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Churchill Mining plc - Final Results - Part 1

Tue 17th November, 2015 11:15am
RNS Number : 9916F
Churchill Mining plc
17 November 2015

17 November 2015

AIM: CHL

CHURCHILL MINING PLC

("Churchill" or "the Company")

Full Year Results for the 12 Months ended 30 June 2015

Churchill Mining (AIM: CHL) reports its full year results for the 12 months ended 30 June 2015.

CHAIRMAN'S STATEMENT

Dear Shareholder,

I present Churchill Mining Plc's ("Churchill" or the "Company") Full Year Report for the 12 months ended 30 June 2015.

Introduction

During the year the Company continued to actively pursue its claim - currently quantified at US$1.315 billion plus interest from July 2014 - against the Republic of Indonesia ("Indonesia") for unlawful measures taken by Indonesia against Churchill's interests in the East Kutai Coal Project ("EKCP").

The unlawful measures taken by Indonesia include Indonesia's revocation (without justification, compensation or due process) of the mining licences that underpinned the EKCP (the "EKCP licences"), which were held by Churchill and its local partner in the project, the Ridlatama Group.

At the time the EKCP licences were illegally revoked, Churchill andits wholly owned subsidiary Planet Mining Pty Ltd's ("Planet") held a 75% interest in the EKCP. The area covered by the EKCP licences (i.e. the EKCP) contained a JORC Resource of 2.8 billion tonnes and incorporated a JORC Reserve of 980 million tonnes.

Churchill brings its claims against Indonesia under the United Kingdom-Indonesia Bilateral Investment Treaty (the "UK BIT"); Planet's claim - which is being run in consolidation with Churchill's case - is brought under the Australia-Indonesia Bilateral Investment Treaty (the "Australia BIT").

The consolidated Churchill/Planet arbitration is being conducted at the International Centre for Settlement of Investment Disputes ("ICSID"). The arbitral tribunal hearing the case comprises highly-credentialed arbitrators: Professor Gabrielle Kaufmann-Kohler (Chairperson) from Switzerland, Professor Albert Jan van den Berg from the Netherlands and Judge Michael Hwang SC from Singapore.

In legal terms, Churchill and Planet's causes of action are brought primarily under the expropriation and "Fair and Equitable Treatment ("FET") provisions of the respective treaties.

Developments in the ICSID arbitration

As I explained last year, Indonesia objected to the ICSID tribunal's jurisdiction to determine Churchill and Planet's claims, but these objections were dismissed (i.e. the tribunal upheld jurisdiction).

However, on 25 September 2014, Indonesia filed an "Application for Dismissal of Claimants Claims" based on Forged and Fabricated Ridlatama Mining Licences" (the "Forgery Dismissal Application").

In the Forgery Dismissal Application, Indonesia's main contentions were as follows:

The Ridlatama licences were never the property of either Ridlatama or Churchill;

The areas of land covered by the Ridlatama licences were at all times the property of companies within the Nusantara Group;

Ridlatama forged the licences for General Survey and Exploration (and related approvals and recommendations) as part of a "massive, systematic and sophisticated scheme to defraud the Republic";

Ridlatama used its forged general survey and exploration licences to "trick" the Regent of East Kutai into signing and issuing the exploitation licences for the EKCP;

By its conduct Ridlatama stole from the Nusantara Group property; and

Churchill and Planet's claims should be dismissed because they arise out of measures allegedly taken by Indonesia against investments that themselves depend entirely on the rights conveyed by the Ridlatama licences.

Churchill has been advised by Ridlatama that Ridlatama unequivocally denies that it or its officers or directors have committed any of the acts of criminality alleged by Indonesia.

Based on the particulars given in Indonesia's Forgery Dismissal Application, Churchill and Planet were not sure whether or not they were being accused of criminal wrongdoing (or whether, instead, Indonesia's allegations of forgery and fraud were levelled solely against Ridlatama). On 23 March 2015, in response to our request for particulars on this point, Indonesia positively denied that it had ever made any accusation against Churchill or Planet. On 22 July 2015, Indonesia confirmed its position in this regard, saying it "has never affirmatively claimed that Churchill's officials engaged in fraud and forgery".

For the avoidance of doubt, Churchill and Planet:

expressly deny that they (or any of their officers or directors) have ever engaged in any of the acts of criminality described above; and

dispute Indonesia's allegations that Ridlatama engaged in any of the acts of criminality described above.

Recapping significant events and progress achieved in the ICSID arbitration process during 2014/15:

(i) On 29 August 2014 representatives from Churchill and Indonesia met in Singapore to inspect a designated bundle of original documents relating to the EKCP mining licences.

(ii) On 29 August 2014 (the same day as the Company was attending the document inspection in Singapore) Indonesian police officers raided the Company's Jakarta office and seized a number of documents, computers and backup drives as part of a new police investigation into alleged license document forgery.

(iii) In September 2014, Indonesia filed its Forgery Dismissal Application.

(iv) In late October 2014, the Tribunal dismissed Indonesia's application for a separate hearing on its Forgery Dismissal Application and directed Indonesia to file its substantive defence to Churchill's claims by 12 November 2014.

(v) In November 2014, however, the Tribunal reversed its earlier decision not to hold a stand-alone hearing on document authenticity and directed that such a hearing be held as it would benefit and simplify the overall arbitration process.

(vi) On 3 February 2015 the Company advised that it had replaced existing counsel, Quinn Emanuel Urquhart & Sullivan, with the global "Magic Circle" law firm of Clifford Chance LLP as the Company's counsel in the ICSID arbitration proceedings against Indonesia. Clifford Chance were also appointed as counsel for Planet.

(vii) On 9 March 2015 there was a suspicious fire in the Wisma Kosgoro building in Jakarta, Indonesia which is where the offices of the Company's Indonesian subsidiary PT Indonesia Coal Development ("ICD") are located. The fire was eventually extinguished by midday on Tuesday 10 March 2015 however a number of floors in the building, including the floor on which ICD's offices were located, were extensively damaged.

(viii) In correspondence on 23 March 2015, Indonesia advised that it was not no longer alleging that Churchill or Planet "masterminded the scheme" to defraud Indonesia.

(ix) On 29 May 2015, following a document discovery and inspection process in which Indonesia refused to provide the majority of documents it was ordered to provide by the Tribunal, Churchill filed its response to Indonesia's Forgery Dismissal Application. It is Churchill and Planet's contention that Indonesia's Forgery Dismissal Application must fail because the evidence contradicting Indonesia's case - even without the documents Indonesia was ordered to provide but did not - is overwhelming. Specific evidence includes:

All four of the General Survey licences which Indonesia alleges were "non-existent" were in fact properly recorded in the register book of the Legal Section of East Kutai as having been granted.

Contrary to Indonesia's assertion that the applications for Ridlatama's General Survey licences were rejected at an early stage, there is conclusive documentary evidence that proves otherwise.

The documentary "irregularities" which Indonesia contended were evidence of forgery were also found on many documents produced by Indonesia (and which Indonesia has said are genuine).

There is conclusive evidence to show that the accounts of Indonesia's key witnesses are wrong in critical aspects.

There is a vast body of undisputed documents that show the true footprint of the EKCP licences, many of which bear the signatures of Indonesia's witnesses who deny processing (or even knowing about) the allegedly forged licences.

Events Post 30 June 2015

The following significant events have occurred post 30 June 2015

(i) Document Authenticity Hearing

Pursuant to ICSID Procedural Order 15, Indonesia's Forgery Dismissal Application was heard in Singapore between 3 and 10 August 2015. Churchill and Planet were represented by (the international law firm) Clifford Chance LLP with members of the Churchill board and management also in attendance at the hearing.

The conduct of the hearing included fact witnesses, oral presentations and expert witnesses. All of the witnesses for Churchill whom Indonesia requested for cross-examination attended the hearing. With the exception of the very person responsible for the revocation of the Ridlatama mining licences in which Churchill held a 75% interest - former Regent of East Kutai, Mr Isran Noor - all of the witnesses for Indonesia whom Churchill requested for cross-examination attended the hearing.

Mr Noor refused to attend the hearing. In view of his refusal to attend, the Tribunal ordered that Mr Noor's witness statement be struck out and all his evidence disregarded.

(ii) Post- Hearing Briefs

Shortly after the conclusion of the August hearing on document authenticity, the Tribunal ordered the parties to file "Post-Hearing Briefs" answering certain questions.

In accordance with the Tribunal's orders, Churchill and Planet filed the first of their two Post-Hearing Briefs on 20 October 2015. Churchill and Planet are scheduled to file their second-round Post-Hearing Briefs on 18 November 2015 (and, in this second brief, Churchill and Planet will reply to the points made in Indonesia's first-round Post-Hearing Brief).

Once our second-round Post-Hearing Brief is filed, we will issue a summary of the points made in each of the two briefs filed by Churchill and Planet.

