ABN: 28 106 353 253
And Controlled Entities
CONSOLIDATED ANNUAL REPORT
For the Year Ended
30 June 2018
CONTENTS
CORPORATE DIRECTORY
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ADDITIONAL ASX INFORMATION
1
2
19
20
21
22
23
24
55
56
60
Volt Resources Limited and Controlled Entities
CORPORATE DIRECTORY
DIRECTORS
Asimwe Kabunga
Stephen Hunt
Alwyn Vorster
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
CHIEF EXECUTIVE OFFICER
Trevor Matthews
SECRETARY
Susan Hunter
REGISTERED OFFICE
Level 5, London House
216 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9486 7788
Facsimile: +61 8 9463 6103
BUSINESS OFFICES
Level 5, London House
216 St Georges Terrace
Perth WA 6000
Volt Graphite Tanzania Ltd
Level 1, Golden Heights Building
Plot No 1826/17 Chole Road
Msasani Peninisula, Masaki
PO Box 80003
Dar es Salaam, Tanzania
WEBSITE & EMAIL
www.voltresources.com
info@voltresources.com
SHARE REGISTRY
Advanced Share Registry Services
110 Stirling Highway
Nedlands WA 6009
Telephone: +61 8 9389 8033
Facsimile: +61 8 9262 3723
AUDITORS
HLB Mann Judd
Level 4
130 Stirling Street
Perth WA 6000
Volt Resources Limited and Controlled Entities
1
DIRECTORS’ REPORT
Your Directors submit the financial report of Volt Resources Limited (the Company) and its
Controlled Entities (Consolidated Entity) for the year ended 30 June 2018.
DIRECTORS AND CEO
The names of Directors who held office during or since the end of the year:
Asimwe Kabunga
Stephen Hunt
Alwyn Vorster
Matthew Bull
Non-Executive Chairman (since 4 August 2017)
Non-Executive Director (Chairman to 4 August 2017)
Non-Executive Director
Non-Executive Director (resigned 9 July 2018)
Trevor Matthews is the Chief Executive Officer.
PRINCIPAL ACTIVITIES
The principal activity of the Consolidated Entity during the financial year was graphite exploration
and evaluation activities in Tanzania.
RESULTS
The loss after tax for the year ended 30 June 2018 was $3,079,019 (2017: $3,102,035).
REVIEW OF OPERATIONS
Overview
Key operational highlights during the year included:
• Feasibility Study (FS) for the Stage 1 Bunyu Graphite Project was substantially completed
and the results announced on 31 July 2018.
• Positive FS based on annual throughput rate of 400,000 tonnes of ore to produce on
average 23,700 tonnes per annum of graphite products over a 7 year project period:
Pre-tax NPV at 10% discount rate of US$18.6 million, after tax US$14.7 million;
Pre-tax IRR of 21%
Payback period of 4.4 years
Start-up Capital cost estimate of US$31.8 million
FOB operating costs averaging US$664 per tonne
Average annual EBITDA of US$13.1 million over 7 years, US$96.3 million in total.
• Key objective of Stage 1 development is to establish infrastructure and market position in
support of the development of the significantly larger Stage 2 expansion project.
• Stage 1 development incorporates a significant amount of infrastructure, utilities and
mine development work that will benefit the Stage 2 expansion.
• Stage 2 expansion is currently assumed to approximate the Pre-feasibility Study of 15
December 2016 which reported an after tax NPV at 10% discount rate of US$890 million.
Volt Resources Limited and Controlled Entities
2
DIRECTORS’ REPORT Continued
Based on a 22 year mine life, producing on average 170,000 tonnes per annum of graphite
product. A Definitive Feasibility Study (DFS) for Stage 2 is planned to proceed concurrently
with the Stage 1 project development, in the near term.
• Volt appointed experienced, well-qualified investment banking firm Exotix Capital and in
partnership decided to proceed with a planned raising of US$30-US$40 million via a
Tanzanian note issue listed on the Dar es Salaam Stock Exchange (DSE) as funding for
Stage 1 development.
• A draft prospectus or information memorandum (IM) for the note issue was lodged with
the two Tanzanian regulators, DSE and Capital Markets and Securities Association (CMSA)
on 27 March 2018 for their approvals. After formal feedback and discussions, intergroup
financial restructuring and incorporation of recent FS results, the Company lodged a
revised IM with both regulators on 17 August 2018 for further consideration.
• Subsequent to the new strategic plan announced on 18 May 2017, whereby the Feasibility
studies were to be revised to focus on a Stage 1 starter project and a Stage 2 expansion
project, on 22 September 2017 it was announced that the project would be renamed the
Bunyu Graphite project from the previous Namangale Graphite project and Volt’s
Tanzanian subsidiary Nachi Resources Limited would be renamed Volt Graphite Tanzania
Limited.
• North American offtake partner Nano Graphene Inc. confirmed the premium quality of
Bunyu grahite product during the September 2017 quarter.
Infill drilling for the Bunyu Stage 1 FS focussed on the Bunyu 1 deposit and included:
•
Reverse Circulation drilling of 56 holes totalling 1,452 metres
Diamond Core drilling of 16 holes totalling 463 metres
Water bore drilling of 2 holes totalling 175 metres.
This was completed during the December 2017 quarter, with assays of samples
completed in the following quarter.
• Metallurgical testwork confirmed the premium grade graphite product at the Bunyu 1
deposit including C content of 99.6% and O content of 0.08%, with no impurities. High
quality defect-free material, to be the main source of ore for the Stage 1 project and the
Stage 2 expansion project.
• The Company’s Environmental and Social Impact Statement (ESIS) for the Bunyu Graphite
Project covering the footprints of both Stage 1 and Stage 2 expansion project was initially
lodged with the National Environmental Management Council (NEMC) on 23 January
2018. After site visits by NEMC and requests for the inclusion of further information, an
updated ESIS was lodged during the June 2018 quarter. The resulting Environmental
Certificate and Environmantal Conditions were received on 3 September 2018.
• The Resettlement Action Plan (RAP) was completed during the March 2018 quarter with
the associated Valuation Report of compensation payable to people affected by the
Bunyu Project development approved by the Government Chief Valuer on 17 April 2018.
The Valuation Report is now fully approved following approval at the district and regional
levels.
• On 8 February 2018 the Company announced it had lodged two Mining Licence
Applications (MLA’s) with the Ministry of Energy and Minerals of Tanzania covering both
Stages 1 and 2 of its Bunyu Graphite Project. A key requirement for the approval of the
Volt Resources Limited and Controlled Entities
3
DIRECTORS’ REPORT Continued
Mining Licences is the receipt and attachment of the Environmental Certificate for the
project, which was received on 3 September 2018.
• Additional Offtake agreements continued to be advanced following positive meetings
with potential Chinese partners during April 2018. Subsequent to year end, in early August
2018 a second binding offtake was signed with Qingdao Tiangshengda Graphite for 9,000
tonnes per annum of Bunyu Graphite product, approx. 40% of forecast production from
the Stage 1 project and a Co-operation agreement was signed with Haida Graphite in late
August. Further signed Offtake agreements are anticipated, immediately after project
development funding is available.
CORPORATE
Ms Susan Hunter was appointed Company Secretary effective 1 August 2017.
Following the resignation of Mr Stephen Hunt as Chairman on 4 August 2017, Mr Asimwe Kabunga
was appointed Non-Executive Chairman effective from the same date. Mr Hunt remains as a Non-
executive director.
The 2017 AGM was held on 24 October 2017 and all resolutions passed on a show of hands.
During the December 2017 quarter and in early January 2018, the Company raised $7.9 million
before underwriting and raising costs, from a shareholder purchase plan, top-up placement and
exercise of listed options. These funds were utilised to fund the drilling, feasibility study,
environmental reports, resettlement action plan report with supporting valuations, preparation
and fees for the note prospectus (IM), plus ongoing operational and compliance costs.
A share placement of $2.0 million before costs was completed on 14 June 2018 with funds to be
deployed to repay the Convertible Loan Facility, predominately in July 2018, and working capital
requirements at the Bunyu Graphite project.
Volt Resources Limited and Controlled Entities
4
DIRECTORS’ REPORT Continued
DIRECTOR AND COMPANY SECRETARY INFORMATION
Current Directors
Mr Asimwe Kabunga – Non-Executive Chairman from 4 August 2017, appointed 5 April 2017.
Qualifications – BSc Mathematics and Physics
Other current directorships of Listed Public Companies – Strandline Resources Limited; Lindian
Resources Limited (Chairman).
Former directorships of Listed Public Companies in last three years - Nil
Interests in Shares and Options over Shares in the Company:
160,142,017 fully paid ordinary shares;
Nil options
Mr Kabunga is a Tanzanian born Australian entrepreneur who has over 20 years technical and
commercial experience in Tanzania, the United States and Australia. Mr Kabunga has extensive
experience in the mining industry, logistics, land access, tenure negotiation and acquisition, as
well as a developer of technology businesses. Mr Kabunga has been instrumental in establishing
the Tanzania Community of Western Australia Inc, and served as its first President. Mr Kabunga
was also a founding member of Rafiki Surgical Missions and Safina Foundation, both NGOs
dedicated to helping children in Tanzania.
Mr Stephen Hunt – Non-Executive Director, appointed 15 December 2015. Non-Executive
Chairman prior to 4 August 2017.
Qualifications – Bachelor of Business (Maj. Marketing), AICD member
Other current directorship of Listed Public Companies – American Pacific Borate and Lithium
Limited
Former directorships of Listed Public Companies in last three years – Magnis Resources Limited
Interests in Shares and Options over Shares in the Company:
12,687,026 fully paid ordinary shares;
Nil options;
2,500,000 performance rights
Mr Hunt has more than 25 years of experience in the marketing of steel and mineral products
worldwide. His career includes 15 years at BHP Billiton Ltd, where he spent 5 years in the London
office marketing minerals to European and Middle Eastern customers. Stephen has built on his
extensive network and developed his own minerals trading company, which has a strong Chinese
focus. He brings along with him 15 years of cumulative board experience with ASX limited
companies and most recently was a founding director of Magnis Resources Limited.
Mr Matthew Bull – Non-Executive Director, appointed 1 June 2015, resigned 9 July 2018.
Qualifications – BSc Geology (hons)
Other current directorship of Listed Public Companies – Lindian Resources Limited
Former directorships of Listed Public Companies in last three years - Nil
Interests in Shares and Options over Shares in the Company:
Nil fully paid ordinary shares;
Nil options
Volt Resources Limited and Controlled Entities
5
DIRECTORS’ REPORT Continued
Mr Bull has over 10 years’ experience in the mining and exploration industry. He has worked in a
wide range of commodities including graphite, gold and iron ore. He has considerable experience
on the operation greenfield and resource development drilling exploration programs. His previous
positions include consultant geologist working on Discovery Africa’s Tanzanian Graphite Project
and CEO/Chief Geologist at Baru Resources.
Mr Alwyn Vorster – Non-Executive Director, appointed 22 March 2016.
Qualifications – BSc Geology; MBA, MSc Mineral Economics
Other current directorship of Listed Public Companies: Managing Director of BCI Minerals Limited
Former directorships of Listed Public Companies in last three years: Iron Ore Holdings Limited –
Managing Director (2010-2014)
Interests in Shares and Options over Shares in the Company:
6,229,437 fully paid ordinary shares;
Nil options;
2,000,000 performance rights
Mr Vorster is a mining professional with more than 25 years of experience working with numerous
large and smaller mining companies in technical and commercial roles covering the total supply
chain from geology, mining, rail and port, shipping, marketing and sales. He has held various CEO
roles during his career, including with BCI Minerals Limited, API Management and with Iron Ore
Holdings Limited.
Ms Susan Hunter – Company Secretary, appointed 1 August 2017.
