2018
ANNUAL REPORT
Zeta Resources Limited
is a resource-focused
investment holding
company whose aim is to
maximise total returns for
shareholders by identifying
and investing in resource
assets and companies
where the underlying
value is not reflected in
the market price.
CONTENTS
ZETA RESOURCES LIMITED
2
3
4
5
6
Nature of the Company and Financial Calendar
Geographical Investment Exposure
Group Performance Summary
Significant Investment Holdings
Chairman’s Statement
INVESTMENTS
8
Investment Manager’s Report
13 Macro Trends Affecting Resources
14 Sector Summaries
17
18
20 Geographical and Sector Split of Investments
21 Five Largest Holdings
22 Review of the Five Largest Holdings
ICM Investment Philosophy
Investment Manager and Team
GOVERNANCE
26 Directors
27 Report of the Directors
32 Corporate Governance Statement
33 Additional ASX Information
FINANCIAL STATEMENTS
36
Independent Auditor’s Report
40 Auditor’s Independence Declaration
41 Financial Statements
45 Notes to the Financial Statements
COMPANY INFORMATION
Image Acknowledgement – page 3 image supplied courtesy
of CSIRO ScienceImage
1
ZETA RESOURCES LIMITED
NATURE OF THE COMPANY
GEOGRAPHICAL INVESTMENT EXPOSURE
Zeta Resources Limited (“Zeta”) is a closed-end investment company, whose ordinary shares are listed on the Australian
Stock Exchange (“ASX”). The business of the company consists of investing the pooled funds of its shareholders in
accordance with its investment objective and policy, with the aim of generating a return for shareholders with an
acceptable level of risk. The company has borrowings (“gearing”), the proceeds from which can also be invested with
the aim of enhancing returns to shareholders. This gearing increases the potential risk to shareholders should the
value of the investments fall.
The company has contracted with an external investment manager, ICM Limited (the “Investment Manager” or “ICM”),
to manage its investments and undertake the company secretarial function. The company’s general administration is
undertaken by ICM Corporate Services (Pty) Ltd. The company has a board of non-executive directors who oversee
and monitor the activities of the Investment Manager and the other service providers and ensure that the investment
policy is adhered to.
CANADA
Value US$
$15.0m
% Total Investments
9.1%
MALI
Value US$
$13.5m
% Total Investments
8.2%
SRI LANKA
Value US$
$2.0m
% Total Investments
1.3%
FINANCIAL CALENDAR
Year End
30 June
Annual General Meeting
5 November 2018
Half Year
31 December
Half Year December 2018 Announcement
February 2019
FORWARD-LOOKING STATEMENTS
This annual report may contain “forward-looking statements” with respect to the financial condition, results of operations and business of the company.
Such statements involve risk and uncertainty because they relate to future events and circumstances that could cause actual results to differ materially
from those expressed or implied by forward-looking statements. The forward-looking statements are based on the directors’ current view and on
information known to them at the date of this report. Nothing in this publication should be construed as a profit forecast.
Potential investors are reminded that the value of investments and the income from them may go down as well as up and investors may not receive
back the full amount invested.
OTHER
Value US$
$6.7m
% Total Investments
4.0%
AUSTRALIA
Value US$
$109.6m
% Total Investments
66.6%
2
3
GUINEA
Value US$
$17.8m
% Total Investments
10.8%
Zeta Resources LimitedAnnual Report for the year to 30 June 2018HEADING GROUP PERFORMANCE SUMMARY
30 JUNE
2018
30 JUNE
2017
CHANGE %
2018/17
SIGNIFICANT INVESTMENT HOLDINGS
AS AT 30 JUNE 2018
Total return(1) (annual) (%)
Net tangible asset per ordinary share(2) (Australian cents)
Ordinary share price (Australian cents)
Premium/(Discount) (%)
Profit/(loss) per ordinary share (3) (US dollars)
Dividends per ordinary share
Equity holders' funds (US$m)
Gross assets(4) (US$m)
Cash (US$m)
Other debt (US$m)
Net debt (US$m)
Net debt gearing on gross assets (%)
56.9
57.9
40.5
(30.1)
0.15
Nil
123.9
163.2
0.3
(39.4)
(39.1)
24.0
19.8
36.9
37.0
0.3
0.06
Nil
53.0
80.6
0.0
(27.6)
(27.6)
34.2
187.4
56.9
9.5
10,133.3
150.0
n/a
133.8
102.5
1,714.3
42.8
41.7
n/a
(1)
Total return is calculated based on NTA per share return plus dividends reinvested from the payment date.
(2)
The NTA is calculated based on 288,521,024 shares in issue.
(3)
Earnings per share is based on the weighted average number of shares in issue during the year.
(4) Gross assets less liabilities excluding loans.
n/a = not applicable
Nickel/Cobalt
Gold
resources
Panoramic Resources
Limited
GME Resources
Limited
Resolute Mining
Limited
Bligh Resources
Limited
Nickel
Nickel & Gold
Gold
Gold
West Australian
nickel company
Over 300,000 tonnes
of nickel resources
ASX-listed junior
nickel and gold
explorer
Substantial nickel
resources in Western
Australia
ASX-listed mid-cost
gold producer
ASX-listed junior
gold explorer
Producing mines
in Mali and
Queensland,
Australia
Substantial identified
gold resource in
Western Australia
Copper
Oil & Gas
Graphite
Bauxite
Copper Mountain
Mining Corporation
Seacrest L.P.
Margosa Graphite
Limited
Alliance Mining
Commodities Limited
Copper
Oil & Gas
Graphite
Bauxite
TSX/ASX-listed
copper producer
Global exploration
firm
Unlisted graphite
explorer
Recently acquired
Australian junior
copper firm Altona
Mining
Widely diversified
portfolio of
exploration interests
Focused on high
grade vein graphite
in Sri Lanka
Unlisted bauxite
development
company
World class bauxite
asset in Guinea,
West Africa
4
5
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018
Battery metals
and related
commodities
make up
the largest
component in
Zeta’s portfolio
CHAIRMAN’S STATEMENT
I’m pleased to report that Zeta has had a very successful and active year, in the context of an
upturn in commodity prices generally. Zeta has achieved a profit of US$31.2 million, and the
net asset value per share has grown by 57%.
The composition of Zeta’s portfolio has changed significantly over the year, which requires
some explanation.
The transaction in May 2018 to acquire Axelrock Limited, increased our portfolio size and equity
base by nearly 50%. This acquisition significantly increased Zeta’s holdings in GME Resources
Limited, Seacrest L.P., and Alliance Mining Commodities Limited (“AMC”) and increased Zeta’s
weightings in nickel and cobalt, oil and gas, and bauxite, respectively.
Our holding in AMC and its Tier 1 Koumbia Bauxite Project development has opened up a new
commodity position connecting us to growth in the aluminium markets.
As I noted in last year’s annual report, in April 2017 Zeta launched a takeover offer for Bligh
Resources Limited (“Bligh”). This was completed in July 2017, resulting in Zeta owning an 86%
stake in Bligh. Subsequent drilling at Bligh’s Bundara Gold Project has delivered a material
increase in the gold resource base.
Following the sale of its main assets, the scheme of arrangement to consolidate Pan Pacific
Petroleum NL (“PPP”) was completed in November, and I welcome PPP shareholders in Zeta
who elected to receive new Zeta shares in exchange for their PPP shares.
In August 2017, Zeta launched a partial takeover offer pursuant to the New Zealand Takeovers
Code, to acquire 50.01% of the shares in New Zealand Oil & Gas Limited (“NZOG”). Subsequently,
a competing cash offer was launched at a significant premium to our offer by O.G. Oil & Gas
(Singapore) Pte. Ltd. (“OGOG”), part of the Ofer Group, and Zeta sold the majority of its holding
in NZOG to OGOG. As a result of this and asset sales associated with PPP, the weighting of oil
and gas in Zeta’s portfolio has declined.
Our holding in Toronto listed copper producer Copper Mountain Mining Corporation (“Copper
Mountain”) has increased to over 10% following Zeta’s acceptance of Copper Mountain’s scrip
takeover bid for our substantial shareholding in Altona Resources Limited.
We have also become a substantial shareholder in private company Margosa Graphite Limited
which is advancing high grade vein graphite resources in Sri Lanka.
The adoption of electric vehicles and a focus on batteries has continued to attract attention.
Battery metals and related commodities make up the largest component in Zeta’s portfolio
with positions in nickel, cobalt, copper and graphite now making up 64% of gross assets.
Recently, commodity prices have receded somewhat from their gains of the last two years,
and risks to the health of the global economy are increasing. In particular, rising US interest
rates and the threat of trade conflicts are the greatest risks to economic growth and demand
for commodities. We believe Zeta is relatively well placed, but we will continue to be active in
pursuing value both within our existing investments and elsewhere.
Peter Sullivan
Chairman
5 September 2018
6
INVESTMENTS
IN THIS SECTION:
8
Investment Manager’s Report
13 Macro Trends Affecting Resources
14 Sector Summaries
17
18
ICM Investment Philosophy
Investment Manager and Team
20 Geographical and Sector Split of Investments
21 Five Largest Holdings
22 Review of the Five Largest Holdings
7
Zeta Resources LimitedAnnual Report for the year to 30 June 2018 INVESTMENT MANAGER’S REPORT
For the two years prior to this year, commodity markets were in general up and down during the year, ending each
year slightly higher than where they started. The year ended June 2018 is somewhat different, in that other than
gold, the major commodities spent most of the year increasing in price. That bull run has paused in the wake of
concerns over the global economy, which stems from three factors: firstly, interest rates are rising and expected to
rise further as the US unwinds its quantitative easing; secondly, there are doubts about China’s ability to keep growing
at the same rate as it has; and thirdly, international trade is threatened by a more aggressive US administration. A
secondary factor is a strong US dollar, which is bolstered by the expectation of interest rate rises. Another factor is
the impact of higher energy prices, increasing the cost of production of many commodities.
While commodities in general rose in price, some rose more strongly than others, with big rises in nickel and oil prices,
and more muted rises in copper and aluminium. Gold was basically flat. As a leveraged fund with a high weighting in
nickel, Zeta outperformed the average increase in commodity price. During the year under review, Zeta’s net assets
per share rose from A$0.369 to A$0.579, a rise of 56.9%. For comparison, the S&P/ASX 200 Energy index rose 38.2%
over the same period, and the S&P/ASX 300 Metals & Mining index, which includes gold mining stocks, rose 34.4%.
Zeta’s share price only rose 9.5% to A$0.41. At the start of the period the share price was at a 0.3% premium to net
assets; at the end of the period the share price was at a 30.1% discount to net assets.
TOTAL RETURN COMPARATIVE PERFORMANCE*
since inception on 12 June 2013 to 30 June 2018
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
Jun 13
Dec 13
Jun 14
Dec 14
Jun 15
Dec 15
Jun 16
Dec 16
Jun 17
Dec 17
Jun 18
Zeta Share Price
S&P/ASX 200 Energy
S&P/ASX 300 Metals & Mining
*AUD, rebased to 100 as at 12 June 2013. Zeta NTA adjusted for February 2014 entitlement issue.
Source: ICM and S&P Dow Jones Indices
COMMODITY MARKETS
As noted, the year under review saw significant increases in the prices of nickel and oil, and more modest rises in the
prices of copper and aluminium; gold was flat.
Nickel
Nickel prices have enjoyed a steady uplift in prices during the year, with demand increasing for use in electric batteries,
and global inventories decreasing. For the twelve months ended June 2018, the price of nickel rose 58.4% to US$6.67
per pound. The price remains volatile, and since year end has shown weakness along with most major commodities.
Zeta’s chief investment in the nickel sector is Panoramic Resources Limited, and Zeta has a smaller, but still significant
investment in GME Resources Limited (“GME”). During the year, Panoramic’s two nickel mines in Western Australia,
Savannah and Lanfranchi, remained on care and maintenance. However, Panoramic has subsequently announced the
commencement of work to reopen Savannah, with production targeted to resume in Q1 2019. Behind this has been a
sustained uplift in nickel prices, particularly in Australian dollar terms. Panoramic also recently announced the sale of
Lanfranchi stating that it would use the sale proceeds to concentrate on the resumption of mining at Savannah.
Also after year end, GME released its preliminary feasibility study for the NiWest nickel-cobalt project. The company
released its maiden reserves, and the study shows a significant nickel-cobalt asset, which when developed, would
have an initial mine life of 27 years.
Gold
The price of gold did not change significantly over the course of the year, starting off well, but eventually drifting back
to be almost where it started. At the end of June 2017, gold was US$1,241 per ounce; at the end of June 2018 the
gold price was US$1,250 per ounce.
Leading up to the GFC, and especially thereafter, gold prices rose in response to a period of “cheap money”. With the
US Federal Reserve finally finding a way to unwind quantitative easing without causing undue volatility in bond and
equity markets, the period of cheap money appears to be over, and the price of gold has declined. Another reason
for recent weakness in the gold price has been the strong US dollar, which has tempered natural demand for the
precious metal from non-US investors. Zeta’s investment in Resolute Mining Limited started the year with a share
price of A$1.19, and finished the year with a share price of A$1.275, up 7.1%.
NICKEL PRICE
from June 2016 to July 2018
GOLD PRICE
from June 2016 to July 2018
10
9
8
7
6
5
4
3
2,000
1,800
1,600
1,400
1,200
1,000
800
Jun 16
Dec 16
Jun 17
Dec 17
Jun 18
Jun 16
Dec 16
Jun 17
Dec 17
Jun 18
US$/lb
A$/lb
Spot Price US$
Spot Price A$
Source: LME
Source: Kitco - London PM Fix
8
9
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 INVESTMENT MANAGER’S REPORT
(continued)
Copper
Last year’s rise in copper prices was the first increase since seven years before then. This year showed another
increase, albeit not as much as last year, and with a fall at the end. At the start of the year, copper was US$2.68 per
pound, and by the end of the year it was US$3.02 per pound, an increase of 12.7%. Since year end, copper prices
have declined in line with decreases in the prices of other industrial commodities, as investors have been concerned
about industrial demand weakening in the wake of a slowing Chinese economy and trade wars. During the year under
review, Zeta has increased its holding in copper from 3% of its portfolio to 11%. The largest holding is Canadian
copper firm Copper Mountain Mining Corporation, which produces copper in British Columbia, and has recently
bought a copper development project in Queensland, Australia.
