2018 ANNUAL REPORT
ABN 77 009 241 374
“BUILDING A SUCCESSFUL INDONESIAN GOLD COMPANY”
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CONTENTS
CONTENTS .............................................................................................................................................. 2
CORPORATE DIRECTORY ........................................................................................................................ 3
CHAIRMAN’S REVIEW ............................................................................................................................. 4
REVIEW OF OPERATIONS ........................................................................................................................ 5
DIRECTORS’ REPORT ............................................................................................................................. 11
AUDITOR’S INDEPENDENCE DECLARATION ......................................................................................... 21
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ................ 22
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ....................................................................... 23
CONSOLIDATED STATEMENT OF CASH FLOWS .................................................................................... 24
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ........................................................................25
NOTES TO THE FINANCIAL STATEMENTS ..............................................................................................26
DIRECTORS’ DECLARATION ..................................................................................................................58
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SIHAYO GOLD LIMITED ............................59
ADDITIONAL SHAREHOLDER INFORMATION .......................................................................................63
SUMMARY OF TENEMENTS HELD BY THE GROUP ................................................................................65
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CORPORATE DIRECTORY
Directors
Misha A Collins C.F.A
(Chairman)
Gavin Caudle
(Non Executive Director)
Stuart Gula
(Non Executive Director)
Mark Hepburn (Appointed 1 August 2018)
(Non Executive Director)
Malcolm Paterson
(Managing Director)
(resigned on 31 August 2018)
Daniel Nolan
(Executive Director)
Chief Executive Officer
Malcolm Paterson (resigned 31 August 2018)
Timothy Adams (appointed 1 September 2018)
Company Secretary
Daniel Nolan
Registered Office
and Business Address
C/-McCullough Robertson
11/66 Eagle St,
Brisbane QLD 4000
Share Registry
Home Exchange
Auditors
Solicitors
Bankers
Telephone:
Facsimile:
E-mail:
Web:
0427 401198
(07) 33993172
sihayogold@sihayogold.com
www.sihayogold.com
Security Transfer Australia
770 Canning Highway
Applecross WA 6153
Telephone:
Facsimile:
(08) 9315 2333
(08) 9315 2233
Australian Securities Exchange Limited
Level 40, Central Park
152-158 St George’s Terrace
Perth WA 6000
Stantons International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue
West Perth WA 6005
Steinepreis Paganin
Level 2, The Read Buildings
West Perth WA 6000
ANZ Banking
111 Eagle St,
Brisbane, QLD. 4000
Sihayo Gold Limited is a company limited by shares, incorporated and domiciled in Australia.
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CHAIRMAN’S REVIEW
Dear Fellow Shareholders,
During the past twelve months our Company has completed the refresh of the feasibility study for the
development of the Sihayo-Pungkut project located in North Sumatra, Indonesia. The results of this study
indeed showed significantly improved economics, even with a lower USD Gold price assumption. We believe
some further improvement may yet be possible, however intend to proceed with permitting and other
statutory approvals required given the change in project size and other aspects.
Preliminary discussions around potential project debt capacity and financing structures have also begun.
This process is expected to build momentum once final project approvals are in place and will be an
important part of delivering the project development. Our clear goal is to put the Sihayo-Pungkut project
into development over the next twelve months. To deliver on this objective will require a lot of work and as
a result the coming year should continue to see high levels of activity.
I would again like to thank our employees, contractors and my fellow directors for their efforts over the past
twelve months. I wish to thank Mr Malcolm Paterson for his efforts in completing the feasibility study update
and welcome Mr Timothy Adams as interim CEO.
I would also like to thank all our shareholders and particularly our major shareholders for their ongoing
support of the company.
Yours Sincerely,
Misha Anthony Collins
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REVIEW OF OPERATIONS
Sihayo Gold Project (75%)
The Sihayo Gold Project (“Sihayo”) is held by PT Sorikmas Mining (“Sorikmas”) under a 7th Generation
Contract of Work (“COW”) and is located in Mandailing Natal, North Sumatra, Indonesia.
The COW describes in detail the rights and obligations of both the Company and the Government during the
term of the COW. Our COW is in the first year of construction having completed the three main Indonesian
Government Statutory Permits.
PT Sorikmas Mining is 75% owned by Sihayo Gold Limited (“Sihayo Gold”) and 25% by PT Aneka Tambang
Tbk (“Antam”). Sihayo Gold is responsible for 100% of the exploration and development funding of Sorikmas
until the commencement of production. The funding is by way of loans to Sorikmas and under the terms of
the Loan Agreement, Antam is required to repay its share of loans to Sihayo Gold or other lenders to
Sorikmas, from 80% of its attributable share of available cash flow from production, until its 25% share of the
loans are repaid in full.
Dairi
Sihayo Pungkut
1.6 Moz Au
Tembang
Martabe
Way
Pongkor
Figure 1: Significant Indonesian mineral deposits including the Sihayo Pungkut Gold Deposit
The current Sihayo JORC Code (2012 Edition) Mineral Resource Estimate, which was revised in July 2018,
stands at 23.4 Mt at 2.11 g/t for 1.585 Moz.
Indicated and Measured Resources at Sihayo only have been converted to JORC Code (2012 Edition) Ore
Reserves by Entech Pty Ltd containing 11.39 Mt at 2.1 g/t for 761,000oz.
5 | P a g e
REVIEW OF OPERATIONS
Sihayo Pungkut – Geology
Sihayo is located along the Trans Sumatra Fault Zone ("TSFZ") and associated Neogene Magmatic Arc
("NMA"), which is the result of an oblique collision of two tectonic plates and associated subduction. A
complex suite of Permian volcanics and sediments, intruded by Jurassic and Cretaceous intrusive plutons,
subsequently juxtaposed or overlain by Tertiary to recent volcanics, intrusives, and sediments comprises the
broader COW area.
Figure 2 shows the location of the Sihayo Resource and key exploration prospects across the COW that
support an opportunity for significant exploration targets for ongoing potential project generation.
In addition to the Sihayo Resource there are over twenty (20) identified prospects of carbonate-hosted gold,
low to intermediate - sulphidation epithermal-vein gold; gold-copper skarn, copper-gold porphyry, and lead
zinc skarn style mineralisation spread across the highly prospective COW area and these prospects will be
the subject of future exploration activities.
Figure 2: Sihayo Pungkut Gold Project – JORC Resource, key prospects and regional geology
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REVIEW OF OPERATIONS
Resource Estimate
The Sihayo Mineral Resource Estimate is based upon review and work undertaken by Mr Anthony
McDougall, the Company’s chief geologist. The relevant JORC 2012 Table 1 is available on the Company
website.
Resource
Tonnage
(Mt)
Grade Au
(g/t)
Contained Gold
ounces
JORC Classification
Au Cut-off
grade (g/t)
SIHAYO
23.4
2.11
1,585,000
Measured & Indicated &
0.6
Inferred
Table 1: JORC Code (2012 Edition) Mineral Resource Estimate revised by as at July 2018
Section 55000E
Figure 3: Sihayo-Sambung Resources Location Plan
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REVIEW OF OPERATIONS
Resource Estimate (continued)
A
B
Figure
Figure
5
Figure 4: Geology Cross Section 55000E of Sihayo Resource looking NW
Figure 5: Enlargement of cross section 55000E shows significant gold intercepts.
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REVIEW OF OPERATIONS
Feasibility Study
The Sihayo "Maiden" Ore Reserve and Feasibility Study completion was announced on January 29, 2014 and
was substantially revised in July 2018.
Indicated and Measured Resources have been converted to Probable and Proved Ore Reserves by Entech Pty
Ltd. The relevant JORC 2012 Table 1 is available on the Company website.
Resource
Tonnage (Mt)
Grade Au
(g/t)
Contained Gold
ounces
Resource Category
SIHAYO
TOTAL
2.09
9.30
11.39
1.8
2.1
2.1
119,000
643,000
Proved
Probable
761,000
Proved & Probable
“Calculations have been rounded to the nearest 1,000t, 0.1 g/t grade and 1,000oz metal”
Table 2: JORC Code (2012 Edition) Sihayo Ore Reserves prepared by Entech Pty Ltd (May 2018)
The January 2014 Feasibility Study was based on a gold price of US$1,400/oz, which proved to be optimistic
in the ensuing period and reduced the capacity to attract funding to complete the project.
The revised Feasibility is based on a gold price of US$1,300 and reflects updated assumptions:
Doubling the production rate to average 91,000 oz per year,
Reducing tailings and waste disposal costs,
Owner operation for mining, drilling and laboratory service,
Simplified plant design to reduce capital,
Including grid power,
Inclusion of cyanide recovery and detox technology using the RECYN process to reduce operating
costs.
Permitting and Approvals
The status of the COW is now in the second year of construction and the Company expects to complete
construction within the permitted three year period, providing funding of the project is successful.
The three key Indonesian Government approvals, Feasibility Study, AMDAL (Environmental) and Forestry are
complete, however amendments are being prepared reflecting the proposed changes resulting from the
revised Feasibility Study.
Corporate Social Responsibility (CSR) Programmes
Ahead of the potential project development the Company has continued to engage local Stakeholders
associated with Government permitting and approvals.
As the project progress into construction and operation, the Company remains committed to the delivery of
CSR programs in line with our Strategy.
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REVIEW OF OPERATIONS
Other Projects
India – Diamond Exploration (9-10%)
No progress was made during the year in resolving the legal status of the tenements.
Mount Keith Gold Project – Western Australia (2% net smelter royalty)
No mining was undertaken on the project during the year.
Mulgabbie Gold Project – Western Australia (2% net smelter royalty)
No mining was undertaken on the project during the year.
Competent Persons Statements
All statements in this report, other than statements of historical facts that address future timings, activities, events and developments
that the Company expects, are forward looking statements. Although Sihayo Gold Limited, its subsidiaries, officers and consultants
believe the expectations expressed in such forward looking statements are based on reasonable expectations, investors are cautioned
that such statements are not guarantees of future performance and actual results or developments may differ materially from those
in the forward looking statements. Factors that could cause actual results to differ materially from forward looking statements
include, amongst other things commodity prices, continued availability of capital and financing, timing and receipt of environmental
and other regulatory approvals, and general economic, market or business conditions.
Sihayo Resource
Information that relates to Mineral Resource Estimates at the Sihayo project is based on information compiled by or under the
supervision of Mr Tony Mcdougall, who is the Principal Geologist at PT Sorikmas Mining. Mr Mcdougall has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to
qualify as an Independent Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’ (CP JORC). Mr Mcdougall is a Member of MAusIMM and a full time employee of PT
Sorikmas Mining. Mr Mcdougall consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
Sihayo Reserve
Information that relates to Ore Reserves at Sihayo is based on information compiled by or under the supervision of Mr Shane McLeay,
who is a Principal Mining Engineer at Entech Pty Ltd and provided to PT Sorikmas Mining. Mr McLeay has sufficient experience which
is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify
as an Independent Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Mr McLeay is a Fellow of the Australasian Institute of Mining and Metallurgy and a full time
employee of Entech Pty Ltd. Mr McLeay consents to the inclusion in the report of the matters based on his information in the form
and context in which it appears.
