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ORBMINCO LIMITED Interim / Quarterly Report 2017
65473_rns_2017-10-18_e01ecf9b-b460-49dc-a614-ff1cb969ed69.pdf
Interim / Quarterly Report
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AUSROC METALS LIMITED
(Subject to Deed of Company Arrangement)(In Liquidation)
ACN 073 155 781
HALF YEAR FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2015
To prepare this financial report, the appointed Deed Administrators and
Liquidators have extracted data that is available to them from the Company's accounting system. However, there may be information that the appointed Deed Administrators and Liquidators have not been able to obtain, the impact of which may or may not be material on the accounts. These financial statements do not contain all the required information or disclosures in relation to transactions undertaken by the Company for the reporting period. The Deed Administrators
and Liquidators were not in office and were not involved with the Company during the reporting period nor did they have oversight or control over the Group's financial reporting systems during the reporting period. It is not possible for the Deed Administrators and Liquidators to state that this financial report gives a true and fair view of the Group's financial position during or as at the end of the reporting period.
The information contained in this condensed report is to be read in conjunction with Ausroc Metal Limited's 2015 annual report and announcements to the market made by Ausroc Metal Limited.
AUSROC METALS LTD AND CONTROLLED ENTITIES DEED ADMINSTRATORS'/LIQUIDATORS REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
Deed Administrators'/Liquidators' Report
David Ashley Norman Hurt and Christopher Michael Williamson who are the appointed Administrators of the Deed of Company Arrangement ("DOCA") ("the Deed Administrators") and Liguidators of Ausroc Metals Ltd (Subiect to Deed of Company Arrangement)(In Liquidation)("Ausroc" or "Consolidated Entity" or "Company") formerly AusAmerican Mining Ltd submit herewith the interim financial report for the half-year ended 31 December 2015.
DIRECTORS
Based on ASIC records, the Directors of the Company in office during or since the end of the financial year are;
| Executive Chairman (appointed Director 1 August 2013, appointed Executive Chairman 10 Peter Landau $\sim$ 100 $\mu$ |
|
|---|---|
| July 2014 and resigned 10 December 2015) | |
| Non-Executive Director (appointed 10 July 2014 and resigned 10 December 2015) Malenga Machel - |
|
| Non-Executive Director (appointed 10 December 2015 and resigned 27 June 2016) Vinod Sharma $\blacksquare$ |
|
| Executive Director (appointed 10 December 2015) Ben Mead $\blacksquare$ |
|
| Executive Director (appointed 10 December 2015 and resigned 9 June 2016) Jim Malone $\bullet$ |
All directors held office from the start of the financial year to the date of this report unless otherwise stated.
OPERATING RESULTS
The consolidated loss after tax for the reporting period was \$236,708 (half-year ended 31 December 2014: loss of \$4,378,978).
Incomplete records
The financial report has been compiled from the extracted MYOB records for the Company that were made available to the Deed Administrators and Liquidators. The Deed Administrators and Liquidators were not in office for the periods presented in this report, nor were they parties involved with the Company and did not have oversight or control over the qroup's financial reporting systems including but not limited to being able to obtain access to accounting records of the Company. Reasonable effort has been made by the appointed Deed Administrators and Liquidators to ascertain the position of the Company as at 31 December 2015.
Refer below to Significant Events after Balance Date - Recapitalisation Proposal, for further information.
To prepare the financial report, the appointed Deed Administrators and Liquidators have extracted data from the Company's accounting system. However, there may be information that the appointed deed administrators and liquidators have not been able to obtain, the impact of which may or may not be material on the accounts. These financial statements do not contain all the required information or disclosures in relation to transactions undertaken by the Company as this information is unascertainable by the appointed of the Deed Administrators/Liquidators.
Consequently, the appointed Deed Administrators and Liquidators have extracted the information for this financial report and they are of the opinion that it is not possible to state that this financial report has been prepared in accordance with Australian Accounting Standards including Australian interpretations, other authoritative pronouncements of the Australian Accounting Standard Board and the Corporations Act 2001, nor is it possible to state this financial report gives a true and fair view of the Group's financial position as at 31 December 2015 and for the period then ended.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Significant changes in the state of affairs of the Company during the year were as follows:
On 10 December 2015 the company announced that it had executed a new term sheet to acquire Shenglong International Investment Ltd.
On 10 December 2015, Ben Mead Executive Director was appointed as a Director.
To the best of the knowledge of the Deed administrators and Liquidators (which is incomplete), no other significant changes in the nature of the Company's activities have occurred during the year.
SUBSEQUENT EVENTS
On 9 June 2016, Jim Malone Executive Director, Company Secretary resigned.
On 28 June 2016, Vinod Sharma Non-Executive Director resigned as a Director.
On 23 August 2016, David Ashley Norman Hurt and Christopher Michael Williamson were appointed Liquidators of the Company, at which time, the powers of the Company's officers (including Director) were suspended and the Liquidators' assumed control of the Company's business, property and affairs.
At the meeting of creditors held on 9 February 2017, the creditors of the Company resolved to authorise the Liquidators to appoint themselves as Voluntary Administrators of the Company. The Liquidators subsequently appointed themselves as Voluntary Administrators of the Company on 10 February 2017.
On 13 March 2017, a meeting of creditors was convened for 20 March 2017 to consider the future of the Company, and whether to accept a Deed of Company Arrangement proposal (DOCA1) formulated by Trident Capital Pty Ltd (Trident). On 20 March 2017, creditors resolved to adjourn the meeting for a period not exceeding fifteen (15) business days. At the reconvened meeting of creditors held on 10 April 2017, creditors resolved to further adjourn the meeting for a period not exceeding thirty (30) business days.