Disciplinary Action

In July this year, the London Stock Exchange ("Exchange") served the Company with a Statement of Case alleging breaches of AIM rules 11 and 31 during the period from August 2010 to March 2011. The Company disputes the contentions raised by the Exchange and is defending this action. The 90,000 (US$144,000) provision made in the half yearly accounts in relation to any potential fine has been maintained as a matter of prudence however we note that the ultimate level of any fine may be materially higher or materially lower than the current provision.

I would like to conclude by thanking our shareholders, my fellow Directors and our staff for their continued support and patience and can assure you the Board continues actively to seek a suitable outcome for shareholders.

David Quinlivan

Chairman

17 November 2015

The full report and accounts for the period ended 30 June 2015 are available on the Company's website www.churchillmining.com and will be sent to shareholders.

For further information, please contact:

Churchill Mining plc

David Quinlivan

Nicholas Smith

Russell Hardwick

+ 61 8 6382 3737

Northland Capital Partners Limited

Nominated adviser

Edward Hutton/William Vandyk

Broking John Howes / Abigail Wayne

+44(0)20 7382 1100



STRATEGIC REPORT

BUSINESS REVIEW / HISTORY

Churchill Mining Plc ("Churchill" or "the Company") listed on AIM in April 2005. Churchill's growth path accelerated following the discovery of a world-class thermal coal deposit (the East Kutai Coal Project "EKCP") in the East Kutai Regency of Kalimantan, Indonesia, through an intensive and targeted exploration program.

Churchill's investments and operations culminated in the completion of a feasibility study in readiness for funding and the commencement of construction of the necessary infrastructure to support the exploitation of the coal resource. The Group's operations were subsequently halted by a decision by the East Kutai Regent to revoke the mining licences held by Churchill's Indonesian partners, the Ridlatama Group of companies ("Ridlatama") in which Churchill held a 75% interest. The East Kutai Regent's decision was challenged before the Indonesian courts, resulting initially in a negative ruling from the Samarinda Administrative Tribunal which upheld the East Kutai Regent's decision to revoke the licences. The decision was appealed, first to the Administrative High Court in Jakarta and then to the Supreme Court of Indonesia, but both appeals were unsuccessful. Churchill then took its claim for damages to the International Centre for Settlement of Investment Disputes.

INTERNATIONAL ARBITRATION CLAIM

In May 2012 Churchill filed a Request for Arbitration at the International Centre for Settlement of Investment Disputes ("ICSID") against the Republic of Indonesia ("ROI") alleging breaches by ROI of obligations under the UK-Indonesia Bilateral Investment Treaty. In addition, Churchill's Australian subsidiary, Planet Mining Pty Ltd ("Planet"), also filed a Request for Arbitration at ICSID against the ROI pursuant to the Australia-Indonesia Bilateral Investment Treaty. The Churchill and Planet arbitrations were subsequently consolidated into a single proceeding.

Churchill and Planet have filed their Memorials setting out their case against ROI supported by witness statements and expert and documentary evidence. Key elements within the Memorials include:-

The ROI initially supported and encouraged Churchill/Planet to invest in the East Kutai Coal Project;

Churchill/Planet invested in the ROI in compliance with applicable laws and regulations;

After Churchill/Planet's discovery of substantial coal deposits, the ROI took a series of unlawful actions that resulted in the destruction of Churchill/Planet's valuable investment;

The actions of the ROI constitute clear violations of its obligations under the Bilateral Investment Treaties with the United Kingdom and Australia; and

Churchill/Planet presently quantify their losses and seek damages in the amount of USD 1.315 billion (including interest) based on an industry-standard Discounted Cash Flow analysis.

Further detail in relation to the progress of the international arbitration claim during the 2015 Financial Year is included in the Chairman's Report.

STRATEGY AND OBJECTIVES

Churchill's key objective is to restore shareholder value following the revocation of the mining licences that made up the EKCP in East Kalimantan, Indonesia, in which Churchill/Planet held a 75% interest. The Company will continue to seek to restore value for shareholders by actively progressing its claim for damages via ICSID against the Republic of Indonesia.

FINANCIAL SUMMARY

Results of Operations (All amounts in US$)

The Group incurred a loss for the year attributable to equity shareholders of the parent of $2,792,570 compared to a loss of $2,450,087 for the previous year. The basic loss per ordinary share for the year was 2.24c compared with the loss per share of 1.99c for the previous year.

Other administrative expenses totalled $2.55 million (June 2014: $2.71 million).

Significant expenditure items during the period include:

Legal and professional fees of $1.17 million (June 2014: $1.46 million) mainly reflecting ongoing expenditure for the Company's arbitral claim against the Republic of Indonesia;

Consulting, directors, staff and professional fees of $0.75 million (June 2014: $0.58 million)

Net cash outflow from operating activities has decreased compared to the 2014 year and mainly reflects the ongoing legal and administrative costs of pursuing the ICSID claim against the Republic of Indonesia.


30 June 2015

30 June 2014

30 June 2013


$'000

Audited

$'000

Audited

$'000

Audited

Net cash flows from operating activities

(2,042)

(2,355)

(7,017)

During the year as a matter of prudence, the Group impaired in full the remaining related party receivable of $2,228,848 and also reassessed the related party loan payable of $2,228,848 to nil.

The balance of operating expenditure is in line with the Company's expectations and resources allocated to progressing the ICSID arbitration proceedings.

Selected Annual Information

The Group's statement of financial position at 30 June 2015 and comparatives at 30 June 2014 and 30 June 2013 are summarised as follows:


2015

2014

2013


$'000

$'000

$'000

Non-current assets

8

7

295

Current assets

2,195

5,565

8,075

Total assets

2,203

5,572

8,370

Current liabilities

921

3,222

3,967

Non-current liabilities

45

40

44

Total liabilities

966

3,262

4,011

Net assets

1,237

2,310

4,359

Liquidity & Capital

The Group began the year with US$3.02 million in cash and ended the year with US$2.05 million in cash assets. The Company continues to minimise other administration and corporate overheads where possible to preserve the Company's cash position.

In May 2015 the Company raised 850,000 before expenses through a placing and subscription of 8,500,000 new Ordinary Shares of 1p each at a price of 10p per share together with the issue of warrants over Ordinary Shares on the basis of one warrant for every two Placing Shares exercisable at a price of 15p per Ordinary Share and expiring on 30 June 2018.

Subsequent to the year end in September 2015, the Company raised a further 750,000 before expenses through a placing and subscription of 4,166,664 new Ordinary Shares of 1p each at a price of 18p per share together with the issue of warrants over Ordinary Shares on the basis of one warrant for every two Placing Shares exercisable at a price of 27p per Ordinary Share expiring on 31 October 2018.

PRINCIPAL RISKS AND UNCERTAINTIES

The Board regularly reviews the risks to which the Group is exposed and endeavours to minimise these risks as far as possible. The following summary, which is not exhaustive, outlines some of the risks and uncertainties facing the Group in its present position following the revocation of the mining licences that made up the EKCP and the filing of international arbitration against the Republic of Indonesia.

Litigation risk

As detailed in the Chairman's statement and Strategic Review, the Company is engaged in legal actions including a significant damages claim in international arbitration against the Republic of Indonesia of which the outcome remains unknown. There can be no assurance that any or all of the proceedings may be awarded in favour of the Company. The Company has engaged experienced international counsel to assist in mitigating this risk and providing the best possible chance of recovering value for shareholders.

Sovereign risk

The Group has an administration office in Indonesia where there are a number of associated risks over which it will have no control. Potential risks in Indonesia could include economic, social or political instability, terrorism, currency instability, government participation and taxation.

Reliance on key management

The Group's future success is substantially dependant on the continued services and performance of its key personnel. The Company's aim is to ensure that key personnel are rewarded and incentivised for their contribution to the Group and are motivated to enhance the return to Shareholders. There can be no assurance that the Company's current personnel, systems, procedures and controls will be adequate to support the litigation or any future operations or expansion.

Funding risk

The ability of the Group to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions as well as the general performance of the Company and the progress of the International arbitration claim. There can be no assurance that additional capital or other forms of finance may be available if needed, or that, if available the terms of such financing will be favourable to the Group. The Directors have a reasonable expectation that the Group will have access to the necessary resources to continue its pursuit of the ICSID litigation. This risk has been mitigated by a fundraising completed during the year and a further fundraising completed post the year-end.

Currency risk

The Company is exposed to exchange rate risk in its daily operations and mitigates this risk where possible by holding currency in GBP, USD and AUD based on budgeted expenditure.

ANALYSIS USING KEY PERFORMANCE INDICATORS

The International arbitration claim has in effect become Churchill's principal activity and focus. The key performance indicator is to manage the arbitration claim in an efficient and cost effective manner and raise sufficient funds to support the claim. During the year the Company raised 850,000 to support the arbitration claim. The Directors regularly monitor available cash to meet on-going administration and legal costs with the aim of a recovery of value for Shareholders.