Ms Hunter has over 24 years’ experience in the corporate finance industry and has extensive
experience in Company Secretarial and Non-Executive Director roles on ASX, AIM and TSX listed
companies. She is founder and Managing Director of consulting firm Hunter Corporate Pty Ltd,
which specialises in the provision of corporate governance and company secretarial advice to ASX,
AIM and TSX listed companies. She has previously held senior management roles at Ernst & Young,
PricewaterhouseCoopers and Bankwest, both in Perth and Sydney. Ms Hunter holds a Bachelor
of Commerce degree majoring in accounting and finance, is a Chartered Accountant, a Fellow of
the Financial Services Institute of Australasia, a Fellow of the Institute of Chartered Secretaries
and Administrators and a Graduate Member of the Australian Institute of Company Directors.
Volt Resources Limited and Controlled Entities
6
DIRECTORS’ REPORT Continued
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company’s Directors (and committees
of directors) held during the year ended 30 June 2018, and the number of meetings attended by
each Director.
Director
Director
Asimwe Kabunga
Stephen Hunt *
Alwyn Vorster
Matthew Bull *
Directors’
Meetings
Audit & Risk Committee
Meetings
Eligible to
Attend
12
12
12
12
Attended
12
12
11
11
External Advisor
Glyn O’Brien
Eligible to
Attend
-
-
2
2
2
Attended
-
-
2
2
2
* Mr Matthew Bull resigned as a Non-executive director on 9 July 2018 and Mr Stephen Hunt was
appointed to the Audit and Risk Committee on 15 August 2018.
Mr Kabunga and Mr Hunt attended the Audit & Risk Committee meetings as guests.
SHARE OPTIONS
At the date of this report the following options have been granted over unissued capital to
advisors which had assisted with prior capital raisings and North American investor relations.
Number
12,200,000
4,200,000
4,200,000
4,200,000
Exercise Price
$0.06
$0.08
$0.10
$0.12
Expiry Date Status
30 April 2019 Unlisted
30 April 2019 Unlisted
30 April 2019 Unlisted
30 April 2019 Unlisted
PERFORMANCE RIGHTS
During the 2018 financial year 17,000,000 performance rights have been issued and 6,500,000
performance rights have lapsed. Previously 4,500,000 performance rights lapsed on 30 June 2017.
A balance of 19,500,000 performance rights remain outstanding at balance date and at the date
of this report.
Volt Resources Limited and Controlled Entities
7
DIRECTORS’ REPORT Continued
EVENTS SUBSEQUENT TO REPORTING DATE
No matters or circumstances have arisen since the end of the year which will significantly affect,
or may significantly affect, the state of affairs or operations of the Consolidated Entity in future
financial periods other than the following:
• Mr Matthew Bull resigned from his role as Non-Executive Director effective 9 July 2018.
• The results of the Stage 1 Bunyu Graphite Project Feasibility Study were released on 31
July 2018.
• A binding Offtake Agreement, for 9,000 tonnes of Graphite product per annum, was
signed with Qingdao Tianshengda Graphite Co Ltd on 2 August 2018.
• A revised Prospectus (IM) was lodged with the Tanzanian regulators on 17 August 2018
for approval of the US$30 to US$40 million Note issue to be listed on the Dar es Salaam
Stock Exhange.
• The Company’s wholly-owned subsidiary Volt Graphite Tanzania Ltd, received the
Environmental Impact Assessment (EIA) Certificate from the National Environment
Management Council of Tanzania (NEMC) on 3 September 2018.
LIKELY DEVELOPMENTS
The Consolidated Entity intends to continue its exploration activities on its existing tenements,
assess the viability of existing tenements and to acquire further suitable tenements for
exploration and/or development as opportunities arise.
The Consolidated Entity is progressing options, including a planned Note issue on the Dar es
Salaam Stock Exchange, to raise development funding, intially for the Stage 1 Bunyu Graphite
Project to allow directors to make a Final Investment Decision (FID) based on the recently
completed Stage 1 Feasibility Study.
The FID is also conditional on the receipt of two Mining Licences for the Bunyu 1 project area
currently under application. Recent receipt of the Environmental Certificate for the Bunyu 1 area
is understood to be the final document required to allow consideration of the Mining licence
applications for approval.
Subsequent to development funding, receipt of mining licences and resulting positive FID for
Stage 1, the Company would then be in a position to commence resettlement of affected
landowners, upgrade of access roads and water supply, preparation of the plant site and
commencement of construction works.
ENVIRONMENTAL REGULATION
The Consolidated Entity has a policy of exceeding or at least complying with its environmental
obligations. During the financial year, the Consolidated Entity did not materially breach any
particular or significant regulation in respect to environmental management in any of the
jurisdictions in which it operates.
Volt Resources Limited and Controlled Entities
8
DIRECTORS’ REPORT Continued
DIVIDENDS
No dividends have been declared, provided for or paid in respect of the financial year ended 30
June 2018 (2017: None).
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has agreed to indemnify all the Directors and Officers of the Company for any
liabilities to another person (other than the Company or related body corporate) that may arise
from their position as Directors or Officers of the Company and its controlled entities, except
where the liability arises out of conduct involving a lack of good faith.
During the financial year the Company paid a premium in respect of a contract insuring the
Directors and Officers of the Company and its controlled entities against any liability incurred in
the course of their duties to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Consolidated Entity
or intervene in any proceeding to which the Consolidated Entity is a party for the purpose of taking
responsibility on behalf of the Company for all or any part of those proceedings. The Consolidated
Entity was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the
Directors of the Consolidated Entity support, and adhere to, good corporate governance
practices. Refer to the Company’s Corporate Governance Statement at www.voltresources.com.
NON-AUDIT SERVICES
No fees for non-audit services were paid or payable to the external auditor of the Parent Entity
during the year ended 30 June 2018 (2017: nil).
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2018, which forms a part of
the directors’ report has been received and is included within this annual report at page 19.
Volt Resources Limited and Controlled Entities
9
DIRECTORS’ REPORT Continued
REMUNERATION REPORT: AUDITED
This remuneration report outlines the key management personnel remuneration arrangements
of the Consolidated Entity in accordance with the requirements of the Corporations Act 2001 and
its Regulations. For the purposes of this report, key management personnel (KMP) of the Group
are defined as those persons having authority and responsibility for planning, directing and
controlling the major activities of the Consolidated Entity, directly or indirectly, including any
director (whether executive or otherwise) of the parent company, and includes the specified
executives. For the purposes of this report, the term 'executive' encompasses the chief executive,
senior executives and secretaries of the Parent and the Consolidated Entity.
Remuneration Committee
The Company is not of a sufficient size to justify the establishment of a remuneration committee
and so the Board of Directors of the Company fulfils this obligation and is responsible for
determining and reviewing remuneration arrangements for the directors and executives. The
Board of Directors assesses the appropriateness of the nature and amount of remuneration of
executives on a periodic basis by reference to relevant employment market conditions with the
overall objective of ensuring maximum stakeholder benefit from the retention of a high quality,
high performing director and executive team.
Remuneration Philosophy
The performance of the Company depends upon the quality of its directors and executives. To
prosper, the Company must attract, motivate and retain highly skilled directors and executives.
To this end, the charter adopted by the remuneration committee aims to align rewards with
achievement of strategic objectives. The remuneration framework applied provides for a mixture
of fixed and variable pay and a blend of short and long term incentives as appropriate.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive director
and executive remuneration is separate and distinct.
Non-Executive Directors
The maximum aggregate amount of fees that can be paid to non-executive directors is subject to
approval by shareholders at General Meeting. The Company’s policy is to remunerate non-
executive directors at market rates (for comparable companies) for time, commitment and
responsibilities. Fees for non-executive directors are not linked to the performance of the
Company, however to align directors’ interests with shareholders’ interests, directors are
encouraged to hold shares in the Company, and subject to approval by shareholders, are
permitted to participate in the Employee Share Option Plan.
Retirement Benefits and Allowances
No retirement benefits or allowances are paid or payable to directors of the Company (other than
statutory or mandatory superannuation contributions, where applicable).
Volt Resources Limited and Controlled Entities
10
DIRECTORS’ REPORT Continued
Executives
Base Pay
Executives are offered a competitive level of base pay which comprises the fixed (unrisked)
component of their pay and rewards. Base pay for senior executives is reviewed annually to
ensure market competitiveness. There are no guaranteed base pay increases included in any
senior executives’ contracts.
Short Term Incentives
Payment of short term incentives is dependent on the achievement of key performance
milestones as determined by the Board of Directors. For the years ended 30 June 2017 and 2018,
these milestones required performance in relation to key strategic, non-financial measures linked
to drivers of performance in future reporting periods. No bonuses have been paid or are payable
in respect of the year to 30 June 2018. There have been no forfeitures of bonuses by key
management personnel during the current or prior periods and no cash bonuses remained
unvested at year-end.
Long Term Incentives - Share-Based Compensation
Both performance rights and share options have been issued to Directors and executives as part
of their remuneration. Share-based compensation instruments are not issued based on
performance criteria, however, they are issued with vesting conditions and exercise prices set
specifically to increase goal congruence between Directors, executives and shareholders.
Performance rights and options granted carry no dividend or voting rights. The Company
currently has no policy in place to limit an individual’s risk exposure in relation to the issue of
company securities as remuneration.
Service Agreements
In late November 2016, the Company entered into an agreement with Mr Trevor Matthews, in his
capacity as Chief-Executive Officer to commence from 1 January 2017 with a base package
inclusive of statutory superannuation and before incentives of $300,000 per annum, plus a
company provided car parking bay at its corporate office.
Under an established Performance Rights Plan approved by shareholders, Mr Matthews was
issued 17,000,000 Performance Rights during the current year in the following tranches subject
to vesting conditions:
• Tranche A – 10,000,000 Performance Rights vest on the commencement of Stage 1
construction of the Bunyu project within 3 years of grant date.
• Tranche B – 2,000,000 Performance Rights vest on the completion of the feasibility study
for Stage 1 of the Bunyu Project by 31 March 2018.
• Tranche C – 5,000,000 Performance Rights vest on the achieving a 30 day VWAP of 20
cents per share for the Company within 3 years of grant date.
The condition for Tranche B was not achieved by 31 March 2018 resulting in the 2,000,000
performance rights lapsing.
In December 2015 as part of Mr Stephen Hunt’s consultancy agreement as Chairman, he was
issued 10,000,000 performance rights split into four tranches with varying hurdles as approved
Volt Resources Limited and Controlled Entities
11
DIRECTORS’ REPORT Continued
by shareholdrers. Tranche 1 of 2,500,000 rights vested in the previous financial year and tranches
2 and 3 totalling 5,000,000 rights lapsed as the hurdles were not achieved in the current year.
Tranche 4 of 2,500,000 Performance rights vest on commencement of mining, and processing of
first ore recovered from the Bunyu Graphite Project to be achieved by 31 March 2019.
In March 2016 as part of Mr Alwyn Vorsters’s consultancy agreement as Non-Executive Director,
he was issued 8,000,000 performance rights split into four tranches with varying hurdles as
approved by shareholdrers. Tranche 1 of 2,000,000 rights vested in the previous financial year
and tranches 2 and 3 totalling 4,000,000 rights lapsed as the hurdles were not achieved in the
current year. Tranche 4 of 2,000,000 Performance rights vest on commencement of mining, and
processing of first ore recovered from the Bunyu Graphite Project to be achieved by 31 March
2019.
