ACN 122 995 073
ANNUAL REPORT
30 JUNE 2020
CONTENTS
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2020
CORPORATE DIRECTORY
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
CORPORATE GOVERNANCE STATEMENT
ASX ADDITIONAL INFORMATION
2
3
14
15
16
17
18
19
40
41
44
44
1
CORPORATE DIRECTORY
CORPORATE DIRECTORY
Directors:
Mr Patrick Holywell
Mr Steven Russell Groves
Mr Joshua Alan Letcher
Company Secretary:
Mr Mauro Piccini
Registered Office:
Suite 2, Level 1
1 Altona Street
West Perth WA 6005
Share Registry:
Automic Group
Level 2/267 St Georges Terrace
Perth WA 6000
Telephone 1300 288 664
Banker:
Westpac Banking Corporation
Level 13, 109 St Georges Terrace
Perth WA 6000
Auditor:
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Securities Exchange:
Listed on the Australian Securities Exchange ASX Code: SI6
2
DIRECTORS’ REPORT
The Directors present their report on the consolidated entity consisting of Six Sigma Metals Limited and its controlled entity
(“the Group”) for the year ended 30 June 2020. Directors held office for this entire period unless otherwise stated.
DIRECTORS
The following persons were Directors of the Company during the whole of the financial year and up to the date of this Report
unless otherwise stated:
Mr Patrick Holywell (appointed 25 November 2019)
Mr Steven Russell Groves (appointed 22 February 2017)
Mr Joshua Alan Letcher (appointed 21 August 2017)
Mr Eddie King (resigned 15 April 2020)
COMPANY SECRETARY
Mr Mauro Piccini
Mr Piccini is a Chartered Accountant (CA) and a member of the Governance Institute of Australia (GIA). He specialises in
corporate advisory, company secretarial and financial management services. Mauro spent 7 years at the ASX and possesses
core competencies in publicly listed and unlisted company secretarial, administration and governance disciplines.
PRINCIPAL ACTIVITIES
The Group’s principal activities during the year are unchanged from prior years being exploration in the Limpopo belt on the
eastern side of Botswana. Exploration has focused on base metals and precious metals targets and in particular nickel,
copper and PGEs. The Group has also assessed a number of potential acquisition opportunities. Additionally, the Group
continues to monitor the BCL Limited liquidation process concerning the Group’s affected Botswanan assets.
OPERATING RESULTS
The consolidated loss for the year attributable to the members of the Company was:
Operating loss after income tax
Net consolidated loss attributable to members of the Company
DIVIDENDS
2020
$
2019
$
(686,375)
(686,375)
(1,196,239)
(1,196,239)
As the Group’s principal activities are minerals exploration it has not as yet paid any dividends and does not see any short–
term return to shareholders via dividend payments.
3
DIRECTORS’ REPORT
REVIEW OF OPERATIONS
Botswanan Project
The Group is the holder of tenement licences covering approximately 1,500km2 of terrain prospective for both base metals
and precious metals as well as lithium and tantalum.
Acquisition opportunities
The Group has continued to identify and assess potential value accretive acquisitions in the resources sector, particularly in
the gold and base metals sectors.
BCL Limited liquidation
In April 2014, the Group entered into a farm-in and joint venture agreement with BCL Limited and its subsidiary BCL
Investments (Pty) Ltd (jointly referred to as “BCL”). Under the terms of the agreement, BCL was required to spend A$4 million
on exploration expenditure to earn a 40% equity interest in three tenements (~185km2). BCL had the option to continue
funding the project to a Bankable Feasibility Study in order to earn an additional 30%. By July 2016, BCL had earned the initial
40% equity, subject to the completion of formalities. In October 2016, BCL was placed into liquidation and all work on the JV
assets ceased. The Ministry of Minerals Resources, Green Technology and Energy Security has subsequently suspended (put
on hold) the renewal date of the three Prospecting Licences but this decision does not affect the Group’s right to continue
exploring these licences. The liquidation process is ongoing to date and the Group is closely monitoring progress.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Six Sigma Metals Limited has entered into a binding and exclusive heads of agreement (Heads of Agreement) with DiscovEx
Resources Limited (ASX: DCX) whereby DCX has granted Si6 with an option (Option) to acquire a 100% interest in the
Monument Gold Project (MGP or the Project) in Western Australia via acquisition of Monument Exploration Pty Ltd.
CORPORATE ACTIVITY
Financial Position
The financial results of the Company for the year ended 30 June 2020 are:
Cash and cash equivalents
Net Assets
Other income
Net loss after tax
2020
2019
$
799,695
729,714
23,912
(686,375)
$
1,230,860
1,090,131
18,547
(1,196,239)
Dividends
No dividends have been paid or declared by the Company since the end of the previous financial year. No dividend is
recommended in respect of the current financial year.
Significant Changes in the State of Affairs
Significant changes in the state of affairs of the Group during the financial year were as follows:
4
DIRECTORS’ REPORT
Board Changes
On 25 November 2019, Mr Patrick Holywell was appointed to the board of the Company and on the 16 December 2019 was
appointed to Chairman. On 15 April 2020 Mr Eddie King resigned from the board.
Share Placements
The Company completed a capital raising initiative via a combination of share placement and a Share Purchase Plan. The
Company successfully raised $0.5 million via a share placement at $0.004 which was approved at the Company’s General
meeting on 15 August 2019 and issued 16 August 2019. The capital raise was completed with a further $0.25 million via the
share purchase plan on 16 August 2019.
After Balance Date Events
On 14 July 2020 the Company raised $960,000 before costs through the issue of 160,000,000 fully paid ordinary shares at
$0.006 per share.
On 18 August 2020, the Company raised $1,440,000 before costs through the issue of 240,000,000 fully paid ordinary shares
at $0.006 per share.
On 25 August 2020, SI6 entered into a binding and exclusive heads of agreement with DiscoverEx Resources Limited (ASX:DCX),
whereby DCX has granted SI6 with an option to acquire a 100% interest in the Monument Gold Project in Western Australia
via an acquisition of Monument Exploration Pty Ltd.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. The Company is therefore uncertain
as to the full impact that the pandemic will have on its financial condition, liquidity, and future results of operations during
2020. Management is actively monitoring the global situation and its impact on the Company’s financial condition, liquidity,
operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses
to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations,
financial condition, or liquidity for the 2021 financial year. Although the Company cannot estimate the length or gravity of
the impact of the COVID-19 outbreak at this time, if the pandemic continues, it may have a material adverse effect on the
Company’s results of future operations, financial position, and liquidity in fiscal year 2021.
Other than the matters discussed above, there has not arisen in the interval between the end of the financial year and the
date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the
Company to affect the operations of the Group, the results of these operations or the state of affairs of the Group in
subsequent years.
Future Developments
Six Sigma Metals Limited has entered into a binding and exclusive heads of agreement (Heads of Agreement) with DiscovEx
Resources Limited (ASX: DCX) whereby DCX has granted Si6 with an option (Option) to acquire a 100% interest in the
Monument Gold Project (MGP or the Project) in Western Australia via acquisition of Monument Exploration Pty Ltd.
