ABN 96 125 222 924
CONTENTS
Chairman’s Letter
Review of Operations
Corporate Governance
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report to the Members of Apollo Minerals Limited
Additional Information for Listed Companies
Corporate Directory
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54
CHAIRMAN’S LETTER
Dear Fellow Shareholder,
On behalf of the Directors of Apollo Minerals Limited (Apollo or the Company), I am pleased to
report on the activities of the Company.
The Company achieved a number of significant milestones in 2014, most notably the signing of two
joint venture agreements for the Commonwealth Hill and Kango North projects which have the
potential to inject up to $8 million in development funding in the three years ahead.
High Power Exploration signed a joint venture agreement to spend $3.4 million to earn 80% on one
of Apollo’s three project areas in South Australia and has to date spent $1 million.
On the Kango North (Gabon) joint venture agreement, which we expect to close soon, a major
international group will inject $4.4 million for a 50.1% interest, into a project which Apollo believes
has significant potential.
The funds to be injected by these partners, which have been attracted into projects with prospects
and targets defined by the Apollo exploration team, have the capacity to add substantially to
shareholder wealth and will not require additional capital from the Company.
In addition, during the year the Apollo exploration team have made good progress on the
Eaglehawk joint venture (Apollo earning 75% from Mincor Resources NL) and the Mars Aurora Tank
joint venture (Apollo earning 75% from Marmota Energy Limited), where through systematic
exploration we have identified numerous IOCG (Iron Oxide Copper Gold) targets which are
currently being drilled.
In difficult capital markets for junior explorers the Company has raised over $4 million in the last
13 months to enable it to further its exploration projects.
During the year we were pleased to welcome Mr. Eric Finlayson to the Board. Mr Finlayson is a
geologist with significant experience and was previously Rio Tinto’s global head of exploration.
We are excited with the Company’s prospects and we are looking forward to a successful
exploration year ahead.
On behalf of the Directors I would like to thank all shareholders for their ongoing support.
Yours faithfully,
Richard Shemesian
Chairman
26 September 2014
Apollo Minerals Ltd
Level 15, 1 Alfred St, SYDNEY, NSW, 2000
www.apollominerals.com.au
ABN 96 125 222 924
Australian Stock Exchange Code: AON
Börse Frankfurt Code: A0M5PT, Symbol: 4AP
Börse Berlin Code: A0M5PT, Symbol: 4AP
2 Twitter: @ApolloMinerals
REVIEW OF OPERATIONS
The 2014 financial year proved to be a roller coaster ride with the equity markets once again firmly turning
against the mining sector and explorers before beginning to show some signs of stabilisation and a modest
interest in risky exploration. Fortunately, Apollo Minerals had already begun the process of seeking high
calibre joint venture partners for a number of our projects and successfully closed one transaction with
another pending. These deals have the potential to inject an additional $8 million of exploration expenditure
into our projects over the next three years in support of our search for high value mineral deposits.
Importantly, these joint venture structures protect our shareholders from equity dilution and are expected to
provide an added boost to the share price as these funds are spent and exploration advanced.
Apollo’s primary exploration drive is towards copper-gold discovery with a focus on the world-class Gawler
Craton iron-oxide-copper-gold (IOCG) belt in South Australia. The Company is now actively involved in three
contiguous joint ventures totalling 1,467 km2 in the north-western frontier of this high potential corridor. Of
this land holding 795 km2 is in joint venture with international mining entrepreneur Robert Friedland’s High
Power Exploration Inc. (HPX) (HPX earning 80%), 624 km2 is in joint venture with Mincor Resources NL
(ASX:MCR, AON earning 75%) and 48 km2 in joint venture with Marmota Energy Ltd (ASX:MEU, AON earning
75%).
Apollo’s secondary interest is in exploring and developing low cost, high quality iron ore assets with easy
access to seaborne export markets. Apollo’s key iron ore asset is the Kango North Project located in Gabon on
the African west coast. During the year Apollo increased its interest in the project from 70% to 82.5% and
secured an agreement and option to acquire the remaining 17.5% interest. We also announced a joint venture
with a major international group who are seeking to secure a 50.1% interest in the project by sole funding the
next US$4 million of exploration and development.
Exploration Projects
On the exploration front, Apollo directed most of its energy towards new copper-gold discoveries in South
Australia with a large number of high potential iron-oxide-copper-gold targets confirmed via a range of
geophysical surveys including ground gravity, induced polarisation, airborne magnetics and radiometrics,
magnetotelluric and audio-magnetotellurics; and follow-up soil and shallow RAB drilling geochemical sampling.
Commonwealth Hill – Joint venture with HPX (HPX Earning up to 80%)
In early 2014 Apollo announced a strategic alliance with High Power Exploration Inc. (HPX) to explore for base
metals in a new IOCG frontier in the Northern Gawler Craton in South Australia (See Figure 1).
HPX subsequently made an equity investment into Apollo in the amount of $1 million and needs to spend a
further $2.4m on the joint venture tenements to earn up to an 80% interest. The transaction with HPX does
not affect Apollo’s existing joint venture arrangements, including its rights to earn a 75% interest in the
adjacent Eaglehawk JV (Mincor JV) and the Aurora-Tank JV (Marmota JV) (see Figure 1).
Following completion of the Joint Venture HPX undertook one of South Australia’s largest ever induced
polarisation surveys using their industry leading and proprietary Typhoon technology. The survey’s focus was
the Hiltaba-age Wirrida Intrusive Complex where a number of large-scale chargeability anomalies were
identified and initial drill testing of one of these targets returned anomalous geochemistry consistent with
IOCG style deposits. Follow-up petrology and petrophysics is underway as part of the interpretation of the
Typhoon results and Apollo looks forward to working with HPX to determine next steps for the Commonwealth
Hill project.
3
Figure 1: Apollo Commonwealth Hill Project Areas
Mars Aurora Tank – Apollo Earning up to 75%
The Mars Aurora Tank Prospect covers an area greater than 65km2. Historic drilling returned significant gold,
silver and iron grades in several holes up to a maximum of 2.0g/t Au, 4g/t Ag and 52% Fe, as well as anomalous
copper of up to 470ppm.
Surface outcrop recently discovered by Apollo includes strongly brecciated outcrop which appears strikingly
similar to geology at Olympic Dam and the nearby Vulcan IOCG Prospect.
During the year Apollo identified a set of geophysical geometries suggestive of IOCG alteration potentially
similar to the nearby Prominent Hill IOCG deposit. Apollo’s own IP survey identified a number of strongly
chargeable bodies close to shallow, historic drilling that returned up to 3.3 g/t Au over 1 metre and several
circa 2 g/t Au results over 4 metre intervals. Near surface RAB drilling confirmed a large zone of elevated gold
and sulphide mineralisation indicators co-incident with the geophysical targets. At the time of writing, the
initial holes into this prospect were underway with results expected to shape the 2015 exploration programme
in this area.
Very large scale
magnetic body
remains untested by
drilling
Very limited RAB
and RC drilling off
southern margin
returned up to:
(cid:1) 52% Fe
(cid:1) 2g/t Au
(cid:1) 4g/t Ag,
and
(cid:1) 0.05% Cu
Trial EM profile identified
conductive zone associated with,
and below, epithermal
mineralisation
Conductive
zone
Figure 2: Mars Aurora Tank AMAG 3D inversion, FE drilling and EM profile looking northeast
4
Eaglehawk – Apollo Earning up to 75%
Exploration undertaken during the year identified a number of new high priority drill targets at the Eaglehawk
joint venture project in the Gawler Craton of South Australia.
The new targets identified at Eaglehawk (where Apollo is currently earning a 75% interest in the project) will
be incorporated into the drill program recently commenced, in what will be the first drill program at
Eaglehawk designed to test for IOCG deposits in this recognised high priority IOCG corridor.
The new priority targets were identified from geophysical modelling and review of recent and historic surveys.
As part of this work, a significant 18km2 extension to the Bundi IOCG target has been identified within the
Eaglehawk JV property.
The newly identified large scale targets to be drilled in the current program at Eaglehawk (Figure 3) include:
• Bundi South Extension of approximately 9km x 2km (1.5 mGal)
• Boulder: 6km x 2km (3 mGal)
• Claypan: 8km x 2.5km (2 mGal)
• Cedric Bore West: 6km x 1.5km (2.5 mGal)
• Cedric Bore Central: 4km x 1.5km (1.5 mGal)
• Cedric Bore East: 5km x 1km (1.5 mGal), and
•
a number of smaller anomalies of approximately 1km to 2km in strike length (1 - 2 mGal).
The only historic hole drilled within 5km of any of the new Eaglehawk drill targets (98BG 5 shown in Figure 3)
was terminated at 33m after intersecting reddened, chlorite-clay altered and weakly brecciated granitoid,
believed to belong to the Hiltaba suite – the key target suite for economic IOCG mineralisation.
Bundi
Bundi South Extension
Boulder
Claypan
Cedric Bore Central
Cedric Bore West
Figure 3: Residual gravity image of key target areas at Eaglehawk and Commonwealth Hill
Cedric Bore East
Historic Dill Hole
5
Kango North Project Gabon – Apollo 82.5%
The Kango North Project covers 400km2 and is situated in close proximity to sheltered waters, the national
electricity grid, well-maintained roads and operational, open access rail. The Project is located only 70km from the
capital city, Libreville.
Figure 4: Location map showing Apollo’s ~400km2 Kango North Project in Gabon, Africa
Under the terms of an Agreement entered into with Zoradox Limited, Zoradox may earn a 50.01% equity interest
in Apollo Gabon SA (“Apollo Gabon”) which owns the Project by sole funding:
a) US$750,000 of exploration and development activities during the remainder of 2014, and
b) a further US$3,250,000 before 1 August 2017.
Completion of this agreement is expected shortly. On 25 November 2013, Apollo announced a major Exploration
Target upgrade for the Project and is now focused on evaluating a potentially significant DSO-grade iron ore
prospect, P1, located in the south-east of the tenement. Over the last few months Apollo has been undertaking
ground preparation and obtaining regulatory clearance for a drilling programme later in the year.
Corporate
During the year the Company raised $2.1 million, gross of costs, and a further $2.2 million in July 2014 to further
its exploration programmes.
Mr Eric Finlayson joined the Board during the year, as a representative of HPX.
6
COMPETENT PERSON DECLARATION
The information in this Report that relates to Exploration Results is based on information compiled by Mr Derek Pang
who is a member of the Australasian Institute of Mining and Metallurgy. Derek has over 15 years’ experience in
mineral exploration and is a full time employee of Apollo Minerals Ltd. Derek has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves’. Derek consents to the inclusion in the report of the
matters based on their information in the form and context in which it appears.
The estimates of exploration target sizes mentioned in this report should not be misunderstood or misconstrued as
estimates of Mineral Resources.
The potential quantity and grade of the exploration targets are conceptual in nature and there has been
insufficient results received from exploration to estimate a Mineral Resource compliant with the JORC code (2012)
guidelines. Furthermore, it is uncertain if further exploration will result in the estimation of a Mineral Resource.
Schedule of Tenements
Tenement Name
Commonwealth Hill¹
Commonwealth Hill East¹
Gina¹
Eaglehawk JV²
Aurora Tank³
Mount Oscar East
Mount Oscar North
Mount Oscar South
Kango North⁴
Carne
Tenement
Number
EL5073
EL5074
EL4960
EL4932
EL4433
E47/1304
E47/1378
E47/1379
G1-340`
EL5348
Location
South Australia
South Australia
South Australia
South Australia
South Australia
Western Australia
Western Australia
Western Australia
Gabon, Africa
South Australia
Group Ownership %
2013
2014
100
100
100
100
100
100
-
-
-
25
100
100
100
100
100
100
70
82.5
-
-
Notes:
¹Subject to farm in agreement with High Powered Exploration Group (HPX) whereby HPX can earn up to 80%
²Exploration Licence EL4932 subject to joint venture agreement with Mincor Resources to earn up to 75% by sole
funding exploration totalling AUD$2M over a 3 year period. Apollo has met the first years’ minimum spend
commitment.
