Expressed in thousands of Australian dollars (A$000) unless otherwise stated
Consolidated
statement of profit or loss and other comprehensive income
For the year ended 31 December
2023
2022
2021
(Unaudited)
Note
A$'000
A$'000
A$'000
Sales
revenue
9,868,260
5,574,748
685,248
Cost of sales
4(a)
(932,928)
(931,927)
(329,996)
Other
income
6,605
3,768
3,189
General and administration expenses
(27,768)
(15,929)
(17,279)
Operating
profit
8,914,169
4,630,660
341,162
Reversal of impairment loss
12
-
-
12,755
Financial
income
87,873
55,790
4,127
Financial expenses
(61,552)
(23,311)
(42,404)
Net
finance income/(expense)
4(b)
26,321
32,479
(38,277)
Share of profit of equity-accounted
investees, net of tax
12
23,785
-
-
Profit before income tax
8,964,275
4,663,139
315,640
Income
tax expense
5(a)
(2,676,326)
(1,403,481)
(90,716)
Profit after tax
6,287,949
3,259,658
224,924
Other
comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Foreign currency
translation differences
74
1,536
(1,436)
Other comprehensive income/(loss) for the year
74
1,536
(1,436)
Total
comprehensive income for the year
6,288,023
3,261,194
223,488
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
2
| Page
Consolidated statement of financial position
As at 31 December
2023
2022
2021
(Unaudited)
Note
A$'000
A$'000
A$'000
ASSETS
Current
assets
Cash and cash equivalents
6
286,291
54,884
15,234
Trade and
other receivables
7
1,127,029
2,281,503
233,943
Inventories
8
200,965
120,802
84,672
Total
current assets
1,614,285
2,457,189
333,849
Non-current assets
Property,
plant and equipment
9
2,801,157
1,889,492
1,641,572
Exploration and evaluation assets
10
3,425
3,358
4,747
Intangible
assets
11
2,271
2,721
1,677
Equity accounted investment
12
50,604
26,186
24,407
Total
non-current assets
2,857,457
1,921,757
1,672,403
Total assets
4,471,742
4,378,946
2,006,252
LIABILITIES
Current
liabilities
Trade and other payables
14
382,073
421,241
112,685
Interest-bearing
liabilities
15
28,700
6,303
9,354
Tax payable
469,819
481,407
10,440
Provisions
16
12,517
8,820
6,487
Other
liabilities
164
164
1,665
Total current liabilities
893,273
917,935
140,631
Non-current
liabilities
Interest-bearing liabilities
15
1,450,748
1,389,915
669,988
Provisions
16
65,874
48,782
56,325
Deferred
tax liabilities
13
219,584
193,977
164,537
Other liabilities
2,502
2,666
2,830
Total
non-current liabilities
1,738,708
1,635,340
893,680
Total liabilities
2,631,981
2,553,275
1,034,311
Net
assets
1,839,761
1,825,671
971,941
EQUITY
Share
capital
17
433,167
433,167
433,167
Reserves
(2,075)
(2,149)
(3,685)
Retained
earnings
1,408,669
1,394,653
542,459
Total equity
1,839,761
1,825,671
971,941
The
above consolidated statement of financial position should be read in conjunction with the accompanying notes.
3 | Page
Consolidated statement of changes in equity
For the year ended 31 December
Share
Translation
Retained
Total
capital
reserve
earnings
equity
Note
A$'000
A$'000
A$'000
A$'000
Balance
as at 1 January 2023
433,167
(2,149)
1,394,653
1,825,671
Total comprehensive income for the year
Profit for the year
-
-
6,287,949
6,287,949
Foreign
currency translation
-
74
-
74
Total comprehensive income for the year
-
74
6,287,949
6,288,023
Transactions with equity
holders
Dividend
17
-
-
(6,273,933)
(6,273,933)
Total transactions with equity holders
-
-
(6,273,933)
(6,273,933)
Balance
as at 31 December 2023
433,167
(2,075)
1,408,669
1,839,761
Share
Translation
Retained
Total
capital
reserve
earnings
equity
Note
A$'000
A$'000
A$'000
A$'000
Balance
as at 1 January 2022
433,167
(3,685)
542,459
971,941
Total comprehensive income for the year
Profit for the year
-
-
3,259,658
3,259,658
Foreign
currency translation
-
1,536
-
1,536
Total comprehensive income for the year
-
1,536
3,259,658
3,261,194
Transactions with equity holders
Dividend
17
-
-
(2,407,464)
(2,407,464)
Total
transactions with equity holders
-
-
(2,407,464)
(2,407,464)
Balance as at 31 December 2022
433,167
(2,149)
1,394,653
1,825,671
Share
Translation
Retained
Total
capital
reserve
earnings
equity
A$'000
A$'000
A$'000
A$'000
Note
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Balance
as at 1 January 2021
433,167
(2,249)
507,046
937,964
Total comprehensive income/(expense) for the year
Profit for the year
-
-
224,924
224,924
Foreign
currency translation
-
(1,436)
-
(1,436)
Total comprehensive income/(expense) for the year
-
(1,436)
224,924
223,488
Transactions with equity holders
Dividend
17
-
-
(189,511)
(189,511)
Total
transactions with equity holders
-
-
(189,511)
(189,511)
Balance as at 31 December 2021
433,167
(3,685)
542,459
971,941
The
above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
4 | Page
Consolidated cash flow statement
For the year ended 31 December
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Cash
flows from operating activities
Cash receipts from customers
11,100,673
3,588,772
568,682
Cash paid to suppliers and employees
(498,631)
(349,519)
(192,740)
Interest
paid
(54,656)
(18,769)
(12,620)
Interest received
17,100
1,369
206
Other income
4,775
3,793
3,161
Royalties
paid
(569,866)
(263,566)
(27,883)
Income tax paid
(2,662,307)
(903,074)
(63,868)
Net cash inflow from operating activities
7,337,088
2,059,006
274,938
Cash
flows from investing activities
Proceeds from sale of property, plant and equipment
3,000
-
2
Payments for property, plant and equipment
(727,871)
(301,171)
(126,445)
Interest
paid during development
(41,189)
(12,435)
(8,682)
Payments for intangibles
-
(1,087)
(2,610)
Payments for exploration expenditure
(506)
(255)
(467)
Net
cash outflow from investing activities
(766,566)
(314,948)
(138,202)
Cash flows from financing activities
Payment
of dividend
(6,202,264)
(2,407,464)
(189,511)
Proceeds from borrowings
1,671,189
2,043,325
144,069
Repayment of borrowings
(1,767,472)
(1,345,965)
(166,322)
Payments
for lease liabilities
(31,944)
(12,768)
(9,958)
Net cash outflow from financing activities
(6,330,491)
(1,722,872)
(221,722)
Net
increase/(decrease) in cash and cash equivalents
240,031
21,186
(84,986)
Cash and cash equivalents at beginning of the year
54,884
15,234
100,464
Effects
of exchange rate fluctuation on cash held
(8,624)
18,464
(244)
Cash and cash equivalents at 31 December
286,291
54,884
15,234
The
above consolidated cash flow statement should be read in conjunction with the accompanying notes.
