and Controlled Entities
(ACN 119 670 370)
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2018
COMPANY DIRECTORY
ASX Code: WKT
Directors
Trevor Benson
Allan Mulligan
Thomas Murrell
Andrew Cunningham
Company Secretary
Ian Hobson
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Australia
Securities Exchange Listing
ASX code: WKT
Australian Securities Exchange Limited
Level 40, Central Park
152-158 St Georges’ Terrace
Perth, WA 6000
Australia
Registered Office and Principal Place of Business
Bankers:
National Australia Bank
Perth West Business Banking Centre
1238 Hay Street
West Perth, WA 6005
Australia
Level 3
681 Murray Street
West Perth, WA 6005
Australia
Telephone: +61 8 6298 7500
Facsimile: +61 8 6298 7501
Website : www.wkt.com.au
Email: admin@wkt.com.au
Share Register
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000, Australia
GPO Box 2975
Melbourne VIC 3001, Australia
Phone: 1300 850 505 (within Australia)
+61 3 9415 4000 (outside Australia)
Fax: +61 3 9473 2500
Email: www.investorcentre.com/contact
Web: www.computershare.com
TABLE OF CONTENTS
1.
DIRECTORS’ REPORT 2
2.
AUDITOR’S INDEPENDENCE DECLARATION
15
4.
FINANCIAL STATEMENTS 16
5.
DIRECTORS' DECLARATION 47
6.
INDEPENDENT AUDITOR’S REPORT
48
7.
ADDITIONAL SHAREHOLDER INFORMATION
52
1
DIRECTORS’ REPORT
Your Directors submit the annual financial report of the consolidated entity consisting of Walkabout Resources Ltd (“the
Company”) and the entities it controlled during the period for the financial year ended 30 June 2018. In order to comply with
the provisions of the Corporations Act 2001, the directors report as follows:
Directors
The names of Directors who held office during or since the end of the year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Name, qualifications and
independence status
Experience, special responsibilities and other directorships
Mr Trevor Benson
Appointed Chairman 13 September 2016.
Chairman
Executive Director
Mr Allan Mulligan
Executive Director
Appointed Executive Chairman 22 February 2017
Trevor has extensive experience as an investment banker and has served on a
number of ASX listed company boards as both Chairman and Director. He has
specialised in cross border transactions within the natural resources sector across
China, Africa and SE Asia, and has been an adviser to Chinese State Owned
Enterprises (SOE’s). His specialist activities include corporate funding solutions
and off-take agreement negotiations within the natural resources domain.
Trevor holds a Bachelor of Science Degree from the University of Western
Australia.
Other directorships of listed companies in the last 3 years: None
Appointed Managing Director 7 August 2012
Resigned as Managing Director, retained as Executive Director 22 February
2017.
Allan is a mining engineer with over thirty years of mine management and
production experience.
Allan has specialised in technical assessment and production economics,
feasibilities, project design and costing of underground mines and prospects. He
has worked extensively in exploration, mine development and operations across
Africa and Australia.
Allan was a founding Director of Walkabout Resources Pty Ltd. He has previously
been on the board of several Western Australian explorers.
Other directorships of listed companies in the last 3 years: None
Mr Thomas Murrell
Appointed 1 May 2015
Investor Relations Director
Independent Non-Executive
Director
Tom is recognised as an authority on investor relations and has been the
Managing Director of his own company 8M Media and Communications for the
past eighteen years. He has provided counsel to an elite group of companies listed
on the Australian Stock Exchange ranging from Top 500 companies through to
start – up biotechnology, medical and mineral exploration companies. He has
been a director of Investor Central, a Singapore based financial news service
since 2002.
A graduate of three Australian Universities, Tom gained his MBA from the
University of WA and is the immediate past President of the Business School’s
Graduate Management Association representing UWA MBA alumni.
Other directorships of listed companies in the last 3 years: None
2
DIRECTORS’ REPORT
Mr Andrew Cunningham
Appointed 13 November 2015
Technical Director
Non-Executive Director
Andrew has a BSc Hons in Geology from the University of Stellenbosch in South
Africa and is a member of the Australian Institute of Geosciences.
Andrew has extensive cross discipline technical and management experience in
the minerals industry predominantly in Africa and Australia and has worked in a
range of commodities and geological styles including uranium, iron ore, graphite,
diamonds, gold and base metals.
During the last 15 years, Andrew has managed all facets of exploration and
development projects in Africa from project generation to the completion of
feasibility studies. He has held senior geology and exploration positions with major
international mining companies as well as various ASX and TSX listed companies.
He has been working with Walkabout Resources since 2013 and brings a wide
range of exploration, resource development, mine geology and management
experience to the company.
Other directorships of listed companies in the last 3 years: None
Company Secretary
Mr Ian Hobson
Company Secretary
Appointed 14 December 2017
Ian is a fellow chartered accountant and chartered company secretary with over
32 years’ experience in the profession. Ian acts as company secretary and CFO
for a number of ASX listed companies and is experienced in exploration
companies.
Mr Kimberley France
Company Secretary
Appointed 13 November 2015, resigned 14 December 2017
Interests in the shares and options of the company and related bodies corporate
The following relevant interests in shares of the Company or a related body corporate were held by the directors at the date
of this report.
Director
T Benson
A Mulligan
T Murrell
A Cunningham
Ordinary
shares
2,720,144
5,907,988
3,021,045
1,092,071
Options
107,509
100,000
110,691
37,005
Performance
Rights
2,173,913
1,304,348
1,304,348
1,304,347
No share options of the Company were granted to Directors of the Company during or since the end of the financial year as
part of their remuneration package.
During the year, performance rights granted over unissued shares to the Directors of the Company and the entities it
controlled as part of their remuneration was as follows:
Director
Series 1 Fair value
per right
Series 2
Fair value
per right*
Series 3
Fair value
per right
Total value of
rights granted
No.
$
No.
$
No.
T Benson
A Mulligan
T Murrell
869,565
434,783
434,783
A Cunningham
434,783
0.09 1,304,348
0.09
1,000,000
0.09
0.09
0.09
869,565
869,565
869,565
0.09
0.09
0.09
500,000
500,000
500,000
$
0.09
0.09
0.09
0.09
$
285,652
162,391
162,391
162,391
*Unlikely to vest.
3
DIRECTORS’ REPORT
As at the date of this report unissued shares or interests of the Company under performance rights are:
Date performance
Number of shares
rights granted
under right
Exercise price of
right
Expiry date of right
Series 2
Series 3
15 November 2017
15 November 2017
2,173,914
3,913,043
Nil
Nil
15 November 2018
15 November 2018
The performance rights were approved by shareholders on 15 November 2017 but were not issued until 17 July 2018.
The Series 3 performance rights vested on issue and were converted to the equivalent number of ordinary shares for nil
consideration. No other rights have converted.
Series 1 performance rights shall vest upon an announcement to the ASX platform upon securing 80% of the initial
funding requirement for project development within 12 months of the shareholder approval to grant the rights.
Series 2 performance rights shall vest upon an announcement to the ASX platform of commencement of first commercial
production of graphite concentrate from the Lindi Jumbo Project within 18 months of the shareholder approval to grant the
rights.
As at the date of this report unissued shares or interests of the Company under options are:
Series
Date options granted
Number of shares
under option
Exercise price of
option
Expiry date of option
1
2
24 January 2018
20 February 2018
25,164,321
15,500,000
$0.15
$0.15
31 December 2019
31 December 2019
The series 1 options were issued as free attaching options to subscribers to the Placement completed on 7 December
2017 and subscribers to the Rights Issue competed on 17 January 2018. The series 2 options were issued to Patersons
Securities Ltd as part of the underwriting fees.
Principal Activities
The principal activities of the consolidated entity during the financial year were the exploration and development of resources
and energy assets located in Tanzania, Namibia and Northern Ireland, with the Botswana projects on hold.
Operating Results
The net loss after tax of the consolidated entity amounted to $1,965,876 (2017: loss of $1,421,369).
Financial Position
The net assets of the Group were $15,323,369 at 30 June 2018 (2017: $4,381,057).
Dividends Paid or Recommended
There were no dividends paid or recommended throughout the period.
4
DIRECTORS’ REPORT
Review of Operations
Projects
Lindi Jumbo Graphite Project – 100% of Mining Licence Area and 70% of associated Prospecting Licence
The Lindi Jumbo Graphite Project is located within the emerging graphite province in south-eastern Tanzania approximately
200km by road from the port of Mtwara and comprises two prospecting licences (PL 9992/2014 and (PL 9993/2014)
including a Mining Licence Application (MLA 000638/2017).
The Project has finalised a Definitive Feasibility Study (DFS) (See ASX release 07/02/2017) and is preparing to finance and
construct the mine upon the grant of a Mining Licence from the Ministry of Minerals of Tanzania.
During the year under review, the Government of Tanzania introduced several legislative changes to the Mining Act 2010
which has significantly impacted the mining and exploration industry in the Country. These legislative amendments included:
• A restructuring of the Ministry of Minerals and the creation of a Mining Commission to administer the grant of
permits and licences;
• Restrictions in the use of foreign courts or tribunals regarding matters concerning any natural wealth and resource
issues;
• A free carried right of 16% in all mining projects by the Government of Tanzania;
•
•
•
•
The general requirement to beneficiate all mined minerals in Tanzania and the banning of export of raw minerals;
Local content requirements that require the use of local contractors, consultants and specialists before assigning
international resources;
The return of all primary revenues first into the Tanzanian financial system before repatriating dividends offshore;
and
The prevention of stabilisation clauses into contract arrangements which may freeze out the sovereignty of
Tanzania.
The Company received significant legal advice regarding the issues listed above and proceeded to update the Definitive
Feasibility Study with the effects of the amendments amongst other updated technical detail that had been received.
The results of the updated DFS (See ASX release 24/08/2017) indicated that the project was still highly robust even when
additional direct and indirect costs of the amendments were considered.
Following the updated DFS, the Company elected to proceed with the Project and lodged a Mining Licence Application
(MLA 00638/2017) on 11/09/2017. Approval of this application has subsequently been delayed by the slow pace of the
establishment of the Tanzanian Mining Commission. The Mining Licence had not yet been awarded by the end of the
period.