³Exploration Licence EL4433 subject to joint venture agreement with Marmota Energy to earn up to 75% by sole
funding exploration totalling AUD$900K over a 3 year period. Apollo has met the first years minimum spend
commitment.
⁴Subject to a conditional farm in agreement with Zoradox Limited whereby Zoradox can earn up to 50.1%. Licence
term expires in January 2015 and agreement is subject to renewal.
Dominic Tisdell
Chief Executive Officer
Sydney 26 September 2014
7
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
The Apollo Minerals Limited group (“Apollo”), through its Board and executives, recognises the need to establish
and maintain corporate governance policies and practices that reflect the requirements of the market regulators
and participants, and the expectations of members and others who deal with Apollo. These policies and practices
remain under constant review as the corporate governance environment and good practices evolve.
ASX Corporate Governance Principles and Recommendations
It should be noted that Apollo is currently a small cap listed company and that where its processes do not fit the
model of the 8 principles, the Board believes that there are good reasons for the different approach being
adopted.
Reporting against the 8 Principles, we advise as follows:
Principle 1: Lay solid foundations for management and oversight
Companies should establish the functions reserved to the board and those delegated to senior executives
1.1
and disclose those functions.
The primary responsibilities of Apollo’s board include:
(i)
(ii)
(iii)
(iv)
the establishment of long term goals of the company and strategic plans to achieve those goals;
the review and adoption of the annual business plan for the financial performance of the company and
monitoring the results on a monthly basis;
the appointment of the Chief Executive Officer;
ensuring that the company has implemented adequate systems of internal control together with
appropriate monitoring of compliance activities; and
(v)
the approval of the annual and half-yearly statutory accounts and reports.
The board meets on a regular basis to review the performance of the company against its goals both financial and
non-financial. In normal circumstances, prior to the scheduled board meeting, each board member is provided
with a formal board package containing appropriate management and financial reports.
The responsibilities of senior management including the Chief Executive Officer are contained in letters of
appointment and job descriptions given to each appointee on appointment and updated at least annually or as
required.
The primary responsibilities of senior management are:
(i)
(ii)
(iii)
(iv)
Achieve Apollo’s objectives as established by the Board from time to time;
Operate the business within the cost budget set by the Board;
Ensure that Apollo’s appointees work with an appropriate Code of Conduct and Ethics; and
Ensure that Apollo appointees are supported, developed and rewarded to the appropriate professional
standards.
Companies should disclose the process for evaluating the performance of senior executives and
1.2
appointees.
The performance of all senior executives and appointees is reviewed at least once a year. The performance of the
Chief Executive Officer is reviewed by the Executive Director on an annual basis, and the performance of other
senior executives is reviewed by the Chief Executive Officer, in conjunction with the board’s Remuneration and
Nominations Committee. They are assessed against personal and Company Key Performance Indicators
established from time to time as appropriate for Apollo.
1.3
Companies should provide the information indicated in the Guide to reporting on Principle 1.
A performance evaluation for each senior executive has taken place in the reporting period in line with the process
disclosed. A statement covering the primary responsibilities of the Board is set out in 1.1 above. A statement
covering the primary responsibilities of the senior executives is set out in 1.1 above.
8
The Apollo Corporate Governance Charter is available on the Apollo web site, and includes sections that provide a
board charter. The Apollo board reviews its charter when it considers changes are required.
CORPORATE GOVERNANCE
Principle 2: Structure the board to add value
2.1
A majority of the Board should be independent directors.
Apollo operates in a market where it finds that it must regularly seek investor support to raise additional capital.
As a consequence, Board members themselves often have a significant direct or indirect interest in the company.
The Apollo Board consists of one executive and three non-executive directors. Mr Ho, Mr Rimes and Mr Finlayson
are considered to be independent directors.
2.2
The Chairperson should be independent.
Mr Richard Shemesian, the executive chairman, is not independent given his involvement in the day to day
management of the business and his substantial shareholding.
2.3
Chief Executive Officer should not be the same as Chairman.
The Chief Executive Officer, Mr Dominic Tisdell, is not the Chairman.
2.4
A nomination committee should be established.
The Board has a nominations committee comprised of Anthony Ho (Committee Chairman) and Matthew Rimes.
Both directors are non-executive and independent.
Companies should disclose the process for evaluating the performance of the board, its committees and
2.5
individual directors.
The Apollo board has four board members, who are in regular contact with each other as they deal with matters
relating to Apollo’s business. The board uses a personal evaluation process to review the performance of directors,
and at appropriate times the Chairman takes the opportunity to discuss Board performance with individual
directors and to give them his own personal assessment. The Chairman also welcomes advice from Directors
relating to his own personal performance. The Remuneration Committee determines whether any external advice
or training is required. The Board believes that this approach is appropriate for a company of the size of Apollo
which has a small market capitalisation.
2.6
Companies should provide the information indicated in the Guide to reporting on Principle 2
A description of the skills and experience of each director is contained in the 2014 Directors Report.
Mr Anthony Ho, Mr Matthew Rimes and Mr Eric Finlayson are considered to be independent non executive
directors. Mr Richard Shemesian is an executive director of the Company and is not considered to be independent.
Directors are able to take independent professional advice at the expense of the company, with the prior
agreement of the Chairman. The nomination responsibilities are handled by the nomination committee.
An evaluation of the board of directors took place during the reporting period and was in accordance with the
process described in 2.5 above.
New directors are selected after consultation of all board members and their appointment voted on by the board.
Each year, in addition to any board members appointed to fill casual vacancies during the year, one third of
directors retire by rotation and are subject to re-election by shareholders at the Annual General Meeting.
There is no current board charter for nominations.
Principle 3: Promote ethical and responsible decision-making
3.1
Companies should establish a code of conduct and disclose the code or a summary of the code as to:
•
•
•
the practices necessary to maintain confidence in the company's integrity;
the practices necessary to take into account their legal obligations and the reasonable expectations of
their stakeholders; and
the responsibility and accountability of individuals for reporting and investigating reports of unethical
practices.
9
CORPORATE GOVERNANCE
Apollo’s policies contain a formal code of conduct that applies to all directors and employees, who are expected to
maintain a high standard of conduct and work performance, and observe standards of equity and fairness in
dealing with others. The detailed policies and procedures encapsulate the company’s ethical standards. The code
of conduct is contained in the Apollo Corporate Governance Charter.
3.2
Companies should establish a policy concerning diversity and disclose the policy or a summary of that
policy. The policy should include requirements for the board to establish measurable objectives for achieving
gender diversity for the board to assess annually both the objectives and progress in achieving them.
As a company with a small market capitalisation, the Company has no established policy at present but is aware of
the principle and will be alert for opportunities when board changes are contemplated.
Companies should disclose in each annual report the measurable objectives for achieving gender diversity
3.3
set by the board in accordance with the diversity policy and progress towards achieving them.
The company has, as yet, no established policy in relation to gender diversity. The company has a small number of
employees and as a consequence the opportunities for creating a meaningful gender diversity policy are limited.
Companies should disclose in each annual report the proportion of women employees in the whole
3.4
organisation, women in senior executive positions and women on the board.
Given the small size of the company and the limited number of employees this is not a meaningful statistic at this
time.
Principle 4: Safeguard integrity in financial reporting
4.1
Establish an Audit Committee.
The company has an Audit Committee.
4.2
Audit Committee composition.
The Audit committee is comprised of Mr Anthony Ho (Audit Committee Chairman) and Mr Matthew Rimes
A formal charter should be established for the audit committee.
The company has adopted an Audit Committee charter. It is publicly available on the Apollo website.
4.3
Companies should provide the information indicated in the Guide to reporting on Principle 4.
The Audit Committee met twice during the course of the year.
The Audit Committee provides a forum for the effective communication between the board and external auditors.
The committee reviews:
•
•
•
The annual and half-year financial reports and accounts prior to their approval by the board;
The effectiveness of management information systems and systems of internal control; and
The efficiency and effectiveness of the external audit functions.
The committee meets with and receives regular reports from the external auditors concerning any matters that
arise in connection with the performance of their role, including the adequacy of internal controls.
In conjunction with the auditors the Audit Committee monitors the term of the external audit engagement partner
and ensures that the regulatory limit for such term is not exceeded. At the completion of the term, or earlier in
some circumstances, the auditor nominates a replacement engagement partner.
The committee interviews the nominee to assess relevant prior experience, potential conflicts of interest and
general suitability for the role. If the nominee is deemed suitable, the committee reports to the Board on its
recommendation.
The Audit Committee also reviews the Apollo Corporate Governance and Risk Management processes to ensure
that they are effective enough for a listed public company that is currently small cap.
Principle 5: Make timely and balanced disclosure
5.1
Companies should establish written policies designed to ensure compliance with ASX Listing Rule
disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose
those policies or a summary of those policies.
10
The Apollo board and senior management are conscious of the ASX Listing Rule Continuous Disclosure
requirements, which are supported by the law, and take steps to ensure compliance. The company has a policy,
which can be summarised as follows:
(cid:1)
The Board, with appropriate advice, is to determine whether an announcement is required under the
Continuous Disclosure principles;
CORPORATE GOVERNANCE
(cid:1) All announcements are monitored by the Company Secretary; and
(cid:1) All media comment is managed by the Chief Executive Officer.
Apollo believes that the internet is the best way to communicate with shareholders and accordingly Apollo
provides detailed announcements to the Australian Securities Exchange on a regular basis to ensure that
shareholders are kept well informed on Apollo’s activities.
5.2
Companies should provide the information indicated in the Guide to reporting on Principle 5.
Apollo’s disclosure policy to shareholders is set out as part of the Apollo Corporate Governance charter, which is
publicly available on the Apollo web-site, as are Apollo’s recent announcements.
Principle 6: Respect the rights of shareholders
6.1
Companies should design a communications policy for promoting effective communication with
shareholders and encouraging their participation at general meetings and disclose their policy or a summary of
that policy.
Apollo provides information to its shareholders through the formal communications processes (e.g. ASX releases,
general meetings, annual report, and occasional shareholder letters). This material is also available on the Apollo
website (www.apollominerals.com.au).
Shareholders are encouraged to participate in general meetings and time is set aside for formal and informal
questioning of the board, senior management and the auditors. The external audit partner attends the annual
general meeting to be available to answer any shareholder questions about the conduct of the audit and the
preparation and content of the audit report.
6.2
Companies should provide the information indicated in the Guide to reporting on Principle 6.
The company’s communications policy is described in 6.1 above.
Principle 7: Recognise and manage risk
7.1 Companies should establish a sound system for the oversight and management of material business risks.
The company has established policies for the oversight and management of material business risks.
The board monitors the risks and internal controls of Apollo through the Audit Committee. That committee looks
to the executive management to ensure that an adequate system is in place to identify and, where possible, on a
cost effective basis appropriate for a small cap company, to manage risks inherent in the business, and to have
appropriate internal controls.
As part of the process, Apollo’s management formally identifies and assesses the risks to the business, and these
assessments are noted by the Audit Committee and the Board.
7.2
The board should require management to design and implement the risk management and internal
control system to manage the company’s material business risks and report to it on whether those risks are being
managed effectively. The board should disclose that management has reported to it as to the effectiveness of the
company’s management of its material business risks.