COPPER PRICE
from June 2016 to July 2018
BRENT CRUDE OIL PRICE
from June 2016 to July 2018
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
Jun 16
Dec 16
Jun 17
Dec 17
Jun 18
US$/lb
A$/lb
Source: LME
110
100
90
80
70
60
50
40
30
20
Jun 16
Dec 16
Jun 17
Dec 17
Jun 18
US$/bbl
A$/bbl
Source: US Energy Information Administration
Oil & Gas
At the start of the year under review, the Brent Crude Oil price was US$48/bbl, having been relatively flat over the
previous year. By the end of June 2018 the price of Brent was US$78/bbl, a rise of 61.8%. Various factors have
contributed to the rise, the most significant of which has been a sustained programme of production cuts by major
oil-producing countries, led by Saudi Arabia and Russia. Other contributing factors have been President Trump’s
decision to withdraw the United States from its deal with Iran, and political and economic chaos in Venezuela.
During the year, Zeta sold the majority of its largest investment in oil & gas, New Zealand Oil & Gas Limited, which
was subject to a partial takeover offer by O.G. Oil & Gas (Singapore) Pte. Ltd, part of the Ofer Group. Subsequent
to the takeover, the New Zealand government announced a ban on new offshore exploration permits being issued
after this year, a reminder that even developed nations have political risk when it comes to mining, in this case due
to concerns about global warming.
Zeta’s largest remaining investment in oil & gas is in the seismic exploration firm Seacrest L.P., which is unlisted.
Aluminium
Aluminium prices rose for the second year in a row. At
the start of the year, aluminium was US$0.87 per pound;
by the end of the year it was US$0.99 per pound, a rise of
13.9%. Aluminium prices have been boosted by moves in
2017 by the Chinese government to reduce production
during winter in large cities, and shut down refiners with
poor environmental performance. Outside of China,
increased costs of production and increasing demand,
particularly in Europe, both contributed to increasing
aluminium prices.
During the year, Zeta significantly increased its holding in
unlisted bauxite developer Alliance Mining Commodities
Limited. AMC owns a world-class bauxite asset in Guinea.
ALUMINIUM PRICE
from June 2016 to July 2018
1.50
1.00
0.50
Jun 16
Dec 16
Jun 17
Dec 17
Jun 18
US$/lb
A$/lb
Source: LME
CAPITAL STRUCTURE
Zeta is a closed-end investment company, listed on the ASX, and incorporated in Bermuda.
During the year Zeta has had working capital support from its parent company, UIL Limited (“UIL”). As of 30 June 2018,
Zeta had a loan from UIL totalling US$30.2 million, drawn in Australian dollars and Canadian dollars.
As at 30 June 2018, Zeta had gross assets of US$164.9 million (2017: US$80.9 million). Of this figure, $6.3 million
(2017: $30.4 million) was invested in the oil & gas sector; $103.9 million (2017: $24.1 million) was invested in the nickel
and copper sectors; $30.7 million (2017: $26.4 million) was invested in the gold sector; and US$17.8 million (2017:
US$0.41 million) was invested in the bauxite sector.
NTA PER SHARE VERSUS SHARE PRICE
since inception on 12 June 2013 to June 2018
1.20
1.00
0.80
0.60
0.40
0.20
0.00
)
$
A
(
e
r
a
h
s
r
e
p
A
T
N
1.20
1.00
0.80
0.60
0.40
0.20
0.00
)
$
A
(
e
c
i
r
p
e
r
a
h
S
Jun 13
Dec 13
Jun 14
Dec 14
Jun 15
Dec 15
Jun 16
Dec 16
Jun 17
Dec 17
Jun 18
Listed
Unlisted
Closing Share Price
Source: ICM
10
11
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018
INVESTMENT MANAGER’S REPORT
(continued)
MACRO TRENDS AFFECTING RESOURCES
FINANCIAL RESULTS
E-VEHICLES
The net profit after tax for the year was US$31,215,839 against a profit of US$10,277,906 in the year ended June 2017.
The majority of the net profit was comprised of unrealised gains from investments.
SIGNIFICANT INVESTMENTS
The five largest investments held by Zeta are considered in greater detail in their own section later in this annual report.
The remaining significant investments are as follows.
Bligh
Bligh Resources is a small Australian gold explorer that owns the Bundarra Gold Project, which lies within the
Norseman-Wiluna greenstone belt of the Archean Yilgarn Craton, approximately 60km north of Leonora in the Eastern
Goldfields region of Western Australia. The company also has prospecting licenses for gold in Western Australia and
manganese in the Northern Territory.
During the year, Bligh has worked to prove up the resource at Bundarra. Results of exploration drilling to date have
been pleasing, and follow-up drilling is imminent.
Kumarina
Kumarina Resources Pty Limited (“Kumarina”) is a 100%-owned subsidiary of Zeta. The company is focused on two
prospective projects in Western Australia, being the Ilgarari copper project and the Murrin Murrin copper-gold
project. The Ilgarari project contains a secondary copper oxide resource (JORC 2004) estimated to be 1,100,000
tonnes averaging 1.9% copper located around and below historical mine workings. The Murrin Murrin project is
prospective for gold and base metals in the form VMS style copper zinc mineralisation.
Seacrest
Seacrest is a specialist oil & gas offshore seismic exploration company. Seacrest amassed a significant number of
geographically diversified interests in joint venture licenses for offshore oil exploration, but suffered a loss in value
in the wake of the significant fall in the price of oil and a number of disappointing drilling results. With the recent rise
in oil prices, interest in Seacrest’s areas of operation is increasing, and the chances of exploration success are rising
with the likelihood of more drilling in the joint ventures that Seacrest is invested in.
Margosa Graphite
Margosa Graphite Limited is an unlisted junior explorer focused on Sri Lankan crystalline vein graphite, the purest
naturally occurring graphite. Sri Lanka has historically been one of the world’s largest suppliers of high quality graphite.
RENEWABLES
CHINA URBANISATION
GLOBAL DEBT
• Nearing tipping point where all factors for growth in place
• EVs use more commodities such as nickel and copper than traditional vehicles
• Spike in demand for lithium and cobalt
•
Increased demand for flake and vein graphite
• Consumer pull and government push for renewables
• Price of solar continues to reduce
• Tesla showing the way with trifecta of solar roof panels, home battery and EV,
but yet to reach tipping point
• Low price of natural gas reducing carbon footprint and industrial demand for
renewables
• Central government spending on new cities helps manage GDP growth
• Smooths cycles and sustains demand for industrial commodities
• Long term growth in question as Chinese population ages
• Government committed to renewables and EVs
• Pollution reduction targets reducing obsolescent refineries and reducing
production of certain commodities, e.g. aluminium
• Unprecedented increase in global government debt on a relative basis
• The US leading the way with unwinding of Federal Reserve balance sheet
• Recent past has shown a readiness to retreat easily on market corrections
• Risk to global economy, and thus demand for industrial commodities
Margosa is utilising modern exploration technology in brownfield areas, with the aim of identifying a substantial
resource ahead of development and eventual production.
TRADE CONFLICTS
JDF Morrison
ICM Limited
Investment Manager
5 September 2018
12
• Shift in policy by US administration from promoting stability through free trade
to promoting self interest
• Old agreements such as NAFTA being renegotiated
• First shots of a potential trade war fired by the US, with retaliatory tariffs by
targeted nations
• Tariffs can provide short term benefits to some commodity producers, while
hurting others
• Overall impact of decreased trade is negative for demand and hence
commodity prices
13
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 SECTOR SUMMARIES
GOLD
79
AuGold
196.967
NICKEL
28
NiNickel
58.693
Overview
• Precious metal, prized for its rarity and relative lack of chemical reactivity
• Gold occurs naturally in only a single isotope
• Historic demand has been 50% jewellery; 40% investment; 10% industrial
• Diversified sources of production
• Largest producers China, Australia, Russia
Macro trends
• Hedge to US dollar which has declined long term against gold
• The end of quantitative easing means a shift away from gold by investors who used it as a
hedge against cheap currency
• Gold production has been in a long-term uptrend since record-keeping commenced
• Demand for jewellery dominated by China and India; US a distant third
Exposure
• 3% of Resolute Mining (ASX:RSG) – operating mines in Mali and Queensland, Australia
• 89% of Bligh Resources (ASX:BGH) – development project in Western Australia
• 20% of Horizon Gold (ASX:HRN) – exploration and development in Western Australia
• 100% of Kumarina (unlisted) – exploration and development in Western Australia
Overview
• Industrial metal used primarily in stainless steel
• Other uses include electroplating, alloy steel, and in cathodes for electric batteries
• Diversified sources of production
• Largest producers Philippines, Russia, Canada, Australia, New Caledonia, Indonesia
Macro trends
• Prices moving up in anticipation of additional demand for nickel for lithium-ion
• Global nickel inventories at three-year lows and falling
• Industrial demand still influenced by strength of Chinese economy
Exposure
• 30% of Panoramic Resources (ASX:PAN) – restarting one of its two nickel mines in Western
Australia
• 42% of GME Resources (ASX:GME) – owns development project in Western Australia
COPPER
29
CuCopper
63.546
OIL & GAS
Overview
• Industrial metal used primarily in electrical wiring
• Other uses are roofing and plumbing; industrial machinery; and in alloys
• Occurs naturally in a form that requires relatively little refining
• Diversified production, but Chile by far the largest producer with China a distant second
Macro trends
• Annual production has been increasing for over fifty years, but sharp uptick in late 1990s
• Prices relatively volatile, generally tied to world economy, but also in a downtrend from mid-
2011 through mid-2016
• Increasing demand from wiring for electric vehicles, but price still dominated by industrial
demand or lack thereof
Exposure
• 11% of Copper Mountain Mining (TSX:CMMC, ASX:C6C) – producing copper in Canada, and
developing a copper asset in Australia
• 100% of Kumarina (unlisted) - junior copper-gold exploration firm in Western Australia
Overview
• Oil is a fossil petroleum liquid whose primary use is fuel; around 80% of oil is refined into
gasoline, diesel, and jet fuel, with the remaining 20% supplying various products including
lubricants, asphalt, and petrochemicals
• Natural gas is a petroleum gas whose primary uses are heating, electricity generation,
and feedstock for petrochemicals
• Globally diverse sources of production and demand
• Largest producers of oil are Saudi Arabia, Russia and the US; largest producers of gas are
the US and Russia, with Iran a distant third
Macro trends
• “Peak oil” has been discussed for decades, but long-term trend of annual growth in
production is still intact
• Annual growth in demand has followed a linear trend in line with world population growth
• Lower prices has meant global expenditures on oil & gas exploration have been falling
since 2014
• Fraccing has moved the US into the number one position in gas production; fraccing has
had less success in other countries
Exposure
• 41% of Seacrest (unlisted) – globally diversified seismic oil & gas exploration
14
15
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 SECTOR SUMMARIES
(continued)
ICM INVESTMENT PHILOSOPHY
BAUXITE
13
AI
Aluminium
26.982
GRAPHITE
6
CCarbon
12.011
Overview
• Aluminium is the most widely used metal after iron; its primary usage is in alloys where its
light weight is preferred
• Bauxite is the primary ore from which aluminium is extracted; the ore must first be
chemically processed to produce alumina (aluminium oxide); alumina is then smelted
using an electrolysis process to produce pure aluminium metal
• Diversified sources of production, albeit less than other commodities invested in by Zeta
• Largest bauxite producer Australia, almost twice that of the second producer China, with
Brazil third
• Largest bauxite reserves are in Guinea and Australia; Brazil is a distant third
Macro trends
• Alumina production has been in increasing trend since early 1980s
• Australia a big producer of bauxite and alumina, but relatively little smelting done there
• Aluminium prices in decline from mid-2011 through mid-2016, but now in uptrend
Exposure
• 27% of Alliance Mining Commodities (unlisted) – owner and developer of a world-class
bauxite resource in Guinea
Overview
• Graphite is the most stable form of carbon under standard conditions, and is a form
of coal
• Found in three natural forms: amorphous; flake (or crystalline); and vein (or lump)
• Flake and vein graphite have application in anodes in lithium-ion batteries
• Graphite can be produced synthetically, although current production methods yield
a purer graphite from natural ores
• With modern chemical purification processes and thermal treatment, natural graphite
achieves a purity of 99.9 percent compared to 99.0 percent for the synthetic equivalent
• Largest producer of graphite is China; biggest graphite reserves are in Turkey
Macro trends
• Main uses of graphite are brake linings, foundry operations, lubricants, refractory
applications, and steelmaking
• Growth of production of lithium-ion batteries is causing a rapid increase in demand for
natural graphite
• At the end of 2016, natural graphite accounts for 60-65% of lithium-ion anode market
share; synthetic is around 30%; and alternatives such as lithium titanate, silicon and tin
is around 5%
Exposure
• 35% of Margosa Graphite Limited (unlisted) – Sri Lankan brownfield explorer of vein
graphite, the purest naturally occurring graphite
Zeta Resources Limited’s investment aim is to maximise total returns for shareholders by identifying and investing in
resource assets and companies where the underlying value is not reflected in the market price. The company invests
in a range of resources entities, including those focused on nickel, gold, copper, oil & gas, bauxite, graphite and base
metals exploration and production.
S
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We seek out and make
compelling investments
SUPERIOR, CONSISTENT PERFORMANCE
Long Term
Deep Value
Optionality
Bottom Up
Approach
Active
Investors
Investee
Relationships
Identify
Synergies
Extensive
Domain
Knowledge and
Expertise
Sector Focused
CREATE SYNERGIES
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Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018
DUGALD MORRISON
ALASDAIR YOUNIE
TRISTAN KINGCOTT
INVESTMENT MANAGER AND TEAM
The directors are responsible for Zeta’s investment
policy and have overall responsibility for the company’s
day-to-day activities. Zeta has, however, entered into an
Investment Management Agreement with ICM Limited
under which ICM provides investment management
services to Zeta, including investment analysis, portfolio
monitoring, research and corporate finance.
ICM is a Bermuda based global fund manager and
corporate finance adviser.
ICM focuses on identifying investments at valuations
that do not reflect their true long-term value. Their
investment approach is to have a deep understanding
of the business fundamentals of each investment and
its environment versus its intrinsic value. ICM are long
term, patient investors and see markets as a place to
exchange assets.
ICM manages directly and indirectly approximately
US$20.0 billion in funds spanning a variety of countries,
sectors, and products for leading institutions and retail
Dugald Morrison has been involved with ICM and
its predecessor companies since 1994 and
is
responsible for ICM NZ Limited, based in Wellington.