On 10 May 2017, an alternative DOCA proposal (DOCA2) was received from one of the secured creditors, Caason Group Pty Ltd (Caason).
On 17 May 2017, the adjourned meeting of creditors was reconvened for 25 May 2017. At the meeting on 25 May 2017, the creditors resolved that the Company execute the DOCA2 proposal and that Christopher Michael Williamson and David Ashley Norman be appointed as Administrators of the DOCA2.
A summary of the material terms of the Recapitalisation Proposal is set out below, the Company is currently subject to DOCA2.
Key conditions precedent for completion of the DOCA2 include:
- Satisfying the conditions of the ASX;
- Payment of \$750,000 to the Deed Administrators' trust account for the shell structure of the Company within 14 days of the latter of:
- Execution of the DOCA2; $\mathbf{o}$
- The Court prospectively approving the termination of the liquidation simultaneously with the effectuation $\Omega$ of the DOCA2 (subject to shareholder approval, receipt of \$750,000 and distribution of funds); and
- Shareholders' approval of all resolutions to conduct the proposed capital raising. $\Omega$
- DOCA2 be acceptable to the secured creditors. $\Omega$
The DOCA2 proposal is conditional upon and subject to the following:
- the passing of all necessary shareholder, creditor and court approvals to implement the proposal; $\Omega$
- all secured creditors providing their written consent to be bound by the Reconstruction Deed; and $\mathbf{o}$
- the parties executing a Reconstruction Deed to give legal effect to the offer within thirty (30) days of $\Omega$ acceptance of the binding offer.
If the conditions are not waived by mutual agreement or satisfied by 31 October 2017, this offer will be at an end.
- The DOCA2 proposal is contingent on successful shareholder approval to conduct each of the capital raisings (listed in Schedule 1 Clause 5).
- The DOCA2 sum (\$750,000) will be applied by the Deed Administrators (with reference to sections 556, 560 and 561 of the Act) in the manner and order of priority as follows:
- To pay any liabilities properly incurred by the Liquidators, Administrators, and Deed Administrators during $\Omega$ the course of the liquidation, administration and the DOCA2;
- To pay the Liquidators, Administrators, and Deed Administrators' remuneration and out of pocket $\mathbf{o}$ expenses as negotiated with Caason;
-
To pay any outstanding employee entitlements as at 10 February 2017 as negotiated with Caason; and $\Omega$
-
To part pay secured creditors of the Company as at 10 February 2017 on a pari passu basis (the balance $\Omega$ of the debt owing to the secured creditors has been agreed to be converted into shares under DOCA2 proposal or used to fund the relisting of the company on the ASX at the discretion of the secured creditors); and
- To pay dividends to the ordinary unsecured creditors of the Company whose debt and claims arose on $\Delta$ or before 10 February 2017 and are admitted to proof.
- any existing Convertible Notes to prove as debt on the basis the debt is secured;
- the company proposes to consolidate its share capital on a maximum 100:1 reduction basis: and
- unlisted options or partly paid options are to be cancelled.
On 22 September 2017, the Deed Administrators convened a meeting of creditors to be held on 10 October 2017 where the creditors are to vote to vary the original DOCA2. At the meeting of creditors held on 10 October 2017, creditors resolved that the proposed variations to the original DOCA2 be accepted.
A summary of the key proposed variations to the DOCA2 and Reconstruction Deed are outlined below:
- payment to the Deed Administrators of \$451,869 (compared to the original DOCA2 sum of a) \$750,000) on or before 31 October 2017 (or such later date as agreed between Caason and the Deed Administrators).
- the varied DOCA2 and Reconstruction Deed are not conditional upon successful shareholder b) approval to implement the restructuring proposal and conduct the capital raisings.
- the conditions precedent to payment of the DOCA2 sum of \$451,869 are outlined in Clause 3.1 $\mathsf{C}$ of the proposed varied DOCA2 (refer Annexure A), as follows:
- $\mathbf{d}$ all secured creditors providing their written consent to release their security;
- the Deed Administrators providing written notice to all Instrument Holders that upon $e)$ termination of the DOCA2 due to it being fully effectuated all instruments will be cancelled and all claims by Instrument Holders will be extinguished (unless otherwise agreed in writing between the parties);
- the Deed Administrators providing written notice to Caason that, with the exception of the $f$ secured creditors (Caason and Robert Jesse Hunt ("Hunt")) and Trident Capital Pty Ltd ("Trident") debt, upon termination of the DOCA2 there will be no enforceable claims against the Company by Instrument Holders;
- Caason is satisfied in its absolute discretion that no claims will be made against the $\mathsf{q}$ Company by Instrument Holders;
- execution of the Reconstruction Deed by the Company, Deed Administrators and Caason; $h)$
- all conditions precedent in Clause 2.1 of the Reconstruction Deed (refer Annexure B) have $\mathbf{i}$ been satisfied or waived, including:
- ASX confirming that nothing contemplated by the DOCA2 and the Reconstruction Deed will prevent the Company form retaining its ASX listing:
- Trident agreeing to convert its debt (\$27,500) into shares;
4
- Hunt agrees to convert its remaining debt into shares and options;
- all the conditions in the DOCA2 have been satisfied or waived (with the exception of the condition precedent in clause 3.I(f) of the DOCA2;
- the Deed Administrators issue the meeting documents to convene the shareholder meeting: and
- the Deed Administrators or the Liquidators applying for an order to the effect that the winding up of the Company is or will be terminated pursuant to section 482 of the Act:
- Caason pays \$15,000 into the Trust Account of Jackson McDonald (for the purpose of the j) application to terminate the winding up of the Company).
