ABN 53 090 772 222 Financial Report for the half-year ended 31 December
CORPORATE DIRECTORY Directors Mr Asimwe Kabunga (Non-Executive Chairman) Mr Matthew Bull (Non-Executive Director) Mr Steve Formica (Non-Executive Director) Company Secretary Mr Geoff James Registered Office Level 5 216 St Georges Terrace Perth WA 6000 Telephone: +61 8 9486 7799 Website: www.lindianresources.com.au Share Registry Automic Registry Services Level 2, 267 St Georges Terrace Perth WA 6000 Telephone: + 61 8 9324 2099 Facsimile: + 61 8 9321 2337 Auditors HLB Mann Judd Level 4, 130 Stirling Street Perth WA 6000 Stock Exchange Australian Securities Exchange (Home Exchange: Perth, Western Australia) ASX Code: LIN
Contents Page Directors Report 1 Auditor s Independence Declaration 6 Condensed Consolidated Statement of Comprehensive Income 7 Condensed Consolidated Statement of Financial Position 8 Condensed Consolidated Statement of Changes in Equity 9 Condensed Consolidated Statement of Cash Flows 10 Notes to the Condensed Consolidated Financial Statements 11 Directors Declaration 19 Independent Auditor s Review Report 20
DIRECTORS REPORT The Directors of ( Lindian ) submit the financial report of the Group for the half-year ended 31 December. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows: Directors The names of Directors who held office during or since the end of the half-year and until the date of this report are as below. Directors were in office for the entire period unless otherwise stated. Mr Asimwe Kabunga Mr Matthew Bull Mr Steve Formica Non-Executive Chairman Non-Executive Director Non-Executive Director Results The loss after tax for the half-year ended 31 December was 326,944 (31 December 2017: 2,126,768). Review of Operations Lushoto Bauxite Project Tanzania During the half-year, the Tanzanian Mining Commission released new mining regulations covering matters including local content and a pledge of integrity. The Group prepared the required local content forms and pledge of integrity and submitted these to the Mining Commission. Following the submission of these documents, the Group was granted 3 of the tenements covering the Magamba prospect. Following the grant of the tenements, Lindian commenced exploration focussing on defining high grade outcropping mineralisation close to rail and road infrastructure. Activities included auger drilling, mapping and rock chip sampling. The results from these work programs were released to the ASX on 5 March 2019. The Lushoto Bauxite deposit was formed by deep weathering of metamorphic rocks of the Mozambique Belt that are exposed in Eastern Tanzania. The mineralisation is situated on plateaus within the Usambara Mountains that have been preserved from a time when mineralisation was more extensive in the area. Assay results to date show excellent levels of available alumina and very low levels reactive silica and other deleterious elements including Iron, Silica, Titanium. The presence of the Lushoto bauxite deposits was the subject of a University of Dar es Salaam report in 2003 which confirmed bauxite mineralisation of between 40-60% Al2O3 based on historical drilling data and surface geological mapping. The results of the recent sampling program undertaken were in line with the conclusions of the 2003 report and will greatly assist Lindian in obtaining a maiden JORC resource scheduled for the first half of 2019. 1
Figure 1: Location of Lushoto Project showing the location of road, rail and port infrastructure. Figure 2: Granted tenements for the Lushoto Project in relation to known bauxite deposits. 2
Kangankunde Rare Earths Project Malawi On 6 August, Lindian announced it had entered into an exclusive option agreement ( Agreement ) with Rift Valley Resource Developments Ltd ( RVR ) and Michael Saner ( Saner ) to acquire up to 75% in the Kangankunde Rare Earths Project ( Project ) in Malawi. Kangankunde has been reported as one of the world s largest Rare Earth Projects outside of China. It is a carbonatite complex which rises up to 200m above the surrounding plain with an area size of 1.7km by 1.4km. The material terms of the option agreement were as follows: a) Payment to RVR (or its nominee) of US 100,000 for a 120 day exclusive due diligence period, extendable by agreement between the parties. Payment was made in accordance with the Agreement. b) Subject to satisfaction of certain conditions precedent, Lindian has the right to acquire an initial 30% shareholding interest in RVR (Stage 1 Interest) by way of the following payments: US 500,000 to be used by RVR pursuant to a 6-12 month exploration and development work program on the Project in accordance with an agreed work program, budget and management plan; and US 500,000 payment to Mr. Saner. c) After completion of Lindian obtaining the Stage 1 30% Interest, Lindian will have an exclusive 12 month option (from the date it makes the