,699
1,639
-
(2,560)
(36)
2,742
1,649
-
(46)
4,345
3,104
4,761
697
-
(454)
10,623
7,000
2,723
1
-
(295)
9,429
665
-
(407)
9,687
936
951
26
-
-
-
-
26
27
(26)
-
27
12
6
-
-
-
18
5
(18)
-
5
22
8
366
-
-
-
(1)
365
-
-
(1)
364
191
37
-
-
(1)
227
37
-
(1)
263
101
138
Leasehold buildings are located in Malaysia, Singapore and Australia.
Information about the Group’s leasing activities are disclosed in Note 33.
12,437
8,711
60
(2,560)
(374)
18,274
733
(26)
(518)
18,463
10,902
4,405
1
(2,560)
(332)
12,416
2,356
(18)
(454)
14,300
4,163
5,858
129
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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
2022
US$’000
2021
US$’000
13,791
(1,213)
12,578
(53,336)
34,943
(18,393)
-
12,578
12,578
-
(18,393)
(18,393)
61,626
(48,218)
13,408
(938)
-
(938)
-
13,408
13,408
-
(938)
(938)
The movement in deferred tax assets and liabilities (after offsetting of balances within the same tax jurisdiction) are as
follows:
Temporary differences on
qualifying property, plant
and equipment, and mine
development costs
US$’000
Provisions
US$’000
Tax losses
US$’000
Others
US$’000
Total
US$’000
(49,654)
3,824
56,554
(103)
10,621
3,415
(1,031)
61
(188)
809
(312)
33
-
3,226
(439)
(46,178)
2,605
57,051
(70)
13,408
46,455
(1,228)
(45,455)
(29)
248
(145)
1,232
(670)
10,926
246
(4)
172
18
(848)
12,578
The Group
Deferred tax assets:
At 1 January 2021
Credited/(charged) to
profit or loss (Note 28)
Exchange difference on
translation
At 31 December 2021
and 1 January 2022
Credited/(charged) to
profit or loss (Note 28)
Exchange difference on
translation
At 31 December 2022
130
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
10 Deferred taxation (Cont’d)
Temporary differences on
qualifying property, plant
and equipment
US$’000
Provisions
US$’000
Tax losses
US$’000
Others
US$’000
Total
US$’000
(328)
50
10
(268)
-
-
-
-
-
-
-
-
(620)
(948)
(50)
-
-
10
(670)
(938)
(50,351)
11,914
22,209
(1,245)
(17,473)
18
-
-
-
18
(50,601)
11,914
22,209
(1,915)
(18,393)
The Group
Deferred tax liabilities
At 1 January 2021
(Charged)/credited to
profit or loss (Note 28)
Exchange difference on
translation
At 31 December 2021
and 1 January 2022
(Charged)/credited to
profit or loss (Note 28)
Exchange difference on
translation
At 31 December 2022
11
Subsidiaries
The Company
Unquoted equity investments, at cost
At beginning of the year
Exchange difference on translation
At end of the year
Amounts due from subsidiaries
Less: Accumulated impairment losses
At beginning of the year
Exchange difference on translation
At end of the year
Total
2022
US$’000
2021
US$’000
5,815
(386)
5,429
6,172
(357)
5,815
153,618
158,957
(60,527)
4,012
(56,515)
97,103
102,532
(64,247)
3,720
(60,527)
98,430
104,245
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 Company evaluates any indication of impairment on the investment in subsidiaries at the end of each reporting period.
The Company 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.
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% (2021 – 1%) would not result
in indication of impairment of the carrying amount of the investments in subsidiaries.
131
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
11
Subsidiaries (Cont’d)
Key assumptions used for value-in-use calculations:
2022
2021
People’s
Republic
of China
Malaysia
Australia
People’s
Republic
of China
Malaysia
Australia
Smelting operations
Smelting operations
Gross margin1
Growth rate2
2%
12%
31%
3%
18%
29%
0 – 1%
before 2027,
0% after 2027
1 – 2%
before 2027,
0% after 2027
0%
before 2027,
0% after 2027
0%
before 2026,
0% after 2026
2% - 3%
before 2026,
0% after 2026
0%
before 2026,
0% after 2026
Discount rate3
4.3%
6.6%
12.8%
4.9%
6.3%
12.8%
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:
Name
Held by the Company
OM (Manganese) Ltd. (1)
Place of
incorporation/
operation
Australia
Proportion of
ownership interest
and voting rights
held by the Group
2022
%
100
2021
%
100
Held by OM Resources (HK) Limited
OM Materials (S) Pte. Ltd. (2)
Singapore
100
100
Principal activities
Operation of manganese
mine(5) and exploration
Investment holding and
trading of metals and
ferroalloy products
Sales and processing of
ferroalloys and ores
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)
Malaysia
100
75
PRC
PRC
100
100
Sales and processing of
ferroalloys and ores
100
100
Trading of metals and
ferroalloys products
Note:
(1)
(2)
(3)
(4)
(5)
audited by Grant Thornton Audit Pty Ltd
audited by Foo Kon Tan LLP
audited by Ernst & Young PLT, Malaysia
audited by Guangxi JiaHai Accountant Affairs Office Co. Ltd. for statutory purposes and reviewed by Foo Kon Tan LLP for group
consolidation
Production ceased on 25 January 2022 and the mine was placed on care and maintenance
132
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
11
Subsidiaries (Cont’d)
The principal activities of other subsidiaries that are not material to the Group at the end of the reporting period are
summarised as follows:
Principal activities
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
Project development and project management
services
Exploration and mining of minerals
Engineering services
Place of incorporation/
operation
The British Virgin Islands
Mauritius
Hong Kong
Singapore
Malaysia
PRC
Malaysia
Malaysia
Malaysia
Number of subsidiaries
2022
2021
1
1
1
1
1
1
2
2
1
1
1
1
1
1
1
1
2
1
11
10
Additional investment in OM Materials (Sarawak) Sdn. Bhd. (“OM Sarawak”)
On the 4 March 2021, pursuant to the Equity Injection Notice dated 24 February 2021 from OM Sarawak, OM Materials (S)
Pte Ltd (“OMS”) contributed US$6,839,250, its proportionate share of the additional share capital injection in OM Sarawak,
by subscribing 27,685,284 ordinary shares at an issue price of RM1.00 per share.
