Centrex Limited
ABN 97 096 298 752
Annual Report - 30 June 2023
Contents
Chairman’s Report
Managing Director’s Report
Mining Exploration Entity Annual Reporting Requirements
Directors’ Report
Lead Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
3
4
5
9
23
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26
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28
29
59
60
64
2
Chairman’s Report
Dear Shareholders
On behalf of Centrex Limited’s Directors and senior management I present the Company’s Annual Report for
the 2023 Financial Year.
The Company and management have experienced the numerous challenges of a small exploration company
transferring to production and this Annual Report reflects the financial changes in reporting.
As with numerous mining companies entering the production phase, cost controls are critical to ensure the
profitability and that is demonstrated by the Company’s results of operations disclosing a small gross profit for
the 2023 financial year. The Company is currently seeking long term project debt funding to address its cost of
production issues. The debt funding assignment has commenced with potential lenders presenting indicative
term sheets for consideration.
Recently in June 2023 I personally visited the mine site at Ardmore with the Managing Director Robert Mencel
to view all aspects of the mine operations. Pleasingly I can report a very orderly structured operation, and after
discussions with senior mine management I came away suitably impressed with the stable mine team who were
invested to advance the project in increased tonnage through put and in reducing production costs.
The long-term debt funding when successful will allow management to embark on project capital expenditure
the direct result of which will enable the Company to increase production and more importantly reduce costs.
Senior management have been involved in the debt funding assignment but also in addressing logistics and
operational issues to reduce cost of production. It is pleasing that the company has been able to retain senior
management through a difficult period which was helped by the prior introduction of an Employee Share
Performance Plan.
I wish to thank my fellow directors, employees and shareholders as the Company focuses on the Ardmore Rock
Phosphate Mine.
Kind Regards
Mr Peter Hunt
Chairman
3
Managing Director’s Report
During the Financial 2023 year, Centrex Limited successfully transitioned from an exploration/development company
into a production company.
Its focus was the profitable operation and growth of it’s 100% owned agricultural fertiliser company Agriflex Pty Ltd
(Agriflex). Agriflex achieved a number of key milestones.
In October 2022 Agriflex became the first producer of beneficiated high grade phosphate rock. Australia previously
imported 100% of its high-grade phosphate rock. A month later, Agriflex sold its first shipment to an overseas customer,
in the process establishing a new export industry for Australia.
In November 2022, Agriflex announced its “Stage 1.5” project as an interim project development stage. The Stage 1.5
project provides a near term, low capital, interim development stage, allowing production to increase to 625ktpa, at a
significantly lower capital cost per installed production tonne capacity compared to the original Feasibility Study. The
Stage 1.5 expansion is possible due to continuing strong demand for Ardmore phosphate and the performance of the
Ardmore beneficiation plant that has exceeded design throughput and metallurgical design performance criteria.
In February 2023 Agriflex announced that it had signed a binding transport and logistics service agreement with
Australia’s largest rail freight operator Aurizon for the provision of transport, storage and stevedoring services for
Ardmore beneficiated phosphate rock. The Transport and Logistics Agreement replaced the short-term agreement
that was executed in May 2022 with Aurizon.
In May 2023, the company announced that it had exported its first shipment of phosphate rock to a substantial customer
in South Korea. The shipment was sold to a substantial commercial fertiliser producer customer of Samsung C&T and
represented a further step forward in Agriflex realising its potential as a mass exporter of some of the highest quality
phosphate in the world.
For the year ahead the company’s primary focus remains Agriflex and the successful completion of AgriFlex’s Stage
1.5 project funding and its implementation. Once accomplished, the resulting increased production level and greater
efficiency will significantly reduce Ardmore’s operating costs.
Once Stage 1.5 Project funding is complete, Agriflex intends to increase production capacity to 625,000 tonnes per
annum. All environmental and mining approvals are in place to achieve this expansion. Based on having a year’s
worth of production data and the internal modelling completed to date, post Stage 1.5 Project construction, the
Company perceives the operating cost of production per tonne will range from $160-$180 AUD. The production
forecast, Stage 1.5 Project capital expenditure and projected operation cost is subject to funding.
During the planned Stage 1.5 Project construction program, the Ardmore operation will continue to operate and is
projected to produce and sell at least 55,000 tonnes of beneficiated phosphate rock over the next 6 months. The sales
will be skewed to the last calendar quarter in readiness for the Southern Hemisphere fertiliser production season.
Elsewhere, Centrex continues to investigate other long term development opportunities, including its 100% owned
Oxley Potassium Feldspar Project. In June 2023, the company reported that test work had successfully demonstrated
at lab scale the extraction of potassium from Oxley potassic feldspar via a hydrothermal hydroxide leach process path.
The hydrothermal process has the potential to lead to the production of high value potassium carbonate with further
potential to produce other byproducts. Further test work planned for the next 6 months is aimed at investigating the
process pathway. Once complete, the company expects to move towards a full scoping and pre-feasibility study.
On behalf of the Board, I would like to thank our all our employees for their contribution to Centrex throughout the year
and acknowledge the support of our suppliers and contractors who have played a significant role in the company’s
success to date.
Kindest regards
Mr Robert Mencel
Managing Director
4
Mining Exploration Entity Annual
Reporting Requirements
LIST OF TENEMENTS IN WHICH THE GROUP HAS AN INTEREST
TENEMENT LIST
AS AT 30TH JUNE 2023
Location
Licence
number
Description
Held by:
Queensland
ML 5542
Ardmore Phosphate Rock Mine
EPM 26551
Ardmore EPM 26551
EPM 26568
Ardmore EPM 26568
EPM 26841
Ardmore EPM 26841
EPM 28684
Duchess
Western Australia
E70/4318
Oxley C
E70/5976
Oxley
E70/5977
Oxley
E70/5978
Oxley
New South Wales
EL 7388
Goulburn
Northern Territory
ELA 32048
Northern Territory ELA 32048
AgriF1
AgriF1
AgriF1
AgriF1
AgriF1
CPot2
CPot2
CPot2
CPot2
LM3
CQld4
Interest
%
100
100
100
100
Application
100
100
100
100
100
Application
Wholly owned subsidiaries of Centrex Limited:
1 Agriflex Pty Ltd
2 Centrex Potash Pty Ltd
3
Lachlan Metals Pty Ltd
4 Centrex QLD Exploration Pty Ltd
5
ANNUAL REVIEW OF MINERAL RESOURCES AND ORE RESERVES
The information included in the tables below was prepared in accordance with the JORC Code 2012. The
Group confirms that it is not aware of any new information or data that materially affects the information included
in the table and that all material assumptions and technical parameters underpinning the estimates continue to
apply and have not changed.
PHOSPHATE ORE MINERAL RESOURCES BY AREA
AS AT 30TH JUNE 2023
Location
Resource
Classification
Tonnage
(Mt)
Ardmore
Phosphate Rock
Mine
Measured
Indicated
Inferred
Total
3.0
11.1
1.7
15.8*
* Totals may not add precisely due to rounding.
Head Grade
P2O5 (%)
Cut-off grade P2O5 (%)
29.8
27.4
26.8
27.8
16.0
16.0
16.0
16.0
PHOSPHATE ORE RESERVE ESTIMATE
AS AT 30TH JUNE 2023
Ore Reserve Category
Probable
Proven
Total Ore Reserves
* Totals may not add precisely due to rounding.
Tonnage
(Mt)
7.3
2.5
9.8*
P2O5 (%)
30.2
30.3
30.2
POTASSIUM ORE MINERAL RESOURCES BY AREA
AS AT 30TH JUNE 2023
Location
Resource
Classification
Tonnage
(Mt)
Oxley
Potassium
Project
Measured
Indicated
Inferred
Total
-
-
154.7
154.7
Head Grade
K2O (%)
Cut-off grade K2O (%)
-
-
8.3
8.3
-
-
6.0
6.0
6
COMPARISON OF ANNUAL MINERAL RESERVES AND RESOURCES STATEMENT
TO THE PRIOR YEAR
The table below summarises the changes that took place as far as the Group’s mineral resources and reserves
are concerned. The information contained in this table should be read in conjunction with the detailed resource
and reserve information provided above.
Location
Phosphate
Ardmore
Ardmore
Potassium
Oxley
Resource
or
Reserve
Tonnage (Mt)
30/6/2023
30/6/2022
Notation
Resource
Reserve
15.8*
9.8*
16.2
10.1
Mining depletion
Mining depletion
Resource
154.7
154.7
No change.
* Totals may not add precisely due to rounding.
SUMMARY OF GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS IN
PLACE FOR THE REPORTING OF MINERAL RESOURCES AND ORE RESERVES
Mineral Resources and Ore Reserves are estimated by suitably qualified consultants in accordance with the
JORC Code, using industry standard techniques and internal guidelines for the estimation and reporting of Ore
Reserves and Mineral Resources. These estimates and the supporting documentation are then reviewed by
suitably qualified Competent Persons from the Group.
All Ore Reserve estimates are prepared in conjunction with feasibility studies which consider all material
factors.
The Mineral Resources and Ore Reserves Statements included in the Annual Report are reviewed by suitably
qualified Competent Persons from the Group prior to its inclusion.
CROSS REFERENCING OF THE RESOURCES ANNOUNCMENTS
For more detail regarding the Oxley resources please see the announcement of 8th March 2016.
http://www.asx.com.au/asxpdf/20160308/pdf/435nrchjm48mjx.pdf
For more detail regarding the Ardmore resources please see the announcement of 1st June 2018.
https://www.asx.com.au/asxpdf/20180601/pdf/43vgxdjlpsgcwb.pdf
For more detail regarding the Ardmore reserves please see the announcement of 8th October 2018.
https://www.asx.com.au/asxpdf/20181008/pdf/43z1q8nvm95k58.pdf
7
COMPETENT PERSONS & FORWARD-LOOKING STATEMENTS
The information in this report relating to Exploration Results (contained in the Managing Director’s report) is based
on information either compiled or reviewed by Mr Alastair Watts who is a Member of the Australasian Institute of
Mining and Metallurgy. Mr Watts is the General Manager Exploration of Centrex Limited. Mr Watts has sufficient
experience, which is relevant to the style of mineralization and type of deposit under consideration and to the activity,
which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Watts consents to the inclusion in
the report of the matters based on his information in the form and context in which it appears.
The information in this report relating to the Mineral Resources of the Oxley Potassium Project is based on and
accurately reflects information compiled by Ms Sharron Sylvester of OreWin Pty Ltd, who is a consultant and adviser
to Centrex Limited and who is a Member of the Australian Institute of Geoscientists (RPGeo). Ms Sylvester has
sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity
she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Ms Sylvester consents to the inclusion in
the report of the matters based on this information in the form and context in which it appears.
The information in this report relating to Mineral Resources of the Ardmore Phosphate Rock Project is based on and
accurately reflects information compiled by Mr Jeremy Clark of Lily Valley International Limited, who is a consultant
and adviser to Centrex Limited and who is a Member of the Australian Institute of Geoscientists and AusIMM. Mr
Clark has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to
the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Clark consents to the inclusion
in the report of the matters based on this information in the form and context in which it appears.
The information in this report that relates to Ore Reserves is based on information compiled by Mr Ben Brown, a
Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Ben Brown is employed
by Optima Consulting and Contracting Pty Ltd, an external independent consultancy. Ben Brown has sufficient
experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Ben Brown consents to the inclusion in the
report of the matters based on his information in the form and context in which it appears.
Past and future performance –Forward-looking statements generally relate to current expectations, hopes, beliefs,
intentions, strategies or productions about future events or Centrex's future financial or operating performance. For
example, statements regarding anticipated growth in the industry in which Centrex operates and anticipated growth
in demand for Centrex's products and services, projections of Centrex's future financial results and other metrics are
forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as
"pro forma", "may", "should", "could", "would", "might", "plan", "possible", "project", "strive", "budget", "targets",
"aims", "outlook", "guidance", "forecast", "expect", "intend", "will", "estimate", "anticipate", "believe", "predict",
"potential" or "continue", or the negatives of these terms or variations of them or similar terminology, but the absence
of these words does not mean that a statement is not forward-looking. Such forward-looking statements are subject
to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed
or implied by such forward-looking statements. These forward looking statements are provided as a general guide
only and should not be relied upon as an indication or guarantee of future performance and may involve known and
unknown risks, uncertainties and other factors, many of which are outside the control of Centrex. You are cautioned
not to place undue reliance on any forward looking statement. Forward looking statements in this Announcement
are based on assumptions and contingencies which are subject to change without notice. Actual results,
performance or achievements may vary materially from any forward looking statements and the assumptions on
which statements are based. The forward looking statements in this Announcement are based on information
available to Centrex as at the date of this Announcement and nothing in this Announcement should be regarded as
a representation by any person that the forward-looking statements set forth herein will be achieved or that any of
the contemplated results of such forward-looking statements will be achieved. Except as required by law or
regulation, Centrex its related bodies corporate and their respective officers, employees and advisers disclaim any
obligation or undertaking to provide any additional or updated information whether as a result of new information,
future events or results or otherwise.