Volt Resources Limited and Controlled Entities
12
DIRECTORS’ REPORT Continued
Remuneration of Directors and Key Management Personnel
Key
Management
Personnel
Short Term Benefits
Post-
Employment
Benefits
Super-
annuation
Share
Based
Payments
Perform-
ance
Rights
Total
Perform-
ance
Related
Consulting
Cash
Salary
and Fees
$
Leave
and other
entitle-
ments #
$
$
$
122,472
51,083
48,000
48,000
269,555
-
-
-
-
-
26,909
30,000
-
-
7,835
4,853
4,560
4,560
56,909
21,808
$
-
-
-
-
-
$
157,216
85,936
52,560
52,560
348,272
%
-%
-%
-%
-%
-%
270,000
30,667#
-
30,000
108,261
438,928
24.7%
85,688
3,176
140,000
8,141
139,431
(6,319)
-
11,836
-
-
237,005
144,948
-%
-%
495,119
27,524
140,000
49,977
108,261
820,881
13.2%
764,674
27,524
196,909
71,785
108,261
1,169,153
9.3%
85,000
42,265
48,000
11,441
135,000
-
61,385
-
-
-
-
-
-
-
-
199,300
151,218
4,000
-
-
21,071
4,015
4,560
1,087
15,000
265,000
-
-
5,832
85,000
-
134,000
-
-
-
-
390,371
197,498
190,560
12,528
150,000
265,000
67,217
22%
-%
70%
-%
-%
-%
-%
619,518
51,565
219,000
1,273,174
17.2%
30 June 2018
Asimwe
Kabunga
Stephen
Hunt
Alwyn
Vorster
Matthew
Bull *
Directors
Subtotal
Trevor
Matthews
Mark
Hoffmann
Jason **
Livingstone
Management
Subtotal
KMP
TOTAL
30 June 2017
Stephen Hunt
Matthew Bull
Alwyn Vorster
Asimwe
Kabunga
Trevor
Matthews
Mark
Hoffmann
Jason
Livingstone
KMP TOTAL
383,091
Volt Resources Limited and Controlled Entities
13
DIRECTORS’ REPORT Continued
* Resigned on 9 July 2018
** Resigned on 7 March 2018
# Includes provision of car parking at $6,521.
Share Based Compensation
Options
There were no options granted, exercised or lapsed during the financial year, in relation to key
management personnel’s remuneration, apart from 2,000,000 options exercised by Mr Hunt,
2,000,000 options exercised by Mr Vorster and 3,000,000 options which lapsed unexercised by
Mr Bull, which were all granted as remuneration in the 2016 financial year.
Performance Rights
17,000,000 performance rights have been issued to Trevor Matthews during the 2018 financial
year with milestones as set out above. Based upon a valuation of the performance rights at the
grant date an amount of $108,261 has been included in remuneration of the recipient based on
the value attributable to the milestones over the determined vesting period during the 2018
financial year.
The fair value of the performance rights granted during the financial year is estimated as at the
date of grant using the black scholes model (except Tranche 3) and trinomial option model
(Tranche 3) taking into account the following inputs:
Details
Share price barrier
Expected volatility
Risk free interest rate
Expected life
Exercise price
Grant date share price
Fair value per right
Probability at
30 June 2018
Black Scholes Option Model
Tranche 1
Performance RIghts
expiring
18-May-2020
n/a
90%
1.76%
3 years
nil
$0.029
$0.029
Tranche 2
Performance
RIghts expiring
31-Mar-2018
n/a
90%
1.65%
0.87 years
nil
$0.029
$0.029
Trinomial Option
Model
Tranche 3
Performance
RIghts expiring
18-May-2020
$0.20
30%
1.76%
3 years
nil
$0.029
$0.000
100%
0%
N/A.
Volt Resources Limited and Controlled Entities
14
DIRECTORS’ REPORT Continued
Directors and Key Management Personnel Equity Holdings
Shares
Key
Management
Personnel
Balance at
Beginning
of Year
Issued as
Remuneration
Exercise of
Options /
Conversion of
Perf. Rights
Net Other
Change*
Balance at
End of Year
2018
Asimwe
Kabunga
Stephen
Hunt
Matthew
Bull
Alwyn
Vorster
Trevor
Matthews
Mark
Hoffmann
Jason
Livingstone
145,645,118
9,258,454
4,088,885
3,515,151
-
-
-
TOTAL
162,507,608
2017
Stephen Hunt
Alan
Armstrong
Trevor
Matthews
Matthew
Bull
Alwyn
Vorster
Asimwe
Kabunga
Mark
Hoffmann
Jason
Livingstone
4,173,454
4,000,000
-
3,838,885
1,515,151
142,127,795
-
-
TOTAL
155,655,285
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,202,613
1,294,286 160,142,017
2,000,000
1,428,572
12,687,026
-
-
4,088,885
2,000,000
714,286
6,229,437
-
72,920
72,920
300,000
-
-
-
300,000
-
17,502,613
3,510,064 183,520,285
2,500,000
2,585,000
9,258,454
-
(4,000,000)**
-
-
-
250,000
4,088,885
-
-
2,000,000
-
3,515,151
-
-
-
3,517,323 145,645,118
-
-
-
-
4,500,000
1,352,323 162,507,608
*On-market purchases / (sales) and share placements/purchase plans.
**Balance on date of resignation.
Volt Resources Limited and Controlled Entities
15
DIRECTORS’ REPORT Continued
Options
Key
Management
Personnel
Balance at
Beginning
of Year
Granted as
Remuneration
Exercise/lapsing
of Options
Net Other
Change*
Balance at
End of
Year
Vested at Year End
Exercisable Vested
During
Year
2018
Asimwe
Kabunga
Stephen
Hunt
Matthew
Bull***
Alwyn
Vorster
Trevor
Matthews
Mark
Hoffmann
Jason
Livingstone
11,397,613
2,000,000
5,461,412
2,000,000
-
300,000
-
TOTAL
21,159,025
2017
Stephen
Hunt
Alan
Armstrong
Trevor
Matthews
Matthew
Bull
Alwyn
Vorster
Asimwe
Kabunga
Mark
Hoffmann
Jason
Livingstone
2,000,000
3,000,000
-
3,000,000
2,000,000
9,046,430
-
-
TOTAL
19,046,430
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,202,613)
1,805,000
(2,000,000)
(5,461,412)
(2,000,000)
-
(300,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(22,964,025)
1,805,000
Nil
-
-
-
-
-
-
-
-
-
-
2,000,000
2,000,000
-
(3,000,000)**
-
-
-
-
-
-
-
-
-
-
-
-
2,461,412
5,461,412
5,461,412
-
2,000,000
2,000,000
2,351,183 11,397,613 11,397,613
300,000
300,000
300,000
-
-
-
2,112,595 21,159,025 21,159,025
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
*On-market purchases / (sales).
**Balance on date of resignation.
*** These options lapsed unexercised.
Volt Resources Limited and Controlled Entities
16
DIRECTORS’ REPORT Continued
All share options issued to key management personnel were made in accordance with the
provisions of the employee share option plan. During the financial year, 17,502,613 options were
exercised by key management personnel (2017: nil). No employee share option were granted as
remuneration during the 2017 and 2018 financial years. All options received as remuneration had
vested in full prior to 1 July 2016. Performance rights have been the preferred method of
remuneration in recent years.
Performance Rights
Key
Management
Personnel
Balance at
1 July 2017
Granted as
Remuneration
Vested and
converted into
ordinary shares
Lapsed as
hurdle not
achieved
Balance at
End of Year
2018
Asimwe
Kabunga
Stephen
Hunt
Matthew
Bull
Alwyn
Vorster
Trevor
Matthews
Mark
Hoffmann
Jason
Livingstone
-
5,000,000
-
4,000,000
-
-
-
-
-
-
-
17,000,000
-
-
TOTAL
9,000,000
17,000,000
-
-
-
-
-
-
-
-
-
-
(2,500,000)
2,500,000
-
-
(2,000,000)
2,000,000
(2,000,000)
15,000,000
-
-
-
-
(6,500,000)
19,500,000
Other Transactions with Key Management Personnel of the Consolidated Entity
An entity associated with Mr Trevor Matthews provided a convertible loan of $50,000 to the
Company on the same terms and conditions as all other convertible loans. The loans have a 10%
interest rate per annum which accrues daily. The interest is payable quarterly in arrears in cash or
Company shares. The lender can convert the facility into Company shares at any time prior to
maturity at a conversion price of $0.05 per share. The loan remains outstanding and is due to
mature on 5 October 2018. Interest paid on the convertible loan was paid as fully paid ordinary
shares in the Company at Mr Matthews election, in accordance with the loan terms.
During the 2018 financial year, there were no other transactions with Key Management
Personnel.
End of Remuneration Report
Volt Resources Limited and Controlled Entities
17
DIRECTORS’ REPORT Continued
Signed in accordance with a resolution of directors.
___________________
Asimwe Kabunga
Non-Executive Chairman
14 September 2018
Volt Resources Limited and Controlled Entities
18
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Volt Resources Limited for the year
ended 30 June 2018, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(a)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
14 September 2018
L Di Giallonardo
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers
19
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Revenue
Corporate compliance fees
Corporate management costs
Foreign exchange (loss)
Marketing and investor relations costs
Occupancy expenses
Share based payments
Interest expenses
Other expenses
Loss before income tax benefit
Income tax benefit
Note
2
2, 15
2
3
Consolidated
Year Ended
30 June 2018
$
Consolidated
Year Ended
30 June 2017
$
22,220
(477,413)
(1,655,069)
(56,111)
(246,059)
(161,037)
(108,261)
(140,142)
(805,774)
52,260
(470,490)
(1,173,265)
15,241
(332,727)
(130,153)
(792,750)
-
(423,003)
(3,627,646)
548,627
(3,254,887)
152,852
Net loss for the year from continuing operations
(3,079,019)
(3,102,035)
Net loss for the year
(3,079,019)
(3,102,035)
Other comprehensive income
Items that may be reclassified subsequently to profit or
loss:
Exchange differences on translation of foreign operations
489,194
(400,866)
Total comprehensive loss for the year
(2,589,825)
(3,502,901)
Loss attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interests
(3,076,272)
(2,747)
(3,079,019)
(3,099,831)
(2,204)
(3,102,035)
(2,587,078)
(2,747)
(2,589,825)
(3,500,697)
(2,204)
(3,502,901)
Basic and diluted loss per share from continuing operations
(cents)
4
(0.27)
(0.32)
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
20
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total Current Assets
Non-Current Assets
Trade and other receivables
Other financial assets
Plant and equipment
Deferred exploration and evaluation expenditure
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Provisions
Borrowings
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Issued capital
Reserves
Accumulated losses
Parent entity interest
Non-controlling interests
Total Equity
Note
Consolidated
30 June
2018
$
Consolidated
30 June
2017
$
5
6
6
7
8
9
10
11
12
13
14
2,192,277
214,820
47,330
102,208
148,401
52,315
2,454,427
302,924
2,400
30,000
100,480
21,786,559
2,400
30,000
123,854
16,581,589
21,919,439
16,737,843
24,373,866
17,040,767
614,647
58,867
399,844
667,062
21,682
-
1,073,358
688,744
1,073,358
688,744
23,300,508
16,352,023
63,973,234
163,204
(40,614,874)
23,521,564
(221,056)
53,342,884
4,173,650
(40,946,202)
16,570,332
(218,309)
23,300,508
16,352,023
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
21
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated
Entity
Issued
Capital
Reserves
Accumulated
Losses
Parent Entity
Interest
$
$
$
$
Non-
Controlling
Interest
$
Total
$
Balance at 1 July
2017
Loss for the year
Other
comprehensive
income
Total
comprehensive
loss for the year
Shares issued
during the year
Issue
expenses
Equity
exercised/expired
Share based
payments
Balance at 30
June 2018
Balance at 1 July
2016
Loss for the year
Other
comprehensive
income
Total
comprehensive
loss for the year
Shares issued
during the year
Issue
expenses
Share based
payments
Balance at 30
June 2017
53,342,884
4,173,650
(40,946,202)
16,570,332
(218,309)
16,352,023
-
-
-
-
(3,076,272)
(3,076,272)
(2,747)
(3,079,019)
489,194
-
489,194
-
489,194
489,194
(3,076,272)
(2,587,078)
(2,747)
(2,589,825)
9,999,597
(585,547)
-
-
-
-
9,999,597
(585,547)
1,216,300
(4,623,900)
3,407,600
-
-
124,260
-
124,260
-
-
-
-
9,999,597
(585,547)
-
124,260
63,973,234
163,204
(40,614,874)
23,521,564
(221,056)
23,300,508
51,722,526
3,830,516
(37,846,371)
17,706,671
(216,105)
17,490,566
-
-
-
(3,099,831)
(3,099,831)
(2,204)
(3,102,035)
(400,866)
-
(400,866)
-
(400,866)
(400,866)
(3,099,831)
(3,500,697)
(2,204)
(3,502,901)
1,637,708
(17,350)
-
-
-
744,000
-
-
-
1,637,708
(17,350)
744,000
-
-
-
1,637,708
(17,350)
744,000
53,342,884
4,173,650
(40,946,202)
16,570,332
(218,309)
16,352,023
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
22
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Cash flows from operating activities
Payments to suppliers and employees
Research and development tax credit received
Interest paid
Interest received
Note
Consolidated
Year Ended
30 June 2018
$
Inflows/
(Outflows)
Consolidated
Year Ended
30 June 2017
$
Inflows/
(Outflows)
(3,459,723)
548,627
(120,475)
20,477
(2,246,478)
229,279
-
52,447
Net cash used in operating activities
5
(3,011,094)
(1,964,752)
Cash flows from investing activities
Payments for term deposits
Payments for plant and equipment
Payments for exploration and evaluation
expenditure
-
(20,278)
(10,000)
(133,058)
(4,678,786)
(6,266,877)
Net cash used in investing activities
(4,699,064)
(6,409,935)
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Payment of share issue costs
9,802,688
1,304,301
(914,301)
(392,461)
1,148,957
-
-
(283,349)
Net cash provided by financing activities
9,800,227
865,608
Net increase/(decrease) in cash held
2,090,069
(7,509,079)
Cash and cash equivalents at beginning of the
financial year
Effects of exchange rates on cash and cash
equivalents
102,208
7,617,762
-
(6,475)
Cash and cash equivalents at year end
5
2,192,277
102,208
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
1.
