AUDITORS' INDEPENDENCE DECLARATION 16
STATEMENT OF COMPREHENSIVE INCOME 17
STATEMENT OF FINANCIAL POSITION 18
STATEMENT OF CHANGES IN EQUITY 19
NOTES TO THE FINANCIAL STATEMENTS 21
INDEPENDENT AUDITOR'S REPORT 49
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES 51
CORPORATE INFORMATION
Directors Domenic Martino Chairman Luke Martino Non-Executive Director Michael Pixley Non-Executive Director | Auditor HLB Mann Judd Level 4, 130 Stirling Street Perth WA 6000 Telephone: +61 (8) 9227 7500 Facsimile: +61 (8) 9227 7533 |
Senior Executive Team Alan Hopkins Chief Executive Officer Jason Campbell Company Secretary / Chief Financial Officer Robert Bradley Project Manager Australian Business Number 45 098 448 269 | Share Registry Link Market Services Limited Level 4, 152 St Georges Terrace Perth WA 6000 Telephone: 1300 554 474 Email: registrars@linkmarketservices.com.au Website: www.linkmarketservices.com.au |
Principal Registered Address 311-313 Hay Street Subiaco WA 6008 Australia Telephone: +61 (0) 8 6489 0600 Facsimile: +61 (0) 8 9388 3701 Postal Address PO Box 8282 Subiaco East WA 6008 Indonesian Office Address Jalan Pecenongan No.72 Blok E No.7-9 Jakarta Pusat 10210 Indonesia Website www.panasiacorp.com.au | Lawyers Price Sierakowski Level 24, St Martins Tower 44 St Georges Terrace Perth WA 6000 Telephone: +61 (0) 62115000 Facsimile: +61 (0) 62115055 Christian Teo Purwono & Partners Indonesian Stock Exchange Building Tower II Floor 16 Suite 1604 Sudirman Central Business District Jl. Jend.Surdiman Kav 52-53 Jakarta 12190, INDONESIA ASX Code PZC |
Highlights for the Year
Entered into an agreement to sell the Company's 75% interest in the TCM Project for SGD$ 30M value
Further stabilised the Company's finances via successful equity raisings
Overview
The down cycle for commodities continued with coal prices & equity market support for junior resource companies weakening further throughout the year. This provided a challenging environment to progress the Company's flagship high CV thermal coal project 'TCM'.
However, the Company was successful in closing an agreement to sell the project to an Indonesian group (Universal Coal 'Universal') for SGD$ 30 million in listed shares.
Under this arrangement, the project's significant development cost can then be funded via a successful listing of the project on the Singapore Stock Exchange's 'Catalist' board. The listing by Universal is targeting an equity raising of SGD$ 20M to then be combined with complementary project funding from contractors, equipment suppliers and offtakers. Together this would establish the funding package necessary for successful development.
As part of this arrangement, Universal plans to undertake value added work on the TCM project, including completion of infill drilling in the northern area of the project & updating the JORC resource (bringing all into a higher category), completing a feasibility study over the entire resource area (to date the study work completed was only over the southern portion of the resource) and completing the remaining forestry permitting.
Additionally, Universal is to assume responsibility for the repayment of the KOPEX funding provided for the project (subject to KOPEX's agreement).
The agreement with Universal is conditional upon many processes being satisfactorily completed including Universal providing satisfactory evidence of a successful SGD$20M fundraising as part of their IPO and Pan Asia getting shareholder approval.
While this process will take an extended time, it continues to move the project forward and if successfully closed, should provide a many times multiple return on the investment made in this project by the Company.
In parallel, the Company has moved to establish additional lines of funding necessary to provide the corporate support for the completion of this sale as well as seek significant new opportunities.
Convertible Note:
The Company has established a convertible note facility with a Malaysian funding group Coleman Ventures Ltd ('Coleman') for up to $5m. The key terms of this facility are as follows:
The key terms of the convertible note executed with Coleman are as follows:
Total amount able to be drawn down under the facility : AUD $5 million;
The right to draw down the convertible note is conditional upon the Company obtaining shareholder approval for the purposes of item 7 of section 611 of the Corporations Act. However this condition can be waived by Coleman, wholly or partially, such that they may agree to make the whole or part of the $5 million available to the Company without the Company first having satisfied the condition;
Limits of Drawdown: Unless otherwise agreed between the parties, AUD $2m can be drawn down in the first year of becoming available and a further AUD $3m during the second year of becoming available. The Convertible Note becomes available on the condition of shareholders approval being satisfied and ends on the date 2 years after that date;
Drawdown Amounts: 10 notes of AUD $500,000 each;
Conversion Price of Notes to shares in PZC: $0.007 per share;
Early Conversion: In the event that Coleman elects to convert the notes to shares within 6 months of making the advance, it shall be entitled to receive one option exercisable at $0.01 per share for every two shares in PZC subject to conversion.