5
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS
Patrick Holywell – Non- Executive Chairman
Mr Holywell has over fifteen years of experience in accounting, finance and corporate governance, including employment at
Deloitte and Patersons. He is a Chartered Accountant and a Fellow of the Governance Institute of Australia with the last ten
years focused on Director/CFO/Company Secretarial roles. Mr Holywell worked at Deloitte, in the assurance and advisory
division and was a founding member and investment analyst for Patersons Asset Management. He has held roles with
various companies particularly in the resources and technology space and is currently also involved with De Grey Mining Ltd,
Six Sigma Metals Ltd and Pentanet Pty Ltd. Mr Holywell has completed a Bachelor of Commerce at UWA, a Graduate Diploma
of Chartered Accounting with the Institute of Chartered Accountants and the Company Directors Course with the Australian
Institute of Company Directors.
During the past three years, Mr Holywell held the following directorship in other ASX listed companies:
•
Transcendence Technologies Ltd (current)
Steven Groves – Non- Executive Director
Mr Groves has a Bachelor of Applied Geology (Honours) and completed a Master’s of Economic Geology from CODES-SRC at
the University of Tasmania.
Mr Groves brings 25 years of geological experience in the mining industry including exploration and management roles with
BHP Billiton (ASX: BHP), Newmont Mining, Newcrest Mining (ASX: NCM), A-Cap Resources (ASX: ACB) and Botswana Metals.
During the past three years, Mr Groves held the following directorship in another ASX listed companies:
• Managing Director of Sultan Resources Ltd (current)
Mr Joshua Alan Letcher – Non- Executive director
Mr Letcher has experience working in various operational and technical roles within the African and Australian mining industry.
He was the founder of Allotropes Diamonds Pty Ltd and was responsible for its acquisition by Newfield Resources Ltd (ASX:
NWF) which provided the company with A$4M in working capital. As CEO of Allotropes, Mr Letcher was responsible for the
development of the project from exploration to trial mining. The roles in that capacity included project management, plant
construction and commissioning, exploration management and asset acquisition. Mr Letcher served in the Royal Australian
Navy and trained as a Mechanical Engineer.
During the past three years, Mr Letcher held the following directorships in other ASX listed companies:
• Non-executive Director of Aldoro Resources Limited (current);
6
DIRECTORS’ REPORT
Eddie King– Non-Executive director (Resigned 15 April 2020)
Mr King is a qualified Mining Engineer. He holds a Bachelor of Commerce and Bachelor of Engineering from the University of
Western Australia. His past experience includes being a manager for an investment banking firm, where he specialised in the
analysis of technical and financial requirements of bulk commodity and other resources projects.
During the past three years, Mr King held the following directorships in other ASX listed companies:
Pure Minerals Limited (current);
Easter Iron Limited (current);
•
•
• Ragnar Metals Limited (formerly, Drake Resources Limited) (current);
•
European Cobalt Limited (resigned April 2020);
•
Sultan Resources Limited (resigned March 2019);
• Axxis Technology Limited (resigned March 2019);
• Bowen Coking Coal Limited (resigned December 2018); and
•
Lindian Resources Limited (resigned January 2018).
Interests in Shares and Options of the Group and Related Bodies Corporate
The following table sets out each current Director’s relevant interest in shares, options and performance rights of the Group
or a related body corporate as at the date of this report.
Director
Patrick Holywell
Steven Groves
Joshua Letcher
Total
Directors' Meetings
Ordinary
Shares
Unlisted Share
Options
5,555,870
438,492
-
3,938,492
-
6,666,667
6,666,667
13,333,334
The number of meetings of the Group’s Board of Directors held during the year ended 30 June 2020, and the numbers of
meetings attended by each director were:
Name
Patrick Holywell
Steven Groves
Joshua Letcher
Eddie King
Board of Directors
Number eligible to
attend
Number attended
2
4
4
4
2
4
4
4
In addition to the scheduled Board meetings, Directors regularly communicate by telephone, email or other electronic means,
and where necessary, circular resolutions are executed to effect decisions.
Due to the size and scale of the Group, there is no Remuneration and Nomination Committee or Audit Committee at present.
Matters typically dealt with by these Committees are, for the time being, managed by the Board. For details of the function of
the Board, refer to the Corporate Governance Statement.
7
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
Remuneration Policy
KMP have authority and responsibility for planning, directing and controlling the activities of the Group. KMP of the Group
comprise of the Board of Directors.
The Group’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and
responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality.
No remuneration consultants were employed during the financial year.
Voting and comments made at the Company's Annual General Meeting
At the 2019 Annual General Meeting, the resolution to adopt the Remuneration Report for the year ended 30 June 2019 was
passed without amendment by 96.91% of the vote on the resolution to adopt the Remuneration Report.
The Company did not receive any specific feedback at the Annual General Meeting regarding its remuneration practices.
Remuneration Governance, Structure and Approvals
Remuneration of Directors is currently set by the Board of Directors. The Board has not established a separate Remuneration
Committee at this point in the Group’s development, nor has the Board engaged the services of an external remuneration
consultant. It is considered that the size of the Board along with the level of activity of the Group renders this impractical. The
Board is primarily responsible for:
The over-arching executive remuneration framework;
•
• Operation of the incentive plans which apply to executive directors and senior executives, including key performance
indicators and performance hurdles;
• Remuneration levels of executives; and
• Non-Executive Director fees.
Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term
interests of the Company.
Non-Executive Remuneration Structure
The remuneration of Non-Executive Directors consists of Directors’ fees, payable in arrears. The total aggregate fixed sum per
annum to be paid to Non-Executive Directors in accordance with the Company’s Constitution shall be no more than A$250,000
and may be varied by ordinary resolution of the Shareholders in a General Meeting.
Remuneration of Non-Executive Directors is based on fees approved by the Board of Directors and is set at levels to reflect
market conditions and encourage the continued services of the Directors. The chair’s fees are determined independently to
the fees of the Non-Executive Director’s based on comparative roles in the external market. In accordance with the Company’s
Constitution, the Directors may at any time, subject to the Listing Rules, adopt any scheme or plan which they consider to be
in the interests of the Company and which is designed to provide superannuation benefits for both present and future Non-
Executive Directors, and they may from time to time vary this scheme or plan.
The remuneration of Non-Executive Directors is detailed in KMP Remuneration table and their contractual arrangements are
disclosed below.
Remuneration may also include an invitation to participate in share-based incentive programmes in accordance with Company
policy.
The nature and amount of remuneration is collectively considered by the Board of Directors with reference to relevant
employment conditions and fees commensurate to a company of similar size and level of activity, with the overall objective of
ensuring maximum stakeholder benefit from the retention of high performing Directors.
8
REMUNERATION REPORT (CONTINUED)
Remuneration and Performance
The following table shows the gross revenue, losses, earnings per share (“EPS”) of the Company as at 30 June 2020.
DIRECTORS’ REPORT
Other income ($)
Net profit/(loss) after tax ($)
EPS ($)
30-Jun-20
30-Jun-19
23,912
(686,375)
(0.11)
18,547
(1,196,239)
(0.26)
Relationship between Remuneration and Company Performance
Given the current phase of the Company’s development, the Board does not consider earnings during the current and previous
financial year when determining, and in relation to, the nature and amount of remuneration of KMP.
Executive Remuneration
The pay and reward framework for key management personnel may consist of the following areas:
a) Fixed Remuneration – base salary
b) Variable Short-Term Incentives
c) Variable Long-Term Incentives
The combination of these would comprise the key management personnel’s total remuneration.
a)
Fixed Remuneration – Base Salary
The fixed remuneration for each senior executive is influenced by the nature and responsibilities of each role and
knowledge, skills and experience required for each position. Fixed remuneration provides a base level of remuneration
which is market competitive and comprises a base salary inclusive of statutory superannuation. It is structured as a total
employment cost package.