Note
All statements in this report, other than statements of historical facts that address future timings, activities, events and developments
that the Company expects, are forward looking statements. Although Sihayo Gold Limited, its subsidiaries, officers and consultants
believe the expectations expressed in such forward looking statements are based on reasonable expectations, investors are cautioned
that such statements are not guarantees of future performance and actual results or developments may differ materially from those
in the forward looking statements. Factors that could cause actual results to differ materially from forward looking statements
include, amongst other things commodity prices, continued availability of capital and financing, timing and receipt of environmental
and other regulatory approvals, and general economic, market or business conditions.
10 | P a g e
C
D
Figure 8
Figure 9
DIRECTORS’ REPORT
Your directors present their report on the consolidated entity consisting of Sihayo Gold Limited ("Sihayo
Gold", or" the Company") and the entities it controlled at the end of, or during the year ended 30 June 2018
("the reporting period").
DIRECTORS
The following persons were directors of Sihayo Gold during the financial year and up to the date of this
report:
Misha Collins - Chairman
Gavin Caudle - Non Executive Director
Stuart Leslie Gula - Non Executive Director
Mark Hepburn - Non Executive Director (appointed on 1 August 2018)
Daniel Garry Nolan - Executive Director, Chief Financial Officer, Company Secretary
Malcolm Paterson - Managing Director& Chief Executive Officer (resigned effective on 31 August 2018)
Timothy Adams - Interim Chief Executive Officer (appointed on 1 September 2018)
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the course of the financial year were the continuing
development of the Sihayo Pungkut Gold project. There were no significant changes in the nature of those
activities during the financial year.
DIVIDENDS
No dividends have been paid or declared since the end of the previous financial year and no dividend is
recommended in respect of this financial year.
REVIEW OF OPERATIONS
The review of operations is detailed at pages 5-10.
OPERATING RESULTS
During the financial year the consolidated entity incurred a consolidated operating loss after income tax of
$2,673,862 (2017: $1,315,522).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the consolidated entity for the 2018 financial
year.
EMPLOYEES
The consolidated entity employed 22 employees as at 30 June 2018 (2017: 25 employees)
CORPORATE STRUCTURE
The Company has 1,854,262,526 ordinary shares on issue as at the date of this report.
The corporate group consists of the parent entity Sihayo Gold Limited, its 100% owned subsidiaries Inland
Goldmines Pty Ltd, Excelsior Resources Pty Ltd, Oropa Technologies Pty Ltd, Oropa Indian Resources Pty Ltd,
Oropa Exploration Pty Ltd and Aberfoyle Pungkut Investments Pte Ltd.
Aberfoyle Pungkut Investments Pte Ltd holds a 75% interest in PT Sorikmas Mining, with an Indonesian
Government mining company PT Aneka Tambang Tbk holding the remaining 25%.
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DIRECTORS’ REPORT
LIKELY FUTURE DEVELOPMENTS
Details of important developments occurring in this current financial year have been covered in the review
of operations.
Further information on likely developments in the operations of the consolidated entity and the expected
results have not been included in this report because the directors believe it would be likely to result in
unreasonable prejudice to the consolidated entity.
FINANCIAL POSITION
The net assets of the consolidated entity as at 30 June 2018 are $12,287,475 (2017: $12,313,327 ).
ENVIRONMENTAL REGULATION
The consolidated entity has assessed whether there are any particular or significant environmental
regulations which apply. It has determined that the risk of non-compliance is low, and has not identified any
compliance breaches during the year.
INFORMATION ON DIRECTORS
Details of the directors of the Company in office at the date of this report are:
Misha A Collins
Chairman
Experience and expertise
Mr Collins has 20 years of experience in financial markets with particular emphasis on gold and mining
business analysis and evaluation. Mr Collins was employed by BT Funds Management for an 11 year period
as an equity analyst covering both domestic and international markets together with the formulation of
capital market strategies and commodity forecasting. Mr Collins currently operates his own investment and
technical consulting business and acts as Adviser to a Malaysian based Gold and Silver investment fund.
Mr Collins holds a Bachelor of Engineering in Metallurgy, graduating with First Class Honours from the RMIT
University, a Graduate Certificate in Banking and Finance from Monash University and a Graduate Diploma in
Applied Finance and Investment from the Financial Services Institute of Australia. He also completed the CFA
program with the US based CFA Institute and has been awarded the Chartered Financial Analyst designation
(CFA).
Directorships of Other ASX Listed Companies
None
Former ASX Listed Companies Directorships in last 3 years
Ask Funding Limited
Special responsibilities
Audit Committee chairman
Interests in shares and options
6,823,547 ordinary shares in Sihayo Gold Limited
12 | P a g e
DIRECTORS’ REPORT
Gavin Caudle
(Non Executive Director)
Experience and expertise
Mr Caudle has over 25 years experience in the finance and investment sectors in Australia, Singapore and
Indonesia. Starting his career at Arthur Andersen Australia, he eventually became a partner based in the
Jakarta office. He joined Citigroup in 1998 in Indonesia and held positions as Head of Mergers & Acquisition
and Head of Private Equity at Citigroup and Country Head of the Investment Bank at Salomon Smith Barney.
Since 2003, together with his partners, Gavin has developed numerous successful businesses including
Tower Bersama Group (a listed telecommunications infrastructure business), Merdeka Copper & Gold (an
Indonesian listed mining Company and Provident Agro (a listed plantation business) with assets valued at
more than $4 billion today.
Gavin and his partners bring substantial expertise in dealing with all business aspects in Indonesia, most
importantly for Sihayo being:
Track record of raising more than US$3 billion of senior, mezzanine and equity capital over the past
10 years; and
Expertise in dealing with forestry issues through the ownership of a substantial plantation business.
Expertise in dealing with mining related issues through the ownership of substantial shareholdings in
Sumatra Copper and Gold Limited, Finders Resources Limited and PT Merdeka Copper Gold Tbk.
Directorships of Other ASX Listed Companies
Sumatra Copper and Gold Limited
Finders Resources Limited
Former ASX Listed Companies Directorships in last 3 years
No former directorships
Special responsibilities
Audit Committee member
Interests in shares and options
6,613,984 ordinary shares (held directly)
518,665,951 ordinary shares (held indirectly)
Stuart Leslie Gula
(Non Executive Director)
Experience and expertise
Mr Gula has over 25 years management experience in the mining sector in Australia, North America, Africa
and Asia. Among many other achievements, his experience includes successful construction completion,
commissioning and production of two gold projects in China and Africa and has successfully participated in
varied levels of management on feasibility studies for many other projects. Prior to joining Sihayo Gold, he
held the position of Group General Manager, Mining - North America for Nyrstar. Nyrstar is a European
based integrated metals and mining company with a market capital in excess of US$ 1 billion. Mr Gula holds
a Bachelors degree in Engineering (mining major) and a Masters of Business Administration (Technology
Management).
13 | P a g e
DIRECTORS’ REPORT
Information on Directors (continued)
Directorships of Other ASX Listed Companies
None
Former ASX Listed Companies Directorships in last 3 years
No former directorships
Interests in shares and options
1,033,269 ordinary shares (held indirectly)
Malcolm Paterson (resigned on 31August 2018)
BSc. (Hons) Eng. Met., F. Aus IMM
(Chief Executive Officer & Managing Director of Sihayo Gold Limited)
Malcolm has over forty-five years post graduate experience in the international minerals industry in project
development, operations, engineering and company management.
Prior to joining Sihayo he was CEO of PT Kasongan Bumi Kencana (KBK), part of the Pelsart Group. This
position involved rebuilding the company organisation structure and management systems to provide the in-
house capability to develop and operate mining projects. The Mirah Gold/Silver Project was successfully
commissioned in 2012 and further projects are in the development stage, including the remake of the Mt.
Muro Project, presently being commissioned.
Malcolm was also responsible for the establishment of Green Gold Technology, a company specialising in
Resin technology for the recycling of cyanide and detoxification of gold plant tailings.
Directorships of Other ASX Listed Companies
None
Former ASX Listed Companies Directorships in last 3 years
No former directorships
Interests in shares and options
None
Daniel Garry Nolan
(Executive Director, Chief Financial Officer, Company Secretary)
The company secretary is Mr Daniel Garry Nolan. Mr Nolan was appointed to the position of company
secretary on 1 July 2011. Mr Nolan has worked in finance and accounting for more than 30 years. He has
held senior finance positions in Australia, Cambodia, Vietnam and Indonesia. Immediately before joining
Sihayo he held senior management roles in the Saratoga Group in Indonesia. Prior to that, he was a senior
finance executive at Telstra for 10 years in Australia, Cambodia and Indonesia. Mr Nolan holds a Bachelor of
Business from Monash University and a Certificate in Governance and Risk Management from The
Governance Institute of Australia
Interests in shares and options
4,350,919 ordinary shares (held indirectly)
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DIRECTORS’ REPORT
Information on Directors (continued)
MEETINGS OF DIRECTORS
The following tables set out the number of meetings of the Company's directors held during the year ended
30 June 2018, and the number of meetings attended by each director. (Note that meeting attendance may
have been completed via telephone conferencing).
Directors’ meeting:
M Collins
Gavin Caudle
S Gula
D Nolan
M Paterson
Audit committee meeting:
M Collins
Gavin Caudle
D Nolan
Number eligible
to attend
4
4
4
4
4
Number eligible
to attend
2
2
2
Number
Attended
4
4
4
4
4
Number
Attended
2
2
2
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The full board of Sihayo Gold act as as the Remuneration Committee at the date of this report.
The responsibilities and functions of the Remuneration Committee are as follows:
1) review the competitiveness of the Company’s executive compensation programs to ensure:
(a)
(b)
(c)
the attraction and retention of corporate officers;
the motivation of corporate officers to achieve the Company’s business objectives; and
the alignment of the interests of key leadership with the long-term interests of the
Company’s shareholders.
2) review trends in management compensation, oversee the developemnt of new compensation plans
and, when necessary, approve the revision of existing plans;
3) review the performance of executive management;
4) review and approve Chairperson and Chief Executive Officer goals and objectives, evaluate
Chairperson and Chief Executive Officer performance in light of these corporate objectives, and set
Chairperson and Chief Executive Officer compensation levels consistent with Company philosophy;
5) approve the salaries, bonus and other compensation for all senior executives, the committee will
recommend appropriate salary, bonus and other compensation to the Board for approval;
6) review and approve compensation packages for new corporate officers and termination packages
for corporate officers as requested by management;
7) review and approve the awards made under any executive officer bonus plan, and provide an
appropriate report to the Board;
8) review and make recommendations concerning long-term incentive compensation plans, including
the use of share options and other equity-based plans. Except as otherwise delegated by the Board,
the committee will act on behalf of the Board as the “Committee” established to administer equity-
based and employee benefit plans, and as such will discharge any responsibilities imposed on the
committee under those plans, including making and authorising grants, in accordance with the terms
of those plans; and
9) review periodic reports from management on matters relating to the Company’s personnel
appointments and practices.
