Aura Biosciences, Inc. Annual Report 2014

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ABN 62 115 927 681

ANNUAL REPORT
30 June 2014

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

CORPORATE DIRECTORY

Directors
Peter Reeve

Robert (Bob) Beeson

Brett Fraser

Julian (Jules) Perkins

Company Secretary
Stanley Zillwood

Chairman

Managing Director

Non-executive Director

Head Office and Registered Office

Street:

Level 1, 19-23 Prospect Street

Box Hill VIC 3128

Telephone:

+61 (0)3 9890 1744

Facsimile:

+61 (0)3 9890 3411

Email:

info@auraenergy.com.au

Website:

www.auraenergy.com.au

Share Registry

Computershare Registry Services

Street:

Level 2, 45 St Georges Terrace

Perth WA 6000

Securities Exchange

Australian Securities Exchange

Street:

Exchange Plaza

2, The Esplanade

Perth WA 6000

ASX Code:

AEE

Auditor

Bentleys

Level 1, 12 Kings Park Road

West Perth WA 6005

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

ANNUAL REPORT
30 JUNE 2014

CONTENTS

CHAIRMAN'S LETTER .............................................................................................................................................................. 3
OPERATIONS REVIEW ............................................................................................................................................................. 4
DIRECTORS’ REPORT ............................................................................................................................................................. 10
REMUNERATION REPORT ..................................................................................................................................................... 15
AUDITOR’S INDEPENDENCE DECLARATION .......................................................................................................................... 22
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ................................................ 23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ....................................................................................................... 24
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ......................................................................................................... 25
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................................................................................... 26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ................................................................................................... 27
DIRECTORS’ DECLARATION ................................................................................................................................................... 69
INDEPENDENT AUDITOR'S REPORT ...................................................................................................................................... 70
CORPORATE GOVERNANCE STATEMENT .............................................................................................................................. 72
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES ............................................................................................. 78
TENEMENT REPORT .............................................................................................................................................................. 80

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

CHAIRMAN'S LETTER

Dear Shareholders

Aura Energy’s past year has been an active period with much change, restructuring and adjustment that has left the
Company stronger and better placed for its planned path to development and growth. This positive change has been
forged at a time when the uranium price declined significantly and support for both the junior sector and uranium
equities have been weak.

Aura’s strength is its exceptional uranium projects in Sweden and Mauritania that contain 852 million pounds of uranium
in resource which position Aura to become a major producer in the years ahead.

In the past year the Company took a number of decisive steps to move its projects on to a practical business footing with
realistic and achievable objectives for a company of Aura’s size and financial resources. Of particular importance was to
ensure the Company’s projects were low cost in order to compete in the current weak uranium price environment. At
the same time it was important to retain value for shareholders by maintaining 100% ownership of its asset base.

The steps Aura took in 2014 that I speak of were;

Evaluation of the Häggån heap leach project in Sweden at lower throughput levels to demonstrate technical and

commercial viability at achievable throughputs.

More detailed beneficiation test work on the Reguibat Project in Mauritania which indicated up to 700% upgrade to

the ore grades with simple washing and screening.

Completion of the Reguibat Scoping Study which demonstrated excellent economics with a $45 million capital cost,

$30/lb C1 cash cost for $360 million pre-tax cash flow.

Subsequent to year end raising $1.58 million to progress the Reguibat Feasibility Study

Rationalising office costs, Board numbers and employment costs during the year given the difficult financial

environment for the junior mining sector.

Broadening the marketing of the company in new jurisdictions.

With this strengthened basis Aura is now in an excellent position to progress steadily towards it first operating project at
Reguibat should the feasibility study confirm the excellent scoping study outcomes. The Feasibility Study has
commenced and is expected to run for up to 18 months.

To achieve these positive results in that environment is a great effort and I would like to thank all Aura employees and
contractors in Australia, Sweden and Mauritania for their contribution during the year.

There is some life finally in the uranium price after a sustained down trend . For 2015 the Company has now created a
definitive pathway to development and cash flow. With that will come new challenges and opportunities. Aura is excited
by the potential to advance its projects and continue to create real shareholder value.

Regards

PETER REEVE

Chairman, Aura Energy Limited

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

OPERATIONS REVIEW 2014

Aura Energy Limited is fortunate to possess two large uranium resources with the potential to become substantial, low cost
mining operations. The Company initially discovered uranium mineralisation in Mauritania in 2008, and has subsequently
estimated a 49 million pound U₃O₈) Indicated and Inferred Resource. In the last year exceptional beneficiation and leaching test
results have enabled Aura to scope a low capital cost, low operating cost project.

The Häggån and Reguibat Projects were both greenfields discoveries by Aura’s exploration team. In addition the Aura team has
made bioleaching and beneficiation innovations to transform the economics of these projects.

WEST AFRICAN ACTIVITIES

Aura has been active in the uranium provinces of West Africa since 2007. It currently holds tenements and a joint venture in
Mauritania.

REGUIBAT PROJECT SUMMARY

Aura Energy Limited has reached a key milestone in the development of the Reguibat Uranium Project, Mauritania with the
completion of the Reguibat Scoping Study, which has demonstrated that the Project will generate a high return with strong long
term cash flows.

robust project with

This study has confirmed the potential for an
extremely
shallow
mineralisation upgraded via simple beneficiation to
high-grade leach feed. This will result in a leach plant
processing a low annual tonnage achieved with low
upfront capital and low operating costs.

very

With beneficiation resulting in leach feed upgrades of
up to 700% the Reguibat Scoping Study was designed
to provide a cost effective project of a small initial
scale, a small footprint and a low infrastructure
requirement. Significantly, an
independent water
study has indicated a strong likelihood that potential
sources of water in the immediate vicinity should
satisfy the demands of the project.

Mineralisation occurs largely within 3-4 metres of the land surface, in gravels and weathered granite as shown below.

Schematic section through a typical Reguibat uranium ore pod. Note the extensive horizontal extent.

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

OPERATIONS REVIEW 2014

Mining will be straightforward. Most of the mineralisation occurs as single sheets with little or no cover. The material is largely
unconsolidated and can be readily excavated by diggers or scrapers without blasting. Overlying waste consists of loose
windblown sand. The strip ratio is anticipated to be approximately 0.25:1.