At the date of this report, the Company is currently finalising all the meeting documents and once finalised and approved for distribution, the Company will call a meeting of shareholders to consider the facility.
The completion of the sale of the TCM project and the further stabilisation of the Company's finances should enable the Company to take advantage of significant opportunities that arise during the current industry downturn and we thank you for your ongoing support through this process.
Refer page 52 for Competent Person's Statement
DIRECTORS' REPORTYour Directors present their report on the Company and its controlled entities for the financial year ended 30 June 2015.
The names of Directors of the Company at any time during or since the end of the financial year are:
Domenic Martino
Non-Executive Chairman
Luke Martino
Non-Executive Director
Michael Pixley
Non-Executive Director
Tim Gazzard
Non-Executive Director
Resigned 9 September 2014
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
PARTICULARS OF DIRECTORS AND COMPANY SECRETARY
Domenic Martino (Non- Executive Chairman)
Qualifications
Bachelor of Business
Fellow, Chartered Accountants Australia & New Zealand (FCA)
Fellow, Australian Society of Certified Practising Accountants (FCPA)
Fellow, Australian Institute of Company Directors (FAICD)
Experience
Domenic was appointed as a Director of Pan Asia Corporation on 24 December 2010 and became Chairman of the Company on 1 March 2011. Domenic is a Chartered Accountant by profession and a former Chief Executive Officer of Deloitte Touche Tohmatsu in Australia. Domenic specialises in the resources and energy sector, including mergers and acquisitions, initial public offerings and strategic opportunities.
Luke Martino (Non-Executive Director)
Qualifications & Affiliations
Bachelor of Commerce
Fellow, Chartered Accountants in Australia & New Zealand (FCA)
Member, Australian Society of Certified Practicing Accountants (CPA)
Fellow, Australian Institute of Company Directors (FAICD)
Bachelor of Business
Experience
Michael has worked as a merchant banker specialising in strategic corporate development, joint ventures and acquisitions. He has over 20 years experience in the Asian business sector, and has extensive networks and relationships with key personnel in the government, corporate and private business sectors, in the Asia Pacific region.
Tim Gazzard (Non-Executive Director) - Resigned 9 September 2014
Jason Campbell (Chief Financial Officer & Company Secretary)
Qualifications
Bachelor of Business
Member of CPA Australia
Diploma in Applied Corporate Governance with Chartered Secretaries Australia
Experience
Jason commenced with the Company in March 2011 as Chief Financial Officer and Commercial Manager. He was appointed Company Secretary in October 2011. Prior to joining Pan Asia, Jason spent 7 years at Argonaut Limited, an Investment Banking and Corporate Stocking business in Perth.
OTHER CURRENT DIRECTORSHIPS
Domenic Martino Cokal Limited (Director), Australasian Resources Limited (Chairman), ORH Limited (Chairman), Gladstone Pacific Nickel Limited (Director), Synergy Plus Limited (Chairman), Coral Sea Petroleum Ltd (Managing Director), MUI Corporation Limited (Director)
Luke Martino Nil
Michael Pixley Story-I Limited (Director)
PREVIOUS DIRECTORSHIPS IN THE LAST 3 YEARS
Domenic Martino Resourcehouse Limited (Chairman), Clean Global Energy Limited (Director)
Luke Martino Central Asia Resources Limited (Director)
Michael Pixley OKLO Resources Limited (Director)
DIRECTORS' INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE
As at the date of this report, the interests of the Directors in the shares and options of the Company were:
Director
Shares Held
Performance Shares Held
Options Held
Directly
Indirectly
Directly
Indirectly
Directly
Indirectly
Mr Domenic Martino*
-
7,450,000
-
-
-
-
Mr Luke Martino **
-
6,035,410
-
-
-
-
Mr Michael Pixley
-
-
-
-
-
-
*Indirect interests are held via Domenal Enterprises Pty Ltd, Impact Nominees Pty Ltd and Indian West Pty Ltd. 1,000,000 of these Shares included above are held indirectly but Domenic Martino has no beneficial interest in the same.