8
Directors’ Report
For the Year Ended 30th June 2023
The Directors present their report together with the consolidated financial report of Centrex Limited
(“Company”) and its controlled entities (“Group”), for the financial year ended 30th June 2023 and the auditor’s
report thereon.
Section
Contents of Directors’ Report
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Directors and the Company Secretary
Executives considered to be Key Management Personnel
Directors’ Meetings
Corporate Governance Statement
Principal Activity
Operating and Financial Review
Remuneration Report (audited)
Dividends
Events subsequent to year end
Likely Developments
Indemnification and insurance of Directors and Officers
Environmental Regulation and Performance
Material Business Risks
Non-audit services
Lead Auditor’s Independence Declaration
9
1. Directors and the Company Secretary
1.1 Directors
The directors in office at any time during or since the end of the financial year are:
Name and Qualifications Position, Experience and special responsibilities
Mr Peter Hunt
Chairman – Non-executive Director – Independent
FCA
Appointed 15/12/20
Chairman since 30/06/21
Mr Hunt was appointed initially as a Non-Executive Director of the Company on
15 December 2020. He was a former consultant to BDO Australia, which
acquired PKF Adelaide of which Mr Hunt was senior partner in 2012. He is a
member of the Chartered Accountants Australia & New Zealand.
Mr Hunt is an experienced company director and has been a director and chairman
over several decades of a number of ASX listed mineral exploration and
technology-oriented companies.
Mr Hunt is a member of the Company’s Remuneration and Nomination Committee
and Audit and Risk Committee.
In the three years prior to 30 June 2023, Mr Hunt held no other positions with any
other ASX listed companies.
Mr Robert Mencel
Managing Director – Executive Director
B Eng(Mining) MBA
Appointed CEO 24/05/21
Appointed MD 01/09/21
Mr Mencel is an engineering and mining executive with more than 25 years’
experience developing and operating a wide range of mining, mineral processing
and engineering operations. Previously he held the position of CEO for RONPHOS
Corp., the Republic of Nauru’s Phosphate company, where he was responsible for
production, marketing and export of phosphate to customers throughout Asia and
the Indian Pacific region.
Mr Mencel brings significant senior managerial experience to the role at Centrex,
having held the position of Managing Director/CEO of various ASX listed
companies in the energy and resource sector.
In the three years before 30 June 2023, Mr Mencel held no director positions with
any other ASX listed companies.
Mr Graham Chrisp
Non-executive Director – Not Independent
B Tech (CE)
Appointed 21/1/10
Executive Chairman
2/12/19 – 30/06/21
Remains a Non-Executive
Director
Mr Chrisp has a degree in Civil Engineering and has substantial experience in
numerous aspects of business operations, including design and construction of
roads and other earthworks, mineral exploration and property development. Having
previously been an owner and operator of earth moving equipment for mining and
civil applications, Mr Chrisp has practical experience with modest scale mining
operations, including several of his own developments. He was a founding director
of Centrex Limited (having previously served as its CEO from 2003 to 2005) and
has numerous private interests.
Mr Chrisp is a director of Dapop Pty Ltd, trustee of the Chrisp CXM Family Trust,
which is the largest shareholder in the Company. In addition, Mr Chrisp is
Managing Director of Australian New Zealand Resources Corporation Pty Ltd, who
through the Chrisp Family Trust is the Company’s second largest shareholder.
Accordingly, Mr Chrisp is not considered to be “independent” for the purposes of
the Company’s corporate governance policies.
Mr Chrisp is a member of the Company’s Remuneration and Nomination
Committee and Audit and Risk Committee.
In the three years before 30 June 2023, Mr Chrisp held no director positions with
any other ASX listed companies.
10
Dr A John Parker
Non-Executive Director – Independent
BSc (Hons).PhD,
DipCompSc, MAIG,
MAICD
Appointed 17/12/19
Dr Parker is a geologist, geophysicist and manager with extensive local and
international experience and knowledge of the geology, mineral deposits and
mineralizing systems in the Precambrian. He was formerly Chief Geologist with
the mapping branch of the South Australian Geological Survey and in the late
1980’s he initiated the first geological mapping GIS in Australia, a system that has
subsequently been developed to become the global leading GIS, SARIG. He was
formerly Managing Director of Lincoln Minerals Limited and is a member of the
Australian Institute of Geoscientists and the Australian Institute of Company
Directors.
Dr Parker is a member of the Company’s Remuneration and Nomination
Committee and the Audit and Risk Management Committee.
In the three years before 30 June 2023, Dr Parker held no director positions with
any other ASX listed companies.
1.2 Company Secretary
Dr John Santich was appointed on the 6th September 2023. Dr Santich is a lawyer and engineer with decades
of experience in mining, geoscience and corporate law. He has been a director and secretary of listed
exploration, mining and technology companies and is a principal of a specialist resources and technology legal
firm. Dr Santich had an academic career in Australia, France and the USA, working in several capacities in
engineering and law, including researcher and lecturer. In Australia as a lawyer he has worked with government
and the private sector, establishing and directing a number of listed exploration, mining and technology
companies. With a lifetime of application in the resources industry, he has broad experience in the formulation
of policy and in corporate and legal matters and in the formation and establishment of businesses.
The outgoing Company Secretary, Mr Jonathan Lindh, was appointed Company Secretary on 29th March 2021
and resigned on 6th September 2023.
11
2. Executives considered to be Key Management Personnel (KMP)
The executive considered to be Key Management Personnel in office at any time during or since the end of the
financial year are:
Mr Brian Hall, General Manager, Ardmore Rock Phosphate Mine
DipBs(Front Line Management), DipBs(Surface Operations Management), Dip (Management), Site Senior Executive
(SSE Certificate)
Mr Brian Hall, appointed 1st December 2021, has been in mining for over 35 years, coming from a dual trade
background, having worked in Iron Ore, Gold, Laterite Nickel, Tin and Phosphate mining in Australia and Nauru.
Mr Hall has worked in all levels of the mining structure, from trades to Dept Manager to General Manager roles.
He was the Registered Manager and Maintenance Manager for Mt Gibson Mining, Maintenance Manager for
Bluestone Tin, Maintenance Manager for RONphos Phosphate Corporation, Registered Manager and
Maintenance and Engineering Manager for Litcho Bald Hill Lithium operations. Mr Hall holds diplomas in
Surface Operations Management, Management and Front-line Management.
Mr Alastair Watts, General Manager, Exploration (Ceased to be a KMP during the year)
3. Directors’ Meetings
The number of directors’ meetings and number of meetings attended by each of the directors of the Group
during the year ended 30th June 2023 was:
Board Meetings
Audit and Risk
Management Committee
Meetings
Remuneration and
Nomination Committee
Eligible to
Attend
Number
Attended
Eligible to
Attend
Number
Attended
Eligible to
Attend
Number
Attended
12
12
12
12
12
12
12
10
2
2
2
2
2
2
2
2
-
-
-
-
-
-
-
-
Mr P Hunt
Mr R Mencel
Mr G Chrisp
Dr J Parker
4. Corporate Governance Statement
The Board is committed to the principles underpinning best practice in corporate governance. The Company
must comply with the ASX Listing Rules which require it to report annually on the extent to which it complied
with the Corporate Governance Principles and Recommendations 4th Edition (“Principles”) as published by the
ASX Corporate Governance Council. The Board believes that the Company has complied with the Principles
for the current reporting period unless otherwise stated in the Appendix 4G and Corporate Governance
Statement which is lodged on the Company announcements platform at the same time as the annual report.
A description of the Company’s main corporate governance practices is available on the Company’s website
located at:
https://www.centrexlimited.com.au/governance/
12
5. Principal Activities
The principal activity of the Group during the reporting period was phosphate rock production and exploration
on the following areas:
•
•
•
•
Phosphate Rock mining at the Ardmore Project in Queensland;
Potash exploration in Western Australia;
Base metals exploration in New South Wales and
Exploration for additional phosphate resources.
During the period the Company commenced production and export of high-grade beneficiated concentrate at
the Company’s flagship Ardmore Phosphate Rock Mine in Queensland.
6. Operating and Financial Review
A review of the operations of the Group during the year and the results of those operations are as follows:
The net (loss) for the reporting year, after providing for income tax was:
2023
$
2022
$
Net loss after income tax
(9,548,243)
(21,654,584)
The net loss for the 2022 financial year is inclusive of a once off expense totalling $18.934M relating to the
remeasurement to fair value of the convertible note on issue immediately prior to its exercise into ordinary
shares. Pursuant to the terms of the convertible note, the note converted to 59,545,454 shares with 59,545,454
attaching options. Given the material movement in the share price of the Company since the convertible note
was issued, the fair value uplift of the note was a significant accounting transaction included in the loss for the
year.
Further information on the Group’s operating activities can be found in the Managing Director’s Report.
13
7. Remuneration Report - audited
7.1 Principles of compensation
•
The remuneration report provides details of the
remuneration of the Company’s directors and the
executives identified as those who had authority for
planning, directing and controlling the Company’s
activities during
(“Key
Management Personnel”).
reporting period
the
for
remuneration packages
the key
Total
management personnel of
the Group are
competitively set to attract and retain appropriately
qualified and experienced people.
The
Remuneration and Nomination Committee assists
the Board in setting remuneration strategy.
Non-Executive Directors
Total compensation for all Non-Executive Directors,
pursuant to the constitution must not exceed
$500,000 per annum.
For the year ended 30th June 2023, the Non-
Executive Directors’ compensation comprised
Directors’ base fees of $54,545 per annum (2022:
$54,545 per annum) for the Chairman and $45,455
per annum (2022: $45,455 per annum) for the other
Non-Executive Directors.
Superannuation is paid on behalf of the Non-
Executive Directors as is legislated. Where the
Company engages a director as a consultant the
that would
value of superannuation benefits
otherwise have been payable are paid as additional
fees.
Managing Director and other key management
personnel
Remuneration packages for the Managing Director
and other Key Management include a mix of fixed
The variable
and variable compensation.
compensation uses short and long term incentives.
The remuneration packages take into account
market practice of comparable organisations within
industry and reflect capability, role and
the
experience of each executive.
fixed
component
remuneration
The
(cash,
superannuation and fringe benefits) is currently set
by utilising
industry surveys with particular
reference to the practices of companies in the
lowest quartile of the survey (i.e. those with a similar
market capitalisation and with a similar sized
Total remuneration (base salary
workforce).
packages and variable remuneration) provides the
opportunity for executives to reach compensation
levels in the next quartile as outlined within the
industry surveys through the following variable
awards:
•
the Short Term Incentive (“STI”) Plan, which
awards a cash bonus of between 0% and 20%
14
of fixed remuneration subject to individual and
Company targets being met; and
the Long Term Incentive (“LTI”) Plan, under
which the executive may be granted incentive
rights, some of which vest after an extended
period of continuous employment (Retention
Rights),
vesting after an
assessment of performance (Performance
Rights).
the others
In the 2022 financial year Mr Robert Mencel was
awarded 3 Million Performance Rights (over 3
tranches) as approved at the 2021 AGM.
Following their issue in 2022, the 1,000,000
performance rights (Tranche 1) vested and were
exercised into the equivalent number of ordinary
shares after meeting the following Performance
Conditions.
(a) 500,000 vesting upon a continuous period of
employment of 12 months with the Company;
(b) 100,000 vesting upon completion of an update
the 2018 Ardmore Project Definitive
of
Feasibility Study;
(c) 100,000 vesting upon securing direct application
phosphate rock sales to 3 or more customers;
(d) 200,000 vesting upon securing 2 or more
sales/marketing agreements for future Ardmore
Project production; and
(e) 100,000 vesting upon the Company completing
a successful capital raise of $2m or more.
In the 2023 financial year 1,000,000 performance
rights (Tranche 2) vested after meeting the following
Performance Conditions:
(a) 500,000 vesting upon a continuous period of
employment of 24 months with the Company;
(b) 300,000 vesting upon shipment of more than
20,000t in trial shipments for Ardmore;
(c) 200,000 vesting upon completion of FEED for
625ktpa process plant for the Ardmore Project.
