REG - PYX Resources Ltd. - Final Results
16/03/2023 08:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230316:nRSP1992Ta&default-theme=true
RNS Number : 1992T PYX Resources Limited 16 March 2023
PYX Resources Limited / EPIC: PYX / Market: Standard / Sector: Mining
16 March 2023
PYX Resources Limited
2022 Full Year Results and Publication of Annual Report
Strong Financial Position, Growing Global Demand for Critical Product Suite
PYX Resources Ltd ("PYX or the Company) (NSX: PYX | LSE: PYX) the second
largest publicly-listed zircon producing mining company globally by zircon
resources, is pleased to announce its results for the year ended 31 December
2022 ("Financial Year 2022" or "FY 2022"), and the publication of its Annual
Report.
FY2022 HIGHLIGHTS
· Strong revenue growth on the back of solid business fundamentals
· Revenue increased by 83% to US$22.7 million (2021: US$12.4 million)
· Premium zircon revenue increased by 81%; as a result of price and
volume increases
· Year ended with PYX zircon price at US$2,457 per tonne
· Premium zircon sales volume growth and strong production increase
(33% & 25% year on year)
· Robust customer demand across PYX's end markets
· Natural rutile and ilmenite successfully added to production
portfolio
· Continued to deliver on strategic growth plans by adding new export
products to suite of highly sought after commodities
· Average premium zircon price for FY 2022 of US$2,457 per tonne, 36%
increase on FY2021 (2021: US$1,811)
· Positive underlying EBITDA of US$419k (FY2021: negative US$794k)
· Ended year debt free, with closing cash of US$7.2 million
· Received strong strategic financial backing from well-regarded
international investor groups
· 2023 projected to experience another very strong commodity up-cycle,
which represents a great opportunity for PYX to boost capacity and grow market
share.
FINANCIAL & OPERATIONS SUMMARY
US$ FY 2022 FY 2021 % change
Sales revenue 22,703,190 12,417,086 83%
Cash cost of production (17,293,633) (10,406,727) -66%
EBITDA (9,254,205) (4,329,943) -114%
EBIT (9,496,707) (4,517,820) -110%
Net loss before tax (9,524,646) (4,529,754) -110%
Net loss after tax (NLAT) (9,433,600) (4,321,230) -118%
Underlying EBITDA 419,289 (793,628) 153%
Cash 7,221,085 6,624,364 9%
Total assets 89,124,565 84,796,550 5%
Total liabilities (5,570,118) (1,759,899) -217%
FY 2022 FY 2021 % change
Zircon Produced 9.1kt 7.2kt 25%
Zircon Sales 9.1kt 6.9kt 33%
Titanium Dioxide Minerals Produced 7.5kt -
Titanium Dioxide Minerals Sold 0.3kt -
Value Per Tonne Zircon $2,457 $1,811 36%
Total Produced 16.6kt 7.2kt 129%
Total Sold 9.5kt 6.9kt 38%
FY 2022 OVERVIEW
The Company performed strongly in FY 2022 due to a boost in premium zircon,
rutile and ilmenite production, increased sales volumes, and strong pricing.
Accordingly, FY 2022 saw PYX deliver 83% revenue growth to US$22.7 million (FY
2021: US$12.4 million), while achieving positive underlying EBITDA of US$419k,
with limited negative operating cash flows. The positive underlying EBITDA is
mainly obtained by excluding the non-cash share-based payments and loss on
fair value change of financial instrument from the achieved EBITDA.
PYX achieved ongoing sale price increases in H1 2022, which stabilised in H2
2022, to help the Company achieve average premium zircon prices for FY 2022 of
$2,457 per tonne, an increase of 36% when compared to FY 2021 ($1,811 per
tonne).
Furthermore, PYX produced 16.6kt of minerals sands (zircon, rutile and
ilmenite) ("Minerals Sands") in FY 2022, a 129% year-on-year ("YoY") increase
on FY 2021 (7.2kt), of which 9.1kt were zircon, a 25% YoY increase on FY 2021
(7.2kt).
In FY 2022, YoY sales of Minerals Sands grew by 38% to 9.5kt (FY 2021: 6.9kt)
and for premium zircon by 33% to 9.1kt (FY 2021: 6.9kt). The Company also
strengthened its finished goods inventories to 7.3kt (2021: 0.3 kt) as a
result of the start of rutile and ilmenite production. Premium zircon
inventories increased to 438t (17.5 days) from 343t (18.3 days) at the end of
2021 and decreased from 913t at the end of June 2022.
In a year which saw record production, strong financial performance and
growing product development, PYX began 2022 strongly when it announced it had
commenced production and sales of rutile and ilmenite at the Mandiri deposit
in Indonesia.
The natural rutile is a valuable by-product for the Company and follows PYX
maximising its production capacity at its Mineral Separation Plant to 24ktpa
in November 2021.
The main use of rutile is as a pigment in the manufacture of refractory
ceramic, and for the production of titanium metal. Finely powdered rutile is a
brilliant white pigment and is used in paints, plastics, paper, foods, and
other applications that call for a bright white colour.
From a commercial perspective, ilmenite is the most important titanium ore and
is used to produce synthetic rutile for feedstocks to produce titanium dioxide
(TiO2) pigment, which accounts for around 90% of global titanium feedstock
consumption.
The production of rutile and ilmenite is an integral part of the company's
growth strategy, expanding the range of products available to its increasingly
diverse customers worldwide.
Notably, the Australian Government identified rutile and ilmenite as critical
minerals considered vital for the economic well-being of the world's major and
emerging economies, yet whose supply may be at risk.
Global demand for PYX's primary product, zircon, saw an increase in the price
for PYX's Premium Zircon by 36% from US$1,811 to US$2,457 per tonne during the
year; an increase of 85% compared to the 2020 average price.
On the corporate front, PYX attracted significant global investor interest
throughout the year and received financial backing from a number of
well-respected investment firms.
In late March, PYX announced a strategic placement of shares with
well-regarded US-based institutional investor L1 Capital Global Opportunities
Master Fund. The initial investment was US$4.5 million. A further two
investments of US$4.5 million each (totaling US$9.0 million) may be made by L1
subject to mutual agreement between PYX and L1.
PYX's balance sheet received a further boost in October 2022 when it obtained
a GBP20 million investment commitment from GGY Global Yield LLC SCS (GEM), a
US$3.4 billion alternative investment firm with offices in Paris, New York,
and the Bahamas. In this tailored agreement, PYX is able to control the amount
and timing of investment under this GBP20 million commitment over a 36-month
period, with no minimum subscription obligation.
Finally, in late November PYX boosted its team with the appointment of Dr.
Raden Sukhyar as a Non-Executive Director. Dr. Sukhyar, a highly regarded
geologist and Indonesian executive, has vast experience and knowledge of
operating in Indonesia, including key government roles.
Commenting on the Company's achievements in FY 2022, PYX Resources' Chairman
and Chief Executive Officer, Oliver B. Hasler, said: "2022 has been a hugely
successful year for PYX in which we have delivered strong revenue growth and
operational performance, on the back of solid business fundamentals. We
finished the year on a very powerful note, with a healthy bank balance, global
investor support, strong demand for our growing product suite and, most
importantly, a safe workplace record.
We are particularly pleased that we have continued to grow our production
numbers and have been successful in adding the highly sought after commodities
of natural rutile and ilmenite to our product portfolio. We are very proud of
our safety and environmental record, and sustainability remains a major focus
of our operations. We look forward to delivering further strong growth in 2023
and we want to thank our highly valued shareholders, workers, and operating
communities for their ongoing support."
The Annual Report and Financial Statements for the year ended 31 December 2022
has been published today and is available for inspection at
https://pyxresources.com/investors-reports.
2022 Full Year Results Conference Call
A conference call for equity market participants will take place on Tuesday 21
March 2023 at 7pm AEDT, 4pm HKT, 8am GMT. All participants wishing to join the
call must pre-register here
(https://event.loopup.com/SelfRegistration/registration.aspx?booking=xfnWYgvgjTxAEIpys0pHfePFx9guXjKaqUs0RbIY8yk=)
to receive the dial-in information.
Annual General Meeting
The Company's Annual General Meeting (AGM) will be held virtually on Tuesday,
16 May 2023. Details of all resolutions to be considered at the AGM will be
contained in a Notice of AGM and Explanatory Notes which will be dispatched to
shareholders prior to the meeting in accordance with the relevant legal
requirements.
*** ENDS ***
For more information:
PYX Resources Limited T: +61 2 8823 3132
E: ir@pyxresources.com (mailto:ir@pyxresources.com)
WH Ireland Limited (Broker) T: +44 (0)20 7220 1666
Harry Ansell / Katy Mitchell / Darshan Patel
St Brides Partners Ltd (Financial PR) E: pyx@stbridespartners.co.uk (mailto:pyx@stbridespartners.co.uk)
Ana Ribeiro / Isabel de Salis / Isabelle Morris
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
This announcement is authorised for release by Oliver B. Hasler, Chairman and
Chief Executive Officer.
CHAIRMAN'S LETTER
Dear Shareholders,
Welcome to PYX Resources' December 2022 Annual Report. In 2022, the global
economy experienced moderate economic growth on the path to post pandemic
recovery following the removal of virus-related restrictions in most countries
worldwide, with China being the notable exception having only recently eased
its zero-Covid strategy.
However, governments and financial markets globally had to contend with other
major challenges, mostly stemming from geopolitical tensions, including the
war in Ukraine and tensions around Taiwan and the South China Sea, and
persistently high inflation in Europe and North America as a result of supply
chain disruptions and dislocation following an attempt by most Western
countries to reduce their import dependency from China and Russia.
Inflationary pressure in Western countries has triggered one of the most
abrupt changes in monetary policy over the past 20 years, with US and European
benchmark interest rates rising substantially in a very short period of time,
which in turn led to a strong revaluation of the US Dollar against other major
currencies.
Encouragingly, Indonesia's economy has performed remarkably well within the
international political turmoil, with a contained currency depreciation,
projected 2022 GDP growth of 6% and inflation of 4.6%, resulting from the
commodity export increase and solid structural reforms and improvement of the
regulatory environment.
June 2022 saw industrial metals markets come under pressure and experience the
most significant price decline since 2008. The Company believes the trigger
was not only the equity markets correction, but the uncertainty surrounding
the possibility of an upcoming global recession, high inflation, higher
interest rates, and the concern that the war in Ukraine might spread to other
countries. Despite this, the average zircon price achieved in 2022 was
US$2,457/mt, up 36% on 2021. Since the beginning of 2021, international
premium zircon prices increased from US$1,400/mt to US$2,300/mt in December
2022 and actual prices are projected to remain stable into the beginning of
2023. We believe that zircon prices are driven by physical trade and impacted
by a strong demand/supply imbalance rather than by geopolitical concerns.
The year 2022 showed a strong shift in the geographic segmentation of our
customers, with demand from the Chinese market softening as a result of
Covid-19 related restrictions and weakening of the construction sector.
Fortunately, the flexibility of our commercial model allows us to shift supply
as demand migrates from one geography to another and, accordingly, we moved
sales towards India, Europe, and the Americas. Although there are some signs
of weakened demand in the short term, prices have remained stable as supply
remains tight as a result of the limited inventory in the market and
production remaining at last year's levels. The market indications expect an
increase of demand in China after the Chinese Lunar New Year at the end of
January 2023 and a weakening of the Indian and European market as a result of
the sharp increases in production costs driven by the energy crises.