Acquisition of non-controlling interests (“NCI”) in OM Sarawak and OM Materials (Samalaju) Sdn Bhd (“OM Samalaju”)
On 6 December 2022, the Company’s wholly owned subsidiary, OMS, completed the acquisition of the remaining 25%
interests in OM Sarawak and OM Samalaju. The total consideration was US$120,000,000, which comprised US$109,127,000
for the acquisition of the shares in OM Sarawak and OM Samalaju, and US$10,873,000 for the repayment of loans to the
non-controlling interests (Note 20.2).
Immediately prior to the acquisition, the carrying amount of the existing 25% non-controlling interests in OM Sarawak
and OM Samalaju was US$85,987,000. The Group recognised a decrease in non-controlling interests of US$85,987,000,
and a decrease in equity attributable to owners of the Company of US$23,140,000 (comprising a decrease in capital
reserve of US$23,176,000, an increase in hedging reserve of US$1,129,000, and a decrease in exchange fluctuation reserve
of US$1,093,000). The effect on the equity attributable to the owners of the Company arising from this transaction with
non-controlling interests is summarised as follows:
Total consideration
Less: Loan repayment to NCI
Carrying amount of NCI acquired
Excess of consideration paid recognised within equity attributable to owners of the Company
2022
US$’000
120,000
(10,873)
109,127
(85,987)
23,140
133
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
11
Subsidiaries (Cont’d)
As at 31 December 2021, the material non-controlling interest of the Group comprised the 25% non-controlling interest in
OM Sarawak. The details of OM Sarawak as at 31 December 2021 was as follows:
Place of
Incorporation
and
principal place
of business
Proportion of
ownership
interests and
voting rights
held by non-
controlling interests
Name
OM Materials
(Sarawak) Sdn. Bhd.
Malaysia
2021
%
25
Profit allocated to
non-controlling
interests
Accumulated non-
controlling interests
2021
US$’000
22,008
2021
US$’000
68,230
In 2022, the profit attributable to this non-controlling interest from 1 January 2022 to 6 December 2022 amounted to
US$14,558,000. Summarised financial information in respect of the above subsidiary as at 31 December 2021 is set out
below.
OM Materials (Sarawak) Sdn. Bhd.
Summarised Statement of Comprehensive Income
Revenue
Expenses
Profit for the year
Summarised Statement of Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Other summarised information
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash outflow from financing activities
Net cash inflow
12
Interests in associates
The Group
Cost of investment in associates (1)
At beginning of the year
Exchange difference on translation
At end of the year
Share of post-acquisition profits and reserves, net of dividends
2021
US$’000
436,579
(348,547)
88,032
282,179
429,026
(170,092)
(263,007)
33,545
(4,987)
(20,561)
7,997
2022
US$’000
2021
US$’000
56,358
(3,736)
52,622
28,253
80,875
59,821
(3,463)
56,358
30,214
86,572
(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.
134
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
12
Interests in associates (Cont’d)
Details of the Group’s material associate at the end of the reporting period was as follows:
Name
Country of
incorporation
Proportion of effective
ownership interest
and voting rights
held by the Group
Ntsimbintle Mining Proprietary Limited
South Africa
(“NMPL”) (1)
Held by NMPL (2)
Tshipi é Ntle Manganese Mining
Proprietary Limited (“Tshipi Mining”) (1)
South Africa
2022
%
26
13
2021
%
26
13
Principal activities
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 Company, 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 2022 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
Income (1)
Profit for the year
Total comprehensive income for the year
Ntsimbintle Mining
Proprietary Limited
2022
US$’000
2,773
138,255
-
(93,713)
47,315
52,139
32,080
32,080
2021
US$’000
3,414
127,916
(55)
(113,363)
17,912
30,020
15,656
15,656
Dividends received from associate
7,868
9,697
(1)
Inclusive of equity-accounted results of Tshipi Mining.
135
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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:
Ntsimbintle Mining
Proprietary Limited
Total
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
Net assets 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
47,315
93,713
141,028
36,667
40,543
3,579
80,789
17,912
113,363
131,275
34,132
43,421
9,010
86,563
Aggregate information of associates that are not individually material
The summarised financial information of the individually immaterial associates are as follows:
- Profit/(loss) for the year
- Total comprehensive income for the year
47,315
93,713
141,028
36,667
40,543
3,579
80,789
86
80,875
17,912
113,363
131,275
34,132
43,421
9,010
86,563
9
86,572
2022
US$’000
2021
US$’000
228
228
(40)
(40)
2022
US$’000
2021
US$’000
The Group’s share of profit/(loss)
76
(13)
136
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
13
Inventories
The Group
At cost
Raw materials
Work-in-progress
Finished goods
At net realisable value
Raw materials, work-in-progress and finished goods
Total
Recognised as expenses and included in cost of sales:
Cost of inventories (Note 27), inclusive of:
Write-down of inventories to net realisable value
Recognised as expenses and included in other operating expenses:
Write-down of inventories to net realisable value (Note 27)
14
Trade and other receivables
2022
US$’000
2021
US$’000
92,064
14,339
82,329
188,732
46,683
235,415
649,686
51,181
155,938
13,454
72,465
241,857
14,519
256,376
573,932
-
561
2,830
The Company
The Group
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
Trade receivables (i)
-
-
27,443
32,625
Other receivables:
Amounts due from subsidiaries (non-trade)
6,380
6,833
-
-
Deposits and other receivables:
- third party
- associate
Less: Allowance for impairment
of other receivables:
At beginning of the year
Impairment loss (Note 27)
At end of the year
Net other receivables (ii)
Total (i) + (ii)
-
-
-
-
6,380
6,833
-
-
-
6,380
6,380
-
-
-
6,833
6,833
4,818
220
5,038
(698)
-
(698)
4,340
31,783
8,936
37
8,973
(214)
(484)
(698)
8,275
40,900
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 US$99,000 (2021 - US$333,000)
from tax authorities.