The board has required management to design and implement the risk management and internal control system
appropriate to a small cap company of the size of Apollo to manage the company's material business risks and
report to it on whether those risks are being managed effectively. Management has reported to the board as to
the effectiveness of the company's management of its material business risks.
11
CORPORATE GOVERNANCE
The board should disclose whether it has received assurance from the chief executive officer (or
7.3
equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section
295A of the Corporations Act is founded on a system of risk management and internal control and that the system
is operating effectively in all material respects in relation to financial reporting risks.
The board has received assurance from the Chief Executive Officer and the Chief Financial Officer (or its
equivalent) that the declaration provided in accordance with section 295A of the Corporations Act 2001 is founded
on a sound system of risk management and internal control appropriate for a small cap company of the size of
Apollo, and that the system is operating effectively in all material respects in relation to financial reporting risks.
7.4
Companies should provide information in the Guide to reporting on Principle 7.
The board has received the report from management under Recommendation 7.2; and the board has received the
assurances referred to under Recommendation 7.3. The company’s policies on risk oversight and management of
material business risks for a small cap company the size of Apollo are not publicly available.
Principle 8: Remunerate fairly and responsibly
8.1
Establish a remuneration committee.
Apollo has a remuneration committee. The committee comprises Mr Anthony Ho and the Executive Chairman, Mr
Richard Shemesian.
8.2
The remuneration committee should be structures so that it:
-
-
-
consists of a majority of independent directors
is chaired by an independent chair
has at least three members
Apollo considers that the structure of its Remuneration Committee is appropriate for a company with a small
market capitalisation. The Remuneration Committee is chaired by the independent director, Mr Anthony Ho.
Companies should clearly distinguish the structure of non-executive directors' remuneration from that of
8.3
executive directors and senior executives.
The remuneration details of non executive directors, executive directors and senior management are set out in the
Remuneration Report that forms part of the Directors’ report.
Senior executives remuneration packages are reviewed by reference to Apollo’s performance, the executive
director’s or senior executive’s performance, as well as comparable information from industry sectors and other
listed companies in similar industries, which is obtained from external remuneration sources. This ensures that
base remuneration is set to reflect the market for a comparable role.
The performance of the executive director and senior executives is measured against criteria agreed annually and
bonuses and incentives are linked to predetermined performance criteria and may, with shareholder approval,
include the issue of shares and / or options.
There are no schemes for retirement benefits, other than statutory superannuation for non-executive directors.
A copy of the Remuneration Committee charter is publicly available on the Apollo web site
www.apollominerals.com.au
8.4
Companies should provide the information indicated in the Guide to reporting on Principle 8.
The information is as outlined above.
12
DIRECTORS REPORT
Your directors present their report on Apollo Minerals Limited (Apollo or the Company) for the year ended 30
June 2014.
DIRECTORS
The names of directors in office at any time during or since the end of the year are:
Current Directors
RICHARD SHEMESIAN
B.Com, LLB (Hons.) FINSIA
Chairman
Mr Shemesian brings more than 20 years’ experience in the resources sector
prior to Apollo providing corporate and strategic advice for a number of
resource companies, with a particular focus on companies listed on the
Australian Securities Exchange and the London Stock Exchange Alternative
Investment Market.
Mr Shemesian was involved in the foundation and development of Redport
Limited into a uranium company which was taken over by Mega Uranium Ltd
for $125 million, and the takeover of iron ore producer Aztec Resources Limited
by Mt Gibson for $300 million.
Mr Shemesian was appointed an Executive Director on 27 September 2010.
Mr Ho joined the Apollo Board on 13 July 2009. Mr Ho was previously an
executive director at Arthur Yates & Co Ltd, retiring from this position in April
2002. He was a past non-executive director of Brazin Limited and DoloMatrix
International Limited; and the past non-executive Chairman of Esperance
Minerals Limited, Metal Bank Limited and St George Community Housing
Limited.
Mr Ho’s current non-executive directorships of listed public companies are:
• Non-executive Chairman of Greenland Minerals and Energy Limited.
• Hastings Rare Metals Limited where he also chairs the Audit Committee;
and
• Non-executive Chairman of Bioxyne Limited.
Mr Ho was previously a partner of Cox Johnston & Co, Chartered Accountants
(since merged with Ernst & Young). His extensive executive experience included
being Finance Director/Chief Financial Officer of the listed Arthur Yates & Co
Limited, M. S. McLeod Limited group, Galore Group Limited, the Edward H.
O’Brien group of companies and Volante Group Limited.
Mr Ho was appointed a Non-Executive Director on the 13 July 2009 and chairs
the Audit Committee.
Mr Rimes was previously the Managing Director of Iron Ore Holdings Limited
(“IOH”). During his time at IOH, the company successfully progressed a strategy
of proving up its iron ore resources in its Pilbara tenements. The company also
worked on fast-tracking project feasibility studies and infrastructure access
options at its various projects with the aim of establishing valuable technical
and commercial development solutions. At the time of Mr Rimes resignation,
the company had a market capitalisation of approximately $220 million.
ANTHONY HO
B Com, CA, FAICD, FCIS,FGIA
Non-Executive Director
MATTHEW RIMES
AWASM (Mining Eng). Exec
MBA
Non-Executive Director
13
Current Directors (continued)
DIRECTORS REPORT
Mr Rimes is an MBA qualified mining engineer with over thirty years’
experience in a range of commodities including gold, copper, nickel and iron
ore. He worked with North Ltd from 1989, and then subsequently with the Rio
Tinto group following the takeover of North Ltd in 2000. Over the last fifteen
years he has held roles with IOH and Robe River Mining Company (“Robe”),
including senior executive and operational positions at both of Robe’s
operations at Pannawonica and West Angelas.
Mr Rimes has held positions on the boards of Robe, Fusion Resources Ltd
(formerly Echelon Resources Ltd), Sovereign Metals Ltd and Indo Mines Ltd.
Mr Rimes was appointed a Non-Executive Director on 3 October 2011.
ERIC FINLAYSON
Non-Executive Director
BSc (Hons) Applied Geology
Mr Finlayson is a geologist with over thirty years’ experience in Australia and
overseas.
Mr Finlayson worked as an exploration geologist in Ireland and Turkey with NL
Petroleum Services and as a field geochemist in Malawi with the British Civil
Uranium Procurement Organisation prior to joining the Geological Survey of
Papua New Guinea in 1984 as a regional geological mapper.
In 1989 he joined Rio Tinto as project geologist responsible for copper and gold
exploration in the Papua New Guinea highlands based out of Sydney and in
1993 was transferred to Vancouver as regional exploration manager for
Canada. This was followed by a transfer to London in 2000 as the personal
assistant to the Head of Exploration.
In January 2002, he moved to Perth to assume the role of Rio Tinto’s Director of
Exploration for Australasia and in January of 2007 was appointed Global Head
of Exploration for Rio Tinto based in London. In July 2011, he was appointed
CEO of Rio Tinto Coal Mozambique following Rio Tinto’s takeover of Riversdale
Mining. After two years in Mozambique, Eric departed Rio Tinto in July 2013
and joined High Power Exploration Australia.
Mr Finlayson was appointed a Non-Executive Director on 1 May 2014.
Directors have been in office since the start of the financial period to the date of this report unless otherwise
stated.
Former Directors
Dominic Tisdell – Appointed Chief Executive Officer on 27 November 2013, previously Executive Director from 3
October 2011 to 27 November 2013.
Secretary
GUY ROBERTSON
(Company Secretary/Chief
Financial Officer)
B Com (Hons.) CA
Mr Guy Robertson was appointed Company Secretary and Chief Financial
Officer on 12 November 2009.
Mr Robertson has over 25 years experience as a Chief Financial Officer and
Company Secretary of both private and ASX listed companies in both Australia
and Hong Kong.
14
DIRECTORS REPORT
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than as outlined in the operations report, there were no significant changes in the state of affairs of the
Company during the year.
PRINCIPAL ACTIVITIES
The principal activity of the Company during the financial period was mineral exploration. There have been no
significant changes in the nature of the Company’s principal activities during the financial period.
SIGNIFICANT AFTER BALANCE SHEET DATE EVENTS
On 14 July 2014 the Company raised $2.2 million with the issue of 100,000,000 shares to professional and
sophisticated investors.
Other than as outlined above, there are currently no matters or circumstances that have arisen since the end of
the financial year that have significantly affected or may 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.
LIKELY FUTURE DEVELOPMENTS AND EXPECTED RESULTS
Apollo is an exploration company focused on base and precious metals and iron ore. The Board intends to explore
its current tenements in South and Western Australia and Gabon. The Company continues to look to invest directly
and indirectly in mineral resources projects focusing on iron ore, base metals, gold and energy-related minerals.
During the coming year the Group, depending on available funding plans to further develop all of its major
projects.
The material business risks faced by the Company that are likely to have an effect on the financial prospects of the
Company, and how the Company manages these risks, are:
• Future Capital Needs – the Company does not currently generate cash from its operations. The Company will
require further funding in order to meet its corporate expenses, continue its exploration activities and
complete studies necessary to assess the economic viability of its projects.
• Exploration and Developments Risks – whilst the Company has already discovered resources on one of its
projects, the Company may fail to discover additional mineral deposits and there is a risk that the Company’s
mineral deposits may not be economically viable. The Company employs geologists and other technical
specialists, and engages external consultants where appropriate to address this risk.
• Commodity Price Risk – as a Company which is focused on the exploration of iron ore and base and precious
metals, it is exposed to movements in the price of these commodities. The Company monitors historical and
forecast price information from a range of sources in order to inform its planning and decision making.
PERFORMANCE IN RELATION TO ENVIRONMENTAL REGULATION
The consolidated entity will comply with its obligations in relation to environmental regulation on its South and
Western Australian and Gabon projects when it undertakes exploration in the future. The Directors are not aware
of any breaches of any environmental regulations during the period covered by this report.
15
DIRECTORS REPORT
OPERATING RESULTS AND FINANCIAL REVIEW
The loss of the consolidated entity after providing for income tax amounted to $14,022,934 (2013: loss of
$1,611,913). The 2014 loss included a write down of the exploration expenditure on Mt Oscar of $12,685,074. The
write down has no cash flow impact.
The Group’s operating income decreased to $26,190 (2013-$108,064) with the reduction being in interest income
attributable to a lower level of funds on deposit and lower deposit interest rates during the year.
Expenses increased to $14,111,053 (2013-$1,900,176). Current year expenses were adversely affected by a non
cash write down of exploration expenditure on Mt Oscar of $12,685,074. After adjusting for legal fees, expenses
declined by 25.8% over the prior year given an overall focus to reduce overhead costs which is ongoing.
Exploration costs decreased to $6,381,641 (2013- $16,493,083) following the write down outlined above.
Exploration expenditure for the period was $2,073,629 with a further $500,000 paid for an additional interest in
the Gabon project by way of the issue of shares.
Net assets decreased to $6,743,881 (2013-$17,706,419) reflecting the write down of exploration for the year, the
issue of capital in the amount of $2,869,607 net of costs, and the loss for the year.
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a
dividend to the date of this report.
REMUNERATION REPORT
Remuneration Policy
The remuneration policy of Apollo has been designed to align director objectives with shareholder and business
objectives by providing a fixed remuneration component which is assessed on an annual basis in line with market
rates and offering specific long-term incentives based on key performance areas affecting the consolidated group’s
financial results. The Board of Apollo believes the remuneration policy to be appropriate and effective in its ability
to attract and retain the best directors to run and manage the company, as well as create goal congruence
between directors and shareholders.