Key management personnel are offered a competitive base salary that comprises the fixed component of pay and
rewards. External remuneration consultants may provide analysis and advice to ensure base pay is set to reflect the
market for a comparable role. No external advice was taken this year. Base salary for key management personnel is
reviewed annually to ensure the executives’ pay is competitive with the market. The pay of key management personnel
is also reviewed on promotion. There is no guaranteed pay increase included in any key management personnel’s
contract.
Variable Remuneration – Short -Term Incentives (STI)
Discretionary cash bonuses may be paid to senior executives annually, subject to the requisite Board and shareholder
approvals where applicable. No bonus payments were made during the financial year.
Variable Remuneration – Long-Term Incentives (LTI)
Options are issued at the Board’s discretion. Other than options disclosed in the Remuneration Report there have been
no options issued to employees at the date of this financial report.
b)
c)
9
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
KMP Remuneration for the year ended 30 June 2020
Details of the nature and amount of each major element of the remuneration of each KMP of Six Sigma Metals Limited for the
year ended 30 June 2020 are:
Name
Mr P Holywell
Mr S R Groves
Mr J Letcher
Mr E King
Total
Short-term
Benefits
Cash Salary &
Fees
$
43,617
58,000
46,400
45,968
193,985
Post-
employment
Benefits
Share-Based
Payments
Short-term
Benefits
Other
Superannuation
$
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
Total
$
43,617
58,000
46,400
45,968
193,985
Details of the nature and amount of each major element of the remuneration of each KMP of Six Sigma Metals Limited for the
year ended 30 June 2019 are:
Short-term
Benefits
Cash Salary &
Fees
$
70,000
60,000
48,000
5,000
183,000
Post-
employment
Benefits
Share-Based
Payments
Short-term
Benefits
Other
Superannuation
$
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
Name
Mr S R Groves
Mr E King
Mr J Letcher
Mr E Bulseco
Total
Total
$
70,000
60,000
48,000
5,000
183,000
The following table shows the relative proportions of remuneration that are linked to performance and those that are fixed,
based on the amounts disclosed as statutory remuneration expense in the tables above.
Relative proportion of fixed vs variable remuneration expense
Name
Key Management Personal
Mr P Holywell
Mr S R Groves
Mr E King
Mr J Letcher
Fixed Remuneration
2019
2020
At Risk – STI (%)
At Risk – LTI (%)
2020
2019
2020
2019
100% -
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Number of Options Held directly or indirectly by Key Management Personnel
2020
Balance
1.7.2019
Granted as
Compensation
Exercised
Expired
Net Change
Other*
Balance
30.6.2020
Vested and
exercisable
Mr P Holywell
-
Mr S R
Groves
Mr E King*
Mr J Letcher
Total
6,666,667
-
6,666,667
13,333,334
*Eddie King resigned 15 April 2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,666,667
-
6,666,667
13,333,334
6,666,667
-
6,666,667
13,333,334
Number of Shares held directly or indirectly by Key Management Personnel
2020
Balance
1.7.2019
Received as
Compensation
Net Change
Other*
Balance
30.6.2020
Mr P Holywell
Mr S R Groves
Mr E King*
Mr J Letcher
Total
3,500,000
-
438,492
-
-
-
-
-
3,938,492
-
*Eddie King resigned 15 April 2020 and Patrick Holywell held 500,000 prior to his directorship and 3,000,000 was purchased
on market during the year.
-
438,492
750,000
-
1,188,492
3,500,000
-
(750,000)
-
2,750,000
Issued on
Exercise of
Options /
Performance
Rights
-
-
-
-
-
Service Agreements
There are no service agreement contracts between the Company and the directors.
Share-based compensation
The Company rewards Directors for their performance and aligns their remuneration with the creation of shareholder wealth
by issuing share options. Share-based compensation is at the discretion of the Board and no individual has a contractual right
to receive any guaranteed benefits.
Equity Instruments Issued on Exercise of Remuneration Options
No remuneration options were exercised during the financial year.
Other transactions with Directors and related parties
At 30 June 2020, Director fees for $5,256 were payable to PWT Corporate Pty Ltd, a Company in which Patrick Holywell is a
director. $3,200 is payable to Renewable Holdings Pty Ltd a Company in which Joshua Letches is a director (2019 nil).
During the year $16,700 was paid to King Corporate Pty Ltd for rental fees (2019 $18,000).
Loans with KMP
There were no loans made to any KMP during the year ended 30 June 2020 (2019 nil).
This is the end of the audited remuneration report
11
DIRECTORS’ REPORT
ADDITIONAL INFORMATION
Other income
EBITDA
EBIT
Loss after income tax
Share Price
Basic EPS ($)
2020
$
23,912
(686,375)
(686,375)
(686,375)
0.005
(0.11)
2019
$
18,547
(1,158,895)
(1,196,239)
(1,196,239)
0.005
(0.26)
2018
$
5,896
(1,865,883)
(1,871,186)
(1,871,186)
0.013
(0.61)
2017
$
47,468
(2,296,741)
(2,302,811)
(2,302,811)
0.012
(0.02)
2016
$
37,561
(1,779,045)
(1,792,533)
(1,792,533
0.048
(0.02)
The Company has not yet set measurable objectives for achieving gender diversity. The Company is currently not of a size that
justifies the establishment of measurable diversity objectives. As the Company develops, the Board will seek to develop a
reporting framework in the future to report the Company’s progress against the objectives and strategies for achieving a
diverse workplace which can be used as a guide to be used by the Company to identify new Directors, senior executives and
employees. The Company intends to appoint additional female Directors and employees should a vacancy arise, and
appropriately qualified and experienced individuals are available.
Full details of the Company’s Diversity Policy can be found on the Corporate Governance page of the Company’s website.
SHARES UNDER OPTION
At the date of this report, the unissued ordinary shares of the Company under option are as follows:
•
•
•
•
18,000,000 unlisted options expiring 23 March 2021, exercisable at $0.022 each;
132,436,366 options expiring July 2021, exercisable at $0.015 each;
12,500,000 unlisted options expiring 16 April 2021, exercisable at $0.022 each; and
56,687,500 unlisted options expiring 1 July 2022, exercisable at $0.008 each.
SHARES ISSUED ON EXERCISE OF OPTIONS
There were no ordinary shares of the Company issued on the exercise of options during the year ended 30 June 2020 and up
to the date of this report.
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
The Company has indemnified the Directors and Executives of the Company for costs incurred, in their capacity as a Director
or Executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and Executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure
of the nature of the liability and the amount of the premium.
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
12
ENVIRONMENTAL REGULATIONS
The company is not currently subject to any specific environmental regulation. There have not been any known significant
breaches of any environmental regulations during the year under review and up until the date of this report.
DIRECTORS’ REPORT
AUDITOR
BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF BDO AUDIT (WA) PTY LTD
There are no officers of the company who are former partners of BDO Audit (WA) Pty Ltd.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2020 has been received and included within these
financial statements.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or the Company are important.
Details of the amounts paid or payable to the auditor for non-audit services provided during the year by the auditor amounted
to $5,150.
The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that
the provision of non-audit services by the auditors, as set out below, did not compromise the auditor independent
requirements of the Corporations Act 2001 for the following reasons:
•
all non-audit services have been reviewed by the Board of Directors to ensure they do not impact the impartiality and
objectivity of the auditor; and
• None of the services undermine the general principles relating to the auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
This report is signed in accordance with a resolution of Board of Directors.