Statement of significant accounting policies
Basis of preparation
a)
These financial statements are general purpose financial statements, which have been prepared
in accordance with the requirements of the Corporations Act 2001, Accounting Standards and
Interpretations and comply with other requirements of the law. The accounting policies detailed
below have been consistently applied to all of the years presented unless otherwise stated. The
financial statements are for the Consolidated Entity consisting of Volt Resources Limited and its
subsidiaries. The financial statements have also been prepared on a historical cost basis. Cost
is based on the fair values of the consideration given in exchange for assets. The Company is a
listed public company, incorporated in Australia. The entity’s principal activities are graphite
exploration activities in Tanzania.
Going Concern
The financial report has been prepared on a going concern basis, which contemplates the
continuity of normal business activity and the realisation of assets and the settlement of liabilities
in the normal course of business.
At 30 June 2018 the Consolidated entity had cash of $2,192,277 and net assets of $23,300,508,
primarily represented by deferred exploration expenditure of $21,786,559 on its Graphite
prospecting tenements in Tanzania. During the year, net cash outflows from operating activities
totalled $3,011,094 primarily in relation to corporate compliance, management, marketing and
investor relations costs of the listed parent entity. The cash outflows from investing activities were
primarily exploration and evaluation expenditure of $4,678,786, which was spent in maintaining
the Tanzanian graphite tenements and completing (i) the feasibility study for the Stage 1 Bunyu
Graphit project, (ii) environmental reports, (iii) resettlement action plan report and valuations and
(iv) ongoing exploration activities. In the near term, operating activities are expected to contine
at similar levels while investing activities will be reduced until funding is available.
The Directors are of the opinion that the Consolidated Entity is a going concern due to the
following factors:
(i)
The Company is in the process of obtaining regulatory approval in Tanzania to issue a
Prospectus or Information Memorandum to raise debt funding through the issue of listed
Notes on the Dar es Salaam Stock Exchange for the equivalent of US$30 to US$40 million.
Assuming a successful Note issue, all expenditures relating to the Bunyu Graphite project
and Tanzanian activities will be met out of these funds in Tanzania. The remaing corporate
costs to be incurred in Australia are expected to approximate A$2.5 million per annum;
The Company has the ability to raise additional working capital in the shorter term from:
(ii)
a capital raising;
issue of convertible loan notes; and
a loan advance on Research & Development income tax credits; and
The Company has the ability to sell assets, or an interest in assets.
(iii)
Whilst the Directors are confident that the above initiatives will generate sufficient funds to
enable the Consolidated Entity to continue as a going concern for at least the period of 12 months
from the date of signing this financial report, should these initiatives be unsuccessful, there exists
a material uncertainty that may cast significant doubt on the ability of the Consolidated Entity to-
Volt Resources Limited and Controlled Entities
24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
Statement of significant accounting policies (Continued)
1.
continue as a going concern and, therefore, whether it will be able to realise its assets and
extinguish its liabilities in the normal course of business and at the amounts stated in the financial
report.
b)
Adoption of new and revised standards
Standards and Interpretations applicable to 30 June 2018
In the year ended 30 June 2018, the Directors have reviewed all of the new and revised Standards
and Interpretations issued by the AASB that are relevant to the Consolidated Entity and effective
for the current annual reporting period. As a result of this review, the Directors have determined
that there is no impact, material or otherwise, of the new and revised Standards and
Interpretations on the Consolidated Entity’s business and, therefore, no change is necessary to
the Consolidated Entity’s accounting policies. The Directors have also reviewed all new Standards
and Interpretations that have been issued but are not yet effective for the year ended 30 June
2018. As a result of this review the Directors have determined that there is no impact, material or
otherwise, of the new and revised Standards and Interpretations on the Consolidated Entity’s
business and, therefore, no change necessary to the Consolidated Entity’s accounting policies.
Statement of compliance
c)
The financial report was authorised for issue on 14 September 2018. The financial report
complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the
financial report, comprising the financial statements and notes thereto, complies with
International Financial Reporting Standards (IFRS).
Basis of consolidation
d)
The consolidated financial statements incorporate the financial statements of the Company and
entities controlled by the Company and its subsidiaries. Control is achieved when the Company:
• has power over the investee;
•
is exposed, or has rights, to variable returns from its involvement in with the investee;
and
• has the ability within its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements listed above. Consolidation
of a subsidiary begins when the Company obtains control over the subsidiary and ceases when
the Company loses control of the subsidiary. Specifically income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of profit or
loss from the date the Company gains control until the date when the Company ceases to control
the subsidiary. Profit or loss and each component of other comprehensive income are attributed
to the owners of the Company and to the non-controlling interests. Total comprehensive income
of subsidiaries is attributed to the owners of the Company and to the non-controlling interests
even if this results in the controlling interest having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to bring their accounting
policies in line with the Consolidated Entity’s accounting policies. All intragroup assets and
liabilities, equity, income, expenses and cash flows relating to transactions between members
are eliminated in full on consolidation.
Volt Resources Limited and Controlled Entities
25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
1.
Statement of significant accounting policies (Continued)
Critical accounting judgements and key sources of estimation uncertainty
e)
The application of accounting policies requires the use of judgements, estimates and
assumptions about carrying values of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual results may differ from these
estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions are recognised in the period in which the estimate is revised if it affects only that
period, or in the period of the revision and future periods if the revision affects both current and
future periods.
Share-based payment transactions:
The Consolidated Entity measures the cost of equity-settled transactions by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
using either the Black and Scholes or Trinomial Options formula taking into account the terms and
conditions upon which the instruments were granted.
Exploration and evaluation expenditure:
The application of the Group’s accounting policy for exploration and evaluation expenditure
requires judgment in determining whether it is likely that future economic benefits are likely
either from future exploitation or sale or where activities have not reached a stage which permits
a reasonable assessment of the existence of reserves.
The determination of a Joint Ore Reserves Committee (JORC) resource is itself an estimation
process that requires varying degrees of uncertainty depending on sub-classification and these
estimates directly impact the point of deferral of exploration and evaluation expenditure. The
deferral policy requires management to make certain estimates and assumptions about future
events or circumstances, in particular whether an economically viable extraction operation can
be established. Estimates and assumptions made may change if new information becomes
available.
Volt Resources Limited and Controlled Entities
26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
2.
Revenue and expenses
Revenue
Interest income
Expenses
Share based payments:
Liability settled in ordinary shares
Performance rights
Options
Other Expenses:
Corporate advisors and brokers, including
business development
Depreciation
Travel and accomodation
Other
Consolidated
Year Ended
30 June 2018
$
Consolidated
Year Ended
30 June 2017
$
22,220
52,260
22,220
52,260
-
108,261
-
48,750
219,000
525,000
108,261
792,750
282,326
63,682
256,438
203,328
-
11,787
221,332
189,884
805,774
423,003
Accounting policy: revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to
the Consolidated Entity and the revenue can be reliably measured. The following specific
recognition criteria must also be met before revenue is recognised:
(i) Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective
yield on the financial asset.
Volt Resources Limited and Controlled Entities
27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
3.
Income tax
The prima facie income tax benefit on pre-tax accounting loss
reconciles to the income tax benefit in the financial
statements as follows:
Accounting loss before income tax
Income tax benefit calculated at 27.5% & 30% (2017: 27.5%
& 30%)
Share based payments
Non-deductible expenses
Capital raising costs deductible
Income tax losses not brought to account
Profit and loss proportion of research and development tax
credit
Consolidated
Year Ended 30
June 2018
$
Consolidated
Year Ended
30 June 2017
$
(3,627,646)
997,603
(3,254,887)
895,094
(29,772)
(637,229)
22,902
(353,504)
(243,100)
(295,444)
22,962
(379,512)
548,627
152,852
Income tax benefit from continuing operations
548,627
152,852
The tax rates used in the above reconciliation are the corporate tax rates of Australia 27.5% and
Tanzania 30% (2017: Australia 27.5%, Tanzania 30%). The 27.5% tax rate applies to Australian
corporate entities on taxable profits under Australian tax law for small businesses. The
Consolidated Entity has tax losses arising in Australia of $18,319,381 (2017: $17,543,167) that are
available indefinitely for offset against future taxable profits of the companies in which the losses
arose. The availability of these losses is subject to the satisfaction of either the same business or
continuity of ownership tests. Tax losses arising in Tanzania to 30 June 2017 totalled A$1.2 million
equivalent. The Tanzania tax losses for the year ended 30 June 2018 are yet to be determined.
Deferred tax assets have not been recognised in respect of these items because it is not
sufficiently probable that future taxable profit will be available against which the Consolidated
Entity can utilise the benefits thereof.
Accounting policy: income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted by the
reporting date. Deferred income tax is provided on all temporary differences at the reporting
date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary
differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or
of 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 profit nor taxable profit or loss;
or
• when the taxable temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, and the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not
reverse in the foreseeable future.
Volt Resources Limited and Controlled Entities
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
3.
Income tax (continued)
Deferred income tax assets are recognised for all deductible temporary differences, carry-
forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences and the carry-forward
of unused tax credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; or
• when the deductible temporary difference
in
subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset
is only recognised to the extent that it is probable that the temporary difference will
reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
is associated with
investments
The carrying amount of deferred income tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred
income tax assets are reassessed at each reporting date and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in
profit or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally
enforceable right exists to set off current tax assets against current tax liabilities and the
deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
Tax consolidation legislation
Volt Resources Limited and its 100% owned Australian resident subsidiary have implemented
the tax consolidation legislation. Current and deferred tax amounts are accounted for in each
individual entity as if each entity continued to act as a taxpayer on its own. Volt Resources
Limited recognises both its own current and deferred tax amounts and those current tax
liabilities, current tax assets and deferred tax assets arising from unused tax credits and unused
tax losses which it has assumed from its controlled entities within the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognised as amounts payable or receivable from or payable to other entities in the
Consolidated Entity. Any difference between the amounts receivable or payable under the tax
funding agreement are recognised as a contribution to (or distribution from) controlled entities
in the tax consolidated group.