APPROVAL OF THE BOARD

This strategic report contains certain forward-looking statements that are subject to the usual risk factors and uncertainties with a Company that has a legal claim as its main business. Whilst the Directors believe that any expectation reflected herein to be reasonable in light of the information available up to the time of their approval of this report, the actual outcome may be materially different owing to factors beyond the Group's control. Accordingly no reliance may be placed on any forward-looking statements.

By order of the Board

David Quinlivan

Chairman

17 November 2015



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2015



2015

2014


Note

$'000

$'000





Other operating income


-

8





Other administrative expenses


(2,554)

(2,711)

Loss on sale of financial asset

8

-

(46)

Reassessment of loan payable


2,229

-

Impairment of receivables


(2,229)

-

Total administrative expenses

3

(2,554)

(2,757)





Loss from operations


(2,554)

(2,749)





Finance income

2

4

306





Finance expense

3

(243)

(7)









Loss before taxation


(2,793)

(2,450)

Tax expense

5

-

-

Loss for the year attributable to equity shareholders of the parent


(2,793)

(2,450)





Other comprehensive (expense)/income:




Foreign exchange differences on translating foreign operations


(9)

(5)

Other comprehensive (expense)/income for the year


(9)

(5)





Total comprehensive loss for the year attributable to equity shareholders of the parent


(2,802)

(2,455)





Loss for the year attributable to:




Owners of the parent


(2,793)

(2,450)

Non-controlling interest


-

-


(2,793)

(2,450)

Total comprehensive loss for the year attributable to:




Owners of the parent


(2,802)

(2,455)

Non-controlling interest


-

-


(2,802)

(2,455)

Loss per share attributable to owners of the parent:



Basic and diluted loss per share (cents)

6

(2.24c)

(1.99c)

The accompanying notes form part of these financial statements.



STATEMENTS OF FINANCIAL POSITION

As at 30 June 2015

Company number 5275606


Consolidated

Company


Note

2015

2014

2015

2014



$'000

$'000

$'000

$'000

ASSETS






Current assets






Cash and cash equivalents


2,050

3,016

2,029

2,993

Other receivables

9

145

2,549

135

56

Total current assets


2,195

5,565

2,164

3,049







Non-current assets






Property, plant and equipment

10

8

7

5

6

Investment in subsidiaries

11

-

-

-

-

Total non-current assets


8

7

5

6







TOTAL ASSETS


2,203

5,572

2,169

3,055







LIABILITIES






Current Liabilities






Trade and other payables

12

777

739

769

681

Loans and borrowings

13

-

2,483

-

-

Provisions

14

144

-

144

-

Total current liabilities


921

3,222

913

681







Non-current liabilities






Provisions

14

45

40

-

-

Total non-current liabilities


45

40

-

-







TOTAL LIABILITIES


966

3,262

913

681







NET ASSETS


1,237

2,310

1,256

2,374







CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE COMPANY






Share capital

16

2,381

2,237

2,381

2,237

Share premium

16

79,235

77,791

78,863

77,791

Other reserves

16

2,506

2,424

3,593

2,488

Retained deficit


(82,885)

(81,246)

(83,953)

(80,142)







TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT


1,237

1,206

1,256

2,374

Non-controlling interest


-

1,104

-

-

TOTAL EQUITY


1,237

2,310

1,256

2,374

The accompanying notes form part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 17 November 2015 and were signed on its behalf by:

David Quinlivan

Director


STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2015





Other Reserves


Consolidated

Share Capital

Share premium

reserve

Retained deficit

Foreign exchange

Equity settled share options

Total Equity attributable to equity holders of Company

Non-controlling Interest

Total Equity


$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Changes in equity for year to 30 June 2014









Balance at 1 July 2013

2,230

77,641

(78,796)

(59)

2,239

3,255

1,104

4,359

Loss for the period

-

-

(2,450)

-

-

(2,450)

-

(2,450)

Other comprehensive (expense)/income

-

-

-

(5)

-

(5)

-

(5)

Transfer of Merger Reserve to retained

-


-






Deficit









Expiry of share options

-

-

-

-

-

-

-

-

Recognition of share based payments

-

-

-

-

249

249

-

249

Issue of shares

7

150

-

-

-

157

-

157

Balance at 30 June 2014

2,237

77,791

(81,246)

(64)

2,488

1,206

1,104

2,310

Changes in equity for year to 30 June 2015









Balance at 1 July 2014

2,237

77,791

(81,246)

(64)

2,488

1,206

1,104

2,310

Loss for the period

-

-

(2,793)

-

-

(2,793)

-

(2,793)

Other comprehensive expense

-

-

-

(9)

-

(9)

-

(9)

Expiry of share options

-

-

50

-

(50)

-

-

-

Transfer of non-controlling interest to retained deficit

-

-

1104

-

-

1,104

(1,104)

-

Recognition of share based payments

-

-

-

-

141

141

-

141

Issue of shares

144

1,473

-

-

-

1,617

-

1617

Share issue costs

-

(29)

-

-

-

(29)

-

(29)

Balance at 30 June 2015

2,381

79,235

(82,885)

(73)

2,579

1,237

-

1,237

The accompanying notes form part of these financial statements.

Company

Share Capital

Share premium reserve

Retained deficit

Foreign Exchange reserve

Equity settled share options reserve

Total Equity


$'000

$'000

$'000

$'000

$'000

$'000








Changes in equity for year to 30 June 2014







Balance at start of the year

2,230

77,641

(77,751)

-

2,239

4,359

Total comprehensive loss for the year

-

-

(2,391)

-

-

(2,391)

Issue of shares

7

150

-

-

-

157

Recognition of share based payments

-

-

-

-

249

249

Balance at 30 June 2014

2,237

77,791

(80,142)

-

2,488

2,374








Changes in equity for year to 30 June 2015







Balance at start of the year

2,237

77,791

(80,142)

-

2,488

2,374

Total comprehensive loss for the year

-

-

(3,861)

-

-

(3,861)

Other comprehensive (expense)/income

-

-

-

1,014

-

1,014

Expiry of share options

-

-

50

-

(50)

-

Issue of shares

144

1,473

-

-

-

1,617

Share issue costs

-

(29)

-

-

-

(29)

Recognition of share based payments

-

-

-

-

141

141

Balance at 30 June 2015

2,381

79,235

(83,953)

1,014

2,579

1,256

The accompanying notes form part of these financial statements.


STATEMENT OF CASH FLOWS

For the year ended 30 June 2015



Consolidated

Company


Note

2015

2014

2015

2014



$'000

$'000

$'000

$'000







Cash flows used in operating activities

18

(2,042)

(2,355)

(1,867)

(2,057)

Net cash used in operating activities


(2,042)

(2,355)

(1,867)

(2,057)







Cash flows used in investing activities






Finance income


1

2

1

2

Receipts from sale of property, plant and equipment


-

1

-

-

Receipts from sale of financial assets


-

240

-

-

Acquisition of property, plant and equipment


(4)

-

(3)

-

Advances to subsidiaries


-

-

(175)

(304)

Repayment of subsidiary loans


-

-

13

244

Cash flows generated from/(used in) investing activities


(3)

243

(164)

(58)







Cash flows from financing activities






Proceeds from issue of share capital


1,346

-

1,346

-

Expense of share issue


(20)


(20)


Cash flows from financing activities


1,326

-

1,326

-







Net decrease in cash and cash equivalents


(719)

(2,112)

(705)

(2,115)

Cash and cash equivalents at beginning of year


3,016

4,848

2,993

4,821

Effect of foreign exchange rate differences


(247)

280

(258)

287

Cash and cash equivalents at the end of year


2,050

3,016

2,030

2,993

The accompanying notes form part of these financial statements.


NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2015

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

IAS 8 requires that management shall use its judgement in developing and applying accounting policies that result in information which is relevant to the economic decision-making needs of users; that are reliable, free from bias, prudent, complete and represent faithfully the financial position, financial performance and cash flows of the entity.

BASIS OF PREPARATION

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated. All amounts presented are in thousands of US dollars ($'000) unless otherwise stated.

These financial statements have been prepared on a going concern basis and in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations issued by the International Accounting Standards Board (IASB) adopted by the European Union and in accordance with applicable United Kingdom Law. The adoption of all of the new and revised Standards and Interpretations issued by the IASB and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to the operations and effective for annual reporting periods beginning on 1 July 2014 are reflected in these financial statements.