Against this macro-economic backdrop and in the context of a major commodity
pricing correction, I am very proud of the results achieved by PYX during
2022.
Firstly, PYX increased the production of its Minerals Sands by 129% and lifted
sales volumes by 38% having capitalised on our investment in the Mandiri
Mineral Separation Plant and on our strong customer relationships. We also
increased the diversification of our revenue mix with the start of production
and domestic sale of titanium minerals, zircon by-products utilised in the
production of pigment, titanium metal, and welding electrode fluxes. With
exports of these minerals expected to commence soon, we anticipate our
investment in this regard will add a substantial avenue for future revenue
growth.
Secondly, having streamlined our mining and separation processes, we delivered
an increase in gross profit per ton compared to 2021. In addition, our
underlying EBITDA improved significantly from negative US$794k in 2021 to
positive US$419k in 2022, in line with our objective to increase volumes
gradually and mostly through internally generated cash flows. Since the
beginning of the world crisis, it was clear to us that we had to prioritise
our cash, and I am pleased that we continue to have a positive net cash
position of US$7.2m and remain debt free.
Thirdly, as mentioned earlier, we have worked hard to diversify our customer
base with the intention of serving all geographies and industry sectors and
mitigating disruptions in specific locations and markets. At the beginning of
the year, PYX continued to expand its market presence in China while
developing strong relationships with key clients and customers
internationally, which became the larger part of our business in the second
half of the year.
As part of this, we commenced operations at Kuala Lumpur's Port Klang, which
has shown to provide significant benefits to PYX and its international clients
by reducing shipping time to end-use markets, increasing predictability of
shipments, reducing shipping costs to many key markets, and providing a
well-placed buffer stock to negate the effects of seasonal storms and other
supply chain issues.
Fourthly, as a reflection of the continued interest in our shares within the
global investor community and having fully capitalised on our dual listing on
the London Stock Exchange, we diversified our investor base and added high
profile US-based investors including L1 and GEM to our shareholder register.
Finally, but yet importantly, PYX has continued to put the message of
sustainability at the heart of its operations in Indonesia. Having joined
the UN Global Compact Initiative to align our strategies with universal
principles focused on preserving the environment and benefiting communities
for generations to come, we have been involved in several major community
programs: we successfully vaccinated 100% of our employees against Covid-19;
started planting 10,000 Bengkirai trees in our mining tenement; oversaw blood
donation efforts in Kalimantan; and supported both the local school and the
Borneo Orangutans Survival Foundation. A comprehensive analysis of our
measurable impact on ESG matters can be found in our Sustainability Report.
Looking forward, the zircon and titanium industry fundamentals remain
extremely attractive and present significant opportunities for PYX and its
shareholders. We believe the pricing environment on both markets have firmed
up over the past few months and we are confident that 2023 will present
opportunities for PYX in terms of increasing its pricing power. In addition,
we continue to see strong demand for premium products, and we expect to be
able to grow our volumes substantially as our investments in operations and
mining infrastructure continue to bear fruit.
The extraordinary results and achievements during the year have only been
possible thanks to the industriousness and diligence of our directors,
management team and professional staff, and the support and commitment of the
local communities and governments. On this note, on 31 August 2022 with great
sadness we learnt of the sudden death of our director Gary Artmont, a
world-renowned geologist with a deep knowledge of mineral sands and in
particular mining in Kalimantan. Gary was instrumental in building the
foundation for PYX's strategy and operation and we wish his family our most
heartfelt sympathies for their loss.
As sad as we all are for Gary's passing, I am comforted by the fact that we
appointed an equally outstanding director to join our board on 28 November
2022, Dr. Raden Sukhyar. Dr Sukhyar is a highly regarded geologist and
Indonesian executive who is very familiar with PYX and its operations. We are
delighted to have his support as he brings with him over 40 years of
experience in the resource industry.
I would also like to thank our shareholders and stakeholders for their
continued support and look forward to many more successful years ahead as we
deliver on our strategy, build the Group into one of the most prominent
mineral sands producers globally, and generate long-term value to all.
Oliver Hasler
Chairman and Chief Executive Officer
Palangkaraya, Kalimantan Indonesia
15 March 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER 2022
Note 2022 2021
US$
US$
Revenue 3 22,703,190 12,417,086
Cost of sales 4 (17,449,606) (10,511,342)
Gross Profit 5,253,584 1,905,744
Other income 3 8,043 1,089
Selling and distribution expenses (2,120,337) (950,745)
Corporate and administrative expenses (9,852,833) (4,195,750)
Foreign exchange loss (487,174) (350,011)
Listing costs - (928,147)
Loss on fair value change 17 (2,297,990) -
Interest expense 4 (27,939) (11,934)
Loss before income tax (9,524,646) (4,529,754)
Income tax benefit/(expense) 5 91,046 208,524
Net loss for the year (9,433,600) (4,321,230)
Net loss attributable to:
Owners of the Parent Entity (9,471,192) (3,678,882)
Non-controlling interests 37,592 (642,348)
Net loss for the year (9,433,600) (4,321,230)
Other comprehensive income
Items that will be reclassified subsequently to profit or loss when specific
conditions are met:
Exchange differences on translating foreign operations, net of tax (621,873) 18,634
Total comprehensive income for the year (10,055,473) (4,302,596)
Total comprehensive income attributable to:
Owners of the Parent Entity (9,446,042) (3,681,005)
Non-controlling interests (609,431) (621,591)
(10,055,473) (4,302,596)
Loss per share
Basic loss per share (cents) 8 (2.16) (1.10)
Diluted loss per share (cents) 8 (2.03) (1.00)
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022
Note 2022 2021
US$ US$
ASSETS
CURRENT ASSETS
Cash and cash equivalents 9 7,221,085 6,624,364
Trade and other receivables 10 1,396,300 968,915
Advances to suppliers 619,782 337,214
Other assets 517,847 -
Prepayments and deposits 102,457 68,484
Prepaid tax 18 661,130 210,513
Inventories 11 705,776 530,716
TOTAL CURRENT ASSETS 11,224,377 8,740,206
NON-CURRENT ASSETS
Property, plant and equipment 13 4,051,196 2,228,372
Intangible assets 14 73,314,239 73,334,566
Right of use assets 15 11,332 21,595
Deferred tax assets 16 523,421 471,811
TOTAL NON-CURRENT ASSETS 77,900,188 76,056,344
TOTAL ASSETS 89,124,565 84,796,550
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 1,505,996 1,758,140
Other liabilities 17 4,064,122 -
Lease liabilities - 1,759
TOTAL CURRENT LIABILITIES 5,570,118 1,759,899
NON-CURRENT LIABILITIES
Lease liabilities - -
TOTAL NON-CURRENT LIABILITIES - -
TOTAL LIABILITIES 5,570,118 1,759,899
NET ASSETS 83,554,447 83,036,651
EQUITY
Issued capital 19 102,226,925 96,651,080
Reserves 23 8,905,334 3,882,761
Accumulated losses (26,027,122) (16,555,930)
Equity attributable to owners of the Parent Entity 85,105,137 83,977,911
Non-controlling interest (1,550,690) (941,260)
TOTAL EQUITY 83,554,447 83,036,651
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Ordinary Shares Share Based Payment Reserve Foreign Exchange Translation Reserve Options Reserve Accumulated losses Subtotal Non-controlling Interests Total
US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 January 2021 14,873,158 2,804,535 (22,084) - (12,877,048) 4,778,561 (257,712) 4,520,849
Comprehensive income
Loss for the year - - - - (3,678,882) (3,678,882) (642,348) (4,321,230)
Other comprehensive income for the year - - (2,123) - - (2,123) 20,757 18,634
Total comprehensive income for the year - - (2,123) - (3,678,882) (3,681,005) (621,591) (4,302,596)
Transactions with owners, in their capacity as owners, and other transfers
Shares issued during the year 80,818,748 - - - - 80,818,748 - 80,818,748
Share based payments - 2,061,607 - - - 2,061,607 - 2,061,607
Issue of shares to employees 959,174 (959,174) - - - - - -
Non-controlling interests on acquisitions - - - - - - (61,957) (61,957)
Total transactions with owners and other transfers 81,777,922 1,102,433 - - - 82,880,355 (61,957) 82,818,398
Balance at 31 December 2021 96,651,080 3,906,968 (24,207) - (16,555,930) 83,977,911 (941,260) 83,036,651
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Ordinary Shares Share Based Payment Reserve Foreign Exchange Translation Reserve Options Reserve Accumulated losses Subtotal Non-controlling Interests Total
US$ US$ US$ US$ US$ US$ US$ US$
Balance at 1 January 2022 96,651,080 3,906,968 (24,207) - (16,555,930) 83,977,911 (941,260) 83,036,651
Comprehensive income
Loss for the year - - - - (9,471,192) (9,471,192) 37,592 (9,433,600)
Other comprehensive income for the year - - 25,149 - - 25,149 (647,022) (621,873)
Total comprehensive income for the year - - 25,149 - (9,471,192) (9,446,043) (609,430) (10,055,473)
Transactions with owners, in their capacity as owners, and other transfers
Shares issued during the year 4,452,459 - - - - 4,452,459 - 4,452,459
Options reserve - - - 553,939 - 553,939 - 553,939
Share based payments - 5,566,871 - - - 5,566,871 - 5,566,871
Issue of shares to employees 1,123,386 (1,123,386) - - - - - -
Total transactions with owners and other transfers 5,575,845 4,443,485 - 553,939 - 10,573,269 - 10,573,269
Balance at 31 December 2022 102,226,925 8,350,453 942 553,939 (26,027,122) 85,105,137 (1,550,690) 83,554,447
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 31 DECEMBER 2022
Note 2022 2021
US$
US$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 22,148,216 11,879,327
Payments to suppliers and employees (25,646,834) (13,982,760)
Other income 8,043 1,089
Interest received 2,007 2,007
Finance costs (29,946) (13,941)
Income tax paid (408,885) (168,896)
Net cash used in operating activities 20 (3,927,399) (2,283,174)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,021,930) (1,041,853)
Payments for acquisitions, net of cash acquired - (24,179)
Net cash used in investing activities (2,021,930) (1,066,032)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from investor (Net of costs) 6,452,285 -
Net proceeds from placement funds 443,644 8,447,656
Payments of LSE listing costs - (895,461)
Costs associated with shares issues - (769,914)
Repayments of lease liabilities (14,566) (16,794)
(Payments)/Receipts of employee loans 6,930 (6,395)
Net cash provided by financing activities 6,888,293 6,759,092
Net increase in cash and cash equivalents 938,964 3,409,886
Cash and cash equivalents at the beginning of financial year 6,624,364 3,509,395
Effect of foreign exchange rate changes (342,243) (294,917)
Cash and cash equivalents at the end of financial year 9 7,221,085 6,624,364
The accompanying notes form part of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
These general-purpose consolidated financial statements have been prepared in
accordance with the Corporations Act 2001, Australian Accounting Standards and
Interpretations of the Australian Accounting Standards Board and in compliance
with International Financial Reporting Standards as issued by the
International Accounting Standards Board. The Group is a for-profit entity for
financial reporting purposes under Australian Accounting Standards. Material
accounting policies adopted in the preparation of these financial statements
are presented below and have been consistently applied unless stated
otherwise.