The Board’s policy for determining the nature and amount of remuneration for board members is as follows:
•
•
•
The remuneration policy, setting the terms and conditions (where appropriate) for the executive directors and
other senior staff members, was developed by the Remuneration Committee and approved by the Board;
In determining competitive remuneration rates, the Board may seek independent advice on local and
international trends among comparative companies and industry generally. It examines terms and conditions
for employee incentive schemes, benefit plans and share plans. Independent advice may be obtained to
confirm that executive remuneration is in line with market practice and is reasonable in the context of
Australian executive reward practices;
The company is a mineral exploration company, and therefore speculative in terms of performance.
Consistent with attracting and retaining talented executives, directors and senior executives, such personnel
are paid market rates associated with individuals in similar positions within the same industry. Options and
performance incentives may be issued particularly if the company moves from exploration to a producing
entity and key performance indicators such as profit and production can be used as measurements for
assessing executive performance.
• All remuneration paid to directors is valued at the cost to the Company and expensed. Where appropriate,
shares granted to directors and executives are valued as the difference between the market price of those
shares and the amount paid by the director or executive. Options are valued using the Black-Scholes
methodology;
16
•
The Board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The Remuneration Committee in consultation with independent advisors
determines payments to the non-executive directors and reviews their remuneration annually, based on
market practice, duties and accountability.
DIRECTORS REPORT
KEY MANAGEMENT PERSONNEL REMUNERATION
(a) Details of Directors and Key Management Personnel
(i)
Current Directors
Richard Shemesian – Chairman
Anthony Ho – Non-executive Director
Matthew Rimes – Non – executive Director
Eric Finlayson – Non-executive Director (appointed 1 May 2014)
Former Directors
Dominic Tisdell – (appointed 3 October 2011, resigned 27 November 2013)
(ii)
Key Management Personnel
Dominic Tisdell – Chief Executive Officer
Derek Pang – Exploration Manager
Other than the directors, the chief executive officer and the exploration manager, the Company had no Key
Management Personnel for the financial year ended 30 June 2014.
Directors’ remuneration and other terms of employment are reviewed annually by the Board having regard to
performance against goals set at the start of the year, relative comparative information and independent expert
advice.
Except as detailed in Notes (a) – (d) to the Remuneration Report, no director or officer has received or become
entitled to receive, during or since the financial period, a benefit because of a contract made by the Company or a
related body corporate with a director, a firm of which a director is a member or an entity in which a director has a
substantial financial interest. This statement excludes a benefit included in the aggregate amount of emoluments
received or due and receivable by directors and shown in Notes (a) – (d) to the Remuneration Report, prepared in
accordance with the Corporations Regulations, or the fixed salary of a full time employee of the Company.
(b) Remuneration of Directors and Key Management Personnel
Remuneration Policy
The Board of Directors is responsible for determining and reviewing compensation arrangements. The Board will
assess the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by
reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder
benefit from the retention of a high quality Board and executive team. Remuneration of Directors of the Group is
set out below.
17
DIRECTORS REPORT
Parent & Group Key Management Personnel
l
Base Salary
and Fees
Fair Value
of Options
Granted
R. Shemesian¹
A. Ho
M. Rimes
E. Finlayson
D. Tisdell²
D. Pang³
D. Nolan
R. Xia
Totals
60,000
50,000
26,667
3,333
252,294
160,000
-
-
552,294
-
-
-
-
-
-
-
-
-
2014
Super-
annuation
-
-
-
-
22,706
14,800
-
-
Share
Based
Payments⁴
-
20,000
13,333
3,333
-
-
-
-
Base Salary
and Fees
174,433
58,334
40,000
Fair
Value of
Options
Granted
-
-
-
Total
60,000
70,000
40,000
6,666
275,000
305,000
70,500
174,800
160,000
-
-
14,585
14,583
-
-
-
14,400
-
-
2013
Super-
annuation
-
Share
Based
Payments
-
Total
174,433
-
-
-
17,500
-
75,834
40,000
-
-
-
-
375,500
174,400
14,585
14,583
37,506
36,666
626,466
766,935
70,500
14,400
17,500
869,335
¹ Paid to Mining Management Consultants, an entity in which Mr Shemesian has a relevant interest. See note 15.
² Mr Tisdell’s contract has an annual amount payable of $275,000 and can be terminated by either party giving four months’ notice.
³ Mr Pang’s contract has an annual amount payable of $174,400 and can be terminated by either party giving one month’s notice. This
amount has been capitalised to exploration costs.
⁴ Shares will be issued to directors following approval by shareholders.
(c) Employee Related Share-based compensation
To ensure that the Company has appropriate mechanisms to continue to attract and retain the services of
Directors and Employees of a high calibre, the Company has a policy of issuing options or performance share rights
that are exercisable in future at a certain fixed price.
No options were issued to Directors during the year.
The terms and conditions of each share option affecting reported remuneration in the previous, this or future
reporting periods are:
Grant
date
Exercise
price
Value per
option
at grant
date
First exercise
date/vest
date
Fair value
of options
granted
Expense
recognised
in P & L
this
financial
year
Cumulative
expense
recognised
in P & L to
date
Expiry
date/Last
exercise date
1 Dec 2011
1 Dec 2011
1 Dec 2011
$0.08
$0.12
$0.15
$0.0299
$0.0221
1/12/2011
1/12/2011
$0.0203
19/11/2012
89,700
22,100
40,600
-
-
-
89,700
31/12/2014
22,100
31/12/2014
40,600
9/05/2015
Fair values at issue date are determined using a Black-Scholes option pricing model that takes into account the
exercise price, the term of the options, the expected price volatility of the underlying share and the risk free rate
for the term of the option.
18
DIRECTORS REPORT
(d) Share and option holdings
All equity dealings with directors have been entered into with terms and conditions no more favourable than those
that the entity would have adopted if dealing at arm’s length. These options relate to both current and previous
directors and management personnel.
Directors’ holdings of shares and share options have been disclosed in the Remuneration Report.
The following performance rights were issued to key management personnel during the year. The performance
rights will vest once certain hurdles have been met. The performance period is twenty four months to 30 June
2015.
Type
D. Tisdell
No. Issued Performance Date
30 June 2015
7,000,000
Expiry Date
30 November 2015
R. Shemesian
5,000,000
30 June 2015
30 November 2015
A. Ho
M. Rimes
D. Pang
1,000,000
30 June 2015
30 November 2015
1,000,000
30 June 2015
30 November 2015
500,000
30 June 2015
30 November 2015
Shares held by Current Directors
Period from 1 July 2013 to 30 June 2014
Balance at
beginning
of period
Received as
Remuneration
Options
Exercised
Net Change
Other
Balance at
end of year
R. Shemesian¹
15,494,357
-
A. Ho
E. Finlayson
M. Rimes
D. Tisdell²
1,070,000
928,500
-
2,657,748
-
19,222,105
-
285,700
-
1,214,200
-
-
-
-
-
-
-
-
-
-
-
-
15,494,357
1,998,500
-
2,943,448
-
20,436,305
¹
²
Mr Shemesian is the sole director and shareholder in Black Swan Global Pty Limited which as trustee for the Black Swan
Investment Trust holds 10,389,679 shares and is a director and shareholder in Normandy Corporation Limited as trustee for the
Normandy Superannuation Fund which holds 5,104,678 shares.
Director resigned during the year.
Period from 1 July 2012 to 30 June 2013
Balance at
beginning
of period
900,000
A. Ho
R. Shemesian¹
14,878,861
D. Tisdell
M. Rimes
D. Nolan²
R. Xia²
-
2,500,000
-
-
18,278,861
Received as
Remuneration
Options
Exercised
Net Change
Other
Balance at
end of year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
170,000
1,070,000
615,496
15,494,357
-
-
157,748
2,657,748
-
-
-
943,244
-
19,222,105
¹
Mr Shemesian is the sole director and shareholder in Black Swan Global Pty Limited which as trustee for the Black Swan
Investment Trust holds 10,389,679 shares and is a director and shareholder in Normandy Corporation Limited as trustee for the
Normandy Superannuation Fund which holds 5,104,678 shares.
19
DIRECTORS REPORT
²
Director resigned during the year.
Options Held By Current Directors and Officers
Period from 1 July 2013 to 30 June 2014
Balance at
beginning
of period
Granted as
Remuneration¹
Options
expired
Net Change
Other
Balance at end
of year
R. Shemesian¹
1,000,000
A. Ho
M. Rimes³
E. Finlayson
D. Tisdell²
-
1,000,000
-
6,000,000
8,000,000
-
-
-
-
-
-
-
-
-
-
(2,000,000)
(2,000,000)
-
-
-
-
-
-
1,000,000
-
1,000,000
-
4,000,000
6,000,000
¹ Options have fully vested, exercise price 8 cents, expiry date 31 December 2014.
² Options have fully vested, 2 million options have exercise price 8 cents, expiry date 31 December 2014, and 2 million options
have exercise price 15 cents, expiry date 6 May 2015.
³ Options have fully vested, exercise price 12 cents, expiry date 31 December 2014.
Period from 1 July 2012 to 30 June 2013
Balance at
beginning
of period
Granted as
Remuneration¹
Options
expired
Net Change
Other
Balance at end
of year
A. Ho
D. Nolan²
R. Shemesian¹
D. Tisdell³
M. Rimes⁴
R. Xia²
250,000
250,000
1,000,000
6,000,000
1,000,000
-
8,500,000
-
-
-
-
-
-
-
(250,000)
-
-
-
-
-
(250,000)
-
-
-
-
-
-
-
-
250,000
1,000,000
6,000,000
1,000,000
-
8,250,000
¹ Options have fully vested, exercise price 8 cents, expiry date 31 December 2014.
² Director resigned during the year.
³ Options have fully vested, 2 million options have exercise price 8 cents, expiry date 31 December 2014, 2 million options have
exercise price 10 cents, expiry date 5 May 2014 and 2 million options have exercise price 15 cents, expiry date 6 May 2015.
⁴ Options have fully vested, exercise price 12 cents, expiry date 31 December 2014.
MEETINGS OF DIRECTORS
The number of directors' meetings (including committees) held during the financial period each director held office
during the financial period and the number of meetings attended by each director are:
Directors Meetings
Audit Committee Meetings
Director
Meetings Attended
R. Shemesian
A. Ho
M Rimes
E. Finlayson
D. Tisdell
12
12
11
2
5
In addition there were six circular resolutions passed by the board.
Number Eligible to
Attend
12
12
12
2
5
Meetings Attended
-
2
2
-
-
Number Eligible to
Attend
-
2
2
-
-
20
DIRECTORS REPORT
INDEMNIFYING OFFICERS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001, every officer or
agent of the Company shall be indemnified out of the property of the Company against any liability incurred by
him or her in his or her capacity as officer or agent of the Company or any related corporation in respect of any act
or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.
The Company paid insurance premiums of $8,885 in August 2014 in respect of directors’ and officers’ liability. The
insurance premiums relate to:
• Costs and expenses incurred by the relevant officers in defending legal proceedings, whether civil or criminal
and whatever their outcome;
• Other liabilities that may arise from their position, with the exception of conduct involving wilful breach of
duty or improper use of information to gain a personal advantage.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceeding to which the Company is a party for the purpose of taking responsibility on behalf of the Company for
all or any part of those proceedings. The Company was not a party to any such proceedings during the year.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the period ended 30 June 2014 has been received and can be
found on the following page.
NON-AUDIT SERVICES
There were no non-audit services provided to the company during the year.
Richard Shemesian
Chairman
Sydney, 26 September 2014
21
RSM Bird Cameron Partners
Level 12, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 2 8226 4500 F +61 2 8226 4501
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Apollo Minerals Limited for the year ended 30 June 2014, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM BIRD CAMERON PARTNERS
David Talbot
Partner
Sydney, NSW
Dated: 26 September 2014
Liability limited by a
scheme approved
under Professional
Standards Legislation
Major Offices in:
Perth, Sydney,
Melbourne, Adelaide,
Canberra and Brisbane
ABN 36 965 185 036
RSM Bird Cameron Partners is a member of the RSM network. Each member
of the RSM network is an independent accounting and advisory firm which
practises in its own right. The RSM network is not itself a separate legal entity
in any jurisdiction.
