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ASCOT RESOURCES LIMITED TABLE OF CONTENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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Corporate Information 3
Directors’ Report 4
Auditor’s Independence Declaration 8
Condensed Consolidated Statement of Comprehensive Income 9
Condensed Consolidated Statement of Financial Position 10
Condensed Consolidated Statement of Changes in Equity 11
Condensed Consolidated Statement of Cash Flows 12
Notes to the Consolidated Financial Statements 13
Directors’ Declaration 19
Independent Auditor’s Review Report 20
ASCOT RESOURCES LIMITED CORPORATE INFORMATION FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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Directors & Officers Mr Paul Kopejtka - Executive Chairman Mr Andrew Caruso – Executive Director Mr Francis DeSouza - Non- Executive Director Mr Chris Corbett – Non- Executive Director Mr Shahb Richyal – Non- Executive Director Mr Nathan Featherby - Non Executive Director Mr Michael Young – Non- Executive Director Mr Christopher Foley – Company Secretary Registered Office 512 Hay Street Subiaco WA 6008 Australia Telephone: +61 8 9381 4534 Facsimile: +61 8 9380 6440 E-mail: [email protected] Website: www.ascotresources.com Domicile and Country of Incorporation Australia
Bankers National Australia Bank 1232 Hay Street West Perth WA 6005 Website: www.nab.com.au Auditors Pitcher Partners Corporate & Audit (WA) Pty Ltd Level 1, 914 Hay Street Perth WA 6000 Website: www.pitcher.com.au Share Registry Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 Website: www.securitytransfers.com.au
ASCOT RESOURCES LIMITED DIRECTORS’ REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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The Directors present their report of Ascot Resources Limited (“Ascot” or the “Company”) for the half year ended 31 December 2015 (the “Period”). 1. DIRECTORS
The names of the Company’s Directors in office during the Period and until the date of this report are set out below. Directors were in office for the entire Period unless otherwise stated.
Paul Kopejtka Executive Chairman Andrew Caruso Executive Director Francis DeSouza Non - Executive Director Chris Corbett Non – Executive Director (Appointed 21 Sept 2015) Shahb Richyal Non – Executive Director Nathan Featherby Non – Executive Director James McClements Non – Executive Director (Resigned 21 Sept 2015) Michael Young Non – Executive Director
2. PRINCIPAL ACTIVITIES
The Company’s principal activities during the Period were iron ore and coal exploration and development, in Australia and Colombia.
3. REVIEW OF OPERATIONS
Wonmunna Iron Ore Project In October 2015 the Company announced that due to the uncertain state of the iron ore market and volatile market conditions generally, the Board had decided that, until the outlook stabilises and improves, further activity related to development of the Company’s Wonmunna Iron Ore Project will be limited to:
enhancing the value of the Project including (but not limited to) by targeted exploration, resource drilling, and value improvement initiatives; and
obtaining any further necessary approvals to underpin a potential future project financing.
The Company also announced that it would investigate opportunities for corporate or asset transactions that have potential to enhance the value of the Project or the Company generally.
As a consequence of the Board’s decision noted above, the Company also announced that it would seek to be removed from the Official List of ASX. Following shareholder approval at the Company’s Annual General Meeting in November 2015, Ascot was removed from the Official List of ASX on 24 December 2015.
During the period the Company also completed a Reverse Circulation (RC) drilling program to test 3 potential targets on the east side of exploration licence 47/1137. The results show that one target has potential to host DSO mineralisation similar to that included within the current resource estimate. Further drilling is planned for 2016 to seek to better define the extent of the target.
Titiribi Coal Project During the period Ascot commenced the preparation of an updated submission to be presented to the regulator to seek environmental (PMA) approvals to support any future underground mining.
Ascot maintains a small presence in Colombia to advance its interests and to retain optionality in the event of an improvement in coal markets in future.