Simple washing and screening tests have yielded exceptional results. Wet screening at 75 µm resulted in the rejection of 80%
by weight with the retention of 91% of the uranium into the screen undersize. This is within the duty range of modern
commercial screening equipment.

In further testwork splitting at even finer sizes, 89% by weight was rejected when splitting at 10 µm, while remarkably still
retaining 86% of the uranium into the -10 µm fraction. The average concentration of the -10 µm product was 2,500 ppm U3O8.
This represents a sevenfold upgrade factor from the 334 ppm resource grade. Separations down to sizes such as this may be
achievable using well-established processes such as hydrocyloning.

A fivefold upgrade factor was used in the scoping study.

These exceptional results may be explained by the extremely fine size and ready liberation of the uranium mineral, carnotite,
and the large difference in particle size distribution between the carnotite and the bulk of the host rock minerals.

Following a series of encouraging small-scale preliminary tests, a standard leach test on -300 µm beneficiated material
confirmed exceptional results, with 92% uranium extraction within 4 hours and 95% after 8 hours. This compares, for example,
with the 92% extraction in 36 hours at Paladin’s Langer Heinrich Project.

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OPERATIONS REVIEW 2014

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

It is estimated that the project as currently defined will
require between 0.5 and 1.0 gigalitres of water per year.
Aura commissioned independent consultants to carry
out a desk top study, which
identified a number
potential water sources. The closest is the Oued el Foule
ephemeral watercourse, which occurs within a large
is
depression around Aura's eastern permits.
approximately 17,000 square kilometres in size, of which
the lowest point is only a few kilometres from the
proposed operations. Aquifers within this depression
will form the first target for Aura’s water source
investigations.

The main water supply to the iron ore mines of northern
the
the Taoudeni Basin,
Mauritania
Mauritanian SNIM operations, and the new Glencore
iron ore development near Zouerate. The independent
consultants suggest that similar aquifers are likely to be
available from known aquifers on the northern edge of
the Taoudeni Basin near to the Reguibat Project.

including

At Zouerate the aquifer occurs in fractured sedimentary rocks. The aquifer thickness there is known to be at least 500 metres,
and has been exploited for 30 years, with salinities ranging from fresh to brackish. This Basin is 75 kilometres south of the
Project.

PROJECT DESIGN AND SCOPING STUDY

The process flow-sheet adopted for the study begins with wet drum scrubbing and two stages of wet screening to allow
rejection of up to 80% of the original plant feed as essentially barren waste. The remaining 20% of fine, enriched pulp will go to
standard alkaline leaching followed by ion exchange in a NIMCIX reactor. Uranium will then be stripped from the NIMCIX resin
to generate a pregnant solution for precipitation as ammonium diuranate (ADU). After a dewatering step in a centrifuge the
precipitate will be calcined and dried to uranium oxide (“yellowcake”) for packaging and transport to customers. All of these
process steps are standard and proven in the industry.

All process facilities have been centrally located, allowing a short average haul distance from the individual deposits comprising
the Oued El Foule Est (“OEFE”) Zone A resource, which was selected as the first to be mined.

The process plant will be made up of re-locatable process modules, primarily as a means of minimising the initial capital cost.
This design will also permit the plant to be more easily moved to other resources within the Reguibat tenements when Zone A
is exhausted. To the maximum extent possible, industry-proven modules will be used, or modules which will be pre-assembled
and tested before export.

The total estimated initial capital cost for engineering, procurement, construction, commissioning, startup and the owner’s
activities for the Project is A$50.0 million.

The table below shows the estimated costs summary by activity.

Description

Mining

Process Plant

Infrastructure

EPCM

Owner's cost

Contingency
Total Capital Cost

Cost (A$ million)

Cost (US$ million)

1.24

24.52

10.04

3.54

1.75

8.95

50.04

1.12

22.07

9.03

3.19

1.58

8.05

45.04

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

OPERATIONS REVIEW 2014

The life of mine unit operating cost estimate for the Reguibat Project is estimated to be US$30.3/lb U3O8.

The table below provides a summary of the costs in terms of US$ per tonne mined.

Description

Mining

Processing

Services

G & A
Total

US$/t Ore Mined

% of Total

2.59

11.77

3.00

4.08

21.42

8.9

55.0

14.0

19.0

100.0

The planned operation will produce approximately 1.0 million pounds of U3O8 per year in Years 2 and 3, followed by 650,000
pounds for Years 4-11, and 710,000 pounds in Years 12-15. The total uranium produced under these assumptions is 10.7 million
pounds over the 15-year mine life.

Uranium production will increase in Years 12-15 with the benefit from higher grades from the more distant Zones I, J or C, but
the cost of production will also increase in those years because of increased ore transport costs.

The project based on the assumptions provided above has very robust financial characteristics, with cumulative cash flow over
the 15-year mine life of $360M and an internal rate of return of 78% before tax and royalties.

The breakeven price for the Project is US$37/lb U3O8. This makes it among the lowest-cost uranium projects currently being
developed. Its financial strength is the low capital cost. Sensitivity analysis below the capital cost has only a limited impact on
the value of the project.

This project is among the most capital efficient of current peer projects. The project capital cost per pound of U3O8 is less than
$4.00/lb, and Reguibat represents the only mining project within the capital cost/lb uranium produced range that compares
with the in-situ leach operations.

MAURITANIA AS A MINING COUNTRY

Mauritania is a country with a well-established and sizeable mining industry and has a favourable and well-administered Mining
Act. The Government is stable, democratic, and supportive of foreign investment. It has an established reputation for
maintaining stability and security within its borders. The country currently ranks among the highest in Africa as a mining
destination, using the independent Fraser Institute rankings.

HÄGGÅN PROJECT, SWEDEN (AURA 100%)

Häggån is a major uranium project in Central Sweden. Sweden has an active mining industry, with a clear regulatory position
and a well-established path from exploration to mining.