Except for cash flow information, the financial statements have been prepared
on an accrual basis and are based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets,
financial assets and financial liabilities.
Going Concern
During the year ended 31 December 2022 the Group incurred a loss after tax of
US$9,433,600 and had negative cash flows from operations of US$3,927,399.
Management has considered it is appropriate to prepare the financial
statements on a going concern basis. The year-end net cash position of the
Group was US$7,221,085. The losses were partly because of the non-operating
and non-cash items of US$7,820,721. One of the major non-operating items in
the period were loss on fair value change of financial instrument expenses of
US$2,297,990 and an accrual of management's share-based payments of
US$5,566,871. Therefore, the underlying EBITDA for the period was positive
US$419,289. Management has a detailed plan to increase the mining and
production capacity which is expected to generate profit and positive cash
flows from operations in the forthcoming years.
These financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, nor to the
amounts or classification of liabilities that might be necessary should the
Group not be able to continue as a going concern.
a. Principles of Consolidation
The consolidated financial statements incorporate all of the assets,
liabilities and results of the Parent (Pyx Resources Limited) and all of the
subsidiaries (including any structured entities). Subsidiaries are entities
the Parent controls. The Parent controls an entity when it is exposed to, or
has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity. A list
of the subsidiaries is provided in Note 12.
The assets, liabilities and results of all subsidiaries are fully consolidated
into the financial statements of the Group from the date on which control is
obtained by the Group. The consolidation of a subsidiary is discontinued from
the date that control ceases. Intercompany transactions, balances and
unrealised gains or losses on transactions between Group entities are fully
eliminated on consolidation. Accounting policies of subsidiaries have been
changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to
the Group are presented as "non-controlling interests". The Group initially
recognises non-controlling interests that are present ownership interests in
subsidiaries and are entitled to a proportionate share of the subsidiary's net
assets on liquidation at either fair value or at the non-controlling
interests' proportionate share of the subsidiary's net assets. Subsequent to
initial recognition, non-controlling interests are attributed their share of
profit or loss and each component of other comprehensive income.
Non-controlling interests are shown separately within the equity section of
the statement of financial position and statement of comprehensive income.
Business combinations
Business combinations occur where an acquirer obtains control over one or more
businesses.
A business combination is accounted for by applying the acquisition method,
unless it is a combination involving entities or businesses under common
control. The business combination will be accounted for from the date that
control is obtained, whereby the fair value of the identifiable assets
acquired and liabilities (including contingent liabilities) assumed is
recognised (subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any
asset or liability resulting from a contingent consideration arrangement is
also included. Subsequent to initial recognition, contingent consideration
classified as equity is not remeasured and its subsequent settlement is
accounted for within equity. Contingent consideration classified as an asset
or liability is remeasured in each reporting period to fair value, recognising
any change to fair value in profit or loss, unless the change in value can be
identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other
than those associated with the issue of a financial instrument, are recognised
as expenses in profit or loss when incurred.
The acquisition of a business may result in the recognition of goodwill or a
gain from a bargain purchase.
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill
is calculated as the excess of the sum of:
(i) the consideration transferred at fair value;
(ii) any non-controlling interest (determined under either
the fair value or proportionate interest method); and
(iii) the acquisition date fair value of any previously held
equity interest;
over the acquisition date fair value of any identifiable assets acquired and
liabilities assumed.
The acquisition date fair value of the consideration transferred for a
business combination plus the acquisition date fair value of any previously
held equity interest shall form the cost of the investment in the separate
financial statements.
Changes in the Group's ownership interests in subsidiaries that do not result
in the Group losing control over the subsidiaries are accounted for as equity
transactions. The carrying amounts of the Group's interests and the
non-controlling interests are adjusted to reflect the changes in their
relative interests in the subsidiaries. Any difference between the amount by
which the non-controlling interests are adjusted and the fair value of the
consideration paid or received is recognised directly in equity and attributed
to owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in
profit or loss and is calculated as the difference between (i) the aggregate
of the fair value of the consideration received and the fair value of any
retained interest and (ii) the previous carrying amount of the assets
(including goodwill), and liabilities of the subsidiary and any
non-controlling interests. All amounts previously recognised in other
comprehensive income in relation to that subsidiary are accounted for as if
the Group had directly disposed of the related assets or liabilities of the
subsidiary (i.e., reclassified to profit or loss or transferred to another
category of equity as specified/permitted by applicable Accounting Standards).
The fair value of any investment retained in the former subsidiary at the date
when control is lost is regarded as the fair value on initial recognition for
subsequent accounting under AASB 139: Financial Instruments: Recognition and
Measurement, when applicable, the cost on initial recognition of an investment
in an associate or a joint venture.
The amount of goodwill recognised on acquisition of each subsidiary in which
the Group holds less than 100% interest will depend on the method adopted in
measuring the non-controlling interest. The Group can elect in most
circumstances to measure the non-controlling interest in the acquiree either
at fair value (full goodwill method) or at the non-controlling interest's
proportionate share of the subsidiary's identifiable net assets (proportionate
interest method). In such circumstances, the Group determines which method to
adopt for each acquisition and this is stated in the respective note to the
financial statements disclosing the business combination.
Under the full goodwill method, the fair value of the non-controlling interest
is determined using valuation techniques which make the maximum use of market
information where available.
Goodwill on acquisition of subsidiaries is included in intangible assets.
Goodwill on acquisition of associates is included in investments in
associates.
Goodwill is tested for impairment annually and is allocated to the Group's
cash-generating units or groups of cash-generating units, representing the
lowest level at which goodwill is monitored and not larger than an operating
segment. Gains and losses on the disposal of an entity include the carrying
amount of goodwill related to the entity disposed of.
Changes in the ownership interests in a subsidiary that do not result in a
loss of control are accounted for as equity transactions and do not affect the
carrying amounts of goodwill.
Prior Year Asset Acquisition Accounting
On 21 February 2021, Pyx Resources Limited ("PYX") completed an acquisition of
100% of the issued capital of Tisma Development (HK) Limited (the company). In
accordance with accounting standards, through acquiring 100% of the issued
capital of Tisma Development (HK) Limited, the Group has obtained control of
the company.
The consolidated financial information incorporated the assets and liabilities
of all entities deemed to be acquired by Tisma and its controlled entities and
the results of these entities for the period from which those entities are
accounted for as being acquired by PYX. The assets and liabilities of Tisma
acquired by PYX were recorded at fair value whilst the assets and liabilities
of PYX were maintained at their book value. The impact of all transactions
between entities in the Group were eliminated in full.
AASB 3 Business Combinations requires that consolidated financial statements
prepared following a business acquisition shall be issued under the name of
the legal parent (i.e., PYX), but be a continuation of the financial
statements of the legal subsidiary (i.e., Takmur. the acquirer for accounting
purposes). The implications of applying AASB 3 on each of the attached
financial statement comparatives.
Statement of financial position
The consolidated statement of financial position as at 31 December 2022
represents the consolidated financial position of Pyx Resources Limited and
its controlled entities as at 31 December 2022.
Statement of profit or loss and other comprehensive income
The consolidated statement of profit or loss for the year ended 31 December
2022 represents the consolidated results of PYX and Takmur and its controlled
entities for the year ended 31 December 2022 and the consolidated results of
Tisma and its controlled entities, PT Tisma Investasi Abadi and PT Tisma
Global Nusantara, for the period from 1 January 2022 to 31 December 2022.
The comparative information for the period ended 31 December 2022 represents
the consolidated results of Takmur and its controlled entities for the period
from 1 January 2022 to 31 December 2022 and the consolidated results of PYX
for the period from 1 January 2022 to 31 December 2022.
b. Income Tax
The income tax expense (income) for the year comprises current income tax
expense (income) and deferred tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on
taxable income for the current period. Current tax liabilities (assets) are
measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority using tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax expense reflects movements in deferred tax asset and deferred tax
liability balances during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited
outside profit or loss when the tax relates to items that are recognised
outside profit or loss or arising from a business combination.
A deferred tax liability shall be recognised for all taxable temporary
differences, except to the extent that the deferred tax liability arises from:
(a) the initial recognition of goodwill; or (b) the initial recognition of an
asset or liability in a transaction which: (i) is not a business combination;
and (ii) at the time of the transaction, affects neither accounting profit nor
taxable profit (tax loss).
Deferred tax assets and liabilities are calculated at the tax rates that are
expected to apply to the period when the asset is realised or the liability is
settled and their measurement also reflects the manner in which management
expects to recover or settle the carrying amount of the related asset or
liability. With respect to non-depreciable items of property, plant and
equipment measured at fair value and items of investment property measured at
fair value, the related deferred tax liability or deferred tax asset is
measured on the basis that the carrying amount of the asset will be recovered
entirely through sale. When an investment property that is depreciable is
held by the entity in a business model whose objective is to consume
substantially all of the economic benefits embodied in the property through
use over time (rather than through sale), the related deferred tax liability
or deferred tax asset is measured on the basis that the carrying amount of
such property will be recovered entirely through use.
Deferred tax assets relating to temporary differences and unused tax losses
are recognised only to the extent that it is probable that future taxable
profit will be available against which the benefits of the deferred tax asset
can be utilised, unless the deferred tax asset relating to temporary
differences arises from the initial recognition of an asset or liability in a
transaction that:
- is not a business combination; and
- at the time of the transaction, affects neither accounting
profit nor taxable profit (tax loss).
Where temporary differences exist in relation to investments in subsidiaries,
branches, associates, and joint ventures, deferred tax assets and liabilities
are not recognised where the timing of the reversal of the temporary
difference can be controlled and it is not probable that the reversal will
occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable
right of set-off exists and it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where: (i) a legally
enforceable right of set-off exists; and (ii) the deferred tax assets and
liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities where it is
intended that net settlement or simultaneous realisation and settlement of the
respective asset and liability will occur in future periods in which
significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
c. Inventories
Inventories are measured at the lower of cost and net realisable value. The
cost of manufactured products includes direct materials, direct labour and an
appropriate proportion of variable and fixed overheads. Overheads are applied
on the basis of normal operating capacity. Costs are assigned on the first-in,
first-out basis.
d. Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value
as indicated less, where applicable, any accumulated depreciation and
impairment losses.
Property, plant and equipment are measured on the cost basis and therefore
carried at cost less accumulated depreciation and any accumulated impairment.
In the event the carrying amount of plant and equipment is greater than the
estimated recoverable amount, the carrying amount is written down immediately
to the estimated recoverable amount and impairment losses are recognised. A
formal assessment of recoverable amount is made when impairment indicators are
present (refer to Note 1(g) for details of impairment).
The carrying amount of plant and equipment is reviewed annually by directors
to ensure it is not in excess of the recoverable amount from these assets. The
recoverable amount is assessed on the basis of the expected net cash flows
that will be received from the asset's employment and subsequent disposal. The
expected net cash flows have been discounted to their present values in
determining recoverable amounts.