137
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
14
Trade and other receivables (Cont’d)
Trade and other receivables are denominated in the following currencies:
Australian Dollar
Renminbi
United States Dollar
Malaysian Ringgit
Others
The Company
The Group
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
6,380
6,833
-
-
-
-
-
-
-
-
119
2,726
28,148
703
87
6,380
6,833
31,783
1,117
6,246
30,623
404
2,510
40,900
The credit risk for trade and other receivables is as follows:
By geographical areas
Asia Pacific
Europe
Africa
America
The Company
The Group
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
6,380
6,833
19,932
-
-
-
-
-
-
6,380
6,833
-
484
11,367
31,783
29,452
4,534
3,660
3,254
40,900
Neither past due nor impaired
Trade and other receivables that were neither past due nor impaired amounting to US$6,380,000 (2021 - US$6,833,000) and
US$31,693,000 (2021 - US$40,876,000) for the Company and the Group respectively related to a wide range of debtors for
whom there was no recent history of default.
Past due but not impaired
The ageing analysis of trade and other receivables past due but not impaired is as follows:
Past due 0 to 3 months
Past due 3 to 6 months
Past due over 6 months
The Company
The Group
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
-
-
-
-
-
-
-
-
74
-
16
90
21
-
3
24
Trade and other receivables that were past due but not impaired related to a number of debtors that have a good credit
track record with the Group. Based on historical default rates, the Group believes that no further impairment allowance is
necessary in respect of trade and other receivables not past due or past due.
138
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
15
Capitalised contract costs
The Group
2022
US$’000
2021
US$’000
Costs to fulfil service rendered for transportation of goods sold under
CFR and CIF Incoterms
538
1,077
Amortisation recognised as cost of sales during the year
1,077
1,429
The Group’s capitalised contract costs relate to fulfilment costs of freight and insurance for the transportation of goods
sold under CFR and CIF Incoterms. These costs are charged to the profit or loss on a basis consistent with the pattern of
recognition of the associated revenue.
16
Cash and bank balances
Cash at bank and on hand
Short-term bank deposits
Total cash and cash equivalents
Add: Cash collateral
Cash and bank balances
The Company
The Group
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
24
-
24
-
24
32
-
32
-
32
50,192
3,070
53,262
9,121
62,383
69,106
687
69,793
11,731
81,524
Included in the cash collateral were amounts of US$1,025,000 (2021 - US$1,015,000) and US$7,984,000 (2021 - US$10,595,000)
which were pledged to banks as security for banking facilities and the issuance of environmental bonds (Note 34.4)
respectively.
Cash and bank balances (including cash collateral) are denominated in the following currencies:
Australian Dollar
Renminbi
United States Dollar
Malaysian Ringgit
Others
The Company
The Group
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
22
-
2
-
-
24
30
-
2
-
-
32
9,473
5,127
37,374
9,844
565
62,383
13,846
11,817
50,873
3,884
1,104
81,524
The short-term bank deposits have an average maturity of 1 month (2021 - 3 months) from the end of the financial year with
the following effective interest rates:
The Group
United States Dollar
Malaysia Ringgit
2022
Per annum
2021
Per annum
2.48% to 3.11%
1.90%
0.10%
1.15%
139
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
17
Share capital
The Company and The Group
Authorised:
Ordinary shares of US$0.04337 (A$0.05)
(2021 – US$0.04337 (A$0.05)) each
Issued and fully paid:
Ordinary shares of US$0.04337 (A$0.05–
(2021 - US$0.04337 (A$0.05)) each
No. of ordinary shares
Amount
2022
’000
2021
’000
2022
US$’000
2021
US$’000
2,000,000
2,000,000
87,000
87,000
At 1 January and 31 December
738,623
738,623
32,035
32,035
The holders of ordinary shares (excluding treasury shares) are entitled to receive dividends as declared from time to time
and are entitled to one vote per share at meetings of the Company. All shares (excluding treasury shares) rank equally with
regard to the Company’s residual assets.
18
Treasury shares
The Company and The Group
No. of ordinary shares
Amount
2022
’000
2021
’000
2022
US$’000
2021
US$’000
At 1 January and 31 December
1,933
1,933
2,058
2,058
Treasury shares relate to ordinary shares of the Company that are held by the Company. During the year, the Company
acquired Nil shares (2021 - Nil shares) in the Company through on-market purchase on the Australian Securities Exchange
or on Bursa Malaysia.
19
Reserves
Share premium
Non-distributable reserve
Capital reserve
Contributed surplus
Hedging reserve
Exchange fluctuation reserve
(Accumulated losses)/Retained profits
[Note (i)]
[Note (ii)]
[Note (iii)]
[Note (iv)]
[Note (v)]
[Note (vi)]
[Note (vii)]
Share premium
At 1 January and 31 December
Non-distributable reserve
At 1 January
Transfer to statutory reserve
At 31 December
Capital reserve
At 1 January
Acquisition of non-controlling interests
(Note 11)
Transfer to statutory reserve
At 31 December
140
The Company
The Group
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
156,920
-
-
2,593
-
(39,758)
(105,484)
14,271
156,920
-
-
2,593
-
(36,286)
(91,396)
31,831
156,920
7,922
(10,947)
-
272
(40,139)
252,105
366,133
156,920
7,643
12,138
-
(818)
(33,032)
195,158
338,009
156,920
156,920
156,920
156,920
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,643
279
7,922
12,138
(23,176)
91
(10,947)
7,643
-
7,643
12,138
-
-
12,138
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
19
Reserves (Cont’d)
Contributed surplus
At 1 January and 31 December
Hedging reserve
At 1 January
Cash flow hedges
Acquisition of non-controlling interests
(Note 11)
At 31 December
Exchange fluctuation reserve
At 1 January
Acquisition of non-controlling interests
(Note 11)
Currency translation differences
At 31 December
(Accumulated losses)/Retained profits
At 1 January
Profit for the year
Dividends
Transfer to statutory reserve
At 31 December
[Note viii)]
The Company
2022
US$’000
2021
US$’000
The Group
2022
US$’000
2021
US$’000
2,593
2,593
-
-
-
-
-
-
-
-
-
-
(818)
(39)
1,129
272
(2,412)
1,594
-
(818)
(36,286)
(32,533)
(33,032)
(28,639)
-
(3,472)
(39,758)
(91,396)
(3,563)
(10,525)
-
(105,484)
-
(3,753)
(36,286)
(93,100)
1,704
-
-
(91,396)
(1,093)
(6,014)
(40,139)
195,158
67,842
(10,525)
(370)
252,105
-
(4,393)
(33,032)
133,638
61,520
-
-
195,158
Notes:
(i)
(ii)
(iii)
(iv)
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.
