2019 ANNUAL REPORT
ABN 77 009 241 374
(cid:862)BUILDING A SUCCESSFUL INDONESIAN GOLD COMPANY(cid:863)
CONTENTS
CONTENTS .............................................................................................................................................. 2
CORPORATE DIRECTORY ........................................................................................................................ 3
CHAIRMAN(cid:859)S REVIEW ............................................................................................................................. 4
REVIEW OF OPERATIONS ........................................................................................................................ 5
DIRECTORS(cid:859) REPORT ............................................................................................................................... 9
AUDITOR(cid:859)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(cid:859) DECLARATION ..................................................................................................................61
INDEPENDENT AUDITOR(cid:859)S REPORT TO THE MEMBERS OF SIHAYO GOLD LIMITED ............................62
ADDITIONAL SHAREHOLDER INFORMATION .......................................................................................66
SUMMARY OF TENEMENTS HELD BY THE GROUP ................................................................................68
2 | P a g e
CORPORATE DIRECTORY
Directors
Misha A Collins C.F.A
(Chairman)
Gavin Caudle
(Non Executive Director)
Stuart Gula
(Non Executive Director)
Mark Hepburn (Appointed on 1 August 2018 and resigned on 26 November 2018)
(Non Executive Director)
Malcolm Paterson
(Managing Director)
(resigned on 31 August 2018)
Daniel Nolan
(Executive Director)
Chief Executive Officer
Malcolm Paterson (resigned on 31 August 2018)
Timothy Adams (appointed on 1 September 2018 and resigned on 31 July 2019)
George Lloyd (appointed on 1 August 2019)
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-(cid:1005)(cid:1009)(cid:1012) St Geo(cid:396)ge(cid:859)s Te(cid:396)(cid:396)a(cid:272)e
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.
3 | P a g e
CHAIRMAN’S REVIEW
Dear Fellow Shareholders,
Around this time last year the Company presented its summary of the feasibility studies for the Sihayo project.
This followed an intensive period of work that included contributions from many leading consultants. I alluded
at the time that the Company believed further improvement may yet be possible. This remains the base case
and our goal is to quantify this with various specific work programs now underway.
Our clear objective is unchanged - to put the Sihayo-Pungkut project into development over the next twelve
months. Our efforts are greatly assisted by recent increases in the gold price, which have very favourable
i(cid:373)pli(cid:272)atio(cid:374)s fo(cid:396) pote(cid:374)tial p(cid:396)oje(cid:272)t p(cid:396)ofita(cid:271)ilit(cid:455), i(cid:374)(cid:448)est(cid:373)e(cid:374)t (cid:396)etu(cid:396)(cid:374)s a(cid:374)d the p(cid:396)oje(cid:272)t(cid:859)s a(cid:271)ilit(cid:455) to suppo(cid:396)t de(cid:271)t
financing.
Shareholders may feel frustrated by a lack of recovery in the share price of Sihayo Gold on the Australian Stock
Exchange despite the significant increases in the gold price. However, the net present value of the Sihayo-
Pungkut project as defined by our feasibility study is sensitive to the gold price so the key asset of the company
is much more attractive at current gold prices than those prevailing at this time last year. This bodes well for
future shareholder returns.
I would like to welcome Mr George Lloyd to the company as CEO. I would also like to thank our employees,
contractors and my fellow directors for their efforts over the past twelve months, as well as our shareholders
for their ongoing support of the company.
Yours Sincerely,
Misha Anthony Collins
4 | P a g e
REVIEW OF OPERATIONS
Siha(cid:455)o Gold Li(cid:373)ited (cid:894)the (cid:862)Co(cid:373)pa(cid:374)(cid:455)(cid:863)(cid:895) o(cid:449)(cid:374)s a (cid:1011)(cid:1009)% i(cid:374)te(cid:396)est i(cid:374) PT So(cid:396)ik(cid:373)as Mi(cid:374)i(cid:374)g (cid:894)(cid:862)So(cid:396)ik(cid:373)as(cid:863)(cid:895) (cid:449)hi(cid:272)h i(cid:374) tu(cid:396)(cid:374)
holds the Sihayo-Pu(cid:374)gkut (cid:1011)th Ge(cid:374)e(cid:396)atio(cid:374) Co(cid:374)t(cid:396)a(cid:272)t of Wo(cid:396)k (cid:894)(cid:862)CoW(cid:863)(cid:895). PT A(cid:374)eka Ta(cid:373)(cid:271)a(cid:374)g T(cid:271)k (cid:894)(cid:862)A(cid:374)ta(cid:373)(cid:863)(cid:895) is the
Co(cid:373)pa(cid:374)(cid:455)(cid:859)s joi(cid:374)t (cid:448)e(cid:374)tu(cid:396)e pa(cid:396)t(cid:374)e(cid:396) i(cid:374) the CoW (cid:449)ith a (cid:1006)(cid:1009)% i(cid:374)te(cid:396)est. The Co(cid:373)pa(cid:374)(cid:455) is (cid:396)espo(cid:374)si(cid:271)le fo(cid:396) (cid:1005)(cid:1004)(cid:1004)% of the
exploration and development funding of Sorikmas until the commencement of production. The funding is by
way of loans to Sorikmas (cid:449)ith A(cid:374)ta(cid:373)(cid:859)s sha(cid:396)e of loa(cid:374)s to (cid:271)e (cid:396)epaid f(cid:396)o(cid:373) (cid:1012)(cid:1004)% of its att(cid:396)i(cid:271)uta(cid:271)le sha(cid:396)e of
available cash flow from production.
The Siha(cid:455)o Gold P(cid:396)oje(cid:272)t (cid:894)(cid:862)Siha(cid:455)o(cid:863)(cid:895) is the (cid:373)ost ad(cid:448)a(cid:374)(cid:272)ed p(cid:396)oje(cid:272)t (cid:449)ithi(cid:374) the COW. The CoW is dee(cid:373)ed to (cid:271)e
highly prospective for mineralisation and a number of exploration targets have been identified. The Company
has active work programs at Sihayo and in respect of regional exploration across the CoW.
The Company also hold non-operating and royalties interests in detailed below.
Sihayo Pungkut CoW
The CoW is located located in Mandailing Natal, North Sumatra, Indonesia. This coincides with the geologically
prolific Trans Sumatra Fault Zone (cid:894)(cid:862)TSFZ(cid:863)(cid:895) and the associated Neogene Magmatic Arc, which is the result of an
oblique collision of two tectonic plates and associated subduction. The TSFZ hosts a number of significant gold
projects including the Martabe project located approximately 50 kilometres northwest of the CoW.
Dairi
2.3Mt Zn 1.3Mt Pb
PT Bumi / PTAntam Tbk
Sihayo Pungkut
1.6 Moz Au
Sihayo 75% / PT Antam
Tbk 25%
Tembang
1.0 Moz Au 13 Moz Ag
Sumatra Copper Gold
Martabe
6 Moz Au 60 Moz Ag
G Resources
Way Linggo
0.25 Moz Au
Kingsrose Mining
Pongkor Mine
5 Moz Au
PT Antam Tbk
Figure 1: Significant mineral deposits along the Trans Sumatra Fault Zone
The CoW hosts 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. The Co(cid:373)pa(cid:374)(cid:455)(cid:859)s app(cid:396)oa(cid:272)h to u(cid:374)lo(cid:272)ki(cid:374)g the (cid:448)alue (cid:449)ithi(cid:374) the (cid:271)(cid:396)oade(cid:396) CoW is dis(cid:272)ussed (cid:271)elo(cid:449) i(cid:374)
Regional Exploration.
5 | P a g e
REVIEW OF OPERATIONS
Sihayo Gold Project
The Company commenced a new diamond drilling program at Sihayo in July 2019. The program includes up
to 7,000 meters of infill drilling to an average depth of around 100 meters. The objective of the program is to
increase the confidence in Sihayo mineral resource to inform continuing mining studies.
The Sihayo deposit occurs at the top of a hill on the edge of a major dilational pull apart basin. The Sihayo
deposit is situated within a sedimentary package consisting of Permian aged calcareous sediments and
volcaniclastics, which are unconformably overlain by shallow basin origin Tertiary sandstones and siltstones.
The Sihayo deposit gold mineralisation is categorised as Sedimentary Rock Hosted Disseminated Gold Deposit
type. The Sihayo JORC Code (2012 Edition) Mineral Resource Estimate and JORC Code (2012 Edition) Ore
Reserves1, were last updated in July 2018 and stand at:
23.4 Mt at 2.11 g/t for 1.585 Moz. Inferred, Indicated and Measured Resources; and
11.39 Mt at 2.1 g/t for 761,000oz Ore Reserves based on the conversion of Indicated and Measured
Resources.
The Mineral Resource Estimate and Ore Reserves are described in detail, including the presentation of the
(cid:272)o(cid:396)(cid:396)espo(cid:374)di(cid:374)g JORC Ta(cid:271)le (cid:1005), i(cid:374) the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s ASX (cid:396)elease of (cid:1006)(cid:1006) August (cid:1006)(cid:1004)(cid:1005)(cid:1012) titled (cid:862)SIHAYO GOLD PROJECT –
Feasi(cid:271)ilit(cid:455) Stud(cid:455) Co(cid:373)pletio(cid:374) Additio(cid:374)al I(cid:374)fo(cid:396)(cid:373)atio(cid:374)(cid:863).