Dugald is an experienced investment analyst, having
worked in stockbroking, investment banking and
investment management firms in New Zealand, the
United Kingdom, and the United States since 1987.
Dugald is focused on the Resources sector worldwide.
Dugald is a director of RESIMAC Financial Services
Limited and Brightwater Group Limited. Dugald
graduated from Victoria University of Wellington in
1991 with BCA (Hons) and is a Member of the New
Zealand Institute of Directors.
investors. ICM has over 20 specialist ICM staff members,
DUNCAN SAVILLE
and 55 staff in total with offices located worldwide.
Duncan Saville founded the ICM Group and its
predecessor companies, and has been employed by
the Group since 1988. Duncan Saville is a chartered
accountant with experience in corporate finance
and asset management. He is an experienced non-
executive director having previously been a director
in multiple companies in the utility, investment,
mining, and technology sectors. Duncan is currently
a non-executive director of Somers Limited,
Homeloans Limited and West Hamilton Holdings
Limited. His Fellowships include the Institute of
Chartered Accountants Australia and New Zealand,
the Australian Institute of Company Directors and
the Financial Services Institute of Australasia, and he
is a Member of the Singapore Institute of Directors.
Alasdair Younie is a director of ICM Limited and is
Tristan Kingcott joined ICM in 2018 as an Equity
based in Bermuda. Alasdair has extensive experience
Analyst based in Wellington, New Zealand. Tristan
in financial markets and corporate finance, and
has over seven years’ experience in financial and
he is responsible for the day to day running of the
commercial analysis, and prior to joining ICM, has
Somers Group. Alasdair qualified as a chartered
performed various roles,
including Manager of
accountant with PricewaterhouseCoopers and
Corporate Development at Ferus Inc., an oil & gas
subsequently worked for six years in the corporate
services company based in Western Canada. Tristan
finance division of Arbuthnot Securities Limited in
is focused on the resources sector, with an emphasis
London. Alasdair is a director of Ascendant Group
Limited, Bermuda Commercial Bank Limited, Somers
on North America. He holds a Bachelor of Commerce
degree in Finance from the University of Alberta,
Limited, Bermuda First Investment Company Limited,
Canada, and is a CFA Charterholder.
One Communications Limited and West Hamilton
Holdings Limited. Alasdair graduated from Bristol
University with a BSc in Economics and Economic
History in 1998, and is a Member of the Institute of
Chartered Accountants in England and Wales.
EDUARDO GRECA
Eduardo Greca joined ICM in 2010 as a Latam
Investment Strategist, based in Colombia since 2018
(previously in Brazil from 2012). Eduardo has over
ten years of investment research experience, and
prior to joining ICM, he worked for the commodities
risk management team at Kraft Foods. Eduardo
supports the ICM team on Latin American equity
and fixed income investments, and he is responsible
for the Stock Exchange sector worldwide with an
emphasis on Emerging Markets. Eduardo obtained
a Bachelor’s degree in Economics at the Federal
University of Parana in 2009, is a CFA Charterholder,
and a Member of the CFA Society in Brazil.
ICM focuses on
identifying investments
where the underlying
value is not reflected in
the market price.
18
19
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 GEOGRAPHICAL AND SECTOR SPLIT OF INVESTMENTS
FIVE LARGEST HOLDINGS
GEOGRAPHICAL SPLIT OF INVESTMENTS*
*Including investments held by Zeta Energy Pte. Ltd
COUNTRY
Australia
Guinea
Canada
Mali
Other
% OF TOTAL
2018
66.6%
10.8%
9.1%
8.2%
5.3%
2017
46.4%
0.0%
0.0%
16.2%
37.4%
Source: ICM
2018
2017
COMPANY (Country of principal activity)
Description
FAIR VALUE
US$000
% OF TOTAL
INVESTMENTS
1
2
3
4
5
(1)
(2)
(-)
(-)
(-)
Panoramic Resources Limited (Australia)
Nickel exploration and mining
67,999
41.3%
Resolute Mining Limited (Australia, Mali)
Gold exploration and mining
19,593
11.9%
Copper Mountain Mining Corporation (Canada)
Copper exploration and mining
18,400
11.2%
Alliance Mining Commodities Limited (Guinea)
Bauxite developer
17,843
10.8%
GME Resources Limited (Australia)
Nickel and gold exploration and mining
17,182
10.4%
SECTOR SPLIT OF INVESTMENTS*
% OF TOTAL
Other investments
23,613
14.4%
SECTOR
Nickel
Gold
Copper
Bauxite
Oil & Gas
Graphite
Other
Cash
2018
51.8%
20.3%
11.4%
10.8%
3.8%
1.3%
0.2%
0.4%
2017
26.2%
32.3%
3.2%
0.5%
36.9%
0.0%
0.0%
0.9%
Source: ICM
*Including investments held by Zeta Energy Pte. Ltd
Total Portfolio
164,630
100.0%
The value of the five largest holdings represents 85.6% (2017: 84.5%) of the group’s total investments. The country
shown is the location of the principal part of the company’s business. The total number of companies included in the
portfolio is 18 (2017: 18).
20
21
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018
REVIEW OF THE FIVE LARGEST HOLDINGS
PANORAMIC RESOURCES LIMITED
(AUSTRALIA)
COPPER MOUNTAIN MINING
CORPORATION (CANADA)
www.panoramicresources.com
Market Cap: US$223.5 million
Panoramic Resources Limited is a Western Australian
mining company that owns 100% of the Savannah
underground nickel sulphide mine, located in the East
Kimberley in Western Australia. Savannah remained
on care and maintenance throughout the year under
review. Panoramic’s value is leveraged to both the
price of nickel, and the Australian dollar – the higher
the price of nickel and the lower the Australian dollar,
the higher the company’s worth. During the year,
Panoramic raised A$21 million via an entitlement
offer, which Zeta participated in. The funds were used
to support preparations for the restart of mining
at Savannah. Shortly after the year end, Panoramic
formally announced the re-launch of Savannah, with
production set to resume early in 2019. Panoramic
also announced the sale of its other nickel mine,
Lanfranchi, with the aim of redeploying resources to
concentrate on Savannah.
www.cumtn.com
Market Cap: US$174.4 million
Copper Mountain Mining Corporation is a Canadian
copper mining company headquartered in Vancouver,
British Columbia.
is 75% of the
Its chief asset
Copper Mountain mine located about 20 km south
of Princeton, British Columbia and 300 km east of
the port of Vancouver, Canada. Mitsubishi Materials
Corporation owns the remaining 25% of the Copper
Mountain mine. The mine produces about 100 million
pounds of copper equivalent production per year,
including significant gold and silver credits, all of which
are shipped to Japan for smelting in one of Mitsubishi’s
copper smelters. During the year, Copper Mountain
acquired Australian copper firm Altona Mining Limited
in exchange for the issue of new Copper Mountain
shares. Zeta acquired a stake in Copper Mountain both
directly and from owning Altona Mining shares prior to
the takeover by Copper Mountain. Copper Mountain is
working on plans to develop its new Australian copper
assets, which comprise one of Australia’s largest
undeveloped copper resources containing 1.65 million
tonnes of copper and 409,000 ounces of gold.
RESOLUTE MINING LIMITED
(AUSTRALIA, MALI)
ALLIANCE MINING COMMODITIES LIMITED
(GUINEA)
www.resolute-ltd.com.au
Market Cap: US$699.0 million
Resolute Mining Limited is a gold producer listed on
the ASX, with long life mines at Syama in Mali and at
Ravenswood in Australia, and a development project at
Bibiani in Ghana. In the year to June 2018, Resolute’s
various operations yielded 284,185 ounces of gold.
Average cash costs of A$1,238 per ounce were higher
than the previous year’s A$995 per ounce. During
the year, Resolute continued development work on
underground mining at Syama, with production set to
begin shortly. At Ravenswood, Resolute has worked
on updating its Expansion Project, lowering costs and
spreading capital expenditures over a longer period.
Resolute has provided guidance for gold production of
300,000 oz at an All-In-Sustaining-Cost of A$1,280/oz
(US$960/oz) for the year to 30 June 2019. Resolute has
made a number of investments in junior African gold
exploration companies, with the aim of gaining access
to prospective gold resources. As at 30 June 2018,
Resolute had A$34.8m in listed investments.
www.amcbauxite.com
Market Cap: N/A - Unlisted
Alliance Mining Commodities Limited is an Australian
private company that has been granted a Mining
Concession by Presidential Decree for the development
of the Koumbia Bauxite Project in the northwest of the
Republic of Guinea. The Government of Guinea holds
a 10% free-carried interest in AMC’s Guinea subsidiary
which holds the concession. The Koumbia Bauxite
Project is a world class bauxite development, with a
JORC (2012) resource in excess of 2 billion tonnes. The
Koumbia ore, high in alumina and low in reactive silica
and boehmite, makes it particularly attractive for use
in a low temperature, low cost, refining process.
22
23
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 GME RESOURCES LIMITED
(AUSTRALIA)
www.gmeresources.com.au
Market Cap: US$41.1 million
GME Resources Limited is an ASX-listed exploration
and development company with nickel, cobalt and gold
interests in Western Australia. GME’s principal asset
is its 100%-owned NiWest Project situated adjacent
to Glencore’s Murrin Murrin Operations. The NiWest
Project contains one of the largest undeveloped
nickel-cobalt deposits in Australia. After the year end,
GME released its preliminary feasibility study for the
NiWest nickel-cobalt project. The company released
its maiden reserves, and the study shows a significant
nickel-cobalt asset, which when developed, would
have an initial mine life of 27 years. GME is targeting
production of premium nickel and cobalt sulphate
products from the NiWest Project to directly supply
the rapidly growing lithium-ion battery market.
GOVERNANCE
IN THIS SECTION:
26 Directors
27 Report of the Directors
32 Corporate Governance Statement
33 Additional ASX Information
24
25
Zeta Resources LimitedAnnual Report for the year to 30 June 2018 DIRECTORS
REPORT OF THE DIRECTORS
PETER SULLIVAN
CHAIRMAN AND NON-EXECUTIVE DIRECTOR
Appointed 7 June 2013. Mr Sullivan is an engineer and has been involved in the
management and strategic development of resource companies and projects for
more than 25 years, including project engineering, corporate finance, investment
banking, corporate and operational management, and public company
directorships. He has specialised in providing strategic corporate, financial and
investment advice to companies principally in the resource sector. He has served
as a director for numerous listed and unlisted companies and been closely
involved with their development. Mr Sullivan holds a Bachelor of Engineering and
a Master of Business Administration.
Directorships of other listed companies in the last 3 years
Mr Sullivan is chairman of GME Resources Limited (ASX:GME) and Bligh
Resources Limited (ASX:BGH) and non-executive director of Resolute Mining
Limited (ASX:RSG) and Panoramic Resources Limited (ASX:PAN). Mr Sullivan
is also Chair of Pan Pacific Petroleum NL (ASX:PPP) which was delisted on
13 November 2017.
MARTHINUS (MARTIN) BOTHA
NON-EXECUTIVE DIRECTOR
Appointed 7 June 2013. Mr Botha has over 30 years’ experience in banking,
with the last 26 years spent in leadership roles building Standard Bank Group’s
international operations. Mr Botha’s primary responsibilities at Standard Bank
Plc included establishing and leading the development of the core global natural
resources trading and financing franchises, as well as various geographic
strategies, including those in the Russian Commonwealth of Independent States,
Turkey and the Middle East. Mr Botha is currently non-executive chairman of
Sberbank CIB (UK) Ltd, a securities broker regulated by the UK Financial Services
Authority. Mr Botha holds a Bachelor of Engineering degree in Survey.
Directorships of other listed companies in the last 3 years
Mr Botha is chairman of Resolute Mining Limited (ASX:RSG).
XI XI
NON-EXECUTIVE DIRECTOR
Appointed 7 June 2013. Ms Xi is a financial analyst with more than 15 years’
experience in the mining, energy and natural resource industry, ranging from
managing companies focused on international exploration and development
of mining projects to restructuring and overseeing a portfolio of private and
public companies. Ms Xi holds dual Bachelor of Science degrees in Chemical
Engineering and Economics from the Colorado School of Mines and a Master of
Arts in International Relations and China Studies from Johns Hopkins School of
Advanced International Studies.
Directorships of other listed companies in the last 3 years
Ms Xi Xi is currently non-executive director of Mineral Resources Limited
(ASX:MIN), and previously Galaxy Resources Limited (ASX:GXY).
Your directors present their report for Zeta Resources Limited, including its subsidiaries, Kumarina Resources Pty
Limited, Zeta Energy Pte. Ltd, Axelrock Limited, Pan Pacific Petroleum Pty Limited, Pan Pacific Petroleum Vietnam
Pty Limited, Pan Pacific Petroleum JPDA Pty Limited and Zeta Investments Limited, for the year ended 30 June 2018.
DIRECTORS
The names of directors in office at any time during or since the end of the year are:
Peter Ross Sullivan
Marthinus (Martin) Botha
Xi Xi
Directors have been in office since the start of the year to the date of this report.
PRINCIPAL ACTIVITIES
The principal activities of the company are investing in listed and unlisted resource focused investments.
No significant change in the nature of these activities occurred during the year.
OPERATING AND FINANCIAL REVIEW
Operating results
The net profit attributable to the company for the year to 30 June 2018 amounted to US$31,215,839.
Overview of operating activity
The company listed on the ASX on 12 June 2013.
During the year the company has continued to build its portfolio of resource investments by investing a further
US$10,170,940. An increase in the fair value of the portfolio resulted in an unrealised profit recognised in profit or
loss at year end of US$35,166,648.
The activities of the company’s subsidiary, Kumarina, related to further exploration and evaluation of the existing
Australian mining tenements (the Murrin Murrin and Ilgarari projects) and a total of A$123,194 was invested during
the twelve months to 30 June 2018 in further drilling and analysis work.
Financial position
At the end of the year, the company had US$287,172 in cash and cash equivalents. Investments at fair value totalled
US$161,187,270, loans to subsidiaries were valued at US$379,690 and the investment in subsidiaries was valued at
US$3,063,504.
The company has a loan owing to UIL of $30,151,190 at year end.
GOING CONCERN
The financial statements have been prepared on a going concern basis. The majority of the company’s assets consist
of equity shares in listed companies and in most circumstances are realisable within a short timescale. The use of
the going concern basis of accounting is appropriate because there are no material uncertainties related to events
or conditions that may cast significant doubt about the ability of the company to continue as a going concern. After
26
27
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 REPORT OF THE DIRECTORS
(continued)
making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue
in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern
basis in preparing the accounts.