22
APOLLO MINERALS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Revenue
Administration expenses
Personnel cost
Consultancy costs
Compliance and regulatory expenses
Occupancy costs
Technical, geological and support fees
Marketing fees
Directors fees
Legal fees
Exploration expenditure written off
Share based payments
Travel
(LOSS) BEFORE INCOME TAX
Income tax expense
(LOSS) FOR THE YEAR
Note
2
19
3
2014
$
26,190
(105,091)
(30,005)
(183,241)
(92,474)
(6,795)
(290,000)
(90,736)
(194,160)
(107,841)
(12,686,808)
(266,571)
(57,331)
2013
$
108,064
(211,529)
(239,741)
(128,099)
(67,621)
(26,119)
(286,667)
(93,886)
(130,821)
(339,301)
(1,701)
(307,249)
(67,442)
(14,084,863)
(1,792,112)
61,929
180,199
(14,022,934)
(1,611,913)
LOSS ATTRIBUTABLE TO MEMBERS OF THE
PARENT ENTITY
(14,022,934)
(1,611,913)
OTHER COMPREHENSIVE INCOME
-
-
TOTAL COMPREHENSIVE (LOSS)
(14,022,934)
(1,611,913)
Earnings per share
Basic and diluted (loss) per share
(cents per share)
17
(3.78)
(0.56)
The Consolidated Statement of Comprehensive Income is to be read in conjunction with the attached notes.
23
APOLLO MINERALS LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014
Note
2014
$
2013
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Fixed assets
Evaluation and exploration expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share Capital
Reserves
Accumulated losses
TOTAL EQUITY
4
5
6
8
9
1,239,564
288,277
1,527,841
31,492
6,381,641
6,413,133
1,528,241
247,491
1,775,732
43,383
16,493,083
16,536,466
7,940,974
18,312,198
1,197,093
1,197,093
605,779
605,779
605,779
6,743,881
17,706,419
10
11
32,614,135
471,883
(26,342,137)
29,744,528
1,188,483
(13,226,592)
6,743,881
17,706,419
The Consolidated Statement of Financial Position is to be read in conjunction with the attached notes.
24
APOLLO MINERALS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2014
Balance as at 1 July 2013
Loss for the year
Issue of share capital
Cost of share capital issued
Transfer from options based
payments reserve
Transfer to share based
payments reserve
Balance as at 30 June 2014
Balance as at 1 July 2012
Loss for the year
Issue of share capital
Cost of share capital issued
Transfer from options based
payments reserve
Transfer to share based
payments reserve
Balance as at 30 June 2013
Share
Capital
$
29,744,528
-
2,972,524
(102,917)
Reserves
$
1,188,483
-
-
Accumulated
Losses
$
(13,226,592)
(14,022,934)
-
-
Total
$
17,706,419
(14,022,934)
2,972,524
(102,917)
-
(907,389)
907,389
-
-
32,614,135
190,789
471,883
-
(26,342,137)
190,789
6,743,881
27,744,923
-
2,117,500
(117,895)
1,229,793
-
-
-
(11,883,238)
(1,611,913)
-
-
17,091,478
(1,611,913)
2,117,500
(117,895)
-
(268,559)
268,559
-
-
29,744,528
227,249
1,188,483
-
(13,226,592)
227,249
17,706,419
The Consolidated Statement of Changes in Equity is to be read in conjunction with the attached notes.
25
APOLLO MINERALS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees – general
Interest received
Research and development rebate
NET CASH USED IN OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets
Payment for exploration and evaluation
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Costs of issue of shares
NET CASH PROVIDED BY FINANCING ACTIVITIES
Note
20
2014
$
2013
$
(1,205,945)
50,417
61,929
(1,093,599)
(1,647,790)
74,807
180,199
(1,392,784)
-
(1,446,406)
(1,446,406)
(40,020)
(2,062,631)
(2,102,651)
2,354,245
(102,917)
2,251,328
2,050,000
(117,895)
1,932,105
NET DECREASE IN CASH HELD
(288,677)
(1,563,330)
Cash at the beginning of the financial year
CASH AT THE END OF THE FINANCIAL YEAR
4
1,528,241
1,239,564
3,091,571
1,528,241
The Consolidated Statement of Cash Flows is to be read in conjunction with the attached notes
26
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
These consolidated financial statements and notes represent those of Apollo Minerals Limited and Controlled
Entities (the “consolidated group” or “group”).
The separate financial statements of the parent entity, Apollo Minerals Limited, have not been presented within this
financial report as permitted by the Corporations Act 2001.
The financial statements were authorised for issue on 24 September 2014 by the directors of the company.
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards. Material accounting policies adopted in the preparation of
this financial report are presented below and have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
a. Principles of consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent (Apollo
Minerals Limited) and all of the subsidiaries (including any structured entities). Subsidiaries are entities the
parent controls. The parent 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. A list
of the subsidiaries is provided in Note 7.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or
losses on transactions between group entities are fully eliminated on consolidation. Accounting policies of
subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-
controlling interests”. The Group initially recognises non-controlling interests that are present ownership
interests in subsidiaries and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at
either fair value or at the non-controlling interests’ proportionate share of the subsidiary’s net assets.
Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and each
component of other comprehensive income. Non-controlling interests are shown separately within the equity
section of the statement of financial position and statement of comprehensive income.
Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination
involving entities or businesses under common control. The business combination will be accounted for from
the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities
(including contingent liabilities) assumed is recognised (subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from
a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent
consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair
value, recognising any change to fair value in profit or loss, unless the change in value can be identified as
existing at acquisition date.
27
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
All transaction costs incurred in relation to the business combination are expensed to the consolidated
statement of comprehensive income.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
b. Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and discharge of liabilities in the normal course of
business.
As disclosed in the financial statements, the consolidated entity incurred a loss of $14,022,934 and had net
cash outflows from operating activities of $1,093,599 for the year ended 30 June 2014.
The Directors believe that there are reasonable grounds to believe that the company and consolidated entity
will be able to continue as going concerns, after consideration of the following factors:
• The company has been successful in raising capital during the period, and subsequent to year end raised $2.2
million (per note 10);
• The consolidated entity has cash at bank at balance date of $1,239,564, net working capital of $330,748 and
net assets of $6,743,881;
• The ability of the consolidated entity to further scale back certain parts of their activities that are non
essential so as to conserve cash; and
• The consolidated entity retains the ability, if required, to wholly or in part dispose of interests in mineral
exploration and development assets.
Accordingly, the Directors believe that the company and consolidated entity will be able to continue as going
concerns and that it is appropriate to adopt the going concern basis in the preparation of the financial report.
c. Adoption of new and revised accounting standards
Changes in accounting policies on initial application of Accounting Standards
In the year ended 30 June 2014, the Group has reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to its operations and effective for the current annual
reporting period.
It has been determined by the Group that there is no impact, material or otherwise, of the new and revised
Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting
policies.
New Accounting Standards for Application in Future Periods
The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet
effective for the year ended 30 June 2014. As a result of this review the Directors have determined that there is
no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and,
therefore, no change necessary to Group accounting policies.
The following Australian Accounting Standards have been issued or amended and are applicable to the
Company but are not yet effective.
The Group does not anticipate the early adoption of any of the following Australian Accounting Standards.
Reference
Title
Summary
AASB 9
Financial
Instruments
Replaces the requirements of AASB
139 for the classification and
measurement of financial assets.
This is the result of the first part of
Phase 1 of the IASB’s project to
replace IAS 39.
Expected Impact
Unlikely to have
significant
impact
Application
date (financial
years
beginning)
1 January 2015
(Changed to 1
January 2017
by AASB 2013-
9C)
28
1 January 2015 Unlikely to have
significant
impact
1 January 2015 Unlikely to have
significant
impact
1 January 2014
Unlikely to be
significant
1 January 2014
Unlikely to be
significant
1 January 2014 No Impact
1 January 2014
Unlikely to be
significant
2009-11
2010-7
2012-3
2013-3
2013-5
2013-9B
2014-1A
2014-1B
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Amends AASB 1, 3, 4, 5, 7, 101, 102,
108, 112, 118, 121, 127, 128, 131,
132, 136, 139, 1023 and 1038 and
Interpretations 10 and 12 as a result
of the issuance of AASB 9.
Amendments to
Australian
Accounting
Standards arising
from AASB 9
Amendments to
Australian
Accounting
Standards arising
from AASB 9
(December 2010)
Amends AASB 1, 3, 4, 5, 7, 101, 102,
108, 112, 118, 120, 121, 127, 128,
131, 132, 136, 137, 139, 1023 &
1038 and Interpretations 2, 5, 10, 12,
19 & 127 for amendments to AASB 9
in December 2010
This Standard adds application
guidance to AASB 132 to address
inconsistencies identified in applying
some of the offsetting criteria of
AASB 132.
This Standard amends the disclosure
requirements in
AASB 136 to include additional
disclosures about the fair value
measurement and discount rates
when the recoverable amount of
impaired assets is based on fair value
less costs of disposal.
This Standard amends AASB 10,
AASB 12 and AASB 127 to define an
investment entity and require that,
with limited exceptions, an
investment entity not consolidate its
subsidiaries but to measure them at
fair value through profit or loss in
accordance with AASB 9.
Part B of 2013-9 makes amendments
to particular Australian Accounting
Standards to delete references to
AASB 1031, and makes various
editorial corrections to Australian
Accounting Standards.
Amendments to
Australian
Accounting
Standards –
Offsetting Financial
Assets and
Financial Liabilities
Amendments to
AASB 136 –
Recoverable
Amount
Disclosures for
Non-Financial
Assets
Amendments to
Australian
Accounting
Standards –
Investment Entities
Amendments to
Australian
Accounting
Standards –
Conceptual
Framework,
Materiality and
Financial
Instruments
Amendments to
Australian
Accounting
Standards
Amendments to
Australian
Accounting
Standards
Part A of 2014-1 amends various
standards as a result of the annual
improvements process
1 July 2014
Unlikely to be
significant
Part B of AASB 2014-1 makes
amendments to AASB 119 Employee
Benefits in relation to the
requirements for contributions from
employees or third parties that are
linked to service.
1 July 2014
Unlikely to be
significant
2014-1C
Amendments to
Australian
Part C of AASB 2014-1 makes
amendments to particular Australian
1 July 2014
Unlikely to be
significant
29
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Accounting
Standards
Accounting Standards to delete their
references to AASB 1031.
2014-1D
Amendments to
Australian
Accounting
Standards
Part D of AASB 2014-1 makes
amendments to AASB 1 First-time
Adoption of Australian Accounting
Standards, which arise from the
issuance of AASB 14 Regulatory
Deferral Accounts in June 2014.
1 July 2014
No Impact
AASB 1031
Materiality
Re-issuance of AASB 1031
1 January 2014
Unlikely to be
significant
d.
Income taxes
The income tax expense (revenue) for the year comprises current income tax expense (income) and
deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable
on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at
reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid
to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well unused tax losses. Current and deferred income tax expense (income) is charged
or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or
charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements. Deferred tax assets also result where amounts have been fully expensed but future
tax deductions are available. No deferred income tax will be recognised from the initial recognition of an
asset or liability, excluding a business combination, where there is no effect on accounting or taxable
profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at
reporting date. Their measurement also reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary
differences and unused tax losses are recognised only to the extent that it is probable that future taxable
profit will be available against which the benefits of the deferred tax asset can be utilised. Where
temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not probable that the reversal will occur in the
foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off
exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods in
which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
e.