During the period of unfortunate delay, the Company continued with engineering and design work but was unable to
successfully progress project funding or on-site construction activities.
The Company also exercised its option to purchase the Vendor’s 30% share of PL9992/2014. This is the licence within
which the Mining Licence Application has been based and the Company now owns 100% of the Lindi Jumbo Graphite
Project subject to the Government of Tanzania’s 16% free carried right and the future divestment of 5% of the Company’s
Tanzanian holding Company, as per local content regulations.
The Company executed a Heads of Agreement with Yantai Jinpeng Mining and Machinery Limited (‘Jinpeng”) for the
Engineering, Procurement and Construction (EPC) of the Lindi Jumbo graphite flotation plant and mine power generating
system.
Subsequent to this event, the Company welcomed Jinpeng onto the register as a cornerstone investor.
5
DIRECTORS’ REPORT
Northern Ireland Exploration – 100% and earning 75% of various Prospecting Licences
In November, the Company acquired from Lonmin PLC, a multinational platinum mining Company, its portfolio of licences,
operating entities and historic data in Northern Ireland. This acquisition included an operating joint venture for gold and base
metals and represented a geographical and commodity diversification for the Company.
The Company further expanded this portfolio with a Joint Venture over a licence in County Tyrone. (See ASX release 15 Nov
2017 and 22 Feb 2018.)
Existing quarry excavation
Image 1. Co-Cu-Ag prospectivity within and extended from the pre-existing quarry at Tyrone County JV licence
Interpretation of a soil sampling programme at the County Tyrone JV licence, near an existing quarry excavation, highlighted
a potential copper-cobalt-silver anomaly. The quarry area, within the licence, returned surface sample grades of 0.13% Co,
1.27% Cu and 50.3 g/t Ag in individual samples. (See ASX release 11 Apr 2018.)
Eureka Lithium Project, Namibian Exploration – 100% and earning 75% of various Prospecting Licences
After an extended delay, the Company was awarded licences with highly prospective lithium prospects in southern Namibia.
These licences, 100% held by a Walkabout subsidiary, represent an area of more than 1,500km2 with a combined strike
length of 27 kilometres of previously untested pegmatite outcrops.
These licence areas were further expanded with the addition of a highly prospective Joint Venture adjacent to the existing
licences where the Company can earn 75% through the publication of a maiden Mineral Resource. (See ASX releases 21 Nov
2017 and 11 Jan 2018.)
The Company conducted an initial reconnaissance surface sampling programme in Namibia over portions of licence
EPL6308. The results highlighted the more prospective pegmatites are located toward the south of the licence and on the
JV licence EPL5691 which is awaiting Ministerial renewal. Further work for the year was deferred in order to secure access
to EPL5691.
Takatokwane Coal Project, Botswana (Various between 65% and 70% interest)
Takatokwane is located 195km from the Botswana capital, Gaborone, in the southern belt of the Central Kalahari Sub-Basin
and is directly accessible by a well-maintained bitumen road. Walkabout has previously defined a 6.9 billion tonne JORC
2004 Inferred raw coal Resource and a 748 million tonne Indicated raw coal Resource over the two Joint Ventures with
Wizard Investments Pty Ltd (70%) and Triprop Energy Pty Ltd (40% earning 65%).
6
DIRECTORS’ REPORT
During the period under review, the Ministry of Minerals, Energy and Water Resources renewed all licences for a further
period of two years.
The Company has decided to review its participation in the Takatokwane Joint Ventures during 2018/2019.
Competent Person – Mr Andrew Cunningham
The information in this report that relates to Exploration Results and Exploration Targets is based on and fairly represents
information and supporting documentation prepared by Mr Andrew Cunningham (Director of Walkabout Resources Limited).
Mr Cunningham is a member of the Australian Institute of Geoscientists and has sufficient experience of relevance to the
styles of mineralisation and types of deposits under consideration, and to the activities undertaken to qualify as Competent
Persons as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves. Mr Cunningham consents to the inclusion in this report of the
matters based on his information in the form and context in which they appear.
Significant Changes in State of Affairs
The following significant changes in the state of affairs of the Company occurred during the year:
On 5 July 2017 the Company issued 26,132,314 fully paid ordinary shares to raise $1,520,900 at the price of $0.0582 per
share pursuant to a share purchase plan which closed on 28 June 2017.
On 28 September 2017 the Company announced the completion of a placement of 21,881,765 fully paid ordinary shares to
raise $1,555,793 at the price of $0.0711 per share from the Company’s 15% capacity.
On 7 December 2017 the Company announced the completion of a placement of 33,552,040 fully paid ordinary shares to
raise $3,388,756 at the price of $0.101 per share from the Company’s 15% capacity share (together with one (1) free
attaching New Option for every four (4) Shares subscribed for and issued).
On 22 January 2018 the Company announced a $6.7m one for three pro rata renounceable rights issue (Rights Issue) of
approximately 67,104,080 fully paid ordinary shares at $0.10 per share (together with one (1) free attaching New Option
for every four (4) Shares subscribed for and issued) has closed oversubscribed.
On 22 February 2018 the Company announced has finalised a Joint Venture with Partner Koza (UK) Ltd , whereby WKT
will earn-in to at least 75% of the highly prospective Slieve Gallion licence in Northern Ireland.
Significant Events After Balance Date
On 30 August 2018, the Company announced it has received confirmation from the Ministry of Minerals of Tanzania for the granting
of Mining Licence ML00638/2017 for the Lindi Jumbo Graphite Project in south eastern Tanzania.
No other matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity in future financial years.
Likely Developments and Expected Results
Further information has not been presented in this report as disclosure of information regarding likely developments in the
operations of the consolidated entity in future financial years and the expected results of those operations is likely to result
in unreasonable prejudice to the consolidated entity.
Environmental legislation
The consolidated entity is not subject to any significant environmental legislation.
7
DIRECTORS’ REPORT
Indemnification and insurance of Directors and Officers
The Company has agreed to indemnify all the Directors 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 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.
REMUNERATION REPORT (Audited)
This report, which forms part of the Directors’ Report, outlines the remuneration arrangements in place for the Key
Management Personnel (“KMP”) of the Company for the financial year ended 30 June 2018. The information provided in
this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for KMP who are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the Company and its controlled entities,
directly or indirectly, including any Director (whether Executive or otherwise) of the parent company.
The Directors and key management personnel of the Group during or since the end of the financial year were:
Mr T Benson
Mr A Mulligan
Mr T Murrell
Mr A Cunningham
Executive Chairman
Executive Director
Non-executive Director
Non-executive Director
Remuneration policy
The remuneration policy of Walkabout has been designed to align Director and Executive objectives with shareholder and
business objectives by providing a fixed remuneration component and potentially, at the Boards discretion, long term
incentives based on key performance areas affecting the consolidated entity’s financial results. The Board of Walkabout
believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and
Directors to run and manage the consolidated entity, as well as create goal congruence between Directors, Executives and
shareholders.
The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives of the
consolidated entity is as follows: the remuneration policy, setting the terms and conditions for the Executive Directors
and other senior executives, was developed by the Board of Directors, and approved by resolution of the Board. All
Executives receive a base salary including superannuation with the possibility of options and performance incentives.
The Board of Directors review executive packages annually by reference to the consolidated entity’s performance, executive
performance and comparable information from industry sectors and other listed companies in similar industries.
The performance of Executives is assessed annually with each executive and is based predominantly on operational and
exploration activities and shareholders’ value. The Board may, however, exercise its discretion in relation to approving
incentives, bonuses and options, and can award these if they can be reasonably justified. The policy is designed to attract
and retain the highest calibre of Executives and reward them for performance that results in long term growth in shareholder
value.
Directors and Executives receive a superannuation guarantee contribution required by the Government, which is currently
9.5%, and do not receive any other retirement benefits.
All remuneration paid to Directors and Executives is valued at the cost to the Company and expensed.
The Board policy is to remunerate Non-executive Directors at market rates for comparable companies for time, commitment
and responsibilities. The Company has not established a Remuneration Committee. The Board of Directors of the Company
is responsible for determining and reviewing compensation arrangements for directors and executive team. The Board of
Directors determines payments to the Non-executive Directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required. Any changes to the maximum
aggregate amount of fees that can be paid to Non-executive Directors is subject to approval by shareholders at an Annual
General Meeting. The latest determination was at a General Meeting prior to the Company’s listing on ASX, held on 5
August 2006 when shareholders approved an aggregate remuneration of $200,000 per year. Fees for Non-executive
Directors are not linked to performance of the consolidated entity.
8
DIRECTORS’ REPORT
Performance-based remuneration
Performance based remuneration was granted to Directors by shareholders at the Company’s Annual General Meeting
dated 15 November 2017. Details of this remuneration are disclosed above in the paragraph entitled “Interests in the
shares and options of the company and related bodies corporate”.
Company performance, shareholder wealth and Director and executive remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and Executives.
There have been two methods applied in achieving this aim, the first being a fixed market competitive salary, and the second
being the potential issue of options to Directors and Executives to encourage the alignment of personal and shareholder
interests.
In accordance with best practice corporate governance, the structure of Non-executive Director and Executive remuneration
is separate and distinct.
Key Management Personnel Remuneration Policy
The remuneration structure for KMP is to be based on a number of factors, including length of service, particular experience
of the individual concerned, and overall performance of the Company. The contracts for service between the Company and
KMP are on a continuing basis, the terms of which are not expected to change in the immediate future.
Employment Contracts
Executive
Director
Contract
Commencement
Contract
Termination
Remuneration
Notice period
T Benson
22 February 2017
No fixed term
$250,000
3 months
A Mulligan
7 August 2012
7 August 2015
$250,000
3 months
Termination
entitlement
3 months’ pay in
lieu of notice
3 months’ pay in
lieu of notice
Mr Mulligan’s contract has been extended on a 12 month basis and is currently under review.
In addition, each Executive Director is entitled to the statutory 9.5% superannuation guarantee.
9
DIRECTORS’ REPORT
Table 1 details the nature and amount of remuneration for each Director of Walkabout Resources Ltd. There are no Executives who aren’t Directors.