Principles used to determine the nature and amount of remuneration
Non-executive directors receive fees in cash. The fees are fixed and approved by shareholders.
Where non-executive directors provide services in their area of expertise they receive payment at
normal commercial rates.
There are no executives (other than directors) with authority for strategic decision making and
management.
The remuneration of the directors is not linked directly to the performance of the Company.
Engagement of remuneration consultants
During the financial year, the Company did not engage any remuneration consultants.
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Details of remuneration
Details of the remuneration of key management personnel of Sihayo Gold Limited, including their personally
related entities are set out below for the year ended 30 June 2018. There have been no changes to the
below named key management personnel since the end of the reporting period unless noted:
2018
Name
M Collins
G Caudle
D Nolan
S Gula
M
Paterson
Short-term
Post Employment
Long Term
Cash
Salary &
Fees
65,000
45,000
62,864
48,750
420,000
Non
Monetary
Benefits
1,461
1,011
963
1,096
9,438
641,614
13,969
Super-
annuation
Retirement
Benefits
Incentive
Plans
LSL
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Equity
Share
based
payment
-
-
-
-
-
Total
$
66,461
46,011
63,827
49,846
429,438
-
655,583
Total
Remuneration
represented
by options
-
-
-
-
-
-
(a) $65,000 in directors fees was paid to M Collins as at 30 June 2018.
(b) $371,250 in directors fees was payable as at 30 June 2018 to G Caudle for fees for the year ended 30
June 2018 and in lieu of previous years directors fees.
(c) $62,864 salary was paid to D Nolan for the year ended 30 June 2018.
(d) $48,750 salary was paid to Stuart Gula for the year ended 30 June 2018.
(e) $420,000 salary was paid to Malcolm Paterson for the year ended 30 June 2018. He resigned on 31
August 2018.
(f) $13,969 non monetary benefit is related to Director and Officers Liability Insurance.
2017
Name
M Collins
G Caudle
D Nolan
S Gula
M
Paterson
Short-term
Post Employment
Long Term
Cash
Salary &
Fees
65,000
45,000
36,000
233,753
35,000
Non-
Monetary
Benefits
2,220
1,537
410
7,984
1,195
414,753
13,346
Super-
annuation
Retirement
Benefits
Incentive
Plans
LSL
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Equity
Share
based
payment
-
-
-
-
-
Total
$
67,220
46,537
36,410
241,737
36,195
-
428,099
Total
Remuneration
represented
by options
-
-
-
-
-
-
(a) $65,000 in directors fees was paid to M Collins as at 30 June 2017.
(b) $326,250 in directors fees was payable as at 30 June 2017 to G Caudle for fees for the year ended 30
June 2017 and in lieu of previous years directors fees.
(c) $36,000 salary was paid to D Nolan for the year ended 30 June 2017.
(d) $233,753 salary was paid to Stuart Gula for the year ended 30 June 2017.
(e) $35,000 salary was paid to Malcolm Paterson for the year ended 30 June 2017. He was appointed on
01 June 2017.
(f) $13,346 non monetary benefit is related to Director and Officers Liability Insurance.
17 | P a g e
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
No options granted as part of remuneration during the years ended 30 June 2018 and 30 June 2017.
There were no shares issued on exercise of compensation options (Consolidated) for the years ended 30
June 2018 or 30 June 2017.
Option holdings of key management personnel
Nil
Shareholdings of Key Management Personnel
The number of shares held in the Company during the financial year by each key management personnel of
Sihayo Gold Limited, including their personally-related entities, are set out below:
Balance
1 July 17
Granted as
remuneration
On exercise
of options
Net change
other
Balances as at date of
resignation/
termination
Balance
30 June 18
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
34,691,404
487,972,464
1,033,269
4,350,919
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(27,867,857)
37,307,471
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,823,547
525,279,935
1,033,269
4,350,919
-
Balance
1 July 16
Granted as
remuneration
On exercise
of options
Net change
other
Balances as at date of
resignation/
termination
Balance
30 June 17
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
14,529,574
155,435,368
133,269
4,250,919
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,161,830
332,537,096
900,000
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34,691,404
487,972,464
1,033,269
4,350,919
-
30 June
2018
M Collins
G Caudle
S. Gula
D. Nolan
M. Paterson
30 June
2017
M Collins
G Caudle
S. Gula
D. Nolan
M. Paterson
18 | P a g e
DIRECTORS’ REPORT
DIRECTORS AGREEMENTS
Whilst no formal agreements have been entered into between the Company or previous agreements have
expired and each of its Directors, annual Director remuneration, as disclosed below, has been Board
approved.
Name
Remuneration Per Annum ($) plus Allowance
Misha Collins
Stuart Leslie Gula
Daniel Garry Nolan
Gavin Caudle
Malcolm Paterson
65,000
45,000
80,000
45,000
420,000
END OF REMUNERATION REPORT
Directors and Officers Insurance
During the year $13,969 was paid for Directors and officeholders insurance, covering all directors and
officeholders.
The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings
that may be brought against the officers in their capacity as officers of entities in the consolidated entity.
SHARES UNDER OPTION
There were no options outstanding as at 30 June 2018.
WORKING CAPITAL LOAN
Total working capital loan from Provident Minerals Ltd was $1,050,000 with 10% interest per annum accrued
daily and compunded monthly.
Total working capital loan from Asian Metal Mining was $450,000 with 10% interest per annum accrued daily
and compunded monthly.
PROCEEDINGS ON BEHALF OF COMPANY
No person entitled to exercise any of the options has any right, by virtue of the options, to participate in any
share issue of any other body corporate.
The names of all persons who currently hold options, granted at any time, are entered in the register kept by
the Company pursuant to Section 216C of the Corporations Act 2001 and the register may be inspected free
of charge.
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or part of these proceedings.
19 | P a g e
DIRECTORS’ REPORT
The Company was not party to any such proceedings during the year.
CORPORATE GOVERNANCE
The Company’s Corporate Governance Statement is located at the Company’s Website:
http://www.sihayogold.com/view/about-us/corporate-governance
NON-AUDIT SERVICES
There were no non-audit services undertaken by Stantons International during the financial year.
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act
2001 is set out on page 21.
Signed in accordance with a resolution of the Board of Directors.
Misha Anthony Collins
Chairman
30 September 2018
20 | P a g e
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
30 September 2018
The Directors
Sihayo Gold Limited
c/- Mccullough Robertson
Level 11
66 Eagles Street
BRISBANE, QLD 4000
Dear Sirs
RE: SIHAYO GOLD LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Sihayo Gold Limited.
As Audit Director for the audit of the financial statements of Sihayo Gold Limited for the year ended 30 June
2018, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours faithfully,
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved
under Professional Standards Legislation
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Notes
3
3(a)(i)
3(a)(ii)
5, 3(a)(i)
6(a)(ii)
3(a)(ii)
3(a)
3(b)
Other revenue
Total revenue
Employee benefits expense
External consultancy expenses
Rates and taxes
Rental expense
Travel and entertainment expenses
Permit and licenses
Corporate secretarial expenses
Finance costs
Depreciation and amortisation
Insurance expense
Provision for impairment of
capitalised exploration and
evaluation costs
Foreign exchange gain
Write back of provision for
impairment VAT receivable
Gain on derivative liability
Other expenses
Loss before income tax
Income tax expense
Net loss
Other comprehensive income
Items that will never be classified
to profit or loss
Items that may be classified to
profit or loss
Movement in foreign currency
translation reserve
Other comprehensive loss for the
year, net of tax
Total comprehensive loss for the
year
Loss after income tax attributable
to:
Members of Sihayo Gold Limited
Non controlling interest
Comprehensive loss after income
tax attributable to:
Members of Sihayo Gold Limited
Non controlling interest
Basic/diluted loss per share in cents
20
Consolidated
2018
$
2017
$
492
492
(1,915,020)
(589,445)
(250,491)
(103,467)
(62,136)
(55,722)
(52,567)
(38,284)
(15,480)
(10,123)
(1,865,095)
121,596
2,187,030
-
(25,150)
(2,673,862)
-
(2,673,862)
599,427
599,427
528
528
(607,933)
(604,998)
(107,098)
(2,291)
(21,779)
(149,215)
(49,430)
(96,935)
(57,736)
(3,375)
-
-
-
725,554
(340,814)
(1,315,522)
-
(1,315,522)
-
(453,255)
(453,255)
(2,074,435)
(1,768,777)
(2,091,472)
(582,390)
(2,673,862)
(285,471)
(1,788,964)
(2,074,435)
(0.12)
(875,503)
(440,019)
(1,315,522)
(567,588)
(1,201,189)
(1,768,777)
(0.06)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjuction with the
accompanying notes.
