ABN 62 115 927 681
ANNUAL REPORT
30 JUNE 2011
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CORPORATE DIRECTORY
Directors
Brett Fraser
Chairman
Robert (Bob)Beeson
Managing Director
Simon O’Loughlin
Jay Stephenson
Leigh Junk
Non-executive Director
Non-executive Director
Non-executive Director
Julian (Jules) Perkins
Non-executive Director
Other offices
Exploration office – Melbourne
Exploration office – Sweden
Exploration office – Mauritania
Company Secretary
Jay Stephenson
Principal registered office
Level 4, 66 Kings Park Road
West Perth WA 6005
Telephone: +61 (0)8 6141 3100
Facsimile: +61 (0)8 6141 3199
Email: info@auraenergy.com.au
Auditor
Bentleys
Level 1, 12 Kings Park Road
West Perth WA 6005
Share Registry
Computershare Registry Services
Level 2, 45 St Georges Terrace
Perth WA 6000
Australian Stock Exchange
ASX Code – AEE
Website: www.auraenergy.com.au
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONTENTS
Chairman’s Letter
Operations Review
Corporate Governance Statement
Director’s Report
Auditors Independence Declaration
Financial Report
Directors Declaration
Independent Auditor’s Report
Shareholder Information
Tenement Report
4
5
15
21
31
32
71
72
74
76
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
Chairman’s Letter
It has been a year in which the international nuclear industry and its suppliers received a shock with
the tragedy resulting from the earthquake and tsunami in Japan, but from which it has started to
recover and progress. Against this background Aura has delivered a sterling performance both from a
project delivery perspective and its share price performance compared to many of its peers.
Aura now has over 688 million pounds of uranium in inferred resources in its two main projects,
making it a major international holder of uranium resources. This considerable achievement reflects
the establishment of two new JORC resources within a short time frame of about 14 months. All
projects in the company are owned 100% by Aura Energy Limited.
Identifying a new greenfields area and taking it from concept to resource is testimony to the depth of
management’s technical expertise and its vision. The initial resource at Reguibat met expectations
and is well positioned to grow as drilling coverage is expanded.
Expansion of the Häggån resource positions it as the third largest undeveloped TSX or ASX compliant
resource in the world, again an outstanding accomplishment. Importantly, the extension drilling
assists in understanding the ore body for the economic scoping studies that are commencing.
As the company moves from purely exploration to development it has taken the opportunity to
strengthen the board with operational experience and I welcome two new board members. Leigh
Junk is a mining engineer with 19 years’ experience in mine planning. Leigh was the executive
responsible for feasibility studies, project evaluation, production scheduling and mine design with
several mining companies throughout Western Australia including WMC Resources and Mincor. Jules
Perkins was Manager of Mining & Technology (Australia) for AngloGold Ashanti Ltd, one of the
world’s largest gold mining companies until 2006. Jules led the mineral processing department of
Shell Research in the Netherlands for three years before moving into corporate management. Jules
Perkins is currently Chairman of the Board of Parker Centre Ltd, which manages the Parker
Cooperative Research Centre (‘CRC’) for Hydrometallurgy.
Nuclear energy remains a key plank of the world energy supply. While the Japanese accident has
shaken confidence in some countries, others have since announced continuation of the nuclear
reactor build. Aura is positioning itself to be a supplier to this economically important industry.
Personally, I wish to thank your Managing Director Dr Bob Beeson who has positioned your company
distinctly amongst the leading resource owners in the uranium sector. To the management, board,
employees and consultants for their efforts during the year and their outstanding drive who all
significantly contributed value for shareholders, thank you.
Brett Fraser
Chairman
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
OPERATIONS REVIEW
Achievements
Initial resource established for Reguibat project in Mauritania
Resource greatly expanded at Häggån in Sweden
Second major area of extensive uranium mineralisation established in Sweden at Kallsedet
Board strengthened with appointments providing mine planning and operational experience
Objectives for 2011
Progress the bio-heap leaching tests on Häggån to determine metal recoveries
Complete initial scoping studies on Häggån
Drill to extend Reguibat resource
Test additional anomalies in Reguibat
Commence scoping studies at Reguibat
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
OPERATIONS REVIEW
SWEDISH ACTIVITIES
Häggån Project
Excellent work during the year saw the Häggån resource placed in the world’s top three undeveloped
uranium resources that are compliant with ASX or TSX requirements, representing a substantial feat
by Aura’s exploration team.
The Häggån Project forms part of a large uranium field in Central Sweden on eight granted
exploration permits, 100 per cent owned by Aura. These permits are on privately held land, in an area
where forestry has been carried out for generations. No parks or reserves exist in the project area.
Sweden has an active mining industry, with a clear regulatory position and a well established path
from exploration to mining permit.
The uranium occurs with molybdenum, nickel, vanadium and zinc in black shales. The shales form a
near-continuous sheet throughout the part of the project that Aura has drilled, with thicknesses
ranging between 20 and over 250 metres. The mineralisation in Aura’s permits extends into the
adjoining permits held by Continental Precious Minerals Inc (TSX code: CZQ). That company has
previously defined a resource of 1.05 billion pounds in permits adjoining the Häggån Project.
Resource Expansion
In the first half of 2011, Aura completed an 11 hole drill programme on the western side of its main
permit at Häggån. The objective of this programme was to test for higher grade or thicker areas of
mineralisation. In addition the programme was designed to define extensions to the existing JORC
compliant uranium resource.
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AURA ENERGY LIMITED
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ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
OPERATIONS REVIEW
2010 – 2011 Häggån drilling
Drilling extended the zone of thick mineralisation south from previous holes drilled in 2008 and
confirmed the company’s expectation that there remains significant upside in the Häggån resource.
Even after the most recent drilling, the area used to calculate the resource statement covers only 15
per cent of Aura’s permit areas at Häggån.
Independent resource consultants Hellman & Schofield Pty Ltd (H&S) have upgraded the resource
from 291 to 631 million pounds. It should be remembered that Häggån represents not only a
significant uranium resource but also contains other metals such as molybdenum, vanadium, nickel
the contained metal contents are given below.
and zinc. Based on
resource
the
Cutoff U3O8
ppm
Uranium
Molybdenum
(U3O8)
(MoO3)
Millions of pounds
Millions of pounds
Nickel
Zinc
Millions of pounds
Millions of pounds
100
631
843
1277
1790
Metallurgical Testwork
The company is currently undertaking a multi-directional metallurgical test programme to determine
the optimal uranium extraction route for the project, while also trying to maximise the recovery of
valuable metal co-products. Aura has previously reported that high levels of uranium extraction (up
to 93 per cent) have been obtained from initial bench-scale conventional acid leaching tests.
Alum Shale material at Häggån has characteristics that make it amenable to bioleaching technologies.
The similarities to ores being processed by bioleaching elsewhere have been the impetus for
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
commencing bioleaching
for
hydrometallurgical research in Perth, Western Australia. Initial testwork was positive and new results
during 2011 have confirmed the potential of bioleaching, which is an exciting and significant step
forward for the company.
the Parker Cooperative Research Centre
testwork with
Maximum extraction of metals obtained in the presence of bacteria were:
Uranium
Nickel
Zinc
Molybdenum
75%
65%
60%
25%
It is anticipated that these results will be improved with further tests. One opportunity for
improvement is using a finer particle size, as would be normal for a heap leach operation.
Bio-heap leaching of ore has the advantages of significantly reduced capital costs compared to a
conventional plant, lower operating costs and the potential to recover valuable by-products. Aura is
now planning for a larger size, more comprehensive phase of testing.
Next Steps
The world class resource at Häggån will now be subject to scoping studies covering mining and
infrastructure. Concurrently metallurgical testwork will confirm the potential to recover uranium and
other metals.
OPERATIONS REVIEW
Kallsedet Project
A successful drilling program in early 2011 saw this wholly owned area become an important step in
Aura’s strategy to develop a pipeline of uranium projects in Sweden. Kallsedet is a substantial
landholding of about 90 square kilometres of uraniferous Alum Shale, close to the Norwegian border.
Little modern exploration had been undertaken in the area and Aura’s initial evaluation of previous
work and surface exploration identified a number of promising targets. Early in 2011 three holes
were drilled on Aura’s Olden permit and one hole on the Hamborg permit.
Drilling has returned promising results revealing thick, mineralised intersections varying from 12
metres to 98 metres in cumulative thickness, with areas of higher grade. The thicknesses of
mineralisation found in drilling were greater than the surface mapping indicated and demonstrated
good geological understanding by our team. The results confirmed the widespread occurrence of
uraniferous shale in the area and the potential for Aura to establish another significant deposit in
Sweden, with the next step to undertake further drilling. The technological advances that Aura is
making for developing options for the economic processing of the Alum Shale at Häggån can be
applied to the Kallsedet Project.
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
Location of the Kallsedet drill holes
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AURA ENERGY LIMITED
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ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
OPERATIONS REVIEW
Virka Project
Located in the resource rich Norrbotten area of Northern Sweden is Aura’s wholly owned Virka
Project. The project lies approximately 45 kilometres southeast of the more than 20 million pounds
Pleutajokk Uranium Deposit and approximately 50 kilometres northwest of the Arvidsjaur uranium
province.
The Virka Project was discovered by the Swedish Geological Survey (SGU) with initial soil and rock-
chip sampling defining a broad area of anomalism which was later followed up with diamond core
drilling. Subsequent drilling between 1980 and 1982 was then directed towards intersecting this
structure and eight of the total 20 holes drilled in the area intersected high grade uranium
mineralisation. In 2008, Aura assayed the holes with higher radiometric responses and confirmed the
presence of high grade mineralisation. The company is currently developing a programme for Virka.
WEST AFRICAN ACTIVITIES
In both Mauritania and Niger there are well established mining industries. Aura has been active in the
uranium provinces of West Africa since 2007. There is a significant presence of international mining
groups and the governments encourage mining activity. Aura believes many of these areas are
underexplored and that it has a significant advantage in having had an early presence in what is now
one of the more attractive global exploration locations.
Reguibat Project, Mauritania
Aura’s skills and its confidence in its greenfields Reguibat Project has been confirmed by the
calculation of the first JORC-code compliant resource. The exploration team has undertaken
radiometric surveys and two large drilling programs to successfully define several laterally extensive
developments of calcrete uranium mineralisation within the Reguibat Project in northern Mauritania.
The initial Mineral Resource Statement for Aura was prepared by the independent experts, Coffey
Mining Ltd. All of the resource is within six meters of surface allowing potential low cost mining. The
Inferred Resource of 50.2 million pounds at 330 ppm U3O8 on the Reguibat Project was based on a
cut-off grade of 100ppm U3O8. A total of 97 per cent of this resource is contained in permits 100 per
cent held by Aura.
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
Aura Mauritanian permits and drilling to date
The Reguibat resource compares favourably in terms and grade with many other calcrete uranium
resources globally (See Figure 2).
Figure 2: Reguibat project compares positively with other calcrete uranium projects
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AURA ENERGY LIMITED
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ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
OPERATIONS REVIEW
Potential for expansion and higher grades
Many drill holes with higher grade intercepts occur in coherent zones. Within Oued el Foule Est
permit, for example, there are a number of elongate, high grade zones of between 100 and 400
metres width. Similar, spatially continuous, higher grade zones are observed at other prospects.
Aura believes that there is potential to substantially increase the resource as many drill zones have
mineralised holes on their margins that are open in at least one direction. In addition the Coffey
study has identified additional potential in areas which have been drilled, but have not been
classified as resource because of the lack of supporting information.
Next Steps
Aura intends to undertake another drilling programme to extend the resource and to test the high
grade zones to see if they can form the basis for initial mining. Post completion of the drilling Aura
intends to commence a scoping study on the resource.
Drilling will also encompass the substantial undrilled radiometric anomaly in the Ain Sder permit, as
well as other untested radiometric anomalies. Aura holds 2,876 square kilometres in permit
applications to the east of the Ain Sder permit that are considered prospective, but have never been
radiometrically surveyed.
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
OPERATIONS REVIEW
WESTERN AUSTRALIA YILGARN CALCRETE PROJECTS
Wondinong
The wholly owned Wondinong project area covers a broad, sedimentary deltaic environment at the
eastern end of Lake Austin where Aura has defined an Inferred Resource of seven million pounds
uranium above a lower cut-off grade of 100ppm U3O8. Aura has an application for a mining lease to
cover a major part of the resource.
Following receipt of the final Aboriginal heritage site clearance, work is continuing on a potential 72
hole step out drilling program. The proposed shallow drilling will test for extensions of known
uranium mineralisation to the northeast and south of the deposit.
RESOURCE STATEMENTS
HÄGGÅN RESOURCE STATEMENT
Category
Cutoff U3O8
(ppm U3O8)
Size
(Bt)
U3O8
ppm
Inferred
100
1.791
160
MoO3
ppm
214
V2O5
ppm
1551
Ni
ppm
324
Zn
ppm
545
Size in billions of tonnes and grades of the initial resources for the Häggån Project at 100ppm cut-off grade.
