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VYSARN LIMITED — Interim / Quarterly Report 2015
Mar 15, 2015
66029_rns_2015-03-15_392b24af-949d-40f7-b5a5-be0a77664c19.pdf
Interim / Quarterly Report
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Consolidated
financial
report
for
the
half-‐year
ended
31
December
2014
==> picture [385 x 198] intentionally omitted <==
(ABN
41
124
212
175)
==> picture [244 x 24] intentionally omitted <==
MHM
Metals
Limited
ABN
41
124
212
175
| Contents | Page |
|---|---|
| Corporate directory | 3 |
| Directors’ report | 4 |
| Auditors’ independence declaration | 8 |
| Directors’ declaration | 9 |
| Condensed consolidated financial statements | 11 |
| Notes to condensed consolidated financial statements | 16 |
| Independent auditor’s review report to the members | 23 |
Half-‐Year
Report
December
2014
2
MHM
Metals
Limited
ABN
41
124
212
175
**Corporate
Directory**
Directors
Mr
Iain
M.
C.
Kirkwood (Chairman) Mr
Matthew
T.
M.
Keen
Mr
Joseph
M.J.
van
den.
Elsen
Secretary
Mr
Lee
D.
Mitchell
**Share
Register**
Security
Transfer
Registrars
Pty
Ltd 770
Canning
Highway
Pty
Ltd Applecross
WA
6153
Auditor
Deloitte
Touche
Tohmatsu 550
Bourke
Street Melbourne
VIC
3000
Solicitors
Logie-‐Smith
Lanyon
Lawyers Level
12,
575
Bourke
Street Melbourne
VIC
3000
Bankers
National
Australia
Bank Business
Banking
Centre 49-‐51
Malop
Street Geelong
VIC
3220
**Stock
Exchange
Listings**
MHM
Metals
Limited
shares
are listed
on
the
Australian
Securities
Exchange
Ordinary
Fully
Paid
Shares
(ASX
Code:
MHM)
**Registered
Office
in
Australia**
72-‐80
Buckley
Grove Moolap
VIC
3221 Phone:
+61
3
5248
2002 Facsimile:
+61
3
5248
3498 Email:
[email protected] Website:
www.mhmmetals.com
Half-‐Year
Report
December
2014
3
MHM
Metals
Limited
ABN
41
124
212
175
**Directors’
Report**
The
directors
of
MHM
Metals
Limited
(‘MHM’
or
the
‘Company’)
submit
herewith
the
financial
report
of
MHM Metals
Limited
and
its
subsidiaries
(the
Group)
for
the
half-‐year
ended
31
December
2014.
In
order
to
comply with
the
provisions
of
the
Corporations
Act
2001,
the
directors
report
as
follows:
The
names
of
the
directors
of
the
company
during
or
since
the
end
of
the
half-‐year
are:
Name
Mr
Iain
M.
C.
Kirkwood Dr
David
B.
Menzies Mr
Matthew
T.
M.
Keen Mr
Joseph
M.
J.
van
den
Elsen
The
above
named
directors
held
office
during
and
since
the
end
of
the
half-‐year
except
for:
-
Mr
Joseph
M.
J.
van
den
Elsen
–
appointed
10
December
2014 -
Dr
David
B
Menzies
–
resigned
28
February
2015
**Principal
activities**
During
the
period
the
principal
activities
of
the
Group
consisted
of
aluminium
salt
slag
processing
and
production of
Non
Metallic
Product
(NMP)
for
sale
to
domestic
and
overseas
customers.
Dividends
No
dividends
were
paid
to
members
during
the
half-‐
year
and
the
directors
do
not
recommend
the
payment
of
a dividend.
**Review
of
operations**
**(a)
Financial
performance**
| Half-year ended 31 Dec 2014 31 Dec 2013 $ $ |
|
|---|---|
| Revenue from continuing operations Loss before income tax expense Income tax benefit Profit /(loss) attributable to members of MHM Metals Limited |
2,034,364 3,785,232 |
(3,472,070) (4,172,120) 1,483,628 1,387,802 |
|
| (1,988,442) (2,784,318) |
Revenue
decreased
to
$2,034,364
(2013:
$3,785,232)
**(b)
Financial
position**
At
the
end
of
the
half-‐year
MHM
Metals
Limited
had
cash
balances
of
$3,369,491
and
net
assets
of
$5,390,161. Total
liabilities
amounted
to
$2,039,684
being
trade
and
other
payables
of
$633,223
and
provisions
of $1,406,461.
Half-‐Year
Report
December
2014
4
MHM
Metals
Limited
ABN
41
124
212
175
**Directors’
Report
(cont’d)**
**Review
of
operations
(cont’d)**
During
the
reporting
period,
MHM’s
Australian
aluminium
operations
delivered
gross
half-‐yearly
cash
receipts from
customers
of
$3,110,136.
Total
cash
receipts
arising
from
R
&
D
tax
incentive
for
the
2013/14
financial
year was
$2,152,079.
The
half-‐year
net
cash
provided
by
operating
activities
was
$977,704.