payments for the Stage 1 Interest) to acquire an additional 45% shareholding interest in RVR by way of the following payments: US 2,500,000 to be used by RVR pursuant to a 12 18 month exploration and development work program on the Project in accordance with an agreed work program, budget and management plan; and US 2,500,000 cash payment to Mr. Saner or the issue of US 2,500,000 of fully paid ordinary shares in the capital of the Company based on a deemed issue price per Share equal to the 10- day VWAP prior to the Company electing to proceed with the acquisition of the Stage 2 Interest. d) Upon completion of the acquisition of the Stage 2 Interest, Lindian (as 75% interest holder) will fund 100% of the Project. e) The 25% residual interest in RVR held by Saner would be finance carried (and non-dilutive) at all times. f) In the event of any application of Malawi law and the requirement for a government interest in the Project, both parties would dilute pro rata. g) Material conditions precedent include payment of the US100,000 exclusivity fee (which has been paid), completion by Lindian to its satisfaction (in its sole discretion) of all necessary due diligence investigations in respect of RVR and the Project and Lindian obtaining shareholder approval for the transaction. During the exclusivity period, Lindian and its advisors in Malawi assisted with the execution of a consent order between the Malawi Ministry of Natural Resources and Environmental Affairs and Saner ( Consent Order ). The Consent Order settled all matters between the parties and, more importantly, provided for the issuing of a new EPL (25km2) over all the ground that comprises the Kangankunde Rare Earths Project. The EPL was issued in accordance with current Malawi regulations and is for an initial period of 3 years renewable twice for periods of 2 years each. The Consent Order also provided for the Malawi Ministry of Natural Resources and Environmental Affairs to support the conversion of the EPL into a Mining License (in accordance with the application of all valid regulations) as well as assistance with any financing parties introduced to develop the Project. 3
Following the Consent Order being granted and the relevant EPL being issued to RVR, Saner and RVR wrote to Lindian purporting to unilaterally cancel the Agreement on the basis of what were said to be changed circumstances in Malawi that had arisen following the execution of the Agreement that made the Agreement unenforceable. Lindian immediately sought a trading halt, which led subsequently to the suspension of its securities. Lindian did not accept that Saner or RVR had any grounds on which to refuse to perform the Agreement and commenced legal proceedings in the High Court of Malawi obtaining an injunction to prevent RVR or Saner from dealing with the Project or shares in RVR (Injunction). All relevant parties are currently in negotiations to attempt to settle the matter on the basis that Lindian will proceed with the Transaction on revised terms. Lindian is hopeful that the matter will be settled with a mutually agreed path forward. Whilst an agreed settlement position to proceed with the Agreement is Lindian s clear preference, Lindian is extremely confident of its legal position and will ensure that its contractual position is protected in all relevant jurisdictions in the event that a settlement cannot be reached. Figure 3: Location of Kangankunde Project showing the location of rail and port infrastructure. Competent Person Statement The information in this report that relates to exploration results is based on information compiled or reviewed by Mr Matt Bull, who is a director of. Mr Bull is a member of the Australian Institute of Geoscientists and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Bull consents to the inclusion in this report of the matters based on information in the form and context in which it appears. 4
Corporate On 6 August, Lindian announced details of a 1,500,000 capital raising. The capital raising was completed on 5 October with the issue of 100,000,000 fully paid ordinary shares @ 0.015 per share with 100,000,000 free attaching options exercisable at 0.02 on or before 31 December 2020. On 19 October, Lindian announced the change in Company Secretary to Geoff James. Subsequent Events Other than noted elsewhere in this report, no matter or circumstance has arisen since 31 December, which has significantly affected, or may significantly affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent financial years. Auditor s Independence Declaration Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the company with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on page 6 and forms part of this Directors Report for the half-year ended 31 December. This report is signed in accordance with a resolution of the Board of Directors. Asimwe Kabunga Non-Executive Chairman Perth, Western Australia 15 March 2019 5