If the conditions are not waived by mutual agreement or satisfied by 31 October 2017, this offer will be at an end.
The Company proposes to consolidate its share capital on a maximum 50:1 reduction basis (previously on a 100:1 basis).
AUDITOR'S INDEPENDENCE DECLARATION
The lead auditor's independence declaration under section 307C of the Corporation Act 2001 is set out on page 6 for the half-year ended 31 December 2015 which forms part of this report.
Signed by Christopher Michael Williamson and David Ashley Norman Hurt in their capacity as Deed Administrators and Liquidators of the Company
Williamseg.
Christopher Michael Williamson Perth, 13 October 2017
David Ashley Norman Hurt
$\hat{\boldsymbol{\theta}}$
$\overline{\phantom{a}}$
38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF AUSROC METALS LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT/IN LIQUIDATION)
As lead auditor for the audit of Ausroc Metals Limited (Subject to Deed of Company Arrangement/In Liquidation) for the half-year ended 31 December 2015, I declare that, to the best of my knowledge and belief, there have been:
-
- No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
-
- No contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of Ausroc Metals Limited (Subject to Deed of Company Arrangement/In Liquidation) and the entities it controlled during the period.
Dean Just Director
BDO Audit (WA) Pty Ltd Perth, 13 October 2017
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
| CONSOLIDATED ENTITY | |||
|---|---|---|---|
| NOTE | 31 DECEMBER 2015 \$ |
31 DECEMBER 2014 \$ |
|
| CONTINUING OPERATIONS | |||
| Interest Income | 270 | ||
| Other income | 45,917 | ||
| Unrealised foreign exchange gain/(loss) | (9,787) | ||
| Depreciation and amortisation | (8, 339) | ||
| Insurance | (13, 485) | ||
| Occupancy & administration expense | 49,208 | (120, 491) | |
| Project expenditure & acquisition payments | (2,810,038) | ||
| Marketing and promotion | (127, 855) | ||
| Salary, wages, professional fees | 187,500 | (399, 205) | |
| Travel and Accommodation | (76, 072) | ||
| Share based payments expense | (225, 416) | ||
| Impairment of capitalised exploration expenditure | 9 | (256, 446) | |
| Gain/(loss) on disposal of fixed assets | 38,119 | ||
| Interest paid | (42, 087) | ||
| Finance Expenses | (374, 063) | ||
| LOSS BEFORE INCOME TAX | (236, 708) | (4,378,978) | |
| Income tax expense | |||
| LOSS FOR THE PERIOD | (236, 708) | (4,378,978) | |
| OTHER COMPREHENSIVE INCOME | |||
| Revaluation of available for sale securities | |||
| Foreign currency translation | 87,590 | ||
| TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO MEMBERS OF AUSROC METAL LTD |
(236, 708) | (4, 291, 388) | |
| EARNINGS/(LOSS) PER SHARE: | |||
| Basic earnings/(loss)per share (cents per share) | (0.0008) | (1.78) | |
| Diluted earnings/(loss) per share (cents per share) | (0.0008) | (1.78) |
The above Consolidated Statement of Profit or Loss and Comprehensive Income should be read in conjunction with the accompanying notes.
As detailed in Note 1, to prepare the Financial Report, the appointed Deed Administrators and Liquidators have extracted data from the Company's accounting system. However, there may be information that the appointed Deed Administrators and Liquidators have not been able to obtain, the impact of which may or may not be material on the accounts. These financial statements do not contain all required information or disclosures in relation to transactions undertaken by the Company as this information is unascertainable by the appointed Deed Administrators/Liquidators.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
| CONSOLIDATED | |||
|---|---|---|---|
| NOTE | 31 DECEMBER 2015 \$ |
30 JUNE 2015 \$ |
|
| CURRENT ASSETS | |||
| Cash and cash equivalents | 9,877 | 1,304 | |
| Trade and other receivables | 18,404 | 53,413 | |
| Other | 8,895 | 8,895 | |
| TOTAL CURRENT ASSETS | 37,176 | 63,612 | |
| NON-CURRENT ASSETS | |||
| Property, plant and equipment | 47,672 | 47,672 | |
| Exploration and evaluation expenditure | 54,291 | 54,291 | |
| TOTAL NON-CURRENT ASSETS | 101,963 | 101,963 | |
| TOTAL ASSETS | 139,139 | 165,575 | |
| CURRENT LIABILITIES | |||
| Trade and other payables | 992,331 | 902,059 | |
| Provisions | 33,578 | 33,578 | |
| Interest bearing loans and borrowings | $\overline{7}$ | 2,920,680 | 2,800,680 |
| TOTAL CURRENT LIABILITIES | 3,946,589 | 3,736,317 | |
| NON-CURRENT LIABILITIES | |||
| Deferred Tax liability | |||
| TOTAL NON-CURRENT LIABILITIES | |||
| TOTAL LIABILITIES | 3,946,589 | 3,736,317 | |
| NET ASSETS/(LIABILITIES) | (3,807,450) | (3,570,742) | |
| EQUITY | |||
| Issued capital | 10 | 59,838,056 | 59,838,056 |
| Reserves | 4,723,537 | 4,723.537 | |
| Accumulated losses | (68, 369, 043) | (68, 132, 335) | |
| TOTAL EQUITY/ (DEFICIENCY IN EQUITY) | (3,807,450) | (3,570,742) |
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
As detailed in Note 1, to prepare the Financial Report, the appointed Deed Administrators and Liquidators have extracted data from the Company's accounting system. However, there may be information that the appointed Deed Administrators and Liquidators have not been able to obtain, the impact of which may or may not be material on the accounts. These financial statements do not contain all required information or disclosures in relation to transactions undertaken by the Company as this information is unascertainable by the appointed Deed Administrators/Liquidators.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