22 | P a g e
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Other assets
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Other liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
TOTAL NON-CURRENT
LIABILITIES
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY
Parent entity interest:
Contributed equity
Reserves
Accumulated losses
Total parent entity interest
Non-controlling interest in
controlled entities
TOTAL SHAREHOLDERS’ EQUITY
Notes
19
4
4
6
5
7
9
8
10
11(a)
11(b)
18(b)
2018
$
Consolidated
2017
$
116,210
257,696
373,906
2,382,136
13,609,718
102,428
16,094,282
16,468,188
2,106,603
1,500,000
57,271
3,663,874
516,839
516,839
4,180,713
12,287,475
109,269,211
15,183,104
(91,369,369)
33,082,946
(20,795,471)
12,287,475
834,757
203,125
1,037,882
-
12,878,780
83,964
12,962,744
14,000,626
862,800
261,510
57,516
1,181,826
505,473
505,473
1,687,299
12,313,327
107,220,628
13,377,103
(99,144,809)
21,452,922
(9,139,595)
12,313,327
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
23 | P a g e
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to creditors and suppliers &
employees
Interest received
NET CASH FLOWS (USED) IN OPERATING
ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for addition of mining exploration and
evaluation expenditure
Payments for addition of property, plant &
equipment
NET CASH (USED) IN INVESTING ACTIVITIES
CASH FLOWS RECEIVED FROM FINANCING
ACTIVITIES
Proceeds from issue of shares
Repayment of borrowings
Proceeds from borrowings
Payment of unmarketable securities
Cost of shares issue
NET CASH FLOWS RECEIVED FROM FINANCING
ACTIVITIES
Net (decrease)/increase in cash and cash
equivalents held
Cash and cash equivalents at the beginning of
the financial year
Cash and cash equivalents at the end of the
financial year
Notes
2018
$
2017
$
Consolidated
(2,111,479)
492
(1,495,623)
528
19(b)
(2,110,987)
(1,495,095)
(1,865,095)
(29,294)
(1,894,389)
2,163,307
(261,510)
1,500,000
(244)
(114,724)
-
-
-
5,976,981
(3,625,538)
233,454
(404)
(282,361)
3,286,829
2,302,132
(718,547)
807,037
834,757
27,720
19
116,210
834,757
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
24 | P a g e
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
$
$
Share
capital
Options &
equity
reserve
$
Foreign
currency
translation
reserve
$
$
$
Accumulated
losses
Non-
controlling
interest
Total
Balance at 1.07.16
101,526,008
2,380,395
10,688,793
(98,269,306)
(7,938,406)
8,387,484
Loss for the year
Other comprehensive
loss:
Movement in foreign
currency translation
reserve
Total comprehensive
loss for the year
Issue of shares (net of
transaction costs)
-
-
-
5,694,620
-
-
-
-
-
(875,503)
(440,019)
(1,315,522)
307,915
-
(761,170)
(453,255)
307,915
(875,503)
(1,201,189)
(1,768,777)
-
-
-
5,694,620
Balance at 30.06.17
107,220,628
2,380,395
10,996,708
(99,144,809)
(9,139,595)
12,313,327
Balance at 1.07.17
107,220,628
2,380,395
10,996,708
(99,144,809)
(9,139,595)
12,313,327
Transfer of losses from
the Group to NCI as a
result of write off of
exploration and
evaluation expenditure
and VAT at subisidiary
company level
Loss for the year
Other comprehensive
loss:
Movement in foreign
currency translation
reserve
Total comprehensive
loss for the year
Issue of shares (net of
transaction costs)
-
-
-
-
2,048,583
-
-
-
-
-
-
-
9,866,912
(9,866,912)
-
(2,091,472)
(582,390)
(2,673,862)
1,806,001
-
(1,206,574)
599,427
1,806,001
(2,091,472)
(1,788,964)
(2,074,435)
-
-
-
2,048,583
Balance at 30.06.18
109,269,211
2,380,395
12,802,709
(91,369,369)
(20,795,471) 12,287,475
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
25 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are general purpose financial statements that have been prepared in accordance
with Accounting Standards of the Australian Accounting Standards Board and the Corporations Act 2001.
The financial statements cover Sihayo Gold Limited and its controlled entities, and has authorised for issue in
accordance with a resolution of the Directors on 30 September 2018. Sihayo Gold Limited is a listed public
company, incorporated and domiciled in Australia.
The following is a summary of the material accounting policies adopted by the group in the preparation of
the financial report. The accounting policies have been consistently applied, unless otherwise stated.
Basis of preparation
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards (AASBs) and the Corporations Act 2001. The consolidated financial report of
the Group also complies with International Financial Reporting Standards and interpretations adopted by the
International Accounting Standards Board.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations issued by the AASB which are
not yet mandatorily applicable to Sihayo Group have not been applied in preparing these consolidated
financial statements. Those which may be relevant to the Group are set out below. Sihayo Group does not
plan to adopt these standards early.
Certain new accounting standards and interpretations have been published that are not mandatory for 30
June 2018 reporting year. The group’s assessment of the impact of these new standards and interpretations
is set out below:
AASB 9 Financial Instruments and associated Amending Standards (applicable for annual
reporting period commencing 1 January 2018)
The Standard will be applicable retrospectively (subject to the comment on hedge accounting
below) and includes revised requirements for the classification and measurement of financial
instruments, revised recognition and derecognition requirements for financial instruments and
simplified requirements for hedge accounting.
Key changes made to this standard that may affect the Group on initial application include
certain simplifications to the classification of financial assets, simplifications to the accounting of
embedded derivatives, and the irrevocable election to recognise gains and losses on investments
in equity instruments that are not held for trading in other comprehensive income.
The directors anticipate that the adoption of AASB 9 will not have a material impact on the
Group’s financial instruments).
26 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods
commencing on or after 1 January 2018)
When effective, this Standard will replace the current accounting requirements applicable to
revenue with a single, principles-based model. Except for a limited number of exceptions,
including leases, the new revenue model in AASB 15 will apply to all contracts with customers as
well as non-monetary exchanges between entities in the same line of business to facilitate sales
to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for the goods or services. To achieve this
objective, AASB 15 provides the following five-step process:
- identify the contract(s) with a customer;
- identify the performance obligations in the contract(s);
- determine the transaction price;
- allocate the transaction price to the performance obligations in the contract(s); and
- recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding
revenue.
The directors anticipate that the adoption of AASB 15 will not have a material impact on the
Group's financial statements.
AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January
2019).
When effective, this Standard will replace the current accounting requirements applicable to
leases in AASB 117: Leases and related interpretations. AASB 16 introduces a single lessee
accounting model that eliminates the requirement for leases to be classified as either operating
leases or finance leases. Lessor accounting remains similar to current practice.
27 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The main changes introduced by the new Standard are as follows:
-
recognition of the right-to-use asset and liability for all leases (excluding short term leases
with less than 12 months of tenure and leases relating to low value assets);
- depreciating the right-to-use assets in line with AASB 116: Property, Plant and Equipment in
profit or loss and unwinding of the liability in principal and interest components;
inclusion of variable lease payments that depend on an index or a rate in the initial
measurement of the lease liability using the index or rate at the commencement date;
application of a practical expedient to permit a lessee to elect not to separate non-lease
components and instead account for all components as a lease; and
additional disclosure requirements.
-
-
-
The transitional provisions of AASB 16 allow a lease to either retrospectively apply the Standard
to comparatives in line with AASB 108 or recognise the cumulative effect of retrospective
application as an adjustment to opening equity at the date of initial application.
The directors anticipate that the adoption of AASB 16 will not have a material impact on the
Group’s recognition of leases and disclosures.
AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture (applicable to annual reporting periods
commencing on or after 1 January 2018).
This Standard amends AASB 10: Consolidated Financial Statements with regards to a parent
losing control over a subsidiary that is not a “business” as defined in AASB 3: Business
Combinations to an associate or joint venture and requires that:
-
a gain or loss (including any amounts in other comprehensive income (OCI)) be recognised
only to the extent of the unrelated investor’s interest in that associate or joint venture;
the remaining gain or loss be eliminated against the carrying amount of the investment in
that associate or joint venture; and
any gain or loss from remeasuring the remaining investment in the former subsidiary at fair
value also be recognised only to the extent of the unrelated investor’s interest in the
associate or joint venture. The remaining gain or loss should be eliminated against the
carrying amount of the remaining investment.
-
-
The directors anticipate that the adoption of AASB 2014-10 will not have a material impact on
the Group's financial statements.
28 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a
material impact on the entity in the current or future reporting periods and on foreseeable
future transactions
New and amended standards adopted by the Group
The Group has considered the implications of new and amended Accounting Standards applicable for annual
reporting periods beginning after 1 January 2017 but determined that their application to the financial
statements is either not relevant or not material.
a) Going concern
The financial statements have been prepared on a going concern basis which the directors believe to be
appropriate. The directors are confident that the Group will be able to maintain sufficient levels of working
capital to continue as a going concern and continue to pay its debts as and when they fall due.
For the year ended 30 June 2018, the Group incurred a loss before tax of $2,673,862 (2017: loss of
$1,315,522) and has a working capital deficit of $3,289,968 (2017: $143,944). The Group has cash and cash
equivalents of $116,210 (2017: $834,757) and current liabilities of $3,663,874 (2017: $1,181,826) which
includes borrowings of $1,500,000.
The financial report has been prepared on the going concern basis, which contemplates continuity of normal
business activities and realisation of assets and settlement of liabilities in the ordinary course of business.
The Group’s ability to continue as a going concern is dependent upon it maintaining sufficient funds for its
operations and commitments. The directors continue to be focused on meeting the Group’s business
objectives and is mindful of the funding requirements to meet these objectives. The Directors consider the
basis of going concern to be appropriate for the following reasons:
•
•
•
The current cash of the Group relative to its fixed and discretionary commitments;
The contingent nature of certain of the Group’s project expenditure commitments;
The ability of the Group to terminate certain agreements without any further on-going obligation
beyond what has accrued up to the date of termination;
The underlying prospects for the Group to raise funds from the capital markets; and
The fact that future exploration and evaluation expenditure are generally discretionary in nature (ie.
at the discretion of the Directors having regard to an assessment of the progress of works
undertaken to date and the prospects for the same). Subject to meeting certain expenditure
commitments, further exploration activities may be slowed or suspended as part of the
management of the Group’s working capital.
•
•
29 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
a) Going concern (continued)
The Directors are confident that the Group can continue as a going concern and as such are of the opinion
that the financial report has been appropriately prepared on a going concern basis.
Should the Group be unable to undertake the initiatives disclosed above, there is uncertainty which may cast
doubt as to whether or not the Group will be able to continue as a going concern and whether it will realise
its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the
financial statements.
The financial statements do not include any adjustments relating to the recoverability and classification of
recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should
the Group not continue as a going concern.
b) Principles of consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
Sihayo Gold Limited and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent
controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries is
provided in Note 18.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or
losses on transactions between Group entities are fully eliminated on consolidation. Accounting policies of
subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non
controlling interests". The Group initially recognises non-controlling interests that are present ownership
interests in subsidiaries and are entitled to a proportionate share of the subsidiary's net assets on liquidation
at either fair value or at the non-controlling interests' proportionate share of the subsidiary's net assets.
Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and
each component of other comprehensive income. Non-controlling interests are shown separately within the
equity section of the statement of financial position and statement of comprehensive income.
c) Business combinations
The purchase method of accounting is used to account for business combinations regardless of whether
equity instruments or other assets are acquired. The cost of a business combination is measured as the fair
value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange and the
amount of any non-controlling interest in the acquiree. For each business combination, the acquirer
measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the
acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred.
30 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
c) Business combinations (continued)
Where equity instruments are issued in a business combination, the fair value of the instruments is their
published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that
the published price at the date of exchange is an unreliable indicator of fair value and that other evidence
and valuation methods provide a more reliable measure of fair value.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling
interest. The excess of the cost of the business combination over the fair value of the Group’s share of the
identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of
the net assets acquired, the difference is recognised directly in the Statement of Comprehensive Income, but
only after a reassessment of the identification and measurement of the net assets acquired.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously
held equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or
loss.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
d) Income tax
The charge for current income tax expenses is based on the profit for the year adjusted for any non-
assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively
enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding
business combination, where there is no effect on accounting or taxable profit or loss.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be
available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income tax legislation and the anticipation that the
economic entity will derive sufficient future assessable income to enable the benefit to be realised and
comply with the conditions of deductibility imposed by the law.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised
or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it
relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly
against equity.
31 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
e) Property, plant & equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any
accumulated depreciation and impairment losses.