As at 30 June 2015 the Group has cash funds of $2.05m. On 2 October 2015, the Company raised additional funds of 750,000 before expenses through a placing and subscription of 4,166,664 new Ordinary Shares. As detailed in the Chairman's Statement, the ICSID litigation is progressing and whilst the Group is fully funded for more than 12 months from the sign-off date of this report, additional funding will be needed in the form of a further equity raise and/or debt funding. The Group remains fully committed to its ICSID litigation against the Republic of Indonesia. The Group is in early stage discussions with a number of interested parties and the Directors have a reasonable expectation that the Group will have access to the necessary resources to continue its pursuit of the ICSID litigation and for this reason, they continue to adopt the going concern basis in preparing these accounts.

Effective 1 May 2015 the Parent Company's functional currency changed from US dollar to pounds sterling ("GBP"). The change was mainly due to the fundraisings and underlying expenditure being denominated in GBP and the Directors consider that GBP to most faithfully represent the economic effect of the underlying transactions, events and conditions in the parent Company.

NEW STANDARDS AND INTERPRETATIONS APPLIED

The IASB has issued no new standards, amendments to published standards and interpretations to existing standards with effective dates on or prior to 1 July 2014 which have a material effect on the Group.

New standards and interpretations not yet effective

Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the Group's accounting periods beginning after 1 July 2015 or later periods, which the Group has decided not to adopt early or which are yet tobe European Union endorsed.

The only standard which is anticipated to be significant or relevant to the Group is IFRS 9 - Financial Instruments which iseffective 1 January 2018. The Group is in the process of assessing the impact of this standard on the Financial Statements.

SIGNIFICANT ACCOUNTING POLICIES

Finance income

Interest income is accrued on a time basis, by reference to the principal outstanding at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

Basis of consolidation

The financial statements incorporate a consolidation of the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.

The financial statements of subsidiaries are included in the Group's financial statements from the date that control commences until the date that control ceases.

Non-controlling interests are presented in the statement of financial position within equity, separately from equity attributable to the equity shareholders of the Company and in respect of the statement of comprehensive income are presented on the face as an allocation of the total profit or loss and other comprehensive income for the year between non-controlling interests and the equity shareholders of the Company.

Foreign currency

Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate (the "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the statement of comprehensive income.

On the 1st May 2015, the parent Company's ("Churchill Mining Plc") functional currency changed to GBP from USD as this appropriately reflects the Company's primary economic environment, being the United Kingdom, in which it primarily generates its funding and expends part of its operating cash. The consolidated and company financial information continues to be presented in US dollars ($), which is the presentation currency of the Company to ensure consistency with prior periods.

On consolidation, the results of the Group's and parent's operations are translated into US$ at rates approximating to those when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised directly in the statement of changes in equity (the "foreign exchange reserve"). Exchange differences recognised in the statement of comprehensive income of Group entities' separate financial statements on the translation of long-term monetary items forming part of the Group's net investment in the overseas operation concerned are reclassified to the foreign exchange reserve if the item is denominated in the functional currency of the Company or the overseas operation concerned. On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that operation up to the date of disposal are transferred to the consolidated statement of comprehensive income as part of the profit or loss on disposal.

Financial instruments

Financial assets and financial liabilities and equity instruments are recognised when the Group and Company become party to the contractual provisions of the instrument. Financial assets are derecognised when the contractual right to the cash flow expires or when all the risks and rewards of ownership are substantially transferred. Financial liabilities are derecognised when the obligations specified in the contract are either discharged or cancelled.

Financial assets

The Group and Company classify their financial assets into one category - Loans and Receivables. The Group's and Company's accounting policy for each category is as follows:

Loans and receivables

These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They incorporate various types of contractual monetary assets, such as advances made to affiliated entities which give rise to other receivables and cash and cash equivalents includes cash in hand and deposits held at call with banks. Other receivables are carried at cost less any provision for impairment. Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty) that the Group will be unable to collect all of the amounts due under the terms of the receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable.

Financial liabilities

The Group's financial liabilities consist of trade payables, other short-term monetary liabilities and long term liabilities which are initially stated at fair value and subsequently at their amortised cost.

Equity instruments

The warrants are recorded as an equity financial instrument as the Group will receive a fixed amount of cash on exercise of the warrant in the functional currency of the relevant entity for issuing a fixed number of shares.

Provisions

Provisions are recognised for liabilities of uncertain timing or amount that have arisen as a result of past transactions and are discounted at a pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability.

Share-based payments

Where share options are awarded to Directors and employees, the fair value of the options at the date of grant is charged to the statement of comprehensive income immediately or over the vesting period if applicable. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Where equity instruments are granted to persons other than employees, the statement of comprehensive income is charged with the fair value of goods and services received or where this is not possible at the fair value of the equity instruments granted. Fair value is measured by use of an option pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. When the Company grants options over its shares to employees of subsidiaries, the fair value at grant date is recognised as an increase in the investment in subsidiaries, with a corresponding increase in equity over the vesting period of the grant.

Exploration, evaluation and development expenditure

In line with IFRS 6 'Exploration for and Evaluation of Mineral Resources', exploration and evaluation expenditure can be capitalised as an intangible asset in respect of each area of interest. This expenditure includes:

Acquisition of rights to explore;

Topographical, geological, geochemical and geophysical studies;

Exploratory drilling;

Trenching;

Sampling; and

Activities in relation to evaluating the technical feasibility and commercial viability of extracting a mineral resource.

Capitalisation of exploration and evaluation expenditure commences on the acquisition of a right to explore a specific area or evaluate a mineral resource, either by means of the acquisition of an exploration licence or an option to a mineral right and ceases either on the acquisition of a mining lease or mineral production right in respect of that specific area or mineral resource or the making of a decision by management of the Group as to the technical feasibility or economic viability of conducting mining operations in that specific area or extracting the mineral resource being evaluated.

Where management of the Group decides that it is not technically feasible or economically viable to conduct mining operations in a specific area or to extract the mineral resource being evaluated, then capitalised exploration and evaluation expenditure attributable to the exploration and evaluation of that specific area or mineral resource, as the case may be, capitalised up to the date of making such a decision, is written off and any further exploration and evaluation expenditure incurred in respect thereof is charged to profit or loss as and when incurred. Management reviews the levels of capitalised exploration and evaluation expenditure for each area of interest on a regular basis and where deemed appropriate either continues to carry forward costs or impair expenditure based on management estimates of recoverable values for each area of interest.

Assets used exclusively in activities in respect of the exploration for and evaluation of mineral resources are classified as property, plant and equipment. Depreciation charges reflecting the consumption of these assets in carrying out such activities are included in exploration and evaluation expenditure.

Property, plant and equipment

Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs and the estimated present value of any future costs of dismantling and removing items if applicable. The corresponding liability is recognised within provisions. Depreciation is provided on all items of property and equipment to write off the carrying value of items over their expected useful economic lives as follows:

Freehold land - not depreciated

Leasehold improvements - 5 years

Furniture and fixtures - 3 years

Office equipment - 3 years

Motor vehicles - 8 years

Taxation

Tax on the profit or loss from ordinary activities includes current and deferred tax.

Current tax is based on the profit or loss adjusted for items that are non-assessable or disallowed and is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Tax is charged or credited to the statement of comprehensive income, except when the tax relates to items credited or charged directly to equity, in which case the tax is also dealt with in equity.

Deferred taxation

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement of financial position differs to its tax base, except for differences arising on:

The initial recognition of goodwill;

The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and

Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities/ (assets) are settled/ (recovered).

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:

The same taxable Group company; or

Different Group entities which intend either to settle current tax assets and liabilities on a net basis or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

Tax consolidation

The Company and its 100% Australian controlled entities have formed a tax consolidation Group. Members of the tax consolidated Group intend to enter into a tax sharing arrangement which will allow for the allocation of income tax expense to the wholly controlled entities on a pro rata basis. The arrangement will provide for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. The head entity of the tax consolidated Group is Churchill Mining Plc.

Impairment of non-financial assets

Impairment tests on intangible assets and tangible assets with indefinite useful economic lives are undertaken annually on 30 June or when a trigger for impairment is identified. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset's cash-generating unit (i.e. the lowest level Group of assets in which the asset belongs for which there are separately identifiable cash flows).

Impairment charges are included within total administration expenses in the statement of comprehensive income, except to the extent that they reverse gains previously recognised in the statement of changes in equity.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is the Managing Director, under his delegated board authority, is responsible for allocating resources and assessing performance of the operating segments.

Investments

In its separate financial statements, the Company recognises its investments in subsidiaries at cost inclusive of share based payments less any provision for impairment.

Cash and cash equivalents

Cash comprises bank and cash deposits at variable interest rates. Any interest earned is accrued monthly and classified as interest income. Cash equivalents comprise short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Employee benefits

Provision is made for the Company's liability for employee benefits arising from services rendered by employees. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash flows to be made for those benefits.