Aura recognises the requirement to demonstrate that the uranium and other metals can be extracted
economically, and this release is a further report of the progress of this work.
Competent Person’s Statement
Mr Simon Gatehouse takes responsibility for estimation of uranium and associated metals in the Häggån
Resource. This work was completed while Mr Gatehouse was a consultant geologist and a fulltime staff member
of H&S. He is a competent person in the meaning of JORC having had a minimum of five years relevant
experience in exploration and estimation of uranium and other metal resources in many parts of the world. He is
a member of the Australian Institute of Geoscientists. Mr Gatehouse consents to the inclusion in the report of
the matters based on his information in the form and context in which it appears.
REGUIBAT RESOURCE STATEMENT
Category
Lower Cut Off
Tonnes
Grade
Contained U3O8
Inferred
(ppm U3O8)
(Mt )
(ppm U3O8)
100
150
200
250
300
68.7
67.3
60.7
48.8
35.8
330
340
350
380
420
(Mlb)
50.2
49.9
47.3
41.3
33.4
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
Competent Person’s Statement
The Competent Person for the Resource estimation and classification is Mr Oliver Mapeto from Coffey Mining.
The Competent Person for the drill hole data and data quality is Dr Robert Beeson from Aura Energy.
The information in the report to which this statement is attached that relates to the Mineral Resource and is
based on information compiled by Oliver Mapeto. Oliver Mepeto 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.
This qualifies Mr Mapeto as a Competent Person as defined in the 2004 edition of the ‘Australian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Mapeto is a Member of The
Australasian Institute of Mining and Metallurgy and is employed by Coffey Mining Pty Ltd. Mr Mapeto consents
to the inclusion in the report of the matters based on his information in the form and context in which it
appears.
WONDINONG RESOURCE STATEMENT
Category
Lower Cut Off
Tonnes
Grade
Contained U3O8
(ppm U3O8)
100
150
200
250
(Mt )
22.6
6.5
1.9
0.3
(ppm U3O8)
(Mlb)
140
185
225
270
7.0
2.6
0.9
0.2
Competent Person’s Statement
Dr Robert Beeson 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. This qualifies Dr Beeson as a Competent Person
as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’. Dr Robert Beeson consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears. Dr Beeson is a member of the Australian Institute of
Geoscientists. Dr Beeson takes responsibility for the requirement of “reasonable prospects for eventual
economic extraction” for the reporting of Häggån Resources at the quoted cut-off grades.
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CORPORATE GOVERNANCE STATEMENT
As the framework of how the Board of Directors of Aura Energy Limited (“Company”) carries out its duties
and obligations, the Board has considered the eight principles of corporate governance as set out in the ASX
Good Corporate Governance and Best Practice Recommendations.
The essential corporate governance principles are:
1 Lay solid foundations for management and oversight;
2 Structure the Board to add value;
3 Promote ethical and responsible decision-making;
4 Safeguard integrity in financial reporting;
5 Make timely and balanced disclosure;
6 Respect the rights of shareholders;
7 Recognise and manage risk;
8 Remunerate fairly and responsibly.
1. Lay solid foundations for management and oversight.
Recommendation 1.1: Management should establish and disclose functions reserved to the board and
delegated to management.
Roles and Responsibilities:
The roles and responsibilities carried out by the Board are to:
Oversee control and accountability of the Company;
Set the broad targets, objectives, and strategies;
Monitor financial performance;
Assess and review risk exposure and management;
Oversee compliance, corporate governance, and legal obligations;
Approve all major purchases, disposals, acquisitions, and issue of new shares;
Approve the annual and half-year financial statements;
Appoint and remove the Company’s Auditor;
Appoint and assess the performance of the Managing Director and members of the senior management
team;
Report to shareholders.
Recommendation 1.2: Companies should disclose the process for evaluating the performance of senior
executives.
The Board regularly reviews the performance of senior executives.
Recommendation 1.3: Provide the information indicated in the ASX Corporate Governance Council’s Guide to
Reporting on Principle 1.
The evaluation of performance of senior executives has taken place throughout the year.
2. Structure the Board to add value.
Recommendation 2.1: A majority of the Board should be independent Directors. – The majority of the Board is
independent. Refer general comment below.
Recommendation 2.2: The Chairperson should be an independent Director. – The Chairman is not
independent. Refer general comment below.
Recommendation 2.3: The roles of the Chairperson and Chief Executive should not be exercised by the same
individual.
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CORPORATE GOVERNANCE STATEMENT
Recommendation 2.4: Establishment of a nominations committee.
Recommendation 2.5: Disclose the process for performance evaluation of the board, its committees and
individual directors, and key executives.
Recommendation 2.6: Provide the information indicated in the ASX Corporate Governance Council’s Guide to
Reporting on Principle 2.
General Comments:
Membership
The Board’s membership and structure is selected to provide the Company with the most appropriate
direction in the areas of business controlled by the Company. The Board currently consists of six members; a
Managing Director, and five non-executive Directors. Refer to the Directors’ Report for details of each
Director’s profile. The majority of the Board is independent.
Chairman and Managing Director
The roles of the Chairman and the Managing Director are separate. The Chairman is responsible for leading
the Board in its duties, and facilitating effective discussions at Board level. The Managing Director is
responsible for the efficient and effective operation of the Company.
Nomination Committee
The Company has a formal charter for the Nomination Committee, however, no Committee has been
appointed to date. The Board as a whole deals with areas that would normally fall under the charter of the
Nomination Committee. These include matters relating to the renewal of Board members, and Board
performance.
Skills
The Directors bring a range of skills and background to the Board including exploration, mining engineering,
metallurgical engineering, technical management, accountancy, finance, stockbroking, and legal.
Experience
The Directors have considerable experience in business at both operational and corporate levels.
Meetings
The Board endeavours to meet at least bi-monthly on a formal basis, although the board regularly meets
informally.
Independent professional advice
Each Director has the right to seek independent professional advice at the Company’s expense for which the
prior approval of the Chairman is required, and is not unreasonably withheld.
3. Promote ethical and responsible decision-making.
Recommendation 3.1: Establish a code of conduct to guide the Directors, the Chief Executive Officer (or
equivalent) and any other key executives as to:
3.1.1 The practices necessary to maintain confidence in the Company’s integrity;
3.1.2 The practices necessary to take into account legal obligations and the reasonable expectations of
shareholders;
3.1.2 The responsibility and accountability of individuals for reporting and investigating reports of unethical
practices.
The Company is committed to its Directors and employees maintaining high standards of integrity, and ensuring
that activities are in compliance with the letter and spirit of both the law and Company policies. Each staff
member is issued with the Company’s Policies and Procedures manual at the beginning of their employment
with the Company.
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CORPORATE GOVERNANCE STATEMENT
Recommendation 3.2: 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.
The Company has a diversity policy included in its Corporate Governance Policy.
Recommendation 3.3: Disclose in each annual report the measurable objectives for achieving gender diversity
set by the board in accordance with the diversity policy and progress towards achieving them.
The Company believes that the promotion of diversity on boards, in senior management and within the
organisation generally broadens the pool for recruitment of high quality directors and employees; is likely to
support employee retention; through the inclusion of different perspectives, is likely to encourage greater
innovation; and is socially and economically responsible governance practice.
The Company is in compliance with the ASX Corporate Governance Council’s Principles & Recommendations
on Diversity. The Board of Directors is responsible for adopting and monitoring the Company’s diversity policy.
The policy sets out the beliefs and goals and strategies of the Company with respect to diversity within the
Company. Diversity within the Company means all the things that make individuals different to one another
including gender, ethnicity, religion, culture, language, sexual orientation, disability and age. It involves a
commitment to equality and to treating of one another with respect.
The Company is dedicated to promoting a corporate culture that embraces diversity. The Company believes that
diversity begins with the recruitment and selection practices of its board and its staff. Hiring of new employees
and promotion of current employees are made on the bases of performance, ability and attitude.
Recommendation 3.4: Disclose in each annual report the proportion of women employees in the whole
organisation, women in senior executive positions and women on the board.
Currently there are 4 women employees in the whole organisation, in senior executive positions, or on the board.
Given the present size of the Company, there are no plans to establish measurable objectives for achieving
gender diversity at this time. The need for establishing and assessing measurable objectives for achieving gender
diversity will be re-assessed as the size of the Company increases.
Recommendation 3.5: Provide the information indicated in the ASX Corporate Governance Council’s Guide to
Reporting on Principle 3.
A summary of both the Company’s Code of Conduct and its Share Trading Policy is included on the Company’s
website.
General Comments:
Integrity of Company’s Financial Condition
The Company’s Financial Controller and Company Secretary report in writing to the Board that the
consolidated financial statements of the Company and its controlled entities for the half and full financial
year present a true and fair view, in all material respects, of the Company’s financial condition and
operational results are in accordance with relevant accounting standards.
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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
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ANNUAL REPORT 30 JUNE 2011
CORPORATE GOVERNANCE STATEMENT
Audit Committee
The Company has a formal charter for an Audit Committee. The Audit Committee comprises Messers Fraser
and O’Loughlin who are responsible for the following activities:
Review the Company’s accounting policies;
Review the content of financial statements;
Review the scope of the external audit, its effectiveness, and independence of the external audit;
Ensure accounting records are maintained in accordance with statutory and accounting standard
requirements;
Monitor systems used to ensure financial and other information provided is reliable, accurate, and timely;
Review the audit process with the external auditors to ensure full and frank discussion of audit issues;
Present half and full year financial statements to the Board.
5. Make timely and balanced disclosure.
Recommendation 5.1: Establish written policies and procedures designed to ensure compliance with ASX
Listing rules disclosure requirements and to ensure accountability at a senior management level for that
compliance.
Being a listed entity on the ASX, the Company has an obligation under the ASX Listing Rules to maintain an
informed market with respect to its securities. Accordingly, the Company advises the market of all
information required to be disclosed under the Rules that the Board believes would have a material affect on
the price of the Company's securities.
The Company Secretary has been appointed as the person responsible for communication with the Australian
Securities Exchange (ASX). This role includes responsibility for ensuring compliance with the continuous
disclosure requirements of the ASX Listing Rules, and overseeing and co-ordinating information disclosure to
the ASX, analysts, brokers, shareholders, the media, and the public.
All shareholders receive a copy of the Company's annual report.
Recommendation 5.2: Provide the information indicated in the ASX Corporate Governance Councils’ Guide to
Reporting on Principle 5.
Disclosure is reviewed as a routine agenda item at each Board meeting.
6. Respect the rights of shareholders.
Recommendation 6.1: Design and disclose a communications strategy to promote effective communication
with shareholders and encourage effective participation at general meetings.
Recommendation 6.2: Request the external auditor to attend the annual general meeting and be available to
answer shareholder questions about the conduct of the audit, and the preparation and content of the
auditor's report.
General Comments:
The Company is committed to keeping shareholders fully informed of significant developments at the
Company. In addition to public announcements of its financial statements and significant matters, the
Company provides the opportunity for shareholders to question the Board and management about its
activities at the Company's annual general meeting.
The Company's auditor, Bentleys, will be in attendance at the annual general meeting and will also be
available to answer questions from shareholders about the conduct of the audit and the preparation and
content of the auditor's report.
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AURA ENERGY LIMITED
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ANNUAL REPORT 30 JUNE 2011
CORPORATE GOVERNANCE STATEMENT
7. Recognise and manage risk
Recommendation 7.1: The Board or appropriate Board committee should establish policies on risk oversight
and management.
Recommendation 7.2: The chief executive officer (or equivalent) and the chief financial officer (or equivalent)
to state in writing to the Board that:
7.2.1 The statement given in accordance with best practice recommendation 4.1 (the integrity of financial
statements) is founded on a sound system of risk management and internal compliance and control
which implements the policies adopted by the Board.
7.2.2 The Company's risk management and internal compliance and control system is operating efficiently
and effectively in all material respects.
Recommendation 7.3: The board should disclose whether it has received assurance from the chief executive
officer (or 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 the financial
reporting risks.
Recommendation 7.4: Provide the information indicated in the ASX Corporate Governance Council’s Guide to
reporting on Principle 7.
General Comments:
The Board oversees the Company's risk profile. The financial position of the Company and matters of risk are
considered by the Board. The Board is responsible for ensuring that controls and procedures to identify,
analyse, assess, prioritise, monitor and manage risk are in place, being maintained and adhered to.
The Financial Controller and Company Secretary state in writing to the Board that:
The statement given in accordance with best practice recommendation 4.1 (the integrity of financial
statements) is founded on a sound system of risk management and internal compliance and control,
which implements the policies adopted by the Board.
The Company's risk management and internal compliance and control system is operating efficiently and
effectively in all material respects.