Plant and equipment
Property, plant and equipment are measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of
the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected
net cash flows that will be received from the assets employment and subsequent disposal. The expected net
cash flows have been discounted to their present values in determining recoverable amounts
Depreciation
The depreciable amount of all Property, Plant and Equipment (other than Leasehold Improvements and
certain plant and equipment which are based on the prime cost method) is based on the diminishing value
method over their useful lives to the Company commencing from the time the assets are held ready for use.
The depreciation rates used for plant and equipment vary between 2.5% and 40%.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet
date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
value is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in the statement of comprehensive income.
f) Acquistion of assets
The purchase method of accounting is used for all acquisitions of assets regardless of whether shares or
other assets are acquired. Cost is determined as the fair value of the assets given up, shares issued or
liabilities undertaken at the date of acquisition plus costs incidental to the acquisition. Where shares are
issued in an acquisition, the value of the shares is determined having reference to the fair value of the assets
or net assets acquired, including goodwill or discount on acquisition where applicable.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of the acquisition. The discount rate used is the rate at
which a similar borrowing could be obtained under comparable terms and conditions.
g) Exploration and evaluation expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the areas have not yet reached a stage
that permits reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which
the decision to abandon the area is made.
32 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
g) Exploration and evaluation expenditure (continued)
When production commences, the accumulated costs for the relevant area of interest are amortised over
the life of the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest.
h) Financial instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition these instruments are
measured as set out below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are stated at amortised cost using the effective interest rate method.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal
payments and amortisation.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
Impairment
At each reporting date, the group assesses whether there is objective evidence that a financial instrument
has been impaired. Impairment losses are recognised in the statement of comprehensive income.
i) Impairment of assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired.
If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value
less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s
carrying value over its recoverable amount is expensed to the statement of comprehensive income.
j) Interests in joint arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture
where unanimous decisions about relevant activities are required.
33 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
j) Interests in joint arrangements (continued)
Separate joint venture entities providing joint venturers with an interest to net assets are classified as a
"joint venture" and accounted for using the equity method.
Joint venture operations represent arrangements whereby joint operators maintain direct interests in each
asset and exposure to each liability of the arrangement. The Group's interests in the assets, liabilities,
revenue and expenses of joint operations are included in the respective line items of the consolidated
financial statements.
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties'
interests. When the Group makes purchases from a joint operation, it does not recognise its share of the
gains and losses from the joint arrangement until it resells those goods/assets to a third party.
k) Functional and presentation currency
The functional currency of each of the group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented
in Australian dollars which is the parent entity’s functional and presentation currency.
l) Foreign currency transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at
the date of the transaction. Foreign currency monetary items are translated at the year end exchange rate.
Non-monetary items measured at historical costs continue to be carried at the exchange rate at the date of
the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date
when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of
comprehensive income, except where deferred in equity as a qualifying cashflow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to
the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is
recognised in the statement of comprehensive income.
m) Group companies
The financial results and position of foreign operations whose functional currency is different from the
group’s presentation currency are translated as follows:
Assets and Liabilities are translated at year-end exchange rates prevailing at that reporting date.
Income and expenses are translated at average exchange rates for the period.
Exchange rate differences arising on translation of foreign operations are transferred directly to the group’s
foreign currency translation reserve in the statement of financial position. These differences are recognised
in the statement of comprehensive income in the period in which the operation is disposed.
34 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
n) Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets. Revenue from the sale of assets is recognised at the date that the contract is entered into.
All revenue is stated net of the amount of goods and services tax (GST).
o) Employee benefits
Provision is made for the group’s liability for employee benefits arising from services rendered by employees
to balance date. Employee benefits that are expected to be settled within one year have been measured at
the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits
payable later than one year have been measured at the present value of the estimated future cash outflows
to be made for those benefits.
p) Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of a past event,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
q) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short term highly
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are
shown within short term borrowings in current liabilities on the statement of financial position.
r) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST is
not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
s) Share based payment transactions
The group provides benefits to the directors and senior executives in the form of share-based payment
transactions, whereby services are rendered in exchange for shares or rights over shares (‘equity settled
transactions’).
The cost of these equity settled transactions with directors is measured by reference to the fair value at the
date at which they are granted. The fair value is determined by an external valuer using the Black- Scholes
model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of Sihayo Gold Limited.
35 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
s) Share based payment transactions (continued)
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the market conditions are fulfilled. The cumulative expense recognised for equity-settled
transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has
expired and (ii) the number of awards that in the opinion of the directors will ultimately vest. The opinion is
formed on the best available information at balance date. No adjustment is made for the likelihood of
market performance conditions being met as the effect of these conditions is included in the determination
of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
conditional upon market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified. In addition, an expense is recognised for any increase in the value of the
transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and
any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award, and designated as a replacement award on the date that it is granted,
the cancelled and new award are treated as if they were a modification of the original award, as described in
the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation
of earnings per share.
t) Trade and other receivables
CURRENT
All trade debtors are recognised at the amounts receivable as they are due for settlement no more than 30
days from the date of recognition. Collectability of trade debtors is reviewed on an ongoing basis. Debts
which are known to be uncollectible are written off. A provision for doubtful debts is raised when some
doubt as to collection exists and in any event when the debt is more than 60 days overdue.
u) Trade and other receivables
NON-CURRENT
All debtors that are not expected to be received within 12 months of reporting date are included in non-
current receivables. Collectability of non-current receivables is reviewed on an ongoing basis. Debts which
are known to be uncollectible are written off. A provision for doubtful debts is raised when some doubt as to
collection exists.
v) Trade and other creditors
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the
end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30
days of recognition
36 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
w) Operating leases
Operating lease payments are charged to the Statement of comprehensive income in the periods in which
they are incurred, as this represents the pattern of benefits derived from the leased assets.
x) Significant accounting judgements, estimates and assumptions
Significant accounting judgements
In the process of applying the Group’s accounting policies, management has made the following judgements,
apart from those involving estimations, which have the most significant effect on the amounts recognised in
the financial statements:
Exploration and evaluation assets
The Group’s accounting policy for exploration and evaluation expenditure is set out above. The application
of this policy necessarily requires management to make certain estimates and assumptions as to future
events and circumstances, in particular, the assessment of whether economic quantities of reserves are
found. Any such estimates and assumptions may change as new information becomes available.
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting
period are:
Recovery of deferred assets
Deferred tax assets are recognised for deductible temporary differences when management considers that it
is probable that future taxable profits will be available to utilise those temporary differences.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The Group measures the cost of cash-settled
share-based payments at fair value at the grant date using the Black-Scholes model taking into account the
terms and conditions upon which the instruments were granted.
y) Segment reporting
The Group determines and presents operating segments based on the information that internally is provided
to the Managing Director, who is the Group’s chief operating decision maker. An operating segment is a
component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other
components. All operating segments’ operating results are regularly reviewed by the Managing Director to
make decisions about resources to be allocated to the segment and assess its performance.
Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with
respect to operating segments are determined in accordance with accounting policies that are consistent to
those adopted in the annual financial statements of the Group.
37 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
y) Segment reporting (continued)
Intersegment loans payable and receivable are initially recognised at the consideration received net of
transaction costs. If intersegment loans receivable and payable are not on commercial terms, these are not
adjusted to fair value on market interest rates.
2. RISK MANAGEMENT
(a) Interest rate risk
The Consolidated Entity and the Company’s exposure to interest rate risk, is the risk that a financial
instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted
average interest rate on classes of financial assets and liabilities. The Consolidated Entity and the Company
do not have a major exposure in this area as the interest rate earned on deposited funds does not vary
greatly from month to month.
Consolidated Entity
2018
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Deposits
Total financial
assets
Financial liabilities
Trade and other
payables
Borrowings
Other liabilities
Total financial
liabilities
Fixed interest rate maturing in
Floating
Interest
Rate
1 year or
less
1 to 5
years
More than
5 years
Non -
interest
bearing
$
$
$
$
$
Total
carrying
amount at
balance
sheet
$
Applicable
interest
rate on
30 June
2018
%
116,210
-
-
116,210
-
-
-
-
-
-
-
-
1,500,000
-
-
1,500,000
-
-
163
163
-
-
-
-
-
-
-
-
116,210
2,416,940
-
2,416,940
163
-
-
-
-
2,416,940
2,533,313
-
-
-
2,106,603
-
57,271
2,106,603
1,500,000
57,271
-
10%
-
-
2,163,874
3,663,874
38 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
2. RISK MANAGEMENT (continued)
Consolidated Entity
2017
Fixed interest rate maturing in
Floating
Interest
Rate
1 year
or less
1 to 5
years
More than
5 years
Non-
interest
bearing
$
$
$
$
$
Total
carrying
amount at
balance
sheet
$
Applicable
interest
rate on 30
June
%
834,757
-
-
834,757
-
-
-
-
-
-
6,602
6,602
-
-
-
-
261,510
-
-
261,510
-
-
-
-
-
-
-
-
-
-
-
-
-
834,757
0.0%
127,733
-
127,733
6,602
-
4%
127,733
969,092
862,800
-
57,516
862,800
261,510
57,516
-
10%
-
920,316
1,181,826
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Deposits
Total financial
assets
Financial liabilities
Trade and other
payables
Borrowings
Other liabilities
Total financial
liabilities
(b) Credit risk exposures
The consolidated entity and the Company has no significant concentrations of credit risk. The maximum
exposure to credit risk at balance date is the carrying amount (net of provision of doubtful debts) of those
assets as disclosed in the consolidsted statement of financial position and note 21.
As the consolidated entity and Company does not presently have any debtors arising from sales, lending,
significant stock levels or any other credit risk, a formal credit risk management policy is not maintained.
(c) Foreign currency risk management
The Consolidated Entity and the Company is exposed to fluctuations in foreign currencies arising from costs
incurred at overseas mineral exploration tenements. To mitigate this risk the Company holds cash in the
currency in which it forecasts the costs will be incurred.
39 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
2. RISK MANAGEMENT (continued)
(d) Liquidity risk
Liquidity risk is the risk that the Consolidated Entity and the Company will not be able to meet its financial
obligations as they fall due. Financial obligations of the Consolidated Entity and the Company consist of trade
creditors and other payables.
The Company has not conducted a sensitivity analysis on credit or interest rate risk as the amounts are not
considered significant.