Remuneration of Key Management Personnel
Table 1: Directors’ remuneration for the years ended 30 June 2018 and 30 June 2017
30 June 2018
Short-term Benefits
Post-
employment
Benefits
Other Long-
term Benefits
Share-based Payment
Total
Performance
Related
Salary and
fees
$
249,996
249,996
63,284
Trevor Benson1
Allan Mulligan
Thomas Murrell2
Andrew Cunningham3
233,062
796,338
Bonuses
Non-cash
benefit
$
-
-
-
-
-
$
-
-
-
-
-
Other
Superannuation
Long-service Leave
Equity
Options
$
-
-
-
-
-
$
23,750
23,750
-
-
47,500
$
-
-
-
-
-
$
145,690
72,845
72,845
72,845
364,225
$
-
-
-
-
-
$
419,436
346,591
136,129
305,907
1,208,063
%
34.7%
21.0%
53.5%
23.8%
30 June 2017
Short-term Benefits
Post-
employment
Benefits
Other Long-
term Benefits
Share-based Payment
Total
Performance
Related
Salary and
fees
$
112,969
250,000
76,502
Mr Trevor Benson1
Mr Allan Mulligan
Thomas Murrell2
Andrew Cunningham3
171,775
611,246
(1) Appointed 13 September 2016
(2) Appointed 1 May 2015
(3) Appointed 13 November 2015
Bonuses
Non-cash
benefit
$
-
-
-
-
-
$
-
-
-
-
-
Other
Superannuation
Long-service Leave
Equity
Options
$
-
-
-
-
-
$
10,732
23,750
-
-
34,482
$
-
-
-
-
-
$
65,110
32,555
32,555
32,555
162,775
$
-
-
-
-
-
$
188,811
306,305
109,057
204,330
808,503
%
34
11
30
16
No options were issued as compensation during the year to Directors and Executives.
Performance rights issued as compensation and exercised during the year by Directors and Executives are described in previous paragraphs.
10
DIRECTORS’ REPORT
Shareholdings of Key Management Personnel
Ordinary Shares
30 June 2018
Directors
Balance at beginning
of period
Number
Conversion of
performance rights
Number
Effect of consolidation
Net Change Other
Balance at end of period
Balance held nominally
Number
Number
Number
Number
Trevor Benson
Allan Mulligan
Thomas Murrell
Andrew Cunningham
1,032,376
4,750,256
1,562,819
444,053
-
-
-
-
-
-
-
-
687,768
657,732
958,226
148,018
1,720,144
5,407,988
2,521,045
592,071
-
1,544,689
688,271
592,071
30 June 2017
Directors
Balance at beginning of
period
Number
Granted as
remuneration
Number
Effect of consolidation
Net Change Other
Balance at end of period
Balance held nominally
Number
Number
Number
Number
Trevor Benson
Allan Mulligan
Thomas Murrell
Andrew Cunningham
-
98,005,857
4,755,865
3,963,221
434,783
217,391
217,391
217,391
-
(99,722,992)
(29,599,404)
(4,986,559)
597,593
6,250,000
26,188,967
1,250,000
1,032,376
4,750,256
1,562,819
444,053
-
1,086,957
258,471
444,053
All equity transactions with key management personnel other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than
those the Group would have adopted if dealing at arm's length.
11
DIRECTORS’ REPORT
Option holdings of Key Management Personnel
30 June 2018
Directors
Balance at beginning
of period
Number
Granted as
remuneration
Number
Expired
Number
Net Change Other
Balance at end of period
Balance held nominally
Number
Number
Number
Trevor Benson
Allan Mulligan
Thomas Murrell
Andrew Cunningham
-
271,740
1,138,652
54,538
30 June 2017
Directors
Balance at beginning
of period
Number
Granted as
remuneration
Number
Trevor Benson
Allan Mulligan
Thomas Murrell
Andrew Cunningham
-
-
-
-
Performance right holdings of Key Management Personnel
-
-
-
-
-
-
-
-
-
(271,740)
(1,138,652)
(54,538)
107,509
100,000
110,691
37,005
107,509
100,000
110,691
37,005
-
100,000
43,017
37,005
Effect of consolidation
Net Change Other
Balance at end of period
Balance held nominally
Number
Number
Number
Number
-
(5,978,260)
(25,050,315)
(1,195,462)
-
6,250,000
26,188,967
1,250,000
-
271,740
1,138,652
54,538
-
217,392
51,695
54,538
30 June 2018
Series
Directors
Balance at
beginning of period
Number
Granted as
remuneration
Number
Value per performance right
granted during the year
Lapsed
Balance at end of period
Balance held nominally
Number
Number
Number
Allan Mulligan
Trevor Benson
Thomas Murrell
-
-
-
-
-
-
-
-
-
-
-
-
The total fair value of performance rights granted during the year is noted in the Directors’ Report under the section titled “Interests in the shares and options of the Company and related bodies Corporate”. The fair value of
the rights which lapsed during the year was $0.069 per right.
-
(869,565)
(1,304,348)
-
(434,783)
(869,565)
-
(434,783)
(869,565)
-
(434,783)
(869,565)
-
869,565
1,304,348
-
434,783
869,565
-
434,783
869,565
-
434,783
869,565
869,565
1,304,348
1,000,000
434,783
869,565
500,000
434,783
869,565
500,000
434,783
869,565
500,000
869,565
1,304,348
1,000,000
434,783
869,565
500,000
434,783
869,565
500,000
434,783
869,565
500,000
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
$0.09
$0
$0.09
$0.09
$0
$0.09
$0.09
$0
$0.09
$0.09
$0
$0.09
Andrew Cunningham
12
DIRECTORS’ REPORT
30 June 2017
Directors
Series
Balance at beginning
of period
Number
Granted as remuneration
Number
Converted into ordinary
shares
Number
Balance at end of period
Balance held nominally
Number
Number
Trevor Benson
Allan Mulligan
Thomas Murrell
Andrew Cunningham
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
Series 1
Series 2
Series 3
-
-
-
-
-
-
-
-
-
-
-
-
434,783
869,565
1,304,348
217,391
434,783
869,565
217,391
434,783
869,565
217,391
434,783
869,565
(434,783)
-
-
(217,391)
-
-
(217,391)
-
-
(217,391)
-
-
-
869,565
1,304,348
-
434,783
869,565
-
434,783
869,565
-
434,783
869,565
-
869,565
1,304,348
-
434,783
869,565
-
434,783
869,565
-
434,783
869,565
Other transactions with Key Management Personnel
For amounts owing to key management personnel refer to Note 10 to the financial report for details.
End of Remuneration Report
13
DIRECTORS’ REPORT
Directors’ meetings
The number of meetings of directors held during the year and the number of meetings attended by each Director were as
follows:
Number
of meetings
held
Number
eligible to
attend
Number
attended
Trevor Benson
Alan Mulligan
Thomas Murrell
Andrew Cunningham
5
5
5
5
5
5
5
5
5
5
5
5
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings. The Company was not a party to any such proceedings during the year.
Auditor’s independence
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the Company
with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on
page 15 and forms part of this Directors’ Report for the year ended 30 June 2018.
Non-audit Services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined
in Note 4 to the financial statements. The Directors are satisfied that the provision of non-audit services is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services
have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of the services
undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics
for Professional Accountants issued by the Accounting Professional & Ethical Standards Board.
Signed in accordance with a resolution of the Board of Directors.
Trevor Benson
Executive Chairman
21 September 2018
14
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Walkabout 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
21 September 2018
D I Buckley
Partner
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
15
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Note
Consolidated
2
2
2
3
2018
$
2017
$
(Restated)
35,236
3,820
68,439
6,094
(6,924)
(280,889)
(326,544)
(621,194)
(227,617)
(149,171)
(147,596)
(192,542)
(276,450)
(10,693)
(108,962)
(144,150)
(298,955)
(16,352)
(231,164)
(92,869)
(584,291)
(177,383)
(2,125,252)
(1,654,905)
159,376
233,536
(1,965,876)
(1,421,369)
Revenue
Foreign exchange gain
Depreciation and amortisation expense
Occupancy costs
Legal and compliance fees
Administration expenses
Consulting fees
Professional fees
Other expenses
Exploration costs expensed or written off
Share based payments
Loss before income tax
Income tax benefit
Loss for the year
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
148,920
(116,530)
Other comprehensive income/ (loss) for the year, net
of tax
148,920
(116,530)
Total comprehensive loss for the year
(1,816,956)
(1,537,899)
Earnings Per Share
Basic loss per share (cents per share)
5
Diluted loss per share (cents per share)
(0.94)
(0.94)
(1.37)
(1.37)
The accompanying notes form part of these financial statements.
16
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Plant and equipment
Deferred exploration expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefits
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
Consolidated
2018
$
2017
$
(Restated)
6
7
7
8
9
10
11
12
6,412,501
82,714
6,495,215
5,000
8,939
269,259
46,305
315,564
5,000
7,141
9,563,843
4,498,677
9,577,782
4,510,818
16,072,997
4,826,382
665,536
84,092
749,628
749,628
378,258
67,067
445,325
445,325
15,323,369
4,381,057
65,462,255
53,582,608
874,193
(154,348)
(51,013,079)
(49,047,203)
15,323,369
4,381,057
The accompanying notes form part of these financial statements.