8. Remunerate fairly and responsibly
Recommendation 8.1: The Board should establish a Remuneration Committee.
Recommendation 8.2: Clearly distinguish the structure of non-executive Directors' remuneration from that of
executives.
Recommendation 8.3: Provide the information indicated in the ASX Corporate Governance Council’s Guide to
Reporting on Principle 8.
General Comments:
Principles used to determine the nature and amount of remuneration
The objective of the Company's remuneration framework is to ensure reward for performance is competitive
and appropriate to the results delivered. The framework aligns executive reward with the creation of value
for shareholders, and conforms to market best practice.
The remuneration committee ensures that executive rewards satisfy the following key criteria for good
reward governance practices:
Competitiveness and reasonableness;
Acceptability to the shareholders;
Performance linked;
Transparency;
Capital management.
19
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CORPORATE GOVERNANCE STATEMENT
The Company has structured an executive remuneration framework that is market competitive and
complimentary to the reward strategy of the organisation.
Remuneration Committee
Members of the Remuneration Committee are Mr Fraser and Mr Stephenson.
Directors' Remuneration
Further information on Directors' and executives' remuneration is set out in the Directors' Report and Note 5
to the financial statements.
20
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
DIRECTORS’ REPORT
Your Directors present their report together with the financial statements of the Group, being the company
and its controlled entities, for the financial year ended 30 June 2011.
Directors
The names of Directors in office at any time during or since the end of the year are:
Mr Brett Fraser
Dr Bob Beeson
Mr Jay Stephenson
Mr Simon O’Loughlin
Mr Leigh Junk (appointed 7 June 2011)
Mr Julian (Jules) Perkins (appointed 7 June 2011)
Directors have been in office since the start of the financial year to the date of this report unless
otherwise stated.
Company Secretary
The following person held the position of Company Secretary at the end of the financial year:
Mr Jay Richard Stephenson — Fellow of Certified Practicing Accountants; Certified Management
Accountant; Member of Australian Institute of Company Directors; Master of Business Administration;
Fellow of Institute of Chartered Secretaries Australia. Mr Stephenson is also a non-executive director
and performs the role of Chief Financial Officer for the Company.
Principal Activities
The principal activities of the Group during the financial year were the exploration and evaluation of its
projects in Sweden, Africa, and Australia.
Operating Results
The consolidated loss for the year amounted to $2,417,029 (2010: $1,679,699).
Dividends Paid or Recommended
There were no dividends paid or recommended during the financial year ended 30 June 2011.
Review of Operations
A detailed review of the Group’s exploration activities is set out in the section titled “Review of Operations” in
this annual report.
Financial Position
The net assets of the Group have increased by $6,229,002 from 30 June 2010 to $14,066,544 at 30 June 2011.
21
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
DIRECTORS’ REPORT
Significant Changes in State of Affairs
The following significant changes in the state of affairs of the Group occurred during the financial year:
(a) On 23 September 2010, the Company completed a placement of 12,484,898 Shares at an issue price
of $0.15 to raise $1,872,735.
(b) On 20 October 2010, the Company increased its strategic position in Mauritania by purchasing the
balance of interests in its GCM joint ventures in West Africa with the purchase of GCM Africa
Uranium Limited, a company incorporated in the United Kingdom.
(c) On 25 October 2010, the Company completed an entitlement issue of 19,143,511 Shares at an issue
price of $0.15 to raise $2,871,527.
(d) On 20 December 2010, the Company completed a placement of 17,229,000 Shares at an issue price
of $0.23 to raise $3,962,670.
After Balance Date Events
The Company issued 4,500,000 shares at 23 cents, raising $1,035,000.
There are no other significant after balance date events that are not covered in the Operations Review or
elsewhere in this Annual Report.
Likely Developments
Likely developments, future prospects and business strategies of the operations of the Group and the
expected results of those operations have not been included in this report as the directors believe that the
inclusion of such information would be likely to result in unreasonable prejudice to the Group.
Information on Directors
Mr Brett Fraser
Qualifications
— Chairman (Non-Executive).
— Fellow of Certified Practicing Accountants; Fellow of the Financial Services
Institute of Australasia; Grad Dip Finance, Securities Institute of Australia;
Bachelor of Business (Accounting); International Marketing Institute - AGSM
Sydney.
Experience
— Board member since 24 August 2005.
Interest in Shares and
Options
— 1,959,461 ordinary Shares in Aura Energy Limited and no options
Special Responsibilities
— Member of the Due Diligence Committee and Remuneration Committee.
Directorships held in other
listed entities
— Current non-executive director and Chairman of Drake Resources Limited
since March 2004, non-executive director and Chairman of Blina Diamonds
NL and Doray Minerals Limited since September 2008 and October 2009
respectively. Past non-executive director of Gage Roads Brewing Co Limited
from November 2007 to September 2008. No other directorships in the
past three years.
22
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
DIRECTORS’ REPORT
Dr Robert Beeson
— Managing Director
Qualifications
— Bachelor of Science with Honours; PhD; Member of the Australian Institute
of Geoscientists
Experience
— Geologist with over 30 years of global experience in base and precious metal
Interest in Shares and
Options
Directorships held in other
listed entities
exploration and development. Board member since 31 March 2006.
— 1,799,250 Ordinary Shares in Aura Energy Limited and no options
— Current Managing Director of Drake Resources Limited since November
2004. No other directorships in the past three years.
Mr Jay Stephenson
— Director (Non-Executive); Company Secretary
Qualifications
— Fellow of Certified Practicing Accountants; Certified Management
Accountant; Member Australian Institute of Company Directors; Master of
Business Administration; Fellow Institute of Chartered Secretaries Australia.
Experience
— Board member since 24 August 2005
Interest in Shares and
Options
— 1,580,200 Ordinary Shares in Aura Energy Limited and no options
Special Responsibilities
— Member of Due Diligence Committee and Remuneration Committee
Directorships held in other
listed entities
— Current non-executive Director of Drake Resources Limited since March
2004, Strategic Minerals Corporation NL since July 2009 and Doray Minerals
Limited since August 2009. Past non-executive director of Excelsior Gold
Limited from October 2009 to November 2009. No other directorships in
the past three years.
Mr Simon O’Loughlin
— Director (Non-Executive)
Qualifications
Experience
Interest in Shares and
Options
— BA(Acc),Law Society Certificate in Law.
— Board member since 31 March 2006.
— 868,112 Ordinary Shares in Aura Energy Limited and no options
Special Responsibilities
— Member of Due Diligence Committee
Directorships held in other
listed entities
— Current Chairman of Bondi Mining Limited since December 2006, Avenue
Resources Limited since March 2010 and Kagera Nickel Limited since
September 2010, Current Non-Executive Director of WCP Resources Limited
since March 2005, Petratherm Limited since July 2004, Chesser Resources
Limited since May 2007, and Living Cell Technologies Limited since May
2004, Probiomics Limited since July 2008, and Strzelecki Metals Limited
since September 2010. No other directorships in the past three years.
23
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
DIRECTORS’ REPORT
Mr Leigh Junk
Qualifications
— Director (Non-Executive)
— Diploma of Surveying from Wembley Technical College in 1992 and
graduated from the University of Ballarat with a Graduate Diploma of
Mining Engineering in 2000, and a Masters in Mineral Economics from
Curtin University in 2008.
Experience
— Board member since 7 June 2011.
Mr Junk is a mining engineer with 19 years’ experience in mine planning.
Leigh was the Executive responsible for feasibility studies, project
evaluation, production scheduling and mine design with several mining
companies throughout Western Australia, including Pilbara Manganese Pty
Ltd, WMC Resources Ltd. and Mincor Operations Pty Ltd.
— No Ordinary Shares in Aura Energy Limited and no options
Interest in Shares and
Options
Special Responsibilities
— none
Directorships held in other
listed entities
— Mr. Junk is a Director of Doray Minerals Limited, Sentosa Mining Limited,
the Goldfields Credit Union and of TSX-Venture listed Brilliant Mining.
Mr Jules Perkins
Qualifications
— Director (Non-Executive)
— Master of Science (Imperial College of Science & Technology) 1972; Associate
of the Camborne School of Metalliferous Mining (Honours) 1967; Fellow of
the Australasian Institute of Mining and Metallurgy; Member of the Australian
Institute of Company Directors.
Experience
— Board member since 7 June 2011.
Jules has over 40 years' experience in operations and management with
major companies in the international minerals industry. He was Manager of
Mining & Technology (Australia) for AngloGold Ashanti Ltd, one of the
world’s largest gold mining companies, until 2006. His career includes
underground mining engineering in South Africa and management of
metallurgic operations on the Zambian Copperbelt. Jules led the mineral
processing department of Shell Research in the Netherlands for three years
before moving into corporate management in the Netherlands and then in
Australia. Mr Perkins is currently Chairman of the Board of Parker Centre
Ltd, which manages the Parker Cooperative Research Centre (‘CRC’) for
Hydrometallurgy. Jules has previously been a director on the boards of the
CRC Mining and the Australian Centre for Mining Environmental Research.
Interest in Shares and
Options
— 40,000 Ordinary Shares in Aura Energy Limited and 50,000 options
Special Responsibilities
— None
Directorships held in other
listed entities
— No other directorships held in other listed entities.
24
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
DIRECTORS’ REPORT
Meetings of Directors
During the financial year, 3 meetings of Directors (including committees of Directors) were held.
Attendances by each Director during the year were as follows:
DIRECTORS’
MEETINGS
DUE DILIGENCE
COMMITTEE
REMUNERATION
AUDIT
COMMITTEE
COMMITTEE
COMMITTEE MEETINGS
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Brett Fraser
Bob Beeson
Jay Stephenson
Simon O’Loughlin
Leigh Junk
Jules Perkins
3
3
3
3
-
-
3
3
3
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
-
-
1
-
-
1
-
-
1
-
-
Indemnifying Officers or Auditor
During or since the end of the financial year the Company has given an indemnity or entered into an
agreement to indemnify, or paid or agreed to pay insurance premiums as follows:
The Company has entered into agreements to indemnify all Directors and provide access to documents,
against any liability arising from a claim brought by a third party against the Company. The agreement
provides for the company to pay all damages and costs which may be awarded against the Directors.
The Company has paid premiums to insure each of the directors against liabilities for costs and expenses
incurred by them in defending any legal proceedings arising out of their conduct while acting in the
capacity of director of the company, other than conduct involving a willful breach of duty in relation to
the Company. The amount of the premium was $10,566.
No indemnity has been paid to auditors.
Options
At the date of this report, the un-issued ordinary shares of Aura Energy Limited under option are as follows:
Grant Date
Date of Expiry
Exercise Price
Number under Option
30 November 2009
1 September 2011
1 February 2007
8 February 2011
8 February 2011
24 April 2008
1 February 2012
30 March 2013
30 March 2013
24 April 2013
23 December 2009
23 December 2014
31 March 2011
31 March 2016
$0.23
$0.25
$0.69
$1.05
$0.60
$0.30
$0.45
4,500,000
550,000
650,000
650,000
400,000
375,000
570,000
7,695,000
No person entitled to exercise the option has or has any right by virtue of the option to participate in any
share issue of any other body corporate.
25
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
DIRECTORS’ REPORT
Environmental Regulations
In the normal course of business, there are no environmental regulations or requirements that the Company
is subject to.
The directors have considered the enacted National Greenhouse and Energy Reporting Act 2007 (the NGER
Act) which introduces a single national reporting framework for the reporting and dissemination of
information about the greenhouse gas emissions, greenhouse gas projects, and energy use and production of
corporations. At the current stage of development, the directors have determined that the NGER Act will
have no effect on the company for the current, nor subsequent, financial year. The directors will reassess this
position as and when the need arises.
Non-audit Services
During the year ended 30 June 2011, taxation consulting services were provided to the company by a party
related to the auditors. These services amounted to $1,650 (2010: nil).
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
proceedings 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 year ended 30 June 2011 has been received and can be
found on page 20 of the financial report.
26
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
REMUNERATION REPORT (AUDITED)
A. Remuneration Policy
The remuneration policy of Aura Energy Limited has been designed to align director and management
objectives with shareholder and business objectives by providing a fixed remuneration component, and
offering specific long-term incentives based on key performance areas affecting the Group’s financial results.
The Board of Aura Energy Limited believes the remuneration policy to be appropriate and effective in its
ability to attract and retain the best management and directors to run and manage the Group, as well as
create goal congruence between directors, executives and shareholders.
The Board’s policy for determining the nature and amount of remuneration for Board members and senior
executives of the Group is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and other senior
executives, was developed by the Remuneration Committee and approved by the Board. All executives
receive a base salary (which is based on factors such as length of service and experience), superannuation,
options and performance incentives. The Remuneration Committee reviews executive packages annually by
reference to the Group’s performance, executive performance, and comparable information from industry
sectors and other listed companies in similar industries.
Executives are also entitled to participate in the employee share and option arrangements.