5 | Page
Notes to the consolidated financial statements
1Reporting
Entity
Windfield Holdings Pty Ltd (the “Company” or “Windfield”) is a for-profit company domiciled in Australia. The address of the Company’s registered office is Level 15, 216 St Georges Terrace, Perth, Western Australia 6000.
The consolidated financial report of the Company as at and for the year ended 31 December 2023 comprises the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interests in jointly controlled entities. The Group is primarily involved in the mining, development and
exploration of mineral properties in Australia.
2Basis of preparation
(a)Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
The consolidated financial statements were authorised for issue by the Board of Directors on 21 March 2024.
Details of the Group’s accounting policies, including changes during the period, are included in Note 24 and Note 25.
(b)Basis of measurement
The consolidated financial statements have been prepared
on a historical cost basis.
(c)Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The functional currency of the Australian operations is Australian dollars (“A$” or “AUD”). The functional currency of the Chilean operations is Chilean Pesos (“CLP”). The consolidated financial statements are presented in A$.
(d)Use of estimates and judgements
In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 26.
6 | Page
Notes
to the consolidated financial statements
3Segment Reporting
(a)Reportable segments
The Company operates in the lithium exploration and production operating segment within the following geographical segments:
Australia
The Group maintains a registered office in Perth and operates the Greenbushes lithium mine.
Chile
The
Group conducts exploration of its project in Chile via its equity accounted joint venture (refer to Note 12).
(b)Information about reportable segments
Segment profit or loss before tax for the year ended 31 December and assets and liabilities at 31 December were as follows:
2023
2022
2021
(Unaudited)
A$’000
A$’000
A$’000
Profit
or loss before tax
Australia
8,940,490
4,663,139
315,640
Chile
23,785
-
-
Consolidated
profit before tax
8,964,275
4,663,139
315,640
Assets
Australia
4,421,138
4,352,760
1,981,695
Chile
50,604
26,186
24,557
Consolidated
total assets
4,471,742
4,378,946
2,006,252
Liabilities
Australia
2,631,893
2,553,208
1,034,248
Chile
88
67
63
Consolidated
total liabilities
2,631,981
2,553,275
1,034,311
The Chilean operation’s share of profit, net of tax for the year ended 31 December 2023 totaled $23.785 million (2022: nil; 2021 (unaudited): nil).
(c)Capital expenditure
During the year ended 31 December 2023, capital expenditure in relation to Australian operations totaled $752.213 million (2022: $344.597 million; 2021 (unaudited): $146.917 million)
while capital expenditure in relation to Chilean operations totaled $0.458 million (2022: $0.255 million; 2021 (unaudited): $0.209 million).
(d)Major customers
Revenues from transactions with 2 single customers each amounted to more than 10 per cent of the entity’s revenues. Revenues from the 2 major customers represented $4,393.722 million (2022: $2,798.506 million; 2021 (unaudited): $404.971 million) and $5,474.513 million (2022: $2,776.212 million; 2021 (unaudited): $280.243 million) of the Group’s total revenues, respectively (refer Note 18).
7
| Page
Notes to the consolidated financial statements
4Income and expense
(a)Cost of sales
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Royalties
397,865
517,639
80,597
Materials
and services
344,503
261,420
143,879
Employee costs
109,886
67,467
44,471
Depreciation and amortisation
107,418
96,047
53,010
Changes
in inventory
(68,134)
(23,287)
4,305
Other operating expenses
41,390
12,641
3,734
Cost of sales
932,928
931,927
329,996
(b)Finance
income and expense
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Interest
income
17,206
1,752
313
Net change in fair value of derivatives through profit and loss
-
1,501
3,814
Foreign exchange gain
70,667
52,537
-
Finance
income
87,873
55,790
4,127
Interest expense on financial liabilities measured at amortised cost
(59,646)
(21,841)
(12,874)
Unwind
of discount on rehabilitation provision
(1,906)
(1,470)
(841)
Foreign exchange loss
-
-
(28,689)
Finance expense
(61,552)
(23,311)
(42,404)
Net
finance income/(expense)
26,321
32,479
(38,277)
5Income tax
(a)Income tax expense
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Current
tax expense
2,652,463
1,374,696
73,815
Deferred tax expense relating to the origination and reversal of temporary differences
23,863
28,785
16,901
Total
income tax expense in profit or loss
2,676,326
1,403,481
90,716
8
| Page
Notes to the consolidated financial statements
(b)Income tax recognised in other comprehensive income
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
A$'000
A$'000
A$'000
A$'000
A$'000
A$'000
Before
Tax
Net of
Before
Tax
Net of
Before
Tax
Net of
tax
expense
tax
tax
expense
tax
tax
expense
tax
Foreign
currency translation differences for foreign operations
74
-
74
1,536
-
1,536
(1,436)
-
(1,436)
(c)Reconciliation of income tax expense to prima facie tax payable
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Profit
before tax
8,964,275
4,663,139
315,640
Income tax expense using the domestic corporation tax rate of 30%
2,689,283
1,398,942
94,692
Increase
in income tax expense due to:
Non-deductible/(Deductible) items
46
6
(150)
Share of income of equity accounted investment, after tax
(6,741)
-
-
Reversal
of impairment loss
(395)
-
(3,826)
(Derecognition)/recognition of deferred tax liabilities on equity accounted investment
(5,922)
5,832
-
Changes
in estimates related to prior years
55
(1,299)
-
Income tax expense on profit before tax
2,676,326
1,403,481
90,716
6Cash
and cash equivalents
2023
2022
2021
(Unaudited)
A$’000
A$’000
A$’000
Bank
balances
286,291
54,884
15,234
286,291
54,884
15,234
7Trade
and other receivables
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Current
Trade
receivables
1,079,336
2,250,130
216,521
Other receivables
41,273
26,617
16,387
Prepayments
6,420
4,756
1,035
1,127,029
2,281,503
233,943
The
Group’s exposure to credit risk is disclosed in Note 20.