Exploration and evaluation costs
Exploration, evaluation and development expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that they are expected to
be recouped through the successful development of the area or where activities in the area have not yet
reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the
year in which the decision to abandon the area is made.
30
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
When production commences, the accumulated costs for the relevant area of interest are amortised over
the life of the area according to the rate of depletion of the economically recoverable reserves. A regular
review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest. Costs of site restoration are provided over the life of the
facility from when exploration commences and are included in the costs of that stage. Site restoration
costs include the dismantling and removal of mining plant, equipment and building structures, waste
removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have
been determined using estimates of future costs, current legal requirements and technology on an
undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs
of site restoration, there is uncertainty regarding the nature and extent of the restoration due to
community expectations and future legislation. Accordingly the costs have been determined on the basis
that the restoration will be completed within one year of abandoning the site.
f.
Leases
A distinction is made between finance leases which transfer from the lessor to the lessee substantially all
the risks and rewards incident to ownership of the leased asset and operating leases under which the
lessor retains substantially all the risks and rewards.
Where an asset is acquired by means of a finance lease, the fair value of the leased property or the
present value of minimum lease payments, if lower, is established as an asset at the beginning of the
lease term. A corresponding liability is also established and each lease payment is apportioned between
the finance charge and the reduction of the outstanding liability.
Operating lease rental expense is recognised as an expense on a straight line basis over the lease term, or
on a systematic basis more representative of the time pattern of the user's benefit.
g.
Financial instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the company commits
itself to either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified “at fair value through profit or loss”, in which case transaction costs are expensed
to profit or loss immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at fair value, amortised cost using the effective interest
rate method, or cost.
Amortised cost is the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative
amortisation of the difference between that initial amount and the maturity amount calculated using the
effective interest method.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
The effective interest method is used to allocate interest income or interest expense over the relevant
period and is equivalent to the rate that discounts estimated future cash payments or receipts (including
fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot
be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the
financial asset or financial liability. Revisions to expected future net cash flows will necessitate an
adjustment to the carrying value with a consequential recognition of an income or expense item in profit
or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being
subject to the requirements of Accounting Standards specifically applicable to financial instruments.
31
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(i) Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for trading for the
purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are
designated as such to avoid an accounting mismatch or to enable performance evaluation where a Group
of financial assets is managed by key management personnel on a fair value basis in accordance with a
documented risk management or investment strategy. Such assets are subsequently measured at fair
value with changes in carrying value being included in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, where they are expected to mature within 12 months
after the end of the reporting period.
(iii) Held-to-maturity investments
Held-to-maturity investments are included in non-current assets where they are expected to mature
within 12 months after the end of the reporting period. All other investments are classified as current
assets.
(iv) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be
classified into other categories of financial assets due to their nature, or they are designated as such by
management. They comprise investments in the equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
They are subsequently measured at fair value with changes in such fair value (i.e. gains or losses)
recognised in other comprehensive income (except for impairment losses and foreign exchange gains and
losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset
previously recognised in other comprehensive income is reclassified into profit or loss.
Available-for-sale financial assets are included in non-current assets where they are expected to be sold
within 12 months after the end of the reporting period. All other financial assets are classified as current
assets.
(v) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised
cost.
Derivative instruments
The Group designates certain derivatives as either:
i. hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or
ii. hedges of highly probable forecast transactions (cash flow hedges).
At the inception of the transaction the relationship between hedging instruments and hedged items, as
well as the Group’s risk management objective and strategy for undertaking various hedge transactions,
is documented.
Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used
in hedging transactions have been and will continue to be highly effective in offsetting changes in fair
values or cash flows of hedged items, are also documented.
(i) Fair value hedge
Changes in the fair value of derivatives that are designated and qualified as fair value hedges are
recorded in the consolidated statement of comprehensive income, together with any changes in the fair
value of hedged assets or liabilities that are attributable to the hedged risk.
32
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges is deferred to a hedge reserve in equity. The gain or loss relating to the ineffective portion is
recognised immediately in the consolidated statement of comprehensive income.
Amounts accumulated in the hedge reserve in equity are transferred to the consolidated statement of
comprehensive income in the periods when the hedged item will affect profit or loss.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a
financial instrument has been impaired. In the case of available-for-sale financial instruments, a
prolonged decline in the value of the instrument is considered to determine whether an impairment has
arisen. Impairment losses are recognised in profit or loss. Also, any cumulative decline in fair value
previously recognised in other comprehensive income is reclassified to profit or loss at this point.
Financial guarantees
Where material, financial guarantees issued that require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due are
recognised as a financial liability at fair value on initial recognition.
The guarantee is subsequently measured at the higher of the best estimate of the obligation and the
amount initially recognised less, when appropriate, cumulative amortisation in accordance with
AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised
under AASB 118.
The fair value of financial guarantee contracts has been assessed using a probability-weighted discounted
cash flow approach. The probability has been based on:
-
-
-
the likelihood of the guaranteed party defaulting in a year period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed
party defaulting; and
the maximum loss exposed if the guaranteed party were to default.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset
is transferred to another party whereby the entity no longer has any significant continuing involvement in
the risks and benefits associated with the asset. Financial liabilities are derecognised where the related
obligations are discharged, cancelled or expired. The difference between the carrying value of the
financial liability extinguished or transferred to another party and the fair value of consideration paid,
including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
h.
Impairment of assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and
value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its
recoverable amount is expensed to the consolidated statement of comprehensive income. Impairment
testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates
the recoverable amount of the cash-generating unit to which the asset belongs. In the case of available-
for-sale financial instruments, a prolonged decline in the value of the instrument is considered to
determine whether impairment has arisen.
i.
Investments in subsidiaries
In the separate financial statements of Apollo Minerals Limited investments in its subsidiaries are
accounted for at cost.
33
j.
Cash and cash equivalents
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of 3 months or less, and bank overdrafts. Bank overdrafts are
shown within short-term borrowings in current liabilities on the consolidated statement of financial
position.
k. Revenue recognition
Interest revenue is recognised using the effective interest method. It includes the amortisation of any
discount or premium.
l.
Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred except borrowing
costs that are directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period to get ready for its intended use or sale. In this case the borrowing
costs are capitalised as part of the cost of such a qualifying asset.
The amount of borrowing costs relating to funds borrowed generally and used for the acquisition of
qualifying assets has been determined by applying a capitalisation rate to the expenditures on those
assets. The capitalisation rate comprises the weighted average of borrowing costs incurred during the
year.
m. Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables
in the consolidated statement of financial position are shown inclusive of GST. Cash flows are presented in
the consolidated statement of cash flows on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
n. Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes
in presentation for the current financial year.
o.
Significant judgements and key assumptions
The directors evaluate estimates and judgements incorporated into the financial report based on
historical knowledge and best available current information. Estimates assume a reasonable expectation
of future events and are based on current trends and economic data, obtained both externally and within
the group.
p. Key judgements
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to
be recoverable or where the activities have not reached a stage which permits a reasonable assessment of
the existence of reserves. While there are certain areas of interest from which no reserves have been
extracted, the directors are of the continued belief that such expenditure should not be written off since
feasibility studies in such areas have not yet concluded. Such capitalised expenditure is carried at
reporting date at $6,381,641.
34
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
2. REVENUE
Interest received
Fuel tax rebate
Consolidated Group
2014
$
23,921
2,269
26,190
2013
$
86,425
21,639
108,064
3. INCOME TAX EXPENSE
(a) No income tax is payable by the parent or consolidated entities as they recorded losses for income tax
purposes for the period.
(b) Reconciliation between income tax expense and prima facie tax on accounting profit (loss)
Accounting loss
Tax at 30%
Tax effect of net non-deductible expenses (including
share based payment expense and exploration costs
written off)
Deductible exploration costs
Refundable research and development tax offset
Deferred tax asset not recognised
Income tax expense
(c) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised
Consolidated Group
2014
$
2013
$
(14,022,934)
(4,206,880)
(1,611,913)
(483,574)
3,777,880
92,175
(458,329)
61,929
887,330
61,929
(381,442)
180,199
772,841
180,199
2014
$
2013
$
20,624,321
21,108,221
Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not
been brought to account at 30 June 2014 because the directors do not believe it is appropriate to regard
realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained if:
•
•
the company derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deductions for the loss and exploration expenditure to be realised;
the company continues to comply with conditions for deductibility imposed by law; and
• no changes in tax legislation adversely affect the company in realising the benefit from the deductions for
the loss and exploration expenditure.
The applicable tax rate is the national tax rate in Australia for companies, which is 30% at the reporting date.
35
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
4. CASH AND CASH EQUIVALENTS
Consolidated Group
2014
$
2013
$
Cash and cash equivalents
1,239,564
1,528,241
5. TRADE AND OTHER RECEIVABLES
CURRENT
Other receivables
GST refund due
6. FIXED ASSETS
Plant and Equipment
At cost
Opening balance
Additions
Disposal
Closing balance
Depreciation
Opening balance
Charge for the year
Disposal
Closing balance
Written down value
Consolidated Group
2014
$
158,713
129,564
288,277
Consolidated Group
2014
$
94,738
-
-
94,738
(51,355)
(11,891)
(63,246)
2013
$
148,497
98,994
247,491
2013
$
54,719
40,019
-
94,738
(34,224)
(17,131)
-
(51,355)
31,492
43,383
36
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
7. INTEREST IN SUBSIDIARIES
a.
Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares which are held directly by
the Group. The proportion of ownership interests held equals the voting rights held by the Group. Each
subsidiary’s principal place of business is also its country of incorporation.
Parent Entity:
Apollo Minerals Limited
Subsidiaries:
Apollo Iron Ore No 1 Pty Limited¹
Apollo Iron Ore (No. 2) Pty Limited
Apollo Iron Ore No 3 Pty Limited
Apollo African Holdings Limited
Apollo Gabon SA
Capital Resource Holdings No.1 Limited
Jindal Apollo Iron Ore Limited
Southern Exploration Pty Limited
¹
Formerly named Apollo Iron Ore Pty Limited
Country of
Incorporation
Ownership %
2014
Ownership %
2013
Australia
Australia
Australia
Australia
Hong Kong
Gabon
New Zealand
Australia
Australia
-
100
100
100
82.5
82.5
100
100
100
-
100
100
100
70
70
100
-
100
b.
Subsidiary financial statements used in the preparation of these consolidated financial statements have also
been prepared as at the same reporting date as the Group’s financial statements.
8. EXPLORATION AND EVALUATION EXPENDITURE
Consolidated Group
2014
$
2013
$
Evaluation and exploration expenditure
6,381,641
16,493,083
Reconciliation of carrying amount
Balance at beginning of financial period
Acquisition of additional interest in Gabon project
Expenditure in current period
Exploration expenditure written off
Balance at end of financial period
9. TRADE AND OTHER PAYABLES
CURRENT
Unsecured liabilities:
Trade payables
Sundry payables and accrued expenses
16,493,083
500,000
2,075,366
(12,686,808)
6,381,641
14,378,311
-
2,114,772
-
16,493,083
Consolidated Group
2014
$
1,122,436
74,657
1,197,093
2013
$
509,908
95,871
605,779
37
10. SHARE CAPITAL
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
493,355,333 (2013: 324,264,466) fully paid ordinary shares
Consolidated Group
2014
$
32,614,135
2013
$
29,744,528
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to
the number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is
called, otherwise each shareholder has one vote on a show of hands.