There
was
no
capital
expenditure
during
the
reporting
period.
CORPORATE
During
the
half-‐year
period
Joseph
van
den
Elsen
was
appointed
to
the
board
as
a
non-‐executive
director.
Joseph is
a
qualified
Australian
Lawyer
and
is
currently
an
Executive
Director
of
Hampshire
Mining
Group,
a
privately owned
coal
project
development
group.
Prior
to
joining
Hampshire
Mining
Group,
Mr
van
den
Elsen
was
an Associate
Director
with
UBS
having
previously
held
a
comparable
position
with
Goldman
Sachs
JB
Were.
Subsequent
to
the
half-‐year
Dr.
David
Menzies
retired
from
the
board.
The
Board
thanks
David
for
his involvement
with
the
Company
in
a
challenging
period.
**MOOLAP
PLANT**
As
previously
disclosed,
the
shutdown
of
the
Sims
Laverton
plant
and
then
subsequent
shutdown
of
the
Alcoa Yenorra
plant
means
that
there
is
no
longer
a
supply
of
feedstock
for
the
Moolap
operations.
Alcoa
will
ship
the last
of
its
feedstock
to
Alreco
in
March
2015
and
the
Moolap
operations
will
cease
during
the
3rd
quarter
of FY2015.
Post
the
operational
closure
of
the
Moolap
facilities
a
clean
up
operation
will
commence.
The
clean
up
will require
the
removal,
either
by
sale
and/or
disposal
of
the
remaining
NMP
and
partly
processed
material
on
the site
at
80
Buckley
Grove.
It
is
expected
that
this
will
be
ongoing
for
several
months.
The
Company
is
focused
on completing
the
clean
up
in
the
most
cost
effective
and
environmentally
sensitive
manner.
Once
the
Moolap
facility
is
remediated
to
an
acceptable
standard
the
Company
will
look
to
dispose
of
the property,
plant
and
equipment.
**RUSSELLVILLE
PROPERTY,
KENTUCKY,
USA**
As
foreshadowed
in
the
results
of
the
Company’s
strategic
review
announced
to
the
market
on
30
September 2014,
the
Company
has
placed
the
Russellville
property
on
the
market.
Whilst
there
can
be
no
certainty
as
to
the timing
of
the
sale,
nor
the
ultimate
sale
price,
the
Company
is
confident
of
ultimately
realising
at
least
$800k
USD, consistent
with
the
carrying
value
of
the
property.
LITIGATION
In
September,
a
Federal
Court
judgement
was
handed
down
in
the
case
the
Company
had
bought
against
its former
Managing
Director,
Frank
Rogers,
and
Rogers
Southern
Pty
Ltd
in
favour
of
Company.
The
judgement
was for
$548,581
plus
costs
and
interest
for
a
total
of
$1,045,821.
Frank
Rogers
and
Rogers
Southern
appealed
the judgement
and
that
appeal
was
heard
on
the
2[nd] of
March
2015.
The
Company
is
confident
of
its
position
and awaits
the
decision
on
the
appeal
process.
Half-‐Year
Report
December
2014
5
MHM
Metals
Limited
ABN
41
124
212
175
**Directors’
Report
(cont’d)**
**Review
of
operations
(cont’d)**
**FINANCIAL
POSITION
OF
THE
COMPANY**
As
at
31
December
2014
the
Company
held
a
total
of
$3.4
million
in
cash
and
cash
equivalents
and
as
per
the Group’s
reviewed
financial
statements,
an
equity
valuation
of
$5.4
million,
including
a
provision
for
the
Moolap plant
clean
up,
equivalent
to
an
NTA
of
4.0c
per
share.
Further
the
Company
can
expect
to
receive
$1
million
later in
the
year
in
respect
of
the
FY2015
R&D
Tax
Incentive
of
which
$500,000
is
accrued
in
the
balance
sheet
(in FY2014,
the
Company
received
$2,152,079).
Accordingly
taking
into
account
the
assets
available
currently
and
expected
cash
receipts,
the
directors
believe that
the
Company
is
in
a
position
to
more
than
adequately
to
fund
the
clean
up
of
the
80
Buckley
Grove
property.
Importantly,
aggregating
the
current
liquid
assets
with
expected
proceeds
from
FY2015
R&D
tax
incentive
,sales of
freehold
property
and
Plant
&
Equipment
and
the
expected
recovery
of
litigation
judgments,
the
directors
are of
the
view
that
MHM
will
be
in
a
strong
position
to
invest
in
a
new
business
opportunity,
capable
of
becoming
its principal
long
term
undertaking.
The
company
continues
to
assess
business
opportunities
capable
of
becoming
the
principal
long
term
undertaking and
will
keep
the
market
informed
of
any
and
all
material
developments.
Half-‐Year
Report
December
2014
6
MHM
Metals
Limited
ABN
41
124
212
175
**Directors’
Report
(cont’d)**
**Auditor’s
independence
declaration**
A
copy
of
the
auditor's
independence
declaration
is
included
on
page
8
of
the
half-‐year
report.