ASCOT RESOURCES LIMITED DIRECTORS’ REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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Corporate
Cornerstone investor Resource Capital Fund V L.P. (RCF) nominated Mr Chris Corbett as its representative on the Board to replace Mr James McClements who resigned.
The Company reached agreement with RCF to extend the maturity date of a Loan Note Agreement made between RCF and Ascot in May 2013 from 17 September 2015 to 30 June 2016. In addition, should RCF elect to convert the subscription sum into ordinary fully paid shares of Ascot, the parties have agreed a conversion price of $0.10 per share (reduced from $0.36 per share under the original terms). The issue of shares to RCF on conversion of the amended note is subject to approval by Ascot shareholders.
The full amount of $500,000 due under a Loan Note Agreement between Ascot and Sedgman Ltd was repaid during the period. The Company issued 173,762 fully paid ordinary shares to Sedgman Ltd in lieu of interest payable up to the date on which the principal was repaid.
During the period Ascot announced that it would offer to acquire the holdings of shareholders who hold an unmarketable parcel of shares in the Company for $0.05 per share and that any shares acquired by the Company pursuant to the buy-back would be cancelled.
A total of 78 shareholders holding 447,834 fully paid ordinary shares elected to sell their shares before the offer closed. In accordance with the terms of the offer, those shares were cancelled. Tenements
At the date of signing the Directors report the Company held the following beneficial interest in tenements:
TENEMENT No. STATUS PROJECT BENEFICIAL HOLDER FHH-092 Granted Antioquia, Colombia Carbones de Titiribi SAS
HJID-06 Granted Antioquia, Colombia Carbones de Titiribi SAS
HJLI-01 Granted Antioquia, Colombia Carbones el Basal SAS
Refer footnote below Granted Antioquia, Colombia CDI
Refer footnote below Granted Antioquia, Colombia CDI
E47/1137 Granted Pilbara, WA Wonmunna Iron Ore Pty Ltd
M47/1423 Granted Pilbara, WA Wonmunna Iron Ore Pty Ltd
M47/1424 Granted Pilbara, WA Wonmunna Iron Ore Pty Ltd
M47/1425 Granted Pilbara, WA Wonmunna Iron Ore Pty Ltd
L47/726 Granted Pilbara, WA Wonmunna Iron Ore Pty Ltd
L47/727 Granted Pilbara, WA Wonmunna Iron Ore Pty Ltd
Footnote: Each of these areas form part of concession application numbers 5849 and 5837 but have yet to be allocated individual concession numbers.
Wonmunna Iron Ore Pty Ltd is a wholly owned subsidiary of Ascot.
ASCOT RESOURCES LIMITED DIRECTORS’ REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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4. FINANCIAL RESULTS
The financial results of the Company for the half year ended 31 December 2015 are:
31-Dec-15 30-Jun-15 Cash and cash equivalents ($) 1,389,964 3,155,239 Net assets ($) 21,666,534 23,052,010 31-Dec-15 31-Dec-14 Revenue ($) 24,494 120,473 Net loss after tax ($) (666,564) (5,269,285) Dividend ($) - -
5. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 6 October 2015, the Company announced that, due to the uncertain state of the iron ore market and volatile market conditions generally, the Board had decided that, until the outlook stabilises and improves, further activity related to development of the Company’s Wonmunna Iron Ore Project (Project) will be limited to:
enhancing the value of the Project including (but not limited to) by targeted exploration, resource drilling, and value improvement initiatives; and