9 | Page
Notes to the consolidated financial statements
8Inventories
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Current
Consumable
stores – at cost
45,734
33,703
20,860
Work in progress – at cost
104,680
69,154
50,728
Finished goods – at cost
50,551
17,945
13,084
200,965
120,802
84,672
9Property,
plant and equipment
Land and
Plant and
Mine properties
and
Capital
works in
buildings
equipment
development
progress
Total
A$'000
A$'000
A$'000
A$'000
A$'000
Year
ended 31 December 2023
Opening written down value
355,127
476,621
697,677
360,067
1,889,492
Additions
-
-
-
740,652
740,652
Additions
– Right of use assets
1,968
213,594
-
-
215,562
Deferred waste mining costs
-
-
52,750
-
52,750
Disposals –
cost
(2,016)
(23,760)
-
-
(25,776)
Disposals – accumulated depreciation
1,940
22,649
-
-
24,589
Depreciation/amortisation
expense
(29,829)
(53,765)
(25,013)
-
(108,607)
Increase in rehabilitation asset
-
-
12,495
-
12,495
Transfers/reclassifications
145,044
33,266
(96,591)
(81,719)
-
Closing
written down value
472,234
668,605
641,318
1,019,000
2,801,157
At 31 December 2023
Cost
550,268
832,256
795,348
1,019,000
3,196,872
Accumulated
depreciation/amortisation
(78,034)
(163,651)
(154,030)
-
(395,715)
Net written down value
472,234
668,605
641,318
1,019,000
2,801,157
10
| Page
Notes to the consolidated financial statements
Land
and
Plant and
Mine properties
and
Capital
works in
buildings
equipment
development
progress
Total
A$'000
A$'000
A$'000
A$'000
A$'000
Year
ended 31 December 2022
Opening written down value
295,450
420,945
605,445
319,732
1,641,572
Additions
-
-
98,102
213,114
311,216
Additions
– Right of use assets
9,429
1,803
-
-
11,232
Deferred waste mining costs
-
-
31,886
-
31,886
Depreciation/amortisation
expense
(26,871)
(41,787)
(28,174)
-
(96,832)
Decrease in rehabilitation asset
-
-
(10,973)
-
(10,973)
Transfers/reclassifications
77,119
95,660
1,391
(172,779)
1,391
Closing
written down value
355,127
476,621
697,677
360,067
1,889,492
At 31 December 2022
Cost
404,848
598,353
820,669
360,067
2,183,937
Accumulated
depreciation/amortisation
(49,721)
(121,732)
(122,992)
-
(294,445)
Net written down value
355,127
476,621
697,677
360,067
1,889,492
Land
and
Plant and
Mine properties
and
Capital
works in
buildings
equipment
development
progress
Total
A$'000
A$'000
A$'000
A$'000
A$'000
Year
ended 31 December 2021 (Unaudited)
Opening written down value
299,371
378,414
589,877
277,097
1,544,759
Additions
-
-
12,402
112,430
124,832
Additions
– Right of use assets
-
3,316
-
-
3,316
Deferred waste mining costs
-
-
19,752
-
19,752
Disposals – cost
-
(182)
-
-
(182)
Disposals
– accumulated depreciation
-
129
-
-
129
Depreciation/amortisation expense
(11,022)
(23,426)
(18,890)
-
(53,338)
Decrease
in rehabilitation asset
-
-
(3,909)
-
(3,909)
Transfers/reclassifications
7,101
62,694
6,213
(69,795)
6,213
Closing
written down value
295,450
420,945
605,445
319,732
1,641,572
At 31 December 2021 (Unaudited)
Cost
318,300
500,889
700,264
319,732
1,839,185
Accumulated
depreciation/amortisation
(22,850)
(79,944)
(94,819)
-
(197,613)
Net written down value
295,450
420,945
605,445
319,732
1,641,572
(i)Right
of use assets
At 31 December 2023, the net carrying value of right of use assets comprising plant & equipment and land and buildings was $200.394 million (2022: $3.110 million; 2021 (unaudited): $9.471 million) and $12.256 million (2022: $12.974 million; 2021 (unaudited): $6.617 million) respectively (refer Note 25).
(ii)Leased plant and machinery
The Group leases plant and machinery under a number of lease agreements. At 31 December 2023, the net carrying amount of leased plant and machinery was $4.373 million (2022: $4.328 million; 2021 (unaudited): $3.707 million).
11
| Page
Notes to the consolidated financial statements
(iii)Security
As per Note 15, assets with a carrying amount of $4.373 million (2022: $4.328 million; 2021 (unaudited): $3.707 million) have been pledged as security for
lease finance provided to the Group. All other Australian plant and machinery with a carrying amount of $2.584 billion (2022: $1.869 billion; 2021 (unaudited): $1.623 billion) have been pledged as security for the Group’s corporate revolving facility disclosed in Note 15.
10Exploration and evaluation assets
Exploration
A$'000
Year ended 31 December
2023
Opening written down value
3,358
Additions
67
Closing written down value
3,425
At 31 December 2023
Cost
3,425
Net
written down value
3,425
Year ended 31 December 2022
Opening written down value
4,747
Additions
2
Transfer to mine properties and development
(1,391)
Closing written down value
3,358
At
31 December 2022
Cost
3,358
Net written down value
3,358
Year ended 31 December 2021 (Unaudited)
Opening written down value (Unaudited)
9,056
Additions
(Unaudited)
1,904
Transfer to mine properties and development (Unaudited)
(6,213)
Closing written down value (Unaudited)
4,747
At 31 December 2021 (Unaudited)
Cost (Unaudited)
4,747
Net
written down value (Unaudited)
4,747
12 | Page
Notes to the consolidated financial statements
11Intangible
assets
Software
A$'000
Year ended 31 December 2023
Opening written down value
2,721
Additions
8
Transfers/
reclassifications
(152)
Accumulated amortisation
(306)
Closing written down value
2,271
At 31 December 2023
Cost
3,584
Accumulated amortisation
(1,313)
Net
written down value
2,271
Year ended 31 December 2022
Opening written down value
1,677
Additions
1,592
Accumulated amortisation
(548)
Closing written down value
2,721
At
31 December 2022
Cost
5,409
Accumulated amortisation
(2,688)
Net written down value
2,721
Year ended 31 December 2021 (Unaudited)
Opening written down value (Unaudited)
1,597
Additions
(Unaudited)
429
Accumulated amortisation (Unaudited)
(349)
Closing written down value (Unaudited)
1,677
At 31 December 2021 (Unaudited)
Cost (Unaudited)
3,817
Accumulated amortisation
(Unaudited)
(2,140)
Net written down value (Unaudited)
1,677
13 | Page
Notes to the consolidated
financial statements
12Equity accounted investment in joint venture
The Group has a 50% interest in Salares de Atacama Sociedad Contractual Minera (“SALA”). On 16 December 2023, SALA disposed of its concessions in Region III, Chile. SALA has no liabilities and its only significant asset is a receivable in relation to the disposal of the concessions. The parties to the joint venture equally bear the costs and profits of disposal of the concessions SALA held. The Group considers that it has joint control of SALA and that SALA is a joint venture under IFRS 11 Joint Arrangements. The Group’s investment in SALA is measured using
the equity method.