The Company first commenced studies to investigate the feasibility if the Sihayo project in late 2009. Over the
intervening period a number of project iterations have been explored supported by technical studies covering
mining, metallurgy, process design, tailings disposal, water and environment and infrastructure. Between the
2014 and 2018 studies regional grid power supply was extended to be accessible to the project resulting in a
reduction in the cost of power required for operations.
The resulting 2018 feasibility studies2 defined a project with the following characteristics:
life of mine plan incorporated 13Mt of ore with an average gold grade of 1.63 g/t;
an average production rate of 91,000 oz gold per annum based on a largely conventional processing;
economic analysis at the time of the study used a gold price of US$1,300/Oz;
pre-production funding of US$150.5 million including capital of US$118.3 million; and
a Net Present Value of US$107 million and an 8% cost of capital and project payback period of 4 years.
Following an internal review, the Company has decided to undertaking the infill drilling and further studies to
increase the certainty of a number of key assumptions underpinning the 2018 feasibility study and to
investigate incremental improvements in the project design, including:
the life of mine plan assumed the conversion of inferred resources to ore reserves during the life of the
operation. The current infill drilling program is targeting these areas increase the confidence in Sihayo
mineral resource;
the current infill drilling program will enhance the understanding of geotechnical properties of the waste
material and to optimise process metallurly within specific areas of the resource;
1 Refe(cid:396) to the ASX (cid:396)elease (cid:271)(cid:455) the Co(cid:373)pa(cid:374)(cid:455) o(cid:374) (cid:1006)(cid:1006) August (cid:1006)(cid:1004)(cid:1005)(cid:1012) titled (cid:862)SIHAYO GOLD PROJECT – Feasi(cid:271)ilit(cid:455) Stud(cid:455) Co(cid:373)pletio(cid:374) Additio(cid:374)al I(cid:374)fo(cid:396)(cid:373)atio(cid:374)(cid:863)
(http://www.sihayogold.com/upload/pages/news/asx-revised-dfs-ann-22-aug-2018.pdf?1569215617).
2 Refe(cid:396) to the ASX (cid:396)elease (cid:271)(cid:455) the Co(cid:373)pa(cid:374)(cid:455) o(cid:374) (cid:1006)(cid:1006) August (cid:1006)(cid:1004)(cid:1005)(cid:1012) titled (cid:862)SIHAYO GOLD PROJECT – Feasibilit(cid:455) Stud(cid:455) Co(cid:373)pletio(cid:374) Additio(cid:374)al I(cid:374)fo(cid:396)(cid:373)atio(cid:374)(cid:863)
(http://www.sihayogold.com/upload/pages/news/asx-revised-dfs-ann-22-aug-2018.pdf?1569215617).
6 | P a g e
REVIEW OF OPERATIONS
Sihayo Gold Project (continued)
review the proposed tailings storage facility which made a material contribution to project capital and
operating costs;
review the sensitivity of the project to the gold price, including the recent increases in the gold price.
The results of the infill drilling program and related studies are expected to be available over the fourth quarter
of calendar 2019. The Company has also started to rebuild its technical studies team with geotechnical,
hydrological and metallurgical field work programs planned over the later part of 2019 for completion in early
2020. The results of this work will further inform the mining, tailings, process and environmental consultants
that are in the process of being engaged at the time of writing.
The status of the COW is now in the third year of construction and the Company expects to commence
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 it is expected amendments to these will be reflecting changes resulting from the revised Feasibility
Study.
Regional Exploration
The CoW area is deemed to be highly prospective for mineralisation. In addition to the Sihayo project, 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 across
the CoW area.
Figure 2: Sihayo Pungkut CoW key exploration prospects
7 | P a g e
REVIEW OF OPERATIONS
Regional Exploration (continued)
The Company is committed to advancing these regional prospects and has announced an exploration program
incorporating 5,000 meters of diamond drilling to an average depth of around 250 meters to test the potential
for disseminated gold mineralization at the Hutabargot exploration target. Hutabargot is an epithermal style
prospect located within 10km of the Sihayo project. Other prospects will be explored as financial and other
resources become available.
Corporate Social Responsibility (CSR)
The Company sustains a strong focus on proactive community relations in all aspects of its operations will be
an integral part of any project development activities. The Company is committed to protecting the CoW area
and regional environment and to operate in accordance with Indonesian safety, health and environmental
standards and practices as a minimum standard. The current drilling program has provided an opportunity to
re-engage with the local communities by providing short term employment opportunities. The increased
activity is also providing opportunities to local businesses supplying food and other supplies.
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.
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.
8 | P a g e
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 2019 ("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 (resigned effective on 26 November 2018)
Daniel Nolan - Executive Director, Chief Financial Officer, Company Secretary
Malcolm Paterson - Managing Director& Chief Executive Officer (resigned effective on 31 August 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 5-8.
OPERATING RESULTS
During the financial year the consolidated entity incurred a consolidated operating loss after income tax of
$1,940,143 (2018: $2,673,862).
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 2019 (2018: 22 employees).
CORPORATE STRUCTURE
The Company has 2,317,828,158 shares on issue as at the date of this report. Shareholder approval will be
sought at an EGM on 14 October 2019 to buy back 220,058,128 shares issued in breach of ASX listing Rule
10.11. This will reduce the number of shares on issue to 2,097,770,030
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%.
9 | P a g e
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 2019 are $14,396,789 (2018: $12,287,475).
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
10 | P a g e
DIRECTORS’ REPORT
Information on Directors (continued)
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$3 billion of senior, mezzanine and equity capital over the past
10 years; and
Expertise in dealing with forestry issues through the ownership of a substantial plantation business.
Expertise in dealing with mining related issues through the ownership of substantial shareholdings in
Sumatra Copper and Gold Limited, Finders Resources Limited and PT Merdeka Copper Gold Tbk.
Directorships of Other ASX Listed Companies
Sumatra Copper and Gold Limited
Finders Resources Limited
Former ASX Listed Companies Directorships in last 3 years
No former directorships
Special responsibilities
Audit Committee member
Interests in shares and options
29,779,704 ordinary shares (held directly). (23,165,720 shares subject to buy back as a result of a breach of
listing rule 10.11. See ASX announcement 5 July 2019).
715,558,359 ordinary shares (held indirectly). (196,892,408 shares subject to buy back as a result of a breach
of listing rule 10.11. See ASX announcement 5 July 2019).
Stuart Leslie Gula
(Non Executive Director)
Experience and expertise
Mr Gula has over 25 years management experience in the mining sector in Australia, North America, Africa
and Asia. Among many other achievements, his experience includes successful construction completion,
commissioning and production of two gold projects in China and Africa and has successfully participated in
varied levels of management on feasibility studies for many other projects. Prior to joining Sihayo Gold, he
held the position of Group General Manager, Mining - North America for Nyrstar. Nyrstar is a European based
integrated metals and mining company with a market capital in excess of US$ 1 billion. Mr Gula holds a
Bachelors degree in Engineering (mining major) and a Masters of Business Administration (Technology
Management).
11 | 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
1,291,587 ordinary shares (held indirectly)
Mark Hepburn (resigned on 26 November 2018)
(Non Executive Director)
Mr Hepburn is a Corporate and Financial Markets Executive with over 28 years experience in a range of
management and board positions for Institutional Stockbroking and Derivatives Trading desks for major
Financial Institutions.
His career has included roles in Sydney with Deutsche Bank and Macquarie Bank, managing global derivatives
distribution sales teams.
Mr Hepburn has worked as an Executive Director of a leading Perth stockbroking firm during which time he
was involved in numerous fund raising transactions for ASX listed industrial and resource companies.
Mr Hepburn was also Managing Director of his own Corporate Advisory firm which specialised in executing
corporate and equity transactions for ASX listed small resources companies.
His experience also includes working as a corporate executive within mining companies and he has been a
member of the Australian Institute of Company Directors since 2008.
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
Malcolm Paterson BSc. (Hons) Eng. Met., F. Aus IMM (resigned on 31 August 2018)
(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.
12 | P a g e
DIRECTORS’ REPORT
Information on Directors (continued)
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 Nolan
(Executive Director, Chief Financial Officer, Company Secretary)
The company secretary is Mr Daniel 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
Directorships of Other ASX Listed Companies
None
Former ASX Listed Companies Directorships in last 3 years
No former directorships
Interests in shares and options
5,363,649 ordinary shares (held indirectly)
13 | P a g e
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
The following tables set out the number of meetings of the Company's directors held during the year ended
30 June 2019, and the number of meetings attended by each director. (Note that meeting attendance may
have been completed via telephone conferencing).