1,000,000 Performance Rights (Tranche 3), with the
performance period being the financial year ending
2024:
(a) 250,000 vesting upon a continuous period of
employment of 36 months with the Company;
(b) 350,000 vesting upon completing of financial
closure for the construction and operation of a
625kt pa Process Plant;
(c) 400,000 vesting upon 80% of production at the
Ardmore Project allocated by sales/marketing
agreements or off take agreements.
The fair value of the share-based payments was
determined using appropriate valuation techniques
as at the grant date.
Service agreements
Robert Mencel, Managing Director
Mr Mencel was appointed Chief Executive Officer
(CEO) on 24th May 2021 and Managing Director on
1st September 2021. On the 1st June 2022 Mr
Mencel’s total annual fixed remuneration was
$450,000 plus statutory superannuation. On the
24th May 2023 Mr Mencel’s total annual fixed
remuneration was increased to $500,000 plus
statutory superannuation.
Mr Mencel’s employment with the company may be
terminated with three months written notice.
Other Key Management Personnel
Mr Brian Hall - General Manager – Ardmore Rock
Mr Alastair Watts - General Manager Exploration.
As noted Mr Watts ceased being a KMP in 2023.
Service Agreements
salary
Mr Hall’s employment contract outlines an annual
fixed
statutory
superannuation. Mr Hall’s employment with the
company may be terminated with three months
written notice subject no misconduct or dishonesty.
$300,000
plus
of
Consequences of performance on shareholder wealth
Any variable components of the Company’s executives’ remuneration (the short and long-term incentives) seek
to encourage alignment of management performance and shareholders’ interests by linking remuneration to
performance of the Company as a whole.
Any award of any short term or long-term incentive is always at the discretion of the Board which will also take
into account the following indices when assessing performance, although the Board acknowledges that as an
exploration company the use of such indices does not fully reflect Company performance.
Loss attributable to owners of
the company
2023
2022
2021
2020
2019
(9,548,243)
(21,654,584)
(2,626,637)
(19,820,532)
(1,384,316)
Dividends paid (per share)
-
-
-
-
-
Share price at 30 June
$0.14
$0.15
$0.05
$0.03
$0.11
15
Remuneration of Key Management Personnel (KMP) (Consolidated)
Details of the nature and amount of each major element of remuneration of each of the KMP are:
Salary
& fees
Non-
monetary
benefits
Super-
annuation
benefits
Share-based
payments (1)
Note 24
Total
Options /
Rights
related
$
$
$
$
$
%
Directors
Mr P Hunt
Chairman
Mr G Chrisp.
Non-executive
Mr A J Parker
Non-executive
Mr R Mencel
Managing Director
Total compensation: Directors
Executives
Mr A Watts(2)
GM Exploration
Mr Brian Hall (3)
GM Ardmore
Total compensation: executives
Total compensation: KMP
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
60,000
52,819
45,455
41,970
45,455
41,970
455,253
395,000
606,163
531,759
-
196,061
281,896
-
281,896
196,061
888,059
727,820
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,773
4,197
4,773
4,197
27,500
27,500
37,046
35,894
-
19,607
29,599
-
29,599
19,607
66,645
55,501
121,500
181,500
66.94
-
52,819
-
101,250
151,478
66.84
-
46,167
-
101,250
151,478
66.84
-
46,167
407,000
889,753
83,000
505,500
731,000
1,374,209
83,000
650,653
-
45.74
16.42
-
-
-
215,668
-
-
159,039
470,534
33.80
-
-
-
159,039
470,534
-
215,668
890,039
1,844,743
83,000
866,320
(1) In accordance with the requirements of the Accounting Standards, remuneration includes a proportion of the value of the equity linked compensation
determined as at the grant date and progressively expensed over the vesting period. The amount allocated as remuneration is not relative to or indicative
of the actual benefit (if any) that the senior executives may ultimately realise should the equity instruments vest.
(2) From 1 July 2022 Mr Watts ceased being a KMP.
(3) From 1 July 2022 Mr Hall became a KMP.
Key Management Personnel Holding of Shares:
The movement during the reporting period in the number of ordinary shares in Centrex Limited held, directly, indirectly or
beneficially, by each key management person, including their related parties, is as follows:
Opening
Balance
Number
Purchased/
Issued
Issued on
Vesting
Ceased as
KMP
Number
Sold
Closing
Balance
Mr Peter Hunt
Graham Chrisp (i)
Dr A J Parker
Mr Robert Mencel
(ii)
Mr Alastair Watts
(iii)
Mr Brian Hall
(iv)
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
-
-
170,451,126
110,905,672
-
-
1,111,905
100,000
1,176,190
200,000
-
-
200,000
-
59,545,454
-
-
1,011,905
-
976,190
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,176,190
)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200,000
-
170,451,126
170,451,126
-
-
1,111,905
1,111,905
-
1,176,190
-
-
(i)
(ii)
(iii)
(iv)
Shares are held by Dapop Pty Ltd and Australia New Zealand Resources Corporation Pty Ltd both are entities associated
with Mr Graham Chrisp. The movement of 59,545,454 shares during the year related to the conversion of the convertible note as previously approved
by shareholders. Refer to note 25 for more detail.
Shares are held by Mrs Georgina Mencel and Mr Robert John Mencel an entity associated with Mr Robert Mencel. The
movement of 1,011,905 shares represents the exercise of 1,000,000 performance rights to shares with the remaining 11,905 shares acquired
through participation in the Company’s 2022 Pro Rata Rights Issue.
During the period Mr Watts ceased being a KMP.
During the period B Hall commenced as a KMP.
Key Management Personnel Holding of Performance Rights:
The number of performance rights issued during the current and prior years which has been recognised as Director and Key
Management Personnel remuneration is shown below:
30th June 2023
Holding at
30th Jun
2022
Issued
Exercised
(E) or
Lapsed (L)
Holding at 30th
Jun 23
Vested but
unexercised
Unvested
2023 Performance Rights
Mr Robert Mencel
2,000,000
-
Mr Brian Hall
Total
-
-
2,000,000
2,000,000
-
-
-
2,000,000
1,000,000
1,000,000
2,000,000
666,667
1,333,333
2,000,000
1,000,000
1,000,000
Mr Robert Mencel Performance Rights:
During the year ended 30 June 2023, the second tranche of performance conditions were met but remain unexercised.
Tranche 2, 1,000,000 Performance Rights with a performance period of the financial year ending 2023
(a) 500,000 vesting upon a continuous period of employment of 24 months with the Company;
(b) 300,000 vesting upon shipment of more than 20,000t in trial shipments for Ardmore;
(c) 200,000 vesting upon completion of FEED for 625ktpa process plant for the Ardmore Project.
Tranche 3, 1,000,000 Performance Rights with a performance period of the financial year ending 2024
(a) 250,000 vesting upon a continuous period of employment of 36 months with the Company;
(b) 350,000 vesting upon completing of financial closure for the construction and operation of a 625kt pa Process Plant;
(c) 400,000 vesting upon 80% of production at the Ardmore Project allocated by sales/marketing agreements or off take
agreements.
17
Mr Brian Hall Performance Rights:
The performance criteria is as follows for the Performance Rights issued in the period:
Tranche 1: Performance Rights
Vesting performance condition:
(a) 100% vesting upon a continuous period of employment of 12 months with the Company
Performance vesting period: Financial year ending 2023
Tranche 2: Performance Rights
Vesting performance condition:
(a) 50% vesting upon a continuous period of employment of 24 months with the Company;
(b) 30% vesting upon successful completion of production, export and sale of more than 125,000t of phosphate
rock/concentrate in FY24 at the Ardmore Phosphate mine;
(c) 20% vesting upon the successful completion of the 800ktpa FEED study for the Ardmore Phosphate Project.
Performance vesting period: Financial year ending 2024
Tranche 3: Performance Rights
Vesting performance condition:
(a) 25% vesting upon a continuous period of employment of 36 months with the Company;
(b) 50% vesting upon successful completion of production, export and sale of more than 250,000t of phosphate
rock/concentrate in FY25 at the Ardmore Phosphate mine;
(c) 25% vesting upon the successful completion of FID for the 800ktpa plant at the Ardmore Phosphate Project.
Performance vesting period: Financial year ending 2025
Key Management Personnel Holding of share options:
30th June 2023
2023 Unlisted Options
Mr Graham Chrisp (i)
Total
2023 Unlisted Directors Options (ii)
Mr Peter Hunt
Mr Graham Chrisp
Dr A J Parker
Mr Robert Mencel
Total
Holding at 30th
Jun 2022
Issued
Note 24
Exercised (E)
or Lapsed (L)
Holding at 30th
Jun 23
59,545,454
59,545,454
-
-
-
-
-
-
-
1,500,000
1,250,000
1,250,000
4,000,000
8,000,000
-
-
-
-
-
-
-
59,545,454
59,545,454
1,500,000
1,250,000
1,250,000
4,000,000
8,000,000
(i)
On the 1st April 2022 the Company advised the market upon that a notice of conversion was received from the convertible
note holder. At that time the company converted the convertible note (including all capitalised interest on the convertible
note) into 59,545,454 ordinary shares and 59,545,454 free attaching options in accordance with it’s terms. The
movement in options during the period reflects the free attaching options which all have an exercise price of $0.05 per
option and an expiry date of 31st December 2023.
(ii)
At the 2022 AGM, shareholders approved the issue of 8 million options to the directors which vested on issue.
Other related party transactions:
During the 2021 year, Centrex entered into a convertible securities agreement with Australia New Zealand Resources
Corporation Pty Ltd (a director related entity of Graham Chrisp). The effective date of the note was 2 June 2021 being the
date the convertible note was issued and the face value of $1,000,000 was received. The interest rate was 12% per annum
which accrues and compounds on the first day of each calendar month.
On the 1st April 2022 the Company advised the market upon that a notice of conversion was received from the convertible
note holder. The company converted the convertible note (including all capitalised interest outstanding) into 59,545,454
18
ordinary shares and 59,545,454 attaching options in accordance with it terms as approved by shareholders at the Company’s
2021 AGM. The total fair value at the date of conversion was $18.934 million.
Total interest paid or payable on the convertible note held by a related party of Mr Chrisp for the year ended 30 June 2022
was $340,000 of which $30,000 was paid in cash.
Other than transactions as detailed in Note 18 to the financial statements, no director has received or become entitled to
receive, during or since the end of the reporting year, a benefit because of a contract made by the Group or a related body
corporate with a director, a firm of which a director is a member or a Company in which a director has a substantial financial
interest.
End of audited remuneration report.
8. Dividends
No dividends were declared during the year or prior year.
9. Events subsequent to year end
On 3rd July the Company signed a binding offtake agreement with Ravensdown for up to 20% of production. The offtake
agreement is for a term of 2.5 years to purchase 15KT of phosphate in the first year with the subsequent years allocations to
be mutually agreed.
On the 16th August the Company signed an agreement to take first steps towards commencement of exploration on Banaba
Island. The Company has entered into a binding agreement with the Rabi Council of Leaders, the appointed representative of
the official traditional owners of Banaba Island (‘Banaba’), to explore the feasibility of mining the remanent phosphate rock on
the Pacific island of Banaba. If the project proceeds, Centrex’s plans include the expected delivery of extensive rehabilitation
projects and initiatives to improve environmental and socio-economic conditions on the island which were impacted by previous
mining activity.
On the 23rd August the Company announced that it had completed a $4.25M placement and launched a Share Purchase Plan.
The placement resulted in the issue of 47,222,222 shares at $0.09 on the 30th August. On the 25th September the Company
announced the results of the Share Purchase Plan, which raised a total of $0.182M issuing 2,016,666 shares at $0.09 on the
28th September.
On the 29th August the Company issued 42,312 shares as a result of exercise of unlisted options at $0.05.
On the 7th September Dr John Santich was appointed as company secretary of the Company. Dr Santich replace Mr Jonathan
Lindh who tended his resignation to concentrate on his private legal practise.
On the 12th September the Company issued 7,088,461 share as a result of performance rights exercised.
10. Likely Developments
During the period the Company commenced production and export of high-grade beneficiated concentrate at the Company’s
flagship Ardmore Phosphate Rock Mine in Queensland.
It is noted however, that next advancement of the Ardmore Phosphate Rock Mine is subject to sufficient finance being raised.
The Company continues to make further progress with its debt finance and is in advanced discussions with a number of parties
and will keep the market updated in accordance with its continuous disclosure obligations.
The Directors have assessed the status of all of the Group’s remaining tenements and believe all tenements have sufficient
mineral potential to warrant continued exploration.