Volt Resources Limited and Controlled Entities
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
3.
Income tax (continued)
Accounting policy: other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition
of the asset or as part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as
part of receivables or payables in the statement of financial position. Cash flows are included in
the statement of cash flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority
are classified as operating cash flows. Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation authority.
Consolidated
Year Ended
30 June 2018
$
Consolidated
Year Ended
30 June 2017
$
4.
Loss per share
Loss after tax from continuing operations
(3,079,019)
(3,102,035)
Weighted average number of ordinary shares
1,123,682,862
962,554,436
Consolidated
Year Ended
30 June 2018
No.
Consolidated
Year Ended
30 June 2017
No.
Consolidated
Year Ended
30 June 2018
Cents per
Share
Consolidated
Year Ended
30 June 2017
Cents per
Share
Basic / diluted loss per share – continuing operations
(0.27)
(0.32)
As the Consolidated Entity is loss making in both 2018 and 2017, no potential ordinary shares are
considered to be dilutive as they would act to decrease the loss per share. The options on issue
(Note 13) represent potential ordinary shares but are not dilutive and accordingly have been
excluded from the weighted average number of ordinary shares and potential ordinary shares
used in the calculation of diluted loss per share.
Volt Resources Limited and Controlled Entities
30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
4.
Loss per share (continued)
Accounting policy: earnings/loss per share
Basic earnings/loss per share is calculated as net profit or loss attributable to members of the
parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference
share dividends, divided by the weighted average number of ordinary shares, adjusted for any
bonus element. Diluted earnings per share is calculated as net profit or loss attributable to
members of the parent, adjusted for:
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary
shares that have been recognised as expenses; and
• other non-discretionary changes in revenues or expenses during the period that would
result from the dilution of potential ordinary shares; divided by the weighted average
number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
5.
Cash and cash equivalents
Cash at bank and on hand
Consolidated
30 June 2018
$
Consolidated
30 June 2017
$
2,192,277
102,208
2,192,277
102,208
Reconciliation of loss for the year to net cash outflows from operating activities:
Loss for the year
Depreciation
Foreign exchange (gain)/loss
Share based payments
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
(Increase)/decrease in trade and other payables
(Increase)/decrease in provisions
Year ended
30 June 2018
$
(3,079,019)
63,682
(56,111)
108,261
(66,419)
4,985
(23,658)
37,185
Year ended
30 June 2017
$
(3,102,035)
11,787
(15,241)
792,750
(44,281)
51,658
340,610
-
Net cash used in operating activities
(3,011,094)
(1,964,752)
Volt Resources Limited and Controlled Entities
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
5.
Cash and cash equivalents (continued)
Accounting policy: cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. Cash at bank earns interest at floating rates based on daily
bank deposit rates.
6.
Trade and other receivables
Current:
GST receivable net
Sundry receivables
Rental bonds
Non-Current:
Rental bond
Consolidated
30 June 2018
$
Consolidated
30 June 2017
$
131,319
24,413
59,088
43,141
47,915
57,345
214,820
148,401
2,400
2,400
2,400
2,400
Accounting policy: trade and other receivables
Trade receivables are measured on initial recognition at fair value and are subsequently
measured at amortised cost using the effective interest rate method, less provision for
impairment. Trade receivables are generally due for settlement within periods ranging from 15
days to 30 days. Impairment of trade receivables is continually reviewed and those that are
considered to be uncollectible are written off by reducing the carrying amount directly. An
allowance account is used when there is objective evidence that the Consolidated Entity may
not be able to collect all amounts due according to the original contractual terms. Factors
considered by the Consolidated Entity in making this determination include known significant
financial difficulties of the debtor, review of financial information and significant delinquency in
making contractual payments to the Consolidated Entity. The impairment allowance is set equal
to the difference between the carrying amount of the receivable and the present value of
estimated future cash flows, discounted at the original effective interest rate. Where receivables
are short-term discounting is not applied in determining the allowance. The amount of the
impairment loss is recognised in the statement of profit or loss within other expenses. When a
trade receivable for which an impairment allowance had been recognised becomes uncollectible
in a subsequent period, it is written off against the allowance account. Subsequent recoveries
of amounts previously written off are credited against other expenses in the statement of profit
or loss.
Volt Resources Limited and Controlled Entities
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
7.
Other financial assets
Term deposit
Consolidated
30 June 2018
$
Consolidated
30 June 2017
$
30,000
30,000
30,000
30,000
Accounting policy: financial assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement
are classified as either financial assets at fair value through profit or loss, loans and receivables,
held-to-maturity investments, or available-for-sale investments, as appropriate. When financial
assets are recognised initially, they are measured at fair value, plus, in the case of investments
not at fair value through profit or loss, directly attributable transactions costs. The Consolidated
Entity determines the classification of its financial assets after initial recognition and, when
allowed and appropriate, re-evaluates this designation at each financial year-end. All regular
way purchases and sales of financial assets are recognised on the trade date i.e. the date that
the Consolidated Entity commits to purchase the asset. Regular way purchases or sales are
purchases or sales of financial assets under contracts that require delivery of the assets within
the period established generally by regulation or convention in the marketplace.
(i) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category ‘financial assets at fair
value through profit or loss’. Financial assets are classified as held for trading if they are acquired
for the purpose of selling in the near term. Derivatives are also classified as held for trading
unless they are designated as effective hedging instruments. Gains or losses on investments
held for trading are recognised in profit or loss.
(ii) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are
classified as held-to-maturity when the Consolidated Entity has the positive intention and ability
to hold to maturity. Investments intended to be held for an undefined period are not included
in this classification. Investments that are intended to be held-to-maturity, such as bonds, are
subsequently measured at amortised cost. This cost is computed as the amount initially
recognised minus principal repayments, plus or minus the cumulative amortisation using the
effective interest method of any difference between the initially recognised amount and the
maturity amount. This calculation includes all fees and points paid or received between parties
to the contract that are an integral part of the effective interest rate, transaction costs and all
other premiums and discounts. For investments carried at amortised cost, gains and losses are
recognised in profit or loss when the investments are derecognised or impaired, as well as
through the amortisation process.
Volt Resources Limited and Controlled Entities
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
7.
Other financial assets (continued)
(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Such assets are carried at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, as well as through the amortisation process.
(iv) Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets that are designated as
available-for-sale or are not classified as any of the three preceding categories. After initial
recognition available-for sale investments are measured at fair value with gains or losses being
recognised as a separate component of equity until the investment is derecognised or until the
investment is determined to be impaired, at which time the cumulative gain or loss previously
reported in equity is recognised in profit or loss. The fair value of investments that are actively
traded in organised financial markets is determined by reference to quoted market bid prices at
the close of business on the reporting date. For investments with no active market, fair value is
determined using valuation techniques. Such techniques include using recent arm’s length
market transactions; reference to the current market value of another instrument that is
substantially the same; discounted cash flow analysis and option pricing models.
8.
Plant and equipment
Cost
Accumulated depreciation
Written down value
Reconciliation:
Opening written down value
Additions
Depreciation
Foreign currency translation
Closing written down value
Consolidated
30 June 2018
$
Consolidated
30 June 2017
$
168,120
(67,640)
143,797
(19,943)
100,480
123,854
123,854
20,279
(63,682)
20,029
-
137,676
(11,787)
(2,035)
100,480
123,854
Volt Resources Limited and Controlled Entities
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
8.
Plant and equipment (continued)
Accounting policy: property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated
impairment losses. Depreciation is calculated on a straight-line basis over the estimated useful
life of the assets as follows:
• Plant and equipment – over 3 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date,
with recoverable amount being estimated when events or changes in circumstances indicate
that the carrying value may be impaired. The recoverable amount of plant and equipment is the
higher of fair value less costs to sell 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, recoverable amount is
determined for the cash-generating unit to which the asset belongs, unless the asset's value in
use can be estimated to be close to its fair value. An impairment exists when the carrying value
of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or
cash-generating unit is then written down to its recoverable amount. For plant and equipment,
impairment losses are recognised in profit or loss for the year as a separate line item.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further
future economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
9.
Deferred exploration and evaluation expenditure
Balance at beginning of year
Expenditure during the year
Acquisition of Tanzanian graphite project
Foreign currency translation
Balance at end of year
Consolidated
30 June 2018
$
Consolidated
30 June 2017
$
16,581,589
4,863,440
-
341,530
10,750,378
6,166,554
11,339
(346,682)
21,786,559
16,581,589
Volt Resources Limited and Controlled Entities
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
9.
Deferred exploration and evaluation expenditure (continued)
Accounting policy: exploration and evaluation
Exploration and evaluation expenditures in relation to each separate area of interest are
recognised as an exploration and evaluation asset in the year in which they are incurred where
the following conditions are satisfied:
(i)
(ii) at least one of the following conditions is also met:
the rights to tenure of the area of interest are current; and
(a) the exploration and evaluation expenditures are expected to be recouped through
successful development and exploration of the area of interest, or alternatively, by its
sale; or
(b) exploration and evaluation activities in the area of interest have not at the reporting
date reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant operations
in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights
to explore, studies, exploratory drilling, trenching and sampling and associated activities and an
allocation of depreciation and amortised of assets used in exploration and evaluation activities.
General and administrative costs are only included in the measurement of exploration and
evaluation costs where they are related directly to operational activities in a particular area of
interest. Exploration and evaluation assets are assessed for impairment when facts and
circumstances suggest that the carrying amount of an exploration and evaluation asset may
exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset
(for the cash generating unit(s) to which it has been allocated being no larger than the relevant
area of interest) is estimated to determine the extent of the impairment loss (if any). Where an
impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in previous years. Where a decision has been
made to proceed with development in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and the balance is then reclassified to
development. Capitalised exploration and evaluation expenditure represents the accumulated
cost of acquisition and subsequent cost of exploration and evaluation of the properties.
Ultimate recoupment of these costs is dependent on the successful development and
commercial exploitation, or alternatively, sale, of the respective areas of interest.
Volt Resources Limited and Controlled Entities
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
9.
Deferred exploration and evaluation expenditure (continued)
Accounting policy: impairment of assets
The Consolidated Entity assesses at each reporting date whether there is an indication that an
asset may be impaired. If any such indication exists, or when annual impairment testing for an
asset is required, the Consolidated Entity makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use
and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets and the asset's value in
use cannot be estimated to be close to its fair value. In such cases the asset is tested for
impairment as part of the cash-generating unit to which it belongs. When the carrying amount
of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating
unit is considered impaired and is written down to its recoverable amount. 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. Impairment losses relating to continuing operations are recognised in those
expense categories consistent with the function of the impaired asset unless the asset is carried
at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An
assessment is also made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated.
A previously recognised impairment loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is increased to its recoverable
amount. That increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount,
in which case the reversal is treated as a revaluation increase. After such a reversal the
depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount,
less any residual value, on a systematic basis over its remaining useful life.
10.
Trade and other payables
Trade creditors and accruals
Consolidated
30 June 2018
$
Consolidated
30 June 2017
$
614,647
667,062
614,647
667,062
Accounting policy: trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods
and services provided to the Consolidated Entity prior to the end of the financial year that are
unpaid and arise when the Consolidated Entity becomes obliged to make future payments in
respect of the purchase of these goods and services. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months. Trade payables are non-interest
bearing and are normally settled on 30-day terms.
Volt Resources Limited and Controlled Entities
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
11.
Provisions
Employee entitlements
12.