As at the year end, the company had a US$4m loan facility with Bermuda Commercial Bank expiring on 8 March 2019.
The company is in negotiation with Bermuda Commercial Bank to extend the facility. If the terms on the loan cannot
be renegotiated the company will repay the outstanding debt when due from the realisation of portfolio investments.
Creditors and short-term payables as at year end have all been settled through cash flow generated from the
realisation of portfolio investments.
DIVIDENDS
No dividends have been paid or declared since the start of the year. No recommendation is made as to dividends.
AFTER BALANCE DATE EVENTS
Zeta has subscribed to a further issue of shares in Alliance Mining Commodities Limited to take up 1,883,668 shares
for a consideration of US$2,542,951. The share issue notice was given on 6 July 2018. Zeta currently holds 26.7% of
Alliance Mining.
LIKELY DEVELOPMENTS
The company intends to continue to seek to maximise total returns for shareholders by identifying and investing in
assets and companies where the underlying value is not reflected in the market price.
INFORMATION ON COMPANY SECRETARY
On 12 September 2017 ICM Limited was appointed Company Secretary.
REMUNERATION REPORT
The remuneration report is set out in the following manner:
• Policies used to determine the nature and amount of remuneration
• Details of remuneration
• Share based compensation
• Directors and executives interests
Remuneration policy
The board of directors is responsible for remuneration policies and the packages applicable to the directors of the
company. The broad remuneration policy is to ensure that packages offered properly reflect a person’s duties and
responsibilities and that remuneration is competitive and attracts, retains, and motivates people of the highest quality.
The directors are remunerated for the services they render to the company and such services are carried out under
normal commercial terms and conditions. Engagement and payment for such services are approved by the other
directors who have no interest in the engagement of services.
Details of remuneration for Directors
The company paid a total of $150,000 to directors for the year ended 30 June 2018.
The company had no employees as at 30 June 2018.
Share based compensation
There is currently no provision in the policies of the company for the provision of share-based compensation to
directors. The interest of directors and executives in shares and options is set out elsewhere in this report.
Directors and Executives’ interests
The relevant interests of directors and executives either directly or through entities controlled by the directors and
executives in the share capital of the company and related body corporates as at the date of this report are:
DIRECTOR
Peter R Sullivan
Martin Botha
Xi Xi
ORDINARY SHARES
OPENING BALANCE
NET CHANGE
ORDINARY SHARES
CLOSING BALANCE
5,670,632
279,565
–
100,000
200,000
–
5,770,632
479,565
–
MEETINGS OF DIRECTORS
The board held six meetings during the year which were attended by all directors. The meetings were held on 4 July,
12 September, 13 and 24 November 2017 and 7 February and 18 June 2018.
In addition, throughout the course of the year there were a number of resolutions of directors which were made by
unanimous written resolution.
There were no meetings of committees of directors that were required to be held during the year.
LOANS TO DIRECTORS AND EXECUTIVES
There were no loans entered into with directors or executives during the year under review.
UNLISTED OPTIONS
At the date of this report the company had no unlisted options on issue.
During the year 86,461,440 unlisted options were exercised at A$0.001 resulting in the issue of 86,461,440 ordinary
listed shares.
AUDIT COMMITTEE
At the date of this report the company had not entered into any packages with directors or senior executives which
include performance-based components.
The board reviews the performance of the external auditors on an annual basis and will meet with them during the
year to review findings and assist with board recommendations.
28
29
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 REPORT OF THE DIRECTORS
(continued)
The board does not have a separate audit committee with a composition as suggested in the best practice
recommendations. The full board carries out the function of an audit committee.
The board believes that the company is not of a sufficient size to warrant a separate committee and that the full
board is able to meet the objectives of the best practice recommendations and discharge its duties in this area.
INDEMNIFYING OFFICERS OR AUDITORS
The company has not, during or since the year ended, in respect of any person who is or has been an officer or the
auditor of the company or of a related body corporate indemnified or made any relative agreement for indemnifying
against a liability incurred as an officer or auditor, including costs and expenses in defending legal proceedings.
ENVIRONMENTAL REGULATION
Kumarina Resources Pty Limited’s operations are subject to the Western Australian Mining Act 1978 and the
Environmental Protection Act 1986.
The directors are not aware of any significant breaches and no actions were initiated for breaches under the
Environmental Protection Act during the year covered by this report.
NON-AUDIT SERVICES
No non–audit services were performed by the auditors of the company during the year.
ON-MARKET BUY-BACK SCHEME
As part of its ongoing capital management strategy, Zeta has implemented an on-market buy-back for up to 10 million
ordinary shares during the period 15 September 2018 to 14 September 2019. The buy-back will only be effective
should the share price of the company be at a discount to NTA exceeding 10%. The timing and quantity of shares will
depend on current market conditions and other future events. Pursuant to section 257B(4) of the Corporations Act
2001 (Cth), the share buy-back does not require shareholder approval as it falls under the 10/12 limit.
Unlisted
Kumarina Resources Pty Limited
Pan Pacific Petroleum Pty Limited
Alliance Mining Commodities Limited
Margosa Graphite Limited
Zeta Energy Pte. Ltd
Zeta Investments Limited
NUMBER OF
SHARES
% OF ISSUED
SHARES HELD
26,245,610
581,942,846
11,895,376
13,950,000
100
100
100%
100%
26.768%
35.316%
100%
100%
INVESTMENT MANAGEMENT AGREEMENT
The company entered into an Investment Management Agreement with ICM Limited on 3 June 2018. Management
fees are payable at a rate of 0.5% per annum, of funds managed on calculation date, payable quarterly in arrears and
pro-rated for any period less than three months.
Performance fees, if applicable, are payable annually at year end at a rate of 15% of equity funds (adjusted for any
dividends paid or accrued) on calculation date less adjusted base equity funds (high-water mark) previously used in
the performance fee calculation. The adjusted base equity funds is the base equity fund used in the last performance
fee calculation adjusted by the average percentage income yield on the S&P/ASX 300 Metals and Mining Index. No
performance fee was payable for the year.
Either party may terminate the agreement with six months’ notice.
The company paid US$652,993 in management fees during the reporting year.
AUDITOR’S INDEPENDENCE DECLARATION
INVESTMENTS DISCLOSED BY THE COMPANY AT THE REPORTING DATE
A copy of the auditor’s independence declaration is included in the Independent Auditor’s Report.
During the year the company completed a total of 315 transactions in securities and paid a total of US$52,269 in
brokerage on those transactions.
This report is signed in accordance with a resolution of directors.
Listed
Panoramic Resources Limited
Bligh Resources Limited
Resolute Mining Limited
GME Resources Limited
Oilex Limited
NUMBER OF
SHARES
% OF ISSUED
SHARES HELD
149,543,439
253,742,974
20,784,000
193,655,109
121,323,567
30.420%
88.749%
2.803%
41.772%
6.473%
Peter R Sullivan
Chairman
Perth, Western Australia
5 September 2018
30
31
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018
CORPORATE GOVERNANCE STATEMENT
ADDITIONAL ASX INFORMATION
The company’s directors and management are committed to conducting the group’s business in an ethical manner
1.
SUBSTANTIAL SHAREHOLDERS
and in accordance with the highest standards of corporate governance. The company has adopted and substantially
complies with the ASX Corporate Governance Principles and Recommendations (Third Edition) (“Recommendations”)
to the extent appropriate to the size and nature of the group’s operations. The company has prepared a statement
As at 10 September 2018, the company had received notification of the following substantial shareholdings:
UIL Limited
263,496,139 (91.33%)
(“Corporate Governance Statement”) which sets out the corporate governance practices that were in operation
2. DISTRIBUTION SCHEDULE OF ORDINARY SHARES HELD AT 10 SEPTEMBER 2018
throughout the financial year for the company, identifies any Recommendations that have not been followed, and
provides reasons for not following such Recommendations. In accordance with ASX Listing Rules 4.10.3 and 4.7.4, the
Corporate Governance Statement will be available for review on the company’s website (www.zetaresources.limited),
and will be lodged together with an Appendix 4G to the ASX at the same time that the Annual Report is lodged with ASX.
The Appendix 4G will particularise each Recommendation that needs to be reported against by the company and
will provide shareholders with information as to where relevant governance disclosures can be found. The company’s
corporate governance policies and charters are all available on its website.
32
HOLDING RANGES
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Total
NO. OF
SHARES
3,339
2,840,236
1,388,667
5,196,572
279,092,210
288,521,024
NO. OF ORDINARY
SHAREHOLDERS
% OF ISSUED
CAPITAL
19
1,048
179
198
29
1,473
0.00
0.98
0.48
1.80
96.73
100.00
The number of shareholders holding less than a marketable parcel of ordinary shares at 10 September 2018
is 22 and they hold 7,039 securities.
3.
TOP 20 HOLDINGS OF FULLY PAID ORDINARY SHARES AS AT 10 SEPTEMBER 2018
NAME
J P MORGAN NOM AUST LTD
SOMERS ISLES PRIVATE TRUS
HSBC CUSTODY NOM AUST LTD
SULLIVAN JAMES NOEL
HARDROCK CAP PL
CALIMO PL
BURNAL PL
CHERRYBURN PL
SELLERS GILLIAN CLARE
BLESSED INV PL
ACS NSW PL
SAVILLE STEPHANIE C
BROINOWSKI JOHN GILLIS
UURO PL
PERSAL & CO INV PL
SAVILLE ALEXANDRA MAREE
CUSTODIAL SVCS LTD
GREEN BRIAN
SULLIVAN JAMES NOEL + G
NALMOR PL JOHN CHAPPELL S
Total for top 20
SHARES
172,376,417
90,144,895
9,079,766
1,308,595
600,000
576,510
450,000
376,160
350,000
335,000
295,000
269,946
260,000
250,000
250,000
241,778
226,822
215,000
200,000
160,000
% OF ISSUED
CAPITAL
59.74
31.24
3.15
0.45
0.21
0.20
0.16
0.13
0.12
0.12
0.10
0.09
0.09
0.09
0.09
0.08
0.08
0.07
0.07
0.06
277,965,889
96.34
33
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018
ADDITIONAL ASX INFORMATION
(continued)
4.
VOTING RIGHTS
All ordinary shares carry one vote per share without restriction.
FINANCIAL STATEMENTS
5.
APPLICATION OF CHAPTERS 6, 6A, 6B AND 6C OF THE CORPORATIONS ACT 2001
The company is not subject to Chapters 6, 6A, 6B and 6C of the Corporations Act dealing with the acquisition of
its shares. In addition, neither the Bermuda Companies Act nor the company’s Bye Laws prescribe a regime for
the conduct of takeovers or contain a general prohibition on acquisitions of interests in Bermuda companies
beyond a certain threshold in the same way as the Australian Corporations Act 2001.
6.
KUMARINA TENEMENT SCHEDULE
PROJECT AREA
TENEMENT ID
OWNERSHIP
COMMENTS
Ilgarari
Eulaminna
Murrin Murrin
E52/2274
M39/0371
M39/0372
M39/0397
M39/0398
M39/0399
M39/0400
M39/1068
P39/5230
P39/5231
P39/5232
P39/5233
P39/5234
P39/5235
P39/5236
P39/5237
P39/5238
100%
0% Gold and Base Metals Rights
0% Gold and Base Metals Rights
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
IN THIS SECTION:
36
Independent Auditor’s Report
40 Auditor’s Independence Declaration
41 Statement of Financial Position
42 Statement of Profit or Loss and Other Comprehensive Income
43 Statement of Cash Flows
44 Statement of Changes in Equity
45 Notes to the Financial Statements
34
35
35
Zeta Resources LimitedAnnual Report for the year to 30 June 2018 •
•
lack of
The
readily available objective
evidence such as quoted prices, which
increases estimation uncertainty and audit
effort for these unlisted investments;
The valuation methods applied by
the
Company to determine the fair value of the
unlisted investments are subject to a high
degree of
judgement and are complex,
especially for investments where there were
no additional share trades or new equity
issued during the year. Areas of judgement
include the future income expected from
operations that are still in exploration phase,
discount rates applied and other external risk
factors.
• A relatively small percentage change in the
valuations of
in
individual
aggregate, could result in a significant impact
to the financial statements.
investments,
We considered the existing market conditions,
estimates regarding future performance of the
underlying investments within each investment,
and recently traded prices in addressing this key
audit matter.
INDEPENDENT AUDITOR’S REPORT
KPMG Inc.
MSC House
1 Mediterranean Street. Foreshore. 8001
PO Box 4609, Cape Town, 8000, South Africa
Telephone
Fax
Docex
Internet
+27 10)21 408 7000
+2710)21 408 7100
102 Cape Town
kpmg.co.za
Independent Auditor’s Report
To the Shareholders of Zeta Resources Limited
Opinion
We have audited the financial statements of Zeta Resources Limited (the “company”) set out on pages 41
to 67, which comprise the statement of financial position at 30 June 2018, and the statement of profit or
loss and other comprehensive income, the statement of changes in equity and the statement of cash
flows for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies.
In our opinion, the financial statements present fairly, in all material respects, the financial position of
Zeta Resources Limited at 30 June 2018, and its financial performance and cash flows for the year then
ended in accordance with International Financial Reporting Standards.
Basis for Opinion
We conducted our audit
in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the company in accordance with
the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors
(IRBA Code) and other independence requirements applicable to performing audits of financial statements
in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and
in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA
Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for
Professional Accountants (Parts A and B). 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 statements for the current period. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. The key audit matter for the financial statements is set out
below.
Valuation of Unlisted Investments ($25.7mil)
Refer to Note 3.6, 5 and 22.4 of the financial statements.
The key audit matter
How the matter was addressed in our audit
The Company’s core business of investment
holding is driven by the appreciation of value in the
investments held. The Company’s determination
of
is
the valuation of unlisted
considered a key audit matter due to:
investments
Our audit procedures included:
We critically assessed the valuation methodology
applied to value the investments against accounting
standards and industry practice.
KPMG Inc 1:; e company mcorporated under the South
Afncen Compan1e::: Act and a member firm of the KPMG
network of 1ndependont member firm:; aff1llated with "PMG
International Cooperative ("KPMG lnterna11onal"l. a Swi::::::
entity
KPMG Inc 1:; a Reg1:;tered Auditor. m pubhc practice. an term:;
of the Aud1t1ng Profe:;:::,on Act, 26 of 2005
Reg1:;trat1on number 1999J021543/21
Chief Executive
N Dlomu
D,rector:;
Full h:::I on web:;1te
The company':; principal place of bu:;1ne:;:; 1:; at KPMG Cre:::cent.