| SHARE CAPITAL |
OPTIONS RESERVE |
FOREIGN CURRENCY TRANSLATION |
AVAILABLE FOR SALE SECURITIE S |
ACCUMULATED LOSSES |
TOTAL | |
|---|---|---|---|---|---|---|
| CONSOLIDATED ENTITY | ||||||
| Balance at 1 July 2014 | 58,070,242 | 5 343,615 | (855, 148) | (63,083,127) | (524, 418) | |
| Total comprehensive income | $\blacksquare$ | ×. | 87,590 | (4,083,263) | (3,995,673) | |
| Transactions with owners in their capacity as owners: |
||||||
| Shares issued during the period | 1,730,413 | 1,730,413 | ||||
| Share issue costs | (120, 699) | (120, 699) | ||||
| Share based payments | 133,100 | 92,316 | 225,416 | |||
| Balance at 31 December 2014 | 59,813,056 | 5,435,931 | (767, 558) | (67, 166, 390) | (2,684,961) | |
| Balance at 1 July 2015 | 59,838,056 | 5.503,553 | (780, 016) | (68, 132, 335) | (3,570,742) | |
| Total comprehensive income | $\star$ | $\pmb{\star}$ | $\pmb{\star}$ | $\pmb{\ast}$ | (236, 708) | (236, 708) |
| Transactions with owners in their capacity as owners: |
||||||
| Shares issued during the period | $\star$ | $\star$ | $\star$ | $\star$ | ۰ | |
| Share issue costs | $\star$ | $\pmb{\ast}$ | $\star$ | $\bullet$ | $\bullet$ | ۸ |
| Share based payments | $\star$ | $\pmb{\ast}$ | $\star$ | $\pmb{\star}$ | $\pmb{\ast}$ | $\star$ |
| Balance at 31 December 2015 | 59,838,056 | 5.503,553 | (780, 016) | (68, 369, 043) | (3,807,450) |
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
As detailed in Note 1, to prepare the Financial Report, the appointed Deed Administrators and Liquidators have extracted data from the Company's accounting system. However, there may be information that the appointed Deed Administrators and Liquidators have not been able to obtain, the impact of which may or may not be material on the accounts. These financial statements do not contain all required information or disclosures in relation to transactions undertaken by the Company as this information is unascertainable by the appointed Deed Administrators/Liquidators.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
| CONSOLIDATED | |||
|---|---|---|---|
| NOTE | 31 DECEMBER 2015 \$ |
31 DECEMBER 2014 \$ |
|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Payments to suppliers for operating and exploration expenditure | (1, 264, 438) | ||
| Payments to acquire investment in Shenglong | (2, 177, 439) | ||
| Other receipts | 20,932 | ||
| Net cash (used in) operating activities | $\star$ | (3,420,945) | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Interest received | $\star$ | 270 | |
| Interest paid | (241) | ||
| Payment for property, plant equipment | (911) | ||
| Finance costs | (77, 813) | ||
| Payment for other investments | |||
| Proceeds from sale of investments | 59,403 | ||
| Proceeds from sale of fixed assets | 5,819 | ||
| Proceeds from release of security deposits/bonds | ۰ | 19,239 | |
| Net cash (used in) / provided by investing activities | $\star$ | 5,766 | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Proceeds from issue of shares and other equity securities | $\star$ | 1,527,921 | |
| Proceeds from borrowings | 1,829,140 | ||
| Repayment of borrowings | (100, 000) | ||
| Proceeds from issue of convertible notes | |||
| Payment for share issue costs | (120, 698) | ||
| Net cash provided by / (used in) financing activities | $\star$ | 3,136,363 | |
| NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS |
۰ | (278, 818) | |
| Cash and cash and cash equivalents at the beginning of the year | 290,240 | ||
| Cash acquired from purchase of controlled entity | |||
| Effects of exchange rates on cash and cash equivalents | 723 | ||
| Cash and cash equivalents at the end of the period | ۰ | 12,145 |
The above consolidated statement of cash flows in equity should be read in conjunction with the accompanying notes.
As detailed in Note 1, to prepare the Financial Report, the appointed Deed Administrators and Liquidators have extracted data from the Company's accounting system. However, there may be information that the appointed Deed Administrators and Liquidators have not been able to obtain, the impact of which may or may not be material on the accounts. These financial statements do not contain all required information or disclosures in relation to transactions undertaken by the Company as this information is unascertainable by the appointed Deed Administrators/Liquidators.
l,
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF YEAR ENDED 31 DECEMBER 2015
1. Basis of Preparation and Statement of Compliance
The Financial Report is a general purpose Financial Report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The Financial Report also complies with International Financial Reporting Standards as issued by the International Accounting Standards Board. The Financial Report has also been prepared on a historical cost basis, except for available-for-sale investments, which have been measured at fair value. Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.