obtaining any further necessary approvals to underpin a potential future project financing. The Company also announced that it would investigate opportunities for corporate or asset transactions that have potential to enhance the value of the Project or the Company generally. As a consequence of the Board’s decision noted above, the Company announced that the Company would seek to be removed from the Official List of ASX. At the Company’s Annual General Meeting on 13 November 2015, shareholders approved a resolution for the Company to apply to ASX to be delisted. The Company was removed from the Official List of ASX on 24 December 2015. 6. SIGNIFICANT EVENTS AFTER BALANCE DATE In October 2015 the Company announced that further development activity on the Wonmunna Project would be limited until the iron ore price and market conditions generally stabilise and improve. The Company also announced that it would apply to be removed from the Official List of ASX. Following shareholder approval at the Company’s Annual General Meeting in November 2015, the Company was delisted on 24 December 2015. As a consequence of these developments, on 3 February 2016 the Board resolved to cancel Tranches B and C of the Wonmunna Executive Incentives granted to Messrs Paul Kopejtka and Andrew Caruso. In addition, in accordance with the terms of the Ascot Resources Employee Incentive Plan, a total of 1m Tranche B and C incentives granted to an employee, automatically vested upon the redundancy of that employee on 29 January 2016. In September 2015 the Company announced that it had reached agreement with Resource Capital Fund V L.P. (RCF) to amend the terms of the Loan Note Agreement made between the Company and RCF in May 2013 by extending the maturity date until 30 June 2016 and amending the conversion price. The issue of shares to RCF if it elects to convert the loan is subject to approval by the Company’s shareholders by 31 March 2016. A General Meeting of Shareholders to approve the issue of shares will be held on 14 March 2016.
An Independent Western Australian Company ABN 17 111 032 930Registered Audit Company Number 342083Liability limited by a scheme approved under Professional Standards Legislation
Pitcher Partners is an association of Independent firms Melbourne | Sydney | Perth | Adelaide | Brisbane | Newcastle
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AUDITOR’S INDEPENDENCE DECLARATION
To the Directors of Ascot Resources Limited and its controlled entities.
In relation to the independent review for the half year ended 31 December 2015, to the best of my knowledge and belief there have been:
(i) No contraventions of the auditor independence requirements of the Corporations Act 2001; and
(ii) No contraventions of any applicable code of professional conduct.
This declaration is in respect of Ascot Resources Limited and the entities it controlled during the period.
PITCHER PARTNERS CORPORATE & AUDIT (WA) PTY LTD Paul Mulligan Executive Director Perth, WA 14 March 2016
ASCOT RESOURCES LIMITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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Notes 31-Dec-15 31-Dec-14 $ $
Continuing operations Revenue 24,494 120,473 Directors fees and other benefits (15,452) (18,000) Share-based payments 810,345 (4,075,502) Professional & Consulting Fees (65,584) (125,356) Employment expense (525,903) (597,557) Other expenses 4 (896,939) (573,343) Loss before income tax (669,039) (5,269,285) Income tax expense - - Loss after income tax (669,039) (5,269,285)
Loss for the period attributable to: Members of the parent entity (669,039) (5,269,285) Total loss from continuing operations (669,039) (5,269,285)
Items that may be reclassified subsequently to profit and loss Exchange differences on translating foreign operations 2,475 (16,973) Total other comprehensive loss for the period (666,564) (5,286,258)
Total comprehensive loss for the period attributable to: Members of the parent entity (666,564) (5,286,258)
(666,564) (5,286,258)
Cents Cents Loss per share attributable to the ordinary equity holders of the Company: Basic loss per share – cents per share (0.48) (5.9) Diluted loss per share – cents per share (0.48) (5.9)
The above condensed consolidated statement of comprehensive income should be read in conjunction
with the accompanying notes.
