Corporate Directory Directors Report Auditor s Independence Declaration... 5

Transcription

1 Cabral Resources Limited (ABN ) And its Controlled Entities Half Yearly Report 31 December 2016

2 CONTENTS PAGE Corporate Directory... 3 Directors Report... 4 Auditor s Independence Declaration... 5 Statement of Profit or Loss and Other Comprehensive Income... 6 Statement of Financial Position... 7 Statement of Changes in Equity... 8 Statement of Cash Flows... 9 Notes to the Financial Statements Directors Declaration Independent Auditors Review Report Page 2

3 CORPORATE DIRECTORY Directors: Ariel (Eddie) King (Non-Executive Chairman) Steven Formica (Non-Executive Director) Gregory D Arcy (Non-Executive Director) Company Secretary: Registered Office and Principal place of Business: Mr Stephen Brockhurst Level St Georges Terrace PERTH WA 6000 Telephone: Facsimile: Share Register: Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000 Postal Address Locked Bag A14 Sydney South NSW 1235 Auditors: Nexia Sydney Partnership Level 16 1 Market Street Sydney NSW 2000 Securities Exchange Listing: Cabral Resources Limited Australian Securities Exchange Limited (Code: CBS ) Company Numbers: ACN: ABN: Page 3

4 DIRECTORS' REPORT Your Directors present their report on the Cabral Group, consisting of Cabral Resources Limited ("the Company") and the entities it controlled at the end of, or during, the half year ended 31 December DIRECTORS The names of the Directors of the Company at any time during or since the end of the half year are: Ariel (Eddie) King - Non-Executive Chairman Gregory D Arcy - Non-Executive Director Steven Formica - Non-Executive Director PRINCIPAL ACTIVITIES The principal activities of the Cabral Group consisted of iron ore mineral exploration in Bahia State, Brazil. RESULTS The loss after tax for the half-year ended 31 December 2016 was 298,076 (31 December 2015: profit of 284,542). REVIEW OF OPERATIONS During the half year ended 31 December 2016, the Cabral Group conducted, in accordance with the Company s business plan, due diligence on the interests of Metais in the Brazilian mining tenements. On 18 October 2016, the Cabral Group signed a binding term sheet (Term Sheet) for the purchase of 100% of the issued share capital in Tapit Media, a revolutionary location based mobile advertising company. Airmarket TM gives advertisers access to a global network of beacons to deliver personalised, targeted advertising to consumers based on their physical location in real time. It is expected that a share sale agreement, notice of meeting and prospectus will be completed in early EVENTS SUBSEQUENT TO BALANCE DATE The Company is continuing to work through requirements in Chapters 1 and 2 of the ASX Listing Rules as a condition to completing the acquisition of Tapit Media Group. There have been no other transactions or events of a material and unusual nature likely, in the opinion of the Directors of the Company, to significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years. AUDITOR S INDEPENDENCE DECLARATION A copy of the auditor s independence declaration as required under Section 307C of the Corporations Act 2001 given to the Directors by the lead auditor for the review undertaken by Nexia Sydney Partnership is included on page 5. Signed in accordance with a resolution of the Directors. Eddie King Non-Executive Chairman Perth, Western Australia, 12 January 2017 Page 4

5 The Board of Directors Cabral Resources Limited Level St Georges Terrace PERTH WA 6000 Dear Board Members Auditor s Independence Declaration under section 307C of the Corporations Act 2001 As lead audit partner for the review of the financial statements of Cabral Resources Limited for the half year ended 31 December 2016, I declare that to the best of my knowledge and belief, there have been no contraventions of: (a) (b) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and any applicable code of professional conduct in relation to the review. Yours sincerely Lester Wills Partner Nexia Sydney Partnership Sydney, 12 January 2017