The non-executive Directors and executives receive a superannuation guarantee contribution required by the
government, which is currently 9%, and do not receive any other retirement benefits.
All remuneration paid to Directors and executives is valued at the cost to the Company and expensed.
Options given to Directors and employees are valued using the Black-Scholes methodology.
The Board policy is to remunerate non-executive Directors at the lower end of market rates for comparable
companies for time, commitment, and responsibilities. The non-executive Directors have been provided with
options that are meant to incentivise the non-executive Directors. The Remuneration Committee determines
payments to the non-executive Directors and reviews their remuneration annually based on market practice,
duties, and accountability. Independent external advice is sought when required. The maximum aggregate
amount of fees that can be paid to non-executive Directors is subject to approval by shareholders at the
Annual General Meeting. Fees for non-executive Directors are not linked to the performance of the Group.
However, to align Directors’ interests with shareholder interests, the Directors are encouraged to hold shares
in the Company.
The remuneration policy has been tailored to increase the direct positive relationship between shareholders
investment objectives and directors’ and executives’ performance. Currently, this is facilitated through the
issue of options to the majority of directors and executives to encourage the alignment of personal and
shareholder interests. The Company believes this policy will be effective in increasing shareholder wealth. For
details of directors and executives interests in options at year end, refer to note 5 of the financial statements.
27
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
REMUNERATION REPORT (AUDITED)
B. Remuneration Details for the Year Ended 30 June 2011
There were no cash bonuses paid during the year and there are no set performance criteria for achieving cash bonuses.
The following table of benefits and payment details, in respect to the financial year, the components of remuneration for
each member of the key management personnel of the Group:
2011
Group Key
Management
Personnel
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Equity-settled share-
based payments
Total
Salary, fees
Profit share
Non-
Other
Super-
Other
Equity
Options
and leave
and bonuses
monetary
annuation
$
$
$
$
$
$
$
$
$
Brett Fraser
Bob Beeson
58,750
146,675
Jay Stephenson
50,000
Simon O’Loughlin
50,000
-
-
305,425
Leigh Junk
Jules Perkins
2010
Group Key
Management
Personnel
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45,000*
16,434
-
25,000
45,000*
13,626
-
-
-
13,626
-
-
90,000
68,686
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39,958
160,142
59,938
231,613
39,958
148,584
39,958
103,584
-
-
-
-
179,812
643,923
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Equity-settled share-
based payments
Total
Salary, fees
Profit share
Non-
Other
Super-
Other
Equity
Options
and leave
and bonuses
monetary
annuation
$
$
$
$
$
$
$
$
$
Brett Fraser
Bob Beeson
Jay Stephenson
55,000
140,000
40,000
Simon O’Loughlin
40,000
275,000
-
-
-
-
-
-
-
-
-
-
45,000*
4,519
-
50,000
45,000*
3,600
-
3,600
90,000
61,719
-
-
-
-
-
-
-
-
-
-
55,942
160,461
83,911
273,911
55,942
144,542
55,942
99,542
251,737
678,456
*Cash from other activities paid to Mr Fraser and Mr Stephenson are paid to Wolfstar Group Pty Ltd, a company controlled by Mr Fraser
and Mr Stephenson. Wolfstar Group Pty Ltd provides Financial and Company Secretarial services to Aura Energy Limited.
C. Service Agreements
The Managing Director, Dr Robert Beeson, is employed under an extension of the terms of a previous
contract of employment.
The employment contract stipulates a one month resignation period. The Company may terminate the
employment contract without cause by providing one month’s written notice, or making payment in lieu of
notice based on the individual’s annual salary component. Termination payments are generally not payable
on resignation or dismissal for serious misconduct. In the instance of serious misconduct the Company can
terminate employment at any time.
28
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
REMUNERATION REPORT (AUDITED)
D. Share-based compensation
Incentive Option Scheme
Options are granted under the Aura Energy Limited Incentive Option Scheme. All staff who have been
continuously employed by the Company for a period of at least one year are eligible to participate in the plan.
Options are granted under the plan for no consideration.
Director and Key Management Personnel Options
There were no director options issued during the 2011 financial year. An expense was raise in the current
year for options issued in prior periods, in accordance with their vesting conditions.
On 30 November 2009, 4,500,000 share options were granted to directors to take up ordinary shares at an
exercise price of $0.23 each. The options are exercisable on or before 1 September 2011.
Share-based Payments
The terms and conditions relating to options granted as remuneration during the year to Directors and Key
Management Personnel during the year are as follows:
Group Key
Management
Personnel
Grant
value
$
Reason
for grant
Grant date
Percentage
vested during
year
%
(Note 2)
Percentage
forfeited
during year
%
Percentage
remaining as
unvested
%
Brett Fraser
30 November 2009
95,900
Note 1
Bob Beeson
30 November 2009
143,850
Note 1
James Merrillees
19 July 2010
7,040
Note 1
James Merrillees
31 March 2011
7,950
Note 1
Jay Stephenson
30 November 2009
95,900
Note 1
Simon O’Loughlin
30 November 2009
95,900
Note 1
Leigh Junk
Jules Perkins
-
-
-
-
-
-
42
42
100
100
42
42
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Range of
possible
values
relating to
future
payments
-
-
-
-
-
-
-
-
Expiry date for
vesting
1 September 2011
1 September 2011
30 June 2011
31 March 2016
1 September 2011
1 September 2011
-
-
29
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
REMUNERATION REPORT (AUDITED)
Note 1
The options have been granted to Key Management Personnel (KMP) to provide a market-linked
incentive package in their capacity as KMP and for future performance by them in their roles. The
vesting conditions of the options are as follows:
KMP options will vest 12 months after the issue date and if the KMP is continually
employed by the Company during that 12 months.
KMP options vest only if the share price is greater than 26 cents for 5 consecutive days
during the 12 months vesting period.
Director options will vest immediately if there is a change or addition in directors
exceeding 50% to those in office on date of issue.
Note 2
The dollar value of the percentage vested during the period has been reflected in the Table of
Benefits and Payments on previous page.
All options were issued by Aura Energy Limited and entitle the holder to one ordinary share in
Aura Energy Limited for each option exercised.
Description of Options Issued as Remuneration
Details of the options granted as remuneration to those key management personnel listed in the previous table
are as follows:
Grant date
Issuer
30 November
2009
Aura Energy
Limited
19 July 2010
Aura Energy
Limited
Entitlement on
exercise
Dates exercisable
1:1 Ordinary
Shares in Aura
Energy Limited
From vesting date to
11 September 2011
(expiry)
1:1 Ordinary
Shares in Aura
Energy Limited
From vesting date to
30 June 2011
(expiry)
Exercise
price
$
Value per
option at
grant date
$
Amount paid/
payable by
recipient
$
$0.23
$0.0959
$0.197
$0.0352
-
-
Option values at grant date were determined using the Black-Scholes method.
Details relating to service and performance criteria required for vesting have been provided in the Share-based
Payments table in Note 19.
END OF REMUNERATION REPORT
This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution
of the Board of Directors.
JAY STEPHENSON
DIRECTOR
Dated this 30th Day of September 2011
30
To The Board of Directors
This declaration is made in connection with our audit of the financial report of Aura Energy
Limited and Controlled Entities for the year ended 30 June 2011 and in accordance with
the provisions of the Corporations Act 2001.
We declare that, to the best of our knowledge and belief, there have been:
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit;
no contraventions of the Code of Professional Conduct of the Institute of Chartered
Accountants in Australia in relation to the audit.
Yours faithfully
BENTLEYS
Chartered Accountants
RICHARD JOUGHIN CA
Director
DATED at PERTH this 30th day of September 2011
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2011
Revenue
Other income
Accounting and audit fees
Employee benefits
Legal and consulting fees
Business development
Computers and software
Depreciation
Insurance
Public relations
Share registry and listing fees
Rent and utilities
Travel and accommodation
Share-based payments
Impairment on capitalised exploration
Other expenses
Loss before income tax
Income tax expense
Loss from continuing operations
Other Comprehensive Income
Foreign currency movement
Other comprehensive income for the year, net of tax
Note
2
2
3
19
11
3
4
2011
$
133,263
4,730
137,993
(69,138)
(549,708)
(54,972)
(58,539)
(29,025)
(43,836)
(43,439)
(201,906)
(89,746)
(32,935)
(154,217)
(433,009)
(687,505)
(107,047)
2010
$
282,020
48,306
330,326
(37,521)
(505,855)
(13,791)
(323,706)
(27,100)
(55,967)
(17,577)
(38,377)
(47,434)
(32,502)
(91,835)
(293,777)
(452,156)
(72,427)
(2,417,029)
(1,679,699)
-
-
(2,417,029)
(1,679,699)
(33,177)
(33,177)
17,702
17,702
Total comprehensive income attributable to
members of the parent entity
(2,450,206)
(1,661,997)
Earnings per Share:
Basic loss per share (cents per share)
7
(2.10)
(2.15)
The accompanying notes form part of these financial statements.
32
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Exploration and evaluation assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Short term provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Reserves
Accumulated Losses
TOTAL EQUITY
8
9
10
11
12
13
14
15
Note
2011
$
3,289,774
187,607
3,477,381
26,933
11,465,790
11,492,723
2010
$
1,221,825
89,732
1,311,557
53,327
6,697,363
6,750,690
14,970,104
8,062,247
885,253
18,307
903,560
207,811
16,894
224,705
903,560
224,705
14,066,544
7,837,542
21,074,083
12,681,865
923,395
(7,930,934)
14,066,544
860,062
(5,704,385)
7,837,542
The accompanying notes form part of these financial statements.
33
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2011
Issued
Accumulated
Options
Capital
Losses
Reserve
Foreign
Exchange
Translation
Reserve
$
$
$
$
Total
$
8,856,865
(4,222,086)
762,752
(16,769)
5,380,762
(1,679,699)
-
(1,679,699)
-
-
-
4,000,000
(175,000)
-
-
-
-
-
-
-
-
-
197,400
(197,400)
-
293,777
859,129
-
(1,679,699)
17,702
17,702
17,702
(1,661,997)
-
-
-
-
4,000,000
(175,000)
-
293,777
933
7,837,542
12,681,865
(5,704,385)
859,129
933
7,837,542
(2,417,029)
-
(2,417,029)
-
-
-
-
-
-
-
(2,417,029)
(33,177)
(33,177)
(33,177)
(2,450,206)
Balance at 1 July 2009
Loss for the year
Other comprehensive income for
the year
Total comprehensive income for
the year
Transaction with owners, directly
in equity
Shares issued during the year
Transaction costs
Options expired during the year
Options issued during the year
Balance at 1 July 2010
Loss for the year
Other comprehensive income for
the year
Total comprehensive income for
the year
Transaction with owners, directly
in equity
Shares issued during the year
Transaction costs
Balance at 30 June 2010
12,681,865
(5,704,385)
8,763,498
(507,632)
-
-
(9,667)
-
Options expired during the year
136,352
190,480
(326,832)
Options issued during the year
-
-
Balance at 30 June 2011
21,074,083
(7,930,934)
433,009
955,639
The accompanying notes form part of these financial statements.
-
-
-
-
8,753,831
(507,632)
-
433,009
(32,244)
14,066,544
34
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Interest received
Payments to suppliers and employees
Payments for exploration expenditure
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
Loan for acquisition of subsidiary
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Capital raising costs
Net cash provided by financing activities
Net increase/(decrease) in cash held
Cash at 1 July
Cash at 30 June
8
Note
2011
$
2010
$
43,437
98,506
709,563
90,828
(1,928,931)
(1,578,094)
(4,883,019)
(3,027,460)
18a
(6,670,007)
(3,805,163)
(17,443)
509,200
491,757
(23,399)
-
(23,399)
8,753,831
(507,632)
8,246,199
2,067,949
1,221,825
3,289,774
4,000,000
(175,000)
3,825,000
(3,562)
1,225,387
1,221,825
The accompanying notes form part of these financial statements.
35
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
These are the consolidated financial statements and notes of Aura Energy Limited and controlled entities
(‘Consolidated Group’ or ‘Group’). Aura Energy Limited is a company limited by shares, domiciled and
incorporated in Australia.
The separate financial statements of the parent entity, Aura Energy Limited, have not been presented with this
financial report as permitted by the Corporations Act 2001.
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with
Australian Accounting Standards,
Interpretations, other authoritative
including Australian Accounting
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 to which
they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes
also comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies
adopted in the preparation of these financial statements are presented below. They have been consistently
applied unless otherwise stated.
The financial statements have been prepared on an accruals basis and are 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
A controlled entity is any entity over which Aura Energy Limited has the power to govern the financial and
operating policies so as to obtain benefits from its activities. In assessing the power to govern, the
existence and effect of holdings of actual and potential voting rights are considered.
A list of controlled entities is contained in Note 17 to the financial statements.