85 Empire Road, Parktown, where a h:::t of 1he director:;' name:; 1:::
available for m:::pection
For investments where the fair value was calculated
using the market approach based on a limited
number of share trades as well as the price of new
equity issued, we obtained external confirmations of
actual traded prices paid by the Company within the
year or close to year-end.
challenged
External confirmations included items such as
deeds of adherence and variations to shareholders
agreements, showing recently traded prices.
We further
the Company’s key
assumption adopted in the market approach, being
the existence or lack of market conditions impacting
the fair value of these investments since acquisition.
information
this by obtaining market
We did
regarding
the underlying
investment holdings within the investments and
compared it to external source data such as:
the performance of
•
•
investors’ reports issued to shareholders
by the underlying investment companies,
providing external valuations of underlying
investments and status reports on related
projects;
relevant industry information regarding the
sectors within which each entity operates
for consistency to the Company’s views;
and
rates
We analysed
For investments where the fair value was based
on other valuation methods, such as discounted
cash flows, we challenged the key assumptions
such as discount
estimates
future performance of the underlying
regarding
investments.
the Company’s
discount rate against publicly available data of
a group of comparable entities, adjusting these
where necessary for the company’s specific risk
profile. We compared the results of
future
recently
against
performance
available
underlying
investments.
results
most
the
the
of
the
We performed a sensitivity analysis on
the valuations
key assumptions
methods, to identify those assumptions at higher
risk of bias or inconsistency in application and to
focus our further procedures.
applied
in
compared
the assumptions used
in
We
the Company’s valuation methods to previous
periods
consider
consistency and
management bias.
for
to
assessed
We
the Company’s disclosures
(including the assumptions used as inputs to the
valuations) using our understanding obtained
from our testing and against the requirements
of the accounting standards
36
37
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 INDEPENDENT AUDITOR’S REPORT
(continued)
Other Information
The directors are responsible for the other information. The other information comprises the Report of
the Directors’, the Corporate Governance Statement, and the Annual Report. Other information does not
include the financial statements and our auditor’s report thereon.
The Other Information we obtained prior to the date of this Auditor’s Report was the Report of the
Directors’. The Corporate Governance Statement and the Annual Report are expected to be made
available to us after the date of the Auditor's Report.
Our opinion on the financial statements does not cover the other information and, accordingly, we do not
and will not express an audit opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information obtained prior to the date
of this auditor’s report, 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 Statements
The company's directors are responsible
these
financial statements in accordance with International Financial Reporting Standards, and for such internal
control as the directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
the preparation and
fair presentation of
for
conditions that may cast significant doubt on the company’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 statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the company to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent 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 statements 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.
Auditor’s Responsibilities for the Audit of the Financial Statement
KPMG Inc.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are 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 ISAs 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 these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements, 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 company’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
Per: P Conradie
Chartered Accountant (SA)
Registered Auditor
Director
Date: 5 September 2018
38
39
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 AUDITOR’S INDEPENDENCE DECLARATION
STATEMENT OF FINANCIAL POSITION
KPMG Inc.
MSC House
1 Mediterranean Street. Foreshore. 8001
PO Box 4609, Cape Town, 8000, South Africa
Telephone
Fax
Docex
Internet
+27 10)21 408 7000
+2710)21 408 7100
102 Cape Town
kpmg.co.za
Independent Auditor`s Declaration to the directors of Zeta Resources Limited
In relation to our audit of the financial report of Zeta Resources Limited for the financial year ended 30 June 2018, to
the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of
the International Standards on Auditing or any applicable code of professional conduct.
KPMG Inc.
Per P Conradie
Chartered Accountant (SA)
Registered Auditor
Director
Date: 5 September 2018
s at 30 June 2018
e
t
o
N
Non-current assets
Investment in subsidiaries
Investments
Loans to subsidiaries
4
5
6
Current assets
7
Cash and cash equivalents
Total assets
Non-current liabilities
8
9
Loan from subsidiary
Loan from parent
Current Liabilities
10 Loan from third party
11 Trade and other payables
Total liabilities
NET ASSETS
Equity
12
12
Share capital
Share premium
12 Options
Accumulated profit/(loss)
TOTAL EQUITY
June 2018
US$
June 2017
US$
3,063,504
161,187,270
379,690
3,181,102
47,685,376
30,027,206
287,172
164,917,636
15,828
80,909,512
(5,235,527)
(30,151,190)
(5,351,022)
(22,257,029)
(4,000,000)
(1,674,024)
(41,060,741)
123,856,895
2,785
123,096,492
–
757,618
123,856,895
–
(260,421)
(27,868,472)
53,041,040
900
66,233,041
17,265,320
(30,458,221)
53,041,040
KPMG Inc 1:; e company mcorporated under the South
Afncen Compan1e::: Act and a member firm of the KPMG
network of 1ndependont member firm:; aff1llated with "PMG
International Cooperative ("KPMG lnterna11onal"l. a Swi::::::
entity
KPMG Inc 1:; a Reg1:;tered Auditor. m pubhc practice. an term:;
of the Aud1t1ng Profe:;:::,on Act, 26 of 2005
Reg1:;trat1on number 1999J021543/21
Chief Executive
N Dlomu
D,rector:;
Full h:::I on web:;1te
The company':; principal place of bu:;1ne:;:; 1:; at KPMG Cre:::cent.
85 Empire Road, Parktown, where a h:::t of 1he director:;' name:; 1:::
available for m:::pection
40
41
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
STATEMENT OF CASH FLOWS
s for the year ended 30 June 2018
e
t
o
N
Revenue
13
Investment income
14 Other losses
Expenses
Directors fees
Interest expense
15 Management and consulting fees
16 Operating and administration expenses
Profit before income tax
June 2018
US$
35,581,956
(682,799)
(150,000)
(2,179,015)
(925,443)
(428,860)
31,215,839
June 2017
US$
14,246,441
(213,826)
(150,000)
(2,627,116)
(662,662)
(314,931)
10,277,906
17
Income tax
Profit for the year
–
–
31,215,839
10,277,906
Other comprehensive income
–
–
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
31,215,839
10,277,906
s for the year ended 30 June 2018
e
t
o
N
Cash flows from operating activities
19.1 Cash generated/(utilised) by operations
Interest received
Interest expense
Net cash flows from operating activities
Cash flows from investing activities
Investments purchased
Investments sold
Increase in loan to subsidiaries from additional funding
5
5
6
6 Decrease in loan to subsidiaries from repayment
Net cash flows from investing activities
Cash flows from financing activities
19.2 Proceeds from issue of shares
19.3 Increase in loan from third party
June 2018
June 2017
US$
US$
235,803
102
(2,179,015)
(1,943,110)
(703,080)
14
(2,627,116)
(3,330,182)
(41,223,177)
(11,453,601)
331,047
(764,728)
31,816,964
(9,839,894)
26,190,010
–
937,850
15,674,259
66,368
4,000,000
–
–
Profit per share
19.3 Increase in loan from parent from additional funding
18 Basic and diluted profit per share (cents per share)
0.15
0.06
19.3 (Decrease)/increase in loan from subsidiaries
Net cash flows from financing activities
32,476,042
(115,495)
4,950,881
1,596,355
11,845,034
(12,311,912)
19.3 Decrease in loan from parent from repayment
(24,581,881)
(18,859,148)
Net movement in cash and cash equivalents
62,030
32,165
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash held
7 Cash and cash equivalents at end of the year
15,828
209,314
287,172
238,893
(255,230)
15,828
42
43
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 STATEMENT OF CHANGES IN EQUITY
NOTES TO THE FINANCIAL STATEMENTS
s for the year ended 30 June 2018
e
t
o
N
Share
capital
US$
Share
premium
US$
Options
US$
Accumulated
profit/(loss)
US$
Total
US$
Balance at 1 July 2016
900
66,233,041
17,265,320
(40,736,127)
42,763,134
Total comprehensive income for the year
–
–
–
10,277,906
10,277,906
Balance at 30 June 2017
900
66,233,041
17,265,320
(30,458,221)
53,041,040
12 Issue of shares
12 Issue of options
1,020
39,532,628
–
865
17,330,823
(17,265,320)
–
–
39,533,648
66,368
Total comprehensive income for the year
–
–
Balance at 30 June 2018
2,785 123,096,492
–
–
31,215,839
31,215,839
757,618 123,856,895
1. BASIS OF PREPARATION
1.1 Corporate information
Zeta Resources Limited (“Zeta Resources” or “the company”) is an investment company incorporated on 13 August 2012, listed
on the Australian Stock Exchange and domiciled in Bermuda. The financial statements of the company as at and for the year
ended 30 June 2018 comprise the company only.
1.2 Basis of preparation
The financial statements for the period ended 30 June 2018 have been prepared in accordance with International Financial Reporting
Standards (IFRSs). The following accounting policies have, in all material respects, been applied consistently. The company carries on
the business of an investment holding company, in accordance with IFRS 10. The purpose of the company is to earn returns through
capital appreciation or investment income. The company is accordingly applying the consolidation exemption for investments in
subsidiaries and they will be recognised at fair value through profit and loss.
The financial statements were authorised for issue by the board of directors on 5 September 2018.
1.3 Basis of measurement
The financial statements provide information about the financial position, results of operations and changes in financial
position of the company. They have been prepared on the historic cost basis except for financial instruments at fair value
through profit or loss, which are measured at fair value.
1.4 Functional and presentation currency
The company’s functional and presentation currency is United States dollars.
1.5 Use of estimates and judgements
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expense. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions are recognised in the period in which
the estimate is revised and in any future periods affected.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment
within the next financial year, as well as critical judgements in applying accounting policies that have the most significant effect
on the amounts recognised in the financial statements are included in note 22.
2. ADOPTION OF NEW AND REVISED STANDARDS
Future amendments not early adopted in the 2018 year ended financial statements
At the date of these financial statements the following standards, amendments to standards, and interpretations, which are
relevant to the company, have been issued by the International Accounting Standards Board, but have not yet been adopted
by the company.
IFRS 9 Financial Instruments - sets out requirements for recognising and measuring financial assets, financial liabilities and
some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and
Measurement.
IFRS 9 contains a new classification and measurement approach for financial assets that reflects the business model in which
assets are managed and their cash flow characteristics. IFRS 9 contains three principal classification categories for financial
assets: measured at amortised cost, fair value through other comprehensive income and fair value through profit and loss. The
standard eliminates the existing IAS 39 categories of held to maturity, loans and receivables and available for sale.
Based on its assessment, Zeta Resources Limited does not believe that the new classification requirements will have a material
impact on its accounting for loans and investments in equity securities that are managed on a fair value basis. At 30 June 2018,
Zeta Resources Limited had no equity investments classified as available-for-sale or at fair value through other comprehensive
income. Therefore, all gains and losses are recognised in profit and loss.
44
45
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS
(continued)
2. ADOPTION OF NEW AND REVISED STANDARDS (continued)
3.5 Earnings per share (“EPS”)
IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with a forward-looking ‘expected credit loss’ (ECL) model. This will require
considerable judgement about how changes in economic factors affect ECLs, which will be determined on a probability-
weighted basis. In Zeta Resources Limited the new impairment model will only be applicable to loans receivable measured at
amortised cost. As at 30 June 2018, the total loans measured at amortised cost are US$379,690. As Zeta Resources Limited
impairment considerations are in line with IFRS 9, Zeta Resources estimates that no additional impairments would be necessary
under IFRS 9.
IFRS 9 will be adopted for the first time for the year ending 30 June 2019, subject to certain transitional provisions. The impact
on the financial statements will be negligible.
IFRS 15 Revenue - the standard contains a single model that applies to contracts with customers and two approaches to
recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions
to determine whether, how much and when revenue is recognised. The standard is effective for annual periods beginning on
or after 1 January 2018, with early adoption permitted under IFRS. This new standard will have no significant impact on the
company as the main revenue streams consists of dividend income and realised and unrealised gains.
IFRS 16 Leases - as Zeta Resources is an investment entity, its main operations are to invest in securities. All other business
operations are outsourced and therefore no leases are held by Zeta Resources. This indicates that IFRS 16 will have no impact
on Zeta Resources.
Amendments to IAS 7 - the amendments provide for disclosures that enable users of financial statements to evaluate changes
in liabilities arising from financing activities, including both changes arising from cash flow and non-cash changes. This includes
providing a reconciliation between the opening and closing balances for liabilities arising from financing activities.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies detailed below have been consistently applied by the company.
3.1 Revenue
Dividends receivable are recognised as income on the ex-dividend date.
Gains or losses on the sale of investments are recorded on the trade date.
Investment income also comprises gains on changes in the fair value of financial assets at fair value through profit or loss.
Interest income is accrued on a time basis by reference to the principal outstanding and at the interest rate applicable.
3.2 Borrowing costs
Borrowing costs are recognised as an expense when incurred.
3.3
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the balance sheet date.
3.4 Foreign currency
Foreign currency transactions and balances
Transactions in foreign currencies are translated into the respective functional currencies of the company at exchange rates
at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items
is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective
interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the
end of the period. The foreign currency gains or losses are recognised in profit or loss.
Foreign currency differences arising on retranslation are recognised in other comprehensive income.
Basic EPS is calculated as net result attributable to members, adjusted to exclude 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 EPS is calculated as net result attributable to members, adjusted for:
•
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with potential dilutive 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 potential dilutive ordinary
shares, adjusted for any bonus element.
3.6 Financial instruments
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in listed and unlisted securities, investment loans, trade and other
receivables, cash and cash equivalents, trade and other payables and amounts due to/from brokers.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit
or loss, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are
measured as described below.
Recognition and derecognition of financial instruments
Financial instruments are recognised when, and only when, the company becomes a party to the contractual provisions of the
particular instrument. The company derecognises a financial asset when the contractual rights to the cash flows arising from
the financial asset have expired or when it transfers the rights to receive the contractual cash flows on the financial asset in a
transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.
A financial liability is derecognised when the liability is extinguished, that being, when the obligation specified in the contract
is discharged, cancelled or has expired. The difference between the carrying amount of a financial liability assumed (or part
thereof) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss.