The cost of fixed assets constructed within the Consolidated Group includes
the cost of materials, direct labour, borrowing costs and an appropriate
proportion of fixed and variable overheads.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance are
recognised as expenses in profit or loss during the financial period in which
they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised
leased assets, but excluding freehold land, is depreciated on a straight-line
basis over the asset's useful life to the Consolidated Group commencing from
the time the asset is held ready for use. Leasehold improvements are
depreciated over the shorter of either the unexpired period of the lease or
the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset Depreciation Rate
Buildings 5%
Plant and Equipment 20%
Furniture and Fittings 25%
Motor Vehicle 25%
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the
carrying amount. These gains and losses are recognised in profit or loss in
the period in which they arise. Gains shall not be classified as revenue. When
revalued assets are sold, amounts included in the revaluation surplus relating
to that asset are transferred to retained earnings.
e. Leases (the Group as lessee)
The Group as lessee
At inception of a contract, the Group assesses if the contract contains or is
a lease. If there is a lease present, a right-of-use asset and a corresponding
lease liability is recognised by the Group where the Group is a lessee.
However all contracts that are classified as short-term leases (lease with
remaining lease term of 12 months or less) and leases of low value assets are
recognised as an operating expense on a straight-line basis over the term of
the lease.
Initially the lease liability is measured at the present value of the lease
payments still to be paid at commencement date. The lease payments are
discounted at the interest rate implicit in the lease. If this rate cannot be
readily determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as
follows:
- fixed lease payments less any lease incentives;
- variable lease payments that depend on an index or rate,
initially measured using the index or rate at the commencement date;
- the amount expected to be payable by the lessee under residual
value guarantees
- the exercise price of purchase options, if the lessee is
reasonably certain to exercise the options;
- lease payments under extension options if lessee is reasonably
certain to exercise the options; and
- payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding
lease liability as mentioned above, any lease payments made at or before the
commencement date as well as any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the
underlying asset whichever is the shortest.
Where a lease transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Group anticipates to exercise a purchase
option, the specific asset is depreciated over the useful life of the
underlying asset.
f. Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions to the instrument. For financial
assets, this is the date that the Group commits itself to either the purchase
or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments (except for trade receivables) are initially measured at
fair value plus transaction costs, except where the instrument is classified
"at fair value through profit or loss", in which case transaction costs are
expensed to profit or loss immediately. Where available, quoted prices in an
active market are used to determine fair value. In other circumstances,
valuation techniques are adopted.
Trade receivables are initially measured at the transaction price if the trade
receivables do not contain a significant financing component or if the
practical expedient was applied as specified in AASB 15.63.
Classification and subsequent measurement
Financial liabilities
Financial instruments are subsequently measured at:
- amortised cost; or
- fair value through profit or loss.
A financial liability is measured at fair value through profit and loss if the
financial liability is:
- a contingent consideration of an acquirer in a business
combination to which AASB 3: Business Combinations applies;
- held for trading; or
- initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost
using the effective interest method.
The effective interest method is a method of calculating the amortised cost of
a debt instrument and of allocating interest expense in profit or loss over
the relevant period. The effective interest rate is the internal rate of
return of the financial asset or liability. That is, it is the rate that
exactly discounts the estimated future cash flows through the expected life of
the instrument to the net carrying amount at initial recognition.
A financial liability is held for trading if:
- it is incurred for the purpose of repurchasing or repaying in
the near term;
- part of a portfolio where there is an actual pattern of
short-term profit taking; or
- a derivative financial instrument (except for a derivative that
is in a financial guarantee contract or a derivative that is in an effective
hedging relationships).
- Any gains or losses arising on changes in fair value are
recognised in profit or loss to the extent that they are not part of a
designated hedging relationship are recognised in profit or loss.
- The change in fair value of the financial liability attributable
to changes in the issuer's credit risk is taken to other comprehensive income
and are not subsequently reclassified to profit or loss. Instead, they are
transferred to retained earnings upon derecognition of the financial
liability. If taking the change in credit risk in other comprehensive income
enlarges or creates an accounting mismatch, then these gains or losses should
be taken to profit or loss rather than other comprehensive income.
- A financial liability cannot be reclassified.
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make
specified payments to reimburse the holder for a loss it incurs because a
specified debtor fails to make payment when due in accordance with the terms
of a debt instrument.
Financial guarantee contracts are initially measured at fair values (and if
not designated as at fair value through profit or loss and do not arise from a
transfer of a financial asset) and subsequently measured at the higher of:
- the amount of loss allowance determined in accordance with AASB
9.3.25.3; and
- the amount initially recognised less the accumulative amount of
income recognised in accordance with the revenue recognition policies.
Financial assets
Financial assets are subsequently measured at:
- amortised cost;
- fair value through other comprehensive income; or
- fair value through profit or loss.
Measurement is on the basis of two primary criteria:
- the contractual cash flow characteristics of the financial
asset; and
- the business model for managing the financial assets.
A financial asset that meets the following conditions is subsequently measured
at amortised cost:
- the financial asset is managed solely to collect contractual
cash flows; and
- the contractual terms within the financial asset give rise to
cash flows that are solely payments of principal and interest on the principal
amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured
at fair value through other comprehensive income:
- the contractual terms within the financial asset give rise to
cash flows that are solely payments of principal and interest on the principal
amount outstanding on specified dates;
- the business model for managing the financial assets comprises
both contractual cash flows collection and the selling of the financial asset.
By default, all other financial assets that do not meet the measurement
conditions of amortised cost and fair value through other comprehensive income
are subsequently measured at fair value through profit or loss.
The Group initially designates a financial instrument as measured at fair
value through profit or loss if:
- it eliminates or significantly reduces a measurement or
recognition inconsistency (often referred to as "accounting mismatch") that
would otherwise arise from measuring assets or liabilities or recognising the
gains and losses on them on different bases;
- it is in accordance with the documented risk management or
investment strategy, and information about the groupings was documented
appropriately, so that the performance of the financial liability that was
part of a group of financial liabilities or financial assets can be managed
and evaluated consistently on a fair value basis;
- it is a hybrid contract that contains an embedded derivative
that significantly modifies the cash flows otherwise required by the contract.
The initial designation of the financial instruments to measure at fair value
through profit or loss is a one-time option on initial classification and is
irrevocable until the financial asset is derecognised.
Equity instruments
At initial recognition, as long as the equity instrument is not held for
trading and not a contingent consideration recognised by an acquirer in a
business combination to which AASB 3: Business Combinations applies, the Group
made an irrevocable election to measure any subsequent changes in fair value
of the equity instruments in other comprehensive income, while the dividend
revenue received on underlying equity instruments investment will still be
recognised in profit or loss.
Regular way purchases and sales of financial assets are recognised and
derecognised at settlement date in accordance with the Group's accounting
policy.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset
or financial liability from the statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (i.e. when the obligation
in the contract is discharged, cancelled or expires). An exchange of an
existing financial liability for a new one with substantially modified terms,
or a substantial modification to the terms of a financial liability is treated
as an extinguishment of the existing liability and recognition of a new
financial liability.
The difference between the carrying amount of the financial liability
derecognised and the consideration paid and payable, including any non-cash
assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual rights to its
cash flows expires, or the asset is transferred in such a way that all the
risks and rewards of ownership are substantially transferred.
All of the following criteria need to be satisfied for derecognition of
financial asset:
- the right to receive cash flows from the asset has expired or
been transferred;
- all risk and rewards of ownership of the asset have been
substantially transferred; and
- the Group no longer controls the asset (i.e. the Group has no
practical ability to make a unilateral decision to sell the asset to a third
party).
On derecognition of a financial asset measured at amortised cost, the
difference between the asset's carrying amount and the sum of the
consideration received and receivable is recognised in profit or loss.
On derecognition of a debt instrument classified as at fair value through
other comprehensive income, the cumulative gain or loss previously accumulated
in the investment revaluation reserve is reclassified to profit or loss.
On derecognition of an investment in equity which was elected to be classified
under fair value through other comprehensive income, the cumulative gain or
loss previously accumulated in the investment revaluation reserve is not
reclassified to profit or loss but is transferred to retained earnings.
Impairment
The Group recognises a loss allowance for expected credit losses on:
- financial assets that are measured at amortised cost or fair
value through other comprehensive income;
- lease receivables;
- contract assets (e.g. amounts due from customers under
construction contracts);
- loan commitments that are not measured at fair value through
profit or loss; and
- financial guarantee contracts that are not measured at fair
value through profit or loss.
Loss allowance is not recognised for:
- financial assets measured at fair value through profit or loss;
or
- equity instruments measured at fair value through other
comprehensive income.
Expected credit losses are the probability-weighted estimate of credit losses
over the expected life of a financial instrument. A credit loss is the
difference between all contractual cash flows that are due and all cash flows
expected to be received, all discounted at the original effective interest
rate of the financial instrument.
The Group uses the following approaches to impairment, as applicable under
AASB 9: Financial Instruments:
- the general approach
- the simplified approach
General approach
Under the general approach, at each reporting period, the Group assesses
whether the financial instruments are credit-impaired, and if:
- the credit risk of the financial instrument has increased
significantly since initial recognition, the Group measures the loss allowance
of the financial instruments at an amount equal to the lifetime expected
credit losses; or
- there is no significant increase in credit risk since initial
recognition, the Group measures the loss allowance for that financial
instrument at an amount equal to 12-month expected credit losses.
Simplified approach
The simplified approach does not require tracking of changes in credit risk at
every reporting period, but instead requires the recognition of lifetime
expected credit loss at all times. This approach is applicable to:
- trade receivables or contract assets that result from
transactions within the scope of AASB 15: Revenue from Contracts with
Customers and which do not contain a significant financing component; and
- lease receivables.
In measuring the expected credit loss, a provision matrix for trade
receivables was used taking into consideration various data to get to an
expected credit loss (i.e. diversity of customer base, appropriate groupings
of historical loss experience, etc).
Recognition of expected credit losses in financial statements
At each reporting date, the Group recognises the movement in the loss
allowance as an impairment gain or loss in the statement of profit or loss and
other comprehensive income.
The carrying amount of financial assets measured at amortised cost includes
the loss allowance relating to that asset.
Assets measured at fair value through other comprehensive income are
recognised at fair value, with changes in fair value recognised in other
comprehensive income. Amounts in relation to change in credit risk are
transferred from other comprehensive income to profit or loss at every
reporting period.
For financial assets that are unrecognised (e.g. loan commitments yet to be
drawn, financial guarantees), a provision for loss allowance is created in the
statement of financial position to recognise the loss allowance.
g. Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any
indication that an asset may be impaired. The assessment will include the
consideration of external and internal sources of information including
dividends received from subsidiaries, associates or joint ventures deemed to
be out of pre-acquisition profits. If such an indication exists, an impairment
test is carried out on the asset by comparing the recoverable amount of the
asset, being the higher of the asset's fair value less costs of disposal and
value in use, to the asset's carrying amount. Any excess of the asset's
carrying amount over its recoverable amount is recognised immediately in
profit or loss, unless the asset is carried at a revalued amount in accordance
with another Standard (e.g. in accordance with the revaluation model in AASB
116: Property, Plant and Equipment). Any impairment loss of a revalued asset
is treated as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the cash-generating unit
to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with
indefinite lives and intangible assets not yet available for use.
When an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation increase.
h. Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group's entities is the currency of the
primary economic environment in which that entity operates. The consolidated
financial statements are presented in United States dollars, which is the
Parent Entity's functional currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the date of the transaction. Foreign
currency monetary items are translated at the year-end exchange rate.
Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of the transaction. Non-monetary items measured at
fair value are reported at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary items are
recognised in profit or loss, except exchange differences that arise from net
investment hedges.
Exchange differences arising on the translation of non-monetary items are
recognised directly in other comprehensive income to the extent that the
underlying gain or loss is recognised in other comprehensive income; otherwise
the exchange difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations, whose functional
currency is different from the Group's presentation currency, are translated
as follows:
- assets and liabilities are translated at exchange rates
prevailing at the end of the reporting period;
- income and expenses are translated at exchange rates on the date
of transaction; and
- all resulting exchange differences are recognised in other
comprehensive income.
Exchange differences arising on translation of foreign operations with
functional currencies other than US dollars are recognised in other
comprehensive income and included in the foreign exchange translation reserve
in the statement of change in equity and allocated to non-controlling interest
where relevant. The cumulative amount of these differences is reclassified
into profit or loss in the period in which the operation is disposed of.
i. Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair
value for recognition or disclosure purposes, the fair value is based on the
price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date;
and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous
market.
Fair value is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming they act in their economic
best interests. For non-financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair
value, are used, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three
levels, using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Classifications are reviewed at each
reporting date and transfers between levels are determined based on a
reassessment of the lowest level of input that is significant to the fair
value measurement.
j. Exploration and evaluation assets
Exploration and evaluation expenditure in relation to separate areas of
interest for which rights of tenure are current is carried forward as an asset
in the statement of financial position where it is expected that the
expenditure will be recovered through the successful development and
exploitation of an area of interest, or by its sale; or exploration activities
are continuing in an area and activities have not reached a stage which
permits a reasonable estimate of the existence or otherwise of economically
recoverable reserves. Where a project or an area of interest has been
abandoned, the expenditure incurred thereon is written off in the year in
which the decision is made.
k. Employee Benefits
Short-term employee benefits
Provision is made for the Group's obligation for short-term employee benefits.
Short-term employee benefits are benefits (other than termination benefits)
that are expected to be settled wholly before 12 months after the end of the
annual reporting period in which the employees render the related service,
including wages, salaries and sick leave. Short-term employee benefits are
measured at the (undiscounted) amounts expected to be paid when the obligation
is settled.
The Group's obligations for short-term employee benefits such as wages,
salaries and sick leave are recognised as part of current trade and other
payables in the statement of financial position. The Group's obligations for
employees' annual leave and long service leave entitlements are recognised as
provisions in the statement of financial position.
Other long-term employee benefits
Provision is made for employees' long service leave and annual leave
entitlements not expected to be settled wholly within 12 months after the end
of the annual reporting period in which the employees render the related
service. Other long-term employee benefits are measured at the present value
of the expected future payments to be made to employees. Expected future
payments incorporate anticipated future wage and salary levels, durations of
service and employee departures and are discounted at rates determined by
reference to market yields at the end of the reporting period on government
bonds that have maturity dates that approximate the terms of the obligations.
Any remeasurements for changes in assumptions of obligations for other
long-term employee benefits are recognised in profit or loss in the periods in
which the changes occur.
The Group's obligations for long-term employee benefits are presented as
non-current provisions in its statement of financial position, except where
the Group does not have an unconditional right to defer settlement for at
least 12 months after the end of the reporting period, in which case the
obligations are presented as current provisions.
Equity-settled compensation
The Group operates an employee performance rights plan. Share-based payments
to employees are measured at the fair value of the instruments at grant date
and amortised over the vesting periods. The corresponding amounts are
recognised in the share-based payment reserve and statement of profit and loss
respectively. The fair value of rights is determined by reference to the share
price of the Company. The number of rights expected to vest is reviewed and
adjusted at the end of each reporting period such that the amount recognised
for services received as consideration for the equity instruments granted is
based on the number of equity instruments that eventually vest.
l. Provisions
Provisions are recognised when the Group has a legal or constructive
obligation, as a result of past events, for which it is probable that an
outflow of economic benefits will result and that outflow can be reliably
measured.
Provisions are measured using the best estimate of the amounts required to
settle the obligation at the end of the reporting period.
m. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand
with banks, other short-term highly liquid investments with original
maturities of 3 months or less, and bank overdrafts. Bank overdrafts are
reported within borrowings in current liabilities on the statement of
financial position.
n. Revenue and Other Income
Revenue from sales of zircon is recognised either when the customer takes
possession of and accepts the products or when the products are ready for
shipment, according to the sales contract terms. If the products are a partial
fulfilment of a contract covering other goods and/or services, then the amount
of revenue recognised is an appropriate proportion of the total transaction
price under the contract, allocated between all the goods and services
promised under the contract on a relative stand-alone selling price basis.
Interest income is recognised using the effective interest method.
o. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or
production of assets that necessarily take a substantial period of time to
prepare for their intended use or sale are added to the cost of those assets,
until such time as the assets are substantially ready for their intended use
or sale.
All other borrowing costs are recognised in profit or loss in the period in
which they are incurred.
p. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted
to conform to changes in presentation for the current financial year.
q. Segment Information
AASB 8 requires operating segments to be identified on the basis of internal
reports about components of the Company that are regularly reviewed by the
chief operating decision maker in order to allocate resources to the segment
and to assess its performance.
The Group engages in one business segment, being production of mineral sands
(including premium zircon, rutile and ilmenite), activities from which it
incurs costs. Consequently, the results of the Group are analysed as a whole
by the chief operating decision maker.
r. Critical Accounting Estimates, Judgements and Assumptions
The directors evaluate estimates and judgements incorporated into the
financial statements based on historical knowledge and best available current
information. Estimates assume a reasonable expectation of future events and
are based on current trends and economic data, obtained both externally and
within the Group.
Key estimates
(i) Impairment
The Group assesses impairment at the end of each reporting period by
evaluating the conditions and events specific to the Group that may be
indicative of impairment triggers. Recoverable amounts of relevant assets are
reassessed using value-in-use calculations which incorporate various key
assumptions.
Key judgements
(i) Share-based payments
The fair value of performance rights is measured at grant date, taking into
account the terms and conditions upon which those shares were granted. The
cumulative expense recognised between grant date and vesting date is adjusted
to reflect the Director's best estimate of the number of rights that will
ultimately vest because of internal and market conditions, such as the
employees having to remain with the Group until vesting date or such that
employees are required to meet internal KPI.
When shareholders' approval is required for the issuance of performance
rights, the expenses are recognised based on the grant date fair value
according to the management estimation.
(ii) Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only
if the Group considers it is probable that future taxable amounts will be
available to utilise those temporary differences and losses.
(iii) Exploration and evaluation cost
Exploration and evaluation costs have been capitalised on the basis that the
Group will commence commercial production in the future, from which time the
costs will be amortised in proportion to the depletion of the mineral
resources. Key judgements are applied in considering costs to be capitalised
which includes determining expenditures directly related to these activities
and allocating overheads between those that are expensed and capitalised. In
addition, costs are only capitalised that are expected to be recovered either
through successful development or sale of the relevant mining interest.
Factors that could impact the future commercial production at the mine include
the level of reserves and resources, future technology changes, which could
impact the cost of mining, future legal changes and changes in commodity
prices. To the extent that capitalised costs are determined not to be
recoverable in the future, they will be written off in the period in which
this determination is made.
(iv) Impact of COVID-19 on the Group
Demand remained strong during the year of 2022, with our order book reaching
the highest level since production in 2015 and exceeding our maximum operation
capacity. Even with the global economic fallout caused by the COVID-19
outbreak, prices in 2022 have so far been higher than the 2021 average
pricing. The reasons are: (i) zircon is a concentrated industry with a few
suppliers accounting for a large share of the supply base (ii) expectations
that a structural supply deficit would persist, buoying zircon prices.
NOTE 2: PARENT INFORMATION
The following information has been extracted from the books and records of the
financial information of the Parent Entity set out below and has been prepared
in accordance with Australian Accounting Standards.
2022 2021
US$
US$
Statement of Financial Position
ASSETS
Current assets 17,441,243 12,335,955
Non-current assets 78,058,861 78,058,861
TOTAL ASSETS 95,500,104 90,394,816
LIABILITIES
Current liabilities 4,857,163 1,093,863
Non-current liabilities - -
TOTAL LIABILITIES 4,857,163 1,093,863
EQUITY
Issued capital 109,497,411 103,921,565
Accumulated losses (28,097,926) (18,866,644)
Share-based payment reserve 9,243,456 4,246,032
Non-controlling interest - -
TOTAL EQUITY 90,642,941 89,300,953
Statement of Profit or Loss and Other Comprehensive Income
Net loss (9,231,282) (3,468,255)
Total comprehensive income - -
NOTE 3: REVENUE
The Group has recognised the following amounts relating to revenue in the
statement of profit or loss.
Note 2022 2021
US$
US$
Sales Revenue 3a 22,703,190 12,417,086
Other income 3b 8,043 1,089
a. Sales of mineral sands
The Group earns revenue by mining, processing, and subsequently selling
mineral sands (including zircon and rutile) to customers based in the
Americas, Asia, China and Europe. Revenue from the sale of product is
recognised when control has been transferred to the customer, generally being
when the product has been dispatched and is no longer under the physical
control of the Group. In cases where control of product is transferred to
the customer before dispatch takes place, revenue is recognised when the
customer has formally acknowledged their legal ownership of the product, which
includes all inherent risks associated with control of the product. In these
cases, product is clearly identified and immediately available to the
customer.
Sales to customers are generally denominated in US Dollars. The effect of
variable consideration arising from rebates, discounts and other similar
arrangements with customers is included in revenue to the extent that it is
highly probable that there will be no significant reversal of the cumulative
amount of revenue recognised when any pricing uncertainty is resolved.