19
11. Indemnification and insurance of Directors and Officers
Directors’ and Officers’ Liability Insurance has been secured to insure the Directors, officers and senior executives of the
Group to the extent permitted by the Corporations Act 2001. The officers of the Company and the Group covered by the
insurance policy include any person acting in the course of duties for the Company or the Group who is or was a Director,
secretary or senior executive. The contract of insurance prohibits the disclosure of the nature of the insurance covered and
the amount of the premium.
The Company’s constitution provides that the Company indemnifies every person who is or has been an officer of the
Company for any liability (other than for legal costs) incurred by that person as an officer of the Company and any subsidiary
of the Company. The Company has entered into deeds of access, insurance and indemnity with the current Directors of the
Company. The agreements indemnify the Directors to the extent permitted by law against certain liabilities and legal costs
incurred by the Directors; require the Company to maintain and pay Directors’ and Officers’ Liability Insurance in respect of
the Director; and provide the Director with access to board papers and other documents.
12. Environmental Regulation and Performance
The Group is aware of its responsibility to impact as little as possible on the environment, and where there is any disturbance,
to rehabilitate sites. During the period under review the majority of work carried out was on Ardmore Phosphate Rock Project
in NW Queensland and the Group followed procedures and pursued objectives in line with requirements published by the
relevant regulators including the Department of Environment and Science, the Department of Natural Resources, Mines and
Energy and the Department of Aboriginal and Torres Strait Islander Partnerships.
The requirements from the relevant government departments are quite detailed and encompass the impact on owners and
land users, heritage, health and safety and proper restoration practices. The Group supports this approach and is confident
that it properly monitors and adheres to these objectives, and any local conditions applicable. The Group and its partner
companies have individuals with detailed job responsibilities in this area.
The Board is not aware of any significant environmental breaches during the period covered by this report.
13. Material Business Risks
The material business risks for the group include:
Foreign exchange and commodity price
The financial results and position of the Group are reported in Australian dollars. Phosphate Rock Concentrate is sold
principally based on a United stated Dollar (USD) price. Accordingly, the Group’s revenues are linked to both the USD
commodity price and AUD/USD exchange rate. Volatility in the Phosphate Rock market creates revenue uncertainty and
requires careful management to ensure that operating cash margins are maintained should there be a sustained fall in the
Phosphate Rock price. Phosphate Rock is not a commodity for which hedging or derivative transactions can be used to
manage commodity price risk.
Costs
Production, cost and capital estimates: The Group prepares estimates of future production, operating costs and capital
expenditure relating to production at its operations. The ability of the Group to achieve production targets or meet operating
and capital expenditure estimates on a timely basis cannot be assured. The future production and costs of the Group are
subject to uncertainty for a variety of reasons, including:
•
•
•
variances in actual ore mined due to varying estimates of grade, tonnage, dilution, metallurgical and other
characteristic; revisions of mine plan;
the next advancement of the Ardmore Phosphate Rock Mine Stage 1.5 is subject to sufficient finance being raised;
changing ground conditions; labour availability and costs; diesel costs; and general inflationary pressures being felt
across the industry.
Failure to achieve production, cost or capital estimates, or material increases to costs, could have an adverse impact on the
Group’s future cash flows, profitability and financial condition. The development of estimates is managed by the Group using
a budgeting process. Actual results are compared with budgets to identify drivers behind discrepancies which may result in
updates to future estimates.
20
Operating risks and hazards
The Group’s operations, consisting of shallow open pit strip mining and site construction activities involve a degree of risk.
The Group’s operations are subject to all the hazards and risks normally encountered in the exploration, development,
construction, and production phase of an operation. This level of operations is subject to hazards such as equipment failure,
loss of power, fast moving heavy equipment, water, and tailings infrastructure such as retaining dams, rain and seismic events
which may result in environmental pollution and consequent liability. The impact of these events could lead to disruptions in
operations and scheduling, increased costs, and loss of facilities, which may have a material adverse impact on the group’s
results of operations, financial condition, license to operate and prospects. These risks are managed by a structured
operational risk management framework, experienced employees and contractors and formalised procedures. The Company
also has a comprehensive insurance program in place.
Ore reserves and mineral resources
The Group’s estimates of Mineral Resources and Ore Reserves are based on different levels of geological confidence and
different degrees of technical and economic evaluation, and no assurance can be given that anticipated tonnages and grades
will be achieved, that the indicated level of recovery will be realised or that Ore Reserves could be mined or processed
profitably. The quality of any Mineral Resources and Ore Reserves estimate are a function of the quantity of available technical
data and of the assumptions used in engineering and geological interpretation and modifying factors affecting economic
extraction. Such estimates are compiled by experienced and appropriately qualified personnel and subsequently reported by
Competent Persons under the JORC Code. Fluctuation in Phosphate Rock prices, key input costs to production, as well as
the results of additional drilling, and the evaluation of reconciled production and processing data subsequent to any estimate
may require revision of such estimates.
Actual mineralisation of ore bodies may be different from those predicted, and any material variation in the estimated Ore
Reserves, including metallurgy, grade, dilution, ore loss, or stripping ratio at the group’s properties may affect the economic
viability of its properties, and this may have a material adverse impact on the group’s results of operations, financial condition,
and prospects. There is also a risk that depletion of reserves will not be offset by discoveries or acquisitions, or that divestitures
of assets will lead to a lower reserve base. The reserve base of the group may decline if reserves are mined without adequate
replacement and the group may not be able to sustain production beyond the current 14-year Stage 1.5 mine life.
Climate
The Group may be impacted by climate related risks including reduced water availability, extreme weather events, changes
to legislation and regulation, reputational risk, and technological and market changes.
14. Non-audit services
During the year Grant Thornton, the Company’s auditor, has performed certain other services in addition to their statutory
duties.
The Board has considered the non-audit services provided during the year by the auditor and in accordance with written advice
provided by resolution of the Audit and Risk Management Committee is satisfied that the provision of those non-audit services
during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
•
•
all non-audit services were subject to the corporate governance procedures adopted by the Company and have been
reviewed by the Audit and Risk Management Committee to ensure they do not impact the integrity and objectivity of
the auditor; and
the non-audit services provided do not undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s
own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the
Company or jointly sharing risks and rewards.
Details of the amounts paid or accrued to the auditor of the Company, Grant Thornton, and its related practices for audit and
non-audit services provided during the year are set out below.
Audit and review Services
Other services
Auditors of the company
2023
$
241,152
9,150
250,302
2022
$
102,486
15,927
118,413
21
15. Lead Auditor’s Independence Declaration
The Lead auditor’s independence declaration is set out on page 23 and forms part of the Directors’ Report for the financial
year ended 30th June 2023.
Signed in accordance with a Resolution of the Board of Directors:
Mr Robert Mencel
Managing Director
Dated at Adelaide this 29th day of September 2023.
22
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3
170 Frome Street
Adelaide SA 5000
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Directors of Centrex Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Centrex Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and belief, there
have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 29 September 2023
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
#10557107v2w
23
Centrex Limited
Contents
30 June 2023
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Centrex Limited
ASX additional shareholder information
25
26
27
28
29
59
60
64
24
Centrex Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Note
2023
$'000
Revenue
Revenue from sales
Cost of Sales
Other income
Expenses
Administration and other expenses
Exploration and evaluation expense
Share-based payments expense
Change in fair value of convertible notes
Finance Costs
Loss before income tax expense
Income tax expense
5
6
7
8
24
9
10
11
Loss after income tax expense for the year attributable to the owners of
Centrex Limited
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of Centrex
Limited
2022
$'000
214
(236)
(22)
22
(2,037)
(187)
(132)
(18,934)
(365)
25,967
(25,586)
381
63
(7,304)
(231)
(2,393)
-
(64)
(9,548)
(21,655)
-
-
(9,548)
(21,655)
-
-
(9,548)
(21,655)
Cents
Cents
Basic earnings per share
Diluted earnings per share
37
37
(1.56)
(1.56)
(4.93)
(4.93)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
25
Centrex Limited
Statement of financial position
As at 30 June 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Inventories
Plant, equipment and mine development assets
Exploration and evaluation
Financial assets - security deposits
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Note
2023
$'000
2022
$'000
12
13
14
16
14
17
18
15
16
19
20
21
22
21
22
23
24
6,735
1,204
4,710
441
13,090
505
28,520
342
563
113
30,043
12,848
476
-
79
13,403
-
141
22,298
530
-
22,969
43,133
36,372
8,843
3,599
974
435
13,851
1,954
2,503
4,457
18,308
2,783
-
-
169
2,952
151
1,573
1,724
4,676
24,825
31,696
75,100
12,208
(62,483)
74,816
9,815
(52,935)
24,825
31,696
The above statement of financial position should be read in conjunction with the accompanying notes
26
Centrex Limited
Statement of changes in equity
For the year ended 30 June 2023
Balance at 1 July 2021
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 23)
Share-based payments (note 24)
Transfer of Historical Profit Reserve to
Accumulated Losses
Exercise of performance rights
Fair value of options issued in conjunction with
the exercise of the convertible note
Balance at 30 June 2022
Issued capital
$'000
42,564
-
-
-
19,897
12,272
-
83
-
74,816
Share-based
payments
reserve
$'000
-
-
-
-
-
132
-
(83)
9,766
9,815
Profit
reserve
$'000
Retained
losses
$'000
Total equity
$'000
1,005
(32,285)
11,284
-
-
-
-
-
(1,005)
-
-
-
(21,655)
(21,655)
-
-
(21,655)
(21,655)
-
-
19,897
12,404
1,005
-
-
-
-
9,766
(52,935)
31,696
Issued capital
$'000
Share based
payments
reserve
$'000
Profit
reserve
$'000
Retained
losses
$'000
Total equity
$'000
Balance at 1 July 2022
74,816
9,815
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Share-based payments (note 24)
Exercise of options - free attaching
-
-
-
-
-
-
-
284
2,393
-
Balance at 30 June 2023
75,100
12,208
-
-
-
-
-
-
-
(52,935)
31,696
(9,548)
(9,548)
-
-
(9,548)
(9,548)
-
-
2,393
284
(62,483)
24,825
The above statement of changes in equity should be read in conjunction with the accompanying notes
27
Centrex Limited
Statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Other revenue
Interest and other finance costs paid
Net cash used in operating activities
Cash flows from investing activities
Payments for plant, equipment and mine development asset
Payments for exploration and evaluation
Cash transferred (to) / from term deposits
Proceeds from release of security deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from exercise of option
Proceeds from borrowings
Share issue transaction costs
Repayment of leases
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Note
2023
$'000
2022
$'000
25,143
(32,123)
(6,980)
63
-
(45)
217
(1,756)
(1,539)
4
20
(55)
36
(6,962)
(1,570)
23
23
(2,149)
(300)
(33)
-
-
(7,647)
(530)
857
(2,482)
(7,320)
-
284
3,563
-
(516)
20,024
1,102
-
(1,229)
-
3,331
19,897
(6,113)
12,848
11,007
1,841
Cash and cash equivalents at the end of the financial year
12
6,735
12,848
The above statement of cash flows should be read in conjunction with the accompanying notes
28
Centrex Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective
notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 33.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Centrex Limited ('company'
or 'parent entity') as at 30 June 2023 and the results of all subsidiaries for the year then ended. Centrex Limited and its
subsidiaries together are referred to in these financial statements as the 'Group'.
Subsidiaries are entities controlled by the Group. The consolidated financial statements of the Group include the financial
statements of the Company, being the parent entity, and its wholly owned subsidiaries, from the date that control commences
until the date control ceases:
• DSO Development Pty Ltd
• Flinders Pastoral Pty Ltd
• Lachlan Metals Pty Ltd
• Kimba Gap Iron Project Pty Ltd
• Centrex QLD Exploration Pty Ltd (previously named Port Spencer Holdings Pty Ltd)
• South Australia Iron Ore Group Pty Ltd
• AgriFlex Pty Ltd (previously named Centrex Phosphate Pty Ltd)
• Centrex Potash Pty Ltd
• Centrex Zinc Pty Ltd
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
29
Centrex Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises
the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in
profit or loss.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Impairment
The carrying amounts of the Group’s non-financial assets are reviewed at each balance sheet date to determine whether
there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are charged to profit or loss, unless an asset has previously been revalued, in which
case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised
through profit or loss.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any
goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in
the unit (group of units) on a pro rata basis.
The recoverable amount of other assets is the greater of their fair value less costs of disposal and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the
asset belongs.