6 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the half year ended 31 December 2016 Consolidated Note 31 Dec Dec 2015 Continuing operations Other income 3 7, ,370 Administration and corporate expenses (237,111) (166,054) Directors fees and employee benefits expense (68,800) (21,774) Profit/(Loss) from continuing operations before income tax (298,076) 284,542 Income tax benefit - - Profit/(Loss) from continuing operations after income tax (298,076) 284,542 Other comprehensive income/(loss), net of tax - - Total comprehensive profit/(loss) attributable to members of Cabral Resources Limited (298,076) 284,542 Basic and diluted earnings/(loss) per share (0.23 ) 2.35 The accompanying notes form part of these financial statements. Page 6

7 STATEMENT OF FINANCIAL POSITION As at 31 December 2016 Consolidated Note 31 Dec 2016 Restated * 30 Jun 2016 Current assets Cash and cash equivalents 902,051 1,287,985 Trade and other receivables 66,013 54,177 Total current assets 968,064 1,342,162 Non-current assets Exploration assets - - Total non-current assets - - TOTAL ASSETS 968,064 1,342,162 Current liabilities Trade and other payables 88, ,393 Liabilities directly associated with exploration assets - - Total current liabilities 88, ,393 TOTAL LIABILITIES 88, ,393 NET ASSETS 880,053 1,197,769 Equity Contributed equity 8 42,064,761 42,084,401 Reserves Accumulated losses (41,185,508) (40,887,432) TOTAL EQUITY 880,053 1,197,769 The accompanying notes form part of these financial statements. * Refer to Note 1 Page 7

8 STATEMENT OF CHANGES IN EQUITY For the half year ended 31 December 2016 Consolidated Note Contributed equity Reserves Accumulated losses Total equity Balance as at 1 July ,938,263 - (40,837,907) (899,644) Total comprehensive income for the year , ,542 Transactions with owners in their capacity as owners Issue of ordinary shares (net) 388, ,942 Balance as at 31 December ,327,205 - (40,553,365) (226,160) Balance as at 1 July ,084, (43,770,423) (1,685,222) Effect of prior period error ,882,991 2,882,991 Restated balance as at 1 July ,084, (40,887,432) 1,197,769 Total comprehensive income for the year - - (298,076) (298,076) Transactions with owners in their capacity as owners Issue of ordinary shares (net) 4 (19,640) - - (19,640) Balance as at 31 December ,064, (41,185,508) 880,053 The accompanying notes form part of these financial statements. Page 8

9 STATEMENT OF CASH FLOWS For the half year ended 31 December 2016 Consolidated 31 Dec Dec 2015 Cash flows from operating activities Payments to suppliers, employees and creditors (inclusive of GST) (378,808) (102,202) Interest received 12,514 1,358 Net cash outflows from operating activities (366,294) (100,844) Cash flows from investing activities Payments under Deed of Company Arrangement - (569,227) Net cash outflows from investing activities - (569,227) Cash flows from financing activities Loans from related parties - 80,368 Proceeds from issue of shares - 420,328 Payments for capital raising costs (19,640) (31,386) Net cash outflows from investing activities (19,640) 469,310 Net decrease in cash held (385,934) (200,761) Cash and cash equivalents at the beginning of the half year 1,287, ,849 Effects of exchange rate changes on cash and cash equivalents - - Cash and cash equivalents at end of the half year 902,051 1,088 The accompanying notes form part of these financial statements. Page 9

10 NOTES TO THE FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES The consolidated financial report of Cabral Resources Limited and its controlled entities (the Group) for the half-year ended 31 December 2016 was authorised for issue in accordance with a resolution of the Directors on 12 January Cabral Resources Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal activities of the Group are described in the Directors report. Basis of Preparation These general purpose financial statements for the half-year reporting period ended 31 December 2016 have been prepared in accordance with Australian Accounting Standard 134: Interim Financial Reporting and the Corporations Act Compliance with AASB 134 ensures compliance with IAS 34 Interim Financial Reporting. These half-year financial statements do not include all the notes of the type normally included in an annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Group as the full financial statements. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2016 and any public announcements made by Cabral Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act The half-year report has been prepared on an accruals basis and is based on historical costs. For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period. Apart from the changes in accounting policy noted below, the accounting policies and methods of computation are the same as those adopted in the most recent annual financial statements. Changes in accounting policies From 1 July 2016, the Group has adopted the Standards and Interpretations, mandatory for annual periods beginning on or after 1 July Adoption of these standards and interpretations did not have any effect on the financial position or performance of the Group. The Group has not elected to early adopt any new standards or amendments. Significant accounting judgments and key estimates The preparation of the half-year financial report requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. In preparing this half-year financial report, the significant judgments made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated annual financial report for the year ended 30 June Page 10