AUDITOR S INDEPENDENCE DECLARATION As lead auditor for the review of the consolidated financial report of for the half-year ended 31 December, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and b) any applicable code of professional conduct in relation to the review. Perth, Western Australia 15 March 2019 D I Buckley Partner 6
Condensed Consolidated Statement of Comprehensive Income for the half-year ended 31 December Revenue Note 31 December 31 December 2017 Interest income 578 809 Directors fees (90,000) (140,000) Depreciation expense (4,876) (1,447) Impairment of exploration and evaluation assets - (1,653,097) Exploration and evaluation expenses - (160,166) Finance costs (314) - Other expenses (232,332) (172,867) Loss from continuing operations before income tax (326,944) (2,126,768) Income tax expense - - Loss from continuing operations after income tax (326,944) (2,126,768) Other comprehensive income - - Total comprehensive loss for the half-year (326,944) (2,126,768) Loss per share attributable to owners of Lindian Resources Limited Basic and diluted loss per share (cents per share) (0.10) (0.78) The accompanying notes form part of these financial statements. 7
Condensed Consolidated Statement of Financial Position as at 31 December Assets Current Assets Note 31 December 30 June Cash and cash equivalents 173,802 4,429 Trade and other receivables 3 159,109 9,240 Total Current Assets 332,911 13,669 Non-Current Assets Property, plant and equipment 43,223 48,099 Deferred exploration and evaluation expenditure 4 678,816 - Total Non-Current Assets 722,039 48,099 Total Assets 1,054,950 61,768 Current Liabilities Trade and other payables 104,814 244,022 Borrowings 5-357,500 Total Current Liabilities 104,814 601,522 Total Liabilities 104,814 601,522 Net Assets/(Liabilities) 950,136 (539,754) Equity Issued capital 6 28,926,329 27,492,524 Reserves 9,351,433 8,968,404 Accumulated losses (37,327,626) (37,000,682) Total Equity/(Deficiency) 950,136 (539,754) The accompanying notes form part of these financial statements. 8
Condensed Consolidated Statement of Changes in Equity for the half-year ended 31 December Issued Capital Accumulated Losses Option Reserves Share-Based Payment Reserves Total Balance at 1 July 2017 27,492,524 (34,379,106) 4,106,626 4,861,778 2,081,822 Loss for the half-year - (2,126,768) - - (2,126,768) Other comprehensive income - - - - - Total comprehensive loss for the half-year - (2,126,768) - - (2,126,768) Balance at 31 December 2017 27,492,524 (36,505,874) 4,106,626 4,861,778 (44,946) Balance at 1 July 27,492,524 (37,000,682) 4,106,626 4,861,778 (539,754) Loss for the half-year - (326,944) - - (326,944) Other comprehensive income - - - - - Total comprehensive loss for the half-year - (326,944) - - (326,944) Transactions with owners in their capacity as owners Options issued - - - 383,029 383,029 Shares issued 1,690,000 - - - 1,690,000 Cost of share issue (256,195) - - - (256,195) Balance at 31 December 28,926,329 (37,327,626) 4,106,626 5,244,807 950,136 The accompanying notes form part of these financial statements. 9
Condensed Consolidated Statement of Cash Flows for the half-year ended 31 December Cash flows from operating activities 31 December 31 December 2017 Payments to suppliers and employees (404,574) (412,753) Interest received 578 809 Interest paid (34,914) Net cash used in operating activities (438,910) (411,944) Cash flows from investing activities Payments for exploration expenditure (472,133) (131,703) Payments for plant & equipment - (55,000) Net cash used in investing activities (472,133) (186,703) Cash flows from financing activities Proceeds from issue of shares 1,500,000 - Share issue costs (94,584) - Proceeds from borrowings 24,139 - Repayment of borrowings (349,139) - Net cash provided by financing activities 1,080,416 - Net increase/(decrease) in cash and cash equivalents 169,373 (598,647) Cash and cash equivalents at beginning of period 4,429 617,081 Cash and cash equivalents at the end of the period 173,802 18,434 The accompanying notes form part of these financial statements. 10
Notes to the Financial Statements for the half-year ended 31 December NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Statement of Compliance The consolidated financial report of and its controlled entities (the Group) for the half-year ended 31 December was authorised for issue in accordance with a resolution of the Directors on 15 March 2019. The half-year consolidated financial statements comply with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the half-year financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS). is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. Basis of Preparation These general purpose financial statements for the half-year reporting period ended 31 December have been prepared in accordance with Australian Accounting Standard 