ASCOT RESOURCES LIMITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2015
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Notes 31-Dec-15 30-Jun-15
$ $ Current Assets Cash & cash equivalents 1,389,964 3,155,239 Trade & other receivables 3,038 - Other assets 48,538 68,362 Total Current Assets 1,441,540 3,223,601
Non-Current Assets Plant & equipment 27,287 34,441 Exploration & evaluation expenditure 5 38,375,126 38,389,097 Total Non-Current Assets 38,402,413 38,423,538
TOTAL ASSETS 39,843,953 41,647,139
Current Liabilities Trade & other payables 7 200,559 483,829 Interest bearing loans & borrowings 6 1,220,021 1,718,530 Total Current Liabilities 1,420,580 2,202,359
Non-Current Liabilities Provisions 121,670 78,531 Other payables 7 16,635,169 16,314,239 Total Non-Current Liabilities 16,756,839 16,392,770
TOTAL LIABILITIES 18,177,419 18,595,129
NET ASSETS 21,666,534 23,052,010
Equity attributable to the equity holders of the Company Contributed equity 8 32,472,512 32,381,079 Reserves 6,117,806 6,925,676 Accumulated losses (16,949,037) (16,279,998) Non-controlling interest 25,253 25,253 TOTAL EQUITY 21,666,534 23,052,010
The above condensed consolidated statement of financial position should be read in conjunction
with the accompanying notes.
ASCOT RESOURCES LIMITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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Issued Capital
Share-based
Payment Reserve
FX Translation
Reserve Accumulated
Losses Non-
controlling interest
Total Equity
$ $ $ $ $
At 1 July 2015 32,381,079 6,969,461 (43,785) (16,279,998) 25,253 23,052,010 Comprehensive income: Loss for the year - - - (669,039) - (669,039) Other comprehensive income/(loss) for the year
- - 2,475 - - 2,475
Total comprehensive loss for the year - - 2,475 (669,039) - (666,564)
Transactions with owners in their capacity as owners:
Issue of share capital 91,433 - - - - 91,433 Share-based payments - (810,345) - - - (810,345) Non-controlling interest - - - - - - At 31 December 2015 32,472,512 6,159,116 (41,310) (16,949,037) 25,253 21,666,534
Issued Capital
Share-based
Payment Reserve
FX Translation Reserve
Accumulated Losses
Non-controlling
interest
Total Equity
$ $ $ $ $ At 1 July 2014 8,366,925 1,570,500 5,375 (7,636,527) 25,253 2,331,526 Comprehensive income: Loss for the year - - - (5,269,285) - (5,269,285) Other comprehensive income/(loss) for the year - - (16,973)
- - (16,973)
Total comprehensive loss for the period - - (16,973) (5,269,285) - (5,286,258)
Transactions with owners in their capacity as owners:
Issue of share capital 23,435,860 - - - - 23,435,860
Share-based payments - 3,882,954 - - - 3,882,954
Non-controlling interest - - - - - -
At 31 December 2014 31,802,785 5,453,454 (11,598) (12,905,812) 25,253 24,364,082
The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
ASCOT RESOURCES LIMITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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31-Dec-15 31-Dec-14 $ $ Cash flows used in operating activities Receipts from customers 9,065 10,211 Payment to suppliers & employees (901,988) (3,199,151) Interest received 13,395 28,111 Interest paid - (23,310) Net cash flows used in operating activities (879,528) (3,184,139) Cash flows used in investing activities Payment for plant & equipment - (5,607) Payment for exploration & evaluation expenditure (363,405) (3,446,634) Net cash flows used in investing activities (363,405 (3,452,241) Cash flows from financing activities Proceeds from share issue - 10,536,453 Repayment of convertible notes (500,000) - Unmarketable parcel share buyback (22,392) - Net cash flows from financing activities (522,392) 10,536,453 Net decrease in cash and cash equivalents (1,765,326) 3,900,073 Cash and cash equivalents at beginning of period 3,155,239 2,013,066 Effect of foreign exchange differences on cash 51 - Cash and cash equivalents at end of period 1,389,964 5,913,139
The above condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes.