** Indirect interests are held via LJM Capital Corporation Pty Ltd.
DIRECTORS' MEETINGS
During the financial year, five (5) meetings of Directors were held. Attendances by each Director during the year were:
Directors' Meetings Audit & Risk Remuneration
Number of meetings eligible to
Domenic Martino
attend
5
5
attend
-
attended attend
- -
-
Luke Martino
5
5
-
- -
-
Michael Pixley
5
4
-
- -
-
Tim Gazzard*
0
0
-
- -
-
Number attended
Number of meetings eligible to
Number
Number of meetings eligible to
Number attended
*Resigned 9 September 2014
DIVIDENDS
No dividends were paid or recommended during the year.
OPERATING RESULTS
For the financial year, the consolidated entity incurred a consolidated loss after tax of $1,011,233 (2014: $1,237,328).
PRINCIPAL ACTIVITIES
Pan Asia owns a 75% interest in its flagship underground high CV thermal coal project, the PT Transcoal Minergy Project in South Kalimantan, Indonesia. An exploration drilling programme has been completed on the concession to date resulting in a total JORC resource of 177.27 Mt. The JORC Resource from mineable seams is 129Mt.
LIKELY DEVELOPMENTS AND FUTURE RESULTS
In June 2015, the Company entered into an agreement to sell its 75% interest in the TCM Coal Project to Universal Coal Resources Pte Ltd ('Universal') for SGD $30m in Universal shares, conditional upon Universal raising a minimum of SGD$ 20m via a successful IPO listing on the Singapore Stock Exchange. The Company expects this IPO listing to take some time to complete. The Company will continue to look at acquiring other assets, predominately of the same nature in the mining industry.
It is not possible to estimate the future results at this stage.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the consolidated entity to the date of this report other than what has been disclosed in this report.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 8 July 2015, the Company announced a $2m non-renounceable entitlement offer to existing shareholders at
$0.007 per share. The entitlements issue closed on 6 August 2015 raising ~$918,000 from shareholders. The entitlements issue was not underwritten. The Company now has 490,664,567 ordinary fully paid shares on issue.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The consolidated entity is not subject to any environmental regulations or licences. However, the Indonesian controlled entities are subject to Indonesian environmental laws and regulations in respect to its projects located in Indonesia. PT Transcoal Minergy ('TCM'), 75% owned by the Company, commissioned PT Hatfield consultants of Indonesia to revise and update its existing Indonesian Environmental Impact Assessment (AMDAL). The initial environment-related AMDAL permit was granted to TCM on 23 April 2010 on the basis of an initial feasibility study. The AMDAL was extended for a further 3 years on 24 April 2013. When the Company updates its mine plan, TCM will revise the current AMDAL to incorporate changes in the mine plan and results from Wet and Dry Season environmental surveys and Socio-Economic and Health surveys conducted by international consulting firm PT Hatfield Indonesia.
There have been no known breaches of environmental laws or regulations by the consolidated entity in this jurisdiction.
SHARE OPTIONS
As at the date of this report, the Company has no options on issue.
INDEMNIFICATION OF OFFICERS AND AUDITORS
During the financial year, the Company established insurance covers in respect of the Directors of the Company (as named in this report), the Company Secretary, and all executive officers of the Company and of any related body corporate against a liability incurred as such a Director, secretary or executive officer to the extent permitted by the Corporations Act 2001. As per usual with such cover, the contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has not otherwise, during or since the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such by an officer or auditor.
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for key management personnel ('KMP') of Pan Asia Corporation Limited. KMP are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the parent company.
The following persons acted as KMP during or since the end of the financial year:
Domenic Martino (Non-Executive Chairman)
Luke Martino (Non-Executive Director)
Michael Pixley (Non-Executive Director)
Tim Gazzard (Non-Executive Director)- Resigned 9 September 2014
Alan Hopkins (Chief Executive Officer)
Jason Campbell (Chief Financial Officer & Company Secretary)
Experience
Luke was appointed as a Non-Executive Director on 4 March 2010.
Luke has over 25 years experience at Partner and Board level with major accounting firms and has served as a Director of several public and private companies. He has significant experience in the mining and resources industry (particularly in Indonesia) and the property and hospitality industries. Luke has an entrepreneurial passion for nurturing businesses and specialises in corporate and growth business consulting.