17
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR YEAR ENDED 30 JUNE 2018
Consolidated
Note
Share
Capital
Accumulated
Losses
Foreign Currency
Translation
Reserve
Share based
Payment
Reserve
Total
$
$
$
$
$
53,582,608
(49,047,203)
(242,123)
87,775
4,381,057
-
-
-
-
-
13,175,857
(1,296,210)
(1,965,876)
-
-
148,920
(1,965,876)
148,920
-
-
-
(1,965,876)
148,920
(1,816,956)
-
-
-
-
-
-
-
-
364,225
364,225
(87,775)
(87,775)
-
13,175,857
603,171
(693,039)
Balance as at 1 July 2017
(Restated)
Net loss for the year
Exchange differences arising on
translation of foreign operations
Total comprehensive loss for the
year
Share based payment
Share based payment reversal
Shares issued during the year
Transaction costs
Balance as at 30 June 2018
65,462,255
(51,013,079)
(93,203)
967,396
15,323,369
(Restated)
Balance as at 1 July 2016
50,810,046
(39,750,159)
(257,876)
Effect of policy change
14
-
(7,875,675)
132,283
50,810,046
(47,625,834)
(125,593)
Balance 1 July 2016
Net loss for the year
Exchange differences arising on
translation of foreign operations
Total comprehensive loss for the
year
Share based payment
Shares issued during the year
Transaction costs
-
-
-
-
3,048,032
(275,470)
(1,421,369)
-
-
(116,530)
(1,421,369)
(116,530)
-
-
-
-
-
-
87,775
87,775
-
-
3,048,032
(275,470)
10,802,011
(7,743,392)
(3,058,619)
(1,421,369)
(116,530)
(1,537,899)
-
-
-
-
-
-
Balance as at 30 June 2017
53,582,608
(49,047,203)
(242,123)
87,775
4,381,057
The accompanying notes form part of these financial statements.
18
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Research & development incentive received
Interest received
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Exploration and evaluation expenditure
Payments for property, plant & equipment
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Issue costs
Net cash provided by financing activities
Net increase / (decrease) in cash held
Cash at beginning of financial year
Effect of foreign currency on cash balances
Cash at end of financial year
Note
Consolidated
2018
$
2017
$
(1,670,659)
(840,602)
159,376
35,236
233,536
3,820
15
(1,476,047)
(603,246)
(4,756,345)
(2,594,665)
(8,722)
(2,765)
(4,765,067)
(2,597,430)
13,175,857
(791,501)
12,384,356
6,143,242
269,259
-
2,465,590
(217,330)
2,248,260
(952,416)
1,221,675
-
6,412,501
269,259
6
6
The accompanying notes form part of these financial statements.
19
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Preparation
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 Walkabout Resources Ltd and its
subsidiaries. For the purposes of preparing the consolidated financial statements, the Group is a for-profit entity.
The financial statements have been prepared on a historical cost basis. Cost is based on the fair values of the
consideration given in exchange for assets.
The financial statements are presented in Australian dollars.
The Company is a listed public company, incorporated in Australia and operating in Australia, Botswana, Tanzania,
Malawi, Northern Ireland and Namibia. The entity’s principal activities are mineral exploration.
(b)
Adoption of new and revised standards
Standards and Interpretations on issue not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2018
reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new
standards and interpretations is set out below.
Title of standard
AASB 9 Financial Instruments
Nature of change
AASB 9 addresses the classification, measurement and derecognition of financial assets and
financial liabilities, introduces new rules for hedge accounting and a new impairment model
for financial assets.
Impact
The Group has reviewed its financial assets and liabilities and is expecting the following
impact from the adoption of the new standard on 1 July 2018:
The financial assets held by the Group primarily comprise cash and debt instruments
currently measured at amortised cost which meet the conditions for classification at
amortised cost under AASB 9.
Accordingly, the Group does not expect the new guidance to affect the classification and
measurement of these financial assets.
There will be no impact on the Group’s accounting for financial liabilities, as the new
requirements only affect the accounting for financial liabilities that are designated at fair value
through profit or loss and the Group does not have any such liabilities. The derecognition
rules have been transferred from AASB 139 Financial Instruments: Recognition and
Measurement and have not been changed.
The new impairment model requires the recognition of impairment provisions based on
expected credit losses (ECL) rather than only incurred credit losses as is the case under
AASB 139. It applies to financial assets classified at amortised cost, debt instruments
measured at FVOCI, contract assets under AASB 15 Revenue from Contracts with
Customers, lease receivables, loan commitments and certain financial guarantee contracts.
Based on the assessments undertaken to date, the Group expects no significant increase in
the loss allowance for trade debtors.
The new standard also introduces expanded disclosure requirements and changes in
presentation. These may change the nature and extent of the Group’s disclosures about its
financial instruments particularly in the year of the adoption of the new standard.
Date of adoption by
Group
Must be applied for financial years commencing on or after 1 July 2018. The Group will apply
the new rules retrospectively from 1 July 2018, with the practical expedients permitted under
the standard.
Title of standard
AASB 15 Revenue from Contracts with Customers
Nature of change
The AASB has issued a new standard for the recognition of revenue. This will replace AASB
118 which covers revenue arising from the sale of goods and the rendering of services and
AASB 111 which covers construction contracts.
The new standard is based on the principle that revenue is recognised when control of a
good or service transfers to a customer.
20
The standard permits either a full retrospective or a modified retrospective approach for the
adoption.
Impact
Management has assessed the effects of applying the new standard on the group’s financial
statements and has not identified any areas that will be affected.
The application of AASB 15 may result in the identification of separate performance
obligations in relation to certain contracts which could affect the timing of the recognition of
revenue going forward.
Given the exploration stage of this business, revenue is not significant and the impact from
this change is not material.
Date of adoption by
Group
Mandatory for financial years commencing on or after 1 July 2018. The Group intends to
adopt the standard using the modified retrospective approach which means that the
cumulative impact of the adoption, if any, will be recognised in retained earnings as of 1 July
2018 and that comparatives will not be restated.
Title of standard
AASB 16 Leases
Nature of change
AASB 16 was issued in February 2016. It will result in almost all leases being recognised on
the balance sheet, as the distinction between operating and finance leases is removed.
Under the new standard, an asset (the right to use the leased item) and a financial liability to
pay rentals are recognised. The only exceptions are short-term and low-value leases.
Impact
The accounting for lessors will not significantly change.
The standard will affect primarily the accounting for the Group’s operating leases. As at the
reporting date, the Group has minimal non-cancellable operating lease commitments.
Therefore estimation of the amount of right-of-use assets and lease liabilities that will have
to be recognised on adoption of the new standard and how this may affect the Group’s profit
or loss and classification of cash flows going forward is not material.
Mandatory application
date/Date of adoption
by Group
Mandatory for financial years commencing on or after 1 July 2019. At this stage, the Group
does not intend to adopt the standard before its effective date. The Group intends to apply
the simplified transition approach and will likely not restate comparative amounts for the year
prior to first adoption.
(c)
(d)
Statement of Compliance
The financial report was authorised for issue on 21 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
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Walkabout Resources
Ltd (‘the Company or parent entity’) as at 30 June 2018 and the results of all subsidiaries for the year then ended.
Walkabout Resources Ltd and its subsidiaries are referred to in this financial report as the Group or the consolidated
entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using
consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses
and profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group. Control exists where the company has
the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The
existence and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing when the Group controls another entity.
21
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
(d)
Basis of Consolidation - continued
Business combinations have been accounted for using the acquisition method of accounting.
Unrealised gains or transactions between the Group and its associates are eliminated to the extent of the Group’s
interests in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group
and are presented separately in the statement of comprehensive income and within equity in the consolidated
statement of financial position. Losses are attributed to the non-controlling interests even if that results in a deficit
balance.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts
of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference
between the amount of the adjustment to non-controlling interests and any consideration paid or received is
recognised within equity attributable to owners of Walkabout Resources Limited.
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is
remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint controlled
entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of
that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean
that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
(e)
Critical accounting judgements and key sources of estimation uncertainty
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.
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.
Share-based payment transactions:
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. fair value is determined by an external valuer using a Black and
Scholes model, using the assumptions detailed in Note 20. From time to time the Company makes share-based
payments to other parties, other than employees, for goods or services. Where the fair value of the goods and services
cannot be reliably estimated, the Company measures their fair value by reference to the fair value of the equity
instruments granted.
22
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
(f)
(g)
(h)
Going Concern
The Group is involved in the exploration and evaluation of mineral tenements. Further expenditure will be required
upon these tenements to ascertain whether they contain economically recoverable reserves.
For the year ended 30 June 2018, the Group recorded a net loss of $1,965,876 (2017: $1,385,295) and a net cash
inflow of $6,143,242 (2017: outflow $952,416). At 30 June 2018, the Group had cash available of $6,412,501 and
exploration and lease commitments of $3,898,233.
Notwithstanding the above, the financial report has been prepared on the basis of accounting principles applicable to
a going concern, which assumes the commercial realisation of the future potential of the Company’s and Group’s
assets and the discharge of their liabilities in the normal course of business. The Board considers that the Company
is a going concern and that should additional funding be required to progress their exploration and evaluation assets
in the near future, the Directors are confident that sufficient funding can be raised. During the year, the Group
successfully raised $12,384,356, after costs.
Having carefully assessed the uncertainties relating to the likelihood of securing additional funding, the Group’s ability
to effectively manage their expenditures and cash flows from operations and the opportunity to farm out participating
interests in existing tenements, the Directors believe that the Group will continue to operate as a going concern for
the foreseeable future. Therefore the Directors consider it appropriate to prepare the financial report on a going
concern basis.
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 Walkabout Resources Ltd.
Foreign Currency Translation
Both the functional and presentation currency of Walkabout Resources Ltd and its Australian subsidiaries is Australian
dollars. Each entity in the Group 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 balance date.
All exchange differences in the consolidated financial report are taken to the statement of comprehensive income.
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 the foreign operations in Botswana, Tanzania, Malawi, Namibia and Northern Ireland is
Pula, Schillings, Kwacha, Namibian Dollars and Sterling respectively.
As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation currency of
Walkabout Resources Ltd at the rate of exchange ruling at the balance 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
(i)
Revenue Recognition
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
asset.
23
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
(i)
(j)
(k)
Revenue Recognition - continued
Government Grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received and the Group will comply with all attached conditions.
Leases
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where
another systematic basis is more representative of the time pattern in which economic benefits from the leased asset
are consumed.
Income Tax
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the company’s subsidiaries and associates operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
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 balance date.
Deferred income tax is provided on all temporary differences at the balance 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.
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 is associated with investments 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.
The carrying amount of deferred income tax assets is reviewed at each balance 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 balance 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 balance 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.
24
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
(k)
Income tax - continued
Tax consolidation legislation
The Company and its 100% owned Australian resident subsidiaries 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.