Impairment losses are reversed when there is an indication that the impairment loss may no longer exist and there has been
a change in the estimate used to determine the recoverable amount. An impairment loss is reversed only to the extent that
the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
30
Centrex Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Group for the annual reporting period ended 30 June 2023. The Group has not yet
assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Share-based payment transactions
Where performance rights or share options are issued to employees or directors as remuneration for past services, the fair
value of equity instruments granted is recognised as an employee expense with a corresponding increase in equity. The fair
value is measured at grant date and recognised over the period during which the employees become unconditionally entitled
to the equity instruments. Unless otherwise stated, the fair value of the equity instruments granted is measured using an
appropriate valuation option-pricing model, taking into account the terms and conditions upon which the equity instruments
were granted. The amount recognised as an expense is adjusted to reflect the actual number of equity instruments that vest
except for those that fail to vest due to market conditions or vesting conditions not being met.
31
Centrex Limited
Notes to the financial statements
30 June 2023
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the
provision is assessed by taking into account the recent sales experience, the ageing and conditions of inventories.
Fair value measurement hierarchy
The Group is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy, based on the
lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in
active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2: Inputs other than
quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3:
Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant to fair value
and therefore which category the asset or liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable
inputs.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations
or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously
estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written
down.
Impairment of property, plant and equipment and development assets
The Group assesses impairment of property, plant and equipment and development assets at each reporting date by
evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an impairment trigger
exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use
calculations, which incorporate a number of key estimates and assumptions.
Financial instruments - Convertible note
The Group was required to fair value its convertible note at each reporting date utilising appropriate valuation
methodologies. The conversion option was considered a derivative liability measured at fair value using observable inputs
(Monte Carlo). Immediately prior to the conversion of the convertible note fair value was determined using the Centrex share
price as at conversion date and the attaching options using a Black Scholes valuation taking into account observable data
and assumptions.
Rehabilitation provision
The Group assesses its site restoration and rehabilitation provision at each reporting date in accordance with the accounting
policy. Significant judgement is required in determining the provision for restoration and rehabilitation as there are many
transactions and other factors that will affect the ultimate liability payable to rehabilitate and restore the site.
The estimate of future costs therefore requires management to make assessment of the future restoration and rehabilitation
date, future environmental legislation, changes in regulations, price increases, changes in discount rates, the extent of
restoration activities and future removal and rehabilitation technologies. When these factors change or become known in the
future, such differences will impact the restoration and rehabilitation provision in the period in which they change or become
known. At each reporting date the rehabilitation and restoration provision is remeasured to reflect any of these changes.
32
Centrex Limited
Notes to the financial statements
30 June 2023
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the Group will commence commercial production
in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources.
Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related
to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only
capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest.
Factors that could impact the future commercial production at the mine include the level of reserves and resources, future
technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the
extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which
this determination is made.
Note 3. Going Concern
The Group’s financial statements are prepared on the going concern basis which assumes continuity of normal business
activities and the realisation of assets and settlement of liabilities and commitments in the normal course of business.
During the year ended 30 June 2023, the Group recognised a loss of $9.55m (2022: $21.66m), had net cash outflows from
operating and investing activities of $9.44m (2022: $8.89m) and had accumulated losses of $62.48m (2022: $52.94m) as at
30 June 2023. The continuation of the Group as a going concern is dependent upon its ability to generate sufficient net cash
inflows from operating and financing activities and manage the level of expenditure within available cash resources.
The Directors consider that the going concern basis of accounting is appropriate, as the Group has the following options:
● Achieve steady state commercial production levels to generate sufficient cash inflows to meet operating costs;
The ability to obtain debt funding to assist with the continued development of the Ardmore Phosphate project;
●
The ability to issue share capital under the Corporations Act 2001, by a share purchase plan, share placement or rights
●
issue;
The option of farming out all or part of its assets;
The option of selling interests in the Company’s assets; and
The option of relinquishing or disposing of rights and interests in certain assets.
●
●
●
In the event that the Group is unsuccessful in implementing one or more of the funding options listed above, such
circumstances would indicate that a material uncertainty exists that may cast significant doubt as to whether the Group will
continue as a going concern and therefore whether it will realise its assets and discharge its liabilities in the normal course
of business and at the amounts stated in the financial report.
This financial report does not include any adjustments relating to the recoverability and classification of recorded asset
amounts or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going
concern.
33
Centrex Limited
Notes to the financial statements
30 June 2023
Note 4. Operating segments
Identification of reportable operating segments
Management has determined the operating segments based on internal reports about components of the Group that are
regularly reviewed by the Managing Director to make strategic decisions.
The Group has identified two reportable segments of its business:
· Ardmore mining operations; and
· Exploration: exploration and evaluation of phosphate rock, potash, zinc and copper.
The Managing Director monitors performance in these areas separately. Unless stated otherwise, all amounts reported to
the Managing Director are determined in accordance with accounting policies that are consistent to those adopted in the
annual financial statements of the Group.
2023 Segment results
Segment revenue
Cost of sales
Gross profit / (loss)
Finance costs
Other expenses
Exploration and evaluation expenses
Segment Result
Unallocated corporate overheads
Total loss for the year
Total segment assets
Operating segment assets are reconciled to total assets as follows:
Segment assets
Unallocated assets:
Cash and cash equivalents
Other receivables
Total assets
There are no comparatives in previous year as there was only one segment.
Ardmore
mining
Operations Exploration
$'000
$'000
25,967
(25,586)
381
(64)
(3,996)
-
(3,679)
-
-
-
-
-
(231)
(231)
Total
$'000
25,967
(25,586)
381
(64)
(3,996)
(231)
(3,910)
-
-
(5,638)
(9,548)
36,024
342
36,366
2023
$'000
36,366
6,735
32
43,133
2022
$'000
-
-
-
-
34
Centrex Limited
Notes to the financial statements
30 June 2023
Note 5. Revenue from sales
Sales - Concentrate
Sales - DARPS
Revenue recognition
The consolidated entity recognises revenue as follows:
2023
$'000
25,786
181
25,967
2022
$'000
-
214
214
Revenue
Revenue is measured at the fair value of the consideration received or receivable. Revenue from sale of goods is recognised
upon delivery of the goods to customers as this corresponds to the transfer of control of the goods and the cessation of all
involvement with those goods. All revenue is stated net of goods and services tax (GST).
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject
to the constraining principle are recognised as a refund liability.
Concentrate Sales
Concentrate sales comprises the fully processed phosphate rock concentrate. Revenue from the sale is recognised once
control has passed to the customer and performance obligations have been met.
Direct Application Phosphate Rock (DAPR) Sales
DAPR revenue from low-grade direct application crushed phosphate rock is recognised when control passes to the customer
and performance obligations are satisfied. Control of the goods will pass to the customer at the point in time when the goods
are delivered or collected by the customer.
Note 6. Cost of Sales
Mining expenses
Crushing expenses
Depreciation and amortisation expenses
Processing and drying
Freight expense
Royalties
2023
$'000
6,846
3,593
798
4,639
8,335
1,375
25,586
2022
$'000
236
-
-
-
-
-
236
35
Centrex Limited
Notes to the financial statements
30 June 2023
Note 7. Other income
Government grants
Interest Income
Other income
Interest
Interest revenue is recognised as interest accrues.
Note 8. Administration and other expenses
Office and administration expenses
Sales and marketing
Insurance and legal expenses
Employee benefit expense
Directors fees
Travel expenses
Depreciation expense
Foreign exchange loss
Other expenses
2023
$'000
-
63
63
2022
$'000
20
2
22
2023
$'000
1,170
513
1,658
2,823
151
90
151
141
607
7,304
2022
$'000
632
-
384
883
137
-
1
-
-
2,037
Note 9. Change in fair value of convertible notes
On the 26th February 2021 at the Company's AGM, shareholders approved the issue of the convertible note to Australia New
Zealand Resources Corporation Pty Ltd (a director related entity of Graham Chrisp). At the time of the shareholder approval
it was outlined that the maximum number of shares that could be issued on conversion of the note assuming no interest
payments were made during the term of the note was 63,770,882 shares and 63,770,882 free attaching options with a $0.05
exercise price expiring 31st December 2023.
Comparative year - subsequent treatment
On the 29 September 2021 notice was produced by the note holder to defer payment of the interest coupon, which triggered
accrual and compounding effect of the to the face value of the note. In total a further $340,000 in interest was accrued in the
year to 30 June 2022 with $30,000 being settled in cash.
On 1st April 2022, the Company advised the market that it had received a notice of conversion from the convertible note
holder. Pursuant to the terms of the convertible note, the company converted the convertible note (including all capitalised
interest on the outstanding loan) into 59,545,454 ordinary shares and 59,545,454 attaching options in accordance with it
terms.
The 59,545,454 shares and equal number of options was attributed to the note as follows:
●
●
45,454,545 shares on conversion of the face value of the convertible note ($1,000,000)
14,090,908 shares relating to capitalised interest on the convertible note ($310,000)
36
Centrex Limited
Notes to the financial statements
30 June 2023
Note 9. Change in fair value of convertible notes (continued)
The fair value of the ordinary shares at conversion were determined using the closing share price on 1 April 2022 totalling
$12,272,000. This amount was transferred from derivative liability to share capital.
The convertible note options were measured at fair value utilising a Black Scholes valuation model and totalled
$9,766,000. This amount was transferred from derivative liability to the share based payment reserve.
Total fair value of the shares and options recognised in the statement of profit or loss was $18,934,000.
The following inputs were utilised to value the components as at the conversion date:
Valuation date:
Share price at valuation date:
Expiry date:
Risk free rate:
Company specific volatility:
Strike price:
Maximum expected life:
1 April 2022
$0.2061
31 December 2023
2.15%
68%
$0.05; and
1.75 years
Note 10. Finance Costs
Finance costs
2023
$'000
64
2022
$'000
365
37
Centrex Limited
Notes to the financial statements
30 June 2023
Note 11. Income tax expense
Current income tax expense / (benefit)
Current period
Total income tax expense / (benefit)
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 25%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
Timing differences & tax losses not brought to account
Income tax expense
Deferred tax assets (DTA) and Deferred tax liabilities (DTL)
Trade and other receivables
Property, plant & equipment
Provisions and accrued expenses
Exploration and evaluation assets
Development asset
Lease liabilities
Deferred capital expenses
Net DTL
Tax losses recognised to the extent of the DTL
Unrecognised tax losses – tax effected at 30 June 2023
Income tax
2023
$'000
2022
$'000
-
-
-
-
(9,548)
(21,655)
(2,387)
(5,414)
657
1,730
4,767
647
-
-
(1)
(1,909)
782
114
(4,148)
222
190
(4,750)
4,750
9,253
(17)
-
454
(4,235)
-
-
253
(3,545)
3,545
7,610
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
38
Centrex Limited
Notes to the financial statements
30 June 2023
Note 11. Income tax benefit (continued)
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
The company and its wholly owned Australian resident subsidiaries commenced being a tax consolidation group on 27th
January 2005 and are therefore taxed as a single entity. The head entity within the tax consolidation group is Centrex Limited.
Note 12. Cash and cash equivalents
Current assets
Cash at bank
Cash on deposit
2023
$'000
2022
$'000
6,700
35
12,848
-
6,735
12,848
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Note 13. Trade and other receivables
Current assets
Trade receivables
2023
$'000
2022
$'000
1,204
476
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Note 14. Inventories
Current assets
Mined ore
Crushed ore
Processed ore
Stock in transit
Non-current assets
Mined ore
2023
$'000
1,262
158
2,834
456
4,710
505
5,215
2022
$'000
-
-
-
-
-
-
-
39
Centrex Limited
Notes to the financial statements
30 June 2023
Note 14. Inventories (continued)
Recognition and measurement of Inventories includes ore, crushed, rejects and concentrate stockpiles, estimated at the
lower of cost and net realisable value. Cost represents the weighted average cost and comprises direct materials, direct
labour and an appropriate proportion of variable and fixed overhead expenditures including depreciation and amortisation.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Quantities of inventories are determined using various estimation techniques, including observation, weighing and other
industry methods and are subject to periodic physical verification.