Di(cid:396)e(cid:272)to(cid:396)s(cid:859) (cid:373)eeti(cid:374)g:
M Collins
Gavin Caudle
S Gula
D Nolan
Mark Hepburn
M Paterson
Audit committee meeting:
M Collins
Gavin Caudle
D Nolan
Number eligible
to attend
4
4
4
4
2
1
Number eligible
to attend
2
2
2
Number
Attended
4
4
4
4
2
1
Number
Attended
2
2
2
14 | P a g e
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 Co(cid:373)pa(cid:374)(cid:455)(cid:859)s e(cid:454)e(cid:272)uti(cid:448)e (cid:272)o(cid:373)pe(cid:374)satio(cid:374) p(cid:396)og(cid:396)a(cid:373)s to e(cid:374)su(cid:396)e:
(a)
(b)
(c)
the attraction and retention of corporate officers;
the (cid:373)oti(cid:448)atio(cid:374) of (cid:272)o(cid:396)po(cid:396)ate offi(cid:272)e(cid:396)s to a(cid:272)hie(cid:448)e the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s (cid:271)usi(cid:374)ess o(cid:271)je(cid:272)ti(cid:448)es; a(cid:374)d
the alignment of the interests of key leadership with the long-term interests of the Co(cid:373)pa(cid:374)(cid:455)(cid:859)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 (cid:272)o(cid:373)(cid:373)ittee (cid:449)ill a(cid:272)t o(cid:374) (cid:271)ehalf of the Boa(cid:396)d as the (cid:862)Co(cid:373)(cid:373)ittee(cid:863) esta(cid:271)lished to ad(cid:373)i(cid:374)iste(cid:396) 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 manage(cid:373)e(cid:374)t o(cid:374) (cid:373)atte(cid:396)s (cid:396)elati(cid:374)g to the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s pe(cid:396)so(cid:374)(cid:374)el
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.
15 | P a g e
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 2019. There have been no changes to the below
named key management personnel since the end of the reporting period unless noted:
2019
Name
M Collins
G Caudle
D Nolan
S Gula
T Adams
M
Paterson
M
Hepburn
Short-term
Post Employment
Long Term
Cash
Salary &
Fees
65,000
45,000
59,153
45,000
166,667
70,000
18,750
469,570
Non
Monetary
Benefits
Super-
annuation
Retirement
Benefits
Incentive
Plans
LSL
2,384
1,651
2,170
1,651
6,113
-
-
25,000
-
-
-
-
-
13,969
-
25,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Equity
Share
based
payment
-
-
-
-
-
-
-
-
Total
$
67,384
46,651
86,323
46,651
172,780
70,000
18,750
508,539
Total
Remuneration
represented
by options
-
-
-
-
-
-
-
-
(a) $65,000 in directors fees was paid to M Collins as at 30 June 2019.
(b) $416,250 in directors fees was payable as at 30 June 2019 to G Caudle for fees for the year ended 30 June
2019 and in lieu of previous years directors fees. For the year ended 30 June 2019, his director fees were
$45,000.
(c) $84,153 salary was paid to D Nolan for the year ended 30 June 2019.
(d) $45,000 salary was paid to Stuart Gula for the year ended 30 June 2019.
(e) $166,667 in directors fees was payable as at 30 June 2019 to Tim Adams for fees for the year ended
30 June 2019.
(f) $70,000 salary was paid to Malcolm Paterson for the year ended 30 June 2019. He resigned on 31 August
2018.
(g) $18,750 salary was paid to Mark Hepburn for the year ended 30 June 2019. He resigned on 26 November
2018.
(h) $13,969 non monetary benefit is related to Director and Officers Liability Insurance.
(i) George Llyod will appointed as Chief Executive Officer on 1 August 2019. His salary will be $275,000 per
annum including superannuation if applicable.
16 | P a g e
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Details of remuneration (continued)
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
641,614
Non
Monetary
Benefits
1,461
1,011
963
1,096
9,438
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. For the year ended 30 June 2018, his director fees were
$45,000.
(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.
No options granted as part of remuneration during the years ended 30 June 2019 and 30 June 2018.
There were no shares issued on exercise of compensation options (Consolidated) for the years ended 30 June
2019 or 30 June 2018.
17 | P a g e
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
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 2018
Granted as
remuneration
On exercise
of options
Net change
other
Balances as at date
of resignation/
termination
Balance
30 June 2019
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
6,823,547
525,279,935
1,033,269
4,350,919
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
220,058,128*
258,318
1,012,730
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,823,547
745,338,063
1,291,587
5,363,649
-
-
-
30 June
2019
M Collins
G Caudle
S Gula
D Nolan
T Adams
M Paterson
M Hepburn
* 220,058,128 as per ASX Announcement dated 5 July 2019 are part of the proposed buy back shares due to
the breach of ASX listing rules 10.11.
Balance
1 July 2017
Granted as
remuneration
On exercise
of options
Net change
other
Balances as at date
of resignation/
termination
Balance
30 June 2018
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
-
30 June
2018
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 Nolan
Gavin Caudle
Malcolm Paterson (Resigned on
31 August 2018)
Mark Hepburn (Resigned on 26
November 2018)
END OF REMUNERATION REPORT
65,000
45,000
80,000
45,000
70,000
18,750
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 2019.
WORKING CAPITAL LOAN
Total working capital loan from Provident Minerals Ltd was $3,076,183 with 10% interest per annum accrued
daily but not compounded monthly.
Total working capital loan from Asian Metal Mining was $855,539 with 10% interest per annum accrued daily
but not compounded monthly.
Total working capital loan from PT Saratoga Investama Sedaya Tbk. was $798,115 with 10% interest per annum
accrued daily but not compounded monthly.
Total working capital loan from Goldstar Mining Asia Resources (L) Berhad was $513,992 with 10% interest
per annum accrued daily but not compounded monthly.
19 | P a g e
DIRECTORS’ REPORT
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.
The Company was not party to any such proceedings during the year.
CORPORATE GOVERNANCE
The Co(cid:373)pa(cid:374)(cid:455)(cid:859)s Co(cid:396)po(cid:396)ate Go(cid:448)e(cid:396)(cid:374)a(cid:374)(cid:272)e State(cid:373)e(cid:374)t is lo(cid:272)ated at the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s We(cid:271)site:
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 (cid:272)op(cid:455) of the audito(cid:396)(cid:859)s i(cid:374)depe(cid:374)de(cid:374)(cid:272)e de(cid:272)la(cid:396)atio(cid:374) as (cid:396)e(cid:395)ui(cid:396)ed u(cid:374)de(cid:396) se(cid:272)tio(cid:374) (cid:1007)(cid:1004)(cid:1011)C 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 2019
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 2019
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
2019, 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 2019
Notes
3
3(a)(i)
3(a)(ii)
5, 3(a)(i)
6(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
Other expenses
Loss before income tax
Income tax expense
Net loss
Other comprehensive income
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
21
Consolidated
2019
$
2018
$
569
569
(873,356)
(214,364)
(14,114)
(5,344)
(47,398)
(418,065)
(50,915)
(397,017)
(11,415)
(20,435)
17,235
203,929
-
(109,453)
(1,940,143)
-
(1,940,143)
470,843
470,843
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
(1,469,300)
(2,074,435)
(1,716,554)
(223,589)
(1,940,143)
(224,242)
(1,245,058)
(1,469,300)
(0.09)
(2,091,472)
(582,390)
(2,673,862)
(285,471)
(1,788,964)
(2,074,435)
(0.12)
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 2019
Notes
2019
$
Consolidated
2018
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Other assets
Claim for tax refund
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
20
4
4
6
15
5
7
9
8
10
11(a)
11(b)
19(b)
6,256,548
361,314
6,617,862
2,653,626
15,828,602
554,523
95,759
19,132,510
25,750,372
5,437,180
5,243,829
57,249
10,738,258
615,325
615,325
11,353,583
14,396,789
112,847,825
16,675,416
(93,085,923)
36,437,318
(22,040,529)
14,396,789
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
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 2019
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 mineral exploration
and evaluation expenditure
Payments for addition of property, plant &
equipment
NET CASH FLOWS (USED) IN INVESTING
ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of shares
Repayment of borrowings
Proceeds from borrowings
Payment of unmarketable securities
Shares issuance cost
NET CASH FLOWS RECEIVED FROM FINANCING
ACTIVITIES
Net increase/(decrease) 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
20(a)
20(b)
Consolidated
2018
$
2017
$
(2,646,307)
501
(2,111,479)
492
(2,645,806)
(2,110,987)
(1,887,296)
(1,865,095)
-
(29,294)
(1,887,296)
(1,894,389)
6,953,485
-
3,743,829
(22)
(23,852)
2,163,307
(261,510)
1,500,000
(244)
(114,724)
10,673,440
3,286,829
6,140,338
(718,547)
116,210
834,757
20
6,256,548
116,210
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 2019
$
$
Share
capital
Options &
equity
reserve
$
Foreign
currency
translation
reserve
$
$
$
Accumulated
losses
Non-
controlling
interest
Total
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 subsidiary
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)
Balance at 30.06.18
-
-
-
-
-
-
-
-
-
-
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
109,269,211
-
2,380,395
-
12,802,709
-
(91,369,369)
2,048,583
(20,795,471) 12,287,475
-
Balance at 1.07.18
109,269,211
2,380,395
12,802,709
(91,369,369)
(20,795,471) 12,287,475
Transfer of losses from
the Group to NCI as a
result of write off of
exploration and
evaluation expenditure
and VAT at subsidiary
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)
Balance at 30.06.19
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,716,554)
(223,589)
(1,940,143)
1,492,312
-
(1,021,469)
470,843
1,492,312
(1,716,554)
(1,245,058)
(1,469,300)
3,578,614
112,847,825
-
2,380,395
-
14,295,021
-
(93,085,923)
-
(22,040,529)
3,578,614
14,396,789
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 2019
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 2019. 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
2019 (cid:396)epo(cid:396)ti(cid:374)g (cid:455)ea(cid:396). The g(cid:396)oup(cid:859)s assess(cid:373)e(cid:374)t of the i(cid:373)pa(cid:272)t of these (cid:374)e(cid:449) sta(cid:374)da(cid:396)ds a(cid:374)d i(cid:374)te(cid:396)p(cid:396)etatio(cid:374)s is set
out below:
AASB 16: Leases applies to annual reporting periods beginning on or after 1 January 2019.