134: Interim Financial Reporting and the Corporations Act 2001. Compliance with AASB 134 ensures compliance with IAS 34 Interim Financial Reporting. These half-year financial statements do not include all the notes of the type normally included in annual financial statements and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Group as the full financial statements. Accordingly, these half-year financial statements are to be read in conjunction with the annual financial statements for the year ended 30 June and any public announcements made by Lindian Resources Limited during the half-year reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules. The half-year report has been prepared on an accruals basis and is based on historical costs. Cost is based on the fair value of the consideration given in exchange for assets. For the purpose to preparing the half-year financial report, the half-year has been treated as a discrete reporting period. The accounting policies and methods of computation are the same as those adopted in the most recent annual financial statements. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards. Standards and Interpretations applicable to 31 December In the half-year ended 31 December, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Group and effective for the half-year reporting periods beginning on or after 1 July. 11
Notes to the Financial Statements for the half-year ended 31 December NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Group and therefore no material change is necessary to Group accounting policies. Standards and Interpretations in issue not yet adopted The Directors have also reviewed all of the new and revised Standards and interpretations in issue not yet adopted that are relevant to the Group and effective for the half-year reporting periods beginning on or after 1 January 2019. As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards and Interpretations in issue not yet adopted on the Group and therefore no material change is necessary to Group accounting policies. Significant accounting judgments and key estimates The preparation of half-year financial report requires management to make judgments, 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. In preparing this half-year financial report, the significant judgments made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated annual financial report for the year ended 30 June. Going Concern This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business. The Group incurred a net loss after tax for the half-year ended 31 December of 326,944 and experienced net cash outflows from operating activities of 438,910. At 31 December, the cash and cash equivalents balance was 173,802. The Company s listed securities are currently the subject of a voluntary suspension from trading with ASX due to the legal dispute over the Group s option to earn a 75% interest in the Kangankunde Rare Earths Project in Malawi. The ability of the Group to continue as a going concern is principally dependent upon the ability of the Company to secure funds by raising capital from equity markets and managing cashflows in line with available funds. Based on the Company s history of successfully raising capital to date, the directors are satisfied that the going concern basis of preparation is appropriate. The Directors are confident of the Company s ability to raise additional funds as and when they are required. 12
Notes to the Financial Statements for the half-year ended 31 December However, if the Group is not successful in securing sufficient funds, there is a material uncertainty that may cast significant doubt whether the Group will continue as a going concern and therefore whether the Group will be able to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not contain any adjustments relating to the recoverability and classification of recorded assets or to the amounts or classification of recorded assets or liabilities that might be necessary should the Group not be able to continue as a going concern. NOTE 2: SEGMENT REPORTING AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker in order to allocate resources to the segment and to assess its performance. For management purposes, the Group is organised into one main operating segment, being exploration of mineral projects and in three geographical areas, being Tanzania (gold and bauxite minerals), Malawi (rare earths minerals) and Australia (corporate office). SEGMENT PERFORMANCE 31 DECEMBER TANZANIA MALAWI AUSTRALIA TOTAL Revenue Corporate interest revenue - - 578 578 Total segment revenue - - 578 578 Expenditure Depreciation expense 4,876 - - 4,876 Impairment of exploration and evaluation assets - - - - Finance costs - - 314 314 Other expenses - - 322,332 322,332 Total segment expenditure 4,876-322,646 327,522 Loss from continuing operations before income tax (4,876) - (322,068) (326,944) SEGMENT ASSETS 31 DECEMBER Segment operating assets 186,364 535,675 332,911 1,054,950 Total segment assets 186,364 535,675 332,911 1,054,950 SEGMENT LIABILITIES 31 DECEMBER Segment operating liabilities - - 104,814 104,814 Total segment liabilities - - 104,814 104,814 13