**Rounding
off
of
amounts**
The
company
is
a
company
of
the
kind
referred
to
in
ASIC
Class
Order
98/100,
dated
10
July
1998,
and
in accordance
with
that
Class
Order
amounts
in
the
directors’
report
and
the
half-‐year
financial
report
are
rounded off
to
the
nearest
whole
dollar,
unless
otherwise
indicated.
Signed
in
accordance
with
a
resolution
of
directors
made
pursuant
to
s.306(3)
of
the Corporations
Act 2001 This
declaration
is
made
in
accordance
with
a
resolution
of
the
directors.
On
behalf
of
the
Directors
==> picture [134 x 45] intentionally omitted <==
Mr
Iain
M.
C.
Kirkwood Director Geelong,
16
March
2015
Half-‐Year
Report
December
2014
7
==> picture [130 x 25] intentionally omitted <==
Deloitte Touche Tohmatsu ABN 74 490 121 060
550 Bourke Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia
Tel: +61 3 9671 7000 Fax: +61 3 9671 7001 www.deloitte.com.au
The Board of Directors MHM Metals Ltd 80 Buckley Grove Moolap VIC 3221
16 March 2015
Dear Board Members
MHM Metals Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of MHM Metals Limited.
As lead audit partner for the review of the financial statements of MHM Metals Limited for the half-year ended 31 December 2014, I declare that to the best of my knowledge and belief, there have been no contraventions of:
-
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
-
(ii) any applicable code of professional conduct in relation to the review.
Yours sincerely,
==> picture [199 x 34] intentionally omitted <==
DELOITTE TOUCHE TOHMATSU
==> picture [111 x 29] intentionally omitted <==
Chris Biermann Partner Chartered Accountants
8
Liability limited by a scheme approved under Professional Standards Legislation Member of Deloitte Touche Tohmatsu Limited
MHM
Metals
Limited
ABN
41
124
212
175
**Directors’
Declaration**
**For
the
half-‐year
ended
31
December
2014**
The
directors
declare
that:
-
(a) in
the
directors’
opinion,
there
are
reasonable
grounds
to
believe
that
the
company
will
be
able
to
pay
its debts
as
and
when
they
become
due
and
payable;
and -
(b) in
the
directors’
opinion,
the
attached
financial
statements
and
notes
thereto
are
in
accordance
with
the Corporations
Act
2001,
including
compliance
with
accounting
standards
and
giving
a
true
and
fair
view
of the
financial
position
and
performance
of
the
consolidated
entity.
Signed
in
accordance
with
a
resolution
of
the
directors
made
pursuant
to
s.303(5)
of
the
Corporations
Act
2001.
On
behalf
of
the
Directors
==> picture [134 x 44] intentionally omitted <==
Mr
Iain
M.
C.
Kirkwood Director
Geelong,
16
March
2015
Half-‐Year
Report
December
2014
9
MHM
Metals
Limited
ABN
41
124
212
175
**Index
to
the
condensed
consolidated
financial
statements**
| Index to the condensed consolidated financial statements | |
|---|---|
| Page | |
| Condensed consolidated statement of profit or loss and other comprehensive income | 11 |
| Condensed consolidated statement of financial position | 12 |
| Condensed consolidated statement of changes in equity | 14 |
| Condensed consolidated statement of cash flows | 15 |
| Notes to the Consolidated Financial Statements | |
| 1 Significant accounting policies | 16 |
| 2 Critical accounting estimates and judgements | 18 |
| 3 Segment information | 18 |
| 4 Impairment expense | 19 |
| 5 Trade and other receivables | 19 |
| 6 Assets classified as available for sale | 20 |
| 7 Property, plant & equipment | 20 |
| 8 Provisions | 21 |
| 9 Equity securities issued | 21 |
| 10 Contingencies | 22 |
| 11 Dividends | 22 |
| 12 Events occurring after the reporting period | 22 |
Half-‐Year
Report
December
2014
10
MHM
Metals
Limited
ABN
41
124
212
175
**Condensed
consolidated
statement
of
profit
or
loss
and
other
comprehensive
income for
the
half-‐year
ended
31
December
2014**
Continuing operations Sales Revenue Production expenses Depreciation and amortisation expenses Gross Profit/(Loss) Interest Income Administrative expenses Consultancy fees Employee benefit expenses Impairment expenses Insurance expenses Professional fees Legal fees Rehabilitation expense Foreign exchange gain/(loss) Other income and expenses Profit/(loss) before tax Income tax benefit Profit/(loss) for the period from continuing operations Other comprehensive income Profit/(loss) for the period Earnings per share From continuing operations Basic earnings/(loss) (cents per share) |
Notes |
Consolidated |
|---|---|---|