Key sources of estimation uncertainty

The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may deviate from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

While conducting an impairment review of its assets, the Group exercises judgement in making assumptions by evaluating conditions and events specific to the Group that may be indicative of impairment triggers. Changes in these estimates used can result in significant charges to the statement of comprehensive income ; and

Employee, corporate advisory and consulting services received as well as the corresponding increase in equity, are measured by reference to the fair value of the equity instruments at the date of grant, excluding the impact of any non market vesting conditions. The fair value of share options is estimated by using an option pricing model, on the date of grant based on certain assumptions. Those assumptions are described in the Notes to the accounts where more details, including carrying values, are disclosed.


NOTE 2: FINANCE INCOME


Consolidated


2015

2014


$'000

$'000




Finance income - foreign exchange gains

3

304

Finance income - Bank interest

1

2

Total finance income

4

306

NOTE 3: LOSS FROM OPERATIONS


Consolidated


2015

2014


$'000

$'000

Loss before tax includes the following expense items:






Administrative expenses



Audit & accounting and other fees

71

91

Consulting & professional fees

454

252

Legal fees

1,176

1,462

VAT costs unrecovered

3

6

Depreciation & amortisation

4

13

Employee salaries and benefits

286

336

Operating lease expense

51

60

Travel expenses

67

45

Public relations consultancy

27

58

Other administrative costs

285

139

Equity settled share based payment expense

130

249

Loss from sale of financial assets

-

46


2,554

2,757

Finance expenses



Foreign exchange losses

243

7




Total administrative and finance expenses

2,797

2,764




During the year the following fees were paid or payable for services provided by the Auditors of the parent entity and subsidiaries:


Consolidated


2015

2014


$'000

$'000

Fees payable to the Company's Auditor for the audit of the Company's annual accounts

30

31

Other services - interim review

6

10

Fees payable for the audit of the subsidiaries

8

12

Total

44

53

NOTE 4: SALARIES



Consolidated



2015

2014


Note

$'000

$'000





Staff costs (including Directors' fees) comprise:




Employee salaries and benefits


69

144

Superannuation/pension costs


-

7

Directors' fees and benefits


218

186

Share-based payments

17

130

249



417

586







Number

Average number of employees (including Directors)


9

11




2015

2014

Directors' remuneration and Other Key Management disclosures

$'000

$'000




Directors' short term benefits



Directors' fees and benefits

218

186

Consultancy fees/Salaries

186

18

Sub-Total

404

204




Directors' long term benefits



Share based payments (options)

96

171

Total Director Remuneration

500

375




Other Key management short term benefits



Consultancy fees

212

209

Sub-Total

212

209




Key management long term benefits



Share based payments (options)

28

39

Total Other Key Management Remuneration

240

248




Total Director and Key Management Remuneration

740

623




The amounts set out above include emoluments for the highest paid Director as follows:



Short term benefits

146

43

Long term benefits

36

57

Total

182

100

Key management consists of the Board of Directors and the Company Secretary/Chief Financial Officer.

The Company provides Directors' & Officers' liability insurance at a cost of $25,069 (2014: $38,125). This cost is not included in the above table.

NOTE 5: TAXATION ON LOSS FOR THE YEAR

Consolidated


2015

$'000

2014

$'000




Major components of income tax expense for the years ended 30 June 2015 and 2014 are:

Current tax expense

-

-

Deferred tax expense

-

-

Total tax expense

-

-




A reconciliation of income tax expense applicable to accounting loss before income tax at the statutory income tax rate to income tax expense at the Company's effective income tax rate for the years ended 30 June 2015 and 2014 is as follows:

Accounting loss before income tax

(2,793)

(2,450)




At the statutory income tax rate of 30%

(838)

(735)

Effects of:



Non-deductible expenses

514

566

Temporary differences and tax losses not brought to account as a deferred tax asset

330

158

Less:



Tax rate differential

(6)

11

Income tax expense

-

-




Effective income tax rate of 0%

0%

0%

No amounts of deferred tax assets or liabilities have been charged / (credited) to the consolidated statement of comprehensive income or reserves. The deductible temporary differences and Australian domestic tax losses being $21,347,000 (2014: $18,405,000) do not expire under current tax legislation. Indonesian tax losses expire after five years. Deferred tax assets have not been recognised in respect of these items because at this point it is not probable that future taxable profits will be available against which the Group can utilise the benefits of tax losses. The Group has not offset deferred tax assets across different jurisdictions. Foreign tax losses in relation to the Indonesian subsidiary PT Indonesia Coal Development expire as follows:

Financial Year

Expire (year)

$'000




2010/2011

2016

4,351

2011/2012

2017

3,680

2012/2013

2018

1,086

2013/2014

2019

277

*2014/2015

2020

140

*Estimate based on the actual loss for 2014/2015

NOTE 6: LOSS PER SHARE


Consolidated


2015

2014


$'000

$'000




Loss attributable to owners of the parent company

(2,793)

(2,450)





Number




Weighted average number of shares used in the calculation of basic loss per share

124,755,382

123,383,315


Cents




Basic and diluted loss per share

(2.24c)

(1.99c)



The effect of all potential ordinary shares arising from the exercise of options and warrants is considered to be anti-dilutive. 15,202,192 (2014: 13,318,493) potential ordinary shares have been excluded from the above calculations as they are not dilutive.


NOTE 7: PARENT COMPANY LOSS FOR THE FINANCIAL YEAR

The Company has taken advantage of the exemption as allowed by Section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in these financial statements. The Company loss for the year was $3,860,532 (2014: Loss $2,390,597).

NOTE 8: SEGMENT INFORMATION

The Group's reportable segments are set out below and include the Indonesian and Australian corporate offices which are administrative cost centres.

Operating segments are reported in a manner consistent with the reporting provided to the board.

Consolidated 2015

Australia - Corporate office

Indonesia - Administration Office

Total


$'000

$'000

$'000





Finance income

6

3

9

Administration expenses

(2,429)

(313)

(2,742)

Exchange differences

(60)

-

(60)

Loss for the year after taxation

(2,483)

(310)

(2,793)





Non current assets

5

3

8

Other receivables

135

10

145

Cash and cash equivalents

2,029

21

2,050

Segment assets

2,169

34

2,203





Trade and other payables

724

53

777

Provisions

144

45

189

Segment liabilities

868

98

966





Segment net assets

1,301

(64)

1,237

Consolidated 2014

Australia - Corporate office

Indonesia - Administration Office

Total


$'000

$'000

$'000





Finance income

5

5

10

Administration expenses

(2,479)

(232)

(2,711)

Loss on sale of financial assets

(46)

-

(46)

Exchange differences

304

(7)

297





Loss for the year after taxation

(2,216)

(234)

(2,450)





Non current assets

6

1

7

Other receivables

57

2,492

2,549

Cash and cash equivalents

2,993

23

3,016





Segment assets

3,056

2,516

5,572





Trade and other payables

681

58

739

Loans and Borrowings

-

2,483

2,483

Provisions

-

40

40





Segment liabilities

681

2,581

3,262





Segment net assets

2,375

(65)

2,310

NOTE 9: OTHER RECEIVABLES


Consolidated

Company


2015

2014

2015

2014


$'000

$'000

$'000

$'000

Current










Related party receivables

3,000

3,342

-

-

Impairment for non-recovery

(3,000)

(859)

-

-

Prepayments and other receivables

145

66

135

56


145

2,549

135

56

The Group's exposure to credit and currency risk related to other receivables is disclosed in Note 19.

NOTE 10: PROPERTY, PLANT AND EQUIPMENT


Consolidated

Company


2015

2014

2015

2014


$'000

$'000

$'000

$'000






Plant & Equipment





Cost





Balance at start of year

243

255

111

110

Written off

(82)

(12)

-

-

Additions

4

-

1

1

Effects of movements in exchange rates

(5)

-

3

-

Balance at end of year

160

243

115

111






Accumulated Depreciation





Balance at start of year

236

234

105

101

Depreciation expense for the year

3

13

2

4

Reversal of accumulated depreciation - Written off

(82)

(11)

-

-

Effects of movements in exchange rates

(5)

-

3

-

Balance at end of year

152

236

110

105

Net book value at end of the year

8

7

5

6











Net book value at start of year

7

21

6

10

NOTE 11: INVESTMENT IN SUBSIDIARIES

The subsidiaries of Churchill Mining Plc, all of which have been included in these consolidated financial statements, are as follows:

Name

Country of Incorporation

Proportion of ownership interest




Planet Mining Pty Ltd

Australia

100%

PT Indonesia Coal Development

Indonesia

100%

PT Techno Coal Utama Prima*

Indonesia

100%

PT Ridlatama Tambang Mineral*

Indonesia

75%

PT Ridlatama Trade Powerindo*

Indonesia

75%

PT Ridlatama Steel*

Indonesia

75%

PT Ridlatama Power*

Indonesia

75%

*Undertaking held indirectly by the Company.