Capital reserve relates to:
a)
Difference between the consideration paid and the carrying amount of the non-controlling interests acquired,
and
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.
b)
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.
141
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
19
Reserves (Cont’d)
(v)
(vi)
(vii)
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.
(viii)
The Group and The Company
Final tax-exempt (one-tier) dividend of US$0.01429 (A$0.02) per share for 2021
2022
US$’000
2021
US$’000
10,525
10,525
-
-
On 27 February 2023, the Company declared a final dividend of A$0.015 per share to be paid to shareholders on 26 May
2023. The dividend is payable to all shareholders on the register of members on 5 May 2023. The total estimated dividend
to be paid is US$7,506,000 (A$11,079,000), which will be accounted for in the shareholder’s equity as an appropriation of
retained earnings in the financial year ended 31 December 2023.
2022
US$’000
2021
US$’000
175,675
29,452
205,127
(310)
204,817
50,200
-
50,200
(277)
49,923
254,740
204,721
10,731
215,452
(586)
214,866
73,538
8,814
82,352
(425)
81,927
296,793
20
Borrowings
The Group
Non-current
Bank loans (Note 20.1)
Other borrowings (Note 20.2)
Structuring and arrangement fee
Current
Bank loans (Note 20.1)
Other borrowings (Note 20.2)
Structuring and arrangement fee
142
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
20
Borrowings (Cont’d)
20.1 Bank loans
The Group
Bank loans, secured [Note (a)]
Bank loans, secured [Note (b)]
Amount repayable not later than one year
Amount repayable after one year:
Later than one year and not later than five years
2022
US$’000
2,976
222,899
225,875
2021
US$’000
6,295
271,964
278,259
50,200
73,538
175,675
225,875
204,721
278,259
Notes:
(a)
These loans are secured by a charge over certain Buildings and infrastructure and Plant and machinery, as disclosed
in Note 4.
(b) These loans are secured by:
•
•
•
•
•
•
•
•
•
•
shares of OM Materials (Sarawak) Sdn Bhd, a company incorporated in Malaysia;
a charge over its property, plant and equipment (Note 4);
a charge over certain bank accounts;
a charge over land use rights (Note 5);
a debenture;
a borrower assignment;
an assignment of insurances;
a shareholder assignment;
an assignment of reinsurances; and
a corporate guarantee from OM Holdings Limited
20.2 Other borrowings
The Group
Loan from non-controlling interest, unsecured [Note (a)]
Loan from non-controlling interest, unsecured [Note (b)]
Bonds, unsecured [Note (c)]
Third party loan, secured [Note (d)]
Third party loan, unsecured
Amount repayable not later than one year
Amount repayable after one year:
Later than one year and not later than five years
Later than five years
2022
US$’000
2021
US$’000
-
-
20,952
8,500
-
29,452
2,231
8,189
-
8,500
625
19,545
-
8,814
29,452
-
29,452
29,452
8,500
2,231
10,731
19,545
143
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
20
Borrowings (Cont’d)
20.2 Other borrowings (Cont’d)
Notes:
(a)
(b)
(c)
These loans were unsecured. The non-controlling interest was not entitled to demand or receive payment or any
distribution in respect of any loans from the Group. Repayment may be made subject to satisfaction of pre-agreed
tests typical for a project financing of this nature. The loan was repaid on 6 December 2022 as part of consideration
paid for the acquisition of the non-controlling interests in OM Sarawak and OM Samalaju (Note 11), and disclosed in the
Consolidated statement of cash flows under repayment of bank and other loans.
The loan was unsecured and repayable on demand. The loan was repaid on 6 December 2022 as part of consideration
paid for the acquisition of the non-controlling interests in OM Sarawak and OM Samalaju (Note 11), and disclosed in the
Consolidated statement of cash flows under repayment of bank and other loans.
The bonds issued by a wholly owned subsidiary of A$30,926,000 in November 2022 are unsecured and are due for full
repayment in 2025. Coupon of 10% is paid semi-annually in arrears on 30 May and 30 November each year, commencing
on 30 May 2023 and continuing throughout the 3 years term. The subsidiary has the right to redeem the outstanding
principal amount together with unpaid accrued interest, on or after the second anniversary of the issue date with prior
written notice.
(d)
The loan is secured by a corporate guarantee from OM Holdings Limited. In December 2021, the repayment date was
extended to 4 January 2023. In December 2022, the repayment date was extended to 4 January 2024.
20.3 Currency risk
Total borrowings are denominated in the following currencies:
The Group
United States Dollar
Renminbi
Australian Dollar
20.4 Effective interest rates
2022
US$’000
230,812
2,976
20,952
254,740
2021
US$’000
289,873
6,295
625
296,793
The weighted average effective interest rates of total borrowings at the end of the reporting period are as follows:
The Group
Bank loans (Note 20.1)
Other borrowings (Note 20.2)
2022
2021
Per annum
2.83% to 5.42% 1.88% to 5.07%
4.67% to 10.00% 1.24% to 4.53%
144
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 21
Lease liabilities
The Group
Undiscounted lease payments due:
- Year 1
- Year 2
- Year 3
- Year 4 and onwards
Less: Unearned interest cost
Lease liabilities
Presented as:
- Non-current
- Current
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
2022
US$’000
2021
US$’000
1,882
1,657
131
47
3,717
(207)
3,510
1,753
1,757
3,510
2,524
1,818
1,596
3
5,941
(347)
5,594
3,029
2,565
5,594
Interest expense on lease liabilities of US$171,000 (2021 - US$251,000) is recognised within “finance costs” in the Consolidated
statement of comprehensive income.