Financial assets at fair value through profit or loss
Investment purchases and sales are accounted for on the trade date, exclusive of transaction costs. Investments used for
efficient portfolio management are classified as being at fair value through profit or loss. As the company’s business is investing
in financial assets with a view to profiting from their total return in the form of dividends, interest or increases in fair value, its
investments are designated as being at fair value through profit or loss on initial recognition.
Gains and losses on investments are analysed within the statement of comprehensive income as capital return. Quoted
investments are shown at fair value using market bid prices. The fair value of unquoted investments is determined by the
board. In exercising its judgement over the value of these investments, the board uses valuation techniques which take into
account, where appropriate, latest dealing prices, valuations from reliable sources, asset values, earnings and other relevant
factors.
Cash and Cash Equivalents
Cash and cash equivalents are measured at amortised cost at the reporting date. Cash and cash equivalents comprise
operating cash balances, call deposits and short-term deposits with a maturity of three months or less.
Non-derivative financial liabilities
The company has the following non-derivative financial liabilities: loans and borrowings, trade and other receivables, trade and
other payables and amounts due to/from brokers.
All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the
trade date at which the company becomes a party to the contractual provisions of the instrument. The company derecognises
a financial liability when its contractual obligations are discharged or cancelled or expire. The difference between the carrying
amount of a financial liability assumed (or part thereof), extinguished or transferred to another party and consideration paid,
including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
46
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Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS
(continued)
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
3.6 Financial instruments (continued)
Trade and other payables
Trade and other payables are initially recognised at original invoice amount and are subsequently stated at amortised cost
by applying the effective interest method. Trade and other payables are not discounted where the effects of discounting
is considered immaterial. Trade and other payables are settled within 30 to 90 days and are interest free. Any gains on
derecognition are recognised in profit or loss.
3.7
Impairment of assets
Financial assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A
financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect
on the estimated future cash flows of that asset.
An impairment loss in respect of a financial asset is calculated as the difference between its carrying amount, and the present
value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an
available-for-sale financial asset is calculated by reference to its fair value.
Significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed
collectively in groups that share similar credit risk characteristics. All impairment losses are recognised in profit or loss. Any
cumulative loss in respect of an available for-sale financial asset recognised previously in equity is transferred to profit or loss.
Financial assets related to subsidiaries are measured at fair value under IAS 39, in line with the requirements for investment
entities under IFRS 10.
Non-financial assets
The carrying amounts of the non-financial assets, other than deferred tax assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount
is estimated. An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss.
The recoverable amount of an asset is the greater of its value in use and its fair value less cost to sell. The fair value less cost to
sell is the amount obtainable from the sale of an asset in an arm’s length transaction less the cost of disposal. While assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
the current market assessments of the time value of money and the risks specific to the asset.
In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment
loss had been recognised.
3.8 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity.
3.9 Provisions and accruals
Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, for
which it is probable that an outflow of economic benefits will occur, and where a reliable estimate can be made of the amount
of the obligation. The expense relating to any provision is presented in the statement of comprehensive income net of any
reimbursement. If the effect of discounting is material, provisions are discounted. The discount rate used is a pre-tax rate
that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
4.
INVESTMENT IN SUBSIDIARIES
At fair value
Investment in Kumarina Resources Pty Limited ("Kumarina")
3,063,498
3,181,100
June 2018
US$
June 2017
US$
Investment in Zeta Energy Pte. Ltd. ("Zeta Energy")
Investment in Axelrock Limited ("Axelrock")
Investment in Pan Pacific Petroleum Pty Limited ("PPP")
Investment in Pan Pacific Petroleum Vietnam Pty Limited ("PPP
Vietnam")
Investment in Pan Pacific Petroleum JPDA Pty Limited ("PPP JPDA")
Investment in Zeta Investments Limited ("Zeta Investments")
1
1
1
1
1
1
1
–
–
–
–
1
Investments in subsidiaries are held as part of the investment portfolio and consequently, in accordance with IFRS 10 are not
consolidated but rather shown at fair value through profit and loss. The directors’ fair valuation of Kumarina is still considered
to be its 2013 cost value as there have been no significant changes in the entity and its prospects. The company had the
following subsidiaries as at 30 June 2018:
3,063,504
3,181,102
30 June 2017
Kumarina incorporated in Australia
Zeta Investments incorporated in Bermuda
Zeta Energy incorporated in Singapore
30 June 2018
Kumarina incorporated in Australia
Zeta Investments incorporated in Bermuda
Zeta Energy incorporated in Singapore
PPP Vietnam incorporated in Australia
PPP JPDA incorporated in Australia
PPP incorporated in Australia
Axelrock incorporated in Bermuda
Number of
ordinary shares
Percentage of
ordinary shares held
26,245,210
1,000
1
100%
100%
100%
Number of
ordinary shares
Percentage of
ordinary shares held
26,245,210
1,000
1
2
2
581,942,846
100
100%
100%
100%
100%
100%
100%
100%
48
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Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS
(continued)
5.
INVESTMENTS
6.
LOANS TO SUBSIDIARIES
Financial assets at fair value through profit or loss
Equity securities at fair value
Ordinary shares – listed
Subscription and other rights – unlisted
Equity securities at cost
Ordinary shares – listed
Subscription and other rights – unlisted
Investments held by the company at the reporting date
Listed
Bligh Resources Limited
GME Resources Limited
Panoramic Resources Limited
Oilex Limited
Resolute Mining Limited
Other Investments
Unlisted
Other investments
Other rights
June 2018
US$
161,187,270
135,475,520
25,711,750
161,187,270
101,986,368
33,830,307
135,816,675
June 2017
US$
47,685,376
47,276,793
408,583
47,685,376
45,142,335
706,040
45,848,375
Number of
shares
253,742,974
193,655,109
149,543,439
121,323,567
20,784,000
49,433,602
625,281,622
1,038,331
During the reporting period the company completed a total of 315 transactions (2017: 256 transactions) in securities and paid
a total of US$52,269 (2017: US$54,634) in brokerage on those transactions.
During the current year US$41.2 million of investments were acquired for cash, US$13.5 million of investments were acquired
through the repayment of its subsidiary Zeta Energy’s loan and US$36.1 million of investments were acquired through the
issue of share capital. For further information please see Statement of cash flows and note 12.
During the reporting period the company also received loans from its subsidiary Zeta Energy. To secure the loans Zeta
Resources has pledged certain quantities of its shares held in listed entities.
The shares pledged include: Resolute Mining Limited (15,000,000) and Panoramic Resources Limited (5,000,000).
Loan to Zeta Energy
Loan to Kumarina
June 2018
US$
27,010
352,680
379,690
June 2017
US$
29,735,459
291,747
30,027,206
The loan to Zeta Energy is denominated in Australian dollars to the value of A$(190,652) (2017: A$20.669 million), British
pounds to the value of UK£11,100 (2017: UK£1.0 million), New Zealand dollars to the value of NZ$6.2 million (2017: NZ$26.340
million), South African rands to the value of R4,000 (2017: Nil), Singapore dollars to the value of SG$5,100 (2017: Nil) and
United States dollars to the value of US$(149,788) (2017: Nil). There are no fixed repayment terms and no interest is charged.
During the period ended 30 June 2018, the loan to Zeta Energy, which was utilised for the purchase of listed investments,
was impaired, through profit and loss, to the fair value of the company as determined by the directors. In determining the fair
value of Zeta Energy, the directors have valued the listed investment held by the company at market value of the exchange it is
listed on. As at 30 June 2018 the impairment to the loan totalled US$3.898 million which resulted in a recovery of impairments
raised in prior years of US$12.875 million. Please see note 13. The loan to Kumarina is denominated in Australian dollars and
is interest free. There are no fixed repayment terms except that no repayment is due before 30 June 2019.
7. CASH AND CASH EQUIVALENTS
Cash balance comprises:
Cash at bank
June 2018
US$
June 2017
US$
287,172
15,828
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying
periods between three to six months depending on the immediate cash requirements of the company, and earn interest at
the respective short-term deposit rates.
8.
LOAN FROM SUBSIDIARY
Loan from Zeta Energy
June 2018
US$
5,235,527
June 2017
US$
5,351,022
The loan from Zeta Energy is denominated in Australian dollars to the value of A$6.235 million (30 June 2017: A$6.01 million)
and New Zealand dollars to the value of NZ$924,000 (30 June 2017: NZ$1.01 million) and currently attracts interest at rates
between 4.35% and 6.85% per annum (30 June 2017: 4.35% and 6.85%) on the Australian dollar loan and at 6.00% per annum
(30 June 2017: 6.00%) on the New Zealand dollar loan. There are no fixed repayment terms except that no repayment is due
before 30 June 2019. Zeta Energy has in turn borrowed these funds on the same interest and repayment terms. In order to
secure the loans Zeta Resources has pledged certain of its investments. The shares pledged include: Resolute Mining Limited
(15,000,000) and Panoramic Resources Limited (5,000,000).
50
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Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS
(continued)
9.
LOAN FROM PARENT
Loan from UIL Limited (“UIL”)
June 2018
US$
30,151,190
June 2017
US$
22,257,029
The loan is denominated in Australian dollars to the value of A$18.615 million (30 June 2017: A$28.99 million) and in Canadian
dollars to the value of CA$21.542 million (30 June 2017: CA$0), and currently attracts interest at 7.5% per annum (30 June
2017: 7.5%) on the Australian dollar loan and 7.25% on the Canadian dollar loan. There are no repayment terms and no
repayment is due before 30 June 2019. During the year the company converted A$20.7 million of loans into CA$20 million.
During the year the company received A$39.661 million and CA$1.333 million of funding for the purchase of investments,
capitalised interest of A$2.142 million and CA$209,014 and made further repayments of A$31.453 million.
10. LOAN FROM THIRD PARTY
Loan from Bermuda Commercial Bank Limited
June 2018
US$
4,000,000
June 2017
US$
–
The loan denominated in United States dollars currently attracts interest at US$ 3-month LIBOR + 4.25% per annum. The loan
matures within the following 12 months. Please see note 21.
11. TRADE AND OTHER PAYABLES
Payable to ICM Limited
Rehabilitation provision
Accruals
June 2018
US$
459,890
900,000
314,134
1,674,024
June 2017
US$
–
–
260,421
260,421
The accruals are for audit, management, directors and administration fees payable. The rehabilitation provision is raised for
the restoration and rehabilitation obligation resulting from operations previously undertaken by PPP JPDA. The timing and
amount of this liability is uncertain.
Number of
shares
Share
capital
Share
premium
12. SHARE CAPITAL AND SHARE PREMIUM
Authorised
5,000,000,000 ordinary shares of par value US$0.00001
Issued
Ordinary shares
Balance as at incorporation
Issued at incorporation as US$1 par shares
Shares split into 10,000,000 shares of US$0.00001 each
Issued in consideration for purchase of investments from UIL
Issued in consideration for purchase of 100% of Kumarina Resources
Limited
Issued under initial public offering
Issued under public rights issue dated 10 February 2014
Following shareholder approval, issued under ASX listing rule 10.11
dated 7 December 2015
Balance as at 30 June 2017
Issued under a scheme of arrangement pursuant to acquiring all the
ordinary share capital of Pan Pacific Petroleum NL
Issued pursuant to an exercise of options on 10 November 2017
Issued in consideration for purchase of investments from Somers
Isles Private Trust Company Limited
100
9,999,900
22,835,042
17,775,514
4,000
42,616,164
6,769,280
100,000,000
11,914,689
86,461,440
90,144,895
–
–
–
228
178
–
426
68
900
119
865
901
–
–
–
32,221,936
13,406,337
3,795
19,249,296
1,351,677
66,233,041
3,467,556
17,330,823
36,065,072
Balance as at 30 June 2018
288,521,024
2,785
123,096,492
For further details related to the cash flows arising from the share issue transactions please see note 19.2.
Options
June 2018
US$
June 2017
US$
Options
Balance at the beginning of the year (Note (a))
86,461,440
17,265,320
17,265,320
Exercised during the year
Balance at the end of the year
(86,461,440)
(17,265,320)
–
–
–
17,265,320
Note (a) – The options were exercisable at an exercise price of A$0.001 into one ordinary share until 7 December 2019.
52
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Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS
(continued)
13. INVESTMENT INCOME
17. INCOME TAX
Interest income
Dividend income
Realised gains
Unrealised fair value gains:
Financial assets at fair value through profit or loss
Recovery of prior impairments of loan to subsidiary at fair value
through profit or loss
14. OTHER LOSSES
Foreign exchange (losses)/gains
Other (losses)/income
15. MANAGEMENT AND CONSULTING FEES
Management and consulting fees
June 2018
US$
102
318,616
96,590
35,166,648
22,291,678
12,874,970
June 2017
US$
14
380,939
8,361,485
5,504,003
4,342,269
1,161,734
35,581,956
14,246,441
June 2018
US$
209,314
(892,113)
(682,799)
June 2018
US$
925,443
June 2017
US$
(255,230)
41,404
(213,826)
June 2017
US$
662,662
The company entered into an investment management agreement with ICM Limited (Bermuda registered) on 3 June 2018.
Management fees are payable at a rate of 0.5% per annum, of funds managed on calculation date, payable quarterly in arrears
and pro-rated for any period less than three months.
Performance fees are payable annually at year end on the difference between adjusted equity funds (adjusted for any dividends
paid or accrued) on calculation date less adjusted base equity funds (high-water mark) previously used in the performance
fee calculation multiplied by 15%. The adjusted base equity funds is the base equity fund used in the last performance fee
calculation adjusted by the average percentage income yield on the S&P/ASX 300 Metals and Mining Index. No performance
fee was payable in the current period (2017: US$ Nil).
Either party may terminate the agreement with six months’ notice.
16. OPERATING AND ADMINISTRATION EXPENSES
Operating and administration expenses consist of:
Accounting fees
Audit fees
Australian Stock Exchange listing fees and regulation costs
Insurance costs
Other expenses
June 2018
US$
June 2017
US$
139,262
22,040
86,656
13,444
167,458
428,860
115,645
20,838
55,620
14,153
108,675
314,931
The company has elected to be tax exempt in terms of local Bermudian legislation. As such no tax is payable.
18. EARNINGS PER SHARE
Earnings per share
June 2018
US$
0.15
June 2017
US$
0.06
Profit used in calculation of basic and diluted earnings per share
31,215,839
10,277,906
Weighted average number of ordinary shares outstanding during the year
used in calculation of basic and diluted earnings per share
201,443,782
186,461,440
The weighted average number of ordinary shares calculation is based on the year beginning 1 July 2017. For details of cash
flows arising from the shares issued during the year refer to note 19.2.