All inter-group balances and transactions between entities in the Consolidated Group, including any
unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with those adopted by the parent entity.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the
consolidated financial statements as well as their results for the year then ended. Where controlled entities
have entered (left) the Consolidated Group during the year, their operating results have been included
(excluded) from the date control was obtained (ceased).
Business Combinations
Business combinations occur when 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 acquire 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 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
36
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statenment of
comprehensive income.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
(b) Exploration and Development Expenditure
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.
When production commences, the accumulated costs for the relevant area of interest will be 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
capitalise costs in relation to that area of interest.
Costs of site restoration are provided over the life of the project 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.
(c)
Income Tax
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 outside profit or loss when the
tax relates to items recognised outside profit or loss.
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.
37
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
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.
(d) Plant and Equipment
Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess
of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the
expected net cash flows that will be received from the assets employment and subsequent disposal. The
expected net cash flows have not been discounted to their present values in determining recoverable
amounts.
Depreciation
The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding
freehold land, is depreciated on a straight line basis over their useful lives to the Consolidated Group
commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over
the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment
Computers
Motor Vehicles
Depreciation Rate
20%
33%
25%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
38
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in the statement of comprehensive income. When re-valued assets are sold,
amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.
(e) Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by
employees to the end of the reporting period. Employee benefits that are expected to be settled within one
year have been measured at the amounts expected to be paid when the liability is settled, plus related on-
costs. Employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits.
(f)
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts
are shown within short-borrowings in current liabilities on the Statement of financial position.
(g)
Revenue and Other Income
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to
the financial assets.
Management fees are recognised on portion of completion basis.
Gain on disposal of tenements, and revenue from equipment chargebacks, are recognised on receipt of
compensation.
All revenue is stated net of the amount of goods and services tax (GST).
(h)
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 statement of financial position are shown inclusive of GST.
Cash flows are presented in the 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.
(i)
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset,
but not the legal ownership that are transferred to entities in the Group are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the
fair value of the leased property or the present value of the minimum lease payments, including any
guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and
the lease interest expense for the period.
39
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that
the Group will obtain ownership of the asset or over the term of the lease.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor,
are charged as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis
over the life of the lease term.
(j)
Financial Instruments
Initial recognition and measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity
becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for
financial assets that are delivered within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not
classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair
value through profit or loss are expensed to profit or loss immediately.
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.
Classification and Subsequent Measurement
Financial assets at fair value through profit and 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, where they are derivatives not held for hedging purposes, or
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. Realised and unrealised gains and losses arising
from changes in fair value are included in profit or loss in the period in which they arise.
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, except for those which are not expected to mature
within 12 months after the end of the reporting period.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Group’s intention to hold these investments to maturity. They are
subsequently measured at amortised cost.
Held-to-maturity investments are included in non-current assets, except for those which are expected to
mature within 12 months after the end of the reporting period. All other investments are classified as
current assets.
40
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
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 (ie. 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, except for those which are expected to
mature within 12 months after the end of the reporting period. All other financial assets are classified as
current assets.
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised
cost.
Derivative instruments
Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are
taken to the statement of comprehensive income unless they are designated as hedges.
Fair value
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.
Impairment
At the end or 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 the 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.
Derecognition
Financial assets are derecognised where the contractual rights to cash flow expires 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 either 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.
41
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(k)
Earnings Per Share
Basic earnings per share
i.
Basic earnings per share is determined by dividing the profit attributable to equity holders of the Company,
excluding any costs of service equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the year.
ii. Diluted earnings per share
Diluted earnings per share adjusts the figure used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financial costs associated with dilutive
potential ordinary shares and the weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
(l)
Impairment of Assets
At the end of each reporting period, 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 recognised immediately to profit or loss.
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.
(m)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will results and that outflow can be reliably
measured.
(n)
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that
necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost
of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
(o)
Equity-settled compensation
The Group operates an employee share ownership scheme. Share-based payments to employees are
measured at the fair value of the instruments issued and amortised over the vesting periods. Share-based
payments to non-employees are measured at the fair value of goods or services received or the fair value of
the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably
measured, and are recorded at the date the goods or services are received. The corresponding amount is
recorded to the option reserve. The fair value of options is determined using the Black-Scholes pricing
model. The number of shares and options expected to vest is reviewed and adjusted at the end of each
reporting period such that the amount recognised for services received as consideration for the equity
instruments granted is based on the number of equity instruments that eventually vest.
42
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(p)
Comparative Figures
Where required by Accounting Standards comparative figures have been adjusted to conform with changes
in presentation for the current financial year.
(q) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented
in Australian dollars which is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at
the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate.
Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of
the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date
when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the profit or loss except
where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other
comprehensive income to the extent that the gain or loss is directly recognised in other comprehensive
income, otherwise the exchange difference is recognised in the profit or loss.
Group companies
The financial results and position of foreign operations whose functional currency is different from the
Group’s presentation currency are translated as follows:
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
income and expenses are translated at average exchange rates for the period; and
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s
foreign currency translation reserve in the statement of financial position. These differences are recognised
in the profit or loss in the period in which the operation is disposed.
(r)
Critical Accounting Estimates and Judgments
The Directors evaluate estimates and judgments 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
Company.
43
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Key Judgments – Exploration and evaluation expenditure
Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current.
These costs are carried forward in respect of an area that has not at reporting date reached a stage that
permits reasonable assessment of the existence of economically recoverable reserves, refer to the
accounting policy stated in note 1(b). The carrying value of capitalised expenditure at reporting date is
$11,275,898.
During the financial year, the Group undertook assessment of its tenement assets, As a result of this
assessment, the Group decided to impair some of its exploration assets. Refer Note 11.
Key Judgments – Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or
enacted environmental legislation, and the directors understanding thereof. At the current stage of the
company’s development and its current environmental impact, the directors believe such treatment is
reasonable and appropriate.
Key Estimate – Taxation
Balances disclosed in the financial statements and the notes thereto, related to taxation, are based on the
best estimates of directors. These estimates take into account both the financial performance and position
of the company as they pertain to current income taxation legislation, and the directors understanding
thereof. No adjustment has been made for pending or future taxation legislation. The current income tax
position represents that directors’ best estimate, pending an assessment by tax authorities in relevant
jurisdictions.
Key Estimate — Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that
may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset
is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number
of key estimates.
Key Estimate — Acquisition of GCM African Uranium Limited
During the financial year, the Group acquired 100% of the issued capital of GCM African Uranium Limited
(“GCM”). For the purposes of this acquisition, the Group was required to assess the fair value of the
identifiable net assets of GCM. In determining the value, the Group assessed the amount exploration and
evaluation that GCM had previously expended on its explorations assets, and had recognised as an expense
in the period it had incurred the costs.
This expenditure has been taken into account in assessing the fair value of the identifiable net assets of
GCM, and has been brought to account and carried forward as the cost of the exploration asset, in
accordance with AASB 6 Exploration for and Evaluation of Mineral Resources. Refer to Note 16.
Key Estimate – Share-based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The fair value is determined by an internal
valuation using a Black-Scholes option pricing model, using the assumptions detailed in Note 19.
44
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(s) New Accounting Standards for Application in Future Periods
The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory
application dates for future reporting periods and which the Group has decided not to early adopt. A
discussion of those future requirements and their impact on the Group is as follows:
– AASB 9: Financial Instruments (December 2010) (applicable for annual reporting periods commencing on
or after 1 January 2013).
This Standard is applicable retrospectively and includes revised requirements for the classification and
measurement of financial instruments, as well as recognition and derecognition requirements for
financial instruments. The Group has not yet determined any potential impact on the financial
statements.
The key changes made to accounting requirements include:
-
-
-
-
simplifying the classifications of financial assets into those carried at amortised cost and those
carried at fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for financial assets
carried at amortised cost;
- allowing an irrevocable election on initial recognition to present gains and losses on investments in
equity instruments that are not held for trading in other comprehensive income. Dividends in
respect of these investments that are a return on investment can be recognised in profit or loss and
there is no impairment or recycling on disposal of the instrument;
-
requiring financial assets to be reclassified where there is a change in an entity’s business model as
they are initially classified based on: (a) the objective of the entity’s business model for managing the
financial assets; and (b) the characteristics of the contractual cash flows; and
- requiring an entity that chooses to measure a financial liability at fair value to present the portion of
the change in its fair value due to changes in the entity’s own credit risk in other comprehensive
income, except when that would create an accounting mismatch. If such a mismatch would be
created or enlarged, the entity is required to present all changes in fair value (including the effects of
changes in the credit risk of the liability) in profit or loss.
– AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010–2: Amendments to
Australian Accounting Standards arising from Reduced Disclosure Requirements [AASB 1, 2, 3, 5, 7, 8,
101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134, 136, 137, 138,
140, 141, 1050 & 1052 and Interpretations 2, 4, 5, 15, 17, 127, 129 & 1052] (applicable for annual
reporting periods commencing on or after 1 July 2013).
AASB 1053 establishes a revised differential financial reporting framework consisting of two tiers of
financial reporting requirements for those entities preparing general purpose financial statements:
- Tier 1: Australian Accounting Standards; and
- Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements.
45
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Tier 2 of the framework comprises the recognition, measurement and presentation requirements of Tier
1, but contains significantly fewer disclosure requirements.
The following entities are required to apply Tier 1 reporting requirements (ie full IFRS):
-
for-profit private sector entities that have public accountability; and
- the Australian Government and state, territory and local governments.
Since the Group is a for-profit private sector entity that has public accountability, it does not qualify for
the reduced disclosure requirements for Tier 2 entities.
AASB 2010–2 makes amendments to Australian Accounting Standards and Interpretations to give effect
to the reduced disclosure requirements for Tier 2 entities. It achieves this by specifying the disclosure
paragraphs that a Tier 2 entity need not comply with as well as adding specific “RDR” disclosures.
– AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133,
137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting
periods commencing on or after 1 January 2011).
This Standard makes a number of editorial amendments to a range of Australian Accounting Standards
and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB. The
Standard also amends AASB 8 to require entities to exercise judgment in assessing whether a
government and entities known to be under the control of that government are considered a single
customer for the purposes of certain operating segment disclosures. The amendments are not expected
to impact the Group.
– AASB 2010–4: Further Amendments to Australian Accounting Standards arising from the Annual
Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13] (applicable for
annual reporting periods commencing on or after 1 January 2011).
This Standard details numerous non-urgent but necessary changes to Accounting Standards arising from
the IASB’s annual improvements project. Key changes include:
-
clarifying the application of AASB 108 prior to an entity’s first Australian-Accounting-Standards
financial statements;
- adding an explicit statement to AASB 7 that qualitative disclosures should be made in the context of
the quantitative disclosures to better enable users to evaluate an entity’s exposure to risks arising
from financial instruments;
- amending AASB 101 to the effect that disaggregation of changes in each component of equity arising
from transactions recognised in other comprehensive income is required to be presented, but is
permitted to be presented in the statement of changes in equity or in the notes;
- adding a number of examples to the list of events or transactions that require disclosure under AASB
134; and
- making sundry editorial amendments to various Standards and Interpretations.
This Standard is not expected to impact the Group.
– AASB 2010–5: Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119,
121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042]
(applicable for annual reporting periods beginning on or after 1 January 2011).
This Standard makes numerous editorial amendments to a range of Australian Accounting Standards
and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB.
However, these editorial amendments have no major impact on the requirements of the respective
amended pronouncements.
46
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
– AASB 2010–6: Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial
Assets [AASB 1 & AASB 7] (applicable for annual reporting periods beginning on or after 1 July 2011).
This Standard adds and amends disclosure requirements about transfers of financial assets, especially
those in respect of the nature of the financial assets involved and the risks associated with them.
Accordingly, this Standard makes amendments to AASB 1: First-time Adoption of Australian Accounting
Standards, and AASB 7: Financial Instruments: Disclosures, establishing additional disclosure
requirements in relation to transfers of financial assets.
This Standard is not expected to impact the Group.
– AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010)
[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] (applies to periods beginning on or after 1 January 2013).
This Standard makes amendments to a range of Australian Accounting Standards and Interpretations as
a consequence of the issuance of AASB 9: Financial Instruments in December 2010. Accordingly, these
amendments will only apply when the entity adopts AASB 9.
As noted above, the Group has not yet determined any potential impact on the financial statements
from adopting AASB 9.
– AASB 2010–8: Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying
Assets [AASB 112] (applies to periods beginning on or after 1 January 2012).
This Standard makes amendments to AASB 112: Income Taxes.
The amendments brought in by this Standard introduce a more practical approach for measuring
deferred tax liabilities and deferred tax assets when investment property is measured using the fair
value model under AASB 140: Investment Property.
Under the current AASB 112, the measurement of deferred tax liabilities and deferred tax assets
depends on whether an entity expects to recover an asset by using it or by selling it. The amendments
introduce a presumption that an investment property is recovered entirely through sale. This
presumption is rebutted if the investment property is held within a business model whose objective is to
consume substantially all of the economic benefits embodied in the investment property over time,
rather than through sale.