The presentation currency of the Group is Australian dollars.
a) Incomplete Records
The financial report has been compiled from the extracted MYOB records for the Company that were made available to the Deed Administrators and Liquidators. The Deed Administrators and Liquidators were not in office for the periods presented in this report, nor were they parties involved with the Company and did not have oversight or control over the group's financial reporting systems including but not limited to being able to obtain access to accounting records of the Company. Reasonable effort has been made by the appointed Deed Administrators and Liquidators to ascertain the position of the Company as at 31 December 2015.
To prepare the Financial Report, the appointed Deed Administrators and Liquidators have extracted data from the Company's accounting system. However, there may be information that the appointed Deed Administrators and Liquidators have not been able to obtain, the impact of which may or may not be material on the accounts. These financial statements do not contain all the required information or disclosures in relation to transactions undertaken by the Company as this information is unascertainable by the subsequently appointed Deed Administrators/Liquidators.
Consequently, the appointed Deed Administrators and Liguidators have extracted the information for this financial report and they are of the opinion that it is not possible to state that this financial report has been prepared in accordance with Australian Accounting Standards including Australian interpretations, other authoritative pronouncements of the Australian Accounting Standard Board and the Corporations Act 2001, nor is it possible to state this financial report gives a true and fair view of the Group's financial position as at 31 December 2015 and for the period then ended.
- Going concern
The Group incurred a net loss after income tax of \$236,708 for the half year ended 31 December 2015 (2014: net loss after income tax of \$4,378,978), net operating cash outflows of \$* (2014: \$3,420,945) and at reporting date has net deficiencies of \$3,824,168. As at 31 December 2015, the Company had cash and cash equivalents of \$8,663* (31 December 2014: \$12,145).
As detailed in Note 1, to prepare the Financial Report, the appointed Deed Administrators and Liquidators have extracted data from the Company's accounting system. However, there may be information that the appointed Deed Administrators and Liquidators have not been able to obtain, the impact of which may or may not be material on the accounts. These financial statements do not contain all required information or disclosures in relation to transactions undertaken by the Company as this information is unascertainable by the subsequently appointed Deed Administrators and Liquidators.
The company was suspended from the ASX on 27 November 2014 and subsequently placed in liquidation and then administration.
The ability of the Group to continue as a going concern is dependent on securing additional funding through the DOCA2
These conditions indicate a material uncertainty that may cast a significant doubt about the entity's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
The DOCA2 provides for the compromise of creditors' claims, recapitalisation of the Company and (subject to regulatory approval) re-quotation of its securities on the ASX.
The Company expects to recapitalise following completion of the DOCA2 with sufficient funds to continue as a going concern.
The Proponent of the DOCA2 has informed the Deed Administrators that there will be an initial capital raising of between \$750,000 and \$1,000,000, which will be utilised to undertake a relisting process. Then through an IPO the company will look to raise a minimum of \$2,000,000.
Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the entity not continue as a going concern.
3. Significant Accounting Policies
Australian accounting standards and Interpretations that have recently been issued or amended but are not yet effective and to the best of the Deed Administrators'/Liquidators' knowledge, have not been adopted by the Group for the year ended 31 December 2015. Relevant Standards and Interpretations are outlined in the table below.
| Title | Summary | Application date for Group |
|---|---|---|
| AASB 15 Revenue from Contracts with Customers |
AASB 15 provides a single, principles-based five-step model to be applied to all contracts with customers. Guidance is provided on topics such as the point in which revenue is recognised, accounting for variable consideration, costs of fulfilling and obtaining a contract and various related matters. New disclosures about revenue also are introduced. |
1 July 2018 |
| AASB 16 Leases | AASB 16 provides a new lessee accounting model which requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee measures right- of-use assets similarly to other non-financial assets and lease liabilities similarly to other financial liabilities. Assets and liabilities arising from a lease are initially measured on a present value basis. The measurement includes non-cancellable lease payments (including inflation-linked payments), and also includes payments to be made in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or not to exercise an option to terminate the lease. AASB 16 contains disclosure requirements for lessees. |
1 July 2019 |
| Title | Summary | Application date for Group |
|---|---|---|
| AASB Financial 9 Instruments |
A finalised version of AASB 9 which contains accounting requirements for financial instruments, replacing AASB 139 Financial Instruments: Recognition and Measurement. The standard contains requirements in the areas of classification and measurement, impairment, hedge accounting and derecognition. |
1 July 2018 |
To the best of the Deed Administrators' and Liquidators' knowledge (which is incomplete), the Group has decided not to early adopt any of the new and amended pronouncements. The impact of the above standards is yet to be determined.
4. Dividends
To the best of the Deed Administrators' and Liquidators' knowledge (which is incomplete), there have been no dividends paid or declared in the period or in the previous reporting period.
5. Operating Segments
Segment Information
2015(Half Year)
Incomplete Records
The financial report has been compiled from the extracted MYOB records for the Company that were made available to the Deed Administrators and Liquidators. The Deed Administrators and Liquidators were not in office for the periods presented in this report, nor were they parties involved with the Company and did not have oversight or control over the group's financial reporting systems including but not limited to being able to obtain access to complete accounting records of the Company. Reasonable effort has been made by the appointed Deed Administrators and Liquidators to ascertain the position of the Company as at 31 December 2015.
| 2014(Half Year) | AUSTRALIA \$ |
UNITED STATES \$ |
ELIMINATIONS | TOTAL \$ |
|---|---|---|---|---|
| REVENUE | ||||
| Interest income | 270 | ٠ | 270 | |
| Other income | 45,917 | ٠ | 45 917 | |
| Total segment revenue | 46,187 | ٠ | 46,187 | |
| Segment result | (3,532,990) | (550, 273) | ٠ | (4,083,263) |
| Segment assets | 130.470 | 120,142 | ٠ | 250,612 |
| Segment liabilities | 103,426 | 2.924,461 | ۰ | 3,027,887 |
6. Fair Value Measurements
To the best of the Deed Administrators' and Liquidators' knowledge (which is incomplete), the fair value of financial assets and financial liabilities of the Group approximated their carrying amount.