Rental expenses not capitalised in lease liabilities but recognised in the profit or loss are set out below:
The Group
Short-term leases
Leases of low-value assets
2022
US$’000
2021
US$’000
2,962
33
7,148
14
Total cash outflows for all leases in the year amounted to US$2,655,000 (2021 - US$4,459,000).
As at 31 December 2022, the Group’s short-term lease commitments at the reporting date are not substantially dissimilar to
those giving rise to the Group’s short-term lease expense for the year.
The Group’s lease liabilities are secured by the lessors’ title to the leased assets.
Further information about the financial risk management are disclosed in Note 37 and leasing activities in Note 33.
Lease liabilities are denominated in the following currencies:
The Group
Australian Dollar
Malaysian Ringgit
Others
2022
US$’000
2021
US$’000
25
2,910
575
3,510
539
4,150
905
5,594
145
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
22
Trade and other payables
Non-current
Trade payables - third party
Other payables
Retention monies
Current
Trade payables
- third party
Amount due to subsidiaries (non-trade)
Accruals
Other payables
Retention monies
Welfare expense payable
Interest payables
Total
The Company
The Group
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
-
-
-
-
-
62,874
1,793
22
-
-
-
64,689
64,689
64,689
-
-
-
-
-
47,631
1,621
141
-
-
-
49,393
49,393
49,393
54,224
39,301
99
-
85
31
54,323
39,417
111,990
101,191
-
3,238
7,300
3,331
642
103
14,614
126,604
180,927
-
10,788
12,744
1,317
2,030
171
27,050
128,241
167,658
Non-current trade payables relate to payables to vendors which bear interest of 5.5% (2021 - 5.5%) per annum.
The current amount due to subsidiaries (non-trade) represents advances which are unsecured, interest-free and repayable
on demand.
Trade and other payables are denominated in the following currencies:
Australian Dollar
Renminbi
United States Dollar
Malaysian Ringgit
Others
The Company
The Group
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
40,793
-
23,746
-
150
28,482
-
20,762
-
149
64,689
49,393
1,905
7,589
62,653
108,530
250
180,927
9,774
10,638
32,718
114,256
272
167,658
All trade payables are generally on 30 to 120 (2021 - 30 to 120) days’ credit terms.
146
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
23
Provisions
The Group
Rehabilitation
At beginning of the year
Adjustments from mine development costs (Note 7)
Utilisation
Exchange realignment
At end of the year
Non-current
Current
2022
US$’000
2021
US$’000
7,176
450
(2,223)
(437)
4,966
4,778
188
4,966
9,763
(901)
(1,188)
(498)
7,176
5,786
1,390
7,176
According to the Mine Management and Environmental Management Plans submitted to the Northern Territory Government
in Australia, the wholly-owned subsidiary, OM (Manganese) Ltd is obligated for the rehabilitation and restoration of areas
disturbed arising from mining activities conducted by OM (Manganese) Ltd. Mine rehabilitation costs are provided for at
the present value of future expected expenditure when the liability is incurred. Although the ultimate cost to be incurred is
uncertain, the Group has estimated its costs based on the rates outlined by the Northern Territory Department of Industry,
Tourism and Trade using current restoration standards and techniques.
24 Deferred capital grant
The Group
Government grant
Non-current
Current
2022
US$’000
2021
US$’000
7,698
7,131
567
7,698
8,262
7,698
564
8,262
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 of
US$564,000 (2021 - US$567,000) (Note 27) and foreign currency translation differences.
25
Contract liabilities
The Group
2022
US$’000
2021
US$’000
Transportation of goods sold under CFR and CIF Incoterms
10,536
7,028
The Group’s contract liabilities relate to the Group’s obligation to transport goods sold to customers under CFR and CIF
Incoterms for which the Group has received advance payments from these customers.
Unsatisfied performance obligations in relation to contract liabilities at the end of the reporting period are:
The Group
Aggregate amount of transaction price allocated to contracts that
are partially or fully unsatisfied at the end of the year
2022
US$’000
2021
US$’000
10,536
7,028
The Group expects that 100% of the transaction price allocated to the unsatisfied performance obligations at the end of the
current year may be recognised as revenue during the next reporting period.
147
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
26 Other income
The Group
Interest income from banks
Commission income
Government grant
Gain on disposal of other investment
Gain from derecognition of financial liabilities
Sundry income
27
Profit before income tax
The Group
Profit before income tax has been arrived at after
charging:
Depreciation of property, plant and equipment:
- cost of sales
- other operating expenses
(Gain)/loss on disposal of property, plant and equipment (1)
Write off of property, plant and equipment (1)
Amortisation of land use rights (1)
Write-off of exploration and evaluation costs (1)
Amortisation of mine development costs (1)
Depreciation of investment property (1)
Depreciation of right-of-use assets (1)
Cost of inventories recognised as expenses
and included in cost of sales
Write-down of inventories to net realisable value (1)
Impairment loss on trade and other receivables (1)
Unwinding of discount on non-current trade payables (1)
Amortisation of deferred capital grant (2)
Foreign exchange (gain)/loss - net (1)
Rental expenses:
- short-term leases
- leases of low-value assets
Finance costs:
- loans
- lease liabilities
- others
Employee benefits expenses
2022
US$’000
2021
US$’000
1,205
1,607
170
-
-
984
3,966
223
876
378
581
6,681
1,980
10,719
Note
2022
US$’000
2021
US$’000
16,213
8,537
24,750
(3)
10,052
143
130
392
7
2,356
649,686
561
-
-
(564)
(592)
2,962
33
17,447
171
1,034
18,652
47,656
16,468
12,216
28,684
14
5,490
145
114
9,622
8
4,405
573,932
2,830
484
63
(567)
8,818
7,148
14
13,877
251
695
14,823
63,935
4
5
6
7
8
9
13
13
14
24
21
21
31
(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.