Mr Patrick Holywell
Director
18 September 2020
13
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF SIX SIGMA METALS
LIMITED
As lead auditor of Six Sigma Metals Limited for the year ended 30 June 2020, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Six Sigma Metals Limited and the entities it controlled during the
period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth, 18 September 2020
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2020
Consolidated Group
Notes
2020
2019
Revenue and other income
Expenses
Employment and consultancy
Administration and corporate expenses
Other expenses
Directors remuneration and fees
Professional fees
Marketing
Depreciation
Exploration Expenses
Loss before Income Tax Expense
Income Tax Expense
Loss for the year attributable to owners of Six Sigma Metals Limited
Other Comprehensive Income for the year that may be subsequently
reclassified to the profit or loss
Exchange differences on translating foreign controlled operation
Total Comprehensive Loss attributable to owners of Six Sigma Metals
Limited
4
5a
5b
6
$
23,912
-
(147,901)
(59,394)
(193,985)
(207,064)
(12,580)
-
(89,363)
(686,375)
-
(686,375)
$
18,547
(69,403)
(197,201)
(120,345)
(172,983)
(288,002)
(49,800)
(37,344)
(279,707)
(1,196,239)
-
(1,196,239)
15,904
15,527
(670,471)
(1,180,712)
Basic Loss per Share (cents per share) & Diluted Loss per Share (cents
per share)
14
(0.11)
(0.26)
The accompanying notes form part of these financial statements.
15
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2020
Consolidated Group
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
TOTAL LIABILITIES
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
7
8
9
10
11
2020
$
799,695
30,971
830,666
830,666
84,897
16,055
100,952
100,952
729,714
21,661,131
223,303
(21,154,720)
729,714
2019
$
1,230,860
30,885
1,261,745
1,261,745
147,013
24,601
171,614
171,614
1,090,131
21,402,070
156,406
(20,468,345)
1,090,131
The accompanying notes form part of these financial statements.
16
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For year ended 30 June 2020
Issued
Share
Capital
Share
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
Equity
$
$
$
$
$
21,402,070
414,097
(257,691)
(20,468,345)
1,090,131
-)
(686,375)
(686,375)
15,904
15,904
-)
15,904
(686,375)
(670,471)
-)
-)
-
332,500
(73,439)
-)
-)
-
-
50,993
21,661,131
465,090
(241,787)
(21,154,720)
-
-
-
-
332,500
(22,446)
729,714
21,035,871
414,097
(273,218)
(19,272,106)
1,904,644
-)
-)
-
417,500
(51,301)
-
-)
-)
-
-
-
-
-)
(1,196,239)
(1,196,239)
15,527
15,527
-)
15,527
(1,196,239)
(1,180,712)
-
-
-
-
-
-
417,500
(51,301)
-
21,402,070
414,097
(257,691)
(20,468,345)
1,090,131
Balance at 1 July 2019
Loss after income tax for the year
Other Comprehensive income
Total comprehensive income/(loss)
Transactions with owners in their
capacity as owners
Shares issued during the year
Share issue costs
Balance at 30 June 2020
Balance at 1 July 2018
Loss after income tax for the year
Other Comprehensive income
Total comprehensive income/(loss)
Transactions with owners in their
capacity as owners
Shares issued during the year
Share issue costs
Options issued during the year
Balance at 30 June 2019
The accompanying notes form part of these financial statements.
17
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2020
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Government cashflow boost
Exploration expenditure
Net Cash Used in Operating Activities
Cash Flows from Financing Activities
Issue of share capital
Payments of share capital issue costs
Net Cash Received From Financing Activities
Net Increase/(Decrease) in Cash and cash equivalents held
Cash and cash equivalents at the Beginning of the Financial Year
Foreign currency effect on cash held
Cash and cash equivalents at the End of the Financial Year
The accompanying notes form part of these financial statements.
Consolidated Group
Notes
2020
$
2019
$
(680,502)
2,743
10,000
(89,363)
(757,122)
(668,843)
18,547
-
(272,739)
(923,035)
332,500
(22,447)
310,053
(447,069)
1,230,860
15,904
799,695
417,500
(51,301)
366,199
(556,836)
1,772,169
15,527
1,230,860
7b
7
18
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Reporting Entity
Six Sigma Metals Limited (referred to as “Company” or “parent entity”) is a company domiciled in Australia. The address
of the Company’s registered office and principal place of business is disclosed in the Corporate Directory of the Annual
Report. The consolidated financial statements of the Company as at and for the year ended 30 June 2020 comprise the
Company and its subsidiaries (together referred to as the “Consolidated Entity” or the “Group”).
(b)
Basis of Preparation
Statement of compliance
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board ('IASB').
Basis of measurement
The consolidated financial statements have been prepared on a going concern basis in accordance with the historical
cost convention, unless otherwise stated.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity
only. Supplementary information about the parent entity is disclosed in Note 19.
Basis of preparation and changes to the Group’s accounting policies
The consolidated entity has adopted all of the new or amended Accounting Standards and interpretations issued by
the Australian Accounting Standards Board (‘AASB”) that are mandatory for the current reporting period.
Details of the impact of AASB 16 Leases and IFRIC Uncertainty over Income Tax Treatments have had are detailed
below. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted by the consolidated entity.
AASB 16 – Leases
The Consolidated entity has adopted AASB 16 from 1 July 2019 using the retrospective modified approach and as
such the comparatives have not been restated. The impact of adoption is not material to the financial statements.
IFRIC 23 Uncertainty over Income Tax Treatments
IFRIC 23 provides guidance on the accounting for current and deferred tax liabilities and assets in circumstances in
which there is uncertainty over income tax treatments.
The Consolidated entity has adopted IFRIC 23 from 1 July 2019. The impact of adoption is not material to the financial
statements.
Significant Judgements and Estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in Note 2.
19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c) Principles of Consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Six Sigma Metals Limited
(‘Company’ or ‘parent entity’) as at 30 June 2020 and the results of all subsidiaries for the year then ended. Six Sigma
Metals Limited and its subsidiaries together are referred to in this financial report as the consolidated entity.
Subsidiaries are all entities (including special purpose entities) over which the consolidated entity has the power to
govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting
rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered
when assessing whether the consolidated entity controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are
de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between consolidated entity companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the consolidated entity.
The acquisition method of accounting is used to account for business combinations by the consolidated entity.
(d) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board.
(e) Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of each of the consolidated entity’s entities are measured using the currency
of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial
statements are presented in Australian dollars, which is Six Sigma Metals Limited’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Foreign Currency Translation (continued)
Consolidated entity companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency
as follows:
• Assets and liabilities for each statement of financial position account presented are translated at the closing rate at
•
the date of that statement of financial position;
Income and expenses for each statement of profit or loss and other comprehensive income account are translated
at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions); and
• All resulting exchange differences are recognised in other comprehensive income and included in the foreign
currency translation reserve in the statement of financial position.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are
repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
(f) Revenue Recognition and other Income
The consolidated entity recognises revenue and other income as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the
consolidated entity: identifies the contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the time value of
money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone
selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance
obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as
discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events.
Such estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of
variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that
it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The
measurement constraint continues until the uncertainty associated with the variable consideration is subsequently
resolved. Amounts received that are subject to the constraining principle are initially recognised as deferred revenue in
the form of a separate refund liability.
Interest
Interest revenue is recognised as interest accrues using the effective interest method.