Borrowings
Convertible loans (a)
Loan (b)
Balance at beginning of year
Proceeds from convertible loans
Repayment of convertible loans
Repayment of convertible loan through share issue
Interest accrued on convertible loans
Proceeds from loan
Repayment of loan
Consolidated
30 June 2018
$
Consolidated
30 June 2017
$
58,867
21,682
58,867
21,682
399,844
-
399,844
-
-
-
Year ended
30 June 2018
$
-
875,000
(475,000)
(10,000)
9,844
439,301
(439,301)
Year ended
30 June 2017
$
-
-
-
-
-
-
-
Balance at end of year
399,844
-
(a) These funds have been raised from various lenders through a convertible loan facility for
12 months, with a 10% interest rate per annum which accrues daily. The interest is payable
quarterly in arrears in cash or Company shares. The lender can convert the facility into
Company shares at any time prior to maturity at a conversion price of $0.05 per share.
Interest paid and accrued to date on this facility totals $61,538, of which $9,818 has been
settled through the issuance of fully paid ordinary shares.
There is no material equity component to the convertible notes.
(b) The Company entered into a secured loan agreement on 20 October 2017 for $439,301
with an annual interest rate of 15% per annum and final maturity date of 28 February
2018. This is secured against the Company’s present and future right, title and interest in
its eligible research and development expenditure that it will become entitled as a tax
refund under the applicable tax legislation. This was repaid in full on 17 May 2018.
Volt Resources Limited and Controlled Entities
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated
30 June 2018
$
Consolidated
30 June 2017
$
13.
Issued capital
Ordinary shares fully paid of no par value
63,973,234
53,342,884
63,973,234
53,342,884
Consolidated Year Ended
30 June 2018
Number
Consolidated Year Ended
30 June 2017
$
Number
$
976,784,189
53,342,884
906,180,471
51,722,526
-
-
-
-
-
-
-
4,500,000
5,250,000
488,750
111,379,981
130,504,148
2,338,980
2,914,500
-
-
236,314,931
4,726,299
60,853,718
1,148,958
196,462
200,000
-
-
9,818
10,000
1,216,300
(585,547)
-
-
-
-
-
-
-
(17,350)
Movement in
ordinary shares on
issue:
Balance at beginning
of year
In lieu of services
Performance rights
converted at $nil per
right
Share purchase plan
Share placements
Options exercised at
$0.02 per share
Shares issued in lieu
of interest
Convertible loan
converted into shares
Transfer from share
based payment
reserve on exercise of
options
Issue expenses
Balance at end of year
1,455,379,711
63,973,234
976,784,189
53,342,884
Volt Resources Limited and Controlled Entities
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
13.
Issued capital (continued)
Share options:
Grant Date Details
Expiry
Date
Exercise
Price
Balance at
30-Jun-17
1
Listed options
01-Apr-16 Unlisted options
25-May-16 Unlisted options
25-May-16 Unlisted options
25-May-16 Unlisted options
25-May-16 Unlisted options
21-June-18 Unlisted options
31-Dec-17
31-Dec-17
30-Apr-19
30-Apr-19
30-Apr-19
30-Apr-19
30-Apr-19
$0.02 236,314,931
4,500,000
$0.02
4,200,000
$0.06
4,200,000
$0.08
4,200,000
$0.10
4,200,000
$0.12
-
$0.06
257,614,931
Granted
During the
Year
-
-
-
-
-
8,000,000
8,000,000
Exercised
During the
Year
(236,314,931)
-
-
-
-
-
-
(236,314,931)
Expired
During the
Year
-
(4,500,000)
-
-
-
-
-
(4,500,000)
Cancelled
During the
Year
-
-
-
-
-
-
-
-
Balance at
30-Jun-18
-
-
4,200,000
4,200,000
4,200,000
4,200,000
8,000,000
24,800,000
The options granted during the year were granted to a corporate advisor for services relating to
placement and management fees for a June 2018 placement, and the resulting value of $16,000
has been charged to share issue expenses. The options granted during the year have been valued
using the Black and Scholes option pricing method with the following inputs:
Exercise Price
$0.06
Expiry Date
30-Apr-19
Share Price
$0.022
Volatility
90%
Interest Rate
2.07%
Performance rights:
Issue Date Details
Balance at
29 June
2017
Granted
During the
Year
Various Unlisted performance rights 13,500,000 17,000,000
13,500,000 17,000,000
Expired
30 June 2017
and during
the Year
(11,000,000)
(11,000,000)
Converted
During the
Year
Balance at
30 June
2018
-
-
19,500,000
19,500,000
The unlisted performance rights granted during the year to the Chief Executive Officer each
convert into one fully paid ordinary share upon satisfaction of certain milestones achieved by the
Company. The unlisted performance rights will rank equally with the existing fully paid ordinary
shares on issue if and when converted. The performance rights granted during the year were
valued at $288,000 in total. The value attributed to the performance rights granted during the
year amounted to $108,261. This amount has been expensed in the current year.
Accounting policy: 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.
1 Varying grant dates: 27-May-14, 20-Feb-15, 26-Feb-15, 19-Mar-15, 21-Apr-15, 15-May-15, 07-
Aug-15, 10-Aug-15, 18-Aug-15, 22-Oct-15, 04-Nov-15, 11-Nov-15.
Volt Resources Limited and Controlled Entities
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
14.
Reserves
Share based payments reserve:
Balance at beginning of year
Share based payments
Transfer to share capital on exercise of options
Transfer to accumulated losses on lapse of performance
rights and expiry of options
Balance at end of year
Foreign currency translation reserve:
Balance at beginning of year
Currency translation differences
Balance at end of year
Consolidated
Year Ended
30 June 2018
$
Consolidated
Year Ended
30 June 2017
$
4,676,507
124,262
(1,216,300)
3,932,507
744,000
-
(3,407,600)
-
176,869
4,676,507
(502,857)
489,192
(101,991)
(400,866)
(13,665)
(502,857)
Total reserves
163,204
4,173,650
Accounting policy: foreign currency translation
Both the functional and presentation currency of Volt Resources Limited and its Australian
subsidiaries is Australian dollars. Each entity in the Consolidated Entity determines its own
functional currency and items included in the financial statements of each entity are measured
using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency by applying
the exchange rates ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange ruling at the
reporting date. All exchange differences in the consolidated financial report are taken to profit
or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate as at the date of the initial transaction. Non-monetary
items measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined. Translation differences on assets and liabilities carried
at fair value are reported as part of the fair value gain or loss. The functional currency of foreign
operations through Dugal Resources Lda and Xiluva Mozambi Lda, is Mozambique New Metical
(MZN) The functional currency of foreign operations through Volt Graphite Tanzania Limited is
Tanzanian Shillings (TZS) and US Dollars (USD).
Volt Resources Limited and Controlled Entities
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
14.
Reserves (continued)
As at the balance date the assets and liabilities of these subsidiaries are translated into the
presentation currency of Volt Resources Limited at the rate of exchange ruling at the reporting
date and their statements of comprehensive income are translated at the weighted average
exchange rate for the year. The exchange differences arising on the translation are taken directly
to a separate component of equity, being recognised in the foreign currency translation reserve.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to
that particular foreign operation is recognised in profit or loss.
15.
Share based payments
Under an established Performance Rights Plan, CEO Trevor Matthews was issued Performance
Rights in the following tranches and subject to the following vesting conditions:
Key
Management
Personnel
Trevor
Matthews
Valuation /
Grant Date
Tranche
18 May 2017
18 May 2017
18 May 2017
1
2
3
Number of
Performance
Rights
10,000,000
2,000,000
Fair Value
Expensed
Vesting Conditions
$108,261 Commence stage 1 construction of
the Bunyu project within 3 years of
grant date
Vesting
Conditions
Achieved
No (i)
- Completion of the feasibility study
for stage 1 of the Bunyu project by
31 March 2018
No
5,000,000
- Achieving a Company 30 day
No
VWAP of 20 cents per share within
3 years of grant date
Total
(i)
17,000,000
$108,261
The Directors consider it probable that the Tranche 1 vesting conditions will be met.
Accordingly, the value of $108,261 has been recognised as an expense.
The following share based payments were made during the financial year:
Details
Security Type
Issue / Grant
Date
Number Issued /
Granted
Fair Value
Vested Expense
Conversion of
convertible loan and
interest
Fully paid ordinary shares
6-Oct-17
255,110
$12,751
$12,751
In lieu of interest
Fully paid ordinary shares
In lieu of interest
Fully paid ordinary shares
Trevor Matthews
Performance rights
Consulting services
Unlisted options
8-Jan-18
9-Apr-18
18-May-17
21-Jun-18
Total
71,462
69,890
17,000,000
8,000,000
25,396,462
$3,573
$3,494
$288,000
$16,000
$323,818
$3,573
$3,494
$108,261
$16,000
$144,079
The fair value of the equity settled share options and performance rights granted during the
financial year is estimated as at the date of grant using the Black Scholes model (except Tranche
3 Performance Rights) and Trinomial Option model (Tranche 3 Performance Rights) taking into
account the terms and conditions upon which the options were granted:
Volt Resources Limited and Controlled Entities
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
15.
Share based payments (continued)
Details
Share price barrier
Expected volatility
Risk free interest rate
Expected life
Exercise price
Grant date share price
Fair value per
right/option
Black Scholes Option Model
Tranche 1
Performance RIghts
expiring
18-May-2020
n/a
90%
1.76%
3 years
nil
$0.029
Tranche 2
Performance
RIghts expiring
31-Mar-2018
n/a
90%
1.65%
0.87 years
nil
$0.029
Unlisted options
exercisable at
$0.06 expiring
30-Apr-2019
n/a
90%
2.07%
0.86 years
$0.06
$0.022
Trinomial Option
Model
Tranche 3
Performance
RIghts expiring
18-May-2020
$0.20
30%
1.76%
3 years
nil
$0.029
$0.029
$0.029
$0.002
$0.000
Accounting policy: share-based payment transactions
(i) Equity settled transactions:
The Consolidated Entity provides benefits to employees (including senior executives) of the
Consolidated Entity in the form of share-based payments, whereby employees render services
in exchange for shares or rights over shares (equity-settled transactions). The cost of these
equity-settled transactions with employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by an
external valuer using a Black-Scholes model. In valuing equity-settled transactions, no account
is taken of any performance conditions, other than conditions linked to the price of the shares
of Volt Resources Limited (market conditions) if applicable. The cost of equity-settled
transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects
(i) the extent to which the vesting period has expired; and
(ii) the Consolidated Entity’s best estimate of the number of equity instruments that will
ultimately vest.
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. The
statement of comprehensive income charge or credit for a period represents the movement in
cumulative expense recognised as at the beginning and end of that period. No expense is
recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition. If 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 modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.
Volt Resources Limited and Controlled Entities
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
15.
Share based payments (continued)
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new
award is substituted for the cancelled award and designated as a replacement award on the date
that it is granted, the cancelled and new award are treated as if they were a modification of the
original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding
options is reflected as additional share dilution in the computation of earnings/loss per share
(see Note 4).
16.
Financial instruments
Capital risk management
The Consolidated Entity manages its capital to ensure that entities in the Consolidated Entity will
be able to continue as a going concern while maximising the return to stakeholders through the
optimisation of the debt and equity balance. The Consolidated Entity’s overall strategy remains
unchanged from 2017. The capital structure of the Consolidated Entity consists of debt, cash and
cash equivalents and equity attributable to equity holders of the parent, comprising issued capital,
reserves and retained earnings. None of the entities are subject to externally imposed capital
requirements. Operating cash flows are used to maintain and expand operations, as well as to
make routine expenditures such as tax, and general administrative outgoings. Gearing levels are
reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital
and the risks associated with each class of capital.
Volt Resources Limited and Controlled Entities
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
16.
Financial instruments (continued)
Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Convertible loans
Consolidated
30 June 2018
$
Consolidated
30 June 2017
$
2,192,277
217,220
30,000
102,208
150,801
30,000
2,439,497
283,009
614,647
399,844
667,062
-
1,014,491
667,062
Financial risk management objectives
The Consolidated Entity is exposed to market risk (including currency risk, fair value interest rate
risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Consolidated
Entity seeks to minimise the effect of these risks, by using derivative financial instruments to
hedge these risk exposures where appropriate. The use of financial derivatives is governed by the
Consolidated Entity’s policies approved by the board of directors, which provide written principles
on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-
derivative financial instruments, and the investment of excess liquidity. Compliance with policies
and exposure limits is reviewed by management on a continuous basis. The Consolidated Entity
does not enter into or trade financial instruments, including derivative financial instruments, for
speculative purposes.