The Group reviews its inventory at the end of each reporting period to determine if it is properly stated at the lower of cost
and net realisable value. Net realisable value is the estimated selling prices in the ordinary course of business, less estimated
costs of completion of sale.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Note 15. Financial assets - security deposits
Non-current assets
Financial assets - security deposits
2023
$'000
2022
$'000
563
530
An amount of $0.563m (2022: $0.530m) of term deposits are in place and are held as security for bank guarantees. These
guarantees relate to environmental rehabilitation security bonds over mining lease (ML5542). Interest is earned on a fixed
interest rate and received at maturity
Note 16. Other
Current assets
Prepayments
Non-current assets
Deposits paid for plant and equipment
2023
$'000
2022
$'000
441
113
554
79
-
79
40
Centrex Limited
Notes to the financial statements
30 June 2023
Note 17. Plant, equipment and mine development assets
Non-current assets
Property, plant and equipment
Less: Accumulated depreciation
Right of use assets
Less: Accumulated amortisation
Development assets
Less: Accumulated amortisation
2023
$'000
5,187
(218)
4,969
3,362
(496)
2,866
21,096
(411)
20,685
28,520
2022
$'000
143
(2)
141
-
-
-
-
-
-
141
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Property, plant
Balance at 1 July 2021
Additions
Depreciation and amortisation - cost of sales
Depreciation - administration and general
Balance at 30 June 2022
Transferred from exploration and evaluation - 1 July 2022
Additions
Increase from rehabilitation provision
Depreciation and amortisation - cost of sales
Depreciation - administration and general
Balance at 30 June 2023
-
143
(1)
(1)
141
4,586
460
-
(67)
(151)
4,969
1. Refer to note 21 for further detail on right of use assets associated with lease contracts.
Property, plant and equipment
and Right of use Development
assets
$'000
assets1
$'000
equipment
$'000
-
-
-
-
-
-
3,362
-
(496)
-
-
-
-
-
-
17,873
2,347
876
(411)
-
Total
$'000
-
143
(1)
(1)
141
22,459
6,169
876
(974)
(151)
2,866
20,685
28,520
Plant and equipment assets are stated at historical cost less accumulated depreciation and impairment losses. Historical
cost includes expenditure that is directly attributable to the items. Repairs and maintenance are charged to profit or loss
during the reporting period in which they are incurred.
Depreciation is calculated to write off the cost of items of plant and equipment less their estimated residual value using an
appropriate method (either straight line or units of production basis) over either the estimated useful life or the estimated
resource. Depreciation expense is recognised in the Statement of Profit or Loss or absorbed into inventory.
The estimated useful lives of property, plant and equipment for current and comparative periods are as follows.
41
Centrex Limited
Notes to the financial statements
30 June 2023
Note 17. Plant, equipment and mine development assets (continued)
Asset class
Motor vehicles
Furniture and fixture
Plant and equipment
Right of use assets
Estimated useful life
5 years
1-5 years
Based on the units of production
Lease term between 2 - 3 years
Units Production Basis;
Depreciation of plant and equipment is computed by the units of production basis over the estimated proven and probable
reserve. Proved and probable mineral reserves reflect estimated quantities of economically recoverable reserve which can
be recovered in the future from known mineral deposits. The depreciation is calculated from recoverable proven and probable
reserves and a total reserve processed through the plant during the period.
No impairment of plant, equipment and development assets arose during the reporting period.
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Development assets
Deferred Mining Expenditure - Surface Mining Costs
Mining costs incurred during the production stage of operations are deferred, to recognise the future economic benefit
associated with accessing the identified Ore Reserves. This is generally the case where there are fluctuations in deferred
mining costs over the life of the mine, and the effect is material. The amount of mining costs deferred is based on the ratio
obtained by dividing the volume of waste material moved by the volume of ore mined. Mining costs incurred in the period are
deferred to the extent that the current period waste to ore ratio exceeds the expectation being the life of mine waste to ore
(life of mine) ratio. The life of mine ratio is based on economically recoverable reserves of the operation.
Stripping activity assets and stripping activities
The Group incurs waste removal costs (stripping costs) in the creation of improved access and mining flexibility in relation to
ore to be mined in the future. The cost are capitalised as a stripping activity asset, where certain criteria are met. Once the
Group has identified its production stripping for each surface mining operation, it identifies the separate components for the
orebodies in each of its mining operations. An identifiable component is a specific volume of the ore body that is made more
accessible by the stripping activity. The cost of each component are amortised on a units of production basis in applying a
stripping ratio.
Transfer of exploration and evaluation assets to mine development
Once exploration assets have been assessed to be commercially feasible and development is able to proceed, the costs are
transferred to ‘ development assets’.
An impairment assessment is undertaken on the date assets are transferred using the recoverable amount of the Cash
Generating Units (CGU) that included the transferred development asset based on estimated present value of the future
cash flows expected to be derived from the CGU (value in use). Impairment is recognised if the recoverable amount of the
CGU is estimated to be lower than its carrying amount.
Accounting policy for development assets
Capitalised mining development costs include expenditures incurred to develop new ore bodies to define further
mineralisation in existing ore bodies, to expand the capacity of a mine and to maintain production. Mining development also
includes costs transferred from exploration and evaluation phase once production commences in the area of interest.
Development assets are recorded at historical cost less accumulated depreciation / amortisation and impairment losses.
42
Centrex Limited
Notes to the financial statements
30 June 2023
Note 17. Plant, equipment and mine development assets (continued)
Amortisation of mining development asset is computed by the units of production basis over the estimated proved and
probable reserve. Proved and probable mineral reserves reflect estimated quantities of economically recoverable reserve
which can be recovered in the future from known mineral deposits. These reserves are amortised from the date on which
production commence. The amortisation is calculated from recoverable proven and probable reserves and a total reserve
recovered during the period
Key estimates and judgements - Ore Reserves
The Group estimates ore reserves and mineral resources each year based on information compiled by Competent Persons
as defined in accordance with the Australian code for reporting Exploration Results, Mineral Resources and Ore Reserves
2012 (‘JORC code’). Estimated quantities of economically recoverable reserves are based upon interpretations of geological
models and require assumptions to be made including estimates of short and long-term commodity prices, exchange rates,
future operating performance and capital requirements. Changes in reported reserve estimates can impact the carrying value
of plant and equipment, development assets, provision for restoration and rehabilitation obligations as well as the amount of
depreciation and amortisation
Key judgement, estimates and assumptions: Impairment of assets
The Group assesses its CGU at least annually, to determine whether there is any indication of impairment or reversal of a
prior impairment. Where an indicator of impairment or reversal exists, a formal estimate of the recoverable amount is made,
which is deemed as being the higher of the fair value less costs to sell and value in use. These assessments require the use
of estimates and assumptions such as ore reserves, future production, commodity prices, discount rates, exchange rates,
operating costs, sustaining capital costs, any future development cost necessary to produce the reserves (including the
magnitude and timing of cash flows) and operating performance.
Some other factors considered in management’s assessment as to whether there existed any indicators of impairment at the
CGUs included:
• Operational and financial performance of the CGUs;
• Potential to extend mine life across all CGUs; and
• The current and forecast phosphate price environment;
Restoration costs expected to be incurred are provided for as part of development phase that give rise to the need for
restoration.
Note 18. Exploration and evaluation
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Balance at 1 July 2021
Increase rehabilitation provision
Capitalised during the year
Impairment
Balance at 30 June 2022
Capitalised during the year
Transfer to plant and equipment
Transfer to development assets
Balance at 30 June 2023
Ardmore
Phosphate
$'000
Northern
Territory
Phosphate Goulburn Zinc
$'000
$'000
Oxley
Potassium
Nitrate
$'000
Total
$'000
14
-
-
(14)
-
-
-
-
-
7
-
25
(5)
27
21
-
-
48
10
-
81
(75)
16
211
-
-
227
11,910
1,063
9,419
(94)
22,298
503
(4,586)
(17,873)
342
11,879
1,063
9,313
-
22,255
271
(4,586)
(17,873)
67
43
Centrex Limited
Notes to the financial statements
30 June 2023
Note 18. Exploration and evaluation (continued)
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried
forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through
the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in
an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of
economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred
thereon is written off in the year in which the decision is made.
The exploration and evaluation expenditure assets comprise of exploration expenditure incurred since acquiring the
exploration licenses. The expenditure is capitalised on an area of interest basis.
Key judgements - exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on several factors, including
whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale or joint venture. Factors that could impact the future recoverability include the level of Ore
Reserves and Mineral Resources, future technological changes, which could impact the cost of mining, future legislative
changes, and changes to commodity prices and exchange rates. To the extent that capitalised exploration and evaluation
expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which
this determination is made. In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest
have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be written off, profits
and net assets will be reduced in the relevant reporting period in which this determination is made.
Key estimates - impairment
Impairment of specific exploration and evaluation assets during the year have occurred where Directors have concluded that
capitalised expenditure is unlikely to be recovered by sale or future exploitation. At each reporting date the Group undertakes
an assessment of the carrying amount of its exploration and evaluation assets. During the reporting period no indicators of
impairment were identified on certain exploration and evaluation assets in accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources. No impairment loss has been recognised in relation to areas of interest as a result of the
review where the Directors have concluded that capitalised expenditure is unlikely to be recovered by sale or future
exploitation.
Note 19. Trade and other payables
Current liabilities
Trade payables
Other payables
2023
$'000
7,312
1,531
8,843
2022
$'000
2,718
65
2,783
Refer to note 26 for further information on financial instruments and exposures.
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts
are unsecured and are usually paid within 30 days of recognition.
44
Centrex Limited
Notes to the financial statements
30 June 2023
Note 20. Borrowings
Current liabilities
Export Finance Australia - trade finance
2023
$'000
2022
$'000
3,599
-
Refer to note 26 for further information on financial instruments and exposures.
The loan from Export Finance Australia has the following terms:
Interest rate:
variable interest rate calculated as the sum of the Base Rate plus a margin (6.20%) and 1.5%
Commitment Fee
Secured or unsecured: secured by purchase contracts
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
Note 21. Lease liabilities
Current liabilities
Lease - motor vehicle
Lease - plant and equipment
Lease - buildings
Non-current liabilities
Lease - motor vehicle
Lease - plant and equipment
Lease - buildings
2023
$'000
63
804
107
974
309
1,454
191
1,954
2,928
2022
$'000
-
-
-
-
-
151
-
151
151
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected
to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or
a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
Short-term leases and leases of low value assets
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients.
Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense
in statement of profit or loss as they are incurred.
45
Centrex Limited
Notes to the financial statements
30 June 2023
Note 21. Lease liabilities (continued)
Right of use assets
Set out below are the carrying amounts of right of use assets recognised and the movements during the period (as shown in
note 17 'Plant, equipment and mine development assets'):
2023
Carrying amount as at 1 July 2022
Additions
Depreciation
Carrying amount as at 30 June 2023
Plant and
equipment
$'000
Motor
vehicles
$'000
Building
$'000
-
2,700
(301)
2,399
-
295
(54)
241
-
367
(75)
292
Total
$'000
-
3,362
(430)
2,932
The Group did not recognise any right of use assets in the prior year.
Interest relating to right of use assets used in exploration and mining activities is not capitalised to exploration and evaluation
assets or plant, equipment and mine development assets.
A right of use asset is recognised at the commencement date of a lease. The right of use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right of use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the
lease term, the depreciation is over its estimated useful life. Right of use assets are subject to impairment or adjusted for any
remeasurement of lease liabilities.
The Group has elected not to recognise a right of use asset and corresponding lease liability for short-term leases with terms
of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as
incurred.
Asset class
Plant and equipment
Motor vehicles
Buildings
Estimated useful life
2-5 years
3-5 years
3 years
Periodic adjustments are made for any remeasurement of the lease liabilities and for impairment losses, assessed in
accordance with the Group's impairment policies.
46
Centrex Limited
Notes to the financial statements
30 June 2023
Note 22. Provisions
Provisions can be analysed as follows:
Current liabilities
Employee benefits
Non-current liabilities
Employee benefits
Rehabilitation and restoration provision
Provisions
2023
$'000
2022
$'000
435
169
53
2,450
2,503
2,938
-
1,573
1,573
1,742
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of
money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision
resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using market yields at
the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Provision for rehabilitation and restoration
Estimated costs of decommissioning and removing an asset and restoring the site are included in the cost of the asset as at
the date the obligation first arises and to the extent that it is first recognised as a provision. The Group records the present
value of the estimated cost of environmental and legal obligations to restore operating locations in the period in which the
obligation is incurred. The nature of decommissioning activities includes dismantling and removing structures, rehabilitating
mine sites, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation, and revegetation of
affected areas. Typically, the obligation arises when the asset is installed, or the environment is disturbed at the development
location. When the liability is initially recorded, the present value of the estimated cost is capitalised by increasing the carrying
amount of the related mining assets. Over time, the discounted liability is increased for the change in the present value based
on the discount rates that reflect the current market assessments and the risks specific to the liability. Additional disturbances
or changes in decommissioning costs will be recognised as additions or changes to the corresponding asset and
rehabilitation liability when incurred.