| Half-year ended | ||
| 31 Dec 2014 31 Dec 2013 $ $ |
||
4 |
2,034,364 3,785,232 (2,808,478) (3,039,868) (945,090) (1,055,146) |
|
| (1,719,204) (309,782) |
||
33,203 35,202 (111,593) (217,270) (26,513) (27,456) (771,045) (406,338) (286,903) (3,000,000) (102,067) (87,682) (92,646) (131,787) (136,592) (59,533) (456,603) - 224,434 73,834 (26,541) (41,308) |
||
(3,472,070) (4,172,120) 1,483,628 1,387,802 |
||
(1,988,442) (2,784,318) - - |
||
(1,988,442) (2,784,318) |
||
(1.53) (2.13) |
Notes
to
the
condensed
consolidated
financial
statements
are
included
on
pages 16
to
22
Half-‐Year
Report
December
2014
11
MHM
Metals
Limited
ABN
41
124
212
175
**Condensed
consolidated
statement
of
financial
position as
at
31
December
2014**
Current assets Cash and cash equivalents Trade and other receivables Other assets Assets held for sale Total current assets Non-current assets Property, plant and equipment Total non-current assets Total assets |
Notes |
Consolidated |
|---|---|---|
| 31 Dec 2014 30 Jun 2014 $ $ |
||
5 6 7 |
3,369,491 737,568 2,403,479 2,379,141 95,440 81,793 975,372 - |
|
5,177,871 4,864,413 |
||
2,251,974 4,257,976 |
||
2,251,974 4,257,976 |
||
| 7,429,845 9,122,389 |
Notes
to
the
condensed
consolidated
financial
statements
are
included
on
pages 16
to
22
Half-‐Year
Report
December
2014
12
MHM
Metals
Limited
ABN
41
124
212
175
**Condensed
consolidated
statement
of
financial
position as
at
31
December
2014
(cont.)**
Current liabilities Trade and other payables Provisions Total current liabilities Non-current liabilities Provisions Total non-current liabilities Total liabilities Net assets Equity Issued capital Share based payment reserve Accumulated losses Total equity |
Notes |
Consolidated |
|---|---|---|
| 31 Dec 2014 30 Jun 2014 $ $ |
||
8 9 |
633,223 847,560 1,406,461 892,568 |
|
2,039,684 1,740,128 |
||
- 3,658 |
||
- 3,658 |
||
| 2,039,684 1,743,786 |
||
| 5,390,161 7,378,603 |
||
29,846,015 29,846,015 2,303,074 2,303,074 (26,758,928) (24,770,486) |
||
| 5,390,161 7,378,603 |
Notes
to
the
condensed
consolidated
financial
statements
are
included
on
pages 16
to
22
Half-‐Year
Report
December
2014
13
MHM
Metals
Limited
ABN
41
124
212
175
**Condensed
consolidated
statement
of
changes
in
equity for
the
half-‐year
ended
31
December
2014**
Consolidated Notes |
Issued Capital Accumulated Losses Share Based Payment Reserve Total $ $ $ $ |
|---|---|
Balance 1 July 2013 Total comprehensive income/(loss) for the half-year Balance 31 December 2013 Balance 1 July 2014 Total comprehensive income/(loss) for the half-year Balance 31 December 2014 |
|
| 29,846,015 (17,878,252) 2,303,074 14,270,837 |
|
| - (2,784,318) - (2,784,318) |
|
| 29,846,015 (20,662,570) 2,303,074 11,486,519 |
|
| 29,846,015 (24,770,486) 2,303,074 7,378,603 |
|
| - (1,988,442) - (1,988,442) |
|
| 29,846,015 (26,758,928) 2,303,074 5,390,161 |
Notes
to
the
condensed
consolidated
financial
statements
are
included
on
pages 16
to
22
Half-‐Year
Report
December
2014
14
MHM
Metals
Limited
ABN
41
124
212
175
**Condensed
consolidated
statement
of
cash
flows for
the
half-‐year
ended
31
December
2014**
Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest and other costs of finance paid R&D tax offset received Net cash provided by / (used in) operating activities Cash flows from investing activities Payments for plant and equipment Net cash used in investing activities Cash flows from financing activities Net cash provided by financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at the beginning of the financial period Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial period |
Notes |
Consolidated |
|---|---|---|
| Half-year ended | ||
| 31 Dec 2014 31 Dec 2013 $ $ |
||
3,110,136 3,719,969 (4,307,214) (3,529,689) 22,703 35,202 2,152,079 - |
||
| 977,704 225,482 |
||
- (1,408,229) |
||
| - (1,408,229) |
||
| - - |
||
977,704 (1,182,747) 2,403,479 2,401,883 (11,692) 3,425 |
||
| 3,369,491 1,222,561 |
Notes
to
the
condensed
consolidated
financial
statements
are
included
on
pages 16
to
22
Half-‐Year
Report
December
2014
15
MHM
Metals
Limited
ABN
41
124
212
175
**Notes
to
the
condensed
consolidated
financial
statements**
**1.
Significant
accounting
policies**
**Statement
of
compliance**
The
half-‐year
financial
report
is
a
general
purpose
financial
report
prepared
in
accordance
with
the
Corporations Act
2001
and
AASB
134
‘Interim
Financial
Reporting’.