ASCOT RESOURCES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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1. CORPORATE INFORMATION
The financial report of Ascot Resources Limited (referred to as “Ascot” or the “Company”) and its controlled entities (together referred to as the “Group”) is a half year report for the period from 1 July 2015 to 31 December 2015 (the “Period”). For details on the Group’s principal activities refer to the Directors Report on pages 4 to 7. The address of the registered office of the Company is 512 Hay Street, Subiaco WA 6008. The financial report of Ascot Resources Limited for the Period was authorised for issue in accordance with a resolution of the Directors on 14 March 2016. 2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
Basis of compliance This general purpose condensed consolidated financial report of the Company for the Period has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001. Compliance with AASB 134 ensures compliance with International Financial Standard IAS 34 Interim Financial Reporting. The half year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Company as the full financial report. It is recommended that the half year financial report be read in conjunction with the annual financial statements for the year ended 30 June 2015 and considered together with any public announcements made by the Company during the Period and up to the date of the company’s removal from the Official List of ASX, 24 December 2015, in accordance with the continuous disclosure obligations of the ASX Listing Rules up to that date.
(a) Basis of preparation
The condensed financial statements have been prepared on the basis of historical cost. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars. The accounting policies and methods of computation adopted in the preparation of this financial report for the Period under review are consistent with those adopted in the annual financial statements for the year ended 30 June 2015. The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current reporting Period.
The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Company’s accounting policies and has no effect on the amounts reported for the current or prior periods.
ASCOT RESOURCES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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(b) Going Concern
The Statement of Comprehensive Income shows the Company incurred a net loss of $666,564 during the period ended 31 December 2015. The Statement of Financial Position as at 31 December 2015 shows that the Company had cash and cash equivalents of $1,389,964 and net assets of $21,666,534. The directors have reviewed the Group’s financial position and forecast cash flows and have assessed that the Group will be required to raise additional funds by way of issuing equity or other alternative funding arrangements. The directors reasonably expect that the Group will be able to raise additional funds as required to meet future costs associated with its operating and exploration activities for at least the next 12 months. The directors are therefore of the opinion that the use of the going concern basis is appropriate in the circumstances. Should the Group not be successful in obtaining adequate funding, there is material uncertainty as to the ability of the Group to continue as a going concern and it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of liabilities that might result should the group be unable to continue as a going concern and meet its debts as and when they fall due. (c) Accounting standards issued but not yet effective The AASB has issued new standards, amendments and interpretations to existing standards which have been published but are not yet effective, and have not yet been adopted early by the Company. The new standards, amendments and interpretations that may be relevant to the Company’s financial statements are provided below. Standard/Interpretation Effective for annual reporting periods beginning
on or after
AASB 9 Financial Instruments AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities. These requirements improve and simplify the approach for classification and measurement of financial assets
1 January 2018
AASB 15 Revenue from Contracts with Customers AASB 15:
- establishes a new revenue recognition model
- changes the basis for deciding whether revenue is to be recognised over time or at a point in time
- provides new and more detailed guidance on specific topics
- expands and improves disclosures about revenue.
1 January 2018
ASCOT RESOURCES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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3. OPERATING SEGMENTS
The AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Company that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The segments are consistent with the internal management reporting information that is regularly reviewed by the chief operating decision maker. The Company engages in the business of iron ore and coal exploration and evaluation in Australia and Colombia respectively and management identifies its operating segments based on geographical location. The Company’s two operating segments are: 1. Colombia – Prospective coal permits; and 2. Australia – Prospective iron ore permits
The revenues and loss generated by each of the Company’s operating segments and segment assets are summarised as follows: Six (6) months to 31 December 2015
Colombia Australia Total
$ $ $ Revenue - 24,494 24,494 Segment operating loss - (669,039) (669,039) Segment Assets 108,669 39,375,283 39,843,953 Six (6) months to 31 December 2014
Colombia Australia Total
$ $ $ Revenue - 120,473 120,473 Segment operating loss - (5,269,285) (5,269,285) Segment Assets 4,319,996 37,882,546 42,202,542 The Company’s segment operating profit reconciles to the Company’s profit before tax as presented in its financial statements as follows: 31-Dec-15 31-Dec-14 Revenue 24,494 120,473 Directors fees and other benefits (15,452) (18,000) Share-based payments 810,345 (4,075,502) Professional & Consulting Fees (65,584) (125,356) Employment expense (525,903) (597,557) Other expenses (896,939) (573,343) Total operating profit (669,039) (5,269,285)
4. OTHER EXPENSES
31-Dec-15 31-Dec-14 $ $
Expenses Depreciation expenses 7,154 8,305 Administration costs 124,958 186,512 Travel expenses 210 6,381 Compliance and regulatory expenses 35,650 156,595 Exchange loss 12,334 14,109 Interest 716,633 201,441 Total expenses 896,939 573,343
ASCOT RESOURCES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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5. EXPLORATION & EVALUATION EXPENDITURE
31-Dec-15 30-Jun-15 $ $
Carrying amount of exploration & evaluation expenditure 38,375,126 38,389,097
31-Dec-15 30-Jun-15 $ $
Movement during the year Balance at the beginning of the year 38,389,097 5,317,387 Additions 283,399 33,071,710 Revaluation of deferred consideration payable (297,570) - Carrying amount at the end of the year 38,375,126 38,389,097
6. INTEREST BEARING LOANS & BORROWINGS
Current 31-Dec-15 30-Jun-15 $ $
Sedgman Convertible Note - 498,921 RCF Convertible Notes 1,220,021 1,219,609
1,220,021 1,718,530
7. TRADE & OTHER PAYABLES
Current 31-Dec-15 30-Jun-15 $ $
Trade and other payables 146,848 483,829 Accruals 53,711 - Total 200,559 483,829
Non-current 31-Dec-15 30-Jun-15
$ $
Trade and sundry creditors 1,700,000 1,700,000 Deferred consideration 14,935,169 13,705,453 Accrued interest - 908,786 Total 16,635,169 16,314,239
Deferred consideration forms part of the Wonmunna iron ore project acquisition with Ochre Group Holdings. Under a Sale and Purchase Agreement signed 3 July 2014 Ascot Resources owes Ochre Group Holdings an amount of $19.95m payable 5 years from the first shipment of ore. Interest is accrued on a semi-annual basis at 5.88% (capitalised till the earlier of 24 months post the completion of the agreement or first shipment of ore). Deferred Consideration is revalued each reporting period using net present value method. The Sale and Purchase Agreement for the acquisition of the Wonmunna Iron Ore Project has been lodged with the WA Office of State Revenue (OSR) for assessment of stamp duty. In January 2016 the Company responded to requisitions issued by OSR and is awaiting an assessment. Stamp duty payable on the transaction is estimated to be $1.7 million.
ASCOT RESOURCES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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8. CONTRIBUTED EQUITY
31-Dec-15 30-Jun-15 $ No. $ No.
Fully paid ordinary shares 32,472,511 138,968,820 32,381,079 137,588,777 Movement in ordinary shares on issue
Movement in ordinary shares on issue $ No. Issue price per ordinary share
Balance at 30 June 2015 32,381,079 137,588,777 Interest on RCF loan note June 2015 quarter (a) 42,583 679,155 $0.06
Interest on SDM loan note June 2015 quarter (b) 17,452 278,342 $0.06 Interest on RCF loan note Sept 2015 quarter (a) 43,051 696,618 $0.06 Interest on SDM loan note Sept 2015 quarter (b) 10,740 173,762 $0.06 Unmarketable parcels buy-back (22,393) (447,834) $0.05
Balance at 31 December 2015 32,472,512 138,968,820 a) Issued under the terms of the Loan Note Agreement between the Company and Resource Capital Fund (“RCF”). b) Issued under the terms of the Loan Note Agreement between the Company and Sedgman Limited (“Sedgman”).
9. DIVIDENDS
No dividend has been paid during the Period and no dividend is recommended for the Period.