Market risk
The Consolidated Entity’s activities expose it primarily to the financial risks of changes in foreign
currency exchange rates, commodity prices and exchange rates. There has been no change to the
Consolidated Entity’s exposure to market risks or the manner in which it manages and measures
the risk from the previous period.
Volt Resources Limited and Controlled Entities
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
16.
Financial instruments (continued)
Foreign currency risk management
The Consolidated Entity undertakes certain transactions denominated in foreign currencies,
hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed
within approved policy parameters. No forward contracts or other hedging instruments have
been used during the current or prior year as the Consolidated Entity’s foreign exchange exposure
is not considered to be sufficiently material to justify such activities. The carrying amounts of the
Consolidated Entity’s foreign currency denominated monetary assets and monetary liabilities at
the balance date expressed in Australian dollars are as follows:
US dollars
Tanzanian shillings
Assets
2018
1,306
3,767
2017
16,207
3,948
Liabilities
2018
80,911
-
2017
78,007
-
Foreign currency sensitivity analysis
The Consolidated Entity is exposed to US Dollar (USD) and Tanzanian shillings (TZS) currency
fluctuations. The following table details the Consolidated Entity’s sensitivity to a 10% increase
and decrease in the Australian dollar against the relevant foreign currencies. 10% is the sensitivity
rate used when reporting foreign currency risk internally to key management personnel and
represents management’s assessment of the possible change in foreign exchange rates. The
sensitivity analysis includes only outstanding foreign currency denominated monetary items and
adjusts their translation at the period end for a 10% change in foreign currency rates. A positive
number indicates a weakening against the respective currency. For a strengthening of the
Australian Dollar against the respective currency there would be an equal and opposite impact on
the result and other equity and the balances below would be negative.
Result for the year
Result for the year
USD Impact
2018
$
(7,961)
2017
$
(6,180)
TZS Impact
2018
TZS
377
2017
TZS
395
Volt Resources Limited and Controlled Entities
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
16.
Financial instruments (continued)
Interest rate risk
As at and during the year ended on reporting date the Consolidated Entity had no significant
interest-bearing assets or liabilities, other than liquid funds on deposit and convertible loans . As
such, the Consolidated Entity’s income and operating cash flows (other than interest income from
funds on deposit and interest expense on the loans) are substantially independent of changes in
market interest rates. The Consolidated Entity’s exposure to interest rate risk for each class of
financial assets and liabilities is set out below:
Financial Asset
Cash and cash equivalents
Total
Financial Liabilities
Borrowings
Total
Interest Rate Consolidated
2018
$
2,192,277
2,192,277
Floating
Consolidated
2017
$
102,208
102,208
Interest Rate Consolidated
2018
$
399,844
399,844
Fixed
Consolidated
2017
$
-
-
Consolidated Entity and Parent Company sensitivity
The sensitivity analyses below have been determined based on the exposure to interest rates
at the balance date and the stipulated change taking place at the beginning of the financial
year and held constant through the reporting period. At balance date, if interest rates had
been 80 basis points higher or lower and all other variables were held constant, the
Consolidated Entity’s net result would increase or decrease by $17,538 (2017: $4,181). This
is mainly attributable to the Consolidated Entity’s exposure to interest rates on its variable
rate cash holdings.
Credit risk
The Consolidated Entity seeks to trade only with recognised, trustworthy third parties and it
is the Group’s policy to perform credit verification procedures in relation to any customers
wishing to trade on credit terms with the Consolidated Entity. The Consolidated Entity has no
significant concentrations of credit risk.
Liquidity risk
Prudent liquidity management involves the maintenance of sufficient cash, marketable
securities, committed credit facilities and access to capital markets. It is the policy of the
Board to ensure that the Consolidated Entity is able to meet its financial obligations and
maintain the flexibility to pursue attractive investment opportunities through keeping
committed credit lines available where possible, ensuring the Consolidated Entity has
sufficient working capital and preserving the 15% share issue limit available to the Company
under the ASX Listing Rules.
Volt Resources Limited and Controlled Entities
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
16.
Financial instruments (continued)
Net fair value
The carrying amount of financial assets and liabilities recorded in the financial statements
approximate their fair value as at 30 June 2018.
Accounting policy: derecognition of financial assets and financial liabilities
(i) Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is derecognised when:
•
•
•
the rights to receive cash flows from the asset have expired;
the Consolidated Entity retains the right to receive cash flows from the asset, but has
assumed an obligation to pay them in full without material delay to a third party
under a ‘pass-through’ arrangement; or
the Consolidated Entity has transferred its rights to receive cash flows from the asset
and either:
(a) has transferred substantially all the risks and rewards of the asset, or
(b) has neither transferred nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.
When the Consolidated Entity has transferred its rights to receive cash flows from an asset
and has neither transferred nor retained substantially all the risks and rewards of the asset
nor transferred control of the asset, the asset is recognised to the extent of the Consolidated
Entity’s continuing involvement in the asset. Continuing involvement that takes the form of
a guarantee over the transferred asset is measured at the lower of the original carrying
amount of the asset and the maximum amount of consideration received that the
Consolidated Entity could be required to repay.
When continuing involvement takes the form of a written and/or purchased option
(including a cash-settled option or similar provision) on the transferred asset, the extent of
the Consolidated Entity’s continuing involvement is the amount of the transferred asset that
the Consolidated Entity may repurchase, except that in the case of a written put option
(including a cash-settled option or similar provision) on an asset measured at fair value, the
extent of the Consolidated Entity’s continuing involvement is limited to the lower of the fair
value of the transferred asset and the option exercise price.
(ii) Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as a derecognition of the
original liability and the recognition of a new liability, and the difference in the respective
carrying amounts is recognised in profit or loss.
Volt Resources Limited and Controlled Entities
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
16.
Financial instruments (continued)
Accounting policy: impairment of financial assets
The Consolidated Entity assesses at each reporting date whether a financial asset or group
of financial assets is impaired.
Financial assets carried at amortised cost
(i)
If there is objective evidence that an impairment loss on loans and receivables carried at
amortised cost has been incurred, the amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred) discounted at the financial
asset’s original effective interest rate (i.e. the effective interest rate computed at initial
recognition). The carrying amount of the asset is reduced either directly or through use of
an allowance account. The amount of the loss is recognised in profit or loss. The
Consolidated Entity first assesses whether objective evidence of impairment exists
individually for financial assets that are individually significant, and individually or collectively
for financial assets that are not individually significant. If it is determined that no objective
evidence of impairment exists for an individually assessed financial asset, whether significant
or not, the asset is included in a group of financial assets with similar credit risk
characteristics and that group of financial assets is collectively assessed for impairment.
Assets that are individually assessed for impairment and for which an impairment loss is or
continues to be recognised are not included in a collective assessment of impairment. If, in
a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the
previously recognised impairment loss is reversed. Any subsequent reversal of an
impairment loss is recognised in profit or loss, to the extent that the carrying value of the
asset does not exceed its amortised cost at the reversal date.
(ii) Financial assets carried at cost
If there is objective evidence that an impairment loss has been incurred on an unquoted
equity instrument that is not carried at fair value (because its fair value cannot be reliably
measured), or on a derivative asset that is linked to and must be settled by delivery of such
an unquoted equity instrument, the amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the current market rate of return for a similar financial asset.
(iii) Available-for-sale investments
If there is objective evidence that an available-for-sale investment is impaired, an amount
comprising the difference between its cost (net of any principal repayment and
amortisation) and its current fair value, less any impairment loss previously recognised in
profit or loss, is transferred from equity to profit or loss for the period. Reversals of
impairment losses for equity instruments classified as available-for-sale are not recognised
in profit. Reversals of impairment losses for debt instruments are reversed through profit or
loss if the increase in an instrument's fair value can be objectively related to an event
occurring after the impairment loss was recognised in profit or loss.
Volt Resources Limited and Controlled Entities
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated
Year Ended
30 June 2018
$
Consolidated
Year Ended
30 June 2017
$
17.
Commitments and contingencies
In order to maintain and preserve the rights of tenure to granted exploration tenements, the
Consolidated Entity is required to meet certain minimum levels of exploration expenditure.
As at the reporting date, these future minimum expenditure commitments together with
operating lease commitments for office premises are as follows:
Within one year - exploration
Within one year – office lease
One to five years - exploration
One to five years – office lease
150,319
32,334
362,136
-
723,836*
78,128
7,238,356*
26,366
544,789
8,066,686
From the FY2018 year graphite has been confirmed as an industrial mineral or building
material (*rather than “all other minerals”) for determination of minimum levels of
exploration expenditure. As a result, minimum expenditure requirements have reduced
significantly in the current year.
There are no contingent liabilities as at the date of this report, other than for the Resettlement
Action Plan totalling US$3.5 million where commencement of resettlements and any
commitments are contingent on the two Mining Licences being granted for the Bunyu
Graphite project and the Consolidated entity proceeding to develop the project.
On production and sale of graphite products from the Bunyu Graphite project, the previous
owners are entitled to a 3% net smelter royalty on the sale of dried concentrate. At the
Company’s election, at any stage in the future the Company may pay US$2.0 million to reduce
the royalty rate to 1.5%.
Changes to the legal framework governing the natural resources sector in Tanzania were
passed by the Tanzanian Parliament in early July 2017 and the Company advised the ASX of
the impact of the new legislation on 7 July 2017. One impact was the Tanzanian Government
would have a 16% non-dilutable free carried interest in Volt’s Tanzanian subsidiary which
increases from a current interest of nil. The 16% interest is to apply to mining operations under
a mining licence or a special mining licence. The Company is not aware of any further guidance
or application of this change to date. Volt Tanzania is yet to receive its mining licences and
accordingly the Consolidated entity currently retains a 100% interest in Volt’s Tanzanian
subsidiary which holds the Bunyu Graphite Project.
Volt Resources Limited and Controlled Entities
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
18.
Financial reporting by segments
AASB 8 requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision maker
in order to allocate resources to the segment and to assess its performance.
The function of the chief operating decision maker is performed by the Board collectively.
Information reported to the Board for the purposes of resource allocation and assessment of
performance is focused broadly on the Group’s diversified activities across different sectors.
The Group’s reportable segments under AASB 8 are predominantly within the one segment
being Mineral Exploration – Tanzania.
Accounting policy: segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision maker. The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified
as the Board of Directors of Volt Resources Limited.
19.
Subsidiaries
Subsidiary
Principal Activity
Holding Company
Volt Graphite Tanzania Ltd Graphite exploration
Mozambi Graphite Pty Ltd
Mozambi Resource
Investments Pty Ltd
Dugal Pty Ltd
Dugal Resources Lda
Mozambi Ventures Lda
Xiluva Mozambi Lda
Dormant
Dormant
Dormant
Dormant
Dormant
Country of
Incorporation
Tanzania
Australia
Australia
Australia
Mozambique
Mozambique
Mozambique
Equity Interest
2018
2017
100%
100%
100%
100%
70%
80%
80%
100%
100%
100%
100%
70%
80%
80%
The Company’s intention is to wind up or liquidate the three Mozambique subsidiaries and
Dugal Pty Ltd.
Volt Resources Limited and Controlled Entities
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
20.
Auditor’s remuneration
Amounts received or due and receivable by HLB Mann Judd
for an audit or review of the financial report
Amounts received by auditors in Tanzania for the audit of
Volt Graphite Tanzania Ltd
Consolidated
Year Ended
30 June 2018
$
Consolidated
Year Ended
30 June 2017
$
41,000
38,250
16,041
-
57,041
38,250
21.