The movement in the equity accounted investment is attributable to the following:
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Balance
at the beginning of the year
26,186
24,407
12,865
Exploration expenditure incurred during the period
458
255
209
Reversal of impairment
of equity accounted investment in joint venture
1,317
-
12,755
Share of profit, net of tax
23,785
-
-
Effect of movements in foreign
exchange
(1,142)
1,524
(1,422)
Carrying amount at end of the year
50,604
26,186
24,407
13Deferred
tax liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Trade
and other receivables
18,171
15,551
(207)
Inventories
(13,720)
(10,111)
(6,259)
Property, plant and equipment
(285,843)
(200,151)
(173,427)
Intangibles
246
(162)
(193)
Trade
and other payables
353
287
179
Interest-bearing liabilities
36,836
(18,037)
(5,009)
Provisions
23,573
17,797
19,030
Deferred
income
800
849
500
Derivatives
-
-
849
Net deferred tax liability
(219,584)
(193,977)
(164,537)
14 | Page
Notes to the consolidated financial statements
14Trade
and other payables
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Royalty
payable
142,273
314,274
60,201
Trade payables
83,919
60,314
34,955
Dividend payable
71,669
-
-
Accrued
expenses
84,212
46,653
17,529
382,073
421,241
112,685
The Group’s exposure to liquidity risk related to trade and other payables is disclosed in Note 20.
15Interest-bearing
liabilities
2023
2022
2021
(Unaudited)
Note
A$'000
A$'000
A$'000
Current
Lease
liabilities
(i)
28,700
6,303
9,354
Non-current
Lease
liabilities
(i)
185,611
14,407
9,589
Revolving corporate loan
(ii)
1,279,240
1,393,358
667,034
Deferred
debt issuance costs
(14,103)
(17,850)
(6,635)
1,450,748
1,389,915
669,988
The Group’s exposure
to interest rate and liquidity risk relating to interest bearing liabilities is disclosed in Note 20.
(i)Lease liabilities
The Group’s lease liabilities are secured by leased assets with a carrying value of $4.373 million (2022: $4.328 million; 2021 (unaudited): $3.707 million), and in the event of default, the relevant leased assets revert to the lessor. Interest on lease liabilities totaled $5.709 million (2022: $0.839 million; 2021 (unaudited): $0.603 million).
Payments made during the year under lease arrangements qualifying under IFRS 16, but that were variable by nature and therefore not included in the minimum lease payments used to calculate lease liabilities, totaled $180.911 million (2022: $134.142 million; 2021 (unaudited): $74.929 million). These include payments for services, including labour charges,
under those contracts that contained payments for the right-of-use of assets.
(ii)Revolving corporate loan
At 31 December 2023, a facility of US$1,000.000 million (A$1,461.988 million) (2022: US$1,000.000 million (A$1,476.015 million); 2021 (unaudited): US$563.000 million (A$775.910 million)) was in place and US$875.000 million (A$1,279.24 million) (2022: US$944.000 million (A$1,393.358 million); 2021 (unaudited): US$484.000 million (A$667.034 million)) of the facility was drawn.
The key terms and conditions are as follows:
a.The facility is provided by a syndicate of commercial banks.
b.A
commercial interest rate of SOFR plus a margin of 1.65% to 2.1% applies to the facility.
c.Loan covenants typical of this type of facility apply.
d.The facility expires on 6 October 2027.
e.The facility is fully secured over the Australian assets of the Group.
15 | Page
Notes
to the consolidated financial statements
(i)Bank guarantees
HSBC has issued unsecured bank guarantees on the Group’s behalf totaling $9.056 million (2022: $9.056 million; 2021 (unaudited): $0.061 million) in respect of certain supplier and government agency requirements.
16Provisions
2023
2022
2021
(Unaudited)
Note
A$'000
A$'000
A$'000
Current
Employee
entitlements
12,517
8,820
6,487
Non-current
Employee entitlements
11,725
9,035
7,075
Rehabilitation
(i)
54,149
39,747
49,250
65,874
48,782
56,325
(i)Rehabilitation
The
movements in the rehabilitation provision are set out below:
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Non-current
Carrying
amount at start of the period
39,747
49,250
52,318
Increase/(decrease) in provision
12,495
(10,973)
(3,909)
Rehabilitation and restoration accretion expense
1,907
1,470
841
Balance
at 31 December
54,149
39,747
49,250
The rehabilitation provision is an estimate of the value of future costs for dismantling and removing items from, and restoring and rehabilitating, the Greenbushes mine site.
17Share capital and reserves
(a)Movements
in share capital
Number of
Total
Date
Description
shares
A$'000
1
Jan 2021
Opening balance (Unaudited)
835,382,513
433,167
31 Dec 2021
Closing balance (Unaudited)
835,382,513
433,167
1 Jan 2022
Opening balance
835,382,513
433,167
31
Dec 2022
Closing balance
835,382,513
433,167
1 Jan 2023
Opening balance
835,382,513
433,167
31 Dec 2023
Closing balance
835,382,513
433,167
Ordinary
shares have no par value and are fully paid ordinary shares. They entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held and to one vote per share at general meetings of the Company.
16 | Page
Notes
to the consolidated financial statements
(b)Dividends
During the year ended 31 December 2023, fully franked dividends of A$6,273.933 million (US$4,150.000 million) in total (A$7.5103 per share) were declared and A$6,202.264 million (US$4,101.000 million) were paid to shareholders. A$71.669 million (US$49.000 million) were paid subsequent to year end. In prior year ended 31 December 2022, fully franked dividends of A$2,407.464 million (US$1,605.000 million) in total (A$2.8819 per share) were declared and paid to shareholders. For the year ended 31 December 2021, fully franked dividends of A$189.511 million (US$140.000 million) (unaudited)
in total (A$0.2269 per share) (unaudited) were declared and paid to shareholders.
(c)Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
18Related parties
(a)Remuneration of Directors and Key Management Personnel
Director and key management personnel compensation comprised the following:
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Short-term
employee benefits
4,219
2,937
2,500
Post-employment benefits
267
187
112
Other long-term employee benefits
939
536
299
5,425
3,660
2,911
(b)Other
related party transactions
During the year ended 31 December 2023, the Company recognised revenue of $4,393.722 million (2022: $2,798.506 million; 2021 (unaudited): $404.971 million) from the sale of goods to its shareholder, Tianqi Lithium Energy Australia Pty Ltd (formerly Tianqi UK Limited) and its related entities. At 31 December 2023, $289.956 million (2022: $1,118.888 million; 2021 (unaudited): $127.215 million) was owed by Tianqi Lithium Energy Australia Pty Ltd and its related entities to the Company.