The Company recognises 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 Group. Any difference between the amounts receivable
or payable under the funding agreement are recognised as a contribution to (or distribution from) controlled entities
in the tax consolidated Group.
(l)
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST and VAT except:
• when the GST and VAT incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST and VAT 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 and VAT included.
(m)
The net amount of GST and VAT 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 and VAT 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 and VAT recoverable from, or payable to,
the taxation authority.
Impairment of assets
The Group assesses at each balance 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 Group 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 balance 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.
25
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
(n)
(o)
(p)
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.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts.
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 any allowance for impairment.
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
Group will not be able to collect all amounts due according to the original contractual terms. Factors considered by
the Group 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 Group. 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 Comprehensive Income 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 comprehensive income.
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 transaction costs.
The Group 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 Group 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 Group 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.
(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.
26
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
(p) Financial assets - continued
(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 balance 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.
(q)
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 Group 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 Group has transferred its rights to receive cash flows from the asset and either:
has transferred substantially all the risks and rewards of the asset, or
has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
(a)
(b)
When the Group 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 Group’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 Group 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 Group’s continuing involvement is the amount of the
transferred asset that the Group 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 Group’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, 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 de
recognition 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.
(r)
Impairment of financial assets
The Group assesses at each balance date whether a financial asset or group of financial assets is impaired.
(i) Financial assets carried at amortised cost
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 Group 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
27
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
(r)
Impairment of financial assets – continued
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 the statement of comprehensive income. 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.
(s)
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a diminishing value basis over the estimated useful life of the assets at the following
rates:
Plant and equipment – 20%
Computer equipment – 30%
Motor Vehicles – 33.3%
Furniture and Fittings – 22.2%
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 balance 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 the statement of comprehensive income in the cost of
sales 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.
28
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
(s)
Plant and equipment - continued
(t)
(u)
(v)
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.
Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group 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.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating
losses.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as separate assets but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the statement of comprehensive income net of any reimbursement.
Provisions are measured at the present value or management’s best estimate of the expenditure required to settle
the present obligation at the end of the reporting period. If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognised as a borrowing cost.
Employee leave benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the balance date are recognised in other payables in respect of employees’
services up to the balance date, they are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid
or payable.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the balance date.
Consideration is given to expect future wage and salary levels, experience of employee departures, and period of
service. Expected future payments are discounted using market yields at the balance date on national government
bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
(w)
Share-based payment transactions
Equity settled transactions:
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based
payments, whereby employees render services in exchange for shares or rights over shares (equity-settled
transactions).
There are currently two plans in place to provide these benefits:
•
•
the incentive Performance Rights Plan, which provides benefits to Directors, Key Management and other eligible
participants; and
the Incentive Share Plan, which provides benefits to Directors, Key Management and other eligible participants
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.
Where appropriate, fair value is determined by using a Black-Scholes model, further details of which are given in Note
20. From time to time the Company makes share-based payments to other parties, other than employees, for goods
or services. Where the fair value of the goods and services cannot be reliably estimated, the Company measures
their fair value by reference to the fair value of the equity instruments granted.
29
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
(w)
(x)
(y)
Share- based payments transactions - continued
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked
to the price of the shares of Walkabout Resources Ltd (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 balance date until vesting date reflects (i)
the extent to which the vesting period has expired and (ii) the Group’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. The dilutive effect, if any, of outstanding options is reflected as additional
share dilution in the computation of earnings per share (see Note 5).
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. Incremental costs directly attributable to the issue
of new shares or options for the acquisition of a new business are not included in the cost of acquisition as part of the
purchase consideration.
Earnings per share
Basic earnings 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 are 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.
(z)
Exploration and evaluation
The financial report has been prepared on the basis of a retrospectively applied voluntary change in accounting
policy related to exploration and evaluation expenditure (refer to Note 14 for further details) in relation to the
Takatokwane coal area of interest. The directors believe that this change in policy will result in more relevant and
reliable information in the financial report.
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) the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions is also met:
(a) the exploration and evaluation expenditures are expected to be recouped through successful development
and exploitation 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 balance 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.
The decision to capitalise or expense exploration and evaluation expenditure is made separately for each area of
interest.
30
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued
(z)
Exploration & evaluation - continued
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.
(aa)
Parent entity financial information
The financial information for the parent entity, Walkabout Resources Ltd, disclosed in Note 17 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 Walkabout 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 grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the
group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received,
measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment
in subsidiary undertakings, with a corresponding credit to equity.
31
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 2: REVENUE AND EXPENSES
Interest received
Expenses
Foreign exchange losses / (gain)
Depreciation
Exploration costs written off
NOTE 3: INCOME TAX EXPENSE
a. The components of income tax expense comprise:
The prima facie income tax expense on pre-tax accounting profit from
operations reconciles to the income tax expense in the financial statements
as follows:
Accounting profit before tax from continuing operations
Income tax expense / (benefit) calculated at 27.5% (2017: 27.5%)%
Non-deductible expenses
Difference in tax rate of subsidiaries operating in other jurisdictions
Effect due to changes in tax rates (2016: 30%, 2017:27.5%)
Unused tax losses not recognised as deferred tax assets
Effect due to derecognition of losses on Takatokwane Project
Effect due to change in accounting policy in relation to exploration spend
Other deferred tax assets and tax liabilities not recognised
R & D tax incentive
Consolidated
2018
$
2017
$
35,236
3,820
68,439
6,924
192,542
6,094
10,693
584,291
(1,965,876)
(584,444)
198,423
6,342
-
1,464,424
(724,236)
(731,059)
(1,091,568)
(159,376)
(1,618,831)
(445,179)
77,919
(12,263)
404,451
885,670
-
-
(910,598)
(233,536)
Income tax expense/(benefit) reported in the consolidated statement of
comprehensive income
(159,376)
(233,536)
b. Unrecognised deferred tax balances
The following deferred tax assets and (liabilities) have not been brought to
account:
Deferred tax assets / (liabilities) comprise:
25
Losses available for offset against future taxable income – revenue
6,461,664
5,721,475
•
•
Losses available for offset against future taxable income – capital
• Depreciation timing differences
•
• Accrued expenses and liabilities
•
• Exploration expenditure capitalised
•
c. Income tax benefit not recognised direct in equity
• Share issue costs
ggg
20,622
2,211
32,133
(2,451,824)
4,064,806
20,623
4,707
27,846
(2,147,850)
3,626,801
-
-
-
-
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax
assets have not been recognised in respect of these items because it is not probable that future taxable profit
will be available against which the Group can utilise the benefits thereof.
32
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE: 4: AUDITORS REMUNERATION
Remuneration of the auditor for:
Auditing or reviewing the financial report – HLB Mann Judd
Taxation compliance services – HLB Mann Judd
NOTE 5: EARNINGS PER SHARE
Basic and diluted earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Earnings
Earnings used in the calculation of basic and diluted earnings per share
Consolidated
2018
$
2017
$
32,000
7,400
39,400
30,750
10,000
40,750
(0.94)
(0.94)
(1.37)
(1.37)
Consolidated
2018
$
2017
$
Loss from continuing operations
(1,965,876)
(1,421,369)
Weighted average number of ordinary shares
Weighted average number of ordinary shares outstanding
during the year used in calculating basic EPS
209,223,375
103,545,806
Weighted average number of ordinary shares outstanding
during the year used in calculating diluted EPS
209,223,375
103,545,806
No.
No.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and in hand
6,412,501
269,259
Cash at bank earns interest at floating rates based on daily bank deposit rates
NOTE: 7: TRADE AND OTHER RECEIVABLES
CURRENT
Other debtors
NON-CURRENT
Security bonds
82,714
46,305
5,000
5,000
33
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 8: PLANT AND EQUIPMENT
NON-CURRENT
Plant and Equipment
At cost
Accumulated depreciation
Total plant and equipment
Consolidated
2018
$
2017
$
115,676
(106,737)
8,939
106,954
(99,813)
7,141
a. Movements in Carrying Amounts
Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of
the current financial year.
Balance at the beginning of the year
Additions
Depreciation expense
Balance at end of the year
NOTE 9: DEFERRED EXPLORATION EXPENDITURE
NON-CURRENT
Costs carried forward in respect of:
Exploration and evaluation phase – at cost
Balance at beginning of year
Purchase of tenements
Expenditure incurred
Foreign currency exchange variation
Expenditure written off (i)
Carrying amount at end of year
Consolidated
2018
$
2017
$
7,141
8,722
(6,924)
8,939
15,069
2,765
(10,693)
7,141
Consolidated
2018
$
2017
$
(Restated)
4,498,677
1,983,081
1,865,318
3,050,928
148,920
-
9,563,843
15,826
3,133,000
(48,939)
(584,291)
4,498,677
(i)
During the 2017 financial year, exploration and evaluation expenditure totalling $548,217 was written off as a
result of tenement relinquishments and the Directors’ assessment of the value of some of the Groups’ projects
and as a result no further exploration is planned.
Ultimate recovery of exploration and evaluation expenditure carried forward is dependent upon the recoupment of costs
through successful development and commercial exploitation, or alternatively, by sale of the respective areas.
34
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 10: TRADE AND OTHER PAYABLES
CURRENT
Trade payables
Sundry payables and accrued expenses
Consolidated
2018
$
2017
$
462,677
202,859
665,536
250,486
127,772
378,258
Trade payables are non-interest bearing and are normally settled on 30 day terms.
NOTE 11: SHARE CAPITAL
Consolidated
2018
$
2017
$
a) Ordinary Shares
(i) Issued and paid-up capital 268,416,321
(2017: 119,746,122) fully paid ordinary shares
65,462,256
53,582,609
(ii) Movements in share capital
2018
2017
No. of Shares
$
No. of Shares
$
Opening balance
119,746,122 53,582,608
1,981,229,8101
50,810,046
Issued for cash – entitlement issue
Issued in lieu of cash
-
-
-
-
341,230,1321
1,364,921
20,000,0001
100,000
Issued for cash – share purchase plan
26,132,314
1,520,901
-
Capital consolidation on a 23:1 basis
-
-
(2,240,612,827)
-
-
Issued for cash – entitlement issue
67,104,080
6,710,408
4,306,8082
396,226
Issued in lieu of cash
Issued for cash – placements
Conversion of Director performance rights
Employee incentive shares
Less costs of issues
Closing balance
1 Pre-consolidation
2 Post-consolidation
-
-
4,561,2962
387,357
55,433,805
4,944,549
7,656,9902
704,443
-
-
-
-
1,086,9562
286,9572
75,000
20,087
268,416,321 66,758,466
119,746,122
53,858,080
-
(1,296,210)
-
(275,472)
268,416,321 65,462,256
119,746,122
53,582,608
(iii) Holders of ordinary shares have the right to receive dividends as declared and in the event of winding up the company,
to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares held and the
amount paid up.