The Häggån Project is a giant, multi-metal deposit which is underpinned by huge uranium resource. The main metals in the
current resources are:

803Mlbs U₃O₈ inferred resource (2.35Bn tonnes @ 155 ppm U₃O₈)

Nickel

Zinc

Molybdenum



1,640Mlbs

2,230Mlbs

1,070Mlbs

The size of the Häggån resource places it in the top two largest undeveloped uranium resources that are compliant with ASX or
TSX requirements.

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

OPERATIONS REVIEW 2014

Häggån is located in a largely uninhabited area of swamp and forest degraded by generations of commercial forestry.

The scoping study completed in 2012 suggests that the Häggån Project has excellent potential to become a major, low cost
producer of uranium, with by-product nickel and other metals.

Aura considered it prudent, given the current market conditions, to reassess the May 2012 Häggån Scoping Study, which was
based on a conceptual 30Mtpa operation, with smaller options which are more likely to attract funding than a project with a
high initial capital cost.

Aura has considered three smaller size options: 3.5Mtpa, 5.0 Mtpa and 7.5 Mtpa, in order to provide a number of additional
development alternatives with a substantially lower front end capital cost requirement. The table below highlights that the
upfront capital costs are significantly reduced at all the modelled scales with operating costs remaining low in all cases.

In the analysis Aura’s team used factored scoping study costs and published costs from similar heap leaching projects to
develop the capital cost estimates. A peer review analysis of available information for comparable uranium and gold heap leach
projects indicates that these cost estimates are appropriate in the current environment.

Heap leaching is a widely used low cost extraction technology that is well understood within the mining industry. Good
comparative cost data is available. These highlight that unit operating costs show relatively little change when adopting lower
production rates. Analysis of Häggån operating costs on this basis indicated the project will be in the lower half of the 2010
WNA cost curve (<$25/lb. U3O8) after by-product credits.

This analysis of lower throughput options for Häggån underlines the exceptional financial robustness of this remarkable project
even at substantially lower levels of initial capital investment. Aura has assumed similar metal recoveries to that used in the
2012 Scoping Study, namely 75% for uranium, 60% for nickel, and 25% for molybdenum. This gives U3O8 production in the
range of 1.0-2.0 million lbs per annum for the mill capacities considered, as indicated in the table below.

Range of upfront capital costs at 3.5, 5.0 and 7.5 Mtpa and metal production of uranium, nickel and molybdenum* +/- 35%
accuracy level)

MTPA

APPROX CAPEX*

OPCOST

3.5

7.5

30.0

150

190

250

540

US$/lb.

21.00 - 25.00

18.00 - 22.00

13.50

U3O8

Mlbs

1.0

1.4

2.1

7.8

Mlbs

0.4

0.6

1.0

4.3

Mlbs

1.7

2.4

3.6

14.8

SWEDEN AS A MINING COUNTRY

Sweden has a long history of mining, and its legislation and regulations are supportive of mining. The country is Europe’s largest
iron ore producer, and contains its largest copper mine.

It is recognized as a low sovereign risk mining destination. It recently ranked second, after Finland, in the Fraser Institute
(Canada) survey of most favoured mining countries.

Sweden is a nuclear country, with 50% of electricity needs generated by 10 reactors. The country has a low corporate tax rate
and royalties.

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

OPERATIONS REVIEW 2014

REGUIBAT RESOURCE STATEMENT

The Reguibat Project Mineral Resource statement is compliant with the JORC (2012) code and has been prepared by
independent consultants.

Indicated and Inferred Resources for the Reguibat Project at a 100ppm U3O8 cut-off grade

Cut-off grade

Tonnes

Grade (ppm)

Mlb U3O8

Total Indicated & Inferred

Indicated

Inferred

100

334

300

335

Competent Persons for Reguibat Resource

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 Mapeto is a Member of The Australasian Institute of Mining and Metallurgy.

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 data integrity, QA/QC and the requirement of “reasonable prospects for eventual economic extraction” for the
reporting of Häggån Resources at the quoted cut-off grades.

HÄGGÅN RESOURCE STATEMENT

The Haggan Project Mineral Resource statement is compliant with the JORC (2012) code and has been prepared by
independent consultants.

Category

Cut-off U3O8

ppm U3O8

Inferred

100

Competent Persons for Häggån Resource

Size

2.35

U3O8

ppm

155

ppm

207

ppm

1,519

ppm

316

ppm

431

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.

Mr. Arnold van der Heyden takes responsibility for estimation of uranium and associated metals in the Häggån Resource. Mr. van der Heyden is
a director of H&SC and is a competent person in the meaning of JORC having had around thirty 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. van
der Heyden consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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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 2014.

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

1. DIRECTORS

The names of Directors in office at any time during or since the end of the year are:

Mr. Peter Reeve

Chairman (Appointed 13 July 2013)

Dr. Robert (Bob) Beeson

Managing Director

Mr. Brett Fraser

Non-executive Director (Stepped down as Chairman 13 July 2013)

Mr. Julian (Jules) Perkins

Non-executive Director

Mr. Simon O’Loughlin

Non-executive Director (Resigned 12 July 2013)

Mr. Jay Stephenson

Non-executive Director (Resigned 12 July 2013)

Mr. Leigh Junk

Non-executive Director (Resigned 12 July 2013)

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

2. COMPANY SECRETARY

The following person held the position of Company Secretary at the end of the financial year:

Mr Stanley Zillwood

On 5 February 2014, Mr Stephenson resigned as Company Secretary and Mr Stanley
Zillwood was appointed as Company Secretary and Chief Financial Officer of the Company.
Mr Zillwood is a Chartered Accountant.

3. NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

The principal activities of the Group during the financial year were the exploration and evaluation of its projects in Sweden and
Mauritania.

4. DIVIDENDS PAID OR RECOMMENDED

There were no dividends paid or recommended during the financial year ended 30 June 2014.

5. REVIEW OF OPERATIONS

5.1. Operation Review

A detailed review of the Group’s exploration activities is set out in the section entitled Operations Review on page 4 in this
annual report.