The amendments brought in by this Standard also incorporate Interpretation 121 into AASB 112.
The amendments are not expected to impact the Group.
The Group does not anticipate the early adoption of any of the above Australian Accounting Standards.
The financial report was authorised for issue on 30 September 2011 by the board of directors.
47
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 2: REVENUE AND OTHER INCOME
Revenue:
Interest received from financial institutions
Management fees
Total Revenue
Other Income
Equipment charge-backs
Total Other Income
NOTE 3: LOSS BEFORE INCOME TAX
(a) Expenses
Depreciation of non-current assets:
Plant and equipment
Computer equipment
Office equipment
Motor vehicles
Total depreciation
(b) Significant Revenues and Expenses
The following significant revenue and (expense) items are relevant
in explaining the financial performance:
Write-off capitalised expenditure
Share-based payments expense
Superannuation expense
Note
2011
$
2010
$
98,506
34,757
133,263
90,828
191,192
282,020
4,730
4,730
48,306
48,306
2011
$
2010
$
11,593
10,840
6,961
14,442
43,836
23,424
7,607
9,181
15,755
55,967
10(a)
(687,505)
(452,156)
(433,009)
(293,777)
(36,592)
(31,936)
48
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
NOTE 4: INCOME TAX
(a) Income tax expense
Current tax
Deferred tax
Note
2011
$
2010
$
-
-
-
-
-
-
Deferred income tax expense included in income tax expense
comprises:
-
-
Increase / (decrease) in deferred tax assets
(Increase) / decrease in deferred tax liabilities
4(c)
4(d)
(107,398)
107,398
(142,361) 1
142,3611
-
-
1 Correction: Balances in the comparative period have been adjusted to
reflect the movement from period to period of deferred balances. There is
no effect on income tax expense, nor upon the deferred tax balances to
which they related. Amounts previously recorded were ±$498,281
respectively.
(b) Reconciliation of income tax expense to prima facie tax payable
The prima facie tax payable on profit from ordinary activities
before income tax is reconciled to the income tax expense as
follows:
Prima facie tax on operating profit at 30% (2010: 30%)
(725,109)
(503,910)
Add / (Less)
Tax effect of:
- Share-based payments
- Other adjustments
- Deferred tax asset not brought to account
Income tax attributable to operating loss
The applicable weighted average effective tax rates are as follows:
Balance of franking account at year end
129,903
50,669
544,537
-
nil%
nil
88,133
51,364
364,413
-
nil%
nil
49
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 4: INCOME TAX (cont.)
(c) Deferred tax assets
Tax losses
Provisions and accruals
Other
Set-off deferred tax liabilities
Net deferred tax assets
Less deferred tax assets not recognised
Net tax assets
(d) Deferred tax liabilities
Exploration expenditure
Set-off deferred tax assets
Net deferred tax liabilities
(e) Tax losses
Note
2011
$
2010
$
2,062,603
1,496,741
5,696
195,030
5,321
76,840
2,263,328
1,578,902
4(d)
(390,883)
(498,281)
1,872,446
1,080,621
(1,872,446)
(1,080,621)
-
-
390,883
390,883
4(c)
(390,883)
498,281
498,281
(498,281)
-
-
Unused tax losses for which no deferred tax asset has been
recognised, that may be utilised to offset tax liabilities.
6,241,485
3,602,069
Potential deferred tax assets attributable to tax losses and exploration
expenditure carried forward have not been brought to account at 30 June
2011 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:
i.
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;
ii. the company continues to comply with conditions for deductibility
imposed by law; and
iii. no changes in tax legislation adversely affect the company in realising the
benefit from the deductions for the loss and exploration expenditure.
50
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION
(a) Key management personnel (KMP) compensation
The names are positions of KMP are as follows:
Brett Fraser
Chairman
Robert (Bob)Beeson
Managing Director
Simon O’Loughlin
Non-executive Director
Jay Stephenson
Non-executive Director
Leigh Junk
Non-executive Director (appointed 7 June 2011)
Julian Perkins
Non-executive Director (appointed 7 June 2011)
Refer to the Remuneration Report contained in the Director’s Report for details of the remuneration paid to
each member of the Group’s KMP for the year ended 30 June 2011.
The totals of remuneration paid to KMP during the year are as follows:
Short-term employee benefits
Post-employment benefits
Share based payments
Other long term benefits
Termination benefits
Total
2011
$
2010
$
395,425
365,000
68,686
61,719
179,812
251,737
-
-
-
-
643,923
678,456
(b) Equity instrument disclosures relating to KMP
(i) Option holdings
The number of options over ordinary shares held by each KMP of the Group during the financial year is as
follows:
30 June 2011
Balance at the
beginning of
year
Granted as
remuneration
during the year
Directors of Aura Energy Limited
Exercised
during
the year
Other changes
during the year
Balance at
end of year
Vested and
exercisable
Brett Fraser
Robert Beeson
Jay Stephenson
Simon O’Loughlin
Leigh Junk
Julian Perkins
1,000,000
3,000,000
1,000,000
1,000,000
-
-
6,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
(1,500,000)
1,500,000
1,500,000
-
-
-
-
1,000,000
1,000,000
1,000,000
1,000,000
-
-
-
-
(1,500,000)
4,500,000
4,500,000
51
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
30 June 2010
Balance at the
beginning of
year
Granted as
remuneration
during the year
Directors of Aura Energy Limited
Brett Fraser
750,000
1,000,000
Robert Beeson
3,000,000
1,500,000
Jay Stephenson
750,000
1,000,000
Simon O’Loughlin
500,000
1,000,000
5,000,000
4,500,000
(iii) Shareholdings
Exercised
during
the year
Other changes
during the year
Balance at
end of year
Vested and
exercisable
-
-
-
-
-
(750,000)
1,000,000
1,000,000
(1,500,000)
3,000,000
3,000,000
(750,000)
1,000,000
1,000,000
(500,000)
1,000,000
1,000,000
(3,500,000)
6,000,000
6,000,000
The number of ordinary shares in Aura Energy Limited held by each KMP of the Group during the financial year is
as follows:
Balance at the
start of the year
Received during
the year as
compensation
Received during
the year on the
exercise of options
Other changes
during the year
Balance at the end
of the year
30 June 2011
Ordinary Shares
Directors
Brett Fraser
Robert Beeson
Jay Stephenson
Simon O’Loughlin
Leigh Junk
Julian Perkins
1,326,000
1,165,000
1,146,000
768,112
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
315,200
134,250
209,200
-
750,000
-
1,641,200
1,299,250
1,355,200
768,112
750,000
-
1,408,650
5,813,762
Total
4,405,112
30 June 2010
Directors
Ordinary Shares
Brett Fraser
Robert Beeson
Jay Stephenson
Simon O’Loughlin
Total
Balance at the
start of the year
Received during
the year as
compensation
Received during
the year on the
exercise of options
Other changes
during the year
Balance at the end
of the year
1,326,000
1,165,000
1,146,000
768,112
4,405,112
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,326,000
1,165,000
1,146,000
768,112
4,405,112
Other changes during the year relate to shares purchased on market.
52
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
(c) Loans to key management personnel
There are no loans made to directors of Aura Energy as at 30 June 2011.
(d) Other transactions with key management personnel
There have been no other transactions involving equity instruments other than those described in the tables
above. For details of other transactions with key management personnel, refer Note 21: Related party
transactions.
NOTE 6: AUDITOR’S REMUNERATION
Remuneration of the auditor of the Group for:
- Auditing or reviewing the financial reports
- Taxation services provided by a related practice of the auditor
NOTE 7: EARNINGS PER SHARE
(a) Reconciliation of earnings to net profit or loss
Loss used in the calculation of basic EPS
(b) Weighted average number of ordinary shares outstanding
during the year used in calculation of basic EPS
Basic earnings per share (cents per share)
NOTE 8: CASH AND CASH EQUIVALENTS
Cash at bank
Reconciliation of Cash
Cash at the end of the financial year as shown in the consolidated
statement of cash flows is reconciled to items in the consolidated
statement of financial position as follows:
Note
2011
$
2010
$
41,065
1,650
24,080
-
2011
$
2010
$
(2,417,029)
(1,679,699)
114,889,796
78,014,508
(2.10)
(2.15)
2011
$
2010
$
3,289,774
1,221,825
Cash and cash equivalents
3,289,774
1,221,825
The effective interest rate on short term bank deposits was 6% (2010: 4.8%). These deposits have an average
maturity of 4 months (2010: 7 months).
NOTE 9: TRADE AND OTHER RECEIVABLES
CURRENT
Amount receivable from related parties
GST and MOMS receivable
Trade debtors and prepayments
2011
$
2010
$
-
155,072
32,535
187,607
7,640
39,444
42,648
89,732
53
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 10: PLANT AND EQUIPMENT
NON-CURRENT
Plant and equipment
Accumulated depreciation
Motor vehicles
Accumulated depreciation
a. Movements in Carrying Amounts
Balance at the beginning of year
Additions
Depreciation expense
Carrying amount at the end of year
NOTE 11: EXPLORATION AND EVALUATION ASSETS
NON-CURRENT
Exploration expenditure capitalised
- Exploration and evaluation phases at cost
Other
Net carrying value
Note
2011
$
2010
$
169,969
152,526
(143,036)
(113,641)
26,933
62,948
38,885
62,948
(62,948)
(48,506)
-
14,442
26,933
53,327
53,327
17,442
85,895
23,399
3(a)
(43,836)
(55,967)
26,933
53,327
Note
2011
$
2010
$
11,458,202
6,689,736
7,588
7,627
11,465,790
6,697,363
The value of the Group interest in exploration expenditure is dependent upon:
the continuance of the Group’s rights to tenure of the areas of interest;
the results of future exploration; and
the recoupment of costs through successful development and exploitation of the areas of interest, or
alternatively, by their sale.
The Group’s exploration properties may be subjected to claim(s) under Native Title, or contain sacred sites, or
sites of significance to Aboriginal people. As a result, exploration properties or areas within the tenements may
be subject to exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not
possible to quantify whether such claims exist, or the quantum of such claims.
54
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 12: TRADE AND OTHER PAYABLES
CURRENT – unsecured liabilities
Trade payables
Accrued expenses
GST and PAYG payable
Trade payables are non-interest bearing and usually settled within 45 days.
2011
$
2010
$
837,947
102,207
31,749
15,557
42,400
63,204
885,253
207,811
NOTE 13: SHORT TERM PROVISIONS
CURRENT
Employee benefits
Number of employees at year end
NOTE 14: ISSUED CAPITAL
The Company has issued share capital amounting to 132,315,068
(2010: 83,232,659) fully paid ordinary shares at no par value.
(a) Ordinary shares
At the beginning of the reporting period
Shares issued during the year:
5,000,000 Shares issued on 7 July 2009
5,000,000 Shares issued on 10 July 2009
9,670,000 Shares issued on 10 September 2009
5,955,000 Shares issued on 30 October 2009
3,125,000 Shares issued on 4 November 2009
12,484,898 Shares issued on 23 September 2010
19,143,511 Shares issued on 25 October 2010
17,229,000 Shares issued on 20 December 2010
25,000 Shares issued on 9 February 2011
200,000 Shares issued on 30 June 2011
Transaction costs relating to share issues
Premium paid on expired options transferred as contributed equity
At reporting date
Note
2011
$
2010
$
18,307
16,894
3
6
2011
$
2010
$
14(a)
21,074,083
12,681,865
12,681,865
8,856,865
-
-
-
-
-
500,000
500,000
1,547,200
952,800
500,000
1,872,735
2,871,527
3,962,670
10,127
46,440
-
-
-
-
-
(507,633)
(175,000)
136,352
-
21,074,083
12,681,865
55
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 14: ISSUED CAPITAL (cont.)
At the beginning of the reporting period
Shares issued during the year:
5,000,000 Shares issued on 7 July 2009
5,000,000 Shares issued on 10 July 2009
9,670,000 Shares issued on 10 September 2009
5,955,000 Shares issued on 30 October 2009
3,125,000 Shares issued on 4 November 2009
12,484,898 Shares issued on 23 September 2010
19,143,511 Shares issued on 25 October 2010
17,229,000 Shares issued on 20 December 2010
25,000 Shares issued on 9 February 2011
200,000 Shares issued on 30 June 2011
Note
2011
No.
2010
No.
83,232,659
54,482,659
-
-
-
-
-
5,000,000
5,000,000
9,670,000
5,955,000
3,125,000
12,484,898
19,143,511
17,229,000
25,000
200,000
-
-
-
-
-
At reporting date
132,315,068
83,232,659
Ordinary shares participate in dividends and the proceeds on winding up of the Company 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 a vote on a show of hands.