This Standard supersedes AASB 117 Leases, Interpretation 4 Determining whether an
Arrangement contains a Lease, AASB intrpretation 115 Operating Leases-Incentives and AASB
intrpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of lease. AASB
16 sets out the principles for the recognition, measurement, presentation and disclosure of leases
and requires lessees to account for all leases under a single on-balance sheet model similar to the
accounting for finance leases under AASB 117.
The key features of AASB 16 are as follows:
-
Lessees are required to recognise assets and liabilities for all leases with a term of more than
12 months, unless the underlying asset is of low value.
- A lessee measures right-of-use assets similarly to other non-financial assets and lease liabilities
similarly to other financial liabilities.
26 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 16: Leases applies to annual reporting periods beginning on or after 1 January 2019.
(continued)
The key features of AASB 16 are as follows: (continued)
- Assets and Liabilities arising from the lease are initially measured on a present value basis. The
measurement includes non-cancellable lease payments (including inflation-linked payments),
and also includes payments to be mad in optional periods if the lessee is reasonably certain to
exercise an option to extend to lease, or not to exercise an option to terminate the lease.
- AASB 16 contains disclosure requirements for leases.
Lessor accounting
- AASB 16 substantially carries forward the lessor accounting requirements in AASB 117.
Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and
to account for those two types of leases differently.
- AASB 16 also requires enhanced disclosures to be provided by lessors that will improve
i(cid:374)fo(cid:396)(cid:373)atio(cid:374) dis(cid:272)losed a(cid:271)out a lesso(cid:396)(cid:859)s (cid:396)isk e(cid:454)posu(cid:396)e, pa(cid:396)ti(cid:272)ula(cid:396)l(cid:455) to (cid:396)esidual (cid:448)alue (cid:396)isk.
Estimated impact of AASB 16 on the Group when the standard is applied
Due to the adoptio(cid:374) of AASB (cid:1005)(cid:1010), the G(cid:396)oup(cid:859)s (cid:894)o(cid:396) Co(cid:373)pa(cid:374)(cid:455)(cid:859)s(cid:895) ope(cid:396)ati(cid:374)g p(cid:396)ofit (cid:449)ill not have
significant impact. This is due to G(cid:396)oup did(cid:374)(cid:859)t ha(cid:448)e sig(cid:374)ifi(cid:272)a(cid:374)t expenses of leases that were
classified as operating leases under AASB 117.
Other standards not yet applicable
At the date of authorisation of the financial statements, the Standards and Interpretations that were issued
but not effective are listed below:
Standard/amendment
AASB 16 Leases
AASB 17 Insurance Contracts
AASB 2018-7 Amendments to Australian Accounting Standards –
Definition of Material
AASB 2019-1 Amendments to Australian Accounting Standards –
References to the Conceptual Framework
Effective for annual reporting
periods beginning on or after
1 January 2019
1 January 2021
1 January 2020
1 January 2020
27 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
New and amended standards adopted by the Group
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current
reporting period.
New and revised Standards and amendments thereof and Interpretations effective for the current year that
are relevant to the Group include:
AASB 9 Financial Instruments and related amending Standards.
•
• AASB 15 Revenue from Contracts with Customers and relating amending Standards.
• AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurements of
Share-based Payment Transactions.
Interpretation 22 Foreign Currency Transactions and Advance Consideration.
•
AASB 9 Financial Instruments and related amending Standards
The Standard replaces AASB 139 Financial Instruments: Recognition and Measurement for annual periods
beginning on or after 1 January 2018, bringing together all three aspects of the accounting for financial
instruments: classification and measurement, impairment, and hedge accounting.
AASB 15 Revenue from Contracts with Customers and relating amending Standards
The Standard replaces the current accounting requirements applicable to revenue with a single, principles-
based model. Apart from a limited number of exceptions, including leases, the new revenue model in AASB
15 applies to all contracts with customers as well as non-monetary exchanges for goods and services. AASB
15 provides the following five-step process:
-
-
-
-
-
identify the contract(s) with the 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 the revenue when (or as) the performance obligations are satisfied.
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurements of Share-
based Payment Transactions
The amendments to AASB 2 Share-based Payment addresses three main areas:
-
-
-
the effect of vesting conditions on the measurement of a cash-settled share-based payment
transaction;
the classification of a share-based payment transaction with net settlement features for withholding
tax obligations; and
accounting where a modification to the terms and conditions of a share-based payment transaction
changes its classification from cash settled to equity settled.
Interpretation 22 Foreign Currency Transactions and Advance Consideration
This i(cid:374)te(cid:396)p(cid:396)etatio(cid:374) add(cid:396)esses ho(cid:449) to dete(cid:396)(cid:373)i(cid:374)e the (cid:858)date of t(cid:396)a(cid:374)sa(cid:272)tio(cid:374)(cid:859) fo(cid:396) the pu(cid:396)pose of dete(cid:396)(cid:373)i(cid:374)i(cid:374)g the
exchange rate to use on initial recognition of an asset, expense or income, when consideration for that item
has been paid or received in advance in a foreign currency which resulted in the recognition of a non-monetary
asset or non-monetary liability.
28 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The adoption of these Amendments/Interpretation has had no significant impact on the disclosures or the
a(cid:373)ou(cid:374)ts (cid:396)e(cid:272)og(cid:374)ised i(cid:374) the G(cid:396)oup(cid:859)s (cid:272)o(cid:374)solidated fi(cid:374)a(cid:374)(cid:272)ial state(cid:373)e(cid:374)ts.
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 2019, the Group incurred a loss before tax of $1,940,143 (2018: loss of $2,673,862)
and has a working capital deficit of $4,120,396 (2018: $3,289,968). The Group has cash and cash equivalents
of $6,256,548 (2018: $116,210), out of which the proposed buy back payout is $3,300,872 which is included
in current liabilities of $10,738,258 (2018: $3,663,874) and also includes borrowings of $5,243,829 (2018:
$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 G(cid:396)oup(cid:859)s a(cid:271)ilit(cid:455) to (cid:272)o(cid:374)ti(cid:374)ue as a goi(cid:374)g (cid:272)o(cid:374)(cid:272)e(cid:396)(cid:374) is depe(cid:374)de(cid:374)t upo(cid:374) it (cid:373)ai(cid:374)taining sufficient funds for its
operations and commitments. The di(cid:396)e(cid:272)to(cid:396)s (cid:272)o(cid:374)ti(cid:374)ue to (cid:271)e fo(cid:272)used o(cid:374) (cid:373)eeti(cid:374)g the G(cid:396)oup(cid:859)s (cid:271)usi(cid:374)ess
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 (cid:272)o(cid:374)ti(cid:374)ge(cid:374)t (cid:374)atu(cid:396)e of (cid:272)e(cid:396)tai(cid:374) of the G(cid:396)oup(cid:859)s p(cid:396)oje(cid:272)t e(cid:454)pe(cid:374)ditu(cid:396)e (cid:272)o(cid:373)(cid:373)it(cid:373)e(cid:374)ts;
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
explo(cid:396)atio(cid:374) a(cid:272)ti(cid:448)ities (cid:373)a(cid:455) (cid:271)e slo(cid:449)ed o(cid:396) suspe(cid:374)ded as pa(cid:396)t of the (cid:373)a(cid:374)age(cid:373)e(cid:374)t of the G(cid:396)oup(cid:859)s (cid:449)o(cid:396)ki(cid:374)g
capital.
•
•
29 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
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 19.
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
(cid:862)(cid:374)o(cid:374) (cid:272)o(cid:374)t(cid:396)olli(cid:374)g i(cid:374)te(cid:396)ests". The G(cid:396)oup i(cid:374)itiall(cid:455) (cid:396)e(cid:272)og(cid:374)ises (cid:374)o(cid:374)-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 2019
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
i(cid:374)te(cid:396)est. The e(cid:454)(cid:272)ess of the (cid:272)ost of the (cid:271)usi(cid:374)ess (cid:272)o(cid:373)(cid:271)i(cid:374)atio(cid:374) o(cid:448)e(cid:396) the fai(cid:396) (cid:448)alue of the G(cid:396)oup(cid:859)s sha(cid:396)e 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
dis(cid:272)ou(cid:374)ted to thei(cid:396) p(cid:396)ese(cid:374)t (cid:448)alue as at the date of e(cid:454)(cid:272)ha(cid:374)ge. The dis(cid:272)ou(cid:374)t (cid:396)ate used is the e(cid:374)tit(cid:455)(cid:859)s i(cid:374)(cid:272)(cid:396)e(cid:373)e(cid:374)tal
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 2019
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(cid:859) (cid:396)esidual (cid:448)alues a(cid:374)d useful li(cid:448)es a(cid:396)e (cid:396)e(cid:448)ie(cid:449)ed, a(cid:374)d adjusted if app(cid:396)op(cid:396)iate, at ea(cid:272)h (cid:271)ala(cid:374)(cid:272)e sheet
date.