7. Borrowings
| CONSOLIDATED | |||
|---|---|---|---|
| 31 DECEMBER 2015 \$ |
30 JUNE 2015 | ||
| Opening Balance | |||
| Convertible Notes (Face Value) - (i) | 335,000 | 335,000 | |
| Notes Converted | ٠ | ||
| Borrowings - (ii) | 2,585,680 | 2,465,680 | |
| Closing Balance | 2,920,680 | 2,800,680 |
$(i)$ Convertible Notes
To the best of the Deed Administrators' and Liquidators' knowledge (which is incomplete), no Convertible Notes were issued during the period.
$(ii)$ Borrowings
To the best of the Deed Administrators' and Liquidators' knowledge (which is incomplete), during the period the company's borrowing from Directors increased by \$120,000.
As detailed in Note 1, to prepare the Financial Report, the appointed Deed Administrators and Liquidators have extracted data from the Company's accounting system. However, there may be information that the appointed Deed Administrators and Liquidators have not been able to obtain, the impact of which may or may not be material on the accounts. These financial statements do not contain all required information or disclosures in relation to transactions undertaken by the Company as this information is unascertainable by the appointed Deed Administrators/Liquidators.
8. Contingent Liabilities
To the best of the Deed Administrators' and Liquidators' knowledge (which is incomplete), the company is not aware of any contingent liabilities that may affect the financials for the half year ended 31 December 2015.
9. Impairment of Capitalised Exploration Expenditure
| ٠ | CONSOLIDATED | |
|---|---|---|
| 31 DECEMBER 2015 \$ |
30 JUNE 2015 \$ |
|
| Non-producing properties | ||
| Exploration and evaluation expenditure: | ||
| Opening Balance | $\bullet$ | 268,559* |
| Impairment of exploration expenditure | ۰. | |
| Impairment of Deferred Tax Liability | J. | |
| Net foreign currency exchange differences | "∗ | |
| Closing Balance | ÷. |
As detailed in Note 1, to prepare the financial report, the appointed Deed Administrators and Liquidators have extracted data from the Company's accounting system. However, there may be information that the appointed Deed Administrators and Liquidators have not been able to obtain, the impact of which may or may not be material on the accounts. These financial statements do not contain all required information or disclosures in relation to transactions undertaken by the Company as this information is unascertainable by the subsequently appointed Deed Administrators and Liquidators.
$10.$ Issued Capital
| CONSOLIDATED | |||
|---|---|---|---|
| 31 DECEMBER 2015 | 30 JUNE 2015 | ||
| 286,185,210 fully paid ordinary shares (31 December 2015) | 61,822,770 | 61,822,770 | |
| Share issue expenses | (1,984,714) | (1,984,714) | |
| 59,838,056 | 59.838,056 |
The company does not have a limited amount of authorised capital and issued shares do not have a par value.
| CONSOLIDATED AND COMPANY | ||||
|---|---|---|---|---|
| 31 DECEMBER 2015 NUMBER |
31 DECEMBER 2015 |
30 JUNE 2015 NUMBER |
30 JUNE 2015 \$ |
|
| Fully paid ordinary shares Balance at beginning of financial year |
286, 185, 210 | 60,000,374 | 808.624.930 | 58.058,667 |
| Consolidation of shares | $(1, 144, 741, 529)^1$ | |||
| Shares allotted during the year | 627,837,476 | 1,888,511 | ||
| Share issue costs Share Issue adjustments |
(5,537,667) | (109, 122) | ||
| Ordinary fully paid shares at end of year | 286, 185, 210 | 60.000.374 | 286,185,210 | 59.838.056 |
1 Due to the change in nature and scale of the company's activities as a result of the Shenglong transaction the ASX required the company to re-comply with admission requirements set out in Chapters 1 & 2 of the ASX listing rules. Consequently the company had to consolidate its issued capital such that the volume weighted average price of the Company's shares over the period of the 5 trading days prior to the AGM (29 Oct 2014) (5 Day VWAP) will equal \$0.02. The 5 Day VWAP is \$0.004 which will result in a consolidation of 1 share for every 5 shares and 1 option for every 5 option resulting in there being, post consolidation. 286,185,210 shares and 103,584,236 options on issue in. the company.
Fully paid ordinary shares carry one vote per share and carry the right to dividends. Partly paid ordinary shares entitle the holder to vote, participate in dividends and proceeds on a winding up in proportion to the number of and amounts paid on the shares held. The company does not have any partly paid shares.
$11.$ Events after Balance Date
On 9 June 2016, Jim Malone Executive Director, Company Secretary resigned.
On 28 June 2016, Vinod Sharma Non-Executive Director resigned as a Director.
On 23 August 2016, David Ashley Norman Hurt and Christopher Michael Williamson were appointed Liquidators of the Company, at which time, the powers of the Company's officers (including Director) were suspended and the Liquidators' assumed control of the Company's business, property and affairs.