Other income
Other income is recognised when it is received or when the right to receive payment is established.
21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting
period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in foreign operations where the Company is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(i) Exploration and evaluation expenditure
The Group expenses exploration and evaluation expenditure as incurred in respect of each identifiable area of
interest until a time where an asset is in development.
Exploration and Evaluation expenditure
Exploration for and evaluation of mineral resources is the search for mineral resources after the entity has obtained
legal rights to explore in a specific area as well as the determination of the technical feasibility and commercial
viability of extracting mineral resource. Exploration and evaluation expenditure are expensed to the profit or loss as
incurred except when existence of a commercially viable mineral reserves has been established and it is anticipated
that future economic are more likely than not to be generated as a result of the expenditure.
22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j) Cash and Cash Equivalents
Cash on hand and in bank and short-term deposits are stated at nominal value. For the purpose of the statement of
cash flows, cash includes cash on hand and in bank, and bank securities readily convertible to cash, net of outstanding
bank overdrafts.
(k) Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the
ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period
are classified as current assets. All other receivables are classified as non-current assets.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses (ECL). The ECL is
based on either the 12-month or lifetime ECL. The 12-month ECL is the portion of lifetime ECLs that results from
default events on a financial instrument that are possible within 12 months after the reporting date. When there has
been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL.
(l)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the
initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined based on
both the business model within which such assets are held and the contractual cash flow characteristics of the financial
asset, unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically, such financial assets will be either:
(i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a
profit, or a derivative; or
(ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the consolidated
entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial
recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance
depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial
instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable
information that is available, without undue cost or effort to obtain.
23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k) Investments and other financial assets (continued)
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected
credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is
attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit
impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's
lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the
probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the
original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within
other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
(m) Impairment of Assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed 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 the higher of an asset's fair value less costs
to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows. Where an impairment loss subsequently reverses, the carrying amount of
the asset, other than goodwill, is increased to the revised estimate of its recoverable amount, but only to the extent
the increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised in prior years. A reversal of an impairment loss is recognised immediately in profit or
loss.
(n) Trade and Other Payables
Liabilities are recognised for amounts to be paid in the future for goods and services received whether or not billed to
the Group. Trade payables are usually settled within 30 days of recognition.
(o) Employee Benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up
to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date
are recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability.
The liability is measured as the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to the expected
future wage and salary levels, experience of employee departures and periods of service. Expected future payments
are discounted using market yields at the reporting date on national government bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p) Share-based Payments
Equity-settled share-based compensation benefits are provided to Key Management Personnel and employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange
for the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using an appropriate valuation model that takes into account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the consolidated entity receives the services that entitle the employees to receive payment. No account is
taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts
already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total
fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee
and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
(p)
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
If the entity reacquires its own equity instruments, for example as a result of a share buy-back, those instruments are
deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and
the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly
in equity.
25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q) Earnings Per Share
Basic earnings per share
Basic earnings per share are calculated by dividing:
The profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares
•
• By the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account:
•
•
The after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares,
and
The weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
(r) Goods and Services Tax (“GST”)
Revenue, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included as a current asset or liability in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing and financing
activities which are recoverable from, or payable to, the taxation authority are presented as operating cash flows.
Commitments and contingencies are disclosed net of amount of GST recoverable from, or payable to, the tax
authorities.
(s) Current and Non-Current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as
non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period;
or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t) Dividends
Dividends are recognised when declared during the financial year and are no longer at the discretion of the Company.
NOTE 2
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation
to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Share based payments
The consolidated entity measures the cost of equity-settled transactions with service providers by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by using an appropriate
valuation model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. The assumptions
and models used for estimating the fair value of share based payments transactions are disclosure in Note 11.
SEGMENT INFORMATION
NOTE 3
The consolidated entity operates within two geographical segments within mineral exploration being Australia and Botswana.
The segment information provided to the chief operating decision maker is as follows:
Year Ended 30 June 2020
Revenue and other income
Result (loss)
Total assets
Total liabilities
Year Ended 30 June 2019
Revenue and other income
Result (loss)
Total assets
Total liabilities
Botswana
$
11,167
(92,663)
5,589
(25,508)
-
(177,982)
2,551
(31,741)
Total
$
23,912
(686,375)
830,666
(100,952)
18,547
(1,196,239)
1,261,745
(171,614)
Australia
$
12,745
(593,712)
825,077
(75,444)
18,547
(1,018,257)
1,259,194
(139,873)
27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 4
REVENUE AND OTHER INCOME
Income from Ordinary Activities
Interest revenue
VAT income received
Government cashflow boost
NOTE 5
EXPENDITURE
5(a) Professional Fees
Legal Fees
Corporate advisory
Accounting and audit fees
Consulting fees
5(b) Exploration Expenditure
Exploration Expenditure
Consolidated Group
2020
$
2019
$
2,745
11,167
10,000
23,912
18,547
-
-
18,547
Consolidated Group
2020
$
39,445
130,161
37,458
-
207,064
2020
$
2019
$
49,495
175,000
56,041
7,466
288,002
2019
$
89,363
89,363
297,707
297,707
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6 INCOME TAX EXPENSE
Consolidated Group
2020
$
2019
$
The prima facie tax on loss from ordinary activities before income tax is reconciled
to income tax as follows:
(Loss) before income tax expense
Prima facie (tax benefit) on (loss) from ordinary activities before income tax at
30% (2019: 30%)
(686,375)
(1,196,239)
(205,913)
(358,872)
Add:
Tax effect of:
- Accrued expenses
- Non-deductible expenses
-Foreign tax rate differential
Less
Tax effect of:
- Other deductible items
- Prepayments
Tax losses for the year
(428)
8,567
7,413
21,845
99,735
14,239
(49,813)
(1,380)
(241,554)
(50,566)
562
(273,057)
Prior year tax losses not previously brought to account
(2,871,707)
(2,560,517)
The Directors estimate that the potential deferred income tax assets at 30 June in
respect of tax losses not brought to account is:
Tax benefits not recognised during the year
Income Tax Expense for the year
(3,113,261)
(2,833,574)
3,113,261
2,833,574
-
-
Tax benefits are not brought to account for the year ended 30 June 2020 (2019: nil) as the certainty of recovery cannot yet
be reliably determined at this stage of the Group’s development.
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Term deposits held
NOTE 7A CASH FLOW INFORMATION
(a) Reconciliation of cash
For the purposes of the statement of cash flows, cash includes cash on hand and at
bank and short term deposits at call, net of outstanding bank overdrafts. Cash as at
the end of the financial year as shown in the statement of cash flows is reconciled to
the related items in the statement of financial position.