(b) Options
For information relating to the Aura Energy Limited employee options scheme, including details of options
issued, issued and lapsed during the financial year, and the options outstanding at balance date, refer to Note
17, Share-based Payments.
(c) Capital Management
The Directors’ objectives when managing capital are to ensure that the Group can fund its operations and
continue as a going concern, so that they may continue to provide returns for shareholders and benefits for
other stakeholders.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to
credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s
capital risk management is the current working capital position against the requirements of the Group to meet
exploration programmes and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is
maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as
required.
The working capital position of the Group at 30 June 2011 and 30 June 2010 were as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Working capital position
2011
$
3,289,774
187,607
(885,253)
2,592,128
2010
$
1,221,825
89,732
(207,811)
1,103,746
56
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 15: RESERVES
Option reserve
Foreign exchange reserve
Option reserve
Note
2011
$
955,639
(32,244)
923,395
2010
$
859,129
933
860,062
The option reserve records items recognised as expenses on valuations of employee and consultant share
options.
Foreign Exchange Translation Reserve
The foreign exchange reserve records exchange differences arising on translation of a foreign controlled
subsidiary.
NOTE 16: ACQUISITION OF ENTITY
On 8 November 2010, the Company acquire 100% of GCM Africa Uranium Limited, a company incorporated in
the United Kingdom. The purchase required the initial payment of $1,429,629, a deferred payment of
US$500,000 after twelve months.
There is a contingent consideration of US$2,000,000 if the uranium resource exceeds 75 million pounds, and up
to an additional US$4,000,000 plus 4,000,000 Aura shares if the resource significantly exceeds this 75 million
pounds.
Purchase consideration:
Cash paid at settlement
Deferred liability
Assets and Liabilities at acquisition date:
Cash at bank
Value of exploration assets on acquisition
1,429,629
509,200
1,938,829
1
1,938,828
1,938,829
In the opinion of the Directors the contingent consideration component is considered to be not probable as the
likelihood of an outflow of resources is remote as at the date of this report. For this reason the contingent
consideration has not been recognised.
57
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Class of Shares
Percentage Owned
NOTE 17: CONTROLLED ENTITIES
Controlled Entities
Country of
Incorporation
Keyano Jack Pty Limited
Aura Energy Sweden AB
Australia
Sweden
Ordinary
Ordinary
GCM Africa Uranium Limited
United Kingdom
Ordinary
Investments in subsidiaries are accounted for at cost.
NOTE 18: CASH FLOW INFORMATION
(a)
Loss after income tax
Cash flows excluded from profit attributable to operating activities
Non-cash flows in profit from ordinary activities
Employee share-based payments expense
Depreciation
Write-off capitalised expenditure
Changes in assets and liabilities, net of the effects of purchase and
disposal of subsidiaries
2011
100%
100%
100%
2010
100%
100%
-
2011
$
2010
$
(2,417,029)
(1,679,699)
433,009
43,836
687,505
293,777
55,967
452,156
Increase in exploration expenditure capitalised
(5,497,409)
(3,183,956)
Decrease/(increase) in receivables and prepayments
Decrease in payables
Increase/(decrease) in provisions
Cash flow from operations
Credit Standby Facilities
The Group has no credit standby facilities.
Non-Cash investing and financing activities
The Group has no non-cash investing and financing activities.
(5,014)
116,820
1,413
408,938
(186,004)
15,490
(6,636,869)
(3,823,331)
58
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 19: SHARE-BASED PAYMENTS
The following share-based payment arrangements existed at 30 June 2011:
On 1 February 2007, 550,000 share options were granted to employees and consultants under the Aura Energy
Limited Incentive Option Plan to take up ordinary shares at an exercise price of $0.25 each. The options are
exercisable on or before 1 February 2012. The options hold no voting or dividend rights and are not
transferable. Since balance date, no director has ceased their employment. At balance date, no share option
has been exercised, and 550,000 options remain.
On 24 April 2008, 600,000 share options were granted to employees and consultants under the Aura Energy
Limited Incentive Option Plan to take up ordinary shares at an exercise price of $0.60 each. The options are
exercisable on or before 24 April 2013. The options hold no voting or dividend rights and are not transferable.
During the year ended 30 June 2009, one employee ceased employment and 200,000 options expired. Since
that date, no other holder has ceased their employment. During the year ended 30 June 2011, one employee
exercised 25,000 options, and therefore at balance date, 375,000 options remain.
On 30 November 2009, 4,500,000 share options were granted to the Directors to take up ordinary shares at an
exercise price of $0.23 each. The options are exercisable on or before 1 September 2011. The options hold no
voting or dividend rights, and are not transferable. At balance date, no share option has been exercised and
4,500,000 options remain.
On 23 December 2009, 400,000 share options were granted to employees and consultants under the Aura
Energy Limited Incentive Option Plan to take up ordinary shares at an exercise price of $0.30 each. The options
are exercisable on or before 23 December 2014. The options hold no voting or dividend rights and are not
transferable. At balance date, no share option has been exercised or forfeited and 400,000 options remain.
On 19 July 2010, 200,000 share options were granted to employees and consultants under the Aura Energy
Limited Incentive Option Plan to take up ordinary shares at an exercise price of $0.197 each. The options were
exercisable on or before 30 June 2011, and were all exercised on that date.
On 31 March 2011, 570,000 share options were granted to employees and consultants under the Aura Energy
Limited Incentive Option Plan to take up ordinary shares at an exercise price of $0.45 each. The options are
exercisable on or before 31 March 2016. The options hold no voting or dividend rights and are not transferable.
At balance date, no share option has been exercised or forfeited and 570,000 options remain.
All options granted to key management personnel are ordinary shares in Aura Energy Limited, which confer a
right to one ordinary share for every option held.
59
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
A summary of the movements of all company options issued is as follows:
Outstanding at the beginning of the year
Granted
Exercised
Expired
Outstanding at year-end
Exercisable at year-end
2011
2010
Number of
Options
Weighted
Average
Exercise Price
Number of
Options
Weighted
Average
Exercise Price
7,450,000
2,070,000
(225,000)
(1,600,000)
7,695,000
7,695,000
$0.1212
$0.6893
$0.2084
$0.5469
$0.3785
$0.3785
6,050,000
4,900,000
-
(3,500,000)
7,450,000
7,450,000
$0.1035
$0.2943
-
$0.2500
$0.1212
$0.1212
The weighted average remaining contractual life of options outstanding at year end was 1.06 years. The
weighted average exercise price of outstanding shares at the end of the reporting period was $0.3785.
The fair value of the options granted to employees is deemed to represent the value of the employee services
received over the vesting period.
The weighted average fair value of options granted during the year was $0.1307 (2010: $0.0967). These values
were calculated using the Black-Scholes option pricing model applying the following inputs:
Option exercise price:
Number of options issued:
Remaining life of the options:
Expected share price volatility:
Risk-free interest rate:
$0.197
200,000
-
120.00%
4.6%
$0.69
650,000
1.75
93.41%
5.19%
$1.05
650,000
1.75
93.41%
5.19%
$0.45
570,000
4.76
100.38%
5.24%
Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is
indicative of future movements.
The life of the options is based on the historical exercise patterns, which may not eventuate in the future.
NOTE 20: EVENTS SUBSEQUENT TO REPORTING DATE
The Company issued 4,500,000 shares at 23 cents, raising $1,035,000.
Other than the above, there are no other significant after balance date events.
60
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 21: RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and
conditions no more favourable than those available to other parties unless
otherwise stated.
Transactions with Key Management Personnel:
Jay Stephenson
2011
$
2010
$
Aura Energy Limited rents office space from Jay Stephenson
10,800
10,800
Wolfstar Group Pty Ltd
Mr Fraser and Mr Stephenson, non-executive Directors of Aura Energy
Limited, are Directors and Joint Shareholders of Wolfstar Group Pty Ltd.
Mr Stephenson provides Company Secretarial and Chief Financial Officer
duties to Aura Energy Limited, as well as providing corporate advisory
advice during the listing process.
90,000
90,000
NOTE 22: CAPITAL COMMITMENTS
Capital expenditure commitments:
Capital expenditure commitments contracted for:
Exploration tenement minimum expenditure requirements
978,883
6,894,000
Payable:
- not later than 12 months
- between 12 months and 5 years
- greater than 5 years
Operating lease commitments:
Operating leases contracted for but not capitalised in the
financial statements
Payable:
- not later than 12 months
- between 12 months and 5 years
- greater than 5 years
Total commitments
594,500
384,383
1,386,000
1,270,000
-
4,238,000
978,883
6,894,000
13,000
21,000
-
23,000
34,000
-
34,000
57,000
61
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 23: OPERATING SEGMENTS
Segment Information
Identification of reportable segments
The Group operates predominantly in the mining industry. This comprises exploration and evaluation of uranium,
gold, silver and base metals projects. Inter-segment transactions are priced at cost to the Consolidated Group.
The Group has identified its operating segments based on the internal reports that are provided to the Board of
Directors on a monthly basis. Management has identified the operating segments based on the three principal
locations of its projects – Australia, Sweden and West Africa.
Corporate expenses include administration and regulatory expenses arising from operating an ASX listed entity.
Segment assets include the costs to acquire tenements and the capitalised exploration costs of those tenements
Financial assets including cash and cash equivalents, and investments in financial assets, are reported in the
Treasury segment.
For the Year to 30 June 2011
$
$
$
$
$
Australian
Exploration
Sweden
Exploration
African
Exploration
Treasury
Total
Segment Revenue
39,487
-
-
98,506
137,993
Segment Results
(471,814)
(173,553)
(46,514)
98,225
(593,656)
Amounts not included in segment results
but reviewed by Board:
- Corporate charges
- Depreciation
- Share-based payment expenses
Loss before Income Tax
As at 30 June 2011
Segment Assets
Unallocated Assets:
Trade and other receivables
Plant and equipment
Other non-current assets
Total Assets
(1,346,528)
(43,836)
(433,009)
(2,417,029)
1,295,354
4,339,458
5,823,390 3,289,773 14,747,975
Segment asset increases for the period:
- capital expenditure - exploration
135,444
1,290,744
1,890,750
Segment Liabilities
Unallocated Liabilities:
Trade and other payables
Short term provisions
Total Liabilities
18,877
40,176
624,907
187,607
26,933
7,589
14,970,104
-
-
3,316,938
683,960
201,293
18,307
903,560
62
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 23: OPERATING SEGMENTS (CONT.)
For the Year to 30 June 2010
$
$
$
$
$
Australian
Exploration
Sweden
Exploration
African
Exploration
Treasury
Total
Segment Revenue
Segment Results
330,326
330,326
-
-
-
-
-
-
330,326
330,326
Amounts not included in segment results
but reviewed by Board:
- Corporate charges
- Exploration Impairment
- Depreciation
- Share-based payment recoupment
Loss before Income Tax
As at 30 June 2010
Segment Assets
Unallocated Assets:
Trade and other receivables
Plant and equipment
Other non-current assets
Total Assets
(1,208,125)
(452,156)
(55,967)
(293,777)
(1,679,699)
1,628,543
3,222,267
1,838,926 1,221,825
7,911,561
Segment asset increases for the period:
- capital expenditure
-
1,205,005
1,609,798
Segment Liabilities
Unallocated Liabilities:
Trade and other payables
Total Liabilities
31,657
78,473
(9,904)
89,732
53,327
7,627
8,062,247
2,814,803
100,226
124,479
224,705
-
-
63
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 23: OPERATING SEGMENTS (CONT.)
Basis of accounting for purposes of reporting by operating segments
a. Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker
with respect to operating segments, are determined in accordance with accounting policies that are
consistent to those adopted in the annual financial statements of the Group.
b.
Inter-segment transactions
An internally determined transfer price is set for all inter-segment sales. This price is reset quarterly and is
based on what would be realised in the event the sale was made to an external party at arm’s length. All
such transactions are eliminated on consolidation of the Group’s financial statements.
Corporate charges are allocated to reporting segments based on the segments’ overall proportion of
revenue generation within the Group. The Board of Directors believes this is representative of likely
consumption of head office expenditure that should be used in assessing segment performance and cost
recoveries.
Inter-segment loans payable and receivable are initially recognised at the consideration received/to be
received net of transaction costs. If inter-segment loans receivable and payable are not on commercial
terms, these are not adjusted to fair value based on market interest rates. This policy represents a
departure from that applied to the statutory financial statements.
c.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to that segment that receives
majority economic value from that asset. In the majority of instances, segment assets are clearly
identifiable on the basis of their nature and physical location.
d.
Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability
and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the
Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain
direct borrowings.
e. Unallocated items
The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as
they are not considered part of the core operations of any segment:
—
—
—
—
—
Impairment of assets and other non-recurring items of revenue or expense
Income tax expense
Deferred tax assets and liabilities
Current tax liabilities
Other financial liabilities
64
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 24 – FINANCIAL RISK MANAGEMENT
(a)
Financial Risk Management Policies
The Group’s financial instruments consist mainly of deposits with banks, short-term investments, and
accounts payable and receivable.