At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each holder in
person or by proxy has one vote on a show of hands.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
35
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 11: SHARE CAPITAL - continued
b) Options
Movements in Options
Opening balance
Issued for nil consideration – entitlement issue
Capital consolidation on a 23:1 basis
Issued for nil consideration – entitlement issue
Issued in lieu of cash*
Issued for nil consideration – placements
Expired
Closing balance
1 Pre-consolidation
2 Post-consolidation
Consolidated
2018
2017
No. of Options
No. of Options
27,550,019
-
-
-
341,230,1321
(326,393,911) 1
16,776,311
15,500,000
8,388,010
(27,550,019)
40,664,321
4,056,8082
1,000,0002
7,656,9902
-
27,550,019
Upon exercise, the options have the same rights as fully paid ordinary shares.
.
*Underwriter options
15,500,000 options were granted to the Underwriter pursuant to the Prospectus dated 20 December 2017. The
fair value of the options at grant date are determined using a Black Scholes pricing method that takes into
account the exercise price, the term of the option, the share price at grant date and expected volatility of the
underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The
following table lists the inputs to the model used for valuation of the unlisted options:
Item
Volatility (%)
Risk free interest rate (%)
Expected life of option (years)
Expected dividend yield
Exercise price per terms and conditions
Underlying security price at grant date
Expiry date
Value per option
b) Performance Rights
Movements in performance rights
Opening balance
Issued to Directors
Conversion to ordinary shares
Expired
Closing balance
Inputs
100%
1.95%
1.87
Nil
$0.15
$0.096
31 December 2019
$0.0389
6,086,957
8,586,957
-
(6,086,957)
8,586,957
-
7,173,913
(1,086,956)
-
6,086,957
36
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
d) Capital Management
The Group manages its capital to ensure that entities in the Group 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 Group’s overall strategy remains unchanged from 2017.
The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent,
comprising issued capital, reserves and retained earnings.
None of the Group’s 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,
dividends 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.
NOTE 12: RESERVES
Opening Balance 1 July
Restatement adjustment 1 July 2016 (note 14)
Translation of foreign operations
Issue of share based payments
Issue of options
Conversion of performance rights
Expiry of non-market vesting condition
Closing Balance 30 June
Consolidated
2018
$
2017
$
(Restated)
(154,348)
-
148,920
364,225
603,171
(257,876)
132,283
(116,530)
162,775
-
-
(75,000)
(87,775)
874,193
-
(154,348)
Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of foreign subsidiary accounts.
Opening Balance 1 July
Translation of foreign operations
Restatement adjustment 1 July 2016 (note 14)
Closing Balance 30 June
(242,123)
148,920
-
(93,203)
(257,876)
(116,530)
132,283
(242,123)
Share Based Payments Reserve
The share based payments reserve records the value of equity benefits provided to employees and Directors as part of their
remuneration.
Opening Balance 1 July
Issue of share based payment
Conversion of performance rights
Expiry of non-market vesting condition
Closing Balance 30 June
87,775
364,225
-
(87,775)
364,225
Option Reserve
The option reserve records the value of options issued to service providers as part of their remuneration.
Opening Balance 1 July
Issue of options to broker (share issue costs)
Closing Balance 30 June
-
603,171
603,171
-
162,775
(75,000)
-
87,775
-
-
-
37
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 13: SEGMENT REPORTING
Walkabout Resources Ltd operates predominantly in one industry and four geographical segments being the mining and
exploration industry in Australia, Botswana and Tanzania, with Namibia and Northern Ireland as an emerging segment.
Segment Information
Identification of reportable segments
The Company has identified its operating segments based on the internal reports that are reviewed and used by the board of
directors in assessing performance and determining the allocation of resources.
The Company is managed primarily on the basis of its graphite project in Tanzania, copper projects in Northern Ireland, other
developing prospects in Tanzania and Namibia and its corporate activities, with the coal exploration in Botswana under review.
Operating segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have
similar economic characteristics.
Types of reportable segments
Graphite
Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Tanzania are
reported in this segment.
Coal
Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Botswana and
Tanzania are reported in this segment.
Lithium
Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Tanzania and
Namibia are reported in this segment.
Copper
Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Northern
Ireland are reported in this segment.
Corporate
Corporate, including treasury, corporate and regulatory expenses arising from operating an ASX listed entity. Segment assets,
including cash and cash equivalents, and investments in financial assets are reported in this segment.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief operating decision maker with respect to
operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual
financial statements of the Company.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic
value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and
physical location.
Unless indicated otherwise in the segment assets note, deferred tax assets and intangible assets have not been allocated to
operating segments.
Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of
the segment. Borrowings and tax liabilities are generally considered to relate to the Company as a whole and are not allocated.
Segment liabilities include trade and other payables.
Unallocated items
The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not
considered part of the core operations of any segment:
•
•
•
•
•
net gains on disposal of available-for-sale investments;
income tax expense;
deferred tax assets and liabilities;
intangible assets; and
discontinuing operations.
38
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 13: SEGMENT REPORTING – Continued
(i) Segment performance
Continuing Operations
Corporate
Coal
Gold
Graphite
Copper
Lithium
Total
30 June 2018
Segment revenue
$
35,236
$
-
$
-
$
-
$
-
$
$
-
35,236
Segment result
(1,448,588)
(128,620)
(131,282)
(87,300)
(168,436)
(1,650)
(1,965,876)
Included with segment
results:
•
•
•
•
Depreciation
Interest revenue
(6,924)
35,236
Income tax benefit
159,376
Share-based
payment
(276,450)
Acquisition of non-current
assets
1,798
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,924)
35,236
159,376
(276,450)
-
4,136,516
749,863
178,800
5,066,977
Segment assets
6,389,493
16,297
31,458
8,614,891
749,863
270,995
16,072,997
Segment liabilities
(538,330)
(122,882)
(31,458)
(6,940)
(50,018)
30 June 2017
Segment revenue
3,820
-
-
-
-
-
(749,628)
3,820
Segment result
(805,916)
(80,221)
(22,838)
(471,319)
(41,075)
(1,421,369)
Included with segment
results:
•
•
•
•
Depreciation
Interest revenue
(10,693)
3,820
Income tax benefit
233,536
Share-based
payment
(177,383)
Acquisition of non-current
assets
2,765
-
-
-
Segment assets
317,571
1,176
Segment liabilities
(382,465)
(4,131)
-
-
-
-
-
-
(10,693)
3,820
3,021,792
37,363
19,990
3,081,910
4,478,937
(12,258)
-
-
28,698
4,826,382
(46,471)
(445,325)
39
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
14: VOLUNTARY CHANGE IN ACCOUNTING POLICY
(a)
Exploration and Evaluation Accounting Policy
The financial report has been prepared on the basis of a retrospectively applied voluntary change in accounting policy
related to exploration and evaluation expenditure in respect of the Takatokwane coal area of interest.
The new accounting policy in respect to the Takatokwane coal area of interest is to expense exploration and
evaluation expenditure to the profit or loss as incurred.
The previous accounting policy in respect to the Takatokwane coal area of interest was to capitalise exploration and
evaluation expenditure incurred and carry forward as an asset when costs were expected to be recouped through the
successful development of the area of interest (or alternatively by its sale), or where activities in the area had not yet
reached a stage which permitted a reasonable assessment of the existence or otherwise of economically recoverable
reserves and active operations were continuing.
The directors believe that this change in policy will result in more relevant and reliable information in the financial
report. The accounting policy for other exploration assets remain unchanged.
(b)
Impact on Financial Statements
As a result of the change in the accounting policy for exploration and evaluation expenditure in relation to the
Takatokwane coal area of interest, prior year financial statements had to be restated. The amounts disclosed for the
full year to 30 June 2017 reporting period and in the statement of financial position as at 30 June 2017, are after the
change in accounting policy for exploration and evaluation expenditure.
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Exploration expenditure expensed
Loss before income tax
Net loss for the period
Other comprehensive income
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign
operations
Other comprehensive (loss) / Income for the
period net of tax
Previously Stated
30 June 2017
Restatement
Restated
30 June 2017
$
(548,217)
(1,385,295)
(1,385,295)
$
$
(36,074)
(36,074)
(36,074)
(584,291)
(1,421,369)
(1,421,369)
54,908
(171,438)
(116,530)
54,908
(171,438)
(116,530)
Total comprehensive loss for period
(1,330,387)
(207,512)
(1,537,899)
Basic and diluted loss per share from continuing
operations (cents)
(1.34)
(0.03)
(1.37)
40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Statement of Financial Position
30 June 2017
Previously Stated
30 June 2017
Increase/
(Decrease)
Deferred exploration and evaluation
Total Assets
Net Assets
Equity
Issued Capital
Reserves
Accumulated Losses
Total Equity
Statement of Cash Flows
$
12,449,581
12,777,286
12,331,961
53,582,608
(115,193)
(41,135,454)
12,331,961
$
(7,950,904)
(7,950,904)
(7,950,904)
-
(39,155)
(7,911,749)
(7,950,904)
Restated
30 June 2017
$
4,498,677
4,826,382
4,381,057
53,582,608
(154,348)
(49,047,203)
4,381,057
Exploration and evaluation expenditure that is expensed is included as part of cash flows from operating activities whereas
exploration and evaluation expenditure that is capitalised is included as part of cash flows from investing activities. This has
resulted in additional cash outflows from operating activities of $36,074 for the year ended 30 June 2018. This has also resulted
in a corresponding reduction of $36,074 being reflected in the net cash outflows from investing activities for the same reporting
period.