Notes to the Financial Statements for the half-year ended 31 December NOTE 2: SEGMENT REPORTING (Continued) SEGMENT PERFORMANCE 31 DECEMBER 2017 TANZANIA MALAWI AUSTRALIA TOTAL Revenue Corporate interest revenue - - 809 809 Total segment revenue - - 809 809 Expenditure Depreciation expense 1,447 - - 1,447 Impairment of exploration and evaluation assets 1,653,097 - - 1,653,097 Exploration and evaluation expenses 160,166 - - 160,166 Other expenses - - 312,867 312,867 Total segment expenditure 1,814,710-312,867 2,127,577 Loss from continuing operations before income tax (1,814,710) - (312,058) (2,126,768) SEGMENT ASSETS 30 JUNE Segment operating assets 48,099-13,669 61,768 Total segment assets 48,099-13,669 61,768 SEGMENT LIABILITIES 30 JUNE Segment operating liabilities 84,625-516,897 601,522 Total segment liabilities 84,625-516,897 601,522 NOTE 3: TRADE AND OTHER RECEIVABLES Consolidated 31 December 30 June GST receivable 34,382 3,419 Other receivable - 5,821 Prepayments 124,727-159,109 9,240 NOTE 4: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE Consolidated Exploration and evaluation phase: Six months to 31 December Year to 30 June At beginning of the period - 2,164,251 Exploration expenditure during the period 678,816 131,703 Impairment expense (i) - (2,295,954) Total deferred exploration and evaluation expenditure 678,816-14
Notes to the Financial Statements for the half-year ended 31 December NOTE 4: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE (Continued) The deferred exploration and evaluation expenditure consists of expenditure on the Group s Lushoto Bauxite Project in Tanzania and the Kangankunde Rare Earths Project in Malawi. The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of respective areas. (i) The impairment expense in the year ended 30 June related to the group s gold assets in Tanzania as disclosed in the 30 June annual report. NOTE 5: BORROWINGS Consolidated Six months to 31 December Year to 30 June At beginning of period 357,500 - Drawdown of loan facility 24,139 325,000 Finance charges 2,414 32,500 Repayment of borrowings (384,053) - At end of period - 357,500 NOTE 6: ISSUED CAPITAL (a) Issued capital Consolidated 31 December 30 June Ordinary shares fully paid 28,926,329 27,492,524 Six Months to Year to 30 June 31 December Number of shares Number of shares (b) Movements in shares on issue At beginning of period 267,812,123 27,492,524 267,812,123 27,492,524 Shares issued placement 100,000,000 1,500,000 - - Shares issued part consideration for introduction of the Kangankunde Rare Earths Project 6,666,667 113,333 - - Shares issued corporate advisor 3,333,334 76,667 - - Less fundraising costs - (256,195) - - At end of period 377,812,124 28,926,329 267,812,123 27,492,524 15
Notes to the Financial Statements for the half-year ended 31 December NOTE 6: ISSUED CAPITAL (Continued) (c) Share options At 31 December, there were 215,000,001 unissued ordinary shares under options (30 June : 100,284,027 options). The details of the unlisted options are as follows: Number Exercise Price Expiry Date 50,000,000 0.03 7 June 2019 165,000,001 0.02 31 December 2020 The movement in options during the half-year ended 31 December is set out below. No ordinary shares were issued on the exercise of options during the period. Number of options Movements in options on issue At beginning of period 100,284,027 Options expired (10,284,027) Options issued free attaching options for placement 100,000,000 Options issued capital raising fee 10,000,000 Options issued part consideration for introduction of the Kangankunde Rare Earths Project 6,666,667 Options issued corporate advisor services 3,333,334 Options issued consideration for consultancy fee 5,000,000 At end of period 215,000,001 NOTE 7: SHARE BASED PAYMENTS (a) Recognised share based payment transactions Share based payment transactions recognised either as operating expenses in the statement of comprehensive income, capital raising expenses in equity or exploration expenditure on the statement of financial position as follows: Consolidated Six months to 31 December Year to 30 June Operating expenses Other Expenses corporate advisor services 1,2 130,538 - Exploration expenditure Part consideration for introduction of the Kangankunde Rare Earths Project 3,4 221,075 - Consideration for consultancy fee 5 59,804-280,879 - Equity Issued capital 2,3 190,000 - Share issue expenses 6 (161,612) - Share-based payments reserve 1,4,5,6 383,029-411,417-16