5.2. Operating Results

The consolidated loss for the year amounted to $3,855,498 (2013: $2,756,341). The increase is largely attributable to the write-
off of exploration assets as set out in note 11 Exploration and Evaluation Assets on page 49.

The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. Details of the Group’s
assessment in this regard can be found in note 1 Statement Of Significant Accounting Policies: Going Concern on page 27. The
auditor's report on page 70 contains an emphasis on matter in this regard.

5.3. Financial Position

The net assets of the Group have decreased by $3,867,636 from 30 June 2013 to $12,698,874 at 30 June 2014.

As at 30 June 2014, the Group's cash and cash equivalents decreased from 30 June 2013 by $1,441,817 (including foreign
exchange movements) to $570,478. The Group had a working capital deficit of $30,423 (2013: $1,540,400 working capital),
that included the debt component of a convertible note of $188,600 of which $175,000 has subsequent to balance date been
converted to ordinary shares, (refer Note 25 Events Subsequent to Reporting Date).

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ REPORT

6. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

The following significant changes in the state of affairs of the Group occurred during the financial year:

The Group rationalised its tenement holdings in all of its locations by relinquishing non-core assets, this included complete
withdrawal from exploration in Australia. As a result of the rationalisation, the Group wrote off exploration expenditure of
$2,880,191.

Aura Energy Limited relocated its corporate and registered office from Perth to Melbourne during the year as part of a

head office reorganisations and cost saving exercise.

7. EVENTS SUBSEQUENT TO REPORTING DATE

There are no other significant after balance date events that are not covered in the Operations Review on page 4 or within the
financial statements at Note 25 Events Subsequent To Reporting Date on page 65.

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. Peter Reeve

Qualifications



Chairman (Non-executive) – Appointed 13 July 2013

Mr. Reeve is a professional metallurgist, and has held positions with Rio Tinto, Billiton
Australia and Newcrest Mining. Peter was a Resource Fund Manager and Resources
Corporate Finance Director at J B Were & Son. More recently Peter was Chief Executive
Officer of Ivanhoe Australia Ltd.

Experience



Board member since 13 July 2013.

Interest in Shares and Options 

831,038 Ordinary Shares in Aura Energy Limited and 6,333,104, options.

Directorships held in other
listed entities



Nil

Dr. Robert Beeson



Managing Director

Qualifications

Experience



Bachelor of Science with Honours; PhD; Member of the Australian Institute of
Geoscientists

Board member since 31 March 2006. Geologist with over 35 years of global experience in
uranium and other commodity management, exploration and development

Interest in Shares and Options 

3,063,549 Ordinary Shares in Aura Energy Limited and 6,687,377 options.

Directorships held in other
listed entities

Mr. Brett Fraser

Qualifications



Managing Director of Drake Resources Limited from November 2004 until 31 January
2013. Non-executive director or Drake Resources Limited since 1 February 2013. No other
directorships in the past three years.

Director (Non-executive) – stepped down as Chairman 13 July 2013

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 

3,038,040 Ordinary Shares in Aura Energy Limited and 2,602,579 options.

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ REPORT

Directorships held in other
listed entities



Current non-executive director and Chairman of Drake Resources Limited since March
2004, and non-executive director and Chairman of Blina Diamonds NL since September
2008. Past director of Doray Minerals Limited from October 2009 until November 2011.
No other directorships in the past three years.

Mr. Julian Perkins



Director (Non-executive)

Qualifications



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.

Mr. Perkins 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 metallurgical 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. He has
previously been Chairman of the Board of Parker Centre Ltd, which managed the Parker
Cooperative Research Centre (‘CRC’) for Hydrometallurgy and a director on the boards of
the CRC Mining and the Australian Centre for Mining Environmental Research.

Interest in Shares and Options 

925,948 Ordinary Shares in Aura Energy Limited and 1,399,262 options.

Directorships held in other
listed entities



No other directorships held in other listed entities.

Mr. Jay Stephenson

Qualifications



Director (Non-executive) – Resigned 12 July 2013

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 from 24 August 2005 to 12 July 2013.

Interest in Shares and Options 

1,881,068 Ordinary Shares in Aura Energy Limited and 1,013,368 options, as at the date of
resignation.

Directorships held in other
listed entities



Current non-executive Director of Drake Resources Limited since March 2004, Strategic
Minerals Corporation NL since July 2009, Doray Minerals Limited since August 2009,
Spencer Resources Limited since March 2012, and Nickelore Limited since July 2011.
Chairman and non-executive Director of Quintessential Resources Limited since February
2011. Past non-executive director of Excelsior Gold Limited from October 2009 to
November 2009 and Parker Resources Limited from January 2011 to December 2012. No
other directorships in the past three years.

Mr. Simon O’Loughlin



Director (Non-executive) – Resigned 12 July 2013

Qualifications

Experience



BA(Acc), Law Society Certificate in Law.



Board member from 31 March 2006 to 12 July 2013.

Interest in Shares and Options 

993,112 Ordinary Shares in Aura Energy Limited and 125,000 options, as at the date of
resignation.

P a g e | 12

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ REPORT

Directorships held in other
listed entities



Chesser Resources Limited since March 2006, Goldminex Resources Limited since June
2012, Kibaran Resources Limited since September 2010, Petratherm Limited since October
2003, and WCP Resources Limited since March 2005

Former director of Bondi Mining Limited (December 2006 to January 2012), Bioxyne
Limited (July 2008 to April 2012), Avenue Resources Limited (March 2010 to March 2012),
and Living Cell Technologies Limited (May 2004 to November 2010), Australia Oriental
Minerals NL (April 2012to February 2013), Neurodiscovery Limited (March 2012 to July
2013).

No other directorships in the past three years.

Director (Non-executive) – Resigned 12 July 2013

Diploma of Surveying from Wembley Technical College in 1992, Graduate Diploma of
Mining Engineering from University of Ballarat in 2000, and a Masters in Mineral
Economics from Curtin University in 2008.

Mr. Leigh Junk

Qualifications



Experience



Board member from 7 June 2011 to 12 July 2013.

Mr. Junk is a mining engineer with extensive experience in the mining industry.