3. REVENUE
Revenue from the operating activities
Interest
3(a) LOSS BEFORE INCOME TAX
Net expenses
The loss before income tax includes the following expenses:
(i) Expenses:
Depreciation
Rental expenses
(ii) Finance costs and movements in derivative liability
Finance costs
Gain on derivative liability
Consolidated
2018
$
2017
$
492
492
528
528
Consolidated
2018
$
15,480
103,467
118,947
38,284
-
38,284
2017
$
57,736
2,291
60,027
96,935
(725,554)
(628,619)
40 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
3(b) INCOME TAX EXPENSE
Loss from ordinary activities before income tax expense
(2,673,862)
(1,315,522)
Consolidated
2018
$
2017
$
(i) Prima facie tax benefit on loss from ordinary activities @27.5%
Tax effects of amounts which are not deductible (taxable)
In calculating taxable income:
Provisions
Non assessable (income)/expenses
Provision for impairment of mining exploration and evaluation
expenditure
Provision for impairment of VAT receivable
Movement in unrecognised temporary difference
Tax effect of current year tax losses for which
no deferred tax asset has been recognised
Income tax expense
(ii) Unrecognised temporary differences
Deferred Tax Assets at 27.5%
Carried forward revenue tax losses
Carried forward capital tax losses
Black hole expenditure
(735,313)
(361,769)
6,875
-
512,901
(601,433)
(816,970)
(64,223)
881,193
-
12,972
(199,527)
-
-
(548,324)
(68,896)
617,220
-
8,774,025
958,469
100,428
9,832,922
8,326,240
958,469
177,154
9,461,863
This benefit for tax losses will only be obtained if:
(i)
the consolidated entity derives future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions for the losses to be realised, or
the losses are transferred to an eligible entity in the consolidated entity, and
the consolidated entity continues to comply with the conditions for deductibility imposed by tax
legislation; and
no changes in tax legislation adversely affect the consolidated entity in realising the benefit from the
deductions for the losses.
the movement in unrecognised DTA on tax losses does not agree to Note 3(b)(i) due to foreign
exchange differences.
(ii)
(iii)
(iv)
(v)
41 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
4. TRADE AND OTHER RECEIVABLES
CURRENT
Prepayments
Other debtors
NON CURRENT
VAT receivable
Provision for impairment
Consolidated
2018
$
2017
$
222,892
34,804
257,696
2,382,136
-
2,382,136
75,392
127,733
203,125
2,166,660
(2,166,660)
-
VAT receivables will be recoverable from the Indonesian Goverment once production commences.
As the reporting date, none of the other debtors were past due or impaired.
Other debtors
These amounts generally arise from transactions outside the usual operating activities of the consolidated
entity and are non-interest bearing. The other debtors do not contain any impaired receivables.
5. PROPERTY, PLANT AND EQUIPMENT
NON CURRENT
Land at Cost
Plant and equipment, at cost
Less: accumulated depreciation
Motor vehicles, at cost
Less: accumulated depreciation
Office equipment, at cost
Less: accumulated depreciation
Total property, plant and equipment
Consolidated
2018
$
2017
$
71,639
69,186
352,531
(351,801)
351,658
(350,984)
730
674
117,555
(117,555)
117,663
(112,077)
-
5,586
747,575
(717,516)
716,849
(708,331)
30,059
102,428
8,518
83,964
42 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
5. PROPERTY, PLANT AND EQUIPMENT (continued)
Reconciliations
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and
end of the current financial year are set out below:
2018
Consolidated
Carrying amount at
1 July 2017
Effect of foreign currency
translation
Additions
Disposal
Depreciation expense
Carrying amount at
30 June 2018
2017
Consolidated
Carrying amount at
1 July 2016
Effect of foreign currency
translation
Additions
Disposal
Depreciation expense
Carrying amount at
30 June 2017
Land at
cost
$
Plant &
equipment
$
Motor
vehicles
$
Office
equipment
$
Total
$
69,186
674
5,586
8,518
83,964
2,453
-
-
-
71,639
873
-
-
(817)
730
(108)
-
-
(5,478)
1,432
29,294
-
(9,185)
4,650
29,294
-
(15,480)
-
30,059
102,428
Land at
cost
$
Plant &
equipment
$
Motor
vehicles
$
Office
equipment
$
Total
$
71,292
12,277
16,266
45,502
145,337
(2,106)
-
-
-
69,186
(108)
-
-
(11,495)
(391)
-
-
(10,289)
(1,032)
-
-
(35,952)
(3,637)
-
-
(57,736)
674
5,586
8,518
83,964
6. OTHER ASSETS
NON CURRENT
Deposits
Capitalised mineral exploration costs
Consolidated
2018
$
163
13,609,555
13,609,718
2017
$
6,602
12,872,178
12,878,780
6.a.(i) Deposits
Deposits of $163 represent security deposit for office administration (2017: $6,602).
43 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
6. OTHER ASSETS (continued)
6.a.(ii) Mining exploration and evaluation expenditure
Opening balance
Additions during the year
Change arising from foreign currency movement
Provision for impairment
Write off
Consolidated
2018
$
12,872,178
1,865,095
737,377
(1,865,095)
-
2017
$
13,254,246
-
(382,068)
-
-
Closing balance
13,609,555
12,872,178
Management believes that the carrying amount of the Group’s capitalised expenditure and evaluation costs
is adequate to recoverable.
The estimated impairment will be reviewed and revised in future periods in alignment with movements in
the gold price and any changes in the projected cost profile of the Sihayo Pungkut project.
7. TRADE AND OTHER PAYABLES
CURRENT
Trade payables and accruals
Consolidated
2018
$
2017
$
2,106,603
862,800
There are no trade payables past due. The normal credit from suppliers is 30-60 days
8. PROVISIONS
NON CURRENT
Employee Entitlements and Other Provisions
Consolidated
2018
$
2017
$
516,839
505,473
Employee numbers
Average number of employees during the financial year
22
25
44 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
9. BORROWINGS
Working capital loan:
Provident Minerals Pte Ltd.
Asian Metal Mining Developments Limited
Provident Minerals Pte Ltd.
Consolidated
2018
$
2017
$
1,050,000
450,000
261,510
-
1,500,000
261,510
Sihayo Gold has signed a loan agreement with Provident Minerals Pte Ltd dated 28 March 2018. The total
loan facility amounting to $1,400,000 with interest rate of 10% per annum and classified as unsecured loan.
Final maturity date is 31 December 2018 or any other date mutually agreed between the parties.
Provident Minerals is not entitled to demand repayment of outstanding loan in any circumtances before the
final maturity date, except there is event of defaults occurred.
Sihayo Gold has fully repaid the funds which are borrowed from Provident Minerals with final maturity date
30 June 2017.
Gavin Caudle is a director of Sihayo Gold and Provident Minerals. Provident Minerals also one of Sihayo
Gold’s shareholder. Therefore, this loan is classified as related party transaction.
Asian Metal Mining Developments Limited
Sihayo Gold has signed a loan agreement with Asian Metal Mining Developments Limited dated 27 March
2018. The total loan facility amounting to $600,000 with interest rate of 10% per annum and classified as
unsecured loan. Final maturity date is 31 December 2018 or any other date mutually agreed between the
parties.
Asian Metal is not entitled to demand repayment of outstanding loan in any circumtances before the final
maturity date, except there is event of defaults occurred.
Asian Metal is one of Sihayo Gold’s shareholder. Therefore, this loan is classified as related party transaction.
10. CONTRIBUTED EQUITY
Issued capital
Fully paid – ordinary shares
1,854,262,526 (2017: 1,699,740,648)
Consolidated
2018
$
2017
$
109,269,211
107,220,628
109,269,211
107,220,628
45 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
10. CONTRIBUTED EQUITY (continued)
Movements in ordinary share capital of the Company during the past 2 years were as follows:
Number of Shares
$
01/07/2016
06/07/2016
08/09/2016
07/03/2017
26/05/2017
30/06/2017
13/10/2017
05/12/2017
10/01/2018
30/06/2018
Opening balance
Shares issued
Shares issued
Shares issued
Shares issued
Shares issue costs
Balance at 30 June 2017
Shares issued
Shares issued
Shares issued
Shares issue costs
Balance at 30 June 2018
1,136,037,339
88,832,675
361,554,591
30,483,509
82,832,534
-
1,699,740,648
20,927,822
21,428,571
112,165,485
-
1,854,262,526
101,526,008
888,327
3,615,546
396,286
1,076,823
(282,362)
107,220,628
292,990
300,000
1,570,317
(114,724)
109,269,211
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held. On a show of hands every
holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll
each share is entitled to one vote.
Options over ordinary shares
There is no option as at 30 June 2018 (2017: nil).
11. RESERVES AND ACCUMULATED LOSSES
Consolidated
Note
2018
$
2017
$
(a) Reserves
Share based payment reserve (i)
Foreign currency translation reserve (ii)
(i) Option premium reserve
Balance at the beginning of the financial year
Options issued during the year
Balance at the end of the financial year
2,380,395
12,802,709
15,183,104
2,380,395
10,996,708
13,377,103
2,380,395
-
2,380,395
2,380,395
-
2,380,395
46 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
11. RESERVES AND ACCUMULATED LOSSES (continued)
Options
There is no outstanding balance of options as at 30 June 2018.
(ii) Foreign Currency Reserve
Balance at the beginning of the financial year
Movement for the year
Balance at the end of the financial year
(b) Accumulated Losses
Balance at the beginning of the financial year
Net losses attributable to members of
Sihayo Gold Limited
Transfer of losses from the Group to NCI as a result of
write off of exploration and evaluation expenditure
and VAT at subisidiary company level
Consolidated
2018
$
2017
$
10,996,708
1,806,001
12,802,709
10,688,793
307,915
10,996,708
(99,144,809)
(98,269,306)
(2,091,472)
(875,503)
9,866,912
-
Balance at the end of the financial year
(91,369,369)
(99,144,809)
12. PARENT ENTITY DISCLOSURE NOTE
FINANCIAL POSITION
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets deficiency
Equity
Issued capital
Accumulated losses
Reserves
Option reserve
Total equity
Parent
2018
$
2017
$
75,816
125,012
200,828
1,994,520
-
1,994,520
(1,793,692)
610,580
122,814
733,394
804,212
-
804,212
(70,818)
109,269,211
(113,539,998)
107,220,630
(109,768,543)
2,477,095
2,477,095
(1,793,692)
(70,818)
47 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
12. PARENT ENTITY DISCLOSURE NOTE (continued)
FINANCIAL PERFORMANCE
Loss for the year
Other comprehensive income
Total comprehensive Loss
Parent
2018
$
2017
$
(3,771,455)
-
(1,268,893)
-
(3,711,455)
(1,268,893)
The parent entity did not enter into any guarantees in relation to the debts of its subsidiaries for 2017 or
2018.
The parent entity did not have any contingent liabilities for 2017 or 2018.
13. KEY MANAGEMENT PERSONNEL DISCLOSURE
Names and positions held of parent entity key management personnel in office at any time during the
financial year are:
Key Management Personnel
Misha Collins
Gavin Caudle
Stuart Gula
Malcolm Paterson
Daniel Nolan
Chairman
Non Executive Director
Non Executive Director
Managing Director & CEO
Company Secretary, Chief Financial Officer & Executive Director
There are no executives (other than those listed above) with authority for strategic decision and
management.