Michael Pixley (Non-Executive Director)
Qualifications
Remuneration Philosophy
The performance of the Company depends upon the quality of its Directors and executives. To prosper, the Company must attract, motivate and retain highly skilled Directors and executives.
Remuneration Committee
The Company has a formal Remuneration Committee. The Remuneration Committee of the Board of Directors of the Company is responsible for determining and reviewing the compensation arrangements for the Directors and executive management team. The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of Directors and the executive management team.
Remuneration Structure
In accordance with the best practice Corporate Governance, the structure of the non-executive Directors and executives of the Company is separate and distinct.
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders. The level of fees is not linked to the Directors' or the Company's performance.
The ASX Listing Rules specify that the aggregate remuneration of non-executive Directors shall be determined from time to time by a general meeting. The latest determination was at an Annual General Meeting when shareholders approved an aggregate remuneration of $250,000 per year. Further, shareholders must approve the framework for any equity schemes. If a Director is recommended for being able to participate in an equity scheme, this participation must be approved by the shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst Directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid to non-executive Directors of comparable companies when undertaking the annual review process.
Each Director receives a fee for being a Director of the Company. An additional fee may also be paid for each Board committee, where warranted, on which a Director sits. The payment of additional fees for serving on a committee recognises the additional time commitment required by Directors who serve on one or more sub committees.
Senior Manager and Executive Director Remuneration
Remuneration consists of fixed remuneration.
Fixed Remuneration
Fixed remuneration is reviewed by the Board where applicable. The process consists of a review of relevant comparative remuneration in the market and internally and, where appropriate, external advice on policies and practices. The Board has access to external, independent advice where necessary. The Chairman's remuneration is currently $3,000 per month and non-executive directors are paid $2,000 per month.
The CEO Alan Hopkins, through his Company, Ridgescan Pty Ltd, previously provided services via his Consultancy Agreement which expired in April 2015. Since then he continues to provide the services on a monthly basis and at a 50% level of previous arrangements. There is currently no service agreement in place.
REMUNERATION REPORT
Remuneration of Key Management Personnel
Table 1: Directors' remuneration for the years ended 30 June 2015 and 30 June 2014:
Primary Benefits Post Employment
Salary & Fees
Cash STI
LTI Non Monetary Benefits
Equity Options
Superannuation Retirement Other Total % Performance
Related
$ $ $ $ $ $ $ $
D Martino | 2014 | 46,000 | - - - - - - - 46,000 | - |
Non Executive | 2015 | 36,000 | - - - - - - - 36,000 | - |
Chairman | ||||
L Martino | 2014 | 29,000 | - - - - - - - 29,000 | - |
Non Executive | 2015 | 24,000 | - - - - - - - 24,000 | - |
Director | ||||
M Pixley | 2014 | 29,000 | - - - - - - - 29,000 | - |
Non Executive | 2015 | 24,000 | - - - - - - - 24,000 | - |
Director | ||||
T Gazzard* | 2014 | 29,000 | - - - - - - - 29,000 | - |
Non Executive | 2015 | 4,600 | - - - - - - - 4,600 | - |
Director | ||||
Total | 2014 | 148,000 | - - - - - - - 148,000 | - |
2015 | 88,600 | - - - - - - - 88,600 | - |
*Resigned 9 September 2014
REMUNERATION REPORT (continued)
Remuneration of Key Management Personnel (continued)
Table 2: Senior Management and Executives' remuneration for the years ended 30 June 2015 and 30 June 2014:
Primary Benefits Post Employment
Salary & Fees | Cash STI LTI Non Monetary | Equity Options | Superannuation | Retirement | Other Total | % Performance |
Benefits | Related | |||||
$ | $ $ $ | $ | $ | $ | $ $ | |
2014 | 240,000 | - - 18,336 | - - | - - 258,336 | - | |
2015 | 235,000 | - - 15,703 | - - | - - 250,703 | - | |
2014 | 180,000 | - - - | - 16,650 | - - 196,650 | - | |
2015 | 180,000 | - - - | - 17,100 | - - 197,100 | - | |
2014 | 420,000 | - - 18,336 | - 16,650 | - - 454,986 | - | |
2015 | 415,000 | - - 15,703 | - 17,100 | - - 447,803 | - |
A Hopkins CEO
J Campbell Company Sec Total
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