At the meeting of creditors held on 9 February 2017, the creditors of the Company resolved to authorise the Liquidators to appoint themselves as Voluntary Administrators of the Company. The Liquidators subsequently appointed themselves as Voluntary Administrators of the Company on 10 February 2017.
On 13 March 2017, a meeting of creditors was convened for 20 March 2017 to consider the future of the Company, and whether to accept a Deed of Company Arrangement proposal (DOCA1) formulated by Trident Capital Pty Ltd (Trident). On 20 March 2017, creditors resolved to adjourn the meeting for a period not exceeding fifteen (15) business days. At the reconvened meeting of creditors held on 10 April 2017, creditors resolved to further adjourn the meeting for a period not exceeding thirty (30) business days.
On 10 May 2017, an alternative DOCA proposal (DOCA2) was received from one of the secured creditors, Caason Group Pty Ltd (Caason).
On 17 May 2017, the adjourned meeting of creditors was reconvened for 25 May 2017. At the meeting on 25 May 2017, the creditors resolved that the Company execute the DOCA2 proposal and that Christopher Michael Williamson and David Ashley Norman be appointed as Administrators of the DOCA2.
A summary of the material terms of the Recapitalisation Proposal is set out below, the Company is currently subject to DOCA2
Key conditions precedent for completion of the DOCA2 include:
- Satisfying the conditions of the ASX;
- Payment of \$750,000 to the Deed Administrators' trust account for the shell structure of the Company within 14 days of the latter of:
- Execution of the DOCA2; $\Omega$
- $\Omega$ The Court prospectively approving the termination of the liquidation simultaneously with the effectuation of the DOCA2 (subject to shareholder approval, receipt of \$750,000 and distribution of funds); and
- Shareholders' approval of all resolutions to conduct the proposed capital raising. $\Omega$
- DOCA2 be acceptable to the secured creditors. $\circ$
- The DOCA2 proposal is conditional upon and subject to the following:
- the passing of all necessary shareholder, creditor and court approvals to implement the proposal; $\mathbf{o}$
- $\Omega$ all secured creditors providing their written consent to be bound by the Reconstruction Deed; and
- the parties executing a Reconstruction Deed to give legal effect to the offer within thirty (30) days of $\circ$ acceptance of the binding offer.
If the conditions are not waived by mutual agreement or satisfied by 31 October 2017, this offer will be at an end.
- The DOCA2 proposal is contingent on successful shareholder approval to conduct each of the capital raisings (listed in Schedule 1 Clause 5).
- The DOCA2 sum (\$750,000) will be applied by the Deed Administrators (with reference to sections 556, 560 and 561 of the Act) in the manner and order of priority as follows:
- To pay any liabilities properly incurred by the Liquidators, Administrators, and Deed Administrators during $\Omega$ the course of the liquidation, administration and the DOCA2;
- To pay the Liquidators, Administrators, and Deed Administrators' remuneration and out of pocket $\mathbf{o}$ expenses as negotiated with Caason;
- To pay any outstanding employee entitlements as at 10 February 2017 as negotiated with Caason; and $\mathbf{o}$
- To part pay secured creditors of the Company as at 10 February 2017 on a pari passu basis (the balance $\mathbf{o}$ of the debt owing to the secured creditors has been agreed to be converted into shares under DOCA2 proposal or used to fund the relisting of the company on the ASX at the discretion of the secured creditors); and
- To pay dividends to the ordinary unsecured creditors of the Company whose debt and claims arose on $\mathbf{o}$ or before 10 February 2017 and are admitted to proof.
- any existing Convertible Notes to prove as debt on the basis the debt is secured;
- the company proposes to consolidate its share capital on a maximum 100:1 reduction basis: and
- unlisted options or partly paid options are to be cancelled.
On 22 September 2017, the Deed Administrators convened a meeting of creditors to be held on 10 October 2017 where the creditors are to vote to vary the original DOCA2. At the meeting of creditors held on 10 October 2017, creditors resolved that the proposed variations to the original DOCA2 be accepted.
A summary of the key proposed variations to the DOCA2 and Reconstruction Deed are outlined below:
- payment to the Deed Administrators of \$451,869 (compared to the original DOCA2 sum of a) \$750,000) on or before 31 October 2017 (or such later date as agreed between Caason and the Deed Administrators).
- $b)$ the varied DOCA2 and Reconstruction Deed are not conditional upon successful shareholder approval to implement the restructuring proposal and conduct the capital raisings.
- the conditions precedent to payment of the DOCA2 sum of \$451,869 are outlined in Clause 3.1 $\mathbf{c}$ of the proposed varied DOCA2 (refer Annexure A), as follows:
- all secured creditors providing their written consent to release their security; d)
- the Deed Administrators providing written notice to all Instrument Holders that upon $e)$ termination of the DOCA2 due to it being fully effectuated all instruments will be cancelled and all claims by Instrument Holders will be extinguished (unless otherwise agreed in writing between the parties):
- $f$ the Deed Administrators providing written notice to Caason that, with the exception of the secured creditors (Caason and Robert Jesse Hunt ("Hunt")) and Trident Capital Pty Ltd ("Trident") debt, upon termination of the DOCA2 there will be no enforceable claims against the Company by Instrument Holders;
- Caason is satisfied in its absolute discretion that no claims will be made against the $g)$ Company by Instrument Holders:
- $h)$ execution of the Reconstruction Deed by the Company, Deed Administrators and Caason;
- all conditions precedent in Clause 2.1 of the Reconstruction Deed (refer Annexure B) have i) been satisfied or waived, including:
- ASX confirming that nothing contemplated by the DOCA2 and the Reconstruction Deed will prevent the Company form retaining its ASX listing;
- Trident agreeing to convert its debt (\$27,500) into shares;
- Hunt agrees to convert its remaining debt into shares and options:
- all the conditions in the DOCA2 have been satisfied or waived (with the exception of the condition precedent in clause 3.I(f) of the DOCA2;
- the Deed Administrators issue the meeting documents to convene the shareholder meeting: and
- the Deed Administrators or the Liquidators applying for an order to the effect that the winding up of the Company is or will be terminated pursuant to section 482 of the Act:
- $i)$ Caason pays \$15,000 into the Trust Account of Jackson McDonald (for the purpose of the application to terminate the winding up of the Company).