Compliance
with
AASB
134
ensures
compliance
with International
Financial
Reporting
Standard
IAS
34
‘Interim
Financial
Reporting’.
The
half-‐year
report
does
not include
notes
of
the
type
normally
included
in
an
annual
financial
report
and
shall
be
read
in
conjunction
with
the most
recent
annual
financial
report.
**Basis
of
preparation**
The
condensed
consolidated
financial
statements
have
been
prepared
on
the
basis
of
historical
cost,
except
for the
revaluation
of
certain
non-‐current
assets
and
financial
instruments.
Cost
is
based
on
the
fair
values
of
the consideration
given
in
exchange
for
assets.
All
amounts
are
presented
in
Australian
dollars,
unless
otherwise noted.
The
company
is
a
company
of
the
kind
referred
to
in
ASIC
Class
Order
98/100,
dated
10
July
1998,
and
in accordance
with
that
Class
Order
amounts
in
the
directors’
report
and
the
half-‐year
financial
report
are
rounded off
to
the
nearest
thousand
dollars,
unless
otherwise
indicated.
The
accounting
policies
and
methods
of
computation
adopted
in
the
preparation
of
the
half-‐year
financial
report are
consistent
with
those
adopted
and
disclosed
in
the
company’s
2014
annual
financial
report
for
the
financial year
ended
30
June
2014,
except
for
the
impact
of
the
Standards
and
Interpretations
described
below.
These accounting
policies
are
consistent
with
Australian
Accounting
Standards
and
with
International
Financial Reporting
Standards.
The
Group
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
half-‐ year.
New
and
revised
Standards
and
amendments
thereof
and
Interpretations
effective
for
the
current
half-‐year
that are
relevant
to
the
Group
include:
-
AASB
1031
‘Materiality’
(2013) -
AASB
2012-‐3
‘Amendments
to
Australian
Accounting
Standards
–
Offsetting
Financial
Assets
and
Financial Liabilities’ -
AASB
2013-‐3
‘Amendments
to
AASB
136
–
Recoverable
Amount
Disclosures
for
Non-‐
Financial
Assets’ -
AASB
2013-‐4
‘Amendments
to
Australian
Accounting
Standards
–
Novation
of
Derivatives
and Continuation
of
Hedge
Accounting
‘ -
AASB
2013-‐5
‘Amendments
to
Australian
Accounting
Standards
–
Investment
Entities’ -
AASB
2013-‐9
‘Amendments
to
Australian
Accounting
Standards’
–
Part
B:
‘Materiality’ -
AASB
2014-‐1
‘Amendments
to
Australian
Accounting
Standards’ -
Part
A:
‘Annual
Improvements
2010-‐2012
and
2011-‐2013
Cycles’ -
Part
B:
‘Defined
Benefit
Plans:
Employee
Contributions
(Amendments
to
AASB
119)’
Half-‐Year
Report
December
2014
16
MHM
Metals
Limited
ABN
41
124
212
175
**Notes
to
the
condensed
consolidated
financial
statements**
1.
Significant
accounting
policies
(cont’d)
- Part
C:
‘Materiality’
- Interpretation
21
‘Levies’
**Going
Concern**
The
half-‐year
financial
report
has
been
prepared
on
the
going
concern
basis,
which
assumes
the
continuity
of normal
business
activity
and
the
realisation
of
assets
and
settlement
of
liabilities
in
the
normal
course
of
business.
For
the
half-‐year
ended
31
December
2014,
the
Group
incurred
a
net
loss
of
$1,988,442,
and
generated
net
cash inflows
from
operations
for
the
six
months
of
$977,704.
As
at
31
December
2014
the
Group
had
a
surplus
of current
assets
over
current
liabilities
of
$3,138,187,
and
had
$3,369,491
of
cash.
In
October
2014,
the
Directors
announced
that
the
Group
would
be
closing
its
aluminium
by-‐product
treatment operations
in
Moolap,
with
operations
to
cease
in
the
first
quarter
of
calendar
year
2015.
At
the
time
this
occurs, the
Group
will
no
longer
have
any
income
generating
activities.
The
Group’s
plans
during
2015
include:
-
Safe
and
efficient
clean-‐up
of
Alreco’s
plant
at
Moolap; -
Minimise
costs
and
maximise
cash
from
sale
of
all
assets
including
freehold
land
at
Moolap
and Russellville,
KY,
USA; -
Vigorously
pursue
recovery
claims
(refer
details
in
Note
10);
and -
Explore
business
opportunities
that
have
the
potential
to
rebuild
MHM
Metals’
shareholder
value.
Cash
flow
forecasts
prepared
by
management
demonstrate
that
the
Group
has
sufficient
funds
to
meet
its commitments
over
the
next
twelve
months.
For
that
reason
the
financial
statements
have
been
prepared
on
the basis
that
the
Group
is
a
going
concern.
**Non-‐current
assets
held
for
sale**
Non-‐current
assets
and
disposal
groups
are
classified
as
held
for
sale
if
their
carrying
amount
will
be
recovered principally
through
a
sale
transaction
rather
than
through
continuing
use.