Cash at bank and on hand
(b) Reconciliation of cash
Operating Loss after income tax
Non–cash flows in loss:
- Depreciation
Working capital:
-
-
-
-
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Net cash (outflow) from operating activities
NOTE 8 TRADE AND OTHER RECEIVABLES
Current
Trade and other receivables
GST paid
30
Consolidated Group
2019
$
2020
$
799,695
-
799,695
829,722
401,138
1,230,860
Consolidated Group
2020
$
2019
$
799,695
1,230,860
(686,375)
(1,196,239)
-
36,812
(85)
-
(62,116)
(8,546)
(757,122)
61,834
228,014
(35,198)
(18,258)
(923,035)
Consolidated Group
2019
$
2020
$
18,922
12,049
30,971
30,885
-
30,885
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 9 TRADE AND OTHER PAYABLES
Current
Trade payables
Accrued remuneration owing to Directors
Accrued professional fees & operating expenses
Other payables
NOTE 10 ISSUED CAPITAL
645,003,153 (2019: 561,878,153) fully paid ordinary shares
(a)
Ordinary Shares
Consolidated Group
2020
$
37,387
13,302
19,983
14,225
84,897
2019
$
35,624
11,543
99,846
-
147,013
Consolidated Group
2020
$
2019
$
21,661,131
21,402,070
Date
Issue price
No. of Shares
$
Movement in ordinary shares on
issue
Balance at the beginning of the
period
Tranche 1 placement
Costs associated with capital
raising
Balance at the end of period
Balance at the beginning of the
period
Share placement plan
Share placement plan
Capital raising costs
1 July 2018
17 June 2019
17 June 2019
30 June 2019
1 July 2019
16 August 2019
21 August 2019
-
-
$0.004
-
-
-
$0.004
$0.004
-
457,503,153
104,375,000
-
561,878,153
21,035,871
417,500
(51,301)
21,402,070
561,878,153
21,402,070
62,500,000
20,625,000
250,000
82,500
-
(73,439)
Balance at the end of period
30 June 2020
645,003,153
21,661,131
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 11 RESERVES
Share-based payments reserve (a)(i)
Foreign currency translation reserve
Movement reconciliation
Share-based payments reserve (a) (i)
Balance at the beginning of the year
Equity settled share-based payment
Balance at the end of the year
Movement reconciliation
Foreign currency translation reserve
Balance at the beginning of the year
Other comprehensive income
Balance at the end of the year
2020
$
2019
$
465,090
(248,901)
216,189
414,097
(257,691)
156,406
414,097
50,993
465,090
414,097
-
414,097
(257,691)
15,904
(241,787)
(273,218)
15,527
(257,691)
Share-based payment reserve
The share-based payment reserve is used to record the value of share-based payments provided to outside parties, and
share-based remuneration provided to employees and directors.
Recognised share-based payment transactions
(a)
Equity settled share-based payment (i)
2020
$
2019
$
50,993
50,993
-
-
(i)
On 15 August 2019, the Company issued 20,000,000 unquoted options to the Lead managers, exercisable at $0.08 on
or before 1 July 2022. The Company also issued 93,750,000 free attaching unquoted options on the same terms to
shareholders who participated in the placements on a 2 to 1 basis.
(b)
Options
Summary of options granted during the year
Issue Date
Date of
Expiry
Exercise
Price
Opening balance
Lead manager
Free attaching
Free attaching
15/08/2019
15/08/2019
15/08/2019
1/07/2022
1/07/2022
1/07/2022
0.08
0.08
0.08
Granted
during the
year
Exercised
during the
year
Expired
during the
year
Balance at the
end of the
year
162,936,366
20,000,000
31,250,000
62,500,000
276,686,366
-
-
-
-
Balance at
the start of
the year
162,936,366
-
20,000,000
31,250,000
62,500,000
162,936,366 113,750,000
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 11 RESERVES CONTINUED
The options issued to the lead managers cannot be estimated reliably, they have been valued using the Black-Scholes model.
The model and assumptions are shown in the table below:
30 June 2020
Grant date share price
Exercise price
Expected volatility
Grant date
Expiry date
Dividend yield
Risk free rate
Black-Scholes Valuation
Total Fair Value of Options
Number of Options Issued
$0.05
$0.08
100%
15/08/2019
01/07/2022
0%
0.67%
$0.0025
$50,993
20,000,000
Foreign Currency Translation reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary
as described in Note 1.
NOTE 12 REMUNERATION OF AUDITORS
Amounts received or due and receivable by BDO Audit (WA) Pty Ltd for:
Audit or review of the financial statements
Other services - BDO Corporate Tax (WA) Pty Ltd
Tax compliance
NOTE 13 LOSS PER SHARE (“LPS”)
a) Reconciliation of losses to profit or loss
Loss used to calculate basic and diluted loss per share
Consolidated Group
2019
2020
$
$
25,358
5,510
30,868
26,329
7,140
33,469
Consolidated Group
2020
$
2019
$
(670,471)
(1,196,239)
b) Weighted average number of ordinary shares used in the calculation of basic
and diluted loss per share
634,046,869
461,220,619
Basic and diluted loss per share ($0.11) & ($0.26) respectively.
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 14 CONTROLLED ENTITY
Country of
Incorporation
Principal Activity
Class of
Share
African Metals (Pty) Ltd
Botswana
Mineral Exploration
Ordinary
NOTE 15 COMMITMENTS
Planned Exploration Expenditure
Payable
- not later than 12 months
- between 12 months and 5 years
-
greater than 5 years
Equity Holding
2020
%
100
2019
%
100
Consolidated Group
2020
$
2019
$
307,606
-
-
227,361
1,511,284
-
307,606
1,738,645
The figures above are extracted from the Prospecting licences issued to African Metals (Pty) Ltd by the Department of Mines
in Botswana. Expenditures are required to maintain the right of tenure to exploration until the expiry of the licences. These
obligations are subject to renegotiation upon expiry of the tenements and are not provided for in the financial statements.
The Group anticipates future expenditure on its current rights of tenure to exploration and mining tenements up until the
expiry of its current Prospecting licences and on tenement renewals and extensions that have been applied for but not yet
granted, which are included in the above table. In the event the Group does not meet the minimum exploration expenditure
the licences may be cancelled or not renewed.
NOTE 16 CONTINGENT LIABILITIES
Magogaphate Tenement
Although the Group acquired a 100% interest in the Magogaphate group of tenements in Botswana from A-Cap Resources
Limited in 2007, Mineral Holdings Botswana (Pty) Ltd (“MHB”) has retained a right to a 5% net profits share. The Group
therefore, has a contingent liability to MHB should it establish a profitable mining operation on those tenements. The 5%
net profits share interest is limited to the three tenements subject to joint venture with BCL, namely PL 110/94, PL 111/94
and PL 54/98. A profitable mining operation has not yet been established and accordingly there have been no payments to
MHB.
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 17 RELATED PARTY INFORMATION
Details relating to key management personnel, including remuneration paid, are below.
Key Management Personnel Compensation
Short-term benefits
Total
Related Party Transactions
Director fees payable to Renewable Resources Pty Ltd(i)
Director fees payable to PWT Corporate Pty Ltd(ii)
Rental Fees paid to King Corporate Pty Ltd(iii)
Total
(i) An entity in which Joshua Letcher is a Director.
(ii) An entity in which Patrick Holywell is a Director.
(iii) An entity in which Eddie King is a Director.
All amounts above are exclusive of GST.
2020
$
210,685
210,685
2019
$
201,000
201,000
2020
$
3,200
5,256
16,700
25,156
2019
$
-
-
18,000
18,000
Expenses paid by, or for, Directors and related entity were, or will be, reimbursed at cost.
The Company has provided at call interest free unsecured loans to its wholly owned subsidiary African Metals (Pty) Ltd to pay
operational and exploration costs.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
The Company has provided at call interest free unsecured loans to its wholly owned subsidiary African Metals (Pty) Ltd to pay
operational and exploration costs.
NOTE 18 FINANCIAL RISK MANAGEMENT
The Group’s financial instruments consist mainly of deposits with banks and accounts receivable and payable.