Interest in Shares and Options 

937,500 Ordinary Shares in Aura Energy Limited and 125,000 options, as at the date of
resignation. 12 July 2013

Directorships held in other
listed entities



Mr. Junk is a Director of Doray Minerals Limited, Sentosa Mining Limited, and Goldfields
Money Limited.

10. MEETINGS OF DIRECTORS

During the financial year eight meetings of Directors (including committees of Directors) were held. Attendances by each
Director during the year were as follows:

COMMITTEE MEETINGS

DIRECTORS’
MEETINGS

DUE DILIGENCE
COMMITTEE

REMUNERATION

AUDIT

COMMITTEE

Number
eligible to
attend

Number
Attended

Number
eligible to
attend

Number
Attended

Number
eligible to
attend

Number
Attended

Number
eligible to
attend

Number
Attended

Peter Reeve

Bob Beeson

Brett Fraser

Jules Perkins

Jay Stephenson

Simon O’Loughlin

Leigh Junk

At the date of this report, the Remuneration Committee, Audit Committee and
Nomination Committee comprise the full Board of Directors. The Directors believe
the Company is not currently of a size nor are its affairs of such complexity as to
warrant the establishment of these separate committees. Accordingly, all matters
capable of delegation to such committees are considered by the full Board of
Directors.

11. NON-AUDIT SERVICES

During the year ended 30 June 2014, taxation consulting services were provided to the Company by a party related to the
auditors, Bentleys. These services amounted to $3,000 (2013: $10,150). Details of remuneration paid to the auditor can be
found within the financial statements at Note 4 Auditor’s Remuneration on page 44.

The Directors are satisfied that the provision of non-audit services during the year by Bentleys (or by another person or firm on
Bentley's behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001
(Cth).

P a g e | 13

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ REPORT

12.

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 wilful breach of duty in relation to the Company. The amount of the premium was $9,500.

No indemnity has been paid to auditors of the Group.

13. 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
introduced 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 has no effect on the Company for the current, nor subsequent, financial year.
The Directors will reassess this position as and when the need arises.

14. OPTIONS

At the date of this report, the un-issued ordinary shares of Aura Energy Limited under option (listed and unlisted) are as
follows:

Grant Date

Date of Expiry

Exercise Price

Number under Option

23 December 2009

23 December 2014

31 March 2011

24 November 2011

23 December 2011

24 May 2012

4 December 2012

15 January 2013

20 December 2013

8 March 2014

31 March 2016

31 October 2014

1 December 2014

31 May 2015

4 December 2016

1 December 2014

13 January 2015

13 January 2016

13 July 2016

6 March 2017

$0.300

$0.450

$0.310

$0.200

$0.150

$0.200

$0.048

375,000

570,000

3,500,000

32,789,218

1,000,000

200,000

3,000,000

6,625,000

2,250,000

6,625,000

2,600,000

56,934,218

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.

15. 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.

16. AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration for the year ended 30 June 2014 has been received and can be found on page 22
of the annual report.

P a g e | 14

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ REPORT

17. REMUNERATION REPORT (AUDITED)

17.1. 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 described in the following paragraphs.

The remuneration policy of the Company sets the terms and conditions for executive directors and other senior
executives. Due to the rapidly changing circumstances of the Company in recent years, the policy is reviewed annually by
the Board with the purpose of maintaining alignment of the board and management with the Company’s strategic
objectives. Management is also entitled to participate in employee share and option arrangements. All executives receive
a base salary which takes into account such factors as length of service and experience, superannuation and options. The
Board reviews executive packages annually by reference to the performance of the Company, individual executives and
relevant comparable remuneration data from similar listed companies and appropriate industry sectors. Independent
expert advice is sought as required.

The total amount of non-executive directors’ remuneration is proposed by the Board from time to time at the Annual
General Meeting and is subject to formal approval by shareholders. Within this limit, the Board currently remunerates
non-executive directors at around the average of those obtained from relevant comparable data from similar listed
companies and appropriate industry sectors. A measure of longer-term incentive is provided by the allocation of options
to non-executive directors. The Board determines remuneration to individual non-executive directors, working within the
limit set by shareholders, and taking into account any special duties or accountability. Payments to non-executive
directors are not linked to Company performance but in order to align their interest with those of shareholders, non-
executive directors are encouraged to hold shares in the Company.

Executives and non-executive directors have received a superannuation guarantee contribution as required by law, which
was 9.25% up to 30 June 2014, but do not receive any other retirement benefits. From 1 July 2014, the superannuation
guarantee contribution has been increased to 9.5%.

All remuneration paid to non-executive directors and executives is valued at the cost to the Company and is expensed.
Options given to directors and employees are valued using the Black-Scholes methodology. Details of directors’ and
executives’ interests in options as at 30 June 2014 are provided in 17.5b of the Remuneration Report on page 20 of the
financial statements.

A resolution that the remuneration report for the last financial year to be adopted was put to the vote at the Company's
most recent AGM, held on 21 November 2013. At least 25% of the votes cast were against adoption of that report. As this
constituted a second strike under the Corporations Act 2001 (Cth), the meeting considered a spill resolution of non-
executive directors. The resolution was lost with 31,105,097 votes against and 12,181,864 votes in favour.

Following the last AGM, the Company has since December 2013 paid a portion of directors’ fees by way of issues of fully
paid ordinary shares on an average VWAP basis.

In addition the Managing Director has reduced his working hours to 80% normal time and settle 25% of his net pay in
shares on the same basis as the non-executive directors.