A(cid:374) asset(cid:859)s (cid:272)a(cid:396)(cid:396)(cid:455)i(cid:374)g a(cid:373)ou(cid:374)t is (cid:449)(cid:396)itte(cid:374) do(cid:449)(cid:374) i(cid:373)(cid:373)ediatel(cid:455) to its (cid:396)e(cid:272)o(cid:448)e(cid:396)a(cid:271)le a(cid:373)ou(cid:374)t if the asset(cid:859)s (cid:272)a(cid:396)(cid:396)(cid:455)i(cid:374)g (cid:448)alue
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 2019
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
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for
annual periods beginning on or after 1 July 2018, bringing together all three aspects of the accounting for
financial instruments: classification and measurement, impairment, and hedge accounting.
As a result of adopting AASB 9 Financial Instruments, the Group has amended its financial instruments
accounting policies to align with AASB 9. AASB 9 makes major changes to the previous guidance on the
(cid:272)lassifi(cid:272)atio(cid:374) a(cid:374)d (cid:373)easu(cid:396)e(cid:373)e(cid:374)t of fi(cid:374)a(cid:374)(cid:272)ial assets a(cid:374)d i(cid:374)t(cid:396)odu(cid:272)es a(cid:374) (cid:858)e(cid:454)pe(cid:272)ted (cid:272)(cid:396)edit loss(cid:859) (cid:373)odel fo(cid:396)
impairment of financial assets.
There were no financial instruments which the Group designated at fair value through profit or loss under
AASB 139 that were subject to reclassification. The Boa(cid:396)d assessed the G(cid:396)oup(cid:859)s financial assets and
determined the applicatio(cid:374) of AASB (cid:1013) does (cid:374)ot (cid:396)esult i(cid:374) a (cid:272)ha(cid:374)ge i(cid:374) the (cid:272)lassifi(cid:272)atio(cid:374) of the G(cid:396)oup(cid:859)s fi(cid:374)a(cid:374)(cid:272)ial
instruments.
The adoption of AASB 9 does not have a significant impact on the financial report.
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument. Financial instruments (except for trade receivables) are measured
initially at fair value adjusted by transactions costs, except fo(cid:396) those (cid:272)a(cid:396)(cid:396)ied (cid:862)at fai(cid:396) (cid:448)alue th(cid:396)ough p(cid:396)ofit o(cid:396)
loss(cid:863), i(cid:374) (cid:449)hi(cid:272)h (cid:272)ase t(cid:396)a(cid:374)sa(cid:272)tio(cid:374) (cid:272)osts a(cid:396)e e(cid:454)pe(cid:374)sed to p(cid:396)ofit o(cid:396) loss. Whe(cid:396)e a(cid:448)aila(cid:271)le, (cid:395)uoted p(cid:396)i(cid:272)es i(cid:374) a(cid:374) a(cid:272)ti(cid:448)e
market are used to determine the fair value. In other circumstances, valuation techniques are adopted.
Subsequent measurement of financial assets and financial liabilities are described below.
Trade receivables are initially measured at the transaction price if the receivables do not contain a significant
financing component in accordance with AASB 15.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire,
or when the financial asset and all substantial risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
33 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
h) Financial instruments (continued)
Classification and subsequent measurement
Financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at
the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value
adjusted for transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets other than those designated and effective as
hedging instruments, are classified into the following categories upon initial recognition:
Amortised cost;
Fair value through other comprehensive income (FVOCI); and
Fair value through profit or loss (FVPL).
Classifications are determined by both:
The contractual cash flow characteristics of the financial assets; and
The entities business model for managing the financial asset.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as FVPL):
They are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows; and
The contractual terms of the financial assets give rise to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting
is o(cid:373)itted (cid:449)he(cid:396)e the effe(cid:272)t of dis(cid:272)ou(cid:374)ti(cid:374)g is i(cid:373)(cid:373)ate(cid:396)ial. The G(cid:396)oup(cid:859)s (cid:272)ash a(cid:374)d (cid:272)ash e(cid:395)ui(cid:448)ale(cid:374)ts, t(cid:396)ade a(cid:374)d
most other receivables fall into this category of financial instruments.
Financial assets at fair value through other comprehensive income (Equity instruments)
The Group measures debt instruments at fair value through OCI if both of the following conditions are met:
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding; and
The financial asset is held within a business model with the objective of both holding to collect
contractual cash flows and selling the financial asset.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for
financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI.
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
instruments designated at fair value through OCI when they meet the definition of equity under AASB 132
Financial Instruments: Presentation and are not held for trading.
34 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
h) Financial instruments (continued)
Classification and subsequent measurement (continued)
Financial assets (continued)
Financial assets at fair value through profit or loss (FVPL)
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets
designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required
to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the
purpose of selling or repurchasing in the near term.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except
for derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with
gains or losses recognised in profit or loss.
All interest-related charges and, if applicable, gains and losses arising on changes in fair value are recognised
in profit or loss.
Impairment
From 1 July 2018, the Group assesses on a forward looking basis the expected credit losses associated with its
debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on
whether there has been a significant increase in credit risk. For trade receivables, the Group (or Company)
applies the simplified approach permitted by AASB, which requires expected lifetime losses to be recognised
from initial recognition of the receivables.
Comparative information
The Group has applied AASB 9 Financial Instruments retrospectively, but has elected not to restate
comparative information. As a result, the comparative information provided continues to be accounted for in
a(cid:272)(cid:272)o(cid:396)da(cid:374)(cid:272)e (cid:449)ith the G(cid:396)oup(cid:859)s previous accounting policy.
35 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
h) Financial instruments (continued)
Classification and subsequent measurement (continued)
Comparative information (continued)
Classification
Until 30 June 2019, the group classified its financial assets in the following categories:
Loans and receivables;
Financial assets at fair value through profit or loss;
Held-to-maturity investments; and
Available-for-sale financial assets.
The classification depended on the purpose for which the investments were acquired. Management
determined the classification of its investments at initial recognition and, in the case of assets classified as
held-to-maturity, re-evaluated this designation at the end of each reporting period.
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 recovera(cid:271)le a(cid:373)ou(cid:374)t of the asset, (cid:271)ei(cid:374)g the highe(cid:396) of the asset(cid:859)s fai(cid:396) (cid:448)alue less
(cid:272)osts to sell a(cid:374)d (cid:448)alue i(cid:374) use, is (cid:272)o(cid:373)pa(cid:396)ed to the asset(cid:859)s (cid:272)a(cid:396)(cid:396)(cid:455)i(cid:374)g (cid:448)alue. A(cid:374)(cid:455) e(cid:454)(cid:272)ess of the asset(cid:859)s (cid:272)a(cid:396)(cid:396)(cid:455)i(cid:374)g (cid:448)alue
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.
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.
36 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
k) Functional and presentation currency
The fu(cid:374)(cid:272)tio(cid:374)al (cid:272)u(cid:396)(cid:396)e(cid:374)(cid:272)(cid:455) of ea(cid:272)h of the g(cid:396)oup(cid:859)s e(cid:374)tities is (cid:373)easu(cid:396)ed usi(cid:374)g the (cid:272)u(cid:396)(cid:396)e(cid:374)(cid:272)(cid:455) of the p(cid:396)i(cid:373)a(cid:396)(cid:455) e(cid:272)o(cid:374)o(cid:373)i(cid:272)
environment in which that entity operates. The consolidated financial statements are presented in Australian
dolla(cid:396)s (cid:449)hi(cid:272)h is the pa(cid:396)e(cid:374)t e(cid:374)tit(cid:455)(cid:859)s fu(cid:374)(cid:272)tio(cid:374)al a(cid:374)d p(cid:396)ese(cid:374)tatio(cid:374) (cid:272)u(cid:396)(cid:396)e(cid:374)(cid:272)(cid:455).
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 fi(cid:374)a(cid:374)(cid:272)ial (cid:396)esults a(cid:374)d positio(cid:374) of fo(cid:396)eig(cid:374) ope(cid:396)atio(cid:374)s (cid:449)hose fu(cid:374)(cid:272)tio(cid:374)al (cid:272)u(cid:396)(cid:396)e(cid:374)(cid:272)(cid:455) is diffe(cid:396)e(cid:374)t f(cid:396)o(cid:373) the g(cid:396)oup(cid:859)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 arisi(cid:374)g o(cid:374) t(cid:396)a(cid:374)slatio(cid:374) of fo(cid:396)eig(cid:374) ope(cid:396)atio(cid:374)s a(cid:396)e t(cid:396)a(cid:374)sfe(cid:396)(cid:396)ed di(cid:396)e(cid:272)tl(cid:455) to the g(cid:396)oup(cid:859)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.
n) Revenue
AASB 15 replaces AASB 118 Revenue, AASB 111 Construction Contracts and several revenue-related
Interpretations. AASB 15 establishes a five-step model to account for revenue arising from contracts with
customers and requires that revenue to be recognised at an amount that reflects the consideration to which
an entity expects to be entitled in exchange for transferring goods or services to a customer.