NOTE 4: LOSS FOR THE YEAR
2022 2021
US$
US$
Loss before income tax from continuing operations includes the following
specific expenses:
a. Expenses
Cost of sales 17,449,606 10,511,342
Interest expense on financial liabilities not classified as at fair value
through profit or loss:
- unrelated parties 29,907 12,162
Finance charges 39 1,779
Less: Interest income (2,007) (2,007)
Net interest expense 27,939 11,934
Employee benefits expense:
- Staff salaries and benefits 323,931 302,339
- Share based payments 5,566,871 2,061,607
Rental expense on operating leases
- short- term lease expense 4,304 5,509
Depreciation and amortisation 242,502 187,877
Note 5: Tax Expense
2022 2021
US$
US$
a. The components of tax benefit
income comprise:
Deferred tax benefit 91,046 208,524
91,046 208,524
2022 2021
US$
US$
b. The prima facie tax on (loss) from ordinary activities before income tax is
reconciled to income tax as follows:
(Loss) before income tax expense (9,524,646) (4,529,754)
Prima facie tax payable on (loss) from ordinary activities before income tax
at 25% (2021: 25%)
2,381,162 1,132,439
Tax effect of:
- non-deductible items (2,249,813) (856,767)
- Tax losses and temporary differences not recognised as deferred tax assets (67,224) (22,505)
- Impact of overseas tax differential 26,921 (44,643)
Income tax benefit 91,046 208,524
NOTE 6: KEY MANAGEMENT PERSONNEL COMPENSATION
Refer to the remuneration report contained in the directors' report for
details of the remuneration paid or payable to each member of the Group's key
management personnel (KMP) for the year ended 31 December 2022. The total
remuneration paid to KMP of the Company and the Group during the year are as
follows:
2022 2021
US$
US$
Short-term employee benefits 728,876 739,133
Share-based payments 5,515,195 2,061,607
Total KMP compensation 6,244,071 2,800,740
NOTE 7: AUDITOR'S REMUNERATION
2022 2021
US$
US$
Remuneration of the auditor for:
Audit or review of financial statement
Hall Chadwick (NSW) 67,924 58,346
Other services
T.K. Lo (HK) 3,800 14,500
KAP Syarief Basir & Rekan 15,664
Hall Chadwick (NSW) - 52,361
87,388 125,207
NOTE 8: LOSS PER SHARE
2022 2021
US$
US$
a. Reconciliation of losses to profit or loss:
Loss attributable to non-controlling equity interest (9,433,600) (4,321,230)
Loss used to calculate basic and dilutive EPS (9,433,600) (4,321,230)
2022 2021
Weighted average number of ordinary shares on issue used in the calculating of No. No.
basic loss per share
436,375,601 404,902,836
Weighted average number of dilutive options outstanding 4,944,576 537,500
Weighted average number of dilutive warrants outstanding 3,000,000 -
Weighted average number of dilutive performance rights outstanding 20,220,000 19,349,303
Weighted average number of ordinary shares outstanding during the year used in
calculating dilutive loss per share
464,540,177 424,789,639
Loss per share
Basic loss per share (cents) (2.16) (1.10)
Diluted loss per share (cents) (2.03) (1.00)
NOTE 9: CASH AND CASH EQUIVALENTS
2022 2021
US$
US$
Cash at bank and on hand 7,221,085 6,624,364
7,221,085 6,624,364
Reconciliation of cash
Cash and cash equivalents at the end of the financial year as shown in the
statement of cash flows is reconciled to items in the statement of financial
position as follows:
Cash and cash equivalents 7,221,085 6,624,364
7,221,085 6,624,364
NOTE 10: TRADE AND OTHER RECEIVABLES
Note 2022 2021
US$
US$
CURRENT
Trade receivables 1,379,259 945,425
Amount due from a unrelated entity - -
1,379,259 945,425
Other receivables 1,731 10,002
GST/VAT receivable 15,310 14,666
Provision for impairment 10a(i) - (1.178)
17,041 23,490
Total current trade and other receivables 1,396,300 968,915
The following table shows the movement in lifetime expected credit loss that
has been recognised for trade and other receivables in accordance with the
simplified approach set out in AASB 9: Financial Instruments.
Opening balance Net measurement of loss allowance Amounts written off Closing balance
1 January 2021 31 December 2021
US$ US$ US$ US$
a. Lifetime Expected Credit Loss: Credit Impaired
(i) Current other receivables 1,178 - - 1,178
1,178 - - 1,178
Opening balance Net Amounts written off Closing balance
measurement of loss allowance
1 January 31 December 2022
2022
US$ US$ US$ US$
(i) Current other receivables - - - -
- - - -
The Group applies the simplified approach to providing for expected credit
losses prescribed by AASB 9, which permits the use of the lifetime expected
loss provision for all trade receivables. To measure the expected credit
losses, trade receivables have been grouped based on shared credit risk
characteristics and the days past due.
Credit risk
The Group has no significant concentration of credit risk with respect to any
single counterparty or group of counterparties other than those receivables
specifically provided for and mentioned within Note 10. The class of assets
described as "trade and other receivables" is considered to be the main source
of credit risk related to the Group.
The Group always measures the loss allowance for trade receivables at an
amount equal to lifetime expected credit loss. The expected credit losses on
trade receivables are estimated using a provision matrix by reference to past
default experience of the debtor and an analysis of the debtor's current
financial position, adjusted for factors that are specific to the debtor,
general economic conditions of the industry in which the debtor operates and
an assessment of both the current and the forecast direction of conditions at
the reporting date.
There has been no change in the estimation techniques used or significant
assumptions made during the current reporting period.
The Group writes off a trade receivable when there is information indicating
that the debtor is in severe financial difficulty and there is no realistic
prospect of recovery; for example, when the debtor has been placed under
liquidation or has entered into bankruptcy proceedings, or when the trade
receivables are over two years past due, whichever occurs earlier. None of the
trade receivables that have been written off are subject to enforcement
activities.
b. Collateral Held as Security
The Group does not hold any collateral over the trade and other receivables.
c. Financial Assets Measured at Amortised Cost
Note 2022 2021
US$
US$
Trade and other receivables:
- total current 1,396,300 968,915
Total financial assets measured at amortised cost 22 1,396,300 968,915
d. Collateral Pledged
The Group does not hold any collateral over the trade and other receivables.
NOTE 11: INVENTORIES
2022 2021
US$
US$
CURRENT
At cost:
Raw materials - 18,147
Finished goods 705,776 512,569
705,776 530,716
Note 12: Interests in Subsidiaries
a. Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary
shares, which are held directly or indirectly by the Group. The proportion of
ownership interests held equals the voting rights held by the Group. Each
subsidiary's principal place of business is also its country of incorporation.
Name of Subsidiary Principal Place of Business Ownership Interest Held by the Group Proportion of Non-Controlling Interests
2022 2021 2022 2021
% % % %
Takmur Pte Limited Singapore 100 100 - -
PT Andary Usaha Makmur Indonesia 99.5 99 0.5 1
PT Investasi Mandiri* Indonesia - - 100 100
Tisma Development (HK) Ltd. Hong Kong 100 100 - -
PT Tisma Investasi Abadi Indonesia 99 99 1 1
PT Tisma Global Nusantara** Indonesia - - 100 100
* This entity is accounted for as a controlled entity on the basis that
control was obtained through the execution of an exclusive operations and
management agreement between PT Andary Usaha Makmur and PT Investasi Mandiri
and was for nil purchase consideration.
** This entity is accounted for as a controlled entity on the basis that
control was obtained through the execution of an exclusive operations and
management agreement between PT Tisma Investasi Abadi and PT Tisma Global
Nusantara and was for nil purchase consideration.
The non-controlling interests in PT Andary Usaha Makmur and PT Tisma Investasi
Abadi are not material to the Group.
Subsidiary financial statements used in the preparation of these consolidated
financial statements have also been prepared as at the same reporting date as
the Group's financial statements.
b. Summarised Financial Information of Subsidiaries with Material
Non-controlling Interests
Set out below is the summarised financial information for each subsidiary that
has non-controlling interests that are material to the Group, before any
intragroup eliminations.
PT Investasi Mandiri
2022 2021
US$
US$
Summarised Financial Position
Current assets 5,106,190 3,073,202
Non-current assets 2,280,298 1,464,608
Current liabilities (8,865,505) (5,410,355)
Non-current liabilities - -
NET ASSETS (1,479,017) (872,545)
Carrying amount of non-controlling interests (1,479,017) (872,545)
Summarised Financial Performance
Revenue 22,703,190 12,417,086
Profit/(Loss) after income tax 53,431 (633,165)
Other comprehensive income after tax (659,903) 20,822
Total comprehensive income (606,472) (612,343)
Loss attributable to non-controlling interests (606,472) (612,343)
Distributions paid to non-controlling interests - -
Summarised Cash Flow Information
Net cash used in operating activities (2,260,338) (2,134,642)
Net cash used in investing activities (1,086,625) (615,776)
Net cash from financing activities 3,510,633 2,724,907
Net (decrease)/increase in cash and cash equivalents 163,670 (25,511)
PT Tisma Global Nusantura
2022 2021
US$
US$
Summarised Financial Position
Current assets 122,011 14,057
Non-current assets 74,596 -
Current liabilities (332,308) (147,942)
Non-current liabilities - -
NET ASSETS (135,701) (133,885)
Carrying amount of non-controlling interests (135,701) (133,885)
Summarised Financial Performance
Revenue - -
Loss after income tax (14,649) (3,383)
Other comprehensive income after tax 12,833 -
Total comprehensive income (1,816) (3,383)
Loss attributable to non-controlling interests (1,816) (3,383)
Distributions paid to non-controlling interests - -
Summarised Cash Flow Information
Net cash used in operating activities (82,312) (13,876)
Net cash used in investing activities (74,596) -
Net cash from financing activities 188,322 13,705
Net decrease in cash and cash equivalents 31,414 (171)
Note 13: Property, Plant and Equipment
2022 2021
US$
US$
Land and Buildings
Freehold land at cost 211,603 196,989
Translation (11,286) -
Total land 200,317 196,989
Buildings at cost 1,231,651 826,936
Accumulated depreciation (248,221) (176,542)
Translation (53,375) -
Total buildings 930,055 650,394
Total land and buildings 1,130,372 847,383
Construction in Progress
Construction in Progress at cost 2,258,130 659,605
Translation (132,079) -
Total Construction in Progress 2,126,051 659,605
Plant and Equipment
Plant and equipment at cost 1,073,904 818,856
Accumulated depreciation (333,363) (183,903)
Translation (53,678) -
Total plant and equipment 686,863 634,953
Motor Vehicles
Motor vehicles at cost 138,707 79,758
Accumulated depreciation (42,618) (15,777)
Translation (6,254) -
Total motor vehicles 89,835 63,981
Furniture and Fittings
Furniture and fittings at cost 31,806 30,668
Accumulated depreciation (13,145) (8,218)
Translation (586) -
Total furniture and fittings 18,075 22,450
Total property, plant and equipment 4,051,196 2,228,372
a. Movements in Carrying Amounts
Movements in the carrying amounts for each class of property, plant and
equipment between the beginning and the end of the current financial year:
Freehold Construction Plant and Motor Furniture Total
Land Buildings in Progress Equipment Vehicles and Fittings
US$ US$ US$ US$ US$ US$ US$
Balance at 1 Jan 2021 194,542 496,664 166,645 413,698 19,078 27,207 1,317,834
Additions 2,447 191111 645,702 298,471 56,864 - 1,194,595
Transfer - - (152,742) - - - (152,742)
Depreciation expense - (37,381) - (77,216) (11,961) (4,757) (131,315)
Balance at 31 Dec 2021 196,989 650,394 659,605 634,953 63,981 22,450 2,228,372
Balance at 1 Jan 2022 196,989 650,394 659,605 634,953 63,981 22,450 2,228,372
Additions 14,614 381,302 1,652,555 227,191 58,949 1,138 2,335,749
Transfer - - (54,030) - - - (54,030)
Depreciation expense - (48,266) - (121,603) (26,841) (4,927) (201,637)
Translation (11,286) (53,375) (132,079) (53,678) (6,254) (586) (257,258)
Balance at 31 Dec 2022 200,317 930,055 2,126,051 686,863 89,835 18,075 4,051,196
NOTE 14: INTANGIBLE ASSETS
2022 2021
US$
US$
Goodwill:
Cost 7,774 7,774
Accumulated impairment losses - -
Net carrying amount 7,774 7,774
Mining License Renewal:
Cost 88,984 88,984
Accumulated amortization (40,041) (22,245)
Translation (2,531) -
Net carrying amount 46,412 66,739
Exploration asset:
Carrying value on acquisition 73,260,053 73,260,053
Net carrying amount 73,260,053 73,260,053
Total intangible assets 73,314,239 73,334,566
Goodwill Mining Licenses Exploration assets Total
US$ US$ US$ US$
Year ended 31 December 2021
Balance at the beginning of the year 7,774 84,535 - 92,309
Additions through business combinations - - 73,260,053 73,260,053
Amortisation - (17,796) - (17,796)
Closing value at 31 December 2021 7,774 66,739 73,260,053 73,334,566
Year ended 31 December 2022
Balance at the beginning of the year 7,774 66,739 73,260,053 73,334,566
Additions through business combinations - - - -
Amortisation - (17,796) - (17,796)
Translation - (2,531) - (2,531)
Closing value at 31 December 2022 7,774 46,412 73,260,053 73,314,239
NOTE 15: RIGHT OF USE ASSETS
The Group's lease portfolio includes motor vehicles & Office Building.