This
condition
is
regarded
as
met
only when
the
asset
(or
disposal
group)
is
available
for
immediate
sale
in
its
present
condition
subject
only
to
terms that
are
usual
and
customary
for
sales
for
such
assets
(or
disposal
group)
and
its
sale
is
highly
probable. Management
must
be
committed
to
the
sale,
which
should
be
expected
to
qualify
for
recognition
as
a
completed sale
within
one
year
from
the
date
of
classification.
When
the
Group
is
committed
to
a
sale
plan
involving
loss
of
control
of
a
subsidiary,
all
of
the
assets
and
liabilities of
that
subsidiary
are
classified
as
held
for
sale
when
the
criteria
described
above
are
met,
regardless
of
whether the
Group
will
retain
a
non-‐controlling
interest
in
its
former
subsidiary
after
the
sale.
Half-‐Year
Report
December
2014
17
MHM
Metals
Limited
ABN
41
124
212
175
**Notes
to
the
condensed
consolidated
financial
statements**
**1.
Significant
accounting
policies
(cont’d)**
When
the
Group
is
committed
to
a
sale
plan
involving
disposal
of
an
investment,
or
a
portion
of
an
investment,
in an
associate
or
joint
venture,
the
investment
or
the
portion
of
the
investment
that
will
be
disposed
of
is
classified as
held
for
sale
when
the
criteria
described
above
are
met,
and
the
Group
discontinues
the
use
of
the
equity method
in
relation
to
the
portion
that
is
classified
a
held
for
sale.
Any
retained
portion
of
an
investment
in
an associate
or
a
joint
venture
that
has
not
been
classified
as
held
for
sale
continues
to
be
accounted
for
using
the equity
method.
The
Group
discontinues
the
use
of
the
equity
method
at
the
time
of
disposal
when
the
disposal results
in
the
Group
losing
significant
influence
over
the
associate
or
joint
venture.
After
the
disposal
takes
place,
the
Group
accounts
for
any
retained
interest
in
the
associate
or
joint
venture
in accordance
with
AASB
139
unless
the
retained
interest
continues
to
be
an
associate
or
a
joint
venture,
in
which case
the
Group
uses
the
equity
method.
Non-‐current
assets
(and
disposal
groups)
classified
as
held
for
sale
are
measured
at
the
lower
of
their
previous carrying
amount
and
fair
value
less
costs
to
sell.
**2.
Critical
accounting
estimates
and
judgements**
Estimates
and
judgements
are
continually
evaluated
and
are
based
on
historical
experience
and
other
factors, including
expectations
of
future
events
that
may
have
a
financial
impact
on
the
Group
and
that
are
believed
to
be reasonable
under
the
circumstances.
**Critical
accounting
estimates
and
assumptions**
The
Group
makes
estimates
and
assumptions
concerning
the
future.
The
resulting
accounting
estimates
will,
by definition,
seldom
equal
the
related
actual
results.
(a)
Impairment
of
assets
The
Group
reviews
assets
for
impairment
whenever
events
or
changes
in
circumstances
indicate
that
the
carrying amount
may
not
be
recoverable.
An
impairment
loss
is
recognised
for
the
amount
by
which
the
asset’s
carrying amount
exceeds
its
recoverable
amount.
In
assessing
Alreco’s
Moolap
assets
for
impairment,
one
of
the
key assumptions
was
in
relation
to
estimated
re-‐sale
values
of
the
land,
buildings,
plant
and
equipment,
with
the uncertainty
being
around
the
eventual
sale
value
achieved
and
timing.
(c)
Rehabilitation
Provision
The
Group
has
recognised
a
rehabilitation
provision
for
the
estimated
cost
of
disposing
of
any
remaining stockpiles
of
aluminium
by-‐product
upon
completion
of
operations
and
for
other
expected
costs
of
remediation of
its
operations.
In
assessing
the
rehabilitation
provision,
one
of
the
key
assumptions,
and
hence
uncertainties, is
the
extent
and
cost
of
rehabilitation
activities.
**3.
Segment
information**
Management
has
determined
the
operating
segments
based
on
reports
reviewed
by
the
strategic
steering committee,
the
chief
operating
decision
maker.
Half-‐Year
Report
December
2014
18
MHM
Metals
Limited
ABN
41
124
212
175
The
Group
has
one
only
reporting
segment,
aluminium
salt
slag
processing.
Although
the
Group
owns
property
in Kentucky,
USA,
at
present
the
Group
operates
only
in
Australia.
**Notes
to
the
condensed
consolidated
financial
statements**
**4.
Impairment
expense**
As
outlined
in
note
2(a),
the
Group
reviews
assets
for
impairment
whenever
events
or
changes
in
circumstances indicate
that
the
carrying
amount
may
not
be
recoverable.
An
impairment
loss
is
recognised
for
the
amount
by which
the
asset’s
carrying
amount
exceeds
its
recoverable
amount.