148
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
28
Income tax expense
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 2016 to 30 November 2021 on 100% of statutory income derived from the production of ferro-silicon, silicon
manganese and high carbon ferromanganese. OM Sarawak has provided for 24% tax on 100% of its taxable income for the
financial year ended 31 December 2022, and is currently working towards meeting all the conditions set by MIDA to be eligible
for a second 5 year tax exemption period (from 1 December 2021 to 30 November 2026) on 70% of its statutory income.
Upon satisfaction by OM Sarawak of the MIDA conditions, OM Sarawak’s annual tax position will be adjusted accordingly.
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%)
- Other jurisdictions
Deferred taxation
Overprovision in prior years:
- current taxation
- deferred taxation
Income tax
Other taxation:
- withholding tax
- profits-based royalty and special mining taxes
2022
US$’000
2021
US$’000
2,754
1,441
642
17,455
22,292
(27)
-
(27)
22,265
516
257
23,038
2,063
2,115
305
(3,504)
979
(532)
278
(254)
725
498
1,228
2,451
A reconciliation of the income tax applicable to the accounting profit at the applicable tax rates to the income tax expense
for the reporting period was as follows:
The Group
Profit before income tax
Tax at applicable tax rates
Tax effect of non-taxable revenue(1)
Tax effect of non-deductible expenses(2)
Tax effect of allowances and concessions given by tax jurisdictions
Utilisation of deferred tax assets on temporary difference not recognised
in previous years
Effects of share of results of associates
Overprovision in prior years
2022
US$’000
2021
US$’000
105,629
84,534
26,211
(137)
1,556
(2,058)
(2,021)
(1,259)
(27)
22,265
18,779
(17,078)
5,129
(1,502)
(3,739)
(610)
(254)
725
(1)
(2)
In 2021, non-taxable revenue relates mainly to Pioneer Income contributed by OM Sarawak.
Non-deductible expenses relate mainly to depreciation and amortisation of non-qualifying assets, overseas accrued interest expenses
and provision of expenses.
149
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
29
Cash flow hedges
The Group
Cash flow hedges:
(Loss)/gain arising during the year
30
Profit per share
The Group
2022
US$’000
2021
US$’000
(47)
2,125
Basic profit per share is calculated based on the consolidated profit attributable to owners of the parent divided by the
weighted average number of shares (excluding treasury shares) on issue of 736,690,000 (2021 - 736,690,000) ordinary
shares during the financial year.
Fully diluted profit per share is calculated based on the consolidated profit attributable to owners of the parent divided by
736,690,000 (2021 - 736,690,000) ordinary shares (excluding treasury shares). The number of ordinary shares was calculated
based on the weighted average number of shares on issue during the financial year adjusted for the effects of all dilutive
convertible bonds and warrants. Dilutive potential ordinary shares are deemed to have been converted into ordinary shares
at the beginning of the year or if later, the date of the issue of the potential ordinary shares.
The following table reflects profit or loss and share data used in the computation of basic and diluted profit per share from
continuing operations for the years ended 31 December:
The Group
Weighted average number of ordinary shares for the purpose of basic profit
per share
Effect of dilutive potential ordinary shares:
Weighted average number of ordinary shares for the purpose of
diluted profit per share
Profit figures were calculated as follows:
Profit for the year attributable to owners of the Company
Effect of dilutive potential ordinary shares:
Profit for the purposes of diluted profit per share
2022
’000
2021
’000
736,690
736,690
-
-
736,690
736,690
2022
US$’000
2021
US$’000
67,842
-
67,842
61,520
-
61,520
150
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
31
Employee benefits expense
The Group
Directors’ fees
Directors’ remuneration other than fees:
- Directors of the Company
- Directors of the subsidiaries
- Defined contributions plans
Key management personnel (other than Directors):
- Salaries, wages and other related costs
- Defined contributions plans
Other than key management personnel:
- Salaries, wages and other related costs
- Defined contributions plans
2022
US$’000
2021
US$’000
499
2,401
1,847
80
3,125
261
8,213
36,967
2,476
47,656
604
2,234
1,233
61
3,337
299
7,768
52,189
3,978
63,935
32
Related party transactions
In addition to the related party information disclosed elsewhere in the financial statements, the following amounts are
transactions with related parties based upon commercial arm’s length terms and conditions:
The Group
(a) Trading and other transactions
Commission charged to an associate
Commission charged by an associate
Sales of goods to an associate
Purchases of goods from an associate
(b) Key management personnel
Bonds invested by key management personnel (Note 20.2(c))
Interest expense on bonds invested by key management personnel
33
Leases
(i)
The Group as lessee
(a)
Properties
2022
US$’000
2021
US$’000
1,607
(549)
1,864
1,632
(250)
6,520
(77,096)
(75,306)
5,124
43
-
-
The Group leases several land and buildings for operational and storage purposes (Note 9).
The Group makes prepayments for usage of land (Note 5) 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 21 respectively.
151
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
33
Leases (Cont’d)
(ii)
The Group as lessor
Investment property
Operating leases, in which the Group is the lessor, relate to investment property (Note 8) owned by the Group with a
remaining lease term of 7 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
34
Commitments
34.1 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
34.2 Other operating commitments
2022
US$’000
2021
US$’000
57
-
57
96
56
152
2022
US$’000
2021
US$’000
23,370
11,855
Other contracted operating commitments represent the provision of processing services, catering, cleaning and village
management, electrical power services, road haulage and rail haulage. These commitments are contracted for but not
provided for in the financial statements.