10. CONTINGENCIES
There are no new contingencies, other than what existed as at 30 June 2015 that the Company has entered into during the Period under review. 11. COMMITMENTS
Leasing Agreements
31-Dec-15 30-Jun-15 $ $
Within one year 42,462 84,925 After one year but not more than five years - - After more than five years - - Total minimum commitment 42,462 84,925
ASCOT RESOURCES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2015
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12. COMMITMENTS (Continued)
Exploration & Evaluation Commitments
31-Dec-15 30-Jun-15 $ $
Within one year 525,228 475,000 After one year but not more than five years 1,092,665 1,900,000 After more than five years 3,074,981 3,352,000 Total minimum commitment 4,692,875 5,700,000
The commitments above are discretionary and subject to mining expenditure, they relate to the exploration tenements that the Company has interests in as at 31 December 2015. 13. SIGNIFICANT EVENTS AFTER BALANCE DATE In October 2015 the Company announced that further development activity on the Wonmunna Project would be limited until the iron ore price and market conditions generally stabilise and improve. The Company also announced that it would apply to be removed from the Official List of ASX. Following shareholder approval at the Company’s Annual General Meeting in November 2015, the Company was delisted on 24 December 2015. As a consequence of these developments, on 3 February 2016 the Board resolved to cancel Tranches B and C of the Wonmunna Executive Incentives granted to Messrs Paul Kopejtka and Andrew Caruso. In addition, in accordance with the terms of the Ascot Resources Employee Incentive Plan, a total of 1m Tranche B and C incentives granted to an employee, automatically vested upon the redundancy of that employee on 29 January 2016. In September 2015 the Company announced that it had reached agreement with Resource Capital Fund V L.P. (RCF) to amend the terms of the Loan Note Agreement made between the Company and RCF in May 2013 by extending the maturity date until 30 June 2016 and amending the conversion price. The issue of shares to RCF if it elects to convert the loan is subject to approval by the Company’s shareholders by 31 March 2016. A General Meeting of Shareholders to approve the issue of shares will be held on 14 March 2016. Other than the above, there has not arisen in the interval between the end of the financial period and the date of this report, any item, transaction or event, of a material or unusual nature, likely, in the opinion of the Directors of the Company, to affect substantially the operations of the Group, the results of those operations, or the state of the affairs of the Group in subsequent financial periods.
An Independent Western Australian Company ABN 17 111 032 930Registered Audit Company Number 342083Liability limited by a scheme approved under Professional Standards Legislation
Pitcher Partners is an association of Independent firms Melbourne | Sydney | Perth | Adelaide | Brisbane | Newcastle
INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF ASCOT RESOURCES LIMITED
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We have reviewed the accompanying half-year financial report of Ascot Resources Limited and its controlled entities (the “Group”), which comprises the condensed consolidated statement of financial position as at 31 December 2015, the condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and 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 information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the period's end or from time to time during the half year.
Directors' Responsibility for the Half-Year Financial Report
The directors of the Group 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 financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2015 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 Ascot Resources Limited, 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 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.
INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF ASCOT RESOURCES LIMITED
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Conclusion
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 Ascot Resources Limited is not in accordance with the Corporations Act 2001 including:
(a) giving a true and fair view of the consolidated entity's financial position as at 31 December 2015 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.
Emphasis of Matter
Without qualifying our conclusion, we draw attention to Note 2(b) to the half year financial report which indicates that the Group incurred a net loss of $666,564 during the period ended 31 December 2015, and as of that date, the Group's net current assets of $20,960 and net assets of $21,666,534.
After reviewing the forecast cash flows of the Group, it has been assessed that the Group will be required to raise additional funds by way of issuing equity or other alternative funding arrangements, there exists a material uncertainty regarding the Group's ability to continue as a going concern.
These conditions, along with other matters set forth in Note 2(b), indicate the existence of material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.
PITCHER PARTNERS CORPORATE & AUDIT (WA) PTY LTD PAUL MULLIGAN Executive Director Perth, WA 14 March 2016