Compensation for Key Management Personnel
Short-term employee benefits
Non monetary benefit
Post employment benefits
Share based payments
Consolidated
2018
$
641,614
13,969
-
-
2017
$
414,753
13,346
-
-
655,583
428,099
48 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
14. REMUNERATION OF AUDITORS
Remuneration for audit or review of the financial
reports of the parent entity or any entity in the
consolidated entity
Stantons International
Subsidiary Auditor
15. CONTINGENT ASSETS AND LIABILITIES
Consolidated
2018
$
2017
$
45,500
21,735
67,235
40,062
34,927
74,989
The Group’s Indonesian subsidiary, PT Sorikmas Mining has received an assessment from Indonesian Tax
Authorities in July 2018 claiming an underpayment of taxes of approximately $551,523 (Indonesian Rupiah
5.8 billion) for 2013 tax year. PT Sorikmas Mining intends to submit objection and appeal against this
assessment. No liability is acknowledged or accounted for in this financial report.
There are no contingent assets as at 30 June 2018.
16. RELATED PARTIES
Directors and directors-related entities
Disclosures relating to directors and specified executives are set out in the director’s report and as detailed
in Note 13.
PT Green Gold Engineering, an entity associated with Mr Malcolm Paterson, as PT Sorikmas Mining’s
consultant feasibility study. The transaction balances as of 30 June 2018 amounting to $1,606,893.
Wholly-owned Group
The wholly-owned group consists of Sihayo Gold Limited and its wholly-owned subsidiaries Inland Goldmines
Pty Limited, Excelsior Resources Pty Limited, Oropa Technologies Pty Limited, Oropa Indian Resources Pty
Limited and Oropa Exploration Pty Limited.
Sihayo Gold Limited owns 100% of the shares in Aberfoyle Pungkut Investments Pte Ltd (“API”). API holds a
75% interest in PT Sorikmas Mining, with the Indonesian Government mining company, PT Aneka Tambang
Tbk. holding the remaining 25%.
Transactions between Sihayo Gold Limited and related parties in the wholly-owned group during the year
ended 30 June 2018 consisted of loans on an interest free basis with no fixed term and no specific
repayment arrangements. Sihayo Gold Limited reversed provision for doubtful debts of $6,854,629 due to
the movement in loan balance in its accounts for the year ended 30 June 2018 (2017: $680,169) in relation
to the loans made to its subsidiaries. No other amounts were included in the determination of operating loss
before tax of the parent entity that resulted from transactions with related parties in the group.
49 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
16. RELATED PARTIES (continued)
Other related parties
Aggregate amounts receivable from related parties in the wholly owned group at balance date were as
follows:
Non-current receivables
Provision for doubtful debts
17. EXPENDITURE COMMITMENTS
Parent Entity
2018
$
100,054,897
(100,054,897)
-
2017
$
93,200,268
(93,200,268)
-
Exploration commitments
In order to maintain current rights of tenure to exploration tenements, the Company and consolidated entity
were previously required to outlay lease rentals and to meet the minimum expenditure requirements of the
Mines Departments.
PT Sorikmas Mining commitments
Under the Contract of Work (COW), the Company was required to spend certain minimum expenditures in
respect of the contract area for the General Survey Period and Exploration Period as follows:
General survey period
Exploration period
US$ / km2
100
1,100
As at 30 June 2018, PT Sorikmas Mining had fulfilled its expenditure commitments in respect of the General
Survey Period and Exploration Period.
Operating leases – rent
The company currently has no operating leases as at 30 June 2018.
Other commitments
The Company currently has no other commitments as at 30 June 2018.
Capital commitments
There were no outstanding capital commitments not provided for in the financial statements of the
Company as at 30 June 2018 or 30 June 2017.
50 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
17. EXPENDITURE COMMITMENTS (continued)
Other commitments
Parent Entity
Sihayo Gold Limited
Project
Mt Keith
Controlled Entities:
Excelsior Resources Pty Limited
Project
Mulgabbie
18. INVESTMENTS IN CONTROLLED ENTITIES
Class of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Controlled entities:
Inland Goldmines Pty Limited
(incorporated in Australia)
Excelsior Resources Pty Limited
(incorporated in Australia)
Oropa Technologies Pty Ltd
(incorporated in Australia)
Oropa Indian Resources Pty
Limited (incorporated in
Australia)
Oropa Exploration Pty Limited
(incorporated in Australia)
Aberfoyle Pungkut Investments
Pte Ltd(a) (incorporated in
Singapore)
PT Sorikmas Mining (b)
(incorporated in Indonesia)
Principal
activities
Interest
2018
Interest
2017
Mineral
2% Royalty
2% Royalty
exploration
Principal
activities
Interest
2018
Interest
2017
Mineral
2% Royalty
2% Royalty
exploration
Cost of Parent Entity’s
investment
2018
$
2017
$
Equity holding
2018
%
2017
%
583,942
583,942
1,062,900
1,062,900
1
1
1
1
1
1
697,537
697,537
-
-
2,344,382
2,344,382
100
100
100
100
100
100
75
100
100
100
100
100
100
75
51 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
18. INVESTMENTS IN CONTROLLED ENTITIES (continued)
(a) When Sihayo Gold Limited issued 9,259,259 shares as consideration for exercising the option to
acquire 100% of the shares in Aberfoyle Pungkut Indonesia Pte Ltd, it was assigned the vendors
receivables from Aberfoyle Pungkut Investments Pte Ltd and PT Sorikmas Mining. This reduced the
cost of the investment in Aberfoyle Pungkut Investments Pte Ltd.
(b) Aberfoyle Pungkut Investments Pte Ltd holds a 75% interest in PT Sorikmas Mining, with an
Indonesian Government mining company PT Aneka Tambang Tbk. holding the remaining 25%. The
non-controlling interest in PT Sorikmas Mining equates to 25% of the nets liabilities of PT Sorikmas
Mining of US$61,109,665 being $20,795,471 as at 30 June 2018 (2017: $9,139,595). The movement
during the year represents the transfer of losses from the Group to non-controlling interest as a
result of write off of exploration and evaluation expenditure at subsidiary company level.
19. NOTES TO THE STATEMENT OF CASH FLOWS
Consolidated
2018
$
2017
$
Cash and cash equivalents
116,210
834,757
(a) Reconciliation of cash and cash equivalents
For the purposes of the Statement of Cash Flows cash includes cash and cash equivalents on hand and at
call deposits with banks, and investments in money market instruments net of outstanding bank
overdrafts. It includes $26,390 held in trust.
(b) Reconciliation of operating loss after income tax
to net cash flow from operating activities
Consolidated
2018
$
2017
$
Operating loss after income tax
(2,673,862)
(1,315,522)
Non-cash items
Depreciation
Provision for impairment of capitalised exploration
and evaluation expenditure
Provision for impairment VAT receivable
Loss on derivative valuation
Convertible note finance charge
Change in operating assets and liabilities:
(Increase) / decrease in trade and other receivables
Increase in payables
Increase / (decrease) in provisions
Increase in inventory
15,480
57,736
1,865,095
(2,187,030)
-
-
(243,417)
1,101,381
11,366
-
-
-
(725,554)
96,935
121,385
216,902
53,023
-
Net cash outflow from operating activities
(2,110,987)
(1,495,095)
52 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
20. EARNINGS PER SHARE
(a) Basic and diluted loss per share (in cents)
(b) Weighted average number of shares outstanding
during the year used in the calculation of basic earnings
per share
Consolidated Entity
2018
2017
(0.12)
(0.06)
1,777,349,540
1,533,172,344
As the Group made a loss for the year, diluted earnings per share is the same as basic earnings per share.
21. FINANCIAL INSTRUMENTS
Net fair value of financial assets and liabilities
The net fair value of financial assets and financial liabilities of the Group approximates their carrying value.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade, other receivables and deposits
Total financial assets
Financial liabilities
Trade and other payables
Borrowings
Other liabilities
Total financial liabilities
Consolidated
2018
$
2017
$
116,210
2,417,103
2,533,313
834,757
134,335
969,092
Consolidated
2018
$
2017
$
2,106,603
1,500,000
57,271
862,800
261,510
57,516
3,663,874
1,181,826
53 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
21. FINANCIAL INSTRUMENTS (continued)
Credit risk
The Company’s maximum exposure to credit risk at the reporting date was as detailed below:
Financial assets
Cash and cash equivalents
Trade, other receivables and deposits
Total financial assets
Impairment losses
Consolidated
2018
$
2017
$
116,210
2,417,103
2,533,313
834,757
134,335
969,092
At 30 June 2018 and 2017, no additional impairment was made in relation to VAT receivables, however there
was a reversal of prior impairment provision. The Company does not have any material credit risk exposure
to any single debtor or group of debtors under financial instruments entered by the economic entity.
Foreign currency risk management
The consolidated entity and company undertake certain transactions denominated in foreign currencies,
hence exposures to exchange rate fluctuations arise. Sihayo Gold Limited has opened a US Dollar Bank
Account to manage exchange rate fluctuations.
The carrying amount of the consolidated entity’s foreign currency denominated assets and liabilities at the
reporting date in Australian Dollars is as follows:
Australian Dollars
Liabilities
2018
$
1,472,675
2017
$
351,941
Assets
2018
$
2017
$
2,448,100
902,551
54 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
21. FINANCIAL INSTRUMENTS (continued)
The table below details financial assets and liabilities of the consolidated entity exposed to foreign currency
risk.
Cash and cash equivalents
SGD
USD
IDR
Trade, other receivables
and deposits
USD
IDR
Trade and other payables
SGD
USD
IDR
Consolidated
2018
$
2017
$
6
3,922
315,973,210
6
509,253
1,003,109,563
-
25,533,048,944
15,038
1,085,525,138
5,000
-
15,531,069,788
5,000
24,168
3,168,070,659
Sensitivity analysis
The table below summarises the impact of a 10 percent weakening/strengthening of the Australian Dollar
against the US Dollar, the Singaporean Dollar and Rupiah in the movement of the financial assets and
liabilities listed in the previous table.
Impact on post-tax profit and accumulated
losses
USD/AUD
USD/AUD
SGD/AUD
SGD/AUD
IDR/AUD
IDR/AUD
Impact on equity reserve only
USD
USD
SGD
SGD
IDR
IDR
AUD
+10%
-10%
+10%
-10%
+10%
-10%
AUD
+10%
-10%
+10%
-10%
+10%
-10%
Consolidated
2018
$
2017
$
534
(534)
(497)
497
97,506
(97, 506)
66,272
(66,272)
(472)
472
(10,739)
10,739
Consolidated
2018
2017
534
(534)
(497)
497
97,506
(97, 506)
66,272
(66,272)
(472)
472
(10,739)
10,739
55 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
22. EVENTS OCCURRING AFTER REPORTING DATE
In July and September 2018, the Company has made additional of drawdown from the existing loan facilities
(Note 9). The drawdown is amounting to $650,000 from Provident Minerals and $150,000 from Asian Metal.
The Company has announced the following changes of Board Directors composition:
- Mr Malcolm Paterson has resigned on 31 August 2018 as Managing Director and Chief Executive
Officer.
- Mr Timothy Adams has appointed on 1 September 2018 as Interim Chief Executive Officer.