Reconciliation of movements in share capital during the year:
Opening balance
Issue of shares – 28 December 2012
Issue of shares – 27 February 2013
Issue of shares – 27 February 2013
Issue of shares – 3 April 2013
Issue of shares – 1 July 2013
Issue of shares – 15 July 2013
Issue of shares – 23 December 2013
Issue of shares – 25 February 2014
Issue of shares – 28 February 2014
Issue of shares – 7 May 2014
Issue of shares – 7 May 2014
Issue of shares – 7 May 2014
Capital raising costs
2013
$
27,744,923
67,500
650,000
400,000
1,000,000
-
-
-
-
-
-
-
-
(117,895)
29,744,528
On 14 July 2014 the company raised $2.2 million (before costs) with the issue of 100,000,000 shares to
professional and sophisticated investors
2014
No. Shares
324,264,466
-
-
-
-
1,489,957
303,376
1,214,200
81,818,000
25,000,000
50,000,000
8,465,334
800,000
-
493,355,333
2013
No. Shares
270,677,195
2,337,271
16,250,000
10,000,000
25,000,000
-
-
-
-
-
-
-
-
-
324,264,466
2014
$
29,744,528
-
-
-
-
54,681
9,101
42,497
1,227,270
500,000
1,000,000
126,975
12,000
(102,917)
32,614,135
38
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Consolidated Group
2013
$
2014
$
471,883
1,188,482
11. RESERVES
Options reserve
Options reserve
2014
Options
2013
Options
2014
$
2013
$
Total Options
86,541,667
62,000,000
471,883
1,188,483
Opening balance
Issue of unlisted options – 5 July 2012
Expiry of unlisted options – 15 September 2012
Issue of unlisted options – 5 October 2012
Expiry of unlisted options – 30 November 2012
Expiry of unlisted options – 15 December 2012
Expiry of unlisted options – 30 December 2012
Expiry of unlisted options – 31 December 2012
Issue Director Performance Rights – 19
February 2013
Issue Employee Performance Rights – 19
February 2013
Expiry of unlisted options – 15 March 2013
Expiry of Director Performance Rights – 30 June
2013
Expiry of Employee Performance Rights – 30
June 2013
Vesting of unlisted options – 30 June 2013
Issue unlisted options – 31 August 2013
Expiry of unlisted options with exercise date 30
June 2014
Expiry of unlisted options with exercise date 30
June 2014
Issue Director Performance Rights – 23
December 2013
Issue Employee Performance Rights – 23
December 2013
Issue unlisted options expiring 28 February
2017, attached to rights issue
Issue unlisted options expiring 28 February
2017
Expiry unlisted options 9 May 2014
Closing balance
62,000,000
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
(53,500,000)
(500,000)
7,000,000
8,000,000
45,541,667
15,000,000
(2,000,000)
86,541,667
63,486,366
10,000,000
(250,000)
500,000
(5,886,366)
(250,000)
(2,250,000)
(3,100,000)
15,000,000
500,000
(250,000)
(15,000,000)
(500,000)
-
-
-
-
-
-
-
1,188,483
-
-
-
-
-
-
-
-
-
-
-
-
-
112,125
(860,315)
(3,074)
-
-
-
1,229,793
153,675
(7,711)
3,074
-
(7,710)
(200,000)
(42,321)
-
-
(10,817)
-
-
70,500
-
-
-
-
-
-
-
-
62,000,000
78,664
(44,000)
471,883
-
-
1,188,483
The options reserve represents the charge for outstanding options which have met all conditions precedent
to vest, but which have not been exercised. Post year end the Company issued 10 million options with
exercise price of 3 cents and expiry 28 February 2017 to consultants and contractors to the Company.
39
12. FINANCIAL RISK MANAGEMENT
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
The Board of Directors takes responsibility for managing financial risk exposures of the Group. The Board
monitors the Group’s financial risk management policies and exposures and approves financial transactions. It
also reviews the effectiveness of internal controls relating to commodity price risk, counterparty credit risk,
currency risk, liquidity risk and interest rate risk. The Board meets monthly at which these matters are
reviewed.
The Board’s overall risk management strategy seeks to assist the consolidated group in meeting its financial
targets, while minimising potential adverse effects on financial performance. Its review includes the use of
hedging derivative instruments, credit risk policies and future cash flow requirements.
The group’s principal financial instruments comprise mainly of deposits with banks, shares in listed companies
shown as available for sale financial assets, and loans to subsidiaries. The main purpose of the financial
instruments is to earn the maximum amount of interest at a low risk to the group. The group also has other
financial instruments such as trade debtors and creditors which arise directly from its operations. For the
period under review, it has been the Company’s policy not to trade in financial instruments.
The Group holds the following financial instruments at the end of the reporting period:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Consolidated
Group
2014
$
1,239,564
288,277
1,527,841
2013
$
1,528,241
247,491
1,775,732
1,197,093
605,779
The main risks arising from the Company’s financial instruments are market risk, credit risk and liquidity risk.
The board reviews and agrees policies for managing each of these risks and they are summarised below:
a. Market risk
Cash flow and fair value interest rate risk
The group’s main interest rate risk arises from cash deposits to be applied to exploration and
development areas of interest. It is the group’s policy to invest cash in short term deposits to minimise
the group’s exposure to interest rate fluctuations. The group’s deposits were denominated in
Australian dollars throughout the year. The group did not enter into any interest rate swap contracts
during the year ended 30 June 2014. Neither the group nor the parent has any short or long term debt,
and therefore this risk is minimal.
Foreign currency risk
The group has no exposure to foreign currency risk.
b. Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in
financial loss to the group. The group has adopted the policy of only dealing with credit worthy
counterparties and obtaining sufficient collateral or other security where appropriate, as a means of
mitigating the risk of financial loss from defaults. The cash transactions of the group are limited to high
credit quality financial institutions.
The group does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The carrying amount of financial assets recorded in the
financial statements, net of any provisions for losses, represents the group’s maximum exposure to
credit risk.
40
c. Liquidity risk
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
The group manages liquidity risk by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities. Surplus funds when available are
generally only invested in high credit quality financial institutions in highly liquid markets.
Financial instrument composition and maturity analysis
The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed
period of maturity, as well as management’s expectations of the settlement period for all other financial
instruments. As such, the amounts may not reconcile to the consolidated statement of financial position.
Consolidated Group
Within 1 year
1 to 5 years
Over 5 years
Total
2014
2013
2014
2013
2014
2013
2014
2013
Financial liabilities -
due for payment:
Trade and other
payables
Total contractual
outflows
Financial assets –
cash flows realisable
Cash and cash
equivalents
Trade and other
receivables
Total anticipated
inflows
Net inflow on
financial
instruments
1,197,093
605,779
1,197,093
605,779
1,239,564
1,528,241
288,277
247,491
1,527,841
1,775,732
330,748
1,169,953
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,197,093
605,779
1,197,093
605,779
1,239,564
1,528,241
288,277
247,491
1,527,841
1,775,732
-
330,748
1,169,953
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity
and profit or loss by the amounts shown below.
Carrying
Value
$
1,239,564
Change in profit
Change in equity
100bp
increase
100bp
decrease
100bp
increase
100bp
decrease
$
12,395
$
(12,395)
$
12,395
$
(12,395)
1,528,241
15,282
(15,282)
15,282
(15,282)
30 June 2014
Cash and cash equivalents - Consolidated
30 June 2013
Cash and cash equivalents - Consolidated
Maturity of financial assets and liabilities
The note below summarises the maturity of the group’s and the parent’s financial assets and liabilities as per
the director’s expectations. The amounts disclosed are the contractual undiscounted cash flows. There are no
derivatives.
Consolidated Group
< 6 months
30 June 2014
Trade and other receivables
Trade and other payables
$
288,277
1,197,093
6 – 12
months
$
1- 5 years
>5 years
Total
$
$
-
-
-
-
$
288,277
1,197,093
-
-
41
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Fair value of financial assets and financial liabilities
There is no difference between the fair values and the carrying amounts of the Company’s financial
instruments. The Company has no unrecognised financial instruments at balance date.
Sensitivity analysis on changes in market rates
The Company has no remaining available-for-sale financial assets.
13. COMMITMENTS FOR EXPENDITURE
The consolidated group currently has commitments for expenditure at 30 June 2014 on its exploration
tenements as follows:
Not later than 12 months
Between 12 months and 5 years
Greater than 5 years
Consolidated
Group
2014
$
2,641,560
1,589,633
-
4,231,193
Consolidated
Group
2013
$
734,708
2,575,833
-
3,310,541
The Group reviews its tenement obligations on an ongoing basis and will continue to hold existing tenements
based on their prospectivity.
The above commitments include farm-in agreements with Marmota Energy (Aurora Tank Project) where the
company is earning a 75% interest and the Mincor (Eaglehawk Project) where the company is earning a 75%
interest.
In an agreement entered into with the High Power Exploration Group (HPX) during the year, HPX have the right
to earn up to 80% of the Commonwealth Hill Project (excluding the Marmota and Mincor joint ventures) by
spending $1.7 million for a 51% interest and a further $1.7 million for up to an 80% interest. HPX have spent $1
million to date.
In an agreement entered into with Zoradox Limited (Zoradox) during the year, Zoradox have the right to earn a
50.1% interest in the Gabon, Kango North Project by spending US $ 4 million over the next 3 ½ years. This
agreement is conditional on the renewal of the licence in January 2015.
The group has a further commitment to pay a retainer fee under outsourced consultancy and management
agreements for the provision of office, geological and service personnel. These agreements can be cancelled
with varying notice periods up to 12 months.
Not later than 12 months
Between 12 months and 5 years
Greater than 5 years
Consolidated
Group
2014
$
150,000
450,000
-
600,000
Consolidated
Group
2013
$
240,000
60,000
-
300,000
42
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
14. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There are no contingent liabilities or assets in existence at balance sheet date.
15. RELATED PARTY DISCLOSURES
Refer to the Remuneration Report contained in the Directors Report for details of the remuneration paid or
payable to each member of the Group’s key management personnel for the year ended 30 June 2014. Other
than the Directors, Chief Executive Officer and Exploration Manager, the Company had no key management
personnel for the financial period ended 30 June 2014.
The total remuneration paid to key management personnel of the company and the group during the year are
as follows:
Short term employee benefits
Superannuation
Share based payments
Options granted
Related party transactions
Expenses
Greenhill Capital Partners¹
Mining Management Consultants¹
Mills Oakley Lawyers²
Whiteoaks Capital Pty Ltd²
Wirrida Holdings Pty Limited³
Totals
Consolidated Group
2014
$
552,294
37,506
36,666
-
626,466
2013
$
766,935
14,400
17,500
70,500
869,335
Consolidated
Group
2014
$
Consolidated
Group
2013
$
-
174,433
60,000
-
-
715,366
-
8,560
11,668
-
775,366
194,661
¹
²
³
Fees paid to the Executive Director, Mr Richard Shemesian’s consulting company. Mr Shemesian’s was paid $60,000 for directors
fees for 2014, and directors fees of $40,000 2013 and consulting fees at a daily rate of $1,250 per day.
Fees paid to entities in which the former Non-Executive Director, Mr David Nolan has an interest. Mr Nolan retired in November
2012. During this period Mr Nolan was paid Director’s fees of $11,668. Legal fees of $8,560 were paid to a firm in which Mr Nolan
was a partner.
Wirrida Holdings Pty Limited is a subsidiary of HPX Australia Holdings Pty Ltd, a joint venture partner on the Commonwealth Hill
project. Mr Eric Finlayson a director of Apollo is a director of Wirrida Holdings Pty Ltd. This amount was paid to Wirrida Holdings Pty
Ltd for exploration work in the ordinary course of business.
43
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
16. SEGMENT INFORMATION
The group’s operations are in one business segment being the resources sector. The group operates in
Australia and Gabon. All subsidiaries in the group operate within the same segment.