If the conditions are not waived by mutual agreement or satisfied by 31 October 2017, this offer will be at an end.
The Company proposes to consolidate its share capital on a maximum 50:1 reduction basis (previously on a 100:1 basis).
DEED ADMINISTRATORS'/LIQUIDATORS' DECLARATION
In the opinion of the appointed Deed Administrators and Liquidators of Ausroc Metals Ltd (In Liquidation)(Subject to Deed of Company Arrangement):
- As set out in note 1, as the appointed Deed Administrators and Liquidators have extracted the $1.$ information for this financial report from the Company's MYOB records that were made available to the Deed Administrators and Liquidators, they are of the opinion that it is not possible to state that the financial statements, notes thereto, and the remuneration disclosures contained in the Remuneration Report in the Directors' Report, are in accordance with the Corporations Act 2001, including:
- (i) Giving a true and fair view of the Company's financial position as at 31 December 2015 and of its performance for the half-vear ended on that date:
- (ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
- (iii) Complying with International Financial Reporting Standards.
- $2.$ As a result of the Subsequent Events, the Deed Administrators/Liquidators cannot say that there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
- The declaration required to be made in accordance with Section 295A of the Corporation Act 2001 for $31$ the half-vear ended 31 December 2015 has been unable to be made due the reasons set out in Note 1.
Signed by Christopher Michael Williamson and David Ashley Norman Hurt in their capacity as Deed Administrators and Liquidators of the Company:
" Williamsog.
Christopher Michael Williamson
PERTH, 13 OCTOBER 2017
David Ashley Norman Hurt
38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia
INDEPENDENT AUDITOR'S REVIEW REPORT
To the members of Ausroc Metals Limited (Subject to Deed of Company Arrangement/In Liquidation)
Report on the Half-Year Financial Report
We were engaged to review the accompanying half-year financial report of Ausroc Metals Limited (subject to Deed of Company Arrangement/In Liquidation), which comprises the consolidated statement of financial position as at 31 December 15, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, notes comprising a statement of accounting policies and other explanatory information, and the Deed Administrators'/Liquidators' declaration of the consolidated entity comprising the company and the entities it controlled at the half-year's end or from time to time during the half-year.
The Deed Administrators' and Liquidators' Responsibility for the Half-Year Financial Report
The Deed Administrators and Liquidators 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 Deed Administrators and Liquidators determine is necessary to enable the preparation of the half-year financial report that 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. Because of the matters described in the Basis for Disclaimer of Conclusion paragraph, however, we were not able to obtain sufficient appropriate evidence to provide a basis for expressing a conclusion on the half-year financial report.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the Deed Administrators and Liquidators of Ausroc Metals Limited) (subject to Deed of Company Arrangement/In Liquidation), would be in the same terms if given to the Deed Administrators and Liquidators as at the time of this auditor's review report.
Basis for Disclaimer of Conclusion
(i) On 23 August 2016, the powers of the Directors of Ausroc Metals Limited (subject to Deed of Company Arrangement/In Liquidation) were suspended upon liquidation of the Company and the Deed Administrators and Liquidators were appointed to assume control of the Company's business, property and affairs. As stated in note 1(a) of the financial report, the financial report has been prepared by the Deed Administrators and Liquidators who were not in office for the periods presented in this report, and the Deed Administrators and Liquidators did not have oversight or control over the Group's financial reporting systems including (but not limited to) being able to obtain access to the complete accounting records of the Group.
As a result of this matter, we were unable to obtain sufficient appropriate evidence or determine whether any adjustments might have been found necessary in respect of the consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows.
(i) As disclosed in Note 2 to the financial report, the Deed Administrators and Liquidators state that the consolidated financial report has been prepared on a going concern basis. In assessing the going concern basis of preparation, the Deed Administrators and Liquidators have made a number of assumptions including the assumption that the ability of the Group to continue as a going concern is dependent upon securing additional funding through the DOCA2. The DOCA2 provides for the compromise of creditors' claims, recapitalisation of the Company, an initial capital raising of between \$750,000 and \$1,000,000 and (subject to regulatory approval) re-quotation of its securities on the ASX.
We have been unable to obtain alternative evidence which would provide sufficient appropriate evidence as to whether the Company may be able to raise such capital, and hence remove significant doubt of its ability to continue as a going concern for a period of 12 months from the date of this auditor's review report.
Disclaimer of Conclusion
Due to the significance of the matters described in the Basis for Disclaimer of Conclusion paragraph, we were unable to obtain sufficient appropriate evidence to form a conclusion on the accompanying financial statements of Ausroc Metals Limited (subject to Deed of Company Arrangement/In Liquidation). Accordingly, we do not express a conclusion on these financial statements.
BDO Audit (WA) Pty Ltd
Dean Just Director
Perth, 13 October 2017