NOTE 15: CASH FLOW INFORMATION
Consolidated
2018
$
2017
$
(Restated)
Reconciliation of net cash flow from operating activities with loss after
Income Tax
Loss after income tax
(1,965,876)
(1,421,369)
Cash flows excluded from loss attributable to operating activities
Non-cash flows in loss
- Exploration written off
- Depreciation
- Share based payments
Decrease / (increase) in trade and other receivables
Increase / (decrease) in trade payables and accruals
-
6,924
276,450
(7,985)
214,440
584,291
10,693
197,383
(1,915)
63,745
Net cash used in operating activities
(1,476,047)
(567,172)
41
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 16: EVENTS AFTER THE BALANCE DATE
On 30 August 2018, the Company announced it has received confirmation from the Ministry of Minerals of Tanzania for the granting
of Mining Licence ML00638/2017 for the Lindi Jumbo Graphite Project in south eastern Tanzania.
No other matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity in future financial years.
NOTE 17: PARENT ENTITY DISCLOSURES
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Financial performance
2018
$
2017
$
(Restated)
6,371,619
9,486,145
15,857,764
534,395
534,395
290,979
4,472,543
4,763,522
382,465
382,465
65,462,255
963,311
53,582,608
83,690
(51,102,197)
(49,285,241)
15,323,369
4,381,057
Total comprehensive loss for the period
(1,816,956)
(1,330,657)
The parent entity has no contingent liabilities or commitments at balance date.
NOTE 18: RELATED PARTY TRANSACTIONS
Amounts owing to related parties at year end:
Other Related Parties
Thomas Murrell
Andrew Cunningham
Consolidated
2018
$
14,634
26,800
2017
$
12,815
24,613
Transactions between related parties are on normal commercial terms which are no more favourable than those available to
other parties unless otherwise stated.
- Fees paid are for the provision of geological and marketing services to the Company.
The fees payable to Directors and options issued to Directors are disclosed in the Remuneration Report included in this
Financial Report. Key management personnel remuneration is disclosed in Note 23. There are no other related party
transactions that have occurred throughout the year.
42
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
Controlled Entities Consolidated
Parent Entity:
Walkabout Resources Ltd
Subsidiaries of Walkabout Resources Ltd:
Reveal Resources Pty Ltd
Walkabout Resources Australia Pty Ltd
Walkabout Resources (Pty) Ltd
Wizard Investments(Pty) Ltd
Triprop Energy (Pty) Ltd
Walkabout Resources Pty Ltd
Walkabout Resources Pty Ltd
Lindi Jumbo Ltd
Alro Investments Forty Nine (Pty) Ltd
Shackleton Resources Ltd
Antrim Metals Ltd
Country of
Incorporation
Australia
Australia
Australia
Botswana
Botswana
Botswana
Malawi
Tanzania
Tanzania
Namibia
Northern Ireland
UK
Percentage Owned (%)*
2018
2017
100%
100%
100%
70%
40%1
100%
100%
100%
100%
100%
50%
100%
100%
100%
70%
40%1
100%
100%
100%
100%
-
-
* Percentage of voting power is in proportion to ownership
1 The Group has consolidated Triprop Energy (Pty) Ltd as the Directors’ consider the Group controls this company through
the terms of the farm-in agreement.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are therefore not disclosed in this note.
NOTE 19: FINANCIAL INSTRUMENTS
a.
Financial Risk Management
The consolidated entity’s financial instruments consist of deposits with banks, accounts receivable and payable, loans
to a controlled entity and a cash advance to a third party.
i.
Treasury Risk Management
The Company’s funds are held with an Australian “four pillar” bank with the majority residing in a high interest
low transaction fee account.
The Company’s overall risk management strategy seeks to assist the consolidated group in meeting its
financial targets, whilst minimising potential adverse effects on financial performance.
Risk management policies are approved and reviewed by the Board on a regular basis. These include the
formulation of credit risk policies and future cash flow requirements.
Financial Risks
The main risks the group is exposed to through its financial instruments are interest rate risk, foreign currency
risk, liquidity risk and credit risk.
Foreign currency risk
The group is exposed to fluctuations in foreign currencies arising from the purchase of goods and services in
currencies other than the group’s measurement currency.
ii.
Iii
b. Foreign Currency Risk Sensitivity
At 30 June 2018, there would have been an immaterial change in post-tax loss for the year as a result of a 4%
change in the value of the Australian Dollar to the Botswana Pula and an 6% change in the value of the Australian
Dollar to the Tanzanian Schilling. The effect on equity would be the same.
43
Consolidated
2018
Consolidated
2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 19: FINANCIAL INSTRUMENTS - Continued
c. Liquidity risk
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities.
The following table details the Company’s and the Group’s expected maturity for its non-derivative financial liabilities.
These have been drawn up based on undiscounted contractual maturities of the financial assets including interest
that will be earned on those assets except where the Group anticipates that the cash flow will occur in a different
period.
Less than 1
month
1 – 3
Months
3 months
– 1 year
1 – 5
years
5+ years
$
$
$
Non-interest bearing
544,158
121,378
84,092
544,158
121,378
84,092
Less than 1
month
1 – 3
Months
3 months –
1 year
1 – 5
years
5+ years
$
$
$
Non-interest bearing
357,433
20,825
67,067
357,433
20,825
67,067
d.
Credit risk
The main exposure to credit risk as at 30 June 2018 relates to three separate advances made to the Company’s wholly
owned subsidiaries, Walkabout Resources Pty Ltd ($16,148,580), Reveal Resources Pty Ltd ($448,105) and
Shackleton Resources Ltd ($702,381). These separate advances have been made for the purpose of funding the day
to day operations of the subsidiaries and their exploration activities. The loans are unsecured. The risk associated with
these advances is exploration risk. These advances will not be repaid if the exploration does not provide an economic
deposit. This risk is mitigated by providing the best opportunity to make an economic discovery by utilising exploration
professionals of the highest standard and by obtaining the necessary funding.
e.
Interest Rate Risk
The consolidated entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate
as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial
assets and financial liabilities are detailed in the liquidity risk section of this note. At balance date, the Group is not
materially exposed to interest rate risk.
f.
Fair Value
The carrying amount of the Group’s financial assets and liabilities approximate their carrying amount at balance date.
44
$
-
-
$
-
-
$
-
-
$
-
-
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 20: SHARE-BASED PAYMENT PLANS
On 29 November 2016, the Group established share incentive plans that entitle Directors, employees and contractors to
receive or purchase shares / performance rights in the Company under the terms contained in the plans.
Incentive Performance Rights Plan
On 15 November 2017, shareholders granted Directors performance rights over unissued shares at no consideration in
accordance with the following vesting conditions:
• Series 1 – an announcement to the ASX platform upon securing 80% of the initial funding requirement for project
development within 12 months of shareholder approval;
• Series 2 – an announcement to the ASX platform of commencement of first commercial production of graphite
concentrate from Lindi Jumbo Project within 12 months of shareholder approval;
• Series 3 – the Company achieving a market capitalisation of greater than $28,000,000 within 12 months of
shareholder approval.
The following share-based payment arrangements were in place as at 30 June 2018:
Series
Date performance
rights granted
Number of
shares
under right
Exercise
price of
right
Expiry date of right
1
2
3
15 November 2017
2,173,914
15 November 2017
3,913,043
15 November 2017
2,500,000
Nil
Nil
Nil
15 November 2018
15 November 2018
15 November 2018
Fair
value at
grant
date
$
0.09
0.09
0.09
Vesting date
30 Sept 2018
Unlikely to vest
20 Feb 2018
The Series 3 Performance Rights vested during the year and converted to ordinary shares on 17 July 2018.
On 29 November 2016, shareholders granted Directors performance rights over unissued shares at no consideration in
accordance with the following vesting conditions:
• Series 1 – an announcement to the ASX platform of positive results of a definitive feasibility study by an independent
consultant within 6 months of shareholder approval;
• Series 2 – an announcement to the ASX platform upon securing 80% of the initial funding requirement for project
development within 12 months of shareholder approval;
• Series 3 – an announcement to the ASX platform of commencement of first commercial production of graphite
concentrate from Lindi Jumbo Project within 18 months of shareholder approval.
The Series 1 Performance Rights vested and converted to ordinary shares on 31 March 2017. The series 2 and 3 Performance
Rights lapsed.
45
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 21: CONTINGENT LIABILITES
The Directors are not aware of any contingent liabilities as at the date of this report.
NOTE 22: CAPITAL AND LEASING COMMITMENTS
Consolidated
2018
$
2017
$
61,443
-
61,443
-
-
-
1,872,413
1,496,202
3,368,615
2,126,312
-
2,126,312
a.
Property Lease Commitments
Payable — minimum lease payments
-
-
not later than 12 months
between 12 months and 5 years
b.
Capital Expenditure Commitments
Minimum expenditure commitments for mining tenements:
-
-
not later than 12 months
between 12 months and 5 years
NOTE 23: DIRECTORS AND EXECUTIVES DISCLOSURES
Details of Key Management Personnel
Directors
Trevor Benson
Executive Chairman
Allan Mulligan
Executive Director
Thomas Murrell
Non-Executive Director
Andrew Cunningham
Non-Executive Director
Key management personnel remuneration has been included in the Remuneration Report section of the Directors’ Report.
The totals of remuneration paid to key management personnel of the Company and the Group during the year are as follows:
Short-term employment benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total KMP compensation
Consolidated
2018
$
2017
$
796,338
47,500
-
364,225
1,208,063
611,246
34,482
-
162,775
808,503
46
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of Walkabout Resources Ltd (the ‘Company’):
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001
including:
i.
ii.
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018 and
of their performance for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001,
professional reporting requirements and other mandatory requirements.
b.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
c. the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
This declaration is signed in accordance with a resolution of the Board of Directors.
Trevor Benson
Executive Chairman
Dated this 21st day of September 2018
47
Independent Auditor’s Report
To the Members of Walkabout Resources Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Walkabout 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.
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. We have determined the matters described below to be the key
audit matters to be communicated in our report.