The Group
Not later than one year
Later than one year and not later than five years
Later than five years
34.3 Mineral Tenements
2022
US$’000
-
-
-
-
2021
US$’000
1,988
-
-
1,988
In order to maintain the mineral tenements in which a subsidiary is involved, the subsidiary has committed to fulfil the
minimum annual expenditures in accordance with the requirements of the Northern Territory Department of Industry,
Tourism and Trade for the next financial year, as set out below:
The Group
Mineral tenements annual expenditure commitments
2022
US$’000
81
2021
US$’000
111
152
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
34
Commitments (Cont’d)
34.4
Environmental bonds
A subsidiary had environmental bonds to the value of US$7,984,000 (2021 - US$10,595,000) lodged with the Northern
Territory Government (Department of Industry, Tourism and Trade) to secure environmental rehabilitation commitments.
The US$7,984,000 (2021 - US$10,595,000) of bonds are secured by US$7,062,000 (2021 - US$9,472,000) of bonds issued
under financing facilities and certain cash backed.
35 Other matters
Sponsor Guarantee issued under the terms of the Power Purchase Agreement with Syarikat Sesco Berhad
Pursuant to the Amended Power Purchase Agreement (“PPA”) between a subsidiary, OM Materials (Sarawak) Sdn. Bhd. (“OM
Sarawak”), and Syarikat Sesco Berhad (“SSB”), the Company issued guarantees to SSB for certain obligations of OM Sarawak
under the PPA.
The 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 OM Sarawak 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 Sarawak, 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 and OM Material (S) Pte Ltd (“OMS”), the ultimate and immediate holding company of OM
Sarawak, entered into a Project Support Agreement (“PSA”) in relation to the project finance debt facility. The PSA governs
the rights and obligations of the Company and OMS. These obligations and liabilities severally liable.
The PSA will lapse upon the final payment of the project financing facilities.
36 Operating segments
For management purposes, the Group is organised into the following reportable operating segments:
Mining
Smelting
Exploration and mining of manganese ore
Production of manganese ferroalloys, ferrosilicon, silicon metal and manganese sinter ore
Marketing and Trading
Trading of manganese ore, manganese ferroalloys, ferrosilicon and sinter 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 and share of results of associates, 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.
153
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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E
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
36 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
Profit before income tax
2022
US$’000
114,659
1,205
8,417
(18,652)
105,629
2021
US$’000
95,077
223
4,057
(14,823)
84,534
The Group’s revenues from external customers and its non-current assets (other than deferred tax assets) are divided into
the following geographical areas:
Asia Pacific
Europe
Middle East
Africa
America
Revenue from
external customers
Non-current assets
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
662,759
52,346
22,840
976
117,631
856,552
673,770
48,909
28,225
48
28,941
779,893
460,898
461,125
-
-
80,789
-
541,687
-
-
86,562
-
547,687
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.
37
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 and foreign currency 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
currency 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.
37.1
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.
155
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
37
Financial risk management objectives and policies (Cont’d)
37.1
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 and other receivables. Cash
is held with reputable financial institutions. Further details of credit risks on trade and other receivables are disclosed in
Note 14.
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 US$312,086,000 (2021 - US$352,235,000). 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 US$69,829,000 (2021 - US$38,747,000) at the reporting date.
37.2
Liquidity risk
Liquidity risk is the risk that the Company or the Group will encounter difficulty in raising funds to meet commitments
associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result
from an inability to sell a financial asset quickly at close to its fair value.
The Company’s and the Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial
assets and liabilities. The Company’s and the Group’s objective is to maintain a balance between continuity of funding and
flexibility through the use of stand-by credit facilities.
The table below analyses the maturity profile of the Company’s and the Group’s financial liabilities based on contractual
undiscounted cash flows:
Less than
1 year
US$’000
Between
2 and 5
years
US$’000
Over
5 years
US$’000
Total
US$’000
Total
carrying
amount
US$’000
129,912
57,847
69,558
239,615
1,882
1,835
201,352
299,297
128,874
42,227
-
-
-
-
-
187,759
180,927
309,173
254,740
3,717
3,510
500,649
439,177
171,101
167,658
91,079
237,226
2,231
330,536
296,793
2,524
3,417
-
5,941
5,594
222,477
282,870
2,231
507,578
470,045
The Group
As at 31 December 2022
Trade and other payables
Borrowings
Lease liabilities
As at 31 December 2021
Trade and other payables
Borrowings
Lease liabilities
156
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
37
Financial risk management objectives and policies (Cont’d)
37.2
Liquidity risk (Cont’d)
The Company
As at 31 December 2022
Trade and other payables
Intragroup financial guarantees
As at 31 December 2021
Trade and other payables
Intragroup financial guarantees
Less than
1 year
US$’000
Between
2 and 5
years
US$’000
Over
5 years
US$’000
Total
US$’000
Total
carrying
amount
US$’000
64,689
64,689
376,230
49,393
49,393
352,235
-
-
-
-
-
-
-
-
-
-
-
-
64,689
64,689
64,689
64,689
376,230
-
49,393
49,393
49,393
49,393
352,235
-
The above 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.
37.3
Interest rate risk
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 (2021 - 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 lower/higher interest income on cash and bank balances.
The Company
Resulting effect:
profit/(loss)
The Group
Resulting effect:
profit/(loss)
2022
US$’000
2021
US$’000
2022
US$’000
2021
US$’000
United States
Dollar (USD)
- lower 75 basis points
(2021 - 75 basis points)
- higher 75 basis points
(2021 - 75 basis points)
-
-
-
-
1,107
1,344
(1,107)
(1,344)
157
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
37
Financial risk management objectives and policies (Cont’d)
37.4
Foreign currency risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
Currency risk arises when transactions are denominated in foreign currencies.
The Group operates and sells its products in several countries and transacts in foreign currencies. As a result, the Group is
exposed to movements in foreign currency exchange rates arising from normal trading transactions, primarily with respect
to AUD, RMB and MYR.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity to a reasonably possible change in the AUD, RMB and MYR exchange rates
against USD, with all other variables held constant, of the Company’s and the Group’s profit before income tax.