Key management personnel remuneration
Total remuneration paid to key management personnel during the year:
Short term benefits
Post-employment benefits
Share based payments
989,107
71,785
108,261
1,002,609
51,565
219,000
1,169,153
1,273,174
Volt Resources Limited and Controlled Entities
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
Parent
30 June 2018
$
Parent
30 June 2017
$
22.
Parent entity information
The following details information related to the parent entity, Volt Resources Limited, as at 30
June 2018. The information presented here has been prepared using consistent accounting
policies as presented in Note 1.
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Loss for the year
Total comprehensive loss for the year
Commitments
Within one year
One to five years
2,454,427
22,170,665
24,625,092
262,892
16,699,868
16,962,760
(1,028,187)
-
(1,028,187)
(610,737)
-
(610,737)
23,596,905
16,352,023
63,973,234
176,869
(40,553,198)
23,596,905
53,342,884
4,676,509
(41,667,330)
16,352,023
Year ended
30 June 2018
$
Year ended
30 June 2017
$
(2,293,468)
(2,293,468)
(3,502,863)
(3,502,863)
32,334
-
78,128
26,366
32,334
104,494
Volt Resources Limited and Controlled Entities
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2018
22.
Parent entity information (continued)
Accounting policy: parent entity financial information
The financial information for the parent entity, Volt Resources Limited, disclosed in this note has
been prepared on the same basis as the consolidated financial statements, except as set out
below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the
financial statements of Volt Resources Limited. Dividends received from associates are
recognised in the parent entity’s profit or loss, rather than being deducted from the carrying
amount of these investments.
(ii) Share-based payments
The Consolidated Entity measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which they are granted. The
fair value is determined using a Black-Scholes model.
23.
Events subsequent to year end
No matters or circumstances have arisen since the end of the year which will significantly affect,
or may significantly affect, the state of affairs or operations of the reporting entity in future
financial periods other than the following:
• Mr Matthew Bull resigned from his role as Non-Executive Director effective 9 July 2018.
• The results of the Stage 1 Bunyu Graphite Project Feasibility Study were released on 31
July 2018.
• A binding Offtake Agreement, for 9,000 tonnes of Graphite product per annum, was
signed with Qingdao Tianshengda Graphite Co Ltd on 2 August 2018.
• A revised Prospectus (IM) was lodged with the Tanzanian regulators on 17 August 2018
for approval of the US$30 to US$40 million Note issue to be listed on the Dar es Salaam
Stock Exhange.
• The Company’s wholly-owned subsidiary Volt Graphite Tanzania Ltd, received the
Environmental Impact Assessment (EIA) Certificate from the National Environment
Management Council of Tanzania (NEMC) on 3 September 2018.
Volt Resources Limited and Controlled Entities
54
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of Volt Resources Limited (the ‘Company’):
a. the accompanying financial statements and notes and the additional disclosures
are in accordance with the Corporations Act 2001 including:
i. giving a true and fair view of the Consolidated Entity’s financial position
as at 30 June 2018 and of its performance for the year then ended; and
ii. complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations regulations 2001; and
b. there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
2. The financial statements and notes thereto are in accordance with International Financial
Reporting Standards issued by the International Accounting Standards Board.
3. This declaration has been made after receiving the declarations required to be made to the
directors in accordance with Section 295A of the Corporations Act 2001 for the financial year
ended 30 June 2018.
This declaration is signed in accordance with a resolution of the Board of Directors.
___________________
Asimwe Kabunga
Non-Executive Chairman
14 September 2018
Volt Resources Limited and Controlled Entities
55
Independent Auditor’s Report to the Members of Volt Resources Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Volt Resources Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June
2018, the consolidated statement of comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
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 (“the Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1(a) in the financial report, which indicates the existence of a material
incertainty that may cast significant 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.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers
56
Key Audit Matter
How our audit addressed the key audit matter
Carrying amount of exploration and evaluation
expenditure
Note 9 of the financial report
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group
capitalises all exploration and evaluation
including acquisition costs and
expenditure,
subsequently applies
the cost model after
recognition.
Our audit focussed on the Group’s assessment of
the carrying amount of the capitalised exploration
and evaluation asset, as this is one of the most
significant assets of the Group. We planned our
work to address the audit risk that the capitalised
expenditure might no longer meets the recognition
criteria of the standard. In addition, we considered
facts and
it necessary
circumstances existed to suggest that the carrying
amount of an exploration and evaluation asset
may exceed its recoverable amount.
to assess whether
Our procedures included but were not limited to
the following:
We obtained an understanding of the key
processes associated with management’s
review of the carrying values of each area of
interest;
We considered the Directors’ assessment of
potential indicators of impairment;
We obtained evidence that the Group has
current rights to tenure of its areas of interest;
We examined the exploration budget for the
year ending 30 June 2018 and discussed with
management the nature of planned ongoing
activities;
We enquired with management, reviewed
ASX announcements and reviewed minutes
of Directors’ meetings to ensure that the
to discontinue
Group had not resolved
exploration and evaluation at any of its areas
of interest; and
We examined the disclosures made in the
financial report.
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 2018, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
57
‘
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 Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
58
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
2018.
In our opinion, the Remuneration Report of Volt Resources Limited for the year ended 30 June 2018
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
14 September 2018
L Di Giallonardo
Partner
59
ASX ADDITIONAL INFORMATION (CONTINUED)
The following additional information is required by the Australian Securities Exchange. The
information is current as at 13 September 2018.
(a) Distribution schedule and number of holders of equity securities as at 13 September
2018
Issued Securities
1 –
1,000
1,001 –
5,000
5,001 –
10,000
10,001
–
100,000
100,001
– and
over
Total
Fully Paid Ordinary Shares
268
196
180
1,517
1,464
3,625
Options exercisable at $0.06
on or before 30 April 2019.
Options exercisable at $0.08
on or before 30 April 2019.
Options exercisable at $0.10
on or before 30 April 2019.
Options exercisable at $0.12
on or before 30 April 2019.
Performance Rights
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
1
1
1
3
2
1
1
1
3
The number of holders holding less than a marketable parcel of fully paid ordinary shares as
at 13 September 2018 is 1,084.
(b) 20 Largest holders of quoted equity securities as at 13 September 2018
The names of the twenty largest holders of fully paid ordinary shares (ASX code: VRC) as at 13
September 2018 are:
Rank Name
Shares
% of Total
Shares
Kabunga Holdings Pty Ltd
160,142,017
11.00
1
2
3
4
5
6
7
8
9
Littlejohn Embrey Engineering Pty Ltd
Citicorp Nominees Pty Limited
Daroc Pty Limited
26,000,141
22,353,297
21,950,000
Chata Holdings Pty Ltd
21,714,286
Ms Leticia Kokutengeneza Kabunga
Gerard C Toscan Management Pty Limited
Mr Dominic Virgara
Mr Leslie Thomas King & Mrs Heather King
10
BNP Paribas Nominees Pty Ltd
21,652,490
21,026,750
20,000,000
17,464,286
15,492,482
1.79
1.54
1.51
1.49
1.49
1.44
1.37
1.20
1.06
Volt Resources Limited and Controlled Entities
60
ASX ADDITIONAL INFORMATION (CONTINUED)
Rank Name
11 Mr Richard Him Sim Vom
12
Endjua Pty Ltd
13 Mr Jim Anogianakis
14
HSBC Custody Nominees (Australia) Limited
15 Minerals And Metals Marketing Pty Ltd
16
17
Mr Paul John Anstee & Mr Rodney Michael Smith
Mr Stephen Mark Young & Mrs Lilibeth Villamin Young
18
Ian David Penny
19
BNP Paribas Nominees Pty Ltd
Shares
% of Total
Shares
12,258,657
11,121,000
9,495,200
9,488,641
9,472,740
9,130,000
8,157,272
8,048,645
7,941,024
0.84
0.76
0.65
0.65
0.65
0.63
0.56
0.55
0.55
0.52
20 Molate Pty Limited
7,534,000
TOTAL
440,442,928
30.25
Stock Exchange Listing – Listing has been granted for 1,455,450,388 fully paid ordinary shares
of the Company on issue on the Australian Securities Exchange.
The unquoted securities on issue as at 13 September 2018 are detailed below in part (d).
(c)
Substantial shareholders
Substantial shareholders in Volt Resources Limited and the number of equity securities over
which the substantial shareholder has a relevant interest as disclosed in substantial holding
notices provided to the Company are listed below:
Name
Shares
% of Total
Shares
Kabunga Holdings Pty Ltd
160,142,017
11.69%
Volt Resources Limited and Controlled Entities
61
ASX ADDITIONAL INFORMATION (CONTINUED)
(d) Unquoted Securities
The number of unquoted securities on issue as at 13 September 2018 is as follows:
Unquoted Security
Number on Issue
Options exercisable at $0.06
on or before 30 April 2019.
Options exercisable at $0.08
on or before 30 April 2019.
Options exercisable at $0.10
on or before 30 April 2019.
Options exercisable at $0.12
on or before 30 April 2019.
12,200,000
4,200,000
4,200,000
4,200,000
Performance Rights.
19,500,000
(e) Holder Details of Unquoted Securities
Unquoted security holders that hold more than 20% of a given class of unquoted securities
as at 13 September 2018 other than the performance rights which were issued under an
employee incentive scheme are as follows:
Security
Name
Number of
Securities
Options exercisable at $0.06
on or before 30 April 2019.
Options exercisable at $0.06
on or before 30 April 2019.
Options exercisable at $0.08
on or before 30 April 2019.
Options exercisable at $0.10
on or before 30 April 2019.
Options exercisable at $0.12
on or before 30 April 2019.
EAS Advisors LLC
4,200,000
Melshare Nominees Pty Ltd 8,000,000
EAS Advisors LLC
4,200,000
EAS Advisors LLC
4,200,000
EAS Advisors LLC
4,200,000
(f) Restricted Securities as at 13 September 2018
The Company had no restricted securities as at 13 September 2018.
Volt Resources Limited and Controlled Entities
62
ASX ADDITIONAL INFORMATION (CONTINUED)
(g) Voting Rights
All fully paid ordinary shares carry one vote per ordinary share without restriction.
Unquoted options and performance rights have no voting rights.
(h) On-Market Buy-Back
The Company is not currently undertaking an on-market buy-back.
(i) Corporate Governance
The Board of Volt Resources Limited is committed to achieving and demonstrating the highest
standards of Corporate Governance. The Board is responsible to its Shareholders for the
performance of the Company and seeks to communicate extensively with Shareholders. The
Board believes that sound Corporate Governance practices will assist in the creation of
Shareholder wealth and provide accountability. In accordance with ASX Listing Rule 4.10.3,
the Company has elected to disclose its Corporate Governance policies and its compliance
with them on its website, rather than in the Annual Report. Accordingly, information about
the Company's Corporate Governance practices is set out on the Company's website at
http://voltresources.com/corporate-governance/
(j) Schedule of Mining Tenements
The schedule of interest in mining tenements both as at 30 June 2018 and as at 13 September
2018 is as follows:
All tenement within Tanzania are held by Volt Graphite Tanzania Ltd, a wholly owned
subsidiary of Volt Resources Ltd.
Project
Location
Tenement Number Status
Tanzania
Graphite
Tanzania - Nachingwea, Ruangwa &
Masasi Districts
Tanzania - Ruangwa & Masasi Districts
Tanzania - Newala & Masasi Districts
Tanzania - Newala, Ruangwa & Masasi
Districts
Tanzania - Ruangwa & Lindi Districts
Tanzania - Masasi District
Tanzania - Masasi District
PL 10643/2015
PL 10644/2015
PL 10667/2015
PL 10668/2015
PL 10717/2015
PL 10718/2015
PL 10788/2016
Live
Live
Live
Live
Live
Live
Live
Beneficial
Interest
100%
100%
100%
100%
100%
100%
100%
Volt Resources Limited and Controlled Entities
63