Treasury Risk Management
The Board of Directors meets on a regular basis to analyse financial risk exposure and to evaluate treasury management
strategies in the context of the most recent economic conditions and forecasts. The Board’s overall risk management
strategy seeks to assist the Group in meeting its financial targets, whilst minimising potential adverse effects on financial
performance.
Financial Risk Exposures and Management
The main risk the group is exposed to through its financial instruments is liquidity risk.
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 18 FINANCIAL RISK MANAGEMENT (CONTINUED)
Liquidity Risk
Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The group manages liquidity risk by monitoring forecast cash flows and only
investing surplus cash with major financial institutions.
Maturity analysis:
Consolidated
2020
Financial liabilities
Trade and other payables
<6 months
$
6-12 months
$
1-5 years
$
>5 years
$
Total
$
(84,897)
-
-)
-)
(84,897)
Consolidated
2019
<6 months
$
6-12 months
$
1-5 years
$
>5 years
$
Total
$
Financial liabilities
Trade and other payables
147,013
-
-)
-)
147,013
Interest rate risk
The Group is exposed to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of
changes in the market interest rates on interest bearing financial instruments. The Group’s exposure to this risk relates
primarily to the Group’s cash and any cash on deposit. The Group does not use derivatives to mitigate these exposures.
The Group manages its exposure to interest rate risk by holding certain amounts of cash in fixed and floating interest rate
facilities. At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was:
Cash and cash equivalents
2020
2019
Weighted
average
interest rate (i)
0.12%
Balance
$
799,695
Weighted
average interest
rate (i)
1.24%
Balance
$
1,230,860
(i) This interest rate represents the average interest rate for the period.
Sensitivity
Within the analysis, consideration is given to potential renewals of existing positions and the mix of fixed and variable
interest rates. The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting
date. The 1% increase and 1% decrease in rates is based on reasonably expected possible changes over a financial year,
using the observed range of historical rates for the preceding five-year period.
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 18 FINANCIAL RISK MANAGEMENT (CONTINUED)
At 30 June 2020, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
post-tax losses and equity would have been affected as follows:
Judgements of reasonably possible
movements:
+ 1.0% (100 basis points)
- 1.0% (100 basis points)
Profit higher/(lower)
2019
2020
$
$
67,047
(67,047)
12,309
(12,309)
Credit risk
Credit risk arises from the financial assets of the Company, which comprise cash and cash equivalents and trade and other
receivables. The Company’s exposure to credit risk arises from potential default of the counterparty, with maximum exposure
equal to the carrying amount of the financial assets.
The Company’s policy is to trade only with recognised, creditworthy third parties. It is the Company’s policy that all customers
who wish to trade on credit terms will be subject to credit verification procedures.
In addition, receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts
is not significant. There are no significant concentrations of credit risk within the Company except for cash and cash
equivalents. ECS cash accounts are held with both Westpac and Commonwealth bank, their credit rating is AA- and Ba2
respectively by S&P Global and Moody’s.
Foreign Currency Risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations. The Group also has exposure to foreign exchange risk due to the currency cash
reserves and other balances denominated in foreign currencies. The Group does not actively manage foreign currency risk
and does not make use of derivative financial instruments.
The following sensitivity is based on the foreign currency risk exposures in existence at the reporting date.
At 30 June 2020, had the Australian Dollar/Botswana Pula exchange rate moved, as illustrated in the table below with all
other variables held constant, post-tax profit would have been affected as shown.
Judgments of
reasonable
possible
movements
AUD/BWP +5%
AUD/BWP -5%
Other Comprehensive
Income
Higher/(Lower)
Post-tax Loss
Higher/(Lower)
Equity
Higher/(Lower)
2020
$
4,633
(4,633)
2019
$
8,899
(8,899)
2020
$
5,428
(5,428)
2019
$
9,675
(9,675)
2020
$
10,062
(10,062)
2019
$
18,575
(18,575)
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 18 FINANCIAL RISK MANAGEMENT (CONTINUED)
Management believes the reporting date risk exposures are representative of the risk exposure inherent in the financial
instruments.
The net fair values of financial assets and liabilities approximate their carrying values due to their short-term nature.
Capital Risk Management
The Group manages its capital to ensure that Companies in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt to equity balance. The Group’s focus has been to
raise sufficient funds through equity to fund exploration and resource development activities.
The Group’s overall strategy remains unchanged from 2019. Risk management policies and procedures are established with
regular monitoring and reporting.
The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent,
comprising of issued capital, reserves and accumulated losses as disclosed in Notes 10 and 11 respectively.
The Group operates in Australia and Botswana. None of the Group’s companies are subject to externally imposed capital
requirements.
NOTE 19 PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Issued capital
Reserves
Accumulated losses
Total equity
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive loss
2020
$
2019
$
825,077
1,230,004
-
-
825,077
1,230,004
75,444
75,444
139,873
139,873
21,661,131
21,402,070
465,090
414,098
(21,376,588)
(20,726,037)
749,633
1,090,131
(650,551)
(14,228,141)
-
-
(650,551)
(14,228,141)
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 19 PARENT ENTITY DISCLOSURES (CONTINUED)
Guarantees, contingent liabilities and contractual commitments
The subsidiary company has expenditure commitments to maintain its current rights of tenure to exploration and mining
tenements up until the expiry of the leases including its joint venture commitments. These obligations are subject to
renegotiation upon expiry of the leases and are not provided for in the financial statements. The parent entity may provide
funds to ensure the subsidiary company can fulfil these commitments as well as any other operating commitments.
NOTE 20 EVENTS AFTER THE END OF THE REPORTING PERIOD
On 14 July 2020 the Company raised $960,000 before costs through the issue of 160,000,000 fully paid ordinary shares at
$0.006 per share.
On 18 August 2020, the Company raised $1,440,000 before costs through the issue of 240,000,000 fully paid ordinary shares
at $0.006 per share.
On 25 August 2020, SI6 entered into a binding and exclusive heads of agreement with DiscoverEx Resources Limited (ASX:DCX),
whereby DCX has granted SI6 with an option to acquire a 100% interest in the Monument Gold Project in Western Australia
via an acquisition of Monument Exploration Pty Ltd.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. The Company is therefore uncertain
as to the full impact that the pandemic will have on its financial condition, liquidity, and future results of operations during
2020. Management is actively monitoring the global situation and its impact on the Company’s financial condition, liquidity,
operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses
to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations,
financial condition, or liquidity for the 2021 financial year. Although the Company cannot estimate the length or gravity of
the impact of the COVID-19 outbreak at this time, if the pandemic continues, it may have a material adverse effect on the
Company’s results of future operations, financial position, and liquidity in fiscal year 2021.
Other than the matters discussed above, there has not arisen in the interval between the end of the financial year and the
date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the
Company to affect the operations of the Group, the results of these operations or the state of affairs of the Group in
subsequent years.
39
DIRECTORS’ DECLARATION
In the Directors’ opinion:
a)
The financial statements and accompanying notes are in accordance with the Corporations Act 2001, including:
i) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance
for the year ended on that date.
b)
c)
The financial statements and notes comply with International Financial Reporting Standards as described in Note 1 to
the financial statements.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
Directors by:
Mr Patrick Holywell
Director
18 September 2020
40
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Six Sigma Metals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Six Sigma Metals Limited (the Company) and its subsidiary (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. We have determined there are no key audit
matters to be communicated in our report.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
2
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 8 to 11 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Six Sigma Metals Limited, for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 18 September 2020
3
CORPORATE GOVERNANCE STATEMENT
The Company has elected to publish its Corporate Governance Statement on its website in accordance with ASX Listing Rule
4.10.3.