Segment Revenue
External segment revenue
Segment expenses from continuing operating activities
(Loss) before income tax
Income tax benefit
(Loss) after income tax
Assets
Segment Assets
Total assets
Liabilities
Segment Liabilities
Total Liabilities
An analysis of segment assets is as follows:
Assets
Exploration assets
Commonwealth Hill
Mount Oscar
Gabon
Total exploration assets
Unallocated
17. EARNINGS PER SHARE
Reconciliation of earnings per share
Basic and diluted earnings per share
CONSOLIDATED GROUP
2013
$
2014
$
26,190
(14,111,053)
(14,084,863)
61,929
(14,022,934)
108,064
(1,900,176)
(1,792,112)
180,199
(1,611,913)
7,940,974
18,312,198
7,940,974 18,312,198
1,197,093
1,197,093
605,779
605,779
5,080,916
-
1,300,725
6,381,641
1,559,333
7,940,974
3,553,152
12,516,696
423,237
16,493,085
1,819,113
18,312,198
Consolidated Group
2014
Cents
(3.77)
2013
Cents
(0.56)
Loss used in the calculation of the basic earnings per
share
(14,022,934)
(1,611,913)
Weighted average number of ordinary shares:
Used in calculating basic earnings per ordinary share
Dilutive potential ordinary shares
Used in calculating diluted earnings per share
No. of shares
No. of shares
371,855,902
-
371,855,902
286,728,723
-
286,728,723
44
18. AUDITORS REMUNERATION
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Auditor of parent entity
Audit or review of financial reports
Non-audit services
19. SHARE BASED PAYMENTS
Consolidated Group
2014
$
32,600
-
32,600
2013
$
32,000
-
32,000
Goods or services received or acquired in a share-based payment transaction are recognised as an increase in
equity if the goods or services were received in an equity-settled share-based payment transaction or as a
liability if the goods and services were acquired in a cash settled share-based payment transaction.
For equity-settled share-based transactions, goods or services received are measured directly at the fair value
of the goods or services received provided this can be estimated reliably. If a reliable estimate cannot be made
the value of the goods or services is determined indirectly by reference to the fair value of the equity
instrument granted.
Transactions with employees and others providing similar services are measured by reference to the fair value
at grant date of the equity instrument granted.
The options hold no voting or dividend rights and are unlisted. Details of the options issued to key
management personnel are included in the Directors’ report. No new shares were issued in the period to key
management personnel/directors. Total share based payment expense relates to shares issued in prior period
but vesting in the current period or relates to shares yet to be issued.
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the year:
Employee benefits expense
Options issued
Shares in lieu of cash payments
Total employee benefits expense
Options issued to advisors
Shares issued to advisors in lieu of cash payments
Total share based payments
Consolidated Group
2014
$
-
36,664
36,664
190,789
75,782
303,235
2013
$
70,500
17,500
88,000
156,749
62,500
307,249
Options granted to Key Management Personnel:
Grant date
Option
class
Balance
at start
of year
Number
granted/(ex
pired)
during year
Options
outstanding
at 30 June
2014
Fair value
of options
granted
during the
year
Number
vested at
30 June
2014
Exercise
Price
Expiry date
1/12/11
Series 1
3,000,000
1/12/11
Series 2
2,000,000
1/12/11
Series 3
1,000,000
-
-
-
3,000,000
2,000,000
1,000,000
-
-
-
3,000,000
8 cents
31/12/14
2,000,000
15 cents
9/5/15
1,000,000
12 cents
31/12/14
Details of the options issued to key management personnel are included in the Directors’ report.
45
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Options granted to Other Parties:
Grant date
Option
class
Balance at
start of
year
Number
granted/
(expired)
during year
Options
outstanding
at 30 June
2014
Fair
value of
options
granted
during
the year
Number
vested at
30 June
2014
Exercise
Price
Expiry date
29/6/12
Series 4
38,500,000
(38,500,000)
5/7/12
Series 5
10,000,000
(10,000,000)
8/12/12
Series 6
500,000
(500,000)
-
-
-
19/7/10
Series 7
5,000,000
-
5,000,000
-
-
-
-
-
-
-
5 cents
30/6/14
5 cents
30/6/14
5 cents
30/6/14
5,000,000
25 cents
19/7/15
7/5/14
Series 8
-
15,000,000
15,000,000
78,664
15,000,000
3 cents
28/2/17
Basis of valuation
The Black & Scholes methodology has been used to ascertain fair value, together with the following
assumptions for the options issued:
Expected volatility
(%)
Risk-free interest
free (%)
Expected life of
option (years)
Exercise price
($)
Grant date share
price
Fair value at grant
date
Series 1
65%
65%
65%
Series 2
Series 3
Series 7
Series 8
3.71%
3.71%
3.71%
2.5
4.5
3.0
70%
5.5%
5.0
80%
3.44%
2.8
8 cents
15 cents
12 cents
25 cents
3 cents
7 cents
7 cents
7 cents
11 cents
1.5 cents
$89,700
$40,600
$22,100
$240,819
$78,664
The following table illustrates the number (No.) and weighted average exercise prices of and movements in share
options issued during the year:
No.
2014
Weighted average
exercise price
No.
2013
Weighted average
Exercise price
Outstanding at the beginning of the year
62,000,000
Granted during the year
Exercised during the year
15,000,000
-
Expired/cancelled during the year
(49,000,000)
Outstanding at the end of the year
Exercisable at the end of the year
28,000,000
28,000,000
7 cents
3 cents
-
5 cents
9 cents
9 cents
62,000,000
7 cents
-
-
-
-
-
62,000,000
62,000,000
7 cents
7 cents
The share options outstanding at the end of the year had a weighted average exercise price of $0.09 (2013:
$0.07) and weighted average remaining contractual life of 1.97 years (2013:2.0 years).
The weighted average fair value of options granted during the year was $190,789 (2013: $Nil).
46
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Other information
No options have been exercised to 30 June 2014. Post year end the Company issued 10,000,000 options with
an exercise price of 3 cents and expiry date of 28 February 2017, to consultants and contractors.
20. CASH FLOW INFORMATION
Reconciliation of net cash used in operating activities with profit after income tax
Consolidated Group
2013
$
2014
$
Loss after income tax
(14,022,934)
(1,611,913)
Non-cash flows in profit:
Write off exploration expenditure
Depreciation
Share based payments
Changes in assets and liabilities during the financial
period:
(Increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Net cash outflow from operating activities
12,586,808
11,892
303,235
1,701
17,131
307,249
(40,793)
(31,807)
(1,093,599)
(105,408)
(1,544)
(1,392,784)
47
21. PARENT ENTITY DISCLOSURES
APOLLO MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(a) Financial position
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-current Assets
Fixed assets
Financial assets
Trade and other receivables
Total Non-current assets
Total Assets
Current Liabilities
Trade and other payables
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share Capital
Reserves
Accumulated losses
TOTAL EQUITY
(b) Reserves
Options reserve
(c) Financial performance
Loss for the year
Other comprehensive income
Total comprehensive income
(d) Commitments
All Exploration commitments are held by subsidiary companies.
Administration commitments
Not later than 12 months
Between 12 months and 5 years
2014
$
2013
$
1,239,471
251,184
1,490,655
31,492
500,102
5,811,967
6,343,561
1,528,149
210,391
1,738,540
43,383
202,972
16,412,358
16,658,713
7,834,216
18,397,253
1,197,093
1,197,093
1,197,093
6,637,123
605,779
605,779
605,779
17,791,474
32,614,135
471,883
(26,448,895)
29,744,528
1,188,483
(13,141,537)
6,637,123
17,791,474
471,883
471,883
1,188,483
1,188,483
(14,214,749)
-
(14,214,749)
(1,595,608)
-
(1,575,608)
150,000
450,000
600,000
482,500
-
482,500
22. SIGNIFICANT AFTER BALANCE DATE EVENTS
On 14 July 2014 the Company raised $2.2 million with the issue of 100,000,000 shares to professional and
sophisticated investors.
Other than as outlined above, there are currently no matters or circumstances that have arisen since the end of
the financial year that have significantly affected or may 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.
48
APOLLO MINERALS LIMITED
DIRECTORS DECLARATION
The directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 23 to 48, are in accordance with the
Corporations Act 2001 and:
a. comply with Accounting Standards which, as stated in accounting policy Note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial
Reporting Standards (IFRS); and
b. give a true and fair view of the financial position as at 30 June 2014 and of the performance for
the period ended on that date of the Company and consolidated group; and
2.
the Executive Director and Chief Financial Officer have each declared that:
a.
b.
the financial records of the Company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with the Accounting Standards;
and
c.
the financial statements and notes for the financial year give a true and fair view.
3.
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.
Richard Shemesian
Chairman
Sydney, 26 September 2014
49
RSM Bird Cameron Partners
Level 12, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 2 8226 4500 F +61 2 8226 4501
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
APOLLO MINERALS LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Apollo Minerals Limited, which comprises the consolidated
statement of financial position as at 30 June 2014, and the consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended,
notes comprising a summary of significant accounting policies and other explanatory information, and the
directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year’s
end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the 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 financial report that is free from
material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor's judgement, including the assessment of the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the
financial report 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 entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Liability limited by a
scheme approved
under Professional
Standards Legislation
Major Offices in:
Perth, Sydney,
Melbourne, Adelaide,
Canberra and Brisbane
ABN 36 965 185 036
RSM Bird Cameron Partners is a member of the RSM network. Each member
of the RSM network is an independent accounting and advisory firm which
practises in its own right. The RSM network is not itself a separate legal entity
in any jurisdiction.
50
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We
confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
directors of Apollo Minerals Limited, would be in the same terms if given to the directors as at the time of this
auditor's report.
Opinion
In our opinion:
(a)
the financial report of Apollo Minerals Limited is in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its
performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in Note 1
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 16 to 20 of the directors’ report for the year ended
30 June 2014. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to
express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Opinion
In our opinion the Remuneration Report of Apollo Minerals Limited for the year ended 30 June 2014 complies with
section 300A of the Corporations Act 2001.
RSM BIRD CAMERON PARTNERS
David Talbot
Partner
Sydney, NSW
Dated: 26 September 2014
51
ADDITIONAL INFORMATION FOR LISTED COMPANIES
As at Date 19 September 2014
The following additional information is required by the Australian Stock Exchange pursuant to Listing Rule 4.10.
a. Distribution of Shareholders
Number held
1 – 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
Total
Number
of
share
holders
Number of
shares
% of
number of
shares
26
92
105
588
505
5,326
300,909
895,197
28,847,411
563,306,490
1,316
593,355,333
0.00%
0.10%
0.30%
5.00%
94.60%
100.0%
b. The number of shareholders who hold less than a marketable parcel is 287.
c. Substantial shareholders
The names of the substantial shareholders in the Company, the number of equity securities to which
each substantial shareholder and substantial holder’s associates have a relevant interest, as disclosed
in substantial holding notices given to the Company are:
HPX AUST HLDGS PL
CITICORP NOM PL
HSBC CUSTODY NOM AUST LTD
JINDAL STEEL & POWER AUST
TIGER RESOURCES PTE LTD
No of shares
%
50,000,000
47,847,208
38,305,813
31,419,496
30,000,001
8.43%
8.06%
6.46%
5.30%
5.06%
d. Twenty largest holders of each class of quoted equity security
Name
No of Ordinary
Shares
%
HPX Australia Holdings Pty Limited
1
Citicorp Nominees Pty Limited
2
HSBC Custody Nominees Aust Ltd
3
Jindal Steel & Power Australia
4
Tiger Resources Pte Ltd
5
Mair Holdings Limited
6
Stuart Turner
7
Black Swan Global Pty Limited
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