The Company has applied AASB 15 (cid:862)Re(cid:448)e(cid:374)ue (cid:449)ith Customers(cid:863) from 1 July 2018 which resulted in changes in
accounting policy. The changes in policy is relatively consistent with previous policy and has therefore policy
not had a material impact. The Company has applied the modified retrospective application approach in which
only the initial period of application applies AASB 15. No adjustment were made as a result of adopting AASB
15.
The adoption of AASB 15 does not have a significant impact on the Group as the Group does not currently
have any revenue from customers.
37 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o) Employee benefits
P(cid:396)o(cid:448)isio(cid:374) is (cid:373)ade fo(cid:396) the g(cid:396)oup(cid:859)s lia(cid:271)ilit(cid:455) fo(cid:396) e(cid:373)plo(cid:455)ee (cid:271)e(cid:374)efits a(cid:396)isi(cid:374)g f(cid:396)o(cid:373) se(cid:396)(cid:448)i(cid:272)es (cid:396)e(cid:374)de(cid:396)ed (cid:271)(cid:455) e(cid:373)plo(cid:455)ees
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
t(cid:396)a(cid:374)sa(cid:272)tio(cid:374)s, (cid:449)he(cid:396)e(cid:271)(cid:455) se(cid:396)(cid:448)i(cid:272)es a(cid:396)e (cid:396)e(cid:374)de(cid:396)ed i(cid:374) e(cid:454)(cid:272)ha(cid:374)ge fo(cid:396) sha(cid:396)es o(cid:396) (cid:396)ights o(cid:448)e(cid:396) sha(cid:396)es (cid:894)(cid:858)e(cid:395)uit(cid:455) settled
t(cid:396)a(cid:374)sa(cid:272)tio(cid:374)s(cid:859)(cid:895).
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.
38 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
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.
39 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
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
I(cid:374) the p(cid:396)o(cid:272)ess of appl(cid:455)i(cid:374)g the G(cid:396)oup(cid:859)s a(cid:272)(cid:272)ou(cid:374)ti(cid:374)g poli(cid:272)ies, (cid:373)a(cid:374)age(cid:373)e(cid:374)t has (cid:373)ade the follo(cid:449)i(cid:374)g judge(cid:373)e(cid:374)ts,
apart from those involving estimations, which have the most significant effect on the amounts recognised in
the financial statements:
Exploration and evaluation assets
The G(cid:396)oup(cid:859)s a(cid:272)(cid:272)ou(cid:374)ti(cid:374)g poli(cid:272)(cid:455) fo(cid:396) e(cid:454)plo(cid:396)atio(cid:374) a(cid:374)d e(cid:448)aluatio(cid:374) e(cid:454)pe(cid:374)ditu(cid:396)e is set out a(cid:271)o(cid:448)e. The appli(cid:272)atio(cid:374) 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 Ma(cid:374)agi(cid:374)g Di(cid:396)e(cid:272)to(cid:396), (cid:449)ho is the G(cid:396)oup(cid:859)s (cid:272)hief ope(cid:396)ati(cid:374)g de(cid:272)isio(cid:374) (cid:373)ake(cid:396). A(cid:374) ope(cid:396)ati(cid:374)g seg(cid:373)e(cid:374)t is a
component of the Group that engages in business activities from which it may earn revenues and incur
e(cid:454)pe(cid:374)ses, i(cid:374)(cid:272)ludi(cid:374)g (cid:396)e(cid:448)e(cid:374)ues a(cid:374)d e(cid:454)pe(cid:374)ses that (cid:396)elate to t(cid:396)a(cid:374)sa(cid:272)tio(cid:374)s (cid:449)ith a(cid:374)(cid:455) of the G(cid:396)oup(cid:859)s othe(cid:396)
(cid:272)o(cid:373)po(cid:374)e(cid:374)ts. All ope(cid:396)ati(cid:374)g seg(cid:373)e(cid:374)ts(cid:859) ope(cid:396)ati(cid:374)g (cid:396)esults a(cid:396)e (cid:396)egula(cid:396)l(cid:455) (cid:396)e(cid:448)ie(cid:449)ed (cid:271)(cid:455) the Ma(cid:374)agi(cid:374)g 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.
40 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
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 Co(cid:374)solidated E(cid:374)tit(cid:455) a(cid:374)d the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s e(cid:454)posu(cid:396)e to i(cid:374)te(cid:396)est (cid:396)ate (cid:396)isk, is the (cid:396)isk that a fi(cid:374)a(cid:374)(cid:272)ial
i(cid:374)st(cid:396)u(cid:373)e(cid:374)t(cid:859)s (cid:448)alue (cid:449)ill flu(cid:272)tuate as a (cid:396)esult of (cid:272)ha(cid:374)ges i(cid:374) (cid:373)a(cid:396)ket i(cid:374)te(cid:396)est (cid:396)ates a(cid:374)d the effe(cid:272)ti(cid:448)e (cid:449)eighted
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
2019
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 2019
%
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
6,256,548
-
-
6,256,548
-
-
-
-
-
-
-
-
-
5,243,829
-
5,243,829
-
-
171
171
-
-
-
-
-
-
-
-
-
-
-
-
-
6,256,548
2,815,343
-
2,815,343
171
2,815,343
9,072,062
5,437,180
-
57,249
5,437,180
5,243,829
57,249
5,494,429
10,738,258
-
-
-
-
-
10%
-
-
41 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
2. RISK MANAGEMENT (continued)
Consolidated Entity
2018
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
%
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
116,210
-
-
116,210
-
-
-
-
-
-
- 1,500,000
-
-
- 1,500,000
-
-
163
163
-
-
-
-
(b) Credit risk exposures
-
-
-
-
-
-
-
-
-
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
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 consolidated statement of financial position and Note 22.
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.
42 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
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, other payables and borrowings.
The table below summarises the impact of a 1 percent weakening/strengthening of market interest rates and
the effective weighted average interest rate at financial liabilities of borrowing:
Borrowing + 1%
Borrowing - 1%
52,438
(52,438)
Consolidated
2019
$
2018
$
15,000
(15,000)
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
Consolidated
2019
$
2018
$
569
569
492
492
Consolidated
2019
$
11,415
5,344
16,759
397,017
397,017
2018
$
15,480
103,467
118,947
38,284
38,284
43 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
3(b) INCOME TAX EXPENSE
Loss from ordinary activities before income tax expense
(1,940,143)
(2,673,862)
Consolidated
2019
$
2018
$
(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:
Accruals
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
(533,539)
(735,313)
7,260
(4,740)
-
(531,019)
(49,331)
580,350
-
6,875
512,901
(601,433)
(816,970)
(64,223)
881,193
-
8,627,871
958,469
78,321
9,664,661
8,774,025
958,469
100,428
9,832,922
This benefit for tax losses will only be obtained if:
(i)
(ii)
(iii)
(iv)
(v)
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.
44 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
4. TRADE AND OTHER RECEIVABLES
CURRENT
Prepayments
Other debtors
NON CURRENT
VAT receivable
Consolidated
2019
$
2018
$
199,597
161,717
361,314
222,892
34,804
257,696
2,653,626
2,653,626
2,382,136
2,382,136
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
Consolidated
2019
$
2018
$
75,143
71,639
352,531
(351,957)
574
117,555
(117,555)
-
748,817
(728,775)
20,042
352,531
(351,801)
730
117,555
(117,555)
-
747,575
(717,516)
30,059
Total property, plant and equipment
95,759
102,428
45 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
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:
2019
Consolidated
Carrying amount at
1 July 2018
Effect of foreign currency
translation
Additions
Disposal
Depreciation expense
Carrying amount at
30 June 2019
2018
Consolidated
Carrying amount at
1 July 2017
Effect of foreign currency
translation
Additions
Disposal
Depreciation expense
Carrying amount at
30 June 2018
6. OTHER ASSETS
Land at
cost
$
Plant &
equipment
$
Motor
vehicles
$
Office
equipment
$
Total
$
71,639
3,504
-
-
-
75,143
730
-
-
-
(156)
574
-
-
-
-
-
-
30,059
102,428
1,242
-
-
(11,259)
4,746
-
-
(11,415)
20,042
95,759
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
NON CURRENT
Deposits
Capitalised mineral exploration and evaluation expenditure
Consolidated
2019
$
171
15,828,431
15,828,602
2018
$
163
13,609,555
13,609,718
6.a.(i) Deposits
Deposits of $171 represent security deposit for office administration (2018: $163).