During the year ended 31 December 2023, the Company recognised revenue of $5,474.513 million (2022: $2,776.212 million;
2021 (unaudited): $280.243 million) from the sale of goods to its other shareholder, RT Lithium Limited and its related entities. At 31 December 2023, $802.849 million (2022: $1,147.491 million; 2021 (unaudited): $98.048 million) was owed by RT Lithium Limited and its related entities to the Company.
All transactions with related parties are priced on an arm’s length basis and are to be settled within 90 days (2022: 90 days; 2021 (unaudited): 90 days) of the date of the transaction. No expense has been recognised for bad or doubtful debts in respect of amounts owed by related parties.
19Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
•credit
risk
•liquidity risk
•market risk
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout this financial report.
The Board of Directors of the Company has overall responsibility for the establishment and oversight of the risk management framework and for developing and monitoring risk management policies.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
17 | Page
Notes to the consolidated financial statements
(a)Credit
risk
Credit risk is the risk of financial loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s cash on deposit with financial institutions and receivables from customers.
(i)Cash and cash equivalents
The Group places cash on deposit with recognised financial institutions in order to reduce the risk of default. As the institutions have a Moody’s rating of P-1, the credit risk of default of the counterparties is considered low.
(ii)Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer and the country in which customers operate. A
significant proportion of the Group’s revenue is attributable to: sales transactions with two related party customers; and sales transactions with customers in China.
(b)Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
(c)Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income or the value of its holdings
of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising returns.
(i)Currency risk
The Group is exposed to currency risk on sales, purchases and interest which are denominated in US Dollars (“USD”), whilst its functional currency is AUD.
(ii)Interest rate risk
A variable rate of interest is charged on the Group’s revolving corporate loan facility. The Group does not enter into contracts to mitigate the interest rate risk.
(iii)Other market price risk
The
Group does not enter into contracts to mitigate commodity price risk other than to meet its expected usage requirements.
(d)Capital management
The Board’s policy in managing capital is to ensure that the Group continues as a going concern, and that its capital base is sufficiently strong to maintain shareholder, creditor and market confidence and to sustain future development of the business.
The capital base is considered to include the total equity plus borrowings of the Group, which at 31 December 2023 was A$3,319.209 million (2022: A$3,221.888 million; 2021 (unaudited): A$1,651.283 million). In determining the funding mix of debt and equity (total borrowings:total equity), consideration is given to the relative impact
of the gearing ratio on: the ability of the Group to service loan interest and repayment schedules; lending facility compliance ratios; and the ability of the Group to generate adequate free cash for corporate, expansion and exploration activities.
As set out in Note 17, fully franked dividends of A$6,273.933 million (US$4,150.000 million) in total (A$7.5103 per share) were declared and A$6,202.264 million (US$4,101.000 million) were paid to shareholders. A$71.669 million (US$49.000 million) were paid subsequent to year end. In prior year ended 31 December 2022, fully franked dividends of A$2,407.465 million (US$1,605.000 million) in total (A$2.8819 per share) were declared and paid to shareholders. For the year ended 31 December 2021, fully franked dividends of A$189.511 million (US$140.000 million) (unaudited) in total (A$0.2269 per share) (unaudited) were declared and paid to shareholders.
18
| Page
Notes to the consolidated financial statements
20Financial Instruments
(a)Credit risk exposures
Credit risk represents the loss that would be recognised if a customer or counterparty
fails to meet their contracted obligations.
(i)Profile
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the reporting date was:
2023
2022
2021
(Unaudited)
Note
A$'000
A$'000
A$'000
Financial
assets
Cash and cash equivalents
6
286,291
54,884
15,234
Trade and other receivables
7
1,127,029
2,281,503
233,943
1,413,320
2,336,387
249,177
No
provision for impairment is recognised at 31 December 2023 (2022: nil; 2021 (unaudited): nil) on the basis that all trade and other receivables are considered recoverable at the amounts stated.
(ii)Trade & other receivables by geographic region
The Group’s maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was:
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Australia
328,120
1,109,626
123,058
America
694,776
1,024,651
61,844
Europe
58,342
81,934
31,159
China
(including Hong Kong)
45,648
64,877
7,562
Other regions
143
415
10,320
1,127,029
2,281,503
233,943
At
31 December, the ageing of trade and other receivables was as follows. No receivables were considered impaired.
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Neither
past due or impaired
1,118,728
2,194,091
233,943
Past due 1-90 days but not impaired
8,301
87,412
-
1,127,029
2,281,503
233,943
19
| Page
Notes to the consolidated financial statements
(b)Liquidity risk exposures
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:
Carrying
Contractual
6mths
6-12
1-2
2-5
5+
amount
cash
flows
or less
months
years
years
years
A$'000
A$'000
A$'000
A$'000
A$'000
A$'000
A$'000
2023
Trade
and other payables
382,073
382,073
382,073
-
-
-
-
Lease liabilities
214,312
264,638
20,973
20,847
40,966
116,801
65,051
Revolving
corporate loan
1,279,240
1,547,455
45,963
45,963
91,925
1,363,604
-
1,875,625
2,194,166
449,009
66,810
132,891
1,480,405
65,051
2022
Trade and other payables
421,241
421,241
421,241
-
-
-
-
Lease
liabilities
20,710
23,623
4,177
2,350
3,383
6,811
6,902
Revolving corporate loan
1,393,358
1,701,273
20,925
41,992
83,984
1,554,372
-
1,835,309
2,146,137
446,343
44,342
87,367
1,561,183
6,902
2021
(Unaudited)
Trade and other payables
112,684
112,684
112,684
-
-
-
-
Lease
liabilities
18,943
21,580
4,964
4,809
3,812
2,368
5,627
Revolving corporate loan
667,034
690,528
8,267
7,854
674,407
-
-
798,661
824,792
125,915
12,663
678,219
2,368
5,627
(c)Interest
rate risk exposures
(i)Profile
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Fixed
rate instruments
Financial assets
-
-
-
Financial liabilities
(4,162)
(3,816)
(2,388)
(4,162)
(3,816)
(2,388)
Variable
rate instruments
Financial assets
286,291
54,884
15,234
Financial liabilities
(1,265,137)
(1,393,358)
(667,034)
(978,846)
(1,338,474)
(651,800)
(ii)Cash
flow sensitivity analysis for variable rate instruments
An increase/decrease of 100 basis points in interest rates at the reporting date would have decreased/increased profit and loss after tax for the reporting period by $6.852 million (2022: decreased/increased $9.369 million; 2021 (unaudited): decreased/increased $4.563 million). This analysis assumes that all other variables remain constant.