Churchill Mining Plc owns 95% of the shares in PT Indonesia Coal Development with the balance (5%) held by Planet Mining Pty Ltd.

Movements of investments in subsidiaries during the period are:


Company


2015

2014


$'000

$'000




Loans to subsidiaries - Non-current assets



- Opening Balance

-

-

- Loans to subsidiaries

175

60

- Repayment of loans from subsidiaries

(13)

-

- Impairment of subsidiary carrying value

(162)

(60)

Total loans to subsidiaries - non-current assets

-

-




Equity investment in subsidiaries



- Opening Balance

-

158

- Impairment of subsidiary carrying value

-

(158)

Total equity investment in subsidiaries

-

-




Total investment in subsidiaries

-

-

The total of subsidiary loans at 30 June 2015 is $49,201,733 (2014: $49,039,912), the recovery of which has been impaired in full. The intercompany loans are unsecured, non-interest bearing and repayable on demand. Following impairment of the underlying assets held within the relevant subsidiaries, Churchill Mining Plc has accordingly reduced the carrying value of investments held at a parent company level.

NOTE 12: TRADE AND OTHER PAYABLES


Consolidated

Company


2015

2014

2015

2014

$'000

$'000

$'000

$'000






Current





Trade payables

418

67

415

67

Accruals and other payables

359

672

354

614


777

739

769

681

The Group's exposure to credit and currency risk related to trade and other payables is disclosed in Note 19.

NOTE 13: LOANS AND BORROWINGS


Consolidated

Company


2015

2014

2015

2014

$'000

$'000

$'000

$'000






Current





Related party payables

2,229

2,483

-

-

Reassessment of related party loan payable

(2,229)

-

-

-


-

2,483

-

-






Included in the loans and borrowings are amounts potentially payable of $2,228,848 due to the non-controlling shareholders of the IUP Companies PT Ridlatama Tambang Mineral, PT Ridlatama Trade Powerindo, PT Ridlatama Steel and PT Ridlatama Power. During the year ended 30 June 2015 the loan payable has been reassessed to nil.

NOTE 14: PROVISIONS


Consolidated

Company


2015

2014

2015

2014

$'000

$'000

$'000

$'000






Current





Provision for fine

144

-

144

-


144

-

144

-






Non-current





Employee benefits

45

40

-

-


45

40

-

-

Current

During the year, Churchill was made aware of an intention by the London Stock Exchange plc ("the Exchange") to commence proceedings against the Company under the AIM Disciplinary Procedures in relation to alleged breaches of AIM rules 11 and 31 during the period from August 2010 to March 2011.

Whilst the Company disputes the contentions raised by the Exchange and will be defending the disciplinary action which is based upon alleged breaches of the AIM rules which are disputed and alleged to have occurred over 5 years ago, the Company has included a provision of $144,000 (90,000) in relation to any potential fine. The ultimate level of any fine, which will be determined by the AIM Disciplinary Committee if they find the case in favour of the Exchange, may be materially higher or lower than the current provision of $144,000 (90,000).

Non-Current

The Non-current provision relates to the estimated liability for post-employment benefits at year end for staff engaged by PT Indonesia Coal Development.

NOTE 15: COMMITMENTS


Consolidated

Company


2015

2014

2015

2014

$'000

$'000

$'000

$'000






Operating lease commitments





The total future aggregate minimum lease payments under non-cancellable operating leases:





Within one year

19

20

19

20

Within two to five years

-

18

-

18


19

38

19

38






The above amount relates to a property sub-lease for 41 York Street, Subiaco Western Australia with the term expiring on 31 May 2016 with rent payable monthly in advance.






Consultant and Key Management compensation commitments










Commitments under consulting contracts not provided for in the financial statements and payable:





Within one year

321

204

321

204


321

204

204

204






NOTE 16: SHARE CAPITAL, SHARE PREMIUM AND RESERVES


Company

Company


2015

2014

2015

2014


Number

Number

$'000

$'000






Allotted, called up and fully paid





At start of year

123,619,562

123,168,095

2,237

2,230

Additions

9,156,051

451,467

144

7

At end of year

132,775,613

123,619,562

2,381

2,237



Allotted, called up and fully paid

Share premium

Date

Details

Number

$'000

$'000











30/6/2013

Closing balance at 30 June 2013

123,168,095

2,230

77,641

07/01/2014

Issue of shares to directors @ 22.23p per share

451,467

7

150

30/6/2014

Closing balance at 30 June 2014

123,619,562

2,237

77,791

15/1/2015

14/5/2015

14/5/2015

16/6/2015

Issue of shares to directors @ 27.09p per share

Issue of shares for cash @ 10p per share

Share issue expenses

Conversion of options @ 15p per share

606,051

8,500,000

-

50,000

9

134

-

1

261

1201

(29)

11



132,775,613

2,381

79,235

Share premium

The share premium reserve amount arises from subscriptions for or issue of shares in excess of nominal value.

Other Reserves

Other Reserves include

(i) Foreign exchange reserve

The amount represents gains/losses arising from the translation of the financial statements of foreign operations, the functional currency of which is different from the presentation currency of the Group. The reserve is dealt with in accordance with the accounting policy set out in note 1 to these financial statements.

(ii) Equity settled share options reserve

The amount relates to the fair value of the share options that have been expensed through the statement of comprehensive income less amounts, if any, that have been transferred to the retained earnings/deficit upon exercise.

Retained deficit

Retained deficit represents the cumulative net gains and losses recognised in the statement of comprehensive income less any amounts reflected directly in other reserves.

NOTE 17: SHARE BASED PAYMENTS AND WARRANTS GRANTED

Share options issued as compensation

The Company has issued share options, some of which have vested immediately on grant and others with vesting periods. The options are unlisted. Share options are exercisable for ordinary shares which when exercised rank equally with existing ordinary shares.

Exercise price

Grant date

Outstanding at start of year

(Exercised)/

Granted during the year

(Lapsed/ Expired) during the year

Outstanding at end of year

Final exercise date








2014







50p

19/08/2011

4,700,000

-

-

4,700,000

19/08/2016

50p

29/10/2012

1,500,000

-

-

1,500,000

29/10/2017

28p

21/03/2013

5,400,000

-

-

5,400,000

21/03/2018

48p

03/05/2013

50,000

-

-

50,000

03/05/2018

50p

09/12/2013

-

3,000,000

-

3,000,000

09/12/2018








Total


11,650,000

3,000,000

-

14,650,000


2015







50p

19/08/2011

4,700,000

-

(800,000)

3,900,000

19/08/2016

50p

29/10/2012

1,500,000

-

(250,000)

1,250,000

29/10/2017

28p

21/03/2013

5,400,000

-

-

5,400,000

21/03/2018

48p

03/05/2013

50,000

-

-

50,000

03/05/2018

50p

09/12/2013

3,000,000

-

-

3,000,000

09/12/2018

25p

02/04/2015

-

5,000,000

-

5,000,000

02/04/2020

15p

20/05/2015

-

100,000

-

100,000

30/06/2018








Total


14,650,000

5,100,000

(1,050,000)

18,700,000



Weighted average exercise price

Number

Weighted average exercise price

Number


2015

2015

2014

2014






Outstanding at beginning of the year

42p

14,650,000

40p

11,650,000

Expired during the year

50p

(1,050,000)

-

-

Issued during the year

25p

5,100,000

33p

3,000,000

Outstanding at end of the year

37p

18,700,000

42p

14,650,000






Exercisable at the end of the year

41p

13,700,000

40p

11,650,000

The weighted average share price during the year was 30.61p (2014: 20.31p).

Warrants granted

On 14th May 2015 the Company raised 850,000 before expenses through a placing and subscription of 8,500,000 new Ordinary Shares of 1p each at a price of 10p per share together with the issue of 4,250,000 warrants exercisable at a price of 15p per Ordinary Share and expiring on 30 June 2018. 100,000 broker warrants were also issued as part of the fund raise.

Fair value

The fair value of the share options and warrants granted as compensation has been derived using the Black-Scholes model that takes into account factors such as the option/warrant life, the volatility of share price and expected early exercise of share options/warrants. Volatility has been based on an estimate of comparable listed companies to Churchill.

2015




Grant date

2/04/2015

20/05/2015


Granted to

Key Management Personnel

Broker warrants






Number granted

5,000,000

100,000


Fair value at grant date

2.77c

8.76c


Assumptions used




Share price

16.12c

24.34c


Exercise price

37.00c

22.81c


Expected volatility

65%

71%


Average Option life

2.50

1.50


Risk free interest rate

0.5%

0.5%


2014


Grant date

9/12/2013

Granted to

Key Management Personnel



Number granted

3,000,000

Fair value at grant date

7.47c

Assumptions used


Share price

34.32c

Exercise price

81.72c

Expected volatility

70%

Average Option life

2.65

Risk free interest rate

2%

Equity settled share based payment expense

The share based payment for the year ended 30 June 2015 was US$130,000 (2014: $249,297).