11 NOTES TO THE FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Correction of a prior period error - Liabilities directly associated with exploration assets As previously disclosed, the Brazilian mining tenements held by Cabral Metais Ltda ( Metais ) are via a Preliminary Instrument of Future Mining Tenements Assignment with Cabral Mineracao Ltda ( Mineracao ). Mineracao is a Company which is no longer under the control of Cabral Resources Limited and therefore does not form part of the Cabral Group. The Cabral Group has been conducting, in accordance with the Company s business plan, due diligence on the interests of Metais in the Brazilian mining tenements. The Company has in the course of this process further considered the validity of the obligations existing between Mineracao and Metais under contracts for the assignment of mining tenement agreements between those companies (Preliminary Assignment Agreements) pursuant to which Metais interests were supposed to arise. None of the tenements the subject of the Preliminary Assignment Agreements have ever been transferred from Mineracao to Metais. The Company has discovered that no instrument of assignment of the relevant mining tenements has been executed by the parties, contrary to the terms of the Preliminary Assignment Agreements. Execution of an instrument of assignment is a condition precedent for the effecting of the transfer of the tenements. As this condition precedent has not been complied with, and the parties had not taken any other steps towards registration of the transfer of the tenements, the contractual obligations of Metais cannot now be enforced by Mineracao. In any case, the obligation to transfer the mining tenements cannot now be carried out because the vast majority of the tenements have been cancelled. In the course of its due diligence investigations the Company has received confirmation from Brazilian counsel that the Preliminary Assignment Agreements are now unenforceable and as such, Metais does not hold any rights to tenure over the exploration assets. The Company had previously treated exploration expenditure undertaken by Mineracao on the tenements the subject of the Preliminary Assignment Agreements as if it were a non-interest bearing loan of BRL 6,940,494 owed by Metais to Mineracao. Under Brazilian law, a tenement holder is obliged to pay all costs relating to obtaining and maintaining exploration tenements. Therefore this was Mineracao s obligation until such time as an instrument of assignment was executed and the transfer of tenements to Metais was registered at the National Department of Mineral Production ( DNPM ). As the relevant tenements were never transferred to Metais (and cannot now be transferred), the Company no longer considers that there is a loan owed by Metais to Mineracao. The error has been rectified by restating each of the affected financial statement line items for prior periods as follows: Restated Change Previously Reported Statement of Financial Position 30 June June 2016 Liabilities directly associated with exploration assets - 2,882,991 (2,882,991) Accumulated losses (40,887,432) 2,882,991 (43,770,423) Page 11

12 NOTES TO THE FINANCIAL STATEMENTS 2. SEGMENT INFORMATION a. Description of Segments Management has determined the operating segments based on the reports reviewed by those responsible for decision making which are used to make strategic decisions. The management team have identified two reportable segments based on Geographical factors; one segment in Australia and one segment in Brazil. b. Segment Information Provided to those Responsible for Decision Making The segment information provided to those responsible for decision making for the reportable segments for the half year ended 31 December 2016 are as follows: 31 December 2016 Australia Brazil Total Total segment revenue Inter-segment revenue Revenue from external customers EBITDA (298,076) - (298,076) 31 December 2015 Total segment revenue Inter-segment revenue Revenue from external customers EBITDA 283, , December 2016 Australia Brazil Total Total segment assets 968, ,064 Total assets includes: Additions to non-current assets (other than financial assets and deferred tax) Total segment liabilities 88,011-88, June 2016 Total segment assets 1,342,162-1,342,162 Total assets includes: Additions to non-current assets (other than financial assets and deferred tax) Total segment liabilities 144, ,393 Page 12