47
Centrex Limited
Notes to the financial statements
30 June 2023
Note 23. Issued capital
2023
Shares
2022
Shares
2023
$'000
2022
$'000
Ordinary shares - fully paid
614,529,029
608,841,721
75,100
74,816
Movements in ordinary share capital
Details
Date
Shares
$'000
Balance
Issue shares via placement
Issue of shares upon convertible note conversion (Share Based Payment)
Issue of shares via placement (April 22)
Issue of shares via underwritten rights issue
Issue of shares via unlisted options exercised during the period
Issue of shares for conversion of performance rights (Share Based Payment)
Issue costs
1 July 2021
367,403,090
44,444,445
59,545,454
57,104,593
57,314,633
22,029,506
1,000,000
-
Balance
Issue of shares via unlisted options exercised during the period
30 June 2022 608,841,721
5,687,308
42,564
4,005
12,272
7,995
8,024
1,102
83
(1,229)
74,816
284
Balance
30 June 2023 614,529,029
75,100
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost
of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
48
Centrex Limited
Notes to the financial statements
30 June 2023
Note 24. Reserves and share-based payments
Capital Management
Management effectively manages the Group’s capital and capital structure by assessing the Group’s financial risks through
regular monitoring of budgets and forecast cashflows. The Board’s policy is to maintain a strong capital base so as to maintain
investor, creditor and market confidence and to sustain future development of the business, including through the issue of
shares. The Group’s capital is shown as issued capital in the Statement of Financial Position. The Group is not subject to
any external capital restrictions.
Nature and purpose of reserves
The share option reserve and performance rights reserve are used to recognise the fair value of all options and performance
rights.
Share based payments are in line with the Centrex Limited remuneration policy, details of which are outlined in the Director’s
report. Listed below are summaries of options and performance rights granted:
Reconciliation of share-based payments reserve
Opening balance
Issue of options
Issue of performance rights
Exercise of performance rights
Closing Balance
Share Options Reserve
Opening balance
Issued
Exercised1
Balance at 30 June 2023
2023
$'000
9,815
648
1,745
-
12,208
2023
$'000
9,766
648
-
10,414
2022
$'000
-
9,898
-
(83)
9,815
Weighted
Average
Exercise
Price
$0.050
$0.200
$0.050
$0.065
Number of
options
78,194,348
8,000,000
(5,687,308)
80,507,040
1. This included 5,687,308 unquoted options attaching to shares issued in prior years. Each unquoted option has an exercise price of 5 cents and expiry
date of 31 December 2023 and have been attributed no value within the reserve. As at 30 June 2023, 72,507,040 of these unquoted options remain on
issue.
Share Options Reserve
Opening balance
Issued1
Exercised
Balance at 30 June 2022
Number of
options
40,678,400
59,545,454
(22,029,506)
78,194,348
2022
$'000
-
9,766
-
9,766
Weighted
Average
Exercise
Price
$0.050
$0.050
$0.050
$0.050
1. There were 59,545,454 unquoted options attaching to shares issued under convertible notes conversion in April 2022. Each unquoted option has an
exercise price of 5 cents and expiry date of 31 December 2023 and have been attributed no value within the reserve.
49
Centrex Limited
Notes to the financial statements
30 June 2023
Note 24. Reserves and share-based payments (continued)
Performance Rights Reserve
Opening balance
Issued to employees as remuneration1
Vesting of performance rights issued in prior year1
Balance at 30 June 2023
Performance Rights Reserve
Opening balance
Issued to Key Management Personnel as remuneration1
Exercised
Balance at 30 June 2022
Number of
performance
rights
2,000,000
20,880,769
-
22,880,769
Number of
performance
rights
-
3,000,000
(1,000,000)
2,000,000
2023
$'000
49
1,660
85
1,794
2022
$'000
-
132
(83)
49
1. Expense reflected in the statement of profit and loss for performance rights issued to personnel and vested over the vesting period
(a) Share-based payments
The Group has provided payment to related parties in the form of share-based compensation, whereby related parties render
services in exchange for shares, options or performance rights over shares (‘equity-settled transactions’). The cost of these
equity-settled transactions is measured by reference to the fair value at the date at which they are granted. The fair value of
share options is determined using a Black-Scholes methodology depending on the nature of the option terms. The fair value
in relation to performance rights is calculated using the Black Scholes valuation model.
The fair value of the options and performance rights granted is adjusted to reflect market vesting conditions but excludes the
impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number
of options and performance rights that are expected to vest and become exercisable.
At each reporting date, the entity revises its estimates of the number of options and performance rights that are expected to
vest and become exercisable.
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects:
(i)
(ii)
the extent to which the vesting period has expired, and
the number of awards that, in the opinion of the Directors of the Group, will ultimately vest.
This opinion is formed based on the best available information at reporting 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.
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.
50
Centrex Limited
Notes to the financial statements
30 June 2023
Note 24. Reserves and share-based payments (continued)
Key judgement, estimates and assumptions – Share based payments
The Group measures the cost of equity-settled transactions with key management personnel and other parties by reference
to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by the Board of
Directors with reference to quoted market prices or using the Black-Scholes valuation method or a valuation methodology
approximating Monte Carlo simulation as appropriate taking into account the terms and conditions upon which the equity
instruments were granted. These assumptions have been detailed within the note above. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact expenses and equity.
Reconciliation of Share Based Payment Expense
Options issued to directors
Performance rights issued to directors, and employees
Total share-based payments
Net share-based payment expense in the statement of profit or loss
Performance rights granted
2023
$'000
648
1,745
2,393
2,393
2022
$'000
-
132
132
132
During the year ended 30 June 2023, the group issued 20.881 million performance rights to senior executives and employees
of the Company under the term of the Company’s Performance Rights Plan (Plan). The Plan was approved by shareholder
at the Company’s 2021 Annual General Meeting.
● Date granted – 27th September 2022
● Share Based Payment expense recognised in current financial year $1,660,472
●
●
Fair Value of the Performance rights being $2.923M to be expensed over the vesting period.
The fair value of the share based payments were determined based on the market price for the shares as at the issue
date.
The performance criteria is as follows for the Performance Rights issued in the period:
Tranche 1: Performance Rights
Vesting performance condition:
(a) 100% vesting upon a continuous period of employment of 12 months with the Company
Performance vesting period: Financial year ending 2023
Tranche 2: Performance Rights
Vesting performance condition:
(a) 50% vesting upon a continuous period of employment of 24 months with the Company;
(b) 30% vesting upon successful completion of production, export and sale of more than 125,000t of phosphate
rock/concentrate in FY24 at the Ardmore Phosphate mine;
(c) 20% vesting upon the successful completion of the 800ktpa FEED study for the Ardmore Phosphate Project.
Performance vesting period: Financial year ending 2024
Tranche 3: Performance Rights
Vesting performance condition:
(a) 25% vesting upon a continuous period of employment of 36 months with the Company;
(b) 50% vesting upon successful completion of production, export and sale of more than 250,000t of phosphate
rock/concentrate in FY25 at the Ardmore Phosphate mine;
(c) 25% vesting upon the successful completion of FID for the 800ktpa plant at the Ardmore Phosphate Project.
Performance vesting period: Financial year ending 2025
51
Centrex Limited
Notes to the financial statements
30 June 2023
Note 24. Reserves and share-based payments (continued)
Fair value of performance rights granted
The fair value at grant date of the performance rights issued for performance rights with market based on conditions have
been determined using a valuation methodology approximating a Monte Carlo pricing model that takes into account the term
of the performance right, the impact of dilution, the impact of the KPI on the underlying share price, the non-tradeable nature
of the performance right, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk-free interest rate for the term of the performance right. For those performance rights issued where
a non-market performance condition exists the share price at grant date is the fair value at grant date.
The table below outlines the summary of inputs used in the fair value calculation for the performance rights issued under the
performance share plan during the reporting period:
Performance Rights Valuation Inputs
2023
2022
Exercise price
Performance right life
Underlying share price
Expected share price volatility (weighted average)1
Risk free interest rate2
Weighted average fair value
Weighted average contractual life
Nil
Nil
0.76 - 2.76 years 0.52 - 2.52 years
$0.083
N/A
N/A
$0.083
1.52 years
$0.135
103%
3.27%
$0.140
1.76 years
1. Where applicable, the expected volatility has been based on the evaluation of the historical volatility of the Company’s share price, particularly over
the historical period commensurate with the expected performance right life.
2. Where applicable, this is based on high quality government bonds sourced from the Reserve Bank of Australia which reflect the period commensurate
with the performance right life.
Unlisted Directors Options
At the 2022 Company AGM, 8 million options were issued to the directors. The fair value at grant date of the options issued
has been determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility
of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The options
vested immediately.
The Group have valued the options using Black Scholes model using the following inputs:
●
●
●
●
●
●
valuation date - 25 November 2022
share price at valuation date $0.13
expiry date - 21 December 2025
risk free rate - 3.23%
company-specific volatility - 103%
strike price - $0.20
The total fair value of options issued and recognised in the statement of profit and loss during the year amounting to $0.648
million.
Note 25. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
52
Centrex Limited
Notes to the financial statements
30 June 2023
Note 26. Financial instruments and exposures
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group
uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis
in the case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate procedures,
controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Group's operating units. Finance
reports to the Board on a monthly basis.
Financial assets
Cash and cash equivalents
Trade and other receivables
Security deposits
Total financial assets
Financial liabilities
Trade and other payables
Borrowings
Lease liabilities
Financial liabilities
Market risk
2023
$'000
6,735
1,204
563
8,502
8,843
3,599
2,928
15,370
2022
$'000
12,848
476
530
13,854
2,783
-
151
2,934
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through
foreign exchange rate fluctuations.
Interest rate risk
The Group has exposure to future interest rates on investments in fixed and variable-rate deposits. As at 30 June 2023 the
Group had $0.563 million invested in such deposits (2022: $0.530 million). The Group does not use derivatives to mitigate
these exposures.
Sensitivity Analysis
For the year ending 30 June 2023, a 1 percent increase in the effective interest rate would have resulted in an increase in
profit of $0.06 million ( 2022: $0.05 million).
Credit risk
The Group does not have significant credit exposure to outstanding receivables or investments due to the present nature of
its operations. There have been no historical impairment losses.
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents)
and available borrowing facilities to be able to pay debts as and when they become due and payable.
53
Centrex Limited
Notes to the financial statements
30 June 2023
Note 26. Financial instruments and exposures (continued)
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financial risk management objectives
The Group does not enter into or trade financial instruments, for speculative purposes. As at 30th June 2023 the Group has
no exposure to exchange rate risk and has no derivative exposures to commodity prices.
Net fair values of financial assets and liabilities
Net fair values of financial assets and liabilities not readily traded in an organised financial market are determined by valuing
them at the present value of contractual future cash flows on amounts due from customers (reduced for expected credit
losses) or due to suppliers. Cash flows are discounted using standard valuation techniques at the applicable market yield
having regard to the timing of the cash flows. The carrying amounts of bank term deposits, trade debtors, other debtors and
accounts payable approximate net fair value.
The financial assets and financial liabilities included in assets and liabilities approximate their net fair values.
Cash assets are readily traded on organised markets in a standardised form. All other financial assets and liabilities are not
readily traded on organised markets in a standardised form.
Note 27. Fair value measurement
Accounting policy for fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
Note 28. Key management personnel disclosures
Transactions with Key Management Personnel
Key Management Personnel remuneration includes the following as disclosed in detail in the remuneration report:
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is set out
below:
Short-term employee benefits
Long-term benefits
Share-based payments
54
2023
$
888,059
66,645
890,039
2022
$
727,819
55,501
83,000
1,844,743
866,320
Centrex Limited
Notes to the financial statements
30 June 2023
Note 29. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Grant Thornton, the auditor of the
company:
Audit services - Grant Thornton
Audit or review of the financial statements
Other services - Grant Thornton
Tax compliance
Note 30. Contingent assets and liabilities
Contingent assets
2023
$
2022
$
241,152
102,486
9,150
15,927
250,302
118,413
On 22nd March 2018 the Group executed agreements to sell the Wilgerup iron ore project and Kimba Gap iron ore project to
SIMEC Mining (formerly Arrium Mining) which is a business of OneSteel Manufacturing Pty Ltd (“OMPL”). OMPL will pay
royalty streams to Centrex upon commencement of mining at each project. The royalties are capped to a value of A$ 5 million
for each project. The per tonne royalty rates and the royalty caps are both indexed annually to CPI (from 2018). If OMPL has
not committed to mining either of the projects by the 10th anniversary of the executed agreement the relevant project will be
returned at Centrex’s election.