These leases have an average life of 4 years for the vehicle and 2 years for
Office Building being the lease term.
i) AASB 16 related amounts recognised in the balance sheet
Right of use assets
2022 2021
US$ US$
Leased Buildings 25,059 11,187
Accumulated depreciation (4,624) (9,320)
Disposals (11,187) -
Translation (772) -
8,476
1,867
Leased Motor Vehicles 140,484 140,484
Accumulated depreciation (137,334) (120,756)
Translation (294) -
2,856
19,728
Total Right of use assets 11,332 21,595
Movement in carrying amounts:
Leased Buildings:
Opening balance 1,867 7,451
Additions 13,872 -
Depreciation expense (6,491) (5,584)
Translation (772) -
Net Carrying Amount 8,476 1,867
Leased Motor Vehicles:
Opening balance 19,728 52,910
Additions - -
Disposals - -
Depreciation expense (16,578) (33,182)
Translation (294) -
Net Carrying Amount 2,856 19,728
Total Right of use assets 11,332 21,595
ii) AASB 16 related amounts recognised in the statement of profit or loss
2022 2021
US$ US$
Depreciation charge related to right-of-use assets 23,069 38,766
Interest expense on lease liabilities 39 1,779
Short term lease expenses 4,304 5,509
NOTE 16: DEFERRED TAX ASSETS (NON-CURRENT)
Non-current assets - deferred tax
2022 2021
US$
US$
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses 110,811 219,153
Property, plant and equipment (8,131) (6,865)
Employee benefits (11,634) (3,764)
Deferred tax asset 91,046 208,524
Amount expected to be recovered with 12 months
Amount expected to be recovered after more than 12 months 91,046 208,524
Amount expected to be settled within 12 months - -
Amount expected to be settled after more than 12 months - -
91,046 208,524
Movements:
Opening balance 471,811 265,596
Credited to profit or loss (Note 5) 91,046 208,524
Foreign exchange (39,436) (2,309)
Closing balance 523,421 471,811
NOTE 17: OTHER LIABILITIES
2022 2021
US$
US$
Prepayments from investor* 6,827,322 -
Allocation of costs (309,154) -
Less : fair value of initial shares (3,702,036)
Less : fair value of subscribed shares (1,050,000)
Loss on fair value change 2,297,990 -
Balance at the end of reporting period 4,064,122 -
* On 11 March the Company entered into Share Subscription Agreement
("Subscription Agreement") with L1 Capital Global Opportunities Master Fund
("L1" or "Investor") and received an advance payment amount of US$4,383,822
(net of costs) from L1 as a prepayment for US$5 million worth of PYX shares
("Initial Investment Subscription Amount") via a share placement. The
Company has issued initial 3,000,000 shares at zero value and 2,083,431
unlisted options to L1.
The key terms and conditions of the Subscription Agreement are:
· The Investor will immediately prepay a lumpsum of US$4,500,000
for Placement Shares worth US$5,000,000; and on mutual consent, up to an
additional US$9,000,000.
· The Investor will specify the time(s) of issuance(s) of shares
(the "Placement Shares") no later than 24 months following the date of the
applicable funding date to offset the Subscription Amount.
· The subscription price for the Placement Shares was initially
130% of the average of the 5 daily VWAPs on the applicable exchange (NSX or
LSE) preceding the applicable funding date. Commencing 30 days after the
funding date, the Investor may elect to subscribe for the Placement Shares at
95% of the average of 3 daily VWAPs over the 15 trading days (on the
applicable exchange) prior to the Share Issuance Date.
· The Investor will not sell more than 20% of the monthly trading
volume in any month.
· On each of the applicable funding dates, the Company will issue
to the Investor a number of Options equal to 40% of the prepayment amount
divided by the average of the 5 daily VWAPs preceding the applicable funding
date. Each option will have a strike price equal to 130% of the average of
the 5 daily VWAPs preceding the applicable funding date and expire 3 years
from the applicable funding date.
· To the extent that any Shares remain unissued at the 24-month
anniversary of the date of the prepayment, such Shares will be mandatorily
issued at that time, based on the Subscription Price applying at the time.
On 7 July 2022, 857,000 placement shares valued at US$550,000 were issued to
L1.
On 7 October 2022, 1,061,693 placement shares valued at US$500,000 were issued
to L1.
* On 2 December 2022, L1 has invested an additional US$2,500,000 in the
Company in exchange for US$2,777,778 worth of PYX shares. The Company
received the additional advance funds of US$2,443,500 (net of costs) from L1
as a prepayment for US$2,777,778 worth of PYX shares. The Company has issued
to the Investor 1,700,000 shares ("the Additional Initial Shares") and
2,323,645 unlisted options with an exercise price of GBP 0.45 which will
expire three years from the applicable funding date.
The following variations to their agreement have since been made by the
Company and the Investor:
· The Company will issue 1,700,000 shares to the Investor at the
time of the funding of the Advance Payment of US$2.5m (the Additional Shares).
· The Investor may elect to subscribe for the Placement Shares at
95% of the average of 3 daily VWAPs over the 15 trading days (on the
applicable exchange) prior to the Share Issuance Date or 130% of the average
of 5 daily VWAPs over the 5 trading days immediately prior to the relevant
date of the Advance Payment.
· The Investor will not sell more than 40% of the monthly trading
volume in any month, provided that during the term the Investor may not sell
more than 30% of the aggregate trading volume during the term.
· The term of the investment has been increased from 24 to 30
months.
The unconverted amounts of the prepayment and additional advance payment are
reported net of the fair value of initial shares, additional initial shares
and placement shares subscribed as at the reporting date.
NOTE 18: TAX
2022 2021
US$
US$
CURRENT
Income tax recoverable 661,130 210,513
NOTE 19: ISSUED CAPITAL
2022 2021
US$
US$
441,349,100 (2021: 429,520,222) fully paid ordinary shares 102,226,925 96,651,080
2022 2021
No. of shares Contributed equity No. of Shares Contributed equity
No. US$ No. US$
a. Ordinary Shares
At the beginning of the reporting period 429,520,222 96,651,080 267,777,037 14,873,158
Movement:
Year 2021 - - 161,743,185 81,777,922
7 January 2022 2,182,894 586,762 - -
15 March 2022 3,000,000 2,513,971 - -
31 March 2022 1,996,368 536,624 - -
7 July 2022 857,000 550,000 - -
7 October 2022 1,061,693 500,000 - -
7 December 2022 2,730,923 1,166,227 - -
Share issue costs - (277,739) - -
At the end of the reporting period 441,349,100 102,226,925 429,520,222 96,651,080
On 7 January 2022, 2,182,894 shares were issued on conversion of 2,182,894
Performance Rights to Shares on achievement of milestones.
On 21 March 2022, the Company issued initial 3,000,000 shares valued at
US$2,513,971, net of costs and 2,083,431 unlisted options to L1 Capital Global
Opportunities Master Fund ("L1"). These initial shares and unlisted options
were issued in connection with the advance funds of US$4,383,822 received from
L1 as a prepayment for US$5,000,000 worth of PYX shares. These advance funds
will be converted to ordinary shares of the Company within 24 months after the
funding date. The unconverted amount of the advance funds is reported net of
the value of initial shares and included in trade and other payables in the
consolidated statement of financial position.
On 21 March 2022, 1,996,368 shares were issued on conversion of 2,675,943
Performance Rights to Shares on achievement of milestones.
On 7 July 2022, 857,000 shares valued at US$550,000 were issued to L1 Capital
Global Opportunities Master Fund ("L1"). These shares were issued in
connection with the funds of US$4,383,822 received from L1 as a prepayment for
US$5 million worth of PYX shares.
On 7 October 2022, 1,061,693 shares valued at US$500,000 were issued to L1
Capital Global Opportunities Master Fund ("L1"). These shares were issued in
connection with the funds of US$4,383,822 received from L1 as a prepayment for
US$5 million worth of PYX shares.
On 7 December 2022, 1,700,000 shares were issued to L1 Capital Global
Opportunities Master Fund ("L1") (the Additional Shares).
On 7 December 2022, 1,030,923 shares were issued to GGY Global Yield LLC SCS
("GGY").
At the shareholders' meetings each ordinary share is entitled to one vote when
a poll is called; otherwise, each shareholder has one vote on a show of hands.
b. Unlisted Options
2022 2021
No. No.
At the beginning of the reporting period 537,500 537,500
21 March 2022 2,083,431 -
7 December 2022 2,323,645 -
At the end of the reporting period 4,944,576 537,500
On 21 March 2022, the Company issued 2,083,431 unlisted options to L1 Capital
Global Opportunities Master Fund ("L1") with an exercise price of GBP 0.86 and
an expiry date of 21 March 2025.
On 7 December 2022, 2,323,645 unlisted options were issued to L1 Capital
Global Opportunities Master Fund ("L1") with an exercise price of GBP 0.45 to
expire three years from the applicable funding date.
c. Unlisted Warrants
2022 2021
No. No.
At the beginning of the reporting period - -
7 October 2022 3,000,000 -
At the end of the reporting period 3,000,000 -
On 7 October 2022, 3,000,000 unlisted warrants were issued to GGY Global Yield
LLC SCS ("GGY") with an exercise price of GBP100 and an expiry date three
years from the date of issue.
d. Capital Management
Management controls the capital of the Group in order to maintain a
sustainable debt to equity ratio, generate long-term shareholder value and
ensure that the Group can fund its operations and continue as a going concern.
The Group's debt and capital include ordinary share capital, redeemable
preference shares, convertible preference shares and financial liabilities,
supported by financial assets.
The Group is not subject to any externally imposed capital requirements.
Management effectively manages the Group's capital by assessing the Group's
financial risks and adjusting its capital structure in response to changes in
these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control
the capital of the Group since the prior year.