An
impairment
assessment
was
performed
as
at
31
December
2014
for
the
Moolap
property,
plant
and equipment.
The
recoverable
amount
of
the
relevant
assets
has
been
determined
on
the
basis
of
their
value
in
use and
a
discount
rate
of
11.5%.
No
impairment
was
required
as
at
31
December
2014.
The
current
period
impairment
of
$286,903
relates
to
the
write-‐down
of
the
Property,
Plant
and
Equipment owned
in
Russellville,
KY,
USA.
The
impairment
charge
is
to
reduce
the
carrying
amount
of
the
assets
held
for
sale to
their
expected
recoverable
amount.
Refer
note
6.
In
the
prior
half
year,
the
directors’
identified
that
the
carrying
amount
of
the
Moolap
property
plant
and equipment
exceeded
the
recoverable
amount
and
was
required
to
be
written
down
by
$3,000,000.
The recoverable
amount
of
the
relevant
assets
was
determined
on
the
basis
of
their
value
in
use
and
a
discount
rate of
12%
per
annum.
| of 12% per annum. |
|
|---|---|
| Half-year ended 31 Dec 2014 31 Dec 2013 $ $ |
|
Impairment of property, plant and equipment Impairment of Assets classified as available for sale 5. Trade and other receivables Trade receivables R&D tax offset refund GST receivable Other receivables Total trade and other receivables |
- 3,000,000 286,903 - 31 Dec 2014 30 Jun 2014 $ $ 112,525 1,162,561 500,000 1,168,451 70,870 - 54,173 48,129 |
| 737,568 2,379,141 |
Half-‐Year
Report
December
2014
19
MHM
Metals
Limited
ABN
41
124
212
175
**Notes
to
the
condensed
consolidated
financial
statements**
**6.
Assets
classified
as
available
for
sale**
During
the
half
year
ended
31
December
2014,
the
decision
was
made
to
sell
the
Property,
Plant
and
Equipment owned
in
Russellville,
KY,
USA.
As
a
result,
the
Property,
Plant
and
Equipment
owned
in
Russellville,
KY,
USA
is classified
as
Assets
classified
as
available
for
sale.
The
Property,
Plant
and
Equipment
classified
as
available
for sale
has
been
written
down
to
the
expected
recoverable
amount.
The
Assets
classified
as
available
for
sale
comprise:
| sale has been written down to the expected recoverable amount. The Assets classified as available for sale comprise: |
|
|---|---|
Amount transferred from Property, plant & equipment Impairment recognised Assets classified as available - Property, plant & equipment |
31 Dec 2014 $ 1,262,275 (286,903) |
| 975,372 |
**7.
Property,
plant
and
equipment**
| Land & buildings Plant improvements Plant & equipment Motor vehicles Total |
|
|---|---|
| At 30 June 2014 Cost or fair value Accumulated depreciation and impairment Net book amount Half-year ended 31 December 2014 Opening net book amount Additions Transfers Exchange difference Disposal / write off (Cost) Disposal / write off (Acc. dep.) Depreciation charge Transfer to current assets held for sale Closing net book amount At 31 December 2014 Cost or fair value Accumulated depreciation and impairment Net book amount |
2,283,539 - 9,484,721 72,506 11,840,766 (27,933) - (7,495,748) (59,109) (7,582,790) |
| 2,255,606 - 1,988,973 13,397 4,257,976 |
|
2,255,606 - 1,988,973 13,397 4,257,976 - - - - - - - - - - 198,696 - 2,667 - 201,363 - - 2,500,000 - 2,500,000 - - (2,500,000) - (2,500,000) (4,356) - (937,236) (3,498) (945,090) (1,252,932) - (9,343) - (1,262,275) |
|
| 1,197,014 - 1,045,061 9,899 2,251,974 |
|
1,218,253 - 6,971,094 72,506 8,261,853 (21,239) - (5,926,033) (62,607) (6,009,879) |
|
| 1,197,014 - 1,045,061 9,899 2,251,974 |
Half-‐Year
Report
December
2014
20
MHM
Metals
Limited
ABN
41
124
212
175
**Notes
to
the
condensed
consolidated
financial
statements**
**8.
Provisions
-‐
current**
Employee benefits Redundancy provision Rehabilitation provision Total provisions |
31 Dec 2014 30 Jun 2014 $ $ 172,066 204,268 376,395 - 858,000 688,300 |
|---|---|
| 1,406,461 892,568 |
**9.
Equity
securities
issued**
**(a)
Contributed
equity**
| 9. Equity securities issued (a) Contributed equity |
|
|---|---|
31 December 2014 Number 30 Jun 2014 Number |
31 December 2014 $ 30 Jun 2014 $ |
| Ordinary shares – fully paid 130,218,145 130,218,145 Options – unlisted 2,750,000 4,990,000 |
29,816,015 29,816,015 30,000 30,000 |
| 29,846,015 29,846,015 |
**(b)
Ordinary
shares**
Ordinary
shares
entitle
the
holder
to
participate
in
dividends
and
the
proceeds
on
winding
up
of
the
company
in proportion
to
the
number
of
and
amounts
paid
on
the
shares
held.