(iii)Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit and loss. Therefore, a change in interest rates at the reporting date would not affect profit and loss.
20
| Page
Notes to the consolidated financial statements
(d)Currency risk exposures
(i)Profile
Sales revenue and interest-bearing liabilities of the Group are mainly
denominated in US dollars. Given the predominately Australian dollar cost base of the business and a functional currency of Australian dollars, these US dollar sales and interest-bearing liabilities create a foreign exchange exposure in terms of earnings and cash flow.
The Group’s exposure to USD foreign exchange risk at reporting date and for the 12 months from reporting date was as follows, based on notional amounts:
2023
2022
2021
(Unaudited)
A$'000
A$'000
A$'000
Cash
and cash equivalents
183,078
48,172
2,546
Trade receivables
1,088,265
2,266,379
225,263
Interest bearing liabilities
(1,279,240)
(1,393,358)
(667,034)
Net
statement of financial position exposure
(7,897)
921,193
(439,225)
The following significant AUD/USD exchange rates applied during the period:
2023
2022
2021
(Unaudited)
Reporting
date spot
0.6840
0.6775
0.7256
Average rate
0.6644
0.6947
0.7513
(ii)Fair
value sensitivity analysis
A 10 percent strengthening/weakening of the AUD against the USD at 31 December would have increased/decreased profit and loss after tax by AUD$52.463 million (2022: increased/decreased by $63.992 million; 2021 (unaudited): increased/decreased by $32.997 million) and would have had no impact on other comprehensive income (2022: nil; 2021 (unaudited): nil). This analysis assumes that all other variables remain constant.
(e)Fair values
The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet, are as follows:
Carrying
Fair
Carrying
Fair
Carrying
Fair
amount
value
amount
value
amount
value
2023
2023
2022
2022
2021
2021
(Un-audited)
(Un-audited)
$'000
$'000
$'000
$'000
$'000
$'000
Cash
and cash equivalents
286,291
286,291
54,884
54,884
15,234
15,234
Trade and other receivables
1,127,029
1,127,029
2,281,503
2,281,503
233,943
233,943
Trade
and other payables
(382,073)
(382,073)
(421,241)
(421,241)
(112,684)
(112,684)
Lease liabilities
(214,312)
(214,312)
(20,710)
(20,710)
(18,943)
(18,943)
Revolving
corporate loan
(1,265,136)
(1,279,240)
(1,375,508)
(1,393,358)
(660,399)
(667,034)
(448,201)
(462,305)
518,928
501,078
(542,849)
(549,484)
21
| Page
Notes to the consolidated financial statements
21Commitments
(a)Mining tenement expenditure commitments
2023
2022
2021
(Unaudited)
A$’000
A$’000
A$’000
Contracted
but not provided for and payable:
Within one year
1,171
1,171
1,184
One year or later and no later than five years
2,383
3,531
4,727
Later
than five years
119
143
170
3,673
4,845
6,081
The Group has certain statutory obligations to undertake a minimum level of expenditure in order to maintain rights of tenure to its mining licenses. These obligations are expected to be fulfilled in the normal course of operations of the Group to avoid forfeiture of any tenement.
(i)Although
the Company does not hold any ownership interest in the Talison Long Term Incentive Plan Trust, it does have control over the trust in accordance with the trust deed.
23Events occurring after the balance sheet date
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.
22
| Page
Notes to the consolidated financial statements
24Changes in material policies
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the International Accounting Standards Board (IASB) that are mandatory for
the current reporting period. The Group has not elected to early adopt any new standards or amendments during the current financial year.
The Group also adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) from 1 January 2023. Although the amendments did not result in any changes to the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements.
The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting policy information that users need to understand other information in the financial statements.
Management
reviewed the accounting policies and made updates to the information disclosed in Note 25 Material accounting policies (2022: Significant accounting policies) in certain instances in line with the amendments.
25Material Accounting Policies
The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements.
(a)Basis of consolidation
(i)Business combinations
The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill
that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.
Subsidiaries are entities controlled by the Group. The Group 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. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.
(iii)Interests in equity-accounted investees
The Groups’ interest in equity accounted investees comprises an interest in a joint venture. A joint venture is an arrangement in which the Group has joint control and the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Jointly controlled entities are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions.
Investments
in jointly controlled entities are accounted for under the equity method and are initially recognised at cost. The cost of the investment includes transaction costs.
The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of equity accounted interests from the date joint control commences until the date that joint control ceases.
(iv)Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses
are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(b)Foreign currency
(i)Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
23 | Page
Notes
to the consolidated financial statements
(ii)Foreign operations
The assets and liabilities of foreign operations are translated to the functional currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to A$ at exchange rates at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income and presented in the foreign currency translation reserve (translation reserve) in equity. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange
gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the translation reserve in equity.
(c)Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns and trade allowances.
Amounts are recognised as sales revenue when the customer obtains control of the product, and:
•the product is in a form suitable for delivery and no further processing is required by, or on behalf of, the Group;
•the quantity, quality and selling price of the product can be determined
with reasonable accuracy; and
•the product has been dispatched to the customer or delivered to the customer where shipping terms are delivered at place unloaded and is no longer under the physical control of the Group or the customer has formally acknowledged legal ownership of the product including all inherent risks, albeit that the product may be stored in facilities the Group controls.
(d)Financial income and expense
The Group’s financial income and expense includes:
•interest income;
•interest expense;
•the foreign currency gain or loss on financial assets and liabilities;
•the
net change in fair value of derivatives; and
•unwind of discount of rehabilitation and restoration provision.
Interest income or expense is recognised in profit or loss using the effective interest method.
(e)Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the period and any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the
tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable
that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred
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Notes to the consolidated financial statements
tax
assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Tax consolidation
The Company and its wholly-owned Australian resident entities are part of a tax-consolidated group. As a consequence, all members of the tax-consolidated group are taxed as a single entity. The head entity within the tax-consolidated group is Windfield Holdings Pty Ltd.
Nature of tax funding arrangement and tax sharing agreements
The Company, in conjunction with other members of the tax-consolidated group, has entered into a tax funding arrangement which sets
out the funding obligations of members of the tax-consolidated group in respect of tax amounts. The tax funding arrangements require payments to/ from the head entity equal to the current tax liability (asset) assumed by the head entity and any tax-loss deferred tax asset assumed by the head entity. The inter-entity payable (receivable) is at call.
Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.
The Company, in conjunction with other members of the tax-consolidated group, has also entered into a tax sharing agreement. The tax sharing agreement provides for the determination of the allocation of income tax liabilities between
the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote.
(f)Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the Australian Taxation Office (“ATO”) is included as a current asset or liability in the balance sheet.
Cash
flows are included in the statement of cash flows on a net basis.
(g)Cash and cash equivalents
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(h)Inventories
Finished goods and work in progress inventories are valued at the lower of cost and net realisable value.
Costs represent weighted average cost and include direct costs and an appropriate portion of fixed and variable overhead expenditure,
including depreciation and amortisation.
Net realisable value is the amount estimated to be obtained from the sale of the item of inventory in the normal course of business, less any anticipated costs to be incurred prior to its sale.
Consumable stores are valued at weighted average cost.
Obsolete or damaged inventories are valued at net realisable value. A regular and ongoing review is undertaken to establish the extent of surplus items, and a provision is made for any potential loss on their disposal.
(i)Property, plant and equipment
Land is shown at historical cost and is not depreciated. All other property, plant and equipment are stated at historical cost, which includes capitalised borrowing costs, less depreciation. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
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 charged to the income statement during the financial period in which they are incurred.
Mine specific property, plant, machinery and equipment refers to plant, machinery and equipment for which the economic useful life cannot extend beyond the life of its host mine.
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Notes
to the consolidated financial statements
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of non-mine specific property, plant and equipment. Mine specific plant, machinery and equipment are depreciated over the lesser of the life of the economically recoverable reserves for the whole of the mine (using the units of production method) and twenty years. Mining property and development assets are depreciated over the life of economically recoverable reserves for the whole of the mine. Deferred waste is amortised over the life of economically recoverable reserves for the relevant
component of the ore body. The estimated useful lives in the current period are as follows:
Depreciation Percentage
•Mine specific property, plant, machinery and equipment
the shorter of the applicable mine or asset life to a maximum of twenty years
5.0%
•Other non-mine specific plant and equipment
the
asset life
12.5% to 33.3%
The Group applies the units of production method for amortisation of its mine property and development and deferred waste, which results in a depreciation charge proportional to the depletion of the anticipated remaining life of mine production. The mine property & development calculation requires the use of estimates and assumptions in relation to reserves outlined in Note 26.
Each item’s economic life has due regard both to its own physical life limitations and to present assessments of economically recoverable reserves of the mine property at which the item is located, and to possible future variations in those assessments.
The reserves, life of mine and the remaining useful life of each class of asset are
reassessed at regular intervals and the depreciation/amortisation rates adjusted accordingly.
(i)Commercial production
Commercial production commences when the Group determines that assets are capable of being operated in a manner intended by management. Prior to commercial production, pre-production income and an equivalent amount of operating cost is recognised in the income statement and any incremental cost is capitalized to property, plant and equipment.
(j)Intangible assets
(i)Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss as incurred.
Development
activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less any accumulated amortisation and accumulated impairment losses.
(ii)Subsequent
expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred.
(iii)Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives and is recognised in profit or loss.
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Notes
to the consolidated financial statements
The estimated useful lives are as follows:
•Software
10 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(k)Exploration
and evaluation expenditure
Exploration and evaluation expenditure is accumulated separately for each area of interest in accordance with IAS 106 Exploration and Evaluation of Mineral Resources. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure.
Expenditure is carried forward when incurred in areas for which the Group has rights of tenure and where economic mineralisation is indicated, but activities have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in relation to the area are continuing. Each such project is regularly reviewed. If the project is abandoned or if it is considered unlikely the project will proceed to development, accumulated costs to that point
are written off immediately.
Identifiable exploration assets acquired from another mining company are recognised as assets at their cost of acquisition, as determined by the requirements of IFRS 3 Business Combinations.
Projects are advanced to development status when it is expected that accumulated and future expenditure can be recouped through project development or sale.
All of the above expenditure is carried forward up to commencement of operations at which time it is amortised in accordance with the policy stated in Note 25(i).
(l)Financial instruments
(i)Non-derivative financial assets and liabilities – recognition and derecognition
The
Group initially recognises loans and receivables and debt securities on the date when they are originated. All other financial assets and financial liabilities are recognised on the trade date.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
(ii)Non-derivative financial assets – measurement
Receivables
Receivables are financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, receivables are measured at amortised cost using the effective interest method, less any impairment losses.
Non-derivative financial liabilities are recognised initially
at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest rate method.
(m)Share Capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.
(n)Impairment
(i)Financial assets
The carrying amounts of the Company’s financial assets measured at amortised cost are reviewed at each reporting
date to determine whether a loss allowance should be recognised under the ‘expected credit loss’ model.
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Notes to the consolidated financial statements
(ii)Non-financial
assets
The carrying amounts of the Company’s non-financial assets, other than inventories, exploration and evaluation assets and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit (“CGU”) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together
into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The Company’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.
(iii)Exploration
and evaluation assets
Exploration and evaluation assets are tested for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount, for example:
•The term of exploration licence in the specific area of interest has expired during the reporting period or will expire in the near future, and is not expected to be renewed;
•Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area are not budgeted nor planned;
•Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the decision was made
to discontinue such activities in the specified area; or
•Sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation assets is unlikely to be recovered in full from successful development or by sale.
Where a potential impairment is indicated, an assessment of recoverable amount is performed for each CGU which is no larger than the area of interest. The recoverable amount of a CGU is the greater of its value in use and its fair value less costs to sell. An impairment loss is recognised if the carrying amount of a CGU exceeds its recoverable amount. Impairment losses are recognised in profit or loss.
(o)Provisions
A provision is recognised if,
as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
(p)Employee benefits
(i)Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date, are recognised in current liabilities. A liability is recognised for the amount expected to be paid under
a short-term incentive scheme if the Group has a present legal or constructive obligation to pay this amount as a result of past services provided by the employee, and the obligation can be estimated reliably.
(ii)Long-term employee benefits
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on government bonds with terms to maturity that match, as
28
| Page
Notes to the consolidated financial statements
closely as possible, the estimated future cash outflows. A liability is recognised for the amount expected to be paid under a long-term incentive scheme if the Group has a present legal or constructive obligation to pay this amount as a result of past services provided by the
employee, and the obligation can be estimated reliably.
(iii)Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays contributions into a separate entity and will have no legal or constructive obligation to pay future amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by the employees.
(q)Rehabilitation and mine closure costs
The Group has obligations to dismantle, remove, restore and rehabilitate certain items of property, plant and equipment.