ASX ADDITIONAL INFORMATION
A copy of the Corporate Governance Statement can be found at:
https://www.sixsigmametals.com/about-us/corporate-governance/
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Securities Exchange and not shown elsewhere in this Annual Report is as
follows. The information is current as of 15 September 2020.
DISTRIBUTION OF EQUITY SECURITIES
Ordinary share capital
•
1,107,879,607 fully paid shares held by 2,127 individual shareholders. All issued ordinary shares carry one vote per
share and carry the rights to dividends.
The number of shareholders, by size of holding, is:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Listed options
Holders
57
42
19
948
1,061
2,127
Units
8,760
120,024
145,685
56,879,504
1,050,725,634
1,107,879,607
Percentage
0%
0.01%
0.01%
5.13%
94.84%
100%
•
132,436,366 quoted options expiring 1 July 2021, exercisable at $0.015 held by 113 individual option holders.
The number of Option holders, by size of holding, is:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Holders
4
-
-
42
67
113
Units
104
Percentage
0%
-
-
1,520,219
130,916,043
132,436,366
-
-
1.15%
98.91%
100%
44
3
4
5
1
2
Position
6
7
8
9
10
TWENTY LARGEST SHAREHOLDERS
Holder Name
CAP HOLDINGS PTY LTD
CITICORP NOMINEES PTY LIMITED
SACCO DEVELOPMENTS AUSTRALIA PTY LIMITED
KITARA INVESTMENTS PTY LTD
MR CRAIG NASH
VERMAR PTY LTD
KINGSTON NOMINEES PTY LTD
MR TYSON SCHOLZ
MR JORDAN ANTHONY BALO
RIMOYNE PTY LTD
STATE ONE NOMINEES PTY LTD
MR JAMES GRANT ROSS
LIGHTSTORM PTY LTD
CAP HOLDINGS PTY LTD
SISU INTERNATIONAL PTY LTD
NANDIL PTY LTD
AUSTRALIAN LEISURE EQUITY PTY LTD
MR ARTHUR IOANNOU &
MS OLIVIA KEENE
COMSEC NOMINEES PTY LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY
LIMITED
MR LUKE CALEB MUIR
Total
14
14
15
16
11
12
17
18
19
20
13
ASX ADDITIONAL INFORMATION
Holding
% IC
55,269,501
48,182,375
4.99%
4.35%
39,473,156
3.56%
30,000,000
24,713,471
20,902,260
20,000,000
19,995,969
18,809,523
17,887,027
14,413,101
11,000,000
2.71%
2.23%
1.89%
1.81%
1.80%
1.70%
1.61%
1.30%
0.99%
10,731,707
0.97%
10,000,000
10,000,000
8,806,051
8,380,552
7,812,880
7,748,077
0.90%
0.90%
0.79%
0.76%
0.71%
0.70%
7,634,576
7,500,000
399,260,226
0.69%
0.68%
36.04%
45
TWENTY LARGEST OPTION HOLDERS
ASX ADDITIONAL INFORMATION
Position
1
2
3
4
5
6
7
8
9
10
11
12
12
13
14
15
16
17
18
19
20
Holder Name
TANGO88 PTY LTD
MS CHUNYAN NIU
CAP HOLDINGS PTY LTD
SACCO DEVELOPMENTS AUSTRALIA PTY LIMITED
MR BILAL AHMAD
RIMOYNE PTY LTD
LIGHTSTORM PTY LTD
NANDIL PTY LTD
MR OFI DEEB
MR DANIEL AARON HYLTON TUCKETT
BUSHWOOD NOMINEES PTY LTD
MR MOBEEN IQBAL
MR NICK POUTSELAS
MS ANGELA MARIA GIUSTI
MR MARTIN MUSIC
MR JEREMY DAVID RUBEN &
MRS VANESSA RUBEN
MR EDWIN EDWARD BULSECO &
MRS ALLISON BULSECO
MR CAMERON HUTTON
MRS VANESSA RUBEN
MR KYRIAKOS ANDRIANAKIS
BAB SUPER FUND PTY LTD
Total
Holding
29,055,000
16,000,000
12,265,177
% IC
21.94%
12.08%
9.26%
8,124,125
6.13%
7,500,000
5,058,130
4,021,680
3,577,420
3,000,000
2,460,352
2,046,884
2,000,000
2,000,000
1,998,645
1,763,899
1,742,326
5.66%
3.82%
3.04%
2.70%
2.27%
1.86%
1.55%
1.51%
1.51%
1.51%
1.33%
1.32%
1,682,928
1.27%
1,625,000
1,600,000
1,500,000
1,100,000
1.23%
1.21%
1.13%
0.83%
110,121,566
83.15%
46
Unlisted Options
18,000,000 unquoted options with an exercise price of $0.022 and an expiry date of 23/03/21.
12,500,000 unquoted options with an exercise price of $0.022 and an expiry date of 16/04/21.
56,687,500 unquoted options with an exercise price of $0.008 and an expiry date of 1/07/22.
ASX ADDITIONAL INFORMATION
SUBSTANTIAL SHAREHOLDERS
Substantial shareholders in the Company are:
PATRICK JOHN VOLPE AND ASSOCIATES
Voting Rights
Ordinary Shares
Number
Percentage
99,243,991
9.50%
The voting rights attaching to each class of equity security are set out below:
Ordinary Shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Options
Options carry no voting rights.
UNMARKETABLE PARCELS
There were 180 holders of less than a marketable parcel of ordinary shares, which as at 15 September 2020 was 1,547,618.
RESTRICTED / UNQUOTED SECURITIES
There are no restricted or unquoted securities on issue.
ON-MARKET BUY-BACK
There is currently no on-market buyback program for any of ‘SI6 Metals’ listed securities.
SECURITIES EXCHANGE
The Company is listed on the Australian Securities Exchange under the code SI6.
ACQUISITION OF VOTING SHARES
No issues of securities have been approved for the purposes of Item 7 of Section 611 of the Corporations Act 2001.
TAX STATUS
The Company is treated as a public company for taxation purposes.
FRANKING CREDITS
The Company has no franking credits.
47
ASX ADDITIONAL INFORMATION
SCHEDULE OF INTERESTS IN MINING TENEMENTS
Exploration areas held in Botswana
The Company holds the following prospecting licences in Botswana:
Tenement
Magogaphate
PL 110/94
Mokoswane
PL 111/94
Takane
PL 54/98
Shashe South
PL 059/2008
Renewal /
Expiry Date
Percentage
Holding
Title Holder
Comment
31/03/2018
100
African Metals (Pty) Ltd
31/03/2018
100
African Metals (Pty) Ltd
31/03/2018
100
African Metals (Pty) Ltd
30/09/2016
100
African Metals (Pty) Ltd
Farm-in agreement
with BCL Ltd
Farm-in agreement
with BCL Ltd.
Farm-in agreement
with BCL Ltd
Renewal application
submitted
30/06/16, to be
included in JV with
BCL Ltd, currently in
liquidation with
renewals
suspended.
Pending renewal
PL 193/2016
30/09/2019
PL 194/2016
30/09/2019
PL 195/2016
30/09/2019
PL 389/2018
30/09/2021
100
100
100
100
African Metals (Pty) Ltd
African Metals (Pty) Ltd
Pending renewal
African Metals (Pty) Ltd
Pending renewal
African Metals (Pty) Ltd Active
48