Bank guarantees
Bank guarantees have been disclosed at Note 15.
Note 31. Commitments
In order to maintain its right of renewal of tenements (reviewed on a regular basis), the Group is required to meet exploration
expenditures as defined at the time of the granting of the tenements. The tenement commitments are listed in detail in Section
10 of the Directors’ Report. A summary of these commitments is as follows:
Tenements with annual commitments
Committed at the reporting date but not recognised as liabilities, payable:
Ardmore (QLD) - Phosphate
Goulburn (NSW) - Zinc1
Oxley (WA) Potassium Nitrate
2023
$'000
2022
$'000
300
-
152
200
-
152
1. The annual commitments for the New South Wales tenements are an estimate of the work program to which the Group has committed to undertake over
the term of the licence.
Capital commitments
Capital expenditure contracted for at end of the reporting period but not recognised as liabilities is $0.533m (2022: $nil).
Note 32. Related party transactions
Parent entity
Centrex Limited is the parent entity.
55
Centrex Limited
Notes to the financial statements
30 June 2023
Note 32. Related party transactions (continued)
Subsidiaries
Interests in subsidiaries are set out in note 34.
Key management personnel
Disclosures relating to key management personnel are set out in note 28 and the remuneration report included in the
directors' report.
Transactions with related parties
On the 1st April 2022 the Company advised the market upon that a notice of conversion was received from the convertible
note holder. Pursuant to the terms of the convertible note, the company converted the convertible note(including all
capitalised interest on the outstanding loan) into 59,545,454 ordinary shares and 59,545,454 attaching options in accordance
with it terms. The total fair value at the date of conversion was $18.934 million.
Pursuant to the conditions of the convertible note, total interest accumulated on the convertible note was $340,000 of which
$30,000 was paid in cash during the prior year leaving $310,000 subject to share and option settlement.
Note 33. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
56
2023
$'000
Parent
2022
$'000
(9,549)
(21,537)
(9,549)
(21,537)
2023
$'000
Parent
2022
$'000
1,285
13,933
24,167
25,452
141
14,074
594
33
627
24,825
75,100
12,208
(62,483)
4,676
-
4,676
9,399
74,816
9,815
(75,232)
24,825
9,399
Centrex Limited
Notes to the financial statements
30 June 2023
Note 33. Parent entity information (continued)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2023.
Note 34. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 1:
Name
Principal place of
business /
Country of
incorporation
South Australian Iron Ore Group Pty Ltd
Flinders Pastoral Pty Ltd
AgriFlex Pty Ltd (previously named Centrex Phosphate Pty Ltd)
Centrex QLD Exploration Pty Ltd (previously Port Spencer Holdings
Pty Ltd)
DSO Development Pty Ltd
Lachlan Metals Pty Ltd
Kimba Gap Iron Project Pty Ltd
Centrex Potash Pty Ltd
Centrex Zinc Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Note 35. Events after the reporting period
Ownership interest
2023
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2022
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
On 3rd July the Company signed a binding offtake agreement with Ravensdown for up to 20% of production. The offtake
agreement is for a term of 2.5 years to purchase 15KT of phosphate in the first year with the subsequent years allocations to
be mutually agreed.
On the 16th August the Company signed an agreement to take first steps towards commencement of exploration on Banaba
Island. The Company has entered into a binding agreement with the Rabi Council of Leaders, the appointed representative
of the official traditional owners of Banaba Island (‘Banaba’), to explore the feasibility of mining the remanent phosphate rock
on the Pacific island of Banaba. If the project proceeds, Centrex’s plans include the expected delivery of extensive
rehabilitation projects and initiatives to improve environmental and socio-economic conditions on the island which were
impacted by previous mining activity.
On the 23rd August the Company announced that it had completed a $4.25M placement and launched a Share Purchase
Plan. The placement resulted in the issue of 47,222,222 shares at $0.09 on the 30th August. On the 25th September the
Company announced the results of the Share Purchase Plan, which raised a total of $0.182M issuing 2,016,666 shares at
$0.09 on the 28th September.
On the 29th August the Company issued 42,312 shares as a result of exercise of unlisted options at $0.05.
On the 7th September Dr John Santich was appointed as company secretary of the Company. Dr Santich replace Mr Jonathan
Lindh who tended his resignation to concentrate on his private legal practise.
On the 12th September the Company issued 7,088,461 share as a result of performance rights exercised.
No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
57
Centrex Limited
Notes to the financial statements
30 June 2023
Note 36. Reconciliation of loss after income tax to net cash used in operating
activities
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Write off of exploration expenditure
Share-based payments
Change in fair value of convertible note
(Increase) / decrease in inventories
(Increase) / decrease in trade and other receivables
Increase / (decrease) in provisions
Increase / (decrease) in trade and other payables
Increase / (decrease) in payable for investing activities
2023
$'000
2022
$'000
(9,548)
(21,655)
949
-
2,393
-
(5,578)
(841)
319
5,344
-
1
94
132
18,934
-
(475)
1,222
(2,691)
2,868
Net cash used in operating activities
(6,962)
(1,570)
Note 37. Earnings per share
Earnings per share for loss from continuing operations
Loss after income tax attributable to the owners of Centrex Limited
Loss after income tax attributable to the owners of Centrex Limited
2023
$'000
2022
$'000
(9,548)
(21,655)
2023
$'000
2022
$'000
(9,548)
(21,655)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
611,932,487
367,404,274
Weighted average number of ordinary shares used in calculating diluted earnings per share
611,932,487
367,404,274
Basic earnings per share
Diluted earnings per share
Cents
Cents
(1.56)
(1.56)
(4.93)
(4.93)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Centrex Limited, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
58
Centrex Limited
Directors' declaration
30 June 2023
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2023
and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
29 September 2023
59
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3
170 Frome Street
Adelaide SA 5000
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
To the Members of Centrex Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Centrex Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, and notes to the consolidated 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:
a giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for
the year ended on that date; and
b 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 (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
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60
Material uncertainty related to going concern
We draw attention to Note 3 in the financial statements, which indicates that the Group incurred a net loss of
$9,548,000 during the year ended 30 June 2023, and cash outflows from operating and investing activities of
$9,444,000. As stated in Note 3, these events or conditions, along with other matters as set forth in Note 3,
indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. 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.
In addition to the matter described in the Material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
Inventory – Note 14
As at 30 June 2023, the total carrying value of
inventory was $5,215,000. Inventory at period end
represents mined, crushed, and processed ore and
goods in transit.
The assessment of the valuation and classification of
ore stockpiles includes a number of estimates and
judgements. These include, but are not limited to:
•
•
•
•
the determination of tonnes of ore on hand at
year end;
the allocation of mining and processing costs to
inventory based on the stage of production;
the estimation of actual grades and forecast
recovery rates;
the estimation of costs to sell; and
• The net realisable value of inventory.
This is a key audit matter given the number of
management estimates and judgements applied.
Carrying value of plant, equipment and mine
development assets - Note 17
As at 30 June 2023, the Ardmore Phosphate
Project’s plant, equipment, and mine development
assets have a total carrying value of $28,520,000.
The carrying value is inclusive of exploration
interests totalling $22,459,000 that were transferred
from exploration and evaluation assets to plant,
equipment, and mine development assets during the
year.
The evaluation of the recoverable amount of the
assets requires significant judgement in determining
key assumptions supporting the expected future
cash flows of the Ardmore Phosphate Project and
the utilisation of the relevant assets.
How our audit addressed the key audit matter
Our procedures included, amongst others:
•
•
•
•
•
•
obtaining an understanding of the internal controls
in place with respect to the valuation and
classification of ore stocks on hand;
attending inventory stock-takes and observing the
drone surveys completed;
reconciling inventory observations to management’s
inventory models;
assessing the completeness and accuracy of costs
allocated to inventories based on the stage of
production;
assessing the inputs and estimates used in
estimating net realisable values; and
assessing the appropriateness of the disclosures
included in the financial statements.
Our procedures included, amongst others:
• Documenting the processes and assessing the
internal controls relating to the capitalisation of
costs and management’s assessment of
impairment;
• Obtaining management's reconciliation of plant and
equipment and mine development assets and
agreeing to the general ledger;
• Assessing the determination of cash generating
unit's based on understanding how the Chief
Operating Decision Maker monitors the Group's
operations and makes decisions about the assets
that generate independent cash flows;
61
Grant Thornton Audit Pty Ltd 2
Key audit matter
How our audit addressed the key audit matter
Carrying value of plant, equipment and mine
development assets - Note 17 (Cont)
This area is a key audit matter due to the level of
judgement and estimation used in the value in use
models.
• Obtaining management's discounted cash flow
model and analysing for appropriateness against
AASB 136 Impairment of Assets, including:
− Understanding management’s assumptions;
− Performing sensitivity analysis on assumptions;
− Comparing forecast production against
available reserves;
• Compared the market capitalisation of the Group at
30 June 2023 against the carrying value of assets
as a cross check against the value in use model;
and
• Reviewing the appropriateness of the related
disclosures within the financial statements.
Information other than the financial report and auditor’s report thereon
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 2023, 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 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 Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have 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.
62
Grant Thornton Audit Pty Ltd 3
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June
2023.
In our opinion, the Remuneration Report of Centrex Limited, for the year ended 30 June 2023 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.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 29 September 2023
63
Grant Thornton Audit Pty Ltd 4
Centrex Limited
Shareholder information
30 June 2023
The shareholder information set out below was applicable as at 28th September 2023.
ASX Additional Information (unaudited)
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in
this report is set out below.
Substantial Shareholders of Ordinary and Escrow shares
Rank
Name
28th September 2023
Units
% of
Issued
Capital
1
2
3
4
5
DAPOP PTY LTD
110,905,672
16.531%
AUSTRALIA NEW ZEALAND RESOURCES
CORPORATION PTY LTD
WISCO INTERNATIONAL RESOURCES
DEVELOPMENT & INVESTMENT LIMITED
59,545,454
8.875%
40,399,599
6.022%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
25,344,924
3.778%
BAOTOU IRON & STEEL (GROUP) COMPANY
LIMITED
21,900,000
3.264%
Distribution of equity holders
Name
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
28th September 2023
Fully paid
ordinary and
escrow
shares
Employee
options /
rights plan
101
347
623
1,684
668
3,423
-
-
-
-
13
13
At 28th September 2023 there were 2,749 holders of a total of 668,882,024 fully paid ordinary shares and there were 83
shareholders holding less than a marketable parcel.
The issued capital of the Company is fully paid ordinary shares (entitling the holders to participate in dividends and the
proceeds on winding up of the Company in proportion to the number of shares held). On a show of hands every holder
of the shares present at a meeting in person or by proxy is entitled to one vote and upon poll each share counts as one
vote.
64
Centrex Limited
Shareholder information
30 June 2023
Top 20 Holders of Ordinary and Escrow shares
Rank Name
28th September 2023
Units
110,905,672
59,545,454
% of Issued
Capital
16.531%
8.875%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
DAPOP PTY LTD
AUSTRALIA NEW ZEALAND RESOURCES
CORPORATION PTY LTD
WISCO INTERNATIONAL RESOURCES DEVELOPMENT
& INVESTMENT LIMITED
40,399,599
6.022%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BAOTOU IRON & STEEL (GROUP) COMPANY LIMITED
CITICORP NOMINEES PTY LIMITED
HONGMEN PTY LTD
LENROSS NOMINEES PTY LTD
MISS MENGJIAO ZHAO
BNP PARIBAS NOMINEES PTY LTD
VINGO HOLDINGS LTD
MR MELVIN BOON KHER POH
MR GREGORY NEVILLE ARNOLD
MR EWE GHEE LIM & MISS CHARLENE YULING LIM
MR TREVOR COPE & MRS WENDY COPE
JARHAMCHE PTY LTD
MR DIETER URMERSBACH & MRS ROSMARIE
URMERSBACH
MR MICHAEL JOHN ROSSER
JAMARI PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
25,344,924
21,900,000
19,648,870
10,500,000
8,259,251
6,867,500
6,513,409
5,535,000
4,382,404
4,120,962
3,750,000
3,600,000
3,400,000
3,146,301
3,060,455
3,000,000
2,895,811
346,775,612
3.778%
3.264%
2.929%
1.565%
1.231%
1.024%
0.971%
0.825%
0.653%
0.614%
0.559%
0.537%
0.507%
0.469%
0.456%
0.447%
0.432%
51.69%
There are no other classes of equity securities.
65
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