Speciality Metals International Limited Annual Report 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Page | 46 Consideration transferred The acquisition of MCQ was settled in cash for $8,130,000. Acquisition-related costs amounting to $588,741 are not included as part of the consideration transferred and have been recognised as an expense in the consolidated statement of profit or loss and other comprehensive income, as part of consultants’ expenses. This amount also includes the costs associated with the establishment of the unincorporated joint venture between Speciality Metals International Limited and Cronimet Asia Pte Ltd for the development of the Mt Carbine Retreatment Projects. Identifiable net assets The fair value of the estimated 7 million tonnes of stockpiled inventory as part of the business combination amounted to $7,545,413. MCQ’s contribution to the Group results As the acquisition took place at the end of the Group’s full-year reporting period there was no impact on the Group’s revenue nor consolidated profit/(loss) for the period ending 30 June 2019. 16. INVESTMENT IN SUBSIDIARIES Equity Interest Cost of Parent Entity’s Investment Parent Entity Speciality Metals International Limited 2019 % 2018 % 2019 $ 2018 $ Controlled Entities South Eastern Resources Pty Ltd 100 100 3 3 Mt Carbine Retreatment Pty Ltd 1 100 100 2 2 Troutstone Resources Pty Ltd 100 100 2 2 Mt Carbine Quarrying Operations Pty Ltd 2 100 100 - - Mt Carbine Quarries Pty Limited 3 100 - 8,130,000 - Icon Resources Africa Pty Ltd 100 100 10 10 Special Metals Chile SpA 100 - 6,060 - 1 Cast Resources Pty Ltd changed it name to Mt Carbine Retreatment Pty Ltd on 19 March 2019. 2 Kaowest Pty Ltd changed its name to Mt Carbine Quarrying Operations Pty Ltd on 19 March 2019. 3 Mt Carbine Quarries Pty Ltd acquired 28 June 2019. Speciality Metals International Limited and all of its subsidiaries, with the exception of Special Metals Chile SpA, are located and incorporated in Australia. 17. IMPAIRMENT OF DEFERRED EXPLORATION EXPENDITURE AND PLANT AND EQUIPMENT The Directors reassess the carrying value of the Group’s assets including deferred exploration expenditure, tenements and plant and equipment at each half year, or at a period other than that, should there be any indication of impairment to fair value. When making their assessment for the 2018-2019 financial year the Directors took the following into consideration: • During the financial year the Company concluded the 100% acquisition of Mt Carbine Quarries Pty Ltd, an entity that owns and operates the Mt Carbine Quarry and Mining Leases ML 4867 and ML 4919 as well as entering into an unincorporated joint venture with Cronimet Asia Pte Ltd for the development of the Mt Carbine Tailings Retreatment and Stockpile Projects. Production from the tailings retreatment is expected to commence during the 4 th quarter of 2019.