P a g e | 15

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ REPORT

17. REMUNERATION REPORT (AUDITED)

17.2. Remuneration Details for the Year Ended 30 June 2014

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:

2014
Group Key
Management
Personnel

Salary, fees
and leave
$

Peter Reeve (5)(7)

67,588

Bob Beeson(4)(5)(7)

271,836

Brett Fraser(1)(5)(7)

Jules Perkins(2)(7)

Jay Stephenson(1)

Simon O’Loughlin

Leigh Junk

Stanley Zillwood(6)(7)

46,068

36,667

1,995

428,144

2013
Group Key
Management
Personnel

Brett Fraser(1)(5)

Bob Beeson(4)(5)

Jay Stephenson(1)

Salary, fees
and leave
$

60,000

239,388

55,000

Simon O’Loughlin

55,000

Leigh Junk

Jules Perkins(2)

James Merrillees(3)

55,000

519,388

Short-term benefits

Non-
monetary
$

24,368

16,251

13,932

Other

18,333

1,375

43,341

Profit share
and bonuses

Post-
employment
benefits
Super-
annuation
$

8,814

29,913

5,550

5,088

184

Long-term
benefits

Equity-settled share-
based payments

Total

Other

Equity

Options

Compen-
sation
consisting of
options

24,440

125,210

19.52%

11,718

329,718

3.55%

6,893

72,443

9.52%

6,893

68,356

10.08%

2,179

43,341

49,944

645,605

7.74%

72,884

44,716

49,917

Short-term benefits

Post-
employment
benefits
Super-
annuation
$

Non-
monetary
$

Other

Long-term
benefits

Equity-settled share-
based payments

Total

Other

Equity

Options

Compen-
sation
consisting
of options

62,234

128,834

48.31%

82,979

340,292

24.38%

61,150

59,950

91,265

118,865

145,213

860,306

16.88%

1,200

5,400

2,400

15,525

1,200

31,315

118,865

4,950

154,980

40,725

Profit share
and bonuses

(1) Wolfstar Group Pty Ltd, a company controlled by Messrs Fraser and Stephenson, provided financial services and company secretarial services to
Aura Energy Limited. These services were provided indirectly by Messrs Fraser and Stephenson and have therefore not been included in
remuneration. Please refer to part 17.7 Other transactions with key management personnel on page 21 for further details.

(2) Amounts paid to the RRI Trust are in respect to metallurgical consulting provided directly by Mr. Perkins.
(3) Mr. Merrillees was employed as Exploration Manager by Drake Resources Limited, which recharged his salary pro rata for the prior year on a time

basis of hours charge to the Aura Group.

(4) From February 2013, Dr. Beeson ceased acting as a dual Managing Director for Aura Energy and Drake Resources, and became solely employed by

Aura Energy in this role.

(5) An expense was raised in the year for options issued in current and /or prior periods, in accordance with their vesting conditions. Refer part 17.4

Share-based compensation.

(6) The Company Secretary and CFO, Stan Zillwood is employed by Foster Resources Pty Ltd, a company controlled by Mr Zillwood, to provide

services to the Group under a contract dated 30 December 2013.

(7) For the 2014 financial year the following amounts remain unpaid: P Reeve $11,666 ($7,754 to be settled in shares); B Beeson $10,753 ($6,500 to
be settled in shares); B Fraser $5,000 ($3,483 to be settled in shares); and J Perkins $4,583 all to be settled in shares and S. Zillwood $7,500.

P a g e | 16

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ REPORT

17. REMUNERATION REPORT (AUDITED)

17.3. Service Agreements

The Managing Director, Dr. Robert Beeson, is employed under a deed of employment, effective 1 January 2013.

The employment deed stipulates a four weeks' resignation period. The Company may terminate the employment deed without
cause by providing four weeks' written notice, or making payment in lieu of notice based on the individual’s annual salary
component.

If employment is terminated other than for serious misconduct, and the Employee is not then otherwise in default of deed and
his employment, the Managing Director will, in connection with his retirement from the Office, receive in addition to the
required four weeks' notice period, three months' salary. An additional benefit may be paid in the amount of one month for
every year of service. This is subject to the provisions of the Corporations Act 2001 (Cth), which may require shareholder
approval.

17.4. 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.

b. Director and Key Management Personnel Options

On 24 November 2013, the follow share options were granted to directors to take up ordinary shares:

(i) 2,000,000 at an exercise price of $0.15 each. The options are exercisable on or before 13 January 2015;

(ii) 2,250,000 at an exercise price of $0.20 each. The options are exercisable on or before 13 January 2016;

(iii) 2,000,000 at an exercise price of $0.20 each. The options are exercisable on or before 13 July 2016;

(iv) 4,625,000 at an exercise price of $0.15 each. The options are exercisable on or before 13 January 2015; and

(v) 4,625,000 at an exercise price of $0.20 each. The options are exercisable on or before 13 July 2016.

On 24 November 2011, 3,500,000 share options were granted to directors to take up ordinary shares at an exercise price
of $0.31 each. The options are exercisable on or before 31 October 2014.

c. Share-based Payments

The terms and conditions relating to options granted as remuneration during the year to Directors and Key Management
Personnel are as follows:

2014

Group Key
Management
Person

Grant date

Grant value
$
(Note 4)

Reason for
Grant

Vesting date

Percentage
vested during
year
%

Percentage
forfeited
during year
%

Percentage
remaining as
unvested
%

Expiry date

Range of
possible values
relating to
future
payments

Peter Reeve

21 Nov 2013

7,890

Note 1

21 Nov 2013

100

21 Nov 2013

13,534

Note 1

21 May 2015

21 Nov 2013

16,100

Note 1

21 Nov 2015

Robert
Beeson

21 Nov 2013

Brett Fraser

21 Nov 2013

Julian Perkins 21 Nov 2013

21 Nov 2013

2,511

9,207

1,477

5,416

1,477

5,416

Note 2

21 Nov 2013

Note 2

21 Nov 2013

Note 2

21 Nov 2013

Note 2

21 Nov 2013

Note 2

21 Nov 2013

Note 2

21 Nov 2013

100

13 Jan 2015

13 Jan 2016

13 July 2016

13 Jan 2016

13 July 2016

13 Jan 2016

13 July 2016

13 Jan 2016

13 July 2016

P a g e | 17

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ REPORT

17. REMUNERATION REPORT (AUDITED)

2013

Group Key
Management
Person

Grant date

Brett Fraser

Bob Beeson

24 Nov 2011

Grant value
$
(Note 4)

154,950

206,600

Reason for
Grant

Vesting date

Percentage
vested during
year
%

Percentage
forfeited
during year
%

Percentage
remaining as
unvested
%

Expiry date

Range of
possible values
relating to
future
payments

Note 3

24 Nov 2012

Nil, vested in
prior year

31 Oct 2014

Note 1.