- Mr Mark Hepburn has appointed on 1 August 2018 as Non-Executive Director.
23. SEGMENT INFORMATION
Primary reporting – geographical segments
The geographical segments of the consolidated entity are as follows:
Revenue by geographical region
Revenue attributable to the Group disclosed below, based on where the revenue is generated from:
Australia
Africa
South East Asia
India
Other foreign countries
Total revenue
Segment result by geographical region
Australia
Africa
South East Asia
India
Total expenses
Segment result
2018
$
2017
$
492
-
-
-
-
492
528
-
-
-
-
528
2018
$
(353,632)
(156)
(2,319,989)
(577)
(2,674,354)
2017
$
271,076
(717)
(1,586,084)
(325)
(1,316,050)
(2,673,862)
(1,315,522)
56 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2018
23. SEGMENT INFORMATION (continued)
Assets by geographical region
Liabilities by geographical region
The location of segment liabilities by geographical location of the assets is disclosed below:
Australia
Africa
South East Asia
India
Total liabilities
2018
$
(1,995,842)
-
(2,184,871)
-
(4,180,713)
2017
$
(804,211)
-
(883,088)
-
(1,687,299)
57 | P a g e
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Sihayo Gold Limited, I state that:
1. In the opinion of the directors:
(a) The financial statements, notes and the additional disclosures included in the directors’ report
designated as audited, of the Company and of the consolidated entity are in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30
June 2018 and of their performance for the year ended on that date; and
(ii)
complying with Accounting Standards and Corporations Regulations 2001; and
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
(c) The financial report also complies with International Financial Reporting Standards as disclosed in Note
1.
2. This declaration has been made after receiving the declarations required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
On behalf of the Board
Misha Anthony Collins
Chairman
30 September 2018
58 | P a g e
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
SIHAYO GOLD LIMITED
Report on the Audit of the Financial Report
Qualified Opinion
We have audited the financial report of Sihayo Gold Limited, the Company and its subsidiaries, (“the Group”),
which comprises the consolidated statement of financial position as at 30 June 2018, the consolidated
statement of Profit or Loss and 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 statements,
including a summary of significant accounting policies, and the directors' declaration.
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of our
report, 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 2018 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Qualified Opinion
As disclosed in note 15, Group’s Indonesian subsidiary, PT Sorikmas Mining has received an assessment
from the Indonesian tax authorities in July 2018 claiming underpayment of taxes of approximately $551,523
(Indonesian Rupiah 5.8 billion) for 2013 tax year. PT Sorikmas Mining intends to submit objection and appeal
against this assessment. No liability is acknowledged or accounted for in this financial report.
The Group has not accrued any liability on the basis that PT Sorikmas Mining will lodge an appeal against this
assessment. We were unable to obtain sufficient appropriate audit evidence about the tax assessment to
enable us to form an opinion as to the completeness and accuracy of the assessment and the probability of
PT Sorikmas Mining being successful in their appeal. Consequently, we were unable to determine whether
any Liability should have been accrued at the reporting date and the adequacy of the disclosure as contingent
liability made in the Consolidated Financial Report.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the
Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified opinion.
Emphasis of Matter - Material Uncertainty Relating to Going Concern
Attention is drawn to the following matter.
As referred to in Note 1(a) to the financial statements, the consolidated financial statements have been
prepared on the going concern basis. At 30 June 2018, the Group had cash and cash equivalents of
$116,210, net working capital deficiency of $3,289,968 and incurred a loss after income tax of $2,673,862.
The ability of the Group to continue as a going concern and meet its planned exploration, administration and
other commitments is dependent upon the Group raising further working capital and/or successfully exploiting
its mineral assets. In the event that the Group is not successful in raising further equity or successfully
Liability limited by a scheme approved
under Professional Standards Legislation
exploiting its mineral assets, the Group may not be able to meet its liabilities as and when they fall due and the
realisable value of the Group’s current and non-current assets may be significantly less than book values.
Key Audit Matters
In addition to the matter described in the material uncertainty related to going concern, we have determined
the matter described below to be a key audit matter to be communicated in the report.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key Audit Matters
How the matter was addressed in the audit
Carrying Value of Mineral Exploration and
Evaluation Expenditure
As at 30 June 2018, Mineral Exploration and
Evaluation Expenditure totals $13,609,555 (refer to
Note 6 of the financial report).
The carrying value of Mineral Exploration and
Evaluation Expenditure is a key audit matter due
to:
The significance of the total balance (83% of
total assets);
to assess management’s
The necessity
the
requirements of
the
application of
accounting standard Exploration
for and
Evaluation of Mineral Resources (“AASB 6”),
in light of any indicators of impairment that
may be present; and
The assessment of significant judgements
made by management in relation to the
capitalised
evaluation
expenditure.
exploration
and
Inter alia, our audit procedures
following:
included
the
i. Assessing the Group’s right to tenure over
exploration assets by corroborating
the
ownership of the relevant licences for mineral
resources
registries and
relevant third-party documentation;
to government
ii. Reviewing the directors’ assessment of the
carrying value of the exploration and evaluation
costs, ensuring
the data
the veracity of
that management have
presented and
considered the effect of potential impairment
indicators, commodity prices and the stage of
the Group’s projects against AASB 6;
iii. Evaluation of Group documents for consistency
with the intentions for continuing exploration
and evaluation activities particularly in relation
to the Pungkut Project and corroborated with
interviews with management. The documents
we evaluated included:
Minutes of the board and management;
Announcements made by the Group to the
Australian Securities Exchange; and
Net Present Value (NPV) Model for the
Pungkut Project
iv. We reviewed the NPV Model and conducted a
sensitivity analysis to analyse the effects of
changes in key variables on the projects
viability and carrying value.
v. Consideration
of
of
the
accounting standard AASB 6 and reviewed the
financial statements
to ensure appropriate
disclosures are made.
requirements
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group's annual report for the year ended 30 June 2018, but does not include the financial
report and our auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly 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.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and
fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial
report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures
in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that achieves
fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in Internal control that we identify
during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance
in the audit of the consolidated financial report of the current period and are therefore key audit matters. We
describe these matters in our auditor's report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 16 to 19 of the directors’ report for the year
ended 30 June 2018.
In our opinion, the Remuneration Report of Sihayo Gold Limited for the year ended 30 June 2018 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.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
30 September 2018
ADDITIONAL SHAREHOLDER INFORMATION
The following additional information dated 31 August 2018 is provided in compliance with the requirements
of the Australian Securities Exchange Limited.
1.
(a)
(b)
(c)
2.
DISTRIBUTION OF LISTED ORDINARY SHARES AND OPTIONS
Analysis of numbers of shareholders by size of holding.
Distribution
1-1000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and above
Total
No. of
shareholders
Units
% off issued Capital
117
74
42
232
233
698
29,122
187,449
325,747
11,122,163
1,842,598,045
1,854,262,526
0.00%
0.01%
0.02%
0.60%
99.37%
100.00%
There were 189 shareholders holding less than a marketable parcel.
The percentage of the total of the twenty largest holders of ordinary shares was 88.61%.
TWENTY LARGEST SHAREHOLDERS AND OPTION HOLDERS
Names
No. of shares
%
PROVIDENT MINERALS PTE LTD
HSBC CUSTODY NOM AUST LTD
PT SARATOGA INVESTAMA
GOLDSTAR MINING ASIA
LION SELECTION GRP LTD
ASIAN METALS MINING DVLMT
CITICORP NOM PL
GOLDSTAR ASIA MINING
NATIONAL NOM LTD
DBS VICKERS SEC SINGAPORE
FATS PL
YAW CHEE SIEW
PT SARATOGA INVESTAMA
JP MORGAN NOM AUST LTD
LEONG CAROLINE
BUTLER DAVID ROBERT
PETTERSSON BRADLEY JOHN
PT TEKNOLOGI RISET GLOBAL
BJARNASON JON N + RE
DEVINE LUKE DAVID
Total
518,665,951
320,105,036
218,722,017
117,991,074
76,738,654
41,428,571
41,304,594
41,030,239
38,954,792
33,310,161
31,712,787
31,515,151
28,420,378
19,783,649
18,000,000
15,642,150
15,425,000
14,545,455
12,000,000
8,023,907
1,643,319,566
27.97%
17.26%
11.80%
6.36%
4.14%
2.23%
2.23%
2.21%
2.10%
1.80%
1.71%
1.70%
1.53%
1.07%
0.97%
0.84%
0.83%
0.78%
0.65%
0.43%
88.61%
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ADDITIONAL SHAREHOLDER INFORMATION
3.
SUBSTANTIAL SHAREHOLDERS
An extract from the Company’s register of substantial shareholders is set out below:
Ordinary Shares Held
Name
PROVIDENT MINERALS PTE LTD
HSBC CUSTODY NOM AUST LTD
PT SARATOGA INVESTAMA
GOLDSTAR MINING ASIA
4.
VOTING RIGHTS
Number
Percentage
518,665,951
320,105,036
218,722,017
117,991,074
27.97%
17.26%
11.80%
6.36%
The Company's share capital is of one class with the following voting rights:
(a)
Ordinary Shares
On a show of hands every shareholder present in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
(b)
Options
The Company's options have no voting rights.
5.
RESTRICTED SECURITIES
There are no ordinary shares on issue that have been classified by the Australian Securities Exchange
Limited, Perth as restricted securities.
6.
SECURITIES EXCHANGE LISTING
Sihayo Gold Limited shares are listed on the Australian Securities Exchange Limited. The home exchange is
the Australian Securities Exchange (Perth) Limited.
64 | P a g e
SUMMARY OF TENEMENTS HELD BY THE GROUP
FOR THE YEAR ENDED 30 JUNE 2018
Project Name Tenement
Date
Approval
Date
Expiry
Area
Equity
%
OROPA INDIAN RESOURCES
INDIA
Block D-7
PT SORIKMAS MINING
INDONESIA
Pungkut
96PK0042
SIHAYO GOLD LIMITED
WESTERN AUSTRALIA
Mt. Keith
M53/490
M53/491
22.01.00
N/A
4,600km2
31.05.96
N/A
66,200ha
11.06.04
11.06.04
10.06.25
10.06.25
582ha
621ha
EXCELSIOR RESOURCES PTY LTD
Mulgabbie
PL28/1078
PL28/1079
PL28/1080
PL28/1081
PL28/1082
ML28/364
22.09.08
22.09.08
22.09.08
22.09.08
22.09.08
25.03.09
21.09.12
21.09.12
21.09.12
21.09.12
21.09.12
Gullewa
M59/394
NOTES
(1)
(2)
Option to increase interest to 18%
2% net smelter royalty
24.03.30
54.3ha
98.0ha
143.7ha
140.7ha
191.4ha
120.0ha
200.0
9(1)
75
0(2)
0(2)
0(2)
0(2)
0(2)
0(2)
0(2)
0(2)
0 (3)
65 | P a g e