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
expenditure, including acquisition costs and
Our procedures included but were not limited to the
following:
We obtained an understanding of the key
processes associated with management’s
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
48
Key Audit Matter
How our audit addressed the key audit matter
Carrying amount of exploration and evaluation expenditure
Note 9 of the financial report
subsequently applies the cost model after
recognition.
Our audit focussed on the Group’s assessment
of
the capitalised
exploration and evaluation asset, as this is one
of the most significant assets of the Group.
the carrying amount of
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 2019 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 Group
had not resolved to discontinue exploration and
evaluation at any of its areas of interest; and
We examined the disclosures made in the
financial report.
Change of accounting policy
Note 14 of the financial report
relation
During the current year, the Group changed its
accounting policy
to deferred
in
in
exploration and evaluation expenditure
relation to an area of interest. In previous
reporting periods, exploration and evaluation
expenditure was capitalised under AASB 6
for and Evaluation of Mineral
Exploration
Resources. The accounting policy of the are of
interest in this respect has been changed to
expense exploration expenditure as incurred on
the basis described in Note 14.
Our procedures included but were not limited to:
We considered the appropriateness of the
change in accounting policy ensuring that the
disclosure requirements set out in accounting
standards were complied with, including that
the change provided more relevant financial
information to the users of the financial report;
and
We reconciled the restated balances to the prior
year audited balances ensuring that the change
was correctly calculated and disclosed.
Management has assessed this change against
accounting standards requirements with respect
to voluntary changes in accounting policies and
the change in accounting policy is on the basis
that it will result in more relevant and reliable
information in the financial report.
The change in accounting policy resulted in the
restatement of affected 30 June 2017 balances
and the disclosure of the impact of the change
for each financial statement line item affected.
The change in accounting policy was considered
a key audit matter as it was determined to be
important to the users understanding of the
financial statements as a whole, was material in
the most
size and nature and
communication with
those charged with
governance.
involved
49
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.
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
50
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.
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 Walkabout 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
21 September 2018
D I Buckley
Partner
51
ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES
The following additional information is provided as at 20 September 2018.
Distribution of Shareholders
Fully Paid Ordinary Shares
Options
Category (size of holding)
Number of Holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
461
354
311
864
421
Number of
Shares
153,314
1,074,022
2,369,567
34,026,050
233,293,372
2,411
270,916,325
The number of shareholdings held in less than marketable parcels is 662
The names of the substantial are:
Number of Holders Number of Options
51,434
478,660
480,255
7,478,896
32,175,076
40,664,321
119
176
70
204
71
640
Number
Shareholder
Ordinary
%
Hong Kong Tiande Baorun Trade Co Limited
23,043,656
8.51
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
- Each ordinary share is entitled to one vote
Options
- Options are not entitled to a vote
Performance Rights
- Performance rights are not entitled to a vote
Corporate Governance
The 2018 corporate governance statement is located on the Company’s website at www.wkt.com.au.
Unlisted securities :
There are 4 holders of 6,086,957 performance rights expiring 15 November 2018 as follows:
Name
Trevor Benson
Allan Mulligan
Andrew Cunningham
Thomas Murrell
Total
% Held
36%
21%
21%
21%
Holding
2,173,913
1,304,348
1,304,348
1,304,348
6,086,957
52
ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES
20 Largest Shareholders — Ordinary Shares
Name
Number Held
% Held
1
HONG KONG TIANDE BAORUN TRADE CO LIMITED
2 MARCOLONGO NOMINEES PTY LTD
3
4
BNP PARIBAS NOMINEES PTY LTD
MR JOHN RICHARD TURNER + MRS CLARE FRANCES TURNER
5 MR ALLY MBARAK MOHAMED
6 OODACHI PTY LTD
7
8
PANTAI INVESTMENTS PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
9 MR ALLAN MULLIGAN
10 MRS ROBYN JOY CRASE
11 GERROA SERVICES PTY LIMITED
12 MR TREVOR BRUCE BENSON
13 MR NAVEEN TEJPAL + MRS JYOTI TEJPAL
14 MR ROBERT LINCOLN WESTLAKE
15 MR GLEN RAYMOND TIERNEY
16 MR THOMAS ANDREW CALVERT MURRELL
17 BNP PARIBAS NOMS PTY LTD
18 MR SHANNON EDWARD RUTTY
19 P & M ZUVIC PTY LIMITED
20 CITICORP NOMINEES PTY LIMITED
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
Total Remaining Holders Balance
23,043,656
10,364,018
9,819,071
6,696,265
4,213,703
4,152,068
4,000,000
3,801,651
3,640,497
2,981,213
2,839,310
2,720,144
2,630,567
2,520,000
2,483,960
2,332,774
2,202,316
2,100,000
2,000,000
1,879,448
8.51
3.83
3.62
2.47
1.56
1.53
1.48
1.40
1.34
1.10
1.05
1.00
0.97
0.93
0.92
0.86
0.81
0.78
0.74
0.69
96,420,661
174,495,664
35.59
64.41
53
ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES
20 Largest option holders — listed options expire 31/12/2019 exercisable at $0.15
Name
Number Held
% Held
1. MR TREVOR ALAN POWER
2. MARCOLONGO NOMINEES PTY LTD
3.
ADRA FUTURE CO LIMITED
4. HONG KONG TIANDE BAORUN TRADE CO LIMITED
5. MR ROGER GOES
6. MR ROBERT LINCOLN WESTLAKE
7. MR STEPHEN JOHN HOGAN
8. MR HAYDEN JOHN DAHM
9. MR STEPHEN JOHN HOGAN + MS KAREN MAREE HOGAN
10. CLARKE WEALTH PTY LTD
11. MR ROBERT KEITH HOWARD
2,000,000
1,766,502
1,552,057
1,440,229
1,364,793
1,200,001
1,200,000
1,125,306
1,050,000
953,511
947,196
12. MR MATIU RUDOLPH + MRS JANELLE LESLEY RUDOLPH
850,781
4.92
4.34
3.82
3.54
3.36
2.95
2.95
2.77
2.58
2.34
2.33
2.09
2.09
1.90
1.72
1.69
1.69
1.60
1.48
1.48
847,933
772,517
700,000
686,968
685,693
650,000
600,000
600,000
20,993,487
19,670,834
51.63
48.37
13. OODACHI PTY LTD
14. MR CHRISTOPHER POHLNER
15. MR HEATH BERNARD MCCARTNEY
16. MR BRUCE NEVILLE VICTOR TOMICH
17. MR ANDREW WILLIAM BUTLER
18. MR MARK ANTHONY MURTAGH
19. MR SIMON DAVID FEHRE
20. MR DAVID PAUL INGLIS
Totals: Top 20 holders of listed options
Total Remaining Holders Balance
54
ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES
Tenement Schedule
Project /
Location
Tenement
Type
Tenement
Number
Interest
Botswana
35/2007
157/2009
160/2009
70%
40%
40%
Namibia
6308
6309
5691
100%
100%
0%
Tanzania
11119/2017
9992/2014
100%
100%
Comment
Renewed
Earning 65% Renewed
Earning 65% Renewed
Earning 51% and then 75%
Transfer pending to 100% WKT
Takatokwane
Takatokwane
Takatokwane
Eureka
Eureka
Eureka
Kimoingan
Lindi
Lindi
Lindi
PL
PL
PL
EPL*
EPL*
EPL*
PL
PL
PL
9993/2014
70%
Subject to ongoing commitments
ML
00638/2017
100%
Notification of grant received 29
August 2018
Northern Ireland
NE Antrim
Glenariff
The Sheddings
Gortnamoyagy
Tyrone
MPL#
MPL#
MPL#
MPL#
MPL#
LON01/14
LON02/14
LON03/14
LON05/14
KOZ01/16
50%
50%
100%
100%
0%
Antrim Metals JV
Antrim Metals JV
Earning 50% and then 75%
Lindi Jumbo Graphite Project 2012 JORC Mining Reserve – Annual Review as at 30 June 2018
The Resources considered for mining were based on the JORC 2012 Mineral Resource Estimate that was announced on 6
December 2016. The Ore Reserve is based only on the Measured and Indicated Mineral Resource (see ASX announcement
of 6 December 2016) and is summarised in Table 1.
A DFS was completed by Walkabout Resources for the Lindi Jumbo Project with the study proposing an operation processing
an average of 276,000 tonnes per annum to produce 40,000 tonnes of concentrate. The DFS found the project to be
economically viable with a robust Internal Rate of Return (IRR) and a payback period of less than two (2) years. The DFS
was based on production from Proven and Probable Ore Reserves resulting in a Life of Mine (LOM) of approximately 20 years.
The classification of the ore reserve considered only the Measured and Indicated Resources (JORC 2012). No Inferred
material is mined in the current mining schedule. The DFS is discussed in more detail in ASX announcement of 7 February
2017.
Table 1: Lindi Jumbo Project Ore Reserve.
Category
Tonnes
(million)
TGC %
Contained Graphite
(tonnes)
Proven Ore Reserves
Probable Ore Reserves
Total Ore Reserves
3.2
1.8
5.0
16.6
15.4
16.1
529,423
279,580
809,081
55
Walkabout conducts an annual review of its Mineral Resources and Ore Reserves. This process is managed by the Directors
and competent person. As of 30 June 2018 it was determined that there would be no change to Mineral Resources and Ore
Reserves statement which remains the same as that of 30 June 2017.
There has not be been any material change or update that requires a restatement of the Mineral Resources. The
governance arrangements and internal controls in place with respect to its estimates of mineral resources and ore reserves
and the estimation process include oversight of the competent person by the managing director and review by the board. No
mining has commenced and no additional mining studies have been completed.
Competent Person – Mr Andrew Cunningham
The information in this report that relates to Exploration Results and Exploration Targets is based on and fairly represents
information and supporting documentation prepared by Mr Andrew Cunningham (Director of Walkabout Resources Limited).
Mr Cunningham is a member of the Australian Institute of Geoscientists and has sufficient experience of relevance to the
styles of mineralisation and types of deposits under consideration, and to the activities undertaken to qualify as Competent
Persons as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves. Mr Cunningham consents to the inclusion in this report of the
matters based on his information in the form and context in which they appear.
56