The options have been granted to the Chairman as part of his remuneration and for future performance. The vesting conditions of the
options are as follows:

Tranche 1: vest at immediately, exercisable at 15 cents, expire 13 January 2015;
Tranche 2: vest at 18 months from issue, exercisable at 20 cents, expire 13 January 2016; and
Tranche 3: vest at 24 months from issue, exercisable at 20 cents, expire 13 July 2016.

Note 2.

The options have been granted to the Directors (excluding the Chairman) to provide a market-linked incentive package in their
capacity as Directors and for future performance by them in their roles. The vesting conditions of the options are as follows

Tranche 1: vest at immediately, exercisable at 15 cents, expire 13 January 2015;
Tranche 2: vest at immediately, exercisable at 20 cents, expire 13 July 2016.

Note 3.

The options have been granted to Directors to provide a market-linked incentive package in their capacity as Directors and for future
performance by them in their roles. The vesting conditions of the options are as follows:

Director options will vest 12 months after the issue date.

KMP options will vest 12 months after the issue date and if the Director 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.

Note 4.

The monetary value of the percentage vested during the period has been reflected in the table of benefits and payments on the
previous page.
All options were issued by Aura Energy Limited and entitle the holder to one ordinary share in the Company for each option exercised.

Details of all Share-Based Payments in existence during the year can be found at Note 19 Share-Based Payments on page 55.

d. Description of Options Issued as Remuneration

Details of the options granted as remuneration to those KMP listed in the previous tables are as follows:

Amount paid/

Reference

Value per option

payable by

Grant date

Issuer

Entitlement on
exercise

Dates exercisable

Exercise price
$

at grant date
$

recipient
$

21 Nov 2013

24 Nov 2011

Aura Energy Limited

1:1 Ordinary Shares

in Aura Energy
Limited

From vesting date to

13 Jan 2015 (expiry)

13 Jan 2016 (expiry)

13 Jul 2016 (expiry)

13 Jan 2016 (expiry)

13 Jul 2016 (expiry)

31 Oct 2014 (expiry)

0.15

0.20

0.15

0.20

0.31

0.0039

0.0060

0.0080

0.0012

0.0043

0.1033

Note 1

Note 2

Note 3

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 within the financial
statements at Note 19 Share-Based Payments on page 55.

P a g e | 18

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ REPORT

17. REMUNERATION REPORT (AUDITED)

17.5. Key management personnel equity holdings

Fully paid ordinary shares of Aura Energy Limited held by each KMP

2014

Group Key Management Person

Directors of Aura Energy Limited

Peter Reeve

Robert Beeson(1)

Brett Fraser(3)

Julian Perkins

Jay Stephenson (2)

Simon O’Loughlin (2)

Leigh Junk (2)

Other KMP

Stanley Zillwood

2013

Group Key Management Person

Directors of Aura Energy Limited

Brett Fraser

Robert Beeson

Jay Stephenson

Simon O’Loughlin

Leigh Junk

Julian Perkins

Other KMP

James Merrillees (2)

Balance at
start of year
No.

Received during
the year as
compensation
No.

Received during
the year on the
exercise of options
No.

Other changes
during the year
No.

Balance at
end of year
No.

2,257,460

2,486,040

240,000

1,881,067

993,112

937,500

664,830

442,756

380,540

500,758

8,795,179

1,988,884

30,000

(190,270)

664,830

2,730,216

2,676,310

740,758

1,881,067

993,112

937,500

(160,270)

10,623,793

Balance at
start of year
No.

Received during
the year as
compensation
No.

Received during
the year on the
exercise of options
No.

Other changes
during the year(1)
No.

Balance at
end of year
No.

2,286,040

2,069,960

1,843,567

993,112

875,000

106,667

99,167

8,273,513

200,000

187,500

37,500

62,500

133,333

2,486,040

2,257,460

1,881,067

993,112

937,500

240,000

99,167

620,833

8,894,346

(1) Other changes during the year relate to shares purchased or sold on market.
(2)
(3) Other Changes during the year relates to shares received as compensation by B Fraser being allotted to a third party.

Equities disclosed are up to and as at the date of resignation

P a g e | 19

DIRECTORS’ REPORT

17. REMUNERATION REPORT (AUDITED)

b. Options of Aura Energy Limited held by each KMP

2014

Group Key Management
Person

Balance at
start of year
No.

Granted as
Remuneration
during the year
No.

Directors of Aura Energy Limited

Peter Reeve

Robert Beeson

Brett Fraser(2)

Julian Perkins

Jay Stephenson (1)

Simon O’Loughlin (1)

Leigh Junk (1)

Other KMP

6,250,000

2,270,710

4,250,000

1,076,579

2,500,000

56,667

2,500,000

1,013,368

125,000

Stanley Zillwood

2013

Group Key Management
Person

4,667,324

15,500,000

Balance at
start of year
No.

Granted as
Remuneration
during the year
No.

Directors of Aura Energy Limited

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

Exercised
during the year
No.

Other changes
during the year
No.

Balance at
end of year
No.

Vested and
Exercisable
No.

6,250,000

2,000,000

6,520,710

(1,250,000)

2,326,579

2,556,667

1,013,368

125,000

(1,250,000)

18,917,324

14,667,324

Exercised
during the year
No.

Other changes
during the year
No.

Balance at
end of year
No.

Vested and
Exercisable
No.

Brett Fraser

Robert Beeson

Jay Stephenson

Simon O’Loughlin

Leigh Junk

Julian Perkins

Other KMP

James Merrillees (1)

1,076,579

2,270,710

1,013,368

125,000

56,667

64,167

4,731,491

1,076,579

2,270,710

1,013,368

125,000

56,667

125,000

56,667

64,167

4,731,491

Equities disclosed are up to and as at the date of resignation

(1)
(2) Other changes represent options issued to a third-party

P a g e | 20

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ REPORT

17. REMUNERATION REPORT (AUDITED)

17.6. Loans to key management personnel

There are no loans made to directors of Aura Energy as at 30 June 2014 (2013: nil).