The Group does not speculate in the trading of derivative instruments.
A summary of the Group’s Financial Assets and Liabilities is shown below:
Floating
Interest
Rate
$
Non-
interest
bearing
$
2011
Total
$
Floating
Interest
Rate
$
Non-
interest
bearing
$
2010
Total
$
3,289,774
-
3,289,774
1,221,825
-
1,221,825
-
187,607
187,607
-
89,732
89,732
Financial Assets
Cash and cash
equivalents
Trade and other
receivables
Total Financial Assets
3,289,774
187,607
3,477,381
1,221,825
89,732
1,311,557
Financial Liabilities
Financial liabilities at
amortised cost
- Trade and
other payables
Total Financial
Liabilities
-
-
885,253
885,253
885,253
885,253
-
-
207,811
207,811
207,811
207,811
Net Financial Assets
3,289,774
(697,646)
2,592,128
1,221,825
(118,079)
1,103,746
65
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 24 – FINANCIAL INSTRUMENTS (CONT.)
Specific Financial Risk Exposures and Management
The main risk the Group is exposed to through its financial instruments are credit risk, liquidity risk and market
risk consisting of interest rate, foreign currency risk and equity price risk.
a. Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by
counterparties of contract obligations that could lead to a financial loss to the Group.
The Group does not have any material credit risk exposure to any single receivable or group of receivables
under financial instruments entered into by the Group.
Credit risk exposures
The maximum exposure to credit risk is that to its alliance partners and that is limited to the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial
position and notes to the financial statements.
Credit risk related to balances with banks and other financial institutions is managed by the Group in
accordance with approved Board policy. Such policy requires that surplus funds are only invested with
counterparties with a Standard and Poor’s rating of at least AA-. The following table provides information
regarding the credit risk relating to cash and money market securities based on Standard and Poor’s
counterparty credit ratings.
Cash and cash
equivalents
- AA Rated
Note
2011
$
2010
$
8
3,289,774
1,221,825
b.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring
sufficient cash and marketable securities are available to meet the current and future commitments of the
Group. Due to the nature of the Group’s activities, being mineral exploration, the Group does not have
ready access to credit facilities, with the primary source of funding being equity raisings. The Board of
Directors constantly monitor the state of equity markets in conjunction with the Group’s current and
future funding requirements, with a view to initiating appropriate capital raisings as required. Any surplus
funds are invested with major financial institutions.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the Statement
of financial position. All trade and other payables are non-interest bearing and due within 30 days of the
reporting date.
c. Market risk
The Board meets on a regular basis to analyse currency and interest rate exposure and to evaluate treasury
management strategies in the context of the most recent economic conditions and forecasts.
i.
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of
the reporting period whereby a future change in interest rates will affect future cash flows or the fair
value of fixed rate financial instruments. The Group is also exposed to earnings volatility on floating
rate instruments.
Interest rate risk is not material to the Group as no debt arrangements have been entered into.
66
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 24 – FINANCIAL INSTRUMENTS (CONT.)
ii. Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial
instrument fluctuating due to movement in foreign exchange rates of currencies in which the Group
holds financial instruments which are other than the AUD functional currency of the Group.
With instruments being held by overseas operations, fluctuations in foreign currencies may impact on
the Group’s financial results. The Group’s exposure to foreign exchange risk is minimal, however the
Board continues to review this exposure regularly.
iii. Price risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices.
The Group is exposed to securities price risk on investments held for trading or for medium to longer
terms.
The investment in listed equities has been valued at the market price prevailing at balance date.
Management of this investment’s price risk is by ongoing monitoring of the value with respect to any
impairment.
Sensitivity Analysis
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates. The
table indicates the impact on how profit and equity values reported at balance sheet date would have
been affected by changes in the relevant risk variable that management considers to be reasonably
possible. These sensitivities assume that the movement in a particular variable is independent of other
variables.
Year ended 30 June 2011
Consolidated Group
Profit
$
Equity
$
+/-1% in interest rates
+/- 32,897
+/- 32,897
Year ended 30 June 2010
+/-1% in interest rates
+/- 29,316
+/- 29,316
77
Net Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be
compared to their carrying values as presented in the statement of financial position. Fair values are
those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable,
willing parties in an arm’s length transaction.
Cash and cash equivalents, trade and other receivables, and trade and other payables are short-term
investments in nature whose carrying value is equivalent to fair value.
67
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 25: PARENT ENTITY DISCLOSURES
(a) Financial Position of Aura Energy Limited
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Financial assets
Other assets
TOTAL NON-CURRENT ASSETS
Note
2011
$
2010
$
3,226,828
85,259
3,312,087
26,933
2,244,472
9,495,775
11,767,180
1,160,681
86,247
1,246,928
53,327
133,432
6,666,137
6,852,896
25(b)
TOTAL ASSETS
15,079,267
8,099,824
CURRENT LIABILITIES
Trade and other payables
Short term provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Option Reserve
Accumulated Losses
TOTAL EQUITY
885,253
18,307
903,560
228,797
16,894
245,691
903,560
245,691
14,175,707
7,854,133
21,074,083
955,639
(7,854,015)
14,175,707
12,681,865
859,129
(5,686,861)
7,854,133
68
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
NOTE 25: PARENT ENTITY DISCLOSURES (CONT.)
2011
$
2010
$
(b) Financial assets
Loans to subsidiaries
Shares in controlled entities at cost
Net carrying value
(c) Financial Performance of Aura Energy Limited
Loss for the year
Other comprehensive income
Total comprehensive income
243,373
2,001,099
2,244,472
115,025
18,407
133,432
2011
$
2010
$
(2,357,634)
(1,674,207)
-
-
(2,357,634)
(1,674,207)
(d) Guarantees entered into by Aura Energy Limited for the debts of its subsidiaries
There are no guarantees entered into by Aura Energy Limited for the debts of its subsidiaries as at 30 June 2011
(2010: none).
(e) Contingent liabilities of Aura Energy Limited
There are no contingent liabilities as at 30 June 2011 (2010: none).
(f) Commitments by Aura Energy Limited
Capital expenditure commitments contracted for:
2011
$
2010
$
Exploration tenement minimum expenditure requirements
978,883
6,894,000
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
Total commitments
594,500
384,383
-
978,883
1,386,000
1,270,000
4,238,000
6,894,000
69
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
(f) Commitments by Aura Energy Limited (cont.)
Operating lease commitments:
Operating leases contracted for but not capitalised in the
financial statements
Payable:
- not later than 12 months
- between 12 months and 5 years
- greater than 5 years
Total commitments
2011
$
2010
$
13,000
21,000
-
34,000
23,000
34,000
-
57,000
The amounts noted above are applicable for both Aura Energy Limited (the parent) and the Consolidated
Group.
NOTE 26: CONTINGENT LIABILITIES
There are no contingent liabilities as at 30 June 2011 (2010: none).
NOTE 27: COMPANY DETAILS
The registered office of the Company are:
Level 4, 66 Kings Park Road
West Perth WA 6005
Telephone 08 6141 3500
Facsimile 08 6141, 3599
Website: www.auraenergy.com.au
email: info@auraenergy.com.au
The principal places of business are:
Level 4, 66 Kings Park Road
West Perth WA 6005
Suite 3, Level 1
19-23 Prospect Place
Box Hill VIC 3128
70
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
DIRECTORS’ DECLARATION
The directors of the Company declare that:
1.
The financial statements and notes, as set out on pages 32 to 70, are in accordance with the
Corporations Act 2001 and:
(a)
comply with Accounting Standards;
(b) are in accordance with International Financial Reporting Standards issued by the International
Accounting Standards Board, as stated in note 1 to the financial statements; and
(c)
give a true and fair view of the financial position as at 30 June 2011 and of the performance for the
year ended on that date of the Company and Consolidated Group.
2.
the Chief Executive Officer and Chief Finance Officer have each declared that:
(a)
the financial records of the Company for the financial year have been properly maintained in
accordance with s 286 of the Corporations Act 2001;
(b)
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 and is signed for and on
behalf of the directors by:
Director
JAY STEPHENSON
Dated 30th September 2011, Perth WA
71
We have audited the accompanying financial report of Aura Energy Limited (“the
Company”) and Controlled Entities (“the Consolidated Entity”), which comprises the
consolidated statement of financial position as at 30 June 2011, 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 Company and 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.
The directors of the Company are responsible for the preparation and fair presentation of
the financial report 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 Standards AASB 101: Presentation of Financial Statements, that the financial
statements comply with International Financial Reporting Standards.
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 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
judgment, 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 opinion.
In conducting our audit, we followed applicable independence requirements of Australian professional ethical
pronouncements and the Corporations Act 2001.
In our opinion:
a. The financial report of Aura Energy 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 2011 and of its
performance for the year ended on that date; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001;
b. The financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
We have audited the Remuneration Report included in directors’ report of the year ended 30 June 2011. 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.
In our opinion, the Remuneration Report of Aura Energy Limited for the year ended 30 June 2011, complies
with section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
RICHARD JOUGHIN CA
Director
DATED at PERTH this 30th day of September 2011
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The following additional information is required by the Australian Stock Exchange Ltd in respect of listed public
companies only.
1
Shareholding as at 28 September 2011
(a) Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Number
Ordinary
89
294
278
786
161
1,608
(b) The number of shareholdings held in less than marketable parcels is 126.
(c) Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
—
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at
a meeting or by proxy has one vote on a show of hands.
(d) 20 Largest Shareholders — Ordinary Shares as at 28 September 2011.
Name
UBS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
YARANDI INVESTMENTS PTY LTD
1
2
3
4 WISEVEST PTY LTD
5
6
7
8
9
DRAKE RESOURCES LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ASHABIA PTY LTD
MR MICHAEL BUSHELL
10
J P MORGAN NOMINEES AUSTRALIA LIMITED
11 MRS JENNY LEE BUSHELL
12
13
14
DRAKE RESOURCES LIMITED
PERMGOLD PTY LTD
SUVALE NOMINEES PTY LTD
15 MRS JO-ANNE WEBER
16 MR DAVID CHRISTOPHER KEMP
17
18
19
20
COGENT NOMINEES PTY LIMITED
PASAGEAN PTY LIMITED
SAMBOLD PTY LTD
DAVSLAV PTY LTD
TOTAL
Number of Ordinary
Fully Paid Shares
Held
% Held of Issued
Ordinary Capital
9,275,898
5,696,857
4,629,000
4,280,000
4,110,000
4,038,829
3,652,025
3,200,000
2,812,047
2,481,522
2,119,667
2,000,000
2,000,000
2,000,000
1,595,000
1,327,568
1,302,991
1,300,000
1,250,000
1,200,000
6.78
4.16
3.38
3.13
3
2.95
2.67
2.34
2.06
1.81
1.55
1.46
1.46
1.46
1.17
0.97
0.95
0.95
0.91
0.88
60,271,404
44.05
74
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
2
The name of the Company Secretary is Jay Richard Stephenson.
3
The address of the principal registered office in Australia is Level 4, 66 Kings Park Road, West Perth WA
6005. Telephone (08) 6141 3500.
4
Registers of securities are held at the following addresses
Western Australia
Computershare Registry Services
Level 2, 45 St Georges Terrace
PERTH WA 6000
5
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the
Australian Stock Exchange Limited.
6
Unquoted Securities
Options over Unissued Shares
A total of 3,220,000 options are on issue of which no options are on issue to the six Directors.
7
Use of Funds
The Company has used its funds in accordance with its initial business objectives.
75
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
TENEMENT REPORT
W.A.
E69/2658 Disappointed Hill
100%
E38/1200 Kirgella Rocks
E69/2245 Neale - Thin
E39/1221 Ponton
E53/1245 Porcupine Well
E38/1920 Tierney Springs
100%
100%
100%
100%
100%
E58/290 Wondinong Central
100%
E58/349 Wondinong NE
100%
M58/357 Wondinong
Resource
Sweden
Djurkalla nr 1
Flandern nr 1
Grässlåtten nr 1
Gurumyren nr 1
Hackås nr 1
Hageby nr 1
Hageby nr 2
Häggån nr 1
Häggån nr 2
Hamborg nr 1
Hamborg nr 2
Hara nr 1
Koborgsmyren nr 1
Marby nr 1
Näkten nr 1
Norrsten nr 1
Olden nr 2
Råssnesudden nr 1
StavlÖsa nr 1
Stenby nr 1
Stripa nr 1
Ullevi nr 1
Virka nr 10
Vuoltajaur nr 1
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
76
AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2011
West
Africa
Ain Sder
Fai Est
Mserif
Oued Chouk
Oued El Foule Est
Oued El Foule Nord
Oued El Merre
Oum Drouss
Oum Ferkik
Saabia
Aguelt Essfaya
Tenebdar
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
77