Note 2022 2021
US$
US$
Total borrowings - 1,759
Less cash and cash equivalents 9 7,221,085 6,624,364
Net cash/(debt) 7,221,085 6,622,605
Total equity 83,554,447 83,036,651
Total capital 83,554,447 83,036,651
Gearing ratio 0.000% 0.002%
NOTE 20: CASH FLOW INFORMATION
2022 2021
US$
US$
a. Reconciliation of Cash Flows from Operating Activities with Loss after Income
Tax
Loss after income tax (9,433,600) (4,321,230)
Non-cash flows in (loss):
- depreciation 242,502 187,877
- listing and acquisition costs - 25,793
- share-based payments 5,566,871 2,061,607
- exchange differences (286,642) 313,552
- Fair value change of financial instrument 2,297,990 -
Changes in assets and liabilities:
- increase in trade and other receivables (434,478) (666,381)
- (increase)/decrease in advances to suppliers (282,568) 14,848
- increase in inventories (175,060) (408,013)
- increase in prepayments and deposits (33,974) (25,588)
- increase in deferred tax assets (51,610) (206,215)
- (increase)/decrease in trade and other payables (886,213) 16,320
- increase in LSE listing costs - 895,461
- increase in current tax liabilities (450,617) (171,205)
Net cash generated by operating activities (3,927,399) (2,283,174)
b. Changes in Liabilities arising from Financing Activities
Non-cash changes
1 January Cash flows Acquisition Re-classification 31 December
2022 2022
US$ US$ US$ US$ US$
Short term borrowings - - - -
Lease liabilities 1,759 (1,759) - - -
Total 1,759 (1,759) - - -
c. Cash Financing and Investing Activities
(i) Share issue:
Refer to note 19 for details of cash financing activities arising from shares
issued.
NOTE 21: RELATED PARTY TRANSACTIONS
Phoenician Management Services Limited, a related party of Mr. Hasler,
provided management support, general administration and IT services to PT
Investasi Mandiri, after acquisition. For the year ended 31 December 2022,
Phoenician Management Services Limited was paid $1,292,188 (2021: $1,150,602)
and expenses recognised during the year totaled $1,287,784 (2021:
$1,155,006).
NOTE 22: FINANCIAL RISK MANAGEMENT
The Group's financial instruments consist mainly of deposits with banks,
accounts receivable and payable, loan and leases.
The totals for each category of financial instruments, measured in accordance
with AASB 9: Financial Instruments as detailed in the accounting policies to
these financial statements, are as follows:
Note 2022 2021
US$
US$
Financial assets
Financial assets at amortised cost
- cash and cash equivalents 9 7,221,085 6,624,364
- trade and other receivables 10c 1,396,300 968,915
Total financial assets 8,617,385 7,593,279
Financial liabilities
Financial liabilities at amortised cost
- trade and other payables 1,505,996 1,758,140
- lease liabilities - current - 1,759
Financial liabilities at fair value
- other liabilities 17 4,064,122 -
Total financial liabilities 5,570,118 1,759,899
Financial Risk Management Policies
The Finance and Operations Committee (FOC) has been delegated responsibility
by the Board of Directors for, among other issues, managing financial risk
exposures of the Group. The FOC monitors the Group's financial risk management
policies and exposures and approves financial transactions within the scope of
its authority. It also reviews the effectiveness of internal controls relating
to commodity price risk, counterparty credit risk, foreign currency risk,
liquidity risk, and interest rate risk. The FOC meets on a bi-monthly basis
and minutes of the FOC are reviewed by the Board.
The FOC's overall risk management strategy seeks to assist the Consolidated
Group in meeting its financial targets, while minimising potential adverse
effects on financial performance. Its functions include the review of the use
of hedging derivative instruments, credit risk policies and future cash flow
requirements.
The main risks the Group is exposed to through its financial instruments are
credit risk, liquidity risk, and market risk consisting of interest rate risk,
foreign currency risk and other price risk (commodity and equity price risk).
There have been no substantive changes in the types of risks the Group is
exposed to, how these risks arise, or the Board's objectives, policies and
processes for managing or measuring the risks from the previous period.
a. Credit risk
Exposure to credit risk relating to financial assets arises from the potential
non-performance by counterparties of contract obligations that could lead to a
financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such as the
utilisation of systems for the approval, granting and renewal of credit
limits, regular monitoring of exposures against such limits and monitoring of
the financial stability of significant customers and counterparties), ensuring
to the extent possible that customers and counterparties to transactions are
of sound credit worthiness. Such monitoring is used in assessing receivables
for impairment. Depending on the division within the Group, credit terms are
generally 14 to 30 days from the invoice date.
Trade and other receivables that are neither past due nor impaired are
considered to be of high credit quality. Aggregates of such amounts are
detailed in Note 10.
b. Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter
difficulty in settling its debts or otherwise meeting its obligations related
to financial liabilities. The Group manages this risk through the following
mechanisms:
- preparing forward-looking cash flow analyses in relation to its operating,
investing and financing activities;
- obtaining funding from a Parent Group;
- maintaining a reputable credit profile;
- managing credit risk related to financial assets; and
- comparing the maturity profile of financial liabilities with the realisation
profile of financial assets.
The following table reflects an undiscounted contractual maturity analysis for
financial assets and financial liabilities.
Cash flows realised from financial assets reflect management's expectation as
to the timing of realisation. Actual timing may therefore differ from that
disclosed. The timing of cash flows presented in the table to settle financial
liabilities reflects the earliest contractual settlement dates and does not
reflect management's expectations that banking facilities will be rolled
forward.
Financial Liability and Financial Asset Maturity Analysis 1 to 5 Years Total
Within 1 Year
2022 2021 2022 2021 2022 2021
US$ US$ US$ US$ US$ US$
Financial liabilities due for payment
Trade and other payables 1,505,996 1,758,140 - - 1,505,996 1,758,140
Lease liabilities - 1,759 - - - 1,759
Total expected outflows 1,505,996 1,759,899 - - 1,505,996 1,759,899
Financial assets - cash flows realisable
Cash and cash equivalents 7,221,085 6,624,364 - - 7,221,085 6,624,364
Trade and other receivables 1,396,300 968,915 - - 1,396,300 968,915
Total anticipated inflows 8,617,385 7,593,279 - - 8,617,385 7,593,279
Net inflow/ (outflow) on financial instruments 7,111,389 5,833,380 - - 7,111,389 5,833,380
c. (i) Other price risk
Other price risk relates to the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in market prices
for Zircon largely due to demand and supply factors (other than those arising
from interest rate risk or foreign currency risk) for sand minerals.
The Group is exposed to commodity price risk through the operations of its
Zircon Product Contracts for the sale and physical delivery of Zircons are
executed whenever possible on a pricing basis intended to achieve a relevant
index target. Where pricing terms deviate from the index, derivative commodity
contracts may be used when available to return realised prices to the index.
Contracts for the physical delivery of Zircon are generally not financial
instruments and are carried in the statement of financial position at cost
(typically at nil). There were no hedges in place at the end of the reporting
period.
d. (ii) Foreign currency risk
Exposure to foreign currency risk may result in the fair value or future cash
flows of a financial instrument fluctuating due to movement in foreign
exchange rates of currencies in which the Group holds financial instruments
which are other than the USD functional and presentation currency of the
Group.
With instruments being held by overseas operations, fluctuations in the IDR
and AUD may impact on the Group's financial results unless those exposures are
appropriately hedged.
The following table shows foreign currency risk on the financial assets and
liabilities of the Group's operations denominated in currencies other than the
functional currency of the Group's operations. The foreign currency risk in
the books of the Parent Entity is considered immaterial and is therefore not
shown.
2022 Net Financial Assets/(Liabilities) in USD
USD GBP AUD Total USD
Functional currency of entity:
US dollar - (3,213,877) 3,541,491 327,614
Indonesian Rupiah 1,595,683 - - 1,595,683
Statement of financial position exposure 1,595,683 (3,213,877) 3,541,491 1,923,297
2021 Net Financial Assets/(Liabilities) in USD
USD GBP AUD Total USD
Functional currency of entity:
US Dollar - - 5,975,070 5,975,070
Indonesian Rupiah 857,364 - - 857,364
Statement of financial position exposure 857,364 - 5,975,070 6,832,434
Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in
the following table and can be compared to their carrying amounts as presented
in the statement of financial position.
Differences between fair values and carrying amounts of financial instruments
with fixed interest rates are due to the change in discount rates being
applied by the market since their initial recognition by the Group.
2022 2021
Note Carrying Amount Fair Carrying Amount Fair
US$
Value
US$
Value
US$
US$
Financial assets
Financial assets at amortised cost:
Cash and cash equivalents((i)) 9 7,221,085 7,221,085 6,624,364 6,624,364
Trade and other receivables((i)) 10 1,396,300 1,396,300 968,915 968,915
Total financial assets 8,617,385 8,617,385 7,593,279 7,593,279
Financial liabilities
Financial liabilities at amortised costs
Trade and other payables((i)) 1,505,996 1,505,996 1,758,140 1,758,140
Lease liabilities((i)) - - 1,759 1,759
Financial liabilities at fair value
Other liabilities((i)) 17 4,064,122 4,064,122 - -
Total financial liabilities 5,570,118 5,570,118 1,759,899 1,759,899
(i) The carrying amounts of cash and cash equivalents,
trade and other receivables, trade and other payables and lease liabilities
are equivalent to their fair values.
Note 23: Reserves
a. Share-Based Payment Reserve
The share-based payment reserve records items recognised as expenses on
valuation of share-based payments.
b. Options Reserve
The options reserve records costs associated with the option
issue.
c. Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising
on translation of the foreign controlled subsidiaries.
d. Analysis of Each Class of Reserve
2022 2021
US$
US$
Share Based Payment Reserve
At the beginning of the reporting period 3,906,968 2,804,535
Share based payments 5,566,871 2,061,607
Issue of shares to employees (1,123,386) (959,174)
Closing balance in share-based payment reserve 8,350,453 3,906,968
Options Reserve
At the beginning of the reporting period - -
Options reserve 553,939 -
Closing balance in Options reserve 553,939 -
Foreign Currency Translation Reserve
At the beginning of the reporting period (24,207) (22,084)
Exchange differences on translation of foreign operations 25,149 (2,123)
Closing balance in foreign currency translation reserve 942 (24,207)
Total 8,905,334 3,882,761
NOTE 24: EVENTS AFTER THE REPORTING PERIOD
During the 2022 financial year PYX received a total initial investment of
US$6,827,322 from a US Institutional Investor, L1 Capital Global Opportunities
Master Fund ("Investor"), for US$7,777,778 worth of PYX shares ("Subscription
Amount") via a share placement, as announced on 11 March 2022 and 2 December
2022. Subsequent to year end the Company issued 5,412,629 Shares for the
conversion into Shares of a total of US$1,350,000 of the Subscription
Amount in accordance with the third and fourth Subscription Notices
received. Following the fourth Subscription Notice, there is US$5,377,778 of
available Subscription Amount remaining.
On 23 February 2023 the Company announced that it has received notification
from the Central Kalimantan Provincial Government (DMPTSP: Head of Investment
Office and One-Stop Integrated Service Department of Central Kalimantan) that
after approval from the Energy and Mineral Resources Department of Central
Kalimantan ("ESDM") the Company's application for the renewal of the license
for the Tisma tenement has been granted for the maximum authorised period of
10 years, after which the license can be renewed for additional periods. The
renewal of the tenement license allows PT. Tisma Global Nusantara ("PT TGN")
to continue to perform exploration and mining works in the tenement area.
537,500 options with an exercise price of AU$1.00 expired in February 2023.
No other significant events are noted by management since the end of the
reporting period.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR UNVBROVUOARRRecent news on PYX Resources
See all newsREG - PYX Resources Ltd. - Notice of AGM
AnnouncementREG - PYX Resources Ltd. - Final Results
AnnouncementREG - PYX Resources Ltd. - Preliminary Final Report
AnnouncementREG - PYX Resources Ltd. - Royalty Increase
AnnouncementREG - PYX Resources Ltd. - Notification of Major Holdings
Announcement