Shares

On 15th January 2015, the Company issued 606,051 new Ordinary shares to directors, executives and the company secretary at a deemed issue price of 27.09 pence per share in lieu of the payment of cash fees.

NOTE 18: NOTES TO THE CASH FLOW STATEMENT


Consolidated

Company


2015

2014

2015

2014


$'000

$'000

$'000

$'000






Reconciliation of (loss) after tax to cash from operating activities










(Loss) after tax

(2,793)

(2,450)

(3,861)

(2,391)

Share option expense

130

249

130

249

Shares issue in lieu of fees

271

157

271

157

Depreciation expense

4

13

2

5

Impairment expense

-

-

162

218

(Gain)/ Loss on exchange rates

240

(297)

1,276

(287)

Loss on subsidiary loans & investment

-

46

-

-

Finance income

(1)

(2)

(1)

(2)

Reassessment of loan payable

2,229

-

-

-

Impairment of receivables

(2,229)

-

-

-

Decrease / (Increase) in receivables

2,150

167

(78)

138

(Decrease) / Increase in payables

(2,043)

(238)

232

(144)






Cash flow from operating activities

(2,042)

(2,355)

(1,867)

(2,057)






NOTE 19: FINANCIAL INSTRUMENTS

Significant accounting policies

Details of the significant accounting policies in respect of financial instruments are disclosed in Note 1 of the financial statements.

Financial risk management

The Board seeks to minimise its exposure to financial risk by reviewing and agreeing policies for managing each financial risk and monitoring them on a regular basis. No formal policies have been put in place in order to hedge exposure of the Group's and Company's activities to the exposure to currency risk or interest risk. No derivatives or hedges were entered into during the year.

General objectives, policies and processes

The Board has overall responsibility for the determination of the Group and Company's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's finance function.

The Group is exposed through its operations to the following financial risks:

Liquidity risk;

Credit risk;

Cashflow interest rate risk;

Foreign exchange risk.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group and Company's competitiveness and flexibility. There have been no substantive changes in the Group and Company's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note. Further details regarding these policies are set out below:

Principal financial instruments

The principal financial instruments used by the Group and Company, from which financial instrument risk arises are as follows:

Loans and receivables;

Other receivables;

Cash and cash equivalents;

Trade and other payables; and

Loans and borrowings.

Categories of financial assets


Consolidated

Company


2015

2014

2015

2014


$'000

$'000

$'000

$'000






Current financial assets classified as loans and receivables





Other receivables

97

2,543

86

51

Cash and cash equivalents

2,050

3,016

2,029

2,993

Total current financial assets

2,147

5,559

2,115

3,044

Non-current financial assets classified as loans and receivables





Intergroup receivables

-

-

49,202

49,040

Impairment for non-recovery

-

-

(49,202)

(49,040)

Total financial assets

2,147

5,559

2,115

3,044

Categories of financial liabilities


Consolidated

Company


2015

2014

2015

2014


$'000

$'000

$'000

$'000






Current financial liabilities measured at amortised cost





Trade and other payables

777

739

769

681

Loans and borrowings

-

2,483

-

-

Total current financial liabilities

777

3,222

769

681






Total financial liabilities

777

3,222

769

681

At the year end, the Group had a cash balance of US$2,049,728 (2014: US$3,015,620) which was made up as follows:


Consolidated

Company


2015

2014

2015

2014


$'000

$'000

$'000

$'000






Great British Pound

396

1,355

396

1,355

United States Dollar

1,225

1,429

1,209

1,407

Australian Dollar

424

231

424

231

Indonesian Rupiah

5

1

-

-


2,050

3,016

2,029

2,993

There is no material difference between the book value and fair value of the Group's financial instruments.

The Group and Company received interest for the year as follows:


Consolidated

Company


2015

2014

2015

2014


$'000

$'000

$'000

$'000











Interest from bank deposits

1

2

1

2

Total interest from bank deposits

1

2

1

2

LIQUIDITY RISK

The Group's and Company's policy is to ensure that it has sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain readily available cash balances to meet expected requirements for a period of at least 60 days.

Cash forecasts identifying the liquidity requirements of the Group and Company are produced frequently. These are reviewed regularly by management and the Board to ensure that sufficient financial headroom exists for at least a 12 month period.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Consolidated

Carrying amount

Contractual cash flows

6 months or less

Greater than 6 months

2015

$'000

$'000

$'000

$'000






Current financial liabilities





Trade and other payables

777

777

777

-


777

777

777

-

Company

Carrying amount

Contractual cash flows

6 months or less

Greater than 6 months

2015

$'000

$'000

$'000

$'000






Current financial liabilities





769

769

769

-


769

769

769

-

Consolidated

Carrying amount

Contractual cash flows

6 months or less

Greater than 6 months

2014

$'000

$'000

$'000

$'000






Current financial liabilities





Trade and other payables

739

739

739

-

Loans and borrowings

2,483

2,483

-

2,483


3,222

3,222

739

2,483

Company

Carrying amount

Contractual cash flows

6 months or less

Greater than 6 months

2014

$'000

$'000

$'000

$'000






Current financial liabilities





681

681

681

-


681

681

681

-

CREDIT RISK

Credit risk arises principally from the Group's other receivables and investments in cash deposits. It is the risk that the counterparty fails to discharge its obligations in respect of the instrument.

The Group holds its cash balances across several bank accounts. The Group seeks to deposit its cash with reputable financial institutions with strong credit ratings.

The Group and Company's maximum exposure to credit risk by class of individual financial instrument is shown in the table below:

Consolidated

2015

2014


Carrying value

Maximum exposure

Carrying value

Maximum exposure


$'000

$'000

$'000

$'000






Current assets





Cash and cash equivalents

2,050

2,050

3,016

3,016

Other receivables

97

97

2,543

2,543







2,147

2,147

5,559

5,559

Company

2015

2014


Carrying value

Maximum exposure

Carrying value

Maximum exposure


$'000

$'000

$'000

$'000






Current assets





Cash and cash equivalents

2,029

2,029

2,933

2,933






Non - current assets





Loans to subsidiaries

49,202

49,202

49,040

49,040

Impairment for non-recovery

(49,202)

(49,202)

(49,040)

(49,040)







2,029

2,029

2,933

2,933

CASH FLOW INTEREST RATE RISK

The Group and Company is exposed to cash flow interest rate risk from its deposits of cash and cash equivalents with banks. The cash balances maintained by the Group and Company are managed in order to ensure that the maximum level of interest is received for the available funds without affecting the working capital flexibility the Group and Company require.

The Group and Company is not at present exposed to cash flow interest rate risk on borrowings as they are not interest bearing. No subsidiary Company of the Group is permitted to enter into any borrowing facility or lease agreement without prior consent of the Company.

Interest rates on financial assets and liabilities

The Group and Company's financial assets consist of cash and cash equivalents and other receivables. The interest rate profile at 30 June 2015 of these assets was as follows:

Consolidated

Floating interest rate

Fixed interest maturing in 1 year or less

Fixed interest maturing over 1 to 5 years

Non-interest bearing

Total

2015

$'000

$'000

$'000

$'000

$'000







Financial assets






Great British Pound

396

-

-

-

396

Australian Dollar

409

15

-

-

424

United States Dollar

-

1,225

-

96

1,321

Indonesian Rupiah

5

-

-

-

5


810

1,240

-

96

2,146







Weighted average interest rate

0.25%

0.25%










Financial liabilities






Great British Pound

-

-

-

96

96

Australian Dollar

-

-

-

140

140

United States Dollar

-

-

-

685

685

Indonesian Rupiah

-

-

-

-

-


-

-

-

921

921

Company

Floating interest rate

Fixed interest maturing in 1 year or less

Fixed interest maturing over 1 to 5 years

Non-interest bearing loan

Total

2015

$'000

$'000

$'000

$'000

$'000







Financial assets






Great British Pound

396

-

-

-

396

Australian Dollar

495

15

-

-

510

United States Dollar

-

1,209

-

49,202

50,411

Impairment for non-recovery

-

-

-

(49,202)

(49,202)