46 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
6. OTHER ASSETS (continued)
6.a.(ii) Mineral exploration and evaluation expenditure
Opening balance
Additions during the year
Change arising from foreign currency movement
Provision for impairment
Closing balance
Consolidated
2019
$
13,609,555
1,542,781
658,860
17,235
15,828,431
2018
$
12,872,178
1,865,095
737,377
(1,865,095)
13,609,555
Management believes that the (cid:272)a(cid:396)(cid:396)(cid:455)i(cid:374)g a(cid:373)ou(cid:374)t of the G(cid:396)oup(cid:859)s (cid:272)apitalised e(cid:454)pe(cid:374)ditu(cid:396)e a(cid:374)d e(cid:448)aluatio(cid:374) (cid:272)osts
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
Proposed buy back shares (Note 10)
Trade payables and accruals
Consolidated
2019
$
3,300,872
2,136,308
5,437,180
2018
$
-
2,106,603
2,106,603
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
2019
$
2018
$
615,325
516,839
Employee numbers
Average number of employees during the financial year
22
22
47 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
9. BORROWINGS
Working capital loan:
Provident Minerals Pte Ltd.
Asian Metal Mining Developments Limited
PT Saratoga Investama Sedaya Tbk.
Goldtsar Mining Asia Resources (L) Berhad
Consolidated
2019
$
3,076,183
855,539
798,115
513,992
5,243,829
2018
$
1,050,000
450,000
-
-
1,500,000
All working capital loans are charged by interest rate of 10%, classified as unsecured loan. Lenders are not
entitled to demand repayment of outstanding loan in any circumtances before the final maturity date or any
other date mutually agreed between the parties, except there is event of defaults occurred.
The date mutually agreed between the parties for repayment loans on 31 December 2019.
10. CONTRIBUTED EQUITY
Issued capital
Fully paid – ordinary shares
2,097,770,030 (2018: 1,854,262,526)
Consolidated
2019
$
2018
$
112,847,825
112,847,825
109,269,211
109,269,211
Movements in ordinary share capital of the Company during the past 2 years were as follows:
Number of Shares
$
01/07/2016
13/10/2017
05/12/2017
10/01/2018
30/06/2018
25/03/2019
Opening balance
Shares issued
Shares issued
Shares issued
Shares issuance costs
Balance at 30 June 2018
Shares issued
Shares issuance costs
Balance at 30 June 2019
Proposed buy back shares
As per ASX announcement
dated 5 July 2019
1,699,740,648
20,927,822
21,428,571
112,165,485
-
1,854,262,526
463,565,632
-
2,317,828,158
(220,058,128)
107,220,628
292,990
300,000
1,570,317
(114,724)
109,269,211
6,953,485
(73,999)
116,148,697
(3,300,872)
2,097,770,030
112,847,825
48 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
10. CONTRIBUTED EQUITY (continued)
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 2019 (2018: nil).
Buy back shares
O(cid:374) (cid:1009) Jul(cid:455) (cid:1006)(cid:1004)(cid:1005)(cid:1013), Siha(cid:455)o Gold Li(cid:373)ited (cid:894)(cid:862)the Co(cid:373)pa(cid:374)(cid:455)(cid:863)(cid:895) a(cid:374)(cid:374)ou(cid:374)(cid:272)ed that as a (cid:396)esult of i(cid:374)ad(cid:448)e(cid:396)te(cid:374)t (cid:271)(cid:396)ea(cid:272)hes of
ASX Listing Rule 10.11 in connection with the allocation of shortfall under that 1:4 non-renounceable rights
issue. The Company intended to buy back 220,058,128 affected shares at the right issue price of $0.015 by no
later than 30 August 2019.
ASX has granted the Company an extension by which it must complete the buy back. The Company is working
to efficiently complete the buy back as a corrective action required by the ASX whilst still effectively realising
the results of the right issue. As of the date of issued this consolidated financial statements, the Company is
still processing the buy back shares. The buy back is subject to shareholder approval. An EGM will be convened
on 14 October 2019 to seek such approval.
11. RESERVES AND ACCUMULATED LOSSES
Consolidated
2019
$
2018
$
Note
(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
Options
There is no outstanding balance of options as at 30 June 2019.
2,380,395
14,295,021
16,675,416
2,380,395
12,802,709
15,183,104
2,380,395
-
2,380,395
2,380,395
-
2,380,395
49 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
11. RESERVES AND ACCUMULATED LOSSES (continued)
(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
Balance at the end of the financial year
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
Consolidated
2019
$
2018
$
12,802,709
1,492,312
14,295,021
10,996,708
1,806,001
12,802,709
(91,369,369)
(99,144,809)
(1,716,554)
(2,091,472)
-
(93,085,923)
9,866,912
(91,369,369)
Parent
2019
$
5,985,367
122,814
6,108,181
2018
$
75,816
125,012
200,828
9,721,742
-
9,721,742
(3,613,561)
1,994,520
-
1,994,520
(1,793,692)
112,847,825
(118,938,481)
109,269,211
(113,539,998)
2,477,095
(3,613,561)
2,477,095
(1,793,692)
50 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
12. PARENT ENTITY DISCLOSURE NOTE (continued)
FINANCIAL PERFORMANCE
Loss for the year
Total comprehensive Loss
Parent
2019
$
2018
$
(5,398,483)
(5,398,483)
(3,771,455)
(3,711,455)
The parent entity did not enter into any guarantees in relation to the debts of its subsidiaries for 2018 or 2019.
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
Mark Hepburn
Malcolm Paterson
Daniel Nolan
Timothy Adams
Chairman
Non Executive Director
Non Executive Director
Non Executive Director (resigned on 26 November 2018)
Managing Director & CEO (resigned on 31 August 2018)
Company Secretary, Chief Financial Officer & Executive Director
Interim Chief Executive Officer (resigned on 31 July 2019)
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
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
Consolidated
2019
$
469,570
13,969
25,000
-
508,539
2018
$
641,614
13,969
-
-
655,583
Consolidated
2019
$
2018
$
52,800
25,763
78,563
45,500
21,735
67,235
51 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
15. CLAIM TAX FOR REFUND
I(cid:374) the p(cid:396)io(cid:396) (cid:455)ea(cid:396), the G(cid:396)oup(cid:859)s I(cid:374)do(cid:374)esia(cid:374) su(cid:271)sidia(cid:396)(cid:455), PT So(cid:396)ik(cid:373)as Mi(cid:374)i(cid:374)g has a ta(cid:454) assess(cid:373)e(cid:374)t which as per
30 June 2018 Annual Report was disclosed as a contingent liability. During the period ended 30 June 2019, the
Company paid $554,523 (US$388,388) to the Indonesian Tax Authorities and have subsequently lodged a tax
appeal.
16. CONTINGENT ASSETS AND LIABILITIES
There are no contingent assets and liabilities as at 30 June 2019.
17. RELATED PARTIES
Directors and directors-related entities
Dis(cid:272)losu(cid:396)es (cid:396)elati(cid:374)g to di(cid:396)e(cid:272)to(cid:396)s a(cid:374)d spe(cid:272)ified e(cid:454)e(cid:272)uti(cid:448)es a(cid:396)e set out i(cid:374) the di(cid:396)e(cid:272)to(cid:396)(cid:859)s report and as detailed in
Note 13.
PT Green Gold Engineering, an entity associated with Mr Malcolm Pate(cid:396)so(cid:374), as PT So(cid:396)ik(cid:373)as Mi(cid:374)i(cid:374)g(cid:859)s
consultant feasibility study. The transaction balances as of 30 June 2019 amounting to $299,208.
Provident Minerals Pte Ltd, an entity associated with Mr Galvin Caudle. The Company has owned working
capital loan to Provident (Note 9).
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 ((cid:862)API(cid:863)). 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 2019 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 $8,707,052 due to the movement
in loan balance in its accounts for the year ended 30 June 2019 (2018: $6,854,629) 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.
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
Parent
2019
$
2018
$
108,761,949
(108,761,949)
-
100,054,897
(100,054,897)
-
The other related parties transactions are all working capital loan owned by the Company which given by the
Co(cid:373)pa(cid:374)(cid:455)(cid:859)s sha(cid:396)eholde(cid:396) (cid:894)Note (cid:1013)(cid:895).
52 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
18. EXPENDITURE COMMITMENTS
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 2019, 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 2019.
Capital commitments
There were no outstanding capital commitments not provided for in the financial statements of the Company
as at 30 June 2019 or 30 June 2018.
Other commitments
Parent Entity
Sihayo Gold Limited
Project
Mt Keith
Controlled Entities:
Excelsior Resources Pty Limited
Project
Mulgabbie
Principal activities
Interest
2019
Interest
2018
Mineral exploration
2% Royalty
2% Royalty
Principal activities
Interest
2019
Interest
2018
Mineral exploration
2% Royalty
2% Royalty
53 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
19. INVESTMENTS IN CONTROLLED ENTITIES
Controlled entities:
Class of
shares
Cost of Parent Entity’s
investment
Equity holding
2019
$
2018
$
2019
%
2018
%
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
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)
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
(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$61,748,805 being $22,040,529 as at 30 June 2019 (2018: $20,795,471). 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.
54 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
20. NOTES TO THE STATEMENT OF CASH FLOWS
Consolidated
2019
$
2018
$
Cash and cash equivalents
6,256,548
116,210
(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 of $26,891 (2018: $26,390) held in trust.