In the prior year an adjustment was made for the 86,461,440 options as they were considered to be in substance issued
shares. These were exercised on 10 November 2017 and have been included in the weighted average calculation.
19. NOTES TO THE CASH FLOW STATEMENT
19.1 Cash generated/(utilised) by operations
Income before income tax benefit
Adjustments for:
Realised gains on investments
Fair value profit on revaluation of investments
Rehabilitation Provision
Foreign exchange gain/(losses)
Interest income
Interest expense
Operating profit/(loss) before working capital change
Decrease in trade and other receivables
Increase in trade and other payables
Decrease in balance due to brokers
June 2018
US$
June 2017
US$
31,215,839
10,277,906
(96,590)
(35,166,648)
900,000
(209,314)
(102)
2,179,015
(1,177,800)
–
1,413,603
–
235,803
(8,361,485)
(5,504,003)
–
255,230
(14)
2,627,116
(705,250)
12,109
68,201
(78,140)
(703,080)
54
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Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS
(continued)
19. NOTES TO THE CASH FLOW STATEMENT (continued)
Categories of financial instruments
19.2 Issue of shares
Shares issued for consideration
During the year ended 30 June 2016, following shareholder approval, the company
issued 86,461,440 options at a cost of A$0.2817 per option, to UIL Limited, raising the
equivalent of US$17.27 million. In the current year, the options were exercised on 10
November 2017 at an exercise price of A$0.001 per option.
Loan from
third party
US$
June 2018
US$
June 2017
US$
66,368
Share
capital
US$
–
Share
premium
US$
19.3 Reconciliation of movements of liabilities to cash flows arising from
financing activities
Balance at 1 July 2017
–
5,351,022
22,257,029
Proceeds from loans and borrowings
4,000,000
7,574,807
32,476,042
Repayment of borrowings
Balance as at 30 June 2018
20. AUDITOR REMUNERATION
–
(7,690,302)
(24,581,881)
4,000,000
5,235,527
30,151,190
Amounts received or due and receivable by the auditors for audit of financial
statements
June 2018
US$
June 2017
US$
22,040
20,838
21. GOING CONCERN
The financial statements have been prepared on a going concern basis. The majority of the company’s assets consist of equity
shares in listed companies and in most circumstances are realisable within a short timescale. The use of the going concern
basis of accounting is appropriate because there are no material uncertainties related to events or conditions that may cast
significant doubt about the ability of the company to continue as a going concern. After making enquiries, the directors have
a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable
future. Accordingly, the directors continue to adopt the going concern basis in preparing the accounts.
As at the year end, the company had a US$4 million loan facility with Bermuda Commercial Bank expiring on 8 March 2019. The
company is in negotiation with Bermuda Commercial Bank to extend the facility. If the terms on the loan cannot be renegotiated
the company will repay the outstanding debt when due from the realisation of portfolio investments. Creditors and short term
payables as at year end have all been settled through cash flow generated from the realisation of portfolio investments.
22. FINANCIAL RISK MANAGEMENT
The board of directors, together with the Investment Manager, is responsible for the company’s risk management. The directors’
policies and processes for managing the financial risks are set out below. These financial risks are principally related to the
market (currency movements, interest rate changes and security price movements), liquidity and credit and counterparty risk.
The accounting policies which govern the reported statement of financial position carrying values of the underlying financial
assets and liabilities, as well as the related income and expenditure, are set out in note 3 to the financial statements. The
policies are in compliance with IFRS and best practice, and include the valuation of certain financial assets and liabilities at fair
value through profit and loss.
The analysis of assets into their categories as defined in IAS 39 “Financial Instruments: Recognition and Measurement”
(IAS 39) is set out in the following table. For completeness, assets and liabilities of a non-financial nature, or financial assets and
liabilities that are specifically excluded from the scope of IAS 39, are reflected in the non-financial assets and liabilities category.
The table below sets out the company classification of each class of financial assets and liabilities. All assets and liabilities
approximate their fair values:
30 June 2018
Assets
Investments in subsidiaries
Investments
Loans to subsidiaries
Cash and cash equivalents
Liabilities
Loans from subsidiaries
Trade and other payables
Loan from parent
Loan from third party
30 June 2017
Assets
Investments in subsidiaries
Investments
Loans to subsidiaries
Cash and cash equivalents
Liabilities
Loans from subsidiaries
Trade and other payables
Loan from parent
Designated at fair
value through
profit and loss
US$
Loans and receivables
at fair value through
profit and loss
US$
Total
carrying value
US$
3,063,504
161,187,270
–
–
164,250,774
–
–
–
–
–
3,181,102
47,685,376
–
–
50,866,478
–
–
–
–
–
–
379,690
287,172
666,862
5,235,527
1,674,024
30,151,190
4,000,000
41,060,741
–
–
30,027,206
15,828
30,043,034
5,351,022
260,421
22,257,029
27,868,472
3,063,504
161,187,270
379,690
287,172
164,917,636
5,235,527
1,674,024
30,151,190
4,000,000
41,060,741
3,181,102
47,685,376
30,027,206
15,828
80,909,512
5,351,022
260,421
22,257,029
27,868,472
56
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Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS
(continued)
22. FINANCIAL RISK MANAGEMENT (continued)
22.1 Market risks
The fair value of equity and other financial securities held in the company’s portfolio fluctuates with changes in market prices.
Prices are themselves affected by movements in currencies and interest rates and by other financial issues, including the market
perception of future risks. The board sets policies for managing these risks within the company’s objective and meets regularly to
review full, timely and relevant information on investment performance and financial results. The Investment Manager assesses
exposure to market risks when making each investment decision and monitors on-going market risk within the portfolio.
The company’s other assets and liabilities may be denominated in currencies other than United States dollars and may also
be exposed to interest rate risks. The Investment Manager and the board regularly monitor these risks. The company does
not normally hold significant cash balances. Borrowings are limited to amounts and currencies commensurate with the
portfolio’s exposure to those currencies, thereby limiting the company’s exposure to future changes to amounts and currencies
commensurate with the portfolio’s exposure to those currencies, thereby limiting the company’s exposure to future changes in
exchange rates.
Gearing may be short- or long-term, in United States dollars and foreign currencies, and enables the company to take a long-
term view of the countries and markets in which it is invested without having to be concerned about short-term volatility. Income
earned in foreign currencies is converted to United States dollars on receipt. The board regularly monitors the effects on net
revenue of interest earned on deposits and paid on gearing.
Currency exposure
The principal currencies to which the company was exposed were the Australian dollar, Sterling and New Zealand dollar. The
exchange rates applying against the United States dollar at 30 June 2018 and the average rates for the year were as follows:
AUD – Australian dollar
CAD – Canadian dollar
NZD – New Zealand dollar
June 2018
0.7394
0.7607
0.6770
Average
0.7752
0.7872
0.7147
The company’s monetary assets and liabilities at 30 June 2018 (shown at fair value), by currency based on the country of
primary operations, are shown below:
USD
192
–
–
–
AUD
107,291
467,000
6,235,050
CAD
272,941
–
–
18,615,260
21,541,670
4,000,000
1,194,766
–
630,497
–
–
NZD
21
–
923,984
–
–
–
5,194,958
26,055,098
21,814,611
924,005
30 June 2018
Cash and cash equivalents
Loans to subsidiaries
Loans from subsidiaries
Loan from parent
Loan from third party
Trade and other payables
Net monetary assets
30 June 2017
Cash and cash equivalents
Loans to subsidiaries
Loans from subsidiaries
Loan from parent
Trade and other payables
Based on the financial assets and liabilities held, and exchange rates applying, at the reporting date, a weakening or
strengthening of the United States dollar against each of these currencies by 10% would have had the following approximate
effect on annualised income after tax and on net asset value (NAV) per share:
Strengthening of the United States Dollar
Increase/(decrease) in total comprehensive profit
for the year ended 30 June 2018
Decrease in total comprehensive loss for the year
ended 30 June 2017
Weakening of the United States Dollar
Increase/(decrease) in total comprehensive profit
for the year ended 30 June 2018
Increase in total comprehensive loss for the year
ended 30 June 2017
AUD
CAD
NZD
Total
(10,663,959)
77,871
62,549
(10,523,539)
(3,826,679)
(161,552)
(1,849,220)
(5,837,451)
10,663,959
(77,871)
(62,549)
10,523,539
3,826,679
161,552
1,849,220
5,837,451
These analyses are broadly representative of the company’s activities during the current year as a whole, although the level of
the company’s exposure to currencies fluctuates in accordance with the investment and risk management processes.
Interest rate exposure
The exposure of the financial assets and liabilities to interest rate risks at 30 June 2018 is shown below:
30 June 2018
Exposure to floating rates:
Cash
Loan from third party
Exposure to fixed rates:
Loan from subsidiaries
Loan from parent
30 June 2017
Exposure to floating rates:
Cash
Exposure to fixed rates:
Loan from subsidiaries
Loan from parent
Within
one year
US$
Greater than
one year
US$
Total
US$
287,172
(4,000,000)
–
–
287,172
(4,000,000)
–
–
(5,235,527)
(30,151,190)
(5,235,527)
(30,151,190)
15,828
–
15,828
–
–
(5,351,022)
(22,257,029)
(5,351,022)
(22,257,029)
USD
1,656
AUD
14,089
7,679,016
10,040,059
–
–
(4,613,964)
(22,257,029)
(164,815)
(81,739)
CAD
–
–
–
–
–
–
NZD
83
12,308,131
(737,058)
–
(75)
11,571,081
Exposures vary throughout the year as a consequence of changes in the make-up of the net assets of the company arising out of
the investment and risk management processes. The company tends to limit its cash reserves and interest earned is insignificant
and therefore not sensitive to interest rate changes. Borrowings are at a fixed rate and not sensitive to interest rate risk.
Other market risk exposures
The portfolio of investments, valued at US$161,187,270 at 30 June 2018 (30 June 2017: US$47,685,376) is exposed to market
price changes. The Investment Manager assesses these exposures at the time of making each investment decision. An analysis
of the portfolio by country is set out on note 24.
Price sensitivity risk analysis
A 10% decline in the market price of the listed investment held by the company would result in an unrealised loss of
US$16,118,727. A 10% appreciation in the market price would have the opposite effect.
Net monetary (liabilities)/assets
7,515,857
(16,898,584)
58
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Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS
(continued)
22. FINANCIAL RISK MANAGEMENT (continued)
22.2 Liquidity risk exposure
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meets its liabilities when due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the company’s reputation. The
Investment Manager reviews liquidity at the time of making each investment decision. The contractual maturities of the financial
liabilities, based on the earliest date on which payment can be required, were as follows:
30 June 2018
Loan from subsidiaries
Trade and other payables
Loans from parent
Loan from third party
30 June 2017
Loan from subsidiaries
Trade and other payables
Loans from parent
Twelve months
or less
US$
More than
a year
US$
–
5,235,527
1,674,024
–
–
30,151,190
4,000,000
5,674,024
–
35,386,717
–
260,421
–
260,421
5,351,022
–
22,257,029
27,608,051
Total
US$
5,235,527
1,674,024
30,151,190
4,000,000
41,060,741
5,351,022
260,421
22,257,029
27,868,472
22.3 Credit risk and counterparty exposure
The company is exposed to potential failure by counterparties to deliver securities for which the company has paid, or to pay for
securities which the company has delivered. To mitigate against credit and counterparty risk broker counterparties are selected
based on a combination of criteria, including credit rating, balance sheet strength and membership of a relevant regulatory body.
Cash and deposits are held with reputable banks. The company has an on-going contract with its Custodians for the provision of
custody services. The contracts are reviewed regularly. Details of securities held in custody on behalf of the company are received
and reconciled monthly.
Maximum exposure to credit risk
The company has loan assets totalling US$379,690 (2017: US$30,027,206) that is exposed to credit risk.
None of the company’s financial assets are past due, but the loan asset to Zeta Energy has been impaired as per note 6. The
company’s principal banker is Bermuda Commercial Bank (rated by Fitch as BBB-) and the company’s principal custodian is
JP Morgan Chase Bank (rated by Fitch as AA-). The subsidiary Kumarina holds a bank account with National Australia Bank (rated
by Fitch as AA-).
22.4 Fair values of financial assets and liabilities
The assets and liabilities of the company are, in the opinion of the directors, reflected in the statement of financial position at fair
value. Borrowings under loan facilities do not have a value materially different from their capital repayment amount. Borrowings
in foreign currencies are converted into United States dollars at exchanges rates ruling at each valuation date.
Unquoted investments are valued based on professional assumptions and advice that is not wholly supported by prices from
current market transactions or by observable market data.
Valuation of financial instruments
The table below analyses financial assets measured at fair value at the end of the year by the level in the fair value hierarchy into
which the fair value measurement is categorised:
Level 1
The fair values are measured using quoted prices in active markets.
Level 2
Level 3
The fair values are measured using inputs, other than quoted prices, that are included within level 1, that are
observable for the asset.
The fair values are measured using inputs for the asset or liability that are not based on observable market
data. The directors make use of recognised valuation techniques and may take account of recent arms’ length
transactions in the same or similar investments.
The directors regularly review the principles applied by the Investment Manager to those valuations to ensure they comply with
the company’s accounting policies and with fair value principles.
Level 3 financial instruments
Valuation methodology
The directors have satisfied themselves as to the methodology used, the discount rates and key assumptions applied, and the
valuation. The level 3 assets have each been assessed based on its industry, location and business cycle. Where sensible, the
directors have taken into account observable data and events to underpin the valuations.
The level 3 investments are split between (a) unlisted companies and (b) investments and loans in subsidiaries.
(a) Unlisted companies
Seacrest L.P. (“Seacrest”) - Bermuda incorporated
Valuation inputs: The unlisted investment comprises an equity interest in Seacrest. The company’s sole asset is its holding in
Azimuth Limited (“Azimuth”), a joint venture between Seacrest and PGS (the listed Norwegian seismic data service company).
Azimuth owns a number of operating subsidiaries.
The valuation of Azimuth is based on fair value GAAP accounting. Using the General Partner’s valuation of the Seacrest
portfolio a discount is applied to each Azimuth subsidiary. The extent of the discount depends on whether the assets are
in a mature or frontier basin. In addition, following the fall in the oil price a further discount was applied thereby calculating
a fair value for Azimuth. On this basis Azimuth was valued as at 30 June 2017 at US$63.62 million. The director’s deem this
valuation method to be appropriate.