13 NOTES TO THE FINANCIAL STATEMENTS Consolidated Dec 2016 Dec OTHER INCOME Interest 7,835 1,358 Gain on effectuation of DOCA (i) - 471,012 7, ,370 (i) On 13 October 2015, the Administrators confirmed that all funds required to be paid by CPS under the DOCA (totalling 450,000) were received and accordingly, the DOCA has been fully effectuated and control of Cabral returned to its Directors. Concurrently with the effectuation of the DOCA, the Cabral Creditors Trust was established (as provided for in the DOCA). Any assets not included in the sale agreement with CPS (i.e. all assets other than certain interests in Cabral Metais Limitada and Northern Yeelirrie Pty Limited) have either been transferred to or are being held in trust for the Creditors Trust. The assets and liabilities transferred to the creditors trust upon effectuation on 13 October 2015 were as follows: Cash and cash equivalents 569,227 Trade and other receivables 22,289 Trade and other payables (408,799) Employee benefits (653,729) Net liabilities transferred to the creditors trust 471,012 Page 13

14 NOTES TO THE FINANCIAL STATEMENTS Consolidated Consolidated Dec 2016 No Jun 2016 No Dec 2016 Jun CONTRIBUTED EQUITY Ordinary shares 127,312, ,312,898 42,064,761 40,084,401 Movements in ordinary shares Opening balance 1 July 127,312, ,797,815 40,084,401 39,938,263 Share consolidation (100:1) - (290,859,917) - - Shares issued 30 October ,800, Shares issued 30 October ,000-10,000 Shares issued 2 November ,000, ,000 Shares issued 22 April ,000, Shares issued 22 April ,075,000-1,901,500 Capital raising costs - - (19,640) (175,400) Closing balance 127,312, ,312,898 42,064,761 40,084, EVENTS SUBSEQUENT TO BALANCE DATE The Company is continuing to work through requirements in Chapters 1 and 2 of the ASX Listing Rules as a condition to completing the acquisition of Tapit Media Group. There have been no other transactions or events of a material and unusual nature likely, in the opinion of the Directors of the Company, to significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years. Page 14

15 DIRECTORS DECLARATION In the opinion of the directors of Cabral Resources Limited ( the Company ): 1. The financial statements and notes set out on pages 8 to 14, are in accordance with the Corporations Act 2001 and: a. Comply with Australian Accounting Standard AASB 134 Interim Financial Reporting, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and b. Give a true and fair view of the consolidated entity s financial position as at 31 December 2016 and of its performance for the six month period ended on that date; 2. In the directors opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by: Eddie King Non-Executive Chairman Perth, 12 January 2017 Page 15

16 Independent Auditor s Review Report To the members of Cabral Resources Limited Report on the Half-Year Financial Report We have reviewed the accompanying half-year financial report of Cabral Resources Limited (the Company ), which comprises the consolidated statement of financial position as at 31 December 2016, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, notes comprising significant accounting policies and other explanatory information, and the directors declaration of the Group comprising the Company and the entities it controlled at the half year s end or from time to time during the half year. Directors Responsibility for the Half-Year Financial Report The directors of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the company's financial position as at 31 December 2016 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations As the auditor of Cabral Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act We confirm that the independence declaration required by the Corporations Act 2001 would be in the same terms if it had been given to the directors as at the time of this auditor s report. Page 16

17 Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Cabral Resources Limited is not in accordance with the Corporations Act 2001, including: (i) (ii) giving a true and fair view of the Group s financial position as at 31 December 2016 and of its performance for the half year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations Nexia Sydney Partnership Lester Wills Partner 12 January 2017 Sydney Page 17