(b) Reconciliation of operating loss after income tax to net cash flow from operating activities
Consolidated
2019
$
2018
$
Operating loss after income tax
(1,940,143)
(2,673,862)
Non-cash items
Depreciation
Provision for impairment of capitalised exploration
and evaluation expenditure
Provision for impairment VAT receivable
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in claim for tax refund
Decrease in payables
Decrease in provisions
11,415
15,480
(17,235)
-
1,865,095
(2,187,030)
(375,108)
(554,523)
131,302
98,486
(243,417)
-
1,101,381
11,366
Net cash outflow from operating activities
(2,645,806)
(2,110,987)
55 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
21. 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
2019
2018
(0.09)
(0.12)
1,919,642,623
1,777,349,540
As the Group made a loss for the year, diluted earnings per share is the same as basic earnings per share.
22. 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
2019
$
2018
$
6,256,548
2,815,514
116,210
2,417,103
9,072,062
2,533,313
Consolidated
2019
$
5,437,180
5,243,829
57,249
2018
$
2,106,603
1,500,000
57,271
10,738,258
3,663,874
56 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
22. FINANCIAL INSTRUMENTS (continued)
Credit risk
The Co(cid:373)pa(cid:374)(cid:455)(cid:859)s (cid:373)a(cid:454)i(cid:373)u(cid:373) e(cid:454)posu(cid:396)e to (cid:272)(cid:396)edit (cid:396)isk at the (cid:396)epo(cid:396)ti(cid:374)g date was as detailed below:
Financial assets
Cash and cash equivalents
Trade, other receivables and deposits
Total financial assets
Impairment losses
Consolidated
2019
$
2018
$
6,256,548
2,815,514
116,210
2,417,103
9,072,062
2,533,313
At 30 June 2019 and 2018, 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 (cid:272)o(cid:374)solidated e(cid:374)tit(cid:455)(cid:859)s foreign currency denominated assets and liabilities at the
reporting date in Australian Dollars is as follows:
Australian Dollars
Liabilities
2019
$
985,538
2018
$
1,472,675
Assets
2019
$
4,489,371
2018
$
2,448,100
57 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
22. 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
IDR
Trade and other payables
SGD
IDR
Consolidated
2019
$
2018
$
6
633,152
436,067,036
6
3,922
315,973,210
35,073,169,150
25,533,048,944
5,000
9,708,899,498
5,000
15,531,069,788
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
2019
$
2018
$
90,399
(90,399)
(527)
527
260,512
(260,512)
534
(534)
(497)
497
97,506
(97,506)
Consolidated
2019
2018
90,399
(90,399)
(527)
527
260,512
(260,512)
534
(534)
(497)
497
97,506
(97,506)
58 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
23. EVENTS OCCURRING AFTER REPORTING DATE
The Company has announced the following changes of Board Directors composition:
- Mr Timothy Adams has resigned on 31 July 2019 as Interim Chief Executive Officer.
- Mr George Lloyd has appointed on 1 August 2019 as Chief Executive Officer.
24. 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
Total revenue
Segment result by geographical region
Australia
Africa
South East Asia
India
Total expenses
Segment result
2019
$
2018
$
569
-
-
-
569
492
-
-
-
492
2019
$
(1,009,790)
(659)
(929,671)
(592)
(1,940,712)
2018
$
(353,632)
(156)
(2,319,989)
(577)
(2,674,354)
(1,940,143)
(2,673,862)
Assets by geographical region
The location of segment assets by geographical location of the assets is disclosed below:
Australia
Africa
South East Asia
India
Total assets
2019
$
6,110,260
21,181
19,618,929
2
25,750,372
2018
$
200,840
21,337
16,246,009
2
16,468,188
59 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2019
24. SEGMENT INFORMATION (continued)
Liabilities by geographical region
The location of segment liabilities by geographical location of the liabilities is disclosed below:
Australia
South East Asia
Total liabilities
2019
$
(9,725,130)
(1,628,453)
(11,353,583)
2018
$
(1,995,842)
(2,184,871)
(4,180,713)
60 | 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 fi(cid:374)a(cid:374)(cid:272)ial state(cid:373)e(cid:374)ts, (cid:374)otes a(cid:374)d the additio(cid:374)al dis(cid:272)losu(cid:396)es i(cid:374)(cid:272)luded i(cid:374) the di(cid:396)e(cid:272)to(cid:396)s(cid:859) (cid:396)epo(cid:396)t desig(cid:374)ated
as audited, of the Company and of the consolidated entity are in accordance with the Corporations Act
2001, including:
(i)
(ii)
gi(cid:448)i(cid:374)g a t(cid:396)ue a(cid:374)d fai(cid:396) (cid:448)ie(cid:449) of the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s a(cid:374)d (cid:272)o(cid:374)solidated e(cid:374)tit(cid:455)(cid:859)s fi(cid:374)a(cid:374)(cid:272)ial positio(cid:374) as at
30 June 2019 and of their performance for the year ended on that date; and
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 2019.
On behalf of the Board
Misha Anthony Collins
Chairman
30 September 2019
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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
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 2019, 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, 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 2019 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the 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
opinion.
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 2019, the Group had cash and cash equivalents of
$6,256,548, net working capital deficiency of $4,120,396 and incurred a loss after income tax of $1,940,143.
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
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.
Liability limited by a scheme approved
under Professional Standards Legislation
Key Audit Matters
How the matter was addressed in the audit
Carrying Value of Mineral Exploration and
Evaluation Expenditure
As at 30 June 2019, Mineral Exploration and
Evaluation Expenditure totals $15,828,431 (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 (61% of
total assets);
Inter alia, our audit procedures
following:
included
the
i. Reviewing the directors’ assessment of the
carrying value of the exploration and evaluation
the veracity of
costs, ensuring
the data
presented and
that management have
considered the effect of potential impairment
indicators, commodity prices and the stage of
the Group’s projects against AASB 6;
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
ii. Evaluation of Group documents for consistency
with the intentions for continuing exploration
and evaluation activities particularly in relation
to the Sihayo Gold Project and corroborated
with
interviews with management. The
documents we evaluated included:
The assessment of significant judgements
made by management in relation to the
capitalised
evaluation
expenditure.
exploration
and
Minutes of the board and management;
Announcements made by the Group to the
Australian Securities Exchange; and
Reassessed
the discount rate, current
commodity prices in global markets, applied
to
the
the pre-existing NPV model of
Sihayo Gold Project and compared with the
updated DFS announced on the ASX;
iii. 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 2019, 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 15 to 19 of the directors’ report for the year
ended 30 June 2019.
In our opinion, the Remuneration Report of Sihayo Gold Limited for the year ended 30 June 2019 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 2019
ADDITIONAL SHAREHOLDER INFORMATION
The following additional information dated 31 August 2019 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
72
37
213
216
655
28,923
178,251
289,235
10,000,320
2,307,331,429
2,317,828,158
0.00%
0.01%
0.01%
0.43%
99.55%
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 90.85%.
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
NATIONAL NOM LTD
CITICORP NOM PL
DBS VICKERS SEC SINGAPORE
GOLDSTAR ASIA MINING RES
FATS PL
YAW CHEE SIEW
CAUDLE GAVIN ARNOLD
PT SARATOGA INVESTAMA
PETTERSSON BRADLEY JOHN
J P MORGAN NOM AUST LTD
LEONG CAROLINE
BUTLER DAVID ROBERT
PT TEKNOLOGI RISET GLOBAL
BJARNASON JON N + R E
STARKEY ANDREW PHILLIP
715,558,359
410,351,852
312,540,516
178,357,653
76,738,654
49,094,792
42,694,305
41,716,835
41,030,239
31,712,787
31,515,151
29,779,704
28,420,378
22,500,000
18,109,757
18,000,000
15,642,150
14,545,455
14,000,000
13,600,000
Total
2,105,908,587
%
30.87%
17.70%
13.48%
7.70%
3.31%
2.12%
1.84%
1.80%
1.77%
1.37%
1.36%
1.28%
1.23%
0.97%
0.78%
0.78%
0.67%
0.63%
0.60%
0.59%
90.85%
66 | P a g e
ADDITIONAL SHAREHOLDER INFORMATION
3.
SUBSTANTIAL SHAREHOLDERS
A(cid:374) e(cid:454)t(cid:396)a(cid:272)t f(cid:396)o(cid:373) the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s (cid:396)egiste(cid:396) of su(cid:271)sta(cid:374)tial sha(cid:396)eholde(cid:396)s is set out (cid:271)elo(cid:449):
Ordinary Shares Held
Name
PROVIDENT MINERALS PTE LTD
HSBC CUSTODY NOM AUST LTD
PT SARATOGA INVESTAMA SEDAYA, TBK
GOLDSTAR MINING ASIA
4.
VOTING RIGHTS
Number
Percentage
715,558,359
410,351,852
312,540,516
178,357,653
30.87%
17.70%
13.48%
7.70%
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.
67 | P a g e
SUMMARY OF TENEMENTS HELD BY THE GROUP
FOR THE YEAR ENDED 30 JUNE 2019
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
9(1)
75
11.06.04
11.06.04
10.06.25
10.06.25
582ha
621ha
0(2)
0(2)
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
0(2)
0(2)
0(2)
0(2)
0(2)
0(2)
0 (3)
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