The Group
Australian Dollar
- strengthened 5% (2021 - 5%)
- weakened 5% (2021 - 5%)
Renminbi
- strengthened 5% (2021 - 5%)
- weakened 5% (2021 - 5%)
Malaysian Ringgit
- strengthened 5% (2021 - 5%)
- weakened 5% (2021 - 5%)
The Company
Australian Dollar
- strengthened 5% (2021 - 5%)
- weakened 5% (2021 - 5%)
2022
2021
Resulting effect -
profit/(loss)
US$’000
Resulting effect -
profit/(loss)
US$’000
(664)
664
(136)
136
(5,045)
5,045
(1,720)
1,720
201
(201)
57
(57)
(5,706)
5,706
(1,081)
1,081
38
Capital risk management
The Company’s and the Group’s objectives when managing capital are:
•
•
•
•
to safeguard the Company’s and the Group’s abilities to continue as a going concern;
to support the Company’s and the Group’s stability and growth;
to provide capital for the purpose of strengthening the Company’s and the Group’s risk management capability; and
to provide an adequate return to shareholders.
The Company and the Group actively and regularly review and manage its capital structure to ensure optimal capital structure
and shareholders’ returns, taking into consideration the future capital requirements of the Company and the Group and
capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and
projected strategic investment opportunities. The Company has formalised a dividend policy in February 2023, to maintain
an annual dividend payout of between 10% to 30% of net profit after tax attributable to owners, subject to a cap of 50% of
free cash flow, and other considerations as determined by the Board of Directors. This dividend policy takes effect from the
year commencing 1 January 2023.
Management reviews its capital management approach on an on-going basis and believes that this approach, given the
relative size of the Company and the Group, is reasonable.
158
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
38
Capital risk management (Cont’d)
The Company monitors capital using a gearing ratio, which is net debt divided by total equity:
The Group
Borrowings
Less: Cash and bank balances (including cash collateral)
Net debt
Total equity
Gearing ratio
2022
US$’000
254,740
(62,383)
192,357
2021
US$’000
296,793
(81,524)
215,269
399,734
443,713
0.48
0.49
There were no changes in the Company’s and the Group’s approach to capital management during the year.
39
Financial instruments
Accounting classifications of financial assets and financial liabilities
31 December 2022
The Group
Financial assets
Trade and other receivables (1)
Cash and bank balances (including cash collateral)
The Company
Financial assets
Trade and other receivables
Cash and bank balances
31 December 2021
The Group
Financial assets
Trade and other receivables (1)
Cash and bank balances (including cash collateral)
The Company
Financial assets
Trade and other receivables
Cash and bank balances
Note
Debt instruments
(at amortised cost)
US$’000
Total
US$’000
14
16
14
16
14
16
14
16
29,247
62,383
91,630
6,380
24
6,404
34,025
81,524
115,549
6,833
32
6,865
29,247
62,383
91,630
6,380
24
6,404
34,025
81,524
115,549
6,833
32
6,865
(1)
Excluded tax recoverable of US$122,000 (2021 - US$740,000) and advance to suppliers of US$2,414,000 (2021 -
US$6,135,000) from trade and other receivables
159
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
39
Financial instruments (Cont’d)
Accounting classifications of financial assets and financial liabilities (Cont’d)
Note
Other financial
liabilities
(at amortised cost)
US$’000
31 December 2022
The Group
Financial liabilities
Borrowings
Lease liabilities
Trade and other payables (1)
The Company
Financial liabilities
Trade and other payables
31 December 2021
The Group
Financial liabilities
Borrowings
Lease liabilities
Trade and other payables (1)
The Company
Financial liabilities
Trade and other payables
Total
US$’000
254,740
3,510
177,427
435,677
254,740
3,510
177,427
435,677
64,689
64,689
64,689
64,689
296,793
5,594
161,207
463,594
296,793
5,594
161,207
463,594
49,393
49,393
49,393
49,393
20
21
22
22
20
21
22
22
(1)
Excluded tax payable of US$808,000 (2021 - US$1,268,000), advance from customers of US$2,692,000 (2021 -
US$5,183,000) from trade and other payables
40
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.
•
•
•
160
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
40
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 14), cash and bank balances (Note 16), current trade and other
payables (Note 22), current lease liabilities (Note 21) and current borrowings (Note 20) are reasonable approximations of fair
values due to their short-term nature.
The carrying amounts of non-current trade and other payables (Note 22), non-current lease liabilities (Note 21) and non-current
borrowings (Note 20) are reasonable approximations of fair values as their interest rate approximates the market lending rate.
41
Contingencies
Tourag Fatality
On 24 August 2020 a significant wall failure in Tourag pit resulted in the death 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 the Northern Territory Coroner to provide all information to
assist with their investigations.
On 30 August 2021, NT WorkSafe served OMM with a summons to attend court, charging OMM with contraventions of
Division 5 of the Work Health and Safety (National Uniform Legislation) Act 2011 (NT) (“Act”). OMM has indicated its intention
to enter a guilty plea to a “Category Two” failure to comply with a work health and safety duty, contrary to section 32 of the
Act. The maximum penalty for this offence is A$1.5 million. A final outcome is expected by the middle of 2023.
Construction claim
On 8 July 2022, one of the subsidiaries of the Group received a claim for the sum of approximately MYR 30 million (equivalent
to approximately US$6,798,000) and costs in respect of a construction project. As at the date of this report, no determination
has been made of the possible outcome.
161
OM HOLDINGS LIMITED | ANNUAL REPORT 2022OM HOLDINGS LIMITED | ANNUAL REPORT 2022
ASX & BURSA SECURITIES ADDITIONAL INFORMATION
Pursuant to the listing requirements of the Australian Securities Exchange (“ASX”), the shareholder information set out below was
applicable as at 3 April 2023.
1.
A.
SHAREHOLDER INFORMATION
Distribution of Equity Securities
Distribution schedule and number of holders of equity securities as at 3 April 2023
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)
701
884
343
478
163
2,569
% of Issued Capital
0.05
0.34
0.37
1.98
97.25
100.00
There were 288 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
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
BNP PARIBAS NOMS PTY LTD
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