Notes to the Financial Statements for the half-year ended 31 December NOTE 7: SHARE BASED PAYMENTS (Continued) 1 On 5 October, the Group issued 3,333,334 unlisted options exercisable at 0.02 on or before 31 December 2020 pursuant to a corporate advisor mandate (a) 2 On 5 October, the Group issued 3,333,334 fully paid ordinary shares pursuant to a corporate advisor mandate. The shares were valued using the closing share price on the last trading day prior to the issue date of 0.023 per share. 3 On 14 August, the Group issued 6,666,667 fully paid ordinary shares as part consideration for the introduction of the Kangankunde Rare Earths Project. The shares were valued using the closing share price on the issue date of 0.017 per share. 4 On 5 October, the Group issued 6,666,667 unlisted options exercisable at 0.02 on or before 31 December 2020 as part consideration for the introduction of the Kangankunde Rare Earths Project (a) 5 On 23 October, the Group issued 5,000,000 unlisted options exercisable at 0.02 on or before 31 December 2020 pursuant to a consultancy agreement (b) 6 On 5 October, the Group issued 10,000,000 unlisted options exercisable at 0.02 on or before 31 December 2020 pursuant to a capital raising mandate (a) Fair value of options issued during the period: (a) (b) The options were deemed to have a fair value of 0.0162 per option. This value was calculated using the Black-Scholes option pricing model applying the following inputs: Share price 0.023 Exercise price 0.020 Expected volatility 131.09% Risk-free interest rate 1.98% Annualised time to expiry 2.24 The options were deemed to have a fair value of 0.0120 per option. This value was calculated using the Black-Scholes option pricing model applying the following inputs: Share price 0.018 Exercise price 0.020 Expected volatility 132.93% Risk-free interest rate 2.01% Annualised time to expiry 2.19 NOTE 8: FINANCIAL INSTRUMENTS The methods and valuation techniques used for the purpose of measuring fair values are unchanged compared to previous reporting period. The Directors consider that the carrying value of the financial assets and liabilities as recognised in the consolidated financial statements approximate their fair values. NOTE 9: DIVIDENDS No dividends have been paid or provided for during the half-year (2017: nil). NOTE 10: CONTINGENT LIABILITIES There has been no change in contingent liabilities or contingent assets since the last annual reporting date. 17
Notes to the Financial Statements for the half-year ended 31 December NOTE 11: SUBSEQUENT EVENTS There have been no significant events subsequent to the half-year end and up to the date of this report, that require disclosure. 18
DIRECTORS DECLARATION In the opinion of the Directors of ( the company ): 1. The accompanying half-year financial statements and notes of the Group, as set out on pages 7 to 18, are in accordance with the Corporations Act 2001 including: a. complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and b. giving a true and fair view of the Group s financial position as at 31 December and of its performance for the half-year then ended. 2. There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. 3. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 303(5) of the Corporations Act 2001 for the half-year ended 31 December. This declaration is signed in accordance with a resolution of the Board of Directors. Asimwe Kabunga Non-Executive Chairman Perth, Western Australia 15 March 2019 19
INDEPENDENT AUDITOR S REVIEW REPORT To the members of Report on the Condensed Half-Year Financial Report Conclusion We have reviewed the accompanying half-year financial report of ( the company ) which comprises the condensed consolidated statement of financial position as at 31 December, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory notes, and the directors declaration, for the Group comprising the company and the entities it controlled at the half-year end or from time to time during the half-year. Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of is not in accordance with the Corporations Act 2001 including: (a) (b) giving a true and fair view of the Group s financial position as at 31 December and of its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. Emphasis of matter - material uncertainty related to going concern We draw attention to Note 1 in the financial report, which indicates that a material uncertainty exists that may cast significant doubt on the entity s ability to continue as a going concern. Our conclusion is not modified in respect of this matter. Directors responsibility for the half-year financial report The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group s financial position as at 31 December and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of the company, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review 20
procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. HLB Mann Judd Chartered Accountants D I Buckley Partner Perth, Western Australia 15 March 2019 21