Under IAS 16 Property, Plant and Equipment,
the cost of an asset must include any estimated costs of dismantling and removing the asset and restoring the site on which it is located. The capitalised rehabilitation and mine closure costs are depreciated (along with the other costs included in the asset) over the asset’s useful life. The depreciation expense is included in the cost of sales of goods.
IAS 137 Provisions, Contingent Liabilities and Contingent Assets requires a provision to be raised for the present value of the estimated cost of settling the rehabilitation and restoration obligations existing at balance date. Those costs that relate to rehabilitation and restoration obligations arising from the production process are recognised in production costs. The estimated costs are discounted using a pre-tax discount rate that reflects the time value of money. The discount rate must not reflect risks for which
future cash flow estimates have been adjusted.
As the value of the provision represents the discounted value of the present obligation to restore, dismantle and rehabilitate, the increase in the provision due to the passage of time is recognised within borrowing costs. This borrowing cost is excluded from the cost of sales of goods.
Estimates are required to determine the level of undiscounted rehabilitation and closure costs for the Group. In addition, an estimate of the life of mine is required to determine the period over which the undiscounted costs are required to be discounted. The life of mine has been estimated to be approximately 20 years as at 31 December 2023 based on the estimate of mineable reserves updated as at 9 December 2021 and the anticipated rate of production. This is the period over which the rehabilitation and closure provision is discounted. The life
of mine is subject to change should the mineable reserves, ore inventory and the anticipated rate of production change in the future.
(r)Deferred waste mining costs
In accordance with IFRIC 20, expenditure incurred to remove overburden or waste material in an open pit mine, that is mined in a period at a rate that is in excess of the life of mine strip ratio for the particular open pit ore body component is recognised as a non-current asset within Property, Plant and Equipment where the following criteria are met:
•it is probable that the future economic benefit (improved access to the ore body component) associated with the stripping activity will flow to the entity;
•the Group can identify the component of the ore body
for which access has been improved; and
•the costs relating to the stripping activity associated with that component can be measured reliably.
The deferred waste mining costs are amortised in accordance with the policy stated in Note 25(i). Changes in estimates of average life of mine strip ratios are accounted for prospectively. For the purpose of assessing impairment, deferred waste mining is grouped with other assets of the relevant cash generating unit.
(s)Leases
At inception of a contract, the Group determines whether the arrangement is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.
This policy is applied to contracts entered into on or after 1 January 2019.
i)As a lessee
At inception or on reassessment of a contract that contains a lease component,
the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Group
29 | Page
Notes to the consolidated financial statements
has
elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
•Fixed payments, including in-substance fixed payments;
•Variable lease payments
that depend on an index or a rate, initially measured using the index or rate at the commencement date;
•Amounts expected to be payable under a residual value guarantee; and
•The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in the future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee,
if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, plant and equipment’ and lease liabilities in ‘loans and borrowings’ in the statement of financial position.
(ii)Short-term leases
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases. The Group recognises
the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
(t)Maintenance and repairs
Certain items of plant used in the primary extraction, separation and secondary processing of the extracted minerals are subject to major overhaul on a cyclical basis. Costs incurred during such overhauls are characterised as either in the nature of capital or in the nature of repairs and maintenance. Work performed may involve:
i)the replacement of a discrete sub-component asset, in which case an asset addition is recognised and the book value of the replaced item is written off; and
ii)demonstrably extending the useful life or functionality of an existing asset, in which case the relevant
cost is added to the capitalised cost of the asset in question.
Costs incurred during a major cyclical overhaul which do not constitute (i) or (ii) above, are written off as repairs and maintenance as incurred. Costs qualifying for capitalisation under (i) or (ii) above are subsequently depreciated in accordance with Note 25(i). General repairs and maintenance which are not characterised as part of a major cyclical overhaul are expensed as incurred.
30 | Page
Notes
to the consolidated financial statements
(u)Deferred income
The Group recognises deferred income in the statement of financial position in relation to contracts where the Group has provided consideration in return for future income. The deferred income is released to the income statement over time as the income is earned.
(v)Rounding of amounts
The Group is of a kind referred to in instrument 2017/191 issued by ASIC in accordance
with that instrument, all financial information presented in Australian dollars has been rounded off to the nearest thousand dollars, unless otherwise stated.
26Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are the same as those applied by the Group in its consolidated financial
statements.
(a)Reserves
Reserves are estimates of the amount of mineral product that can be economically extracted from the Group’s properties. In order to calculate reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, future capital requirements, short and long term commodity prices and exchange rates.
Estimating the quantity and/or grade of reserves requires the size, shape and depth of ore bodies to be determined by analysing geological data. This process may require complex and difficult geological judgements and calculations to interpret the data.
The Group determines and reports ore reserves under the Australian Code
for Reporting of Mineral Resource and Ore Reserves December 2012, known as the JORC Code. The JORC Code requires the use of reasonable investment assumptions to calculate reserves.
Due to the fact that economic assumptions used to estimate reserves change from period to period, and geological data is generated during the course of operations, estimates of reserves may change from period to period. Changes in reported reserves may affect the Group’s financial results and financial position in a number of ways, including:
Asset carrying values may be impacted due to changes in estimated future cash flows;
Depreciation and amortisation charged in the income statement may change where such charges are calculated using the units of production basis; and
Decommissioning,
site restoration and environmental provisions may change where changes in estimated reserves alter expectations about the timing or cost of these activities.
Depreciation and amortisation of mining assets is prospectively adjusted, based on these changes.
31 | Page
Directors'
declaration
1In the opinion of the directors of Windfield Holdings Pty Ltd (‘the Company’):
(a)the financial statements and notes set out on pages 6 to 31 hereof:
(i)give a true and fair view of the Group’s financial position as at 31 December 2023 and of its performance for the year ended on that date in accordance with the statement of compliance and basis of preparation described in Note 2; and
(ii)comply with International Financial Reporting Standards; and
(iii)are not prepared for statutory reporting purposes.
(b)there
are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of the directors:
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Windfield Holdings Pty Ltd and its subsidiaries (the Company), which comprise the consolidated statements of financial position as of December 31, 2023 and 2022, and the related consolidated statements
of profit or loss and other comprehensive income, changes in equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Basis for Opinion
We conducted our audits in
accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Other Matter
The comparative consolidated statement of financial position as of December 31, 2021 and the related consolidated statements of profit or loss
and other comprehensive income, changes in equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements were not audited, reviewed, or compiled by us and, accordingly, we do not express an opinion or any other form of assurance on them.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS as issued by the IASB, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
KPMG,
an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that
the consolidated financial statements are issued.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered
material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
• Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
We
are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
/s/ KPMG
KPMG
Perth, Australia
26 March 2024
Dates Referenced Herein and Documents Incorporated by Reference