Valuation methodology: Zeta Resources has used a fair value valuation of Seacrest of US$0.33 per share based on the value
of Azimuth, described above. At year end the fair value of the investment was US$5,727,339.
Sensitivities: Given Azimuth is an exploration company its risks are significant in both directions. Should commercially
recoverable oil not be discovered then the value will fall to nil. Should substantial commercially recoverable oil be discovered
the valuation uplifts are significant.
Margosa Graphite Limited (“Margosa”) - Australia incorporated
Valuation inputs: The unlisted investment comprises an equity interest in Margosa, a mineral exploration and development
company focused on high grade graphite vein opportunities in Sri Lanka with rights to a package of highly prospective
tenements. Margosa is an early stage exploration company with drilling commenced on positive geophysical targets at the
end of the period.
Valuation methodology: Based on Margosa being an early stage exploration company with no explorations results, the
directors view the fair value of the company currently to be the cost of the investment made of A$0.20 per share. At year
end the fair value of the investment was US$2,062,847.
Sensitivities: Given Margosa is an exploration company its risks are significant in both directions dependant on the grade of
the graphite veins to be brought into operation. Should substantial premium vein graphite be discovered and successfully
brought into operation, the valuation uplifts are significant.
60
61
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018
NOTES TO THE FINANCIAL STATEMENTS
(continued)
22. FINANCIAL RISK MANAGEMENT (continued)
22.4 Fair values of financial assets and liabilities (continued)
Alliance Mining Commodities Limited (“AMC”) - Australia incorporated
Valuation inputs: The unlisted investment comprises an equity interest in a privately-owned company that has been granted
a mining concession for the development of the Koumbia Bauxite Project in the Republic of Guinea. The simple, low cost,
long life development will initially produce 5.5Mwtpa as a standalone project. Due to the size of the current mineral resource
base there is strong potential to expand the operation significantly during the early years to a capacity well in excess of the
initial targeted production.
Valuation methodology: AMC is a private company in the process of raising funds for the development of its bauxite mining
project. As such, the directors have chosen to use the latest information provided by AMC regarding current equity capital
raisings, as the most appropriate valuation method for Zeta Resources holding. At year end the fair value of the investment
was US$17,843,064.
Sensitivities: The company has a world class bauxite project with initial production capacity of 10Mtpa. Production is
expected to ramp up in 2019 with scope for further expansion over the following five years.
(b)
Investments and loans in subsidiaries
Zeta Energy - Singapore incorporated
Valuation inputs: The key asset is the investment loan to Zeta Energy which was utilised for the purchase of listed investments,
and which was impaired, through profit and loss, to the fair value of the company as determined by the directors based on
the valuation of the investments held by Zeta Energy as at 30 June 2018.
Valuation methodology: Zeta Resources has used a fair value valuation of investments held by Zeta Energy on its investments
by which to impair the loan value in the accounts as at 30 June 2018. At year end the fair value of the loan was US$27,010.
Sensitivities: Given Zeta Energy’s assets comprise listed investments its risks are significant in both directions. Increases in
share prices will increase the value of the loan and decreases in share prices will further decrease the value of the loan.
Kumarina Resources Pty Limited
This comprises the privately-owned 100% equity interest in a mineral exploration company with two highly prospective
copper/gold projects located in Western Australia. The company is in the process of doing further research and exploration
around the development of its Ilgarari Copper Project and its Murrin Murrin Gold Project. As this is still early stage
exploration with no quantifiable results as yet, the directors view the fair value of the company currently to be its cost value
as there have been no significant changes to the entity and its prospects. At year end the fair value of the investment was
US$3,063,498.
Other investments
Zeta Resources has further investments at fair value totalling US$78,505 (2017: US$3.2million). During the year the company
acquired the 100% shareholding in Axelrock Limited, Pan Pacific Petroleum Pty Limited, Pan Pacific Petroleum JPDA Pty
Limited and Pan Pacific Petroleum Vietnam Pty Limited. The directors are of the view that as these subsidiaries currently
hold no assets, the fair value of the companies is nominal.
30 June 2018
Financial assets
Investments
Investment in subsidiaries
Loan to subsidiary
Level 1
US$
Level 2
US$
Level 3
US$
135,475,520
–
–
–
–
–
25,711,750
3,063,504
379,690
There have been no movements between the level 1 and level 3 categories.
The following table shows a reconciliation from opening balances to closing balances for fair value measurements in level 3
investments of the fair value hierarchy:
Balance at 1 July 2017
Acquisitions at cost
Disposals during the year
Total gains/(losses) recognised in:
Fair value through profit or loss
Balance at 30 June 2018
30 June 2017
Financial assets
Investments
Investment in subsidiaries
Loan to subsidiary
Level 3
investments
US$
408,583
33,045,767
–
(7,742,600)
25,711,750
Level 1
US$
47,276,793
–
–
Level 3
investments
in subsidiary
US$
3,181,102
4
–
(117,602)
3,063,504
Level 2
US$
–
–
–
Level 3
loan to
subsidiary
US$
30,027,206
1,013,278
(44,417,518)
13,756,724
379,690
Level 3
US$
408,583
3,181,102
30,027,206
The following table shows a reconciliation from opening balances to closing balances for fair value measurements in level 3
investments of the fair value hierarchy:
Balance at 1 July 2016
Acquisitions at cost
Disposals during the year
Total gains recognised in:
Fair value through profit or loss
Balance at 30 June 2017
Level 3
investments
US$
9,036,636
332,920
(11,200,000)
Level 3
investments
in subsidiary
US$
3,086,091
–
–
2,239,027
408,583
95,011
3,181,102
Level 3
loan to
subsidiary
US$
29,803,322
11,200,000
(12,137,850)
1,161,734
30,027,206
62
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Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS
(continued)
22. FINANCIAL RISK MANAGEMENT (continued)
22.5 Capital risk management
The objective of the company is stated as being to maximise shareholder returns by identifying and investing in investments
where the underlying value is not reflected in the market price. In pursuing this long term objective, the board has a responsibility
for ensuring the company’s ability to continue as a going concern. It must therefore maintain an optimal capital structure through
varying market conditions. This involves the ability to issue and buy back share capital within limits set by the shareholders in
general meeting; borrow monies in the short and long term; and pay dividends to shareholders out of current year earnings as
well as out of brought forward reserves.
23. RELATED PARTIES
23.1 Material related parties
Holding company
The company’s holding company is UIL which held 59.7% of the company’s issued share capital on 30 June 2018. UIL is in turn
held 62.6% by General Provincial Life Pension Fund Limited.
Subsidiary companies
The company’s subsidiaries are Kumarina, Zeta Energy, Axelrock, PPP, PPP Vietnam, PPP JPDA and Zeta Investments, all 100%
held subsidiaries.
Key management personnel
Key management personnel and their close family members and entities which they control, jointly or over which they exercise
significant influence are considered related parties of the company. The company’s directors, as listed in the director’s report
are considered to be key management personnel of the company.
Investment Manager
ICM Limited is an Investment Manager of the company, its subsidiaries and UIL.
23.2 Material related parties transactions
Nature of transactions
Investments in related parties:
Kumarina
Zeta Investments
Zeta Energy
Pan Pacific Petroleum
Axelrock
PPP Vietnam
PPP JPDA
Loans to related parties:
Kumarina
Zeta Energy
Loans from related parties:
UIL Limited
Zeta Energy
June 2018
US$
June 2017
US$
3,063,498
3,181,100
1
1
1
1
1
1
1
1
–
–
–
–
352,680
27,010
291,747
29,735,459
30,151,190
5,235,527
22,257,029
5,351,022
Trade and other payables:
ICM Limited
Directors
Interest charged by the subsidiaries
Interest charged by the parent company
Fees paid to the Investment Manager
Fees paid to the directors:
X Xi
M Botha
P Sullivan
24. SEGMENTAL REPORTING
June 2018
US$
June 2017
US$
459,890
37,500
295,428
1,808,717
652,993
150,000
50,000
50,000
50,000
162,057
37,500
380,552
2,246,555
481,772
150,000
50,000
50,000
50,000
The company has four reportable segments, as described below, which are considered to be the company’s strategic investment
areas. For each investment area, the company’s chief operating decision maker (“CODM”) (ICM Limited – investment manager)
reviews internal management reports on at least a monthly basis. The following summary describes each of the company’s
reportable segments:
Gold: investments in companies which explore or mine for gold
Nickel: investments in companies which explore or mine for nickel
Mineral exploration: investments in companies which explore or mine for copper and other minerals
Other segments: activities which do not fit into one of the above segments
Information regarding the results of each reportable segment is included below. Performance is measured based on segment
profit before tax, as included in the internal management reports that are reviewed by the company’s CODM. Segment
profit is used to measure performance as management believes that such information is the most relevant in evaluating the
performance of certain segments relative to other entities that operate within these industries.
Information about reportable segments
30 June 2018
External revenues
Gold
US$
Nickel
US$
Mineral
exploration
US$
Other
segments
US$
767,222
36,020,009
(1,200,977)
Reportable segment revenue
767,222
36,020,009
(1,200,977)
Interest revenue
Interest expense
Reportable segment profit/(loss)
before tax
–
–
–
–
–
–
766,606
36,023,701
(2,129,260)
(3,445,218)
31,215,839
Reportable segment assets
30,716,732
85,181,389
48,732,343
287,172
164,917,636
Reportable segment liabilities
–
–
–
(41,060,741)
(41,060,741)
Total
US$
35,581,956
35,581,956
102
(4,298)
(4,298)
102
(2,179,015)
(2,179,015)
64
65
Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018 NOTES TO THE FINANCIAL STATEMENTS
(continued)
24. SEGMENTAL REPORTING (continued)
Geographic information
Reportable segment revenue
3,354,866
3,560,753
7,337,443
30 June 2017
External revenues
Interest revenue
Interest expense
Reportable segment profit/(loss)
before tax
Gold
US$
OIl & Gas
US$
Mineral
exploration
US$
Other
segments
US$
3,354,866
3,560,753
7,337,443
Total
US$
14,246,441
14,246,441
14
(6,621)
(6,621)
14
(2,627,116)
(2,627,116)
–
–
–
–
–
–
3,396,270
3,560,753
7,337,443
(4,016,560)
10,277,906
Reportable segment assets
26,371,713
30,392,342
24,129,627
15,830
80,909,512
Reportable segment liabilities
–
–
–
(27,868,472)
(27,868,472)
During the year there were no transactions between segments which resulted in income or expenditure.
Reconciliations of reportable segment revenues, profit or loss, assets
and liabilities, and other material items
Revenues
Total revenue for reportable segments
Revenue for other segments
Revenue
Profit or loss
Total profit for reportable segments
Loss for other segments
Profit before tax
Assets
Total assets for reportable segments
Assets for other segments
Total assets
Liabilities
Total liabilities for reportable segments
Liabilities for other segments
Total liabilities
June 2018
US$
June 2017
US$
35,586,254
14,253,062
(4,298)
(6,621)
35,581,956
14,246,441
34,661,057
(3,442,218)
31,215,839
14,294,466
(4,016,560)
10,277,906
164,630,464
80,893,682
287,172
15,830
164,917,636
80,909,512
–
(41,060,741)
(41,060,741)
–
(27,868,472)
(27,868,472)
In presenting information on the basis of geography, segment revenue and segment assets are based on the geographical
location of the operating assets of the investment held by the company.
Revenue
Australia
Canada
Guinea
Mali
Namibia
Norway
Singapore
United Kingdom
Other Countries
Revenue
Assets
Australia
Canada
Guinea
Mali
Norway
Singapore
Other Countries
Assets
June 2018
US$
33,763,689
(1,197,462)
257,915
636,752
(1,511,710)
(3,693,688)
12,611,090
(1,639,132)
(3,641,200)
35,586,254
June 2018
US$
June 2017
US$
8,274,800
–
–
2,341,802
846,520
911,400
1,161,734
303,800
413,006
14,253,062
June 2017
US$
109,623,707
37,282,206
15,011,839
17,843,064
13,466,126
2,657,485
27,010
6,001,233
164,630,464
–
–
13,102,297
–
29,735,459
773,720
80,893,682
25. EVENTS AFTER THE REPORTING DATE
25.1 Alliance Mining Commodities Limited
Zeta Resources Limited has subscribed to a further issue of shares in AMC to take up 1,883,668 shares for a consideration of
US$2,542,951. The share issue notice was given on 6 July 2018. Zeta currently holds 26.7% of AMC.
66
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Zeta Resources LimitedAnnual Report for the year to 30 June 2018Zeta Resources LimitedAnnual Report for the year to 30 June 2018
COMPANY INFORMATION
Zeta Resources Limited
Company ARBN: 162 902 481
www.zetaresources.limited
DIRECTORS (NON-EXECUTIVE)
Peter Sullivan (Chairman)
Marthinus (Martin) Botha
Xi Xi
REGISTERED OFFICE
34 Bermudiana Road
Hamilton HM 11
Bermuda
Company Registration Number: 46795
AUSTRALIAN REGISTERED OFFICE
Level 2
220 George Street
Sydney NSW 2000
Australia
NEW ZEALAND OFFICE
ICM NZ Limited
PO Box 25437
Featherston Street
Wellington 6146
New Zealand
Telephone: +64 4 901 7600
Email: contact@icmnz.co.nz
INVESTMENT MANAGER
ICM Limited
34 Bermudiana Road
Hamilton HM 11
Bermuda
SECRETARY
ICM Limited
34 Bermudiana Road
PO Box HM 1748
Hamilton HM GX
Bermuda
Telephone: +1 441 299 2894
68
GENERAL ADMINISTRATION
ICM Corporate Services (Pty) Ltd
1 Knutsford Road
Wynberg 7800
Cape Town
South Africa
AUDITOR
KPMG Inc
MSC House
1 Mediterranean Street, Foreshore
8001, Cape Town
South Africa
DEPOSITORY
JP Morgan Chase Bank NA
London Branch
25 Bank Street
Canary Wharf
London E14 5JP
United Kingdom
REGISTRAR
Security Transfer Australia Pty Ltd
770 Canning Highway
Applecross WA 6153
Australia
Telephone: +61 8 9315 2333
STOCK EXCHANGE LISTING
The company’s shares are quoted on the Official List of
the Australian Securities Exchange. Ticker code: ZER
Zeta Resources LimitedAnnual Report for the year to 30 June 2018 www.zetaresources.limited
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