891

1,224

-

-

2,115







Weighted average interest rate

0.25%

0.25%










Financial liabilities






Great British Pound

-

-

-

96

96

Australian Dollar

-

-

-

140

140

United States Dollar

-

-

-

677

677


-

-

-

913

913

Consolidated

Floating interest rate

Fixed interest maturing in 1 year or less

Fixed interest maturing over 1 to 5 years

Non-interest bearing

Total

2014

$'000

$'000

$'000

$'000

$'000







Financial assets






Great British Pound

844

510

-

-

1,355

Australian Dollar

46

185

-

-

231

United States Dollar


1430

-

60

1,490

Indonesian Rupiah

1

-

-

2,483

2,483


891

2,125

-

2,543

5,559







Weighted average interest rate

0%

0.17%










Financial liabilities






Great British Pound

-

-

-

31

31

Australian Dollar

-

-

-

26

26

United States Dollar

-

-

-

682

682

Indonesian Rupiah

-

-

-

2,483

2,483


-

-

-

3,222

3,222

Company

Floating interest rate

Fixed interest maturing in 1 year or less

Fixed interest maturing over 1 to 5 years

Non-interest bearing loan

Total

2014

$'000

$'000

$'000

$'000

$'000







Financial assets






Great British Pound

844

511

-

-

1,355

Australian Dollar

46

185

-

51

282

United States Dollar

-

1,407

-

48,980

50,387

Impairment for non-recovery

-

-

-

(48,980)

(48,980)


890

2,103

-

51

3,044







Weighted average interest rate

0%

0.17%










Financial liabilities






Great British Pound

-

-

-

31

31

Australian Dollar

-

-

-

26

26

United States Dollar

-

-

-

624

624


-

-

-

681

681

Sensitivity Analysis

Interest Rate Risk

The Group and Company have performed sensitivity analysis relating to its exposure to their interest rate risk at reporting date. The sensitivity analysis demonstrates the effect on the current financial year results and equity which could result from a change in these risks.

Interest Rate Sensitivity Analysis

At 30 June 2015, the effect on loss and equity as a result of changes in the interest rate, with all other variables remaining constant, would be as follows:


Consolidated

Company


2015

2014

2015

2014


$'000

$'000

$'000

$'000






Change in profit





- Increase in interest rate by 1%

5

13

5

13

- Decrease in interest rate by 1%

(1)

(2)

(1)

(2)






Change in equity





- Increase in interest rate by 1%

5

13

5

13

- Decrease in interest rate by 1%

(1)

(2)

(1)

(2)

FOREIGN EXCHANGE RISK

The Group has overseas subsidiaries, in Australia and Indonesia, whose expenses are mainly denominated in US dollars with some expenses in Australian Dollars and Indonesian Rupiah. In addition, the Parent Company incurs some expenses in British Pounds and raises its equity finance in British Pounds. Foreign exchange risk is inherent in the Group's activities and is accepted as such. The Group mitigates foreign exchange risk by transferring appropriate amounts to match the budgeted spend in each currency. Although its geographical spread reduces the Group's operational risk, the Group's net assets arising from such overseas operations are exposed to currency risk resulting in gains and losses on retranslation into US dollars. No formal arrangements have been put in place in order to hedge the Group and Company's activities to the exposure to currency risk or interest risk. It is the Group's policy to ensure that individual Group entities enter into local transactions in their functional currency wherever possible. The Group considers that this policy minimises any unnecessary foreign exchange exposure.

In order to monitor the continuing effectiveness of this policy, the Board, through its approval of both corporate and capital expenditure budgets, and review of the currency profile of cash balances and management accounts, considers the effectiveness of the policy on an on-going basis.

The following table discloses the exchange rates of the major currencies utilised by the Group:


Pounds Sterling

Australian Dollar

Indonesian Rupiah

Foreign currency units to US $1




Average for 2014/2015

0.6477

1.2194

12,549





At 30 June 2015

0.6234

1.3330

13,332





Average for 2013/2014

0.6156

1.0895

11,374





At 30 June 2014

0.5866

1.0594

11,990





Currency exposures & Sensitivity analysis

The monetary assets and liabilities of the Group that are not denominated in US dollars and therefore exposed to currency fluctuations are shown below. The amounts shown represent the US dollar's equivalent of local currency balances.


Australian Dollar

Pound Sterling

Indonesian Rupiah

Total


$'000

$'000

$'000

$'000

US Dollar equivalent of exposed net monetary assets and liabilities










At 30 June 2015

421

417

3

841






At 30 June 2014

204

1,374

11

1,589

A 10% strengthening of the US dollar against the Australian dollar at 30 June would have reduced loss by $179,750 (2014: reduced loss by $2,921) and reduced equity by $179,750 (2014: $34,690). This analysis assumed that all other variables, in particular interest rates, remain constant.

A 10% weakening of the US dollar against the above currency at 30 June would have had approximately the equivalent but opposite effects on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

A 10% strengthening of the US dollar against the Great British Pound at 30 June would have increased loss by $35,986 (2014: $123,184) and decrease equity by $35,986 (2014: $123,184). This analysis assumed that all other variables, in particular interest rates, remain constant

A 10% weakening of the US dollar against the above currency at 30 June would have had approximately the equivalent but opposite effects on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

The Parent Company held US$1.2 million at the year-end which is translated to Company's function currency (Pound Sterling- GBP). A 10% weakening of the US dollar against GBP at 30 June would have increased the Company loss by $119,951 and decrease equity by $119,951. A 10% increase against GBP at 30 June would have had approximately equivalent but opposite effects on the above currencies to the amount of $119,951, on the basis that all other variables remain constant.

Capital

The objective of the Directors is to maximise Shareholder returns and minimise risks with the Group being mainly equity financed. In managing their capital, the Group and Company's primary objective is to ensure their ability to provide a sufficient return for their equity Shareholders, principally though the ICSID damages claim. In order to achieve and maximise this return objective, the Group and Company will, in future, seek to maintain any gearing ratio that balances risks and returns at an acceptable level while also maintaining a sufficient funding base to enable the Group and Company to meet their working capital and strategic investment needs. In making decisions to adjust their capital structure to achieve these aims, either through new share issues, increases or reductions in debt, or altering a dividend or share buyback policies, the Group considers not only its short term position but also its medium and longer term operational and strategic objectives.

NOTE 20: RELATED PARTY TRANSACTIONS

The Group had the following material transactions (excluding Directors' salaries and fees) with related parties during the year ended 30 June 2015.

a) During the year the amount of US$1,114,424 receivable from to Ms Florita was impaired in full. The Group also reassessed the loan amount payable to Ms Florita of US$1,178,743 (2014: US$ 1,312,975) to nil. Ms Florita is the partner of Mr Mudjiantoro who are both related parties of Churchill by way of their Directorships in Indonesian subsidiary companies.

b) During the year the amount of US$1,114,424 (2014: US$1,670,983) receivable from Ms Ani Setiawan was impaired in full. The Group also reassessed the loan amount payable to Ms Setiawan of US$1,050,105 (2014: US$ 1,169,698) to nil. Ani Setiawan is the partner of Mr Andreas Rinaldi. Ms Ani Setiawan is a related party of Churchill as she holds the position of Commissioner with some of the Indonesian subsidiary companies.

The Key Management personnel disclosures are included in Note 4 to the financial statements.

NOTE 21: CONTINGENCIES

On 28th November 2012 the South Jakarta District Court held that the deeds of grant by which members of the Ridlatama Group transferred 75% of the issued share capital in two of the four licence companies that made up the East Kutai Coal Project (PT Ridlatama Tambang Mineral and PT Ridlatama Trade Powerindo) to PT TCUP are null and void on the basis that the requirements for a valid grant under Indonesian laws had not been satisfied. On 6th Dec 2012 PT ICD and PT TCUP filed a notice of appeal with the High Court in respect of the South Jakarta District Court's decision. In May/June 2014 the High Court ruled in favour of Ridlatama. In June/July 2014 PT ICD and PT TCUP filed a memoranda of appeal with the Supreme Court of Indonesia with that decision still pending. The decision of the South Jakarta District Court is therefore not final and binding. During the year as a matter of prudence, the Group impaired the remaining receivable of $2,228,848 and also reassessed the loan payable of $2,228,848 to nil. It remains the Group's position that this receivable and payable are able to be offset in the future if required.

The Group is involved in litigation as detailed in the Chairman's Statement and Strategic Report. As at the date of this report the disclosure of any further information about the above matters would be prejudicial to the interests of the Group.

NOTE 22: EVENTS AFTER THE REPORTING PERIOD

On the 25th August 2015 Mr Kiran Vadlamani was appointed as a Director of the Company.

On the 2nd October 2015 the Company raised 750,000 before expenses through a placing and subscription of 4,166,664 new Ordinary Shares of 1p each (the "Placing Shares") at a price of 18p per share (the "Placing") together with the issue of warrants over Ordinary Shares on the basis of one warrant for every two Placing Shares exercisable at a price of 27p per Ordinary Share expiring on 31 October 2018 (the "Placing Warrants"). The Placing Shares represented approximately 3 per cent of the enlarged issued share capital of the Company. In connection with the Placing, the Company granted Northland Capital Partners Limited warrants to subscribe for 70,739 new Ordinary Shares on the same terms as the Placing Warrants.

There has not been any other matter or circumstance occurring subsequent to the end of the financial year, 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.


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