On
a
show
of
hands
every
holder
of
ordinary shares
present
at
a
meeting
in
person
or
by
proxy,
is
entitled
to
one
vote,
and
upon
a
poll
each
share
is
entitled
to one
vote.
During
the
half-‐year
ended
31
December
2014
no
fully
paid
ordinary
shares
were
issued.
**(c)
Options**
At
the
end
of
the
half-‐year,
options
over
ordinary
shares
on
issue
are
as
shown
below:
-
100,000
unlisted
options
exercisable
at
28
cents
and
expiring
4
January
2015; -
150,000
unlisted
options
exercisable
at
85
cents
and
expiring
6
October
2015; -
300,000
unlisted
options
exercisable
at
180
cents
and
expiring
20
June
2016; -
150,000
unlisted
options
exercisable
at
100
cents
and
expiring
30
June
2016; -
100,000
unlisted
options
exercisable
at
126
cents
and
expiring
23
August
2016; -
1,200,000
unlisted
options
exercisable
at
171
cents
and
expiring
30
November
2016; -
150,000
unlisted
options
exercisable
at
135
cents
and
expiring
14
February
2017; -
500,000
unlisted
options
exercisable
at
100
cents
and
expiring
18
July
2017;
and -
100,000
unlisted
options
exercisable
at
45
cents
and
expiring
13
November
Date Details |
Number of options Issueprice$ |
$ |
|---|---|---|
| At the beginning of the period Expired 31 December 2014 |
4,990,000 - (2,240,000) - 2,750,000 |
30,000 - |
| 30,000 | ||
Half-‐Year
Report
December
2014
21
MHM
Metals
Limited
ABN
41
124
212
175
**Notes
to
the
condensed
consolidated
financial
statements**
**10.
Contingencies**
**(a)
Contingent
assets**
On
18
September
2014
in
the
Federal
Court
of
Australia
Melbourne,
Justice
Davies
ordered
Mr
Frank
Rogers (former
Managing
Director)
and
Rogers
Southern
Pty
Ltd
(a
company
controlled
by
Mr
Rogers)
to
pay compensation
to
MHM
Metals
Ltd
of
$548,581
plus
interest
and
costs
totalling
$1,
045,821.
Mr
Frank
Rogers
and Rogers
Southern
Pty
Ltd
appealed
the
ruling
and
the
appeal
was
heard
on
the
2[nd] of
March
2015.
Due
to
the appeal
process
no
amounts
have
been
recorded
in
the
accounts
at
31
December
2014.
On
19
September
2014
the
Group
issued
demands
on
several
claims
to
recover
substantial
funds
(approximately $5
million,
plus
interest
and
legal
costs),
against
a
number
of
entities
including
Project
Development
Corporation (“PDC”)
and
the
Joint
Venture
Partners.
The
recovery
claims
relate
to
alleged
breaches
of
a
number
of agreements
entered
into
by
the
group
and
PDC
and
the
Joint
Venture
Partners.
No
court
date
has
been
set.
**(b)
Contingent
liabilities**
The
group
has
no
contingent
liabilities
to
disclose
at
the
date
of
this
report
**11.
Dividends**
No
dividends
were
declared
or
paid
during
the
half
year.
**12.
Events
occurring
after
the
reporting
period**
There
has
not
been
any
matter
or
circumstance
occurring
subsequent
to
the
end
of
the
half
year
ended
31 December
2014
that
has
significantly
affected,
or
may
significantly
affect,
the
operations
of
the
Group,
the
results of
those
operations,
or
the
state
of
affairs
of
the
Group
in
future
financial
years.
Half-‐Year
Report
December
2014
22
Deloitte Touche Tohmatsu ABN 74 490 121 060
==> picture [130 x 25] intentionally omitted <==
550 Bourke Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia
Tel: +61 3 9671 7000 Fax: +61 3 9671 7001 www.deloitte.com.au
Independent Auditor’s Review Report to the members of MHM Metals Limited
We have reviewed the accompanying half-year financial report of MHM Metals Limited, which comprises the condensed consolidated statement of financial position as at 31 December 2014, and the condensed consolidated statement of profit or loss and other comprehensive income, the condensed consolidated statement of cash flows and the condensed consolidated statement of changes in equity for the half-year ended on that date, selected explanatory notes and, the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 9 to 22.
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 consolidated entity’s financial position as at 31 December 2014 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 MHM Metals 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.
Auditor’s Independence Declaration
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 directors of MHM Metals Limited, would be in the same terms if given to the directors as at the time of this auditor’s review report.
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Liability limited by a scheme approved under Professional Standards Legislation Member of Deloitte Touche Tohmatsu 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 MHM Metals Limited is not in accordance with the Corporations Act 2001 , including:
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(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2014 and of its performance for the half-year ended on that date; and
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(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .
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DELOITTE TOUCHE TOHMATSU
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Chris Biermann Partner Chartered Accountants Melbourne, 16 March 2015
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