NORTH077 Annual Report 2020 V5.2 DIGITAL

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80 NORTHERN MINERALS _ ANNUAL REPORT 2021 NORTHERN MINERALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 10. Non-financial Assets and Liabilities (continued) Leases The Company has purchased a number of items of plant and equipment under hire purchase lease agreements. These are presented as part of property, plant and equipment in the statement of financial position. Plant and equipment under lease 2021 $ 2020 $ Plant and equipment – hire purchase 60,000 472,820 Less: Accumulated depreciation (45,000) (160,797) 15,000 312,023 Lease liability 2021 $ 2020 $ Current lease liability 16,307 142,835 Non-current lease liability - 25,485 16,307 168,320 Interest charged on hire purchase lease liabilities during the year was A$14,204. The average interest rate charged is 4.13%. Right of Use Assets The Company leases office space in West Perth, Western Australia, under a non-cancellable lease which expires on 30 September 2023 and has an option to extend for a further 3 years. The lease agreement does not impose any covenants. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: • Fixed payments (including in- substance fixed payments), less any lease incentives receivable; • Variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date; • Amounts expected to be payable by the Group under residual value guarantees; • The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and • Payments of penalties for terminating the lease, if the lease term reflects the group exercising that option. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the rightof-use asset in a similar economic environment with similar terms, security and conditions. To determine the incremental borrowing rate, the Group: • Where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received • Uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Company, which does not have recent third-party financing, and • Makes adjustments specific to the lease, eg; term, country, currency and security. The Group is exposed to potential future increases in variable lease payments based on an index or rate, which is not included in the lease liability until they take effect. When adjustments to lease 48
81 NORTHERN MINERALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 10. Non-financial Assets and Liabilities (continued) payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Right-of-use assets are measured at cost comprising the following: • The amount of the initial measurement of lease liability • Any lease payments made at or before the commencement date less any lease incentives received • Any initial direct costs, and • Restoration costs. Right-of-use assets are generally depreciated over the shorter of the assets useful life and the lease term on a straight line basis. Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less without a purchase option. In 2020 the Company leased offices in West Perth, Western Australia, under a non-cancellable lease which expired on 31 March 2020. The Company subsequently entered into another lease agreement with a term of 6 months. As the original office lease was due to expire within 12 months of the first date of application of AASB 16, the Company relied on the practical expedients outlined in AASB 16 as follows: - Leases with a remaining term of 12 months or less from the date of application have been accounted for as short-term leases and have therefore not been recognised on the balance sheet. The office leases in 2020 were recognised as an expense in the statement of profit or loss on a straightline basis over the lease term in accordance with AASB 16. Lease Commitments 2021 $ 2020 $ Commitments for minimum lease payments are: Within one year - 45,302 Later than one year but less than five years - - Later than five years - - - 45,302 The statement of profit or loss shows the following amounts relating to leases: Interest expense (included in finance costs) 41,788 - Expense relating to short term leases (included in occupancy costs) 9,197 216,469 Income of A$17,345 (2020: A$125,941) has been recognised for sub-leasing of the office premises. The total cash outflow for leases in 2021 was A$56,292 (2020: A$120,625). 49 NORTHERN MINERALS _ ANNUAL REPORT 2021
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2021 ANNUAL REPORT
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1 Chairman’s Report NORTHERN MINE
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3 CEO’S Report NORTHERN MINERALS
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5 Ore Sorter: The ore sorting syste
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7 ENVIROMMENT, SOCIAL & GOVERNANCE
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9 field team to conduct pre-clearan
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11 Executive Team Our executive tea
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13 COO Report NORTHERN MINERALS _ A
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15 Commissioned: The ore sorter cir
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17 rare earths into groups of produ
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19 EXPLORATION & GEOLOGY REPORT The
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21 The high-grade mineralisation oc
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23 Figure 5: Banshee Prospect Drill
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25 Browns Range Northern Territory
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27 Ore Reserve and Mineral Resource
Page 31 and 32: 29 Mineral Resource The Mineral Res
Page 33 and 34: 31 Comparison with previous years O
Page 35 and 36: 33 NORTHERN MINERALS LIMITED DIRECT
Page 47 and 48: 45 4. Service agreements NORTHERN M
Page 57 and 58: 55 NORTHERN MINERALS LIMITED CONSOL
Page 59 and 60: 57 NORTHERN MINERALS LIMITED CONSOL
Page 61 and 62: 59 2. Basis of Preparation (continu
Page 63 and 64: 61 NORTHERN MINERALS LIMITED NOTES
Page 65 and 66: 63 7. Income Tax Expense NORTHERN M
Page 75 and 76: 73 9. Financial Risk Management (co
Page 79 and 80: 77 9. Financial Risk Management (co
Page 81: 79 NORTHERN MINERALS LIMITED NOTES
Page 87 and 88: 85 11. Equity (continued) (i) Ordin
Page 95 and 96: 93 17. Share-based Payments (contin
Page 99 and 100: 97 19. Earnings per share NORTHERN
Page 101 and 102: 99 21. Segment Information NORTHERN
Page 105 and 106: 103 Auditor’s independence declar
Page 107 and 108: 105 Key audit matter How our audit
Page 109 and 110: 107 From the matters communicated w
Page 111 and 112: 109 Project Location Tenement ID St
Page 113 and 114: 111 b) Twenty largest shareholders
Page 115 and 116: 113 CORPORATE DIRECTORY Northern Mi
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NORTH077 Annual Report 2020 V5.2 DIGITAL

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