17.7. Other transactions with key management personnel

Note

2014

2013

Wolfstar Group Pty Ltd

 Wolfstar Group Pty Ltd, a company controlled by Messrs Fraser and
Stephenson, provided financial services and company secretarial
services to Aura Energy Limited. These services were provided directly
and indirectly by Messrs Fraser and Stephenson and have therefore not
been included in the Remuneration table contained in part 17.2 of this
Remuneration Report.

 Financial services provided to Wolfstar Group
 Amounts due from Wolfstar Group for other services provided by Aura

Energy staff

RRI Trust

64,917

90,000

17,987

9,242

Mr Perkins provides metallurgical consulting services to the Group that is
charged through the RRI Trust, being a trust associated with Mr Perkins.

1,804

31,418

James Merrillees

Drake Resources Limited provided the services of James Merrillees to Aura
Energy Limited, recharging for his salary and superannuation on a cost
basis.

Amounts owing to KMP

Payable for unpaid fees
 P. Reeve
 B. Beeson
 B. Fraser
 J. Perkins
 S. Zillwood

118,865

11,666

10,753

5,000

4,583

7,500

There have been no other transactions involving equity instruments other than those described in the tables above.

END OF REMUNERATION REPORT

This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of directors
made pursuant to s.298(2) of the Corporations Act 2001 (Cth).

PETER REEVE

Chairman

Dated this Tuesday, 30 September 2014

P a g e | 21

To The Board of Directors

As lead audit director for the audit of the financial statements of Aura Energy Limited for

the financial year ended 30 June 2014, I declare that to the best of my knowledge and

belief, there have been no contraventions of:

the auditor independence requirements of the Corporations Act 2001 in relation to

the audit; and

any applicable code of professional conduct in relation to the audit.

Yours faithfully

BENTLEYS
Chartered Accountants

DOUG BELL CA
Director

Dated at Perth this 30th day of September 2014

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014

Continuing operations

Revenue

Other income

Project partnering and divestment

Accounting and audit fees

Business development

Computers and communications

Depreciation

Employee benefits

Finance Costs

Impairment

Insurance

Legal and consulting fees

Public relations

Rent and utilities

Share-based payments

Share registry and listing fees

Travel and accommodation

Exploration expenditure written-off

Other expenses

Loss before income tax

Income tax benefit

Loss from continuing operations

Other comprehensive income, net of income tax



Items that will not be reclassified subsequently to profit or loss

Items that may be reclassified subsequently to profit or loss:

Foreign currency movement

Other comprehensive income for the year, net of tax

Note

2014

2013

8,332

79,451

87,783

(4,785)

(190,577)

(26,419)

(29,025)

(6,700)

26,421

4,736

31,157

(334,395)

(142,228)

(6,051)

(54,041)

(14,610)

(562,693)

(760,773)

(3,064)

(36,223)

(67,229)

(94,165)

(123,832)

(49,944)

(69,517)

(162,686)

(755)

(11,388)

(52,740)

(98,706)

(137,892)

(154,124)

(152,765)

(61,527)

(51,937)

(2,880,191)

(1,747,939)

(41,860)

(83,005)

(4,261,127)

(3,833,719)

405,629

1,077,378

(3,855,498)

(2,756,341)

(294,741)

830,674

(294,741)

830,674

Total comprehensive income attributable to members of the parent entity

(4,150,239)

(1,925,667)

Earnings per share:

Basic loss per share (cents per share)

₵

(2.07)

₵

(1.65)

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

P a g e | 23

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014

Current assets

Cash and cash equivalents

Trade and other receivables

Financial assets

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

Borrowings

Total current liabilities

Total liabilities

Net assets

Equity

Issued capital

Reserves

Accumulated losses

TOTAL EQUITY

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

Note

2014

2013

570,478

2,012,295

92,830

64,453

102,926

727,761

2,115,221

2,994

9,694

12,726,303

15,016,416

12,729,297

15,026,110

13,457,058

17,141,331

431,087

106,081

221,016

427,374

116,311

31,136

758,184

574,821

758,184

574,821

12,698,874

16,566,510

27,935,558

27,759,558

1,238,119

1,426,258

(16,474,803)

(12,619,305)

12,698,874

16,566,511

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

P a g e | 24

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2014

Issued
Capital

Accumulated
Losses

Options
Reserve

Foreign
Exchange
Translation
Reserve

Total

Balance at 1 July 2012

25,723,535

(10,081,664)

625,968

(46,932)

16,220,907

Loss for the year attributable owners of
the parent

Other comprehensive income for the
year attributable owners of the parent

Total comprehensive income for the year
attributable owners of the parent

Transaction with owners, directly in equity

Shares issued during the year

Transaction costs

Options expired during the year

Options exercised during the year

Options issued during the year

(2,756,341)

2,165,771

(129,748)

218,700

(218,700)

235,248

(2,756,341)

830,674

(1,925,667)

2,165,771

(129,748)

235,248

Balance at 30 June 2013

27,759,558

(12,619,305)

642,516

783,742

16,566,511

Balance at 1 July 2013

27,759,558

(12,619,305)

642,516

783,742

16,566,511

Loss for the year attributable owners of
the parent

Other comprehensive income for the
year attributable owners of the parent

Total comprehensive income for the year
attributable owners of the parent

Transaction with owners, directly in equity

Shares issued during the year

Transaction costs

Options expired during the year

Options exercised during the year

Options issued during the year

(3,855,498)

359,944

(183,944)

106,602

(3,855,498)

(294,741)

(4,150,239)

359,944

(183,944)

106,602

Balance at 30 June 2014

27,935,558

(16,474,803)

749,118

489,001

12,698,874

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

P a g e | 25

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2014

Cash flows from operating activities

Receipts from customers

Interest received

Interest and borrowing costs

Payments to suppliers and employees

Payments for exploration expenditure

Rebate received for Research and Development

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

Note

2014

2013

843

8,332

25,578

(3,064)

(4,059)

(1,491,687)

(1,656,554)

(846,242)

(1,202,076)

405,629

1,077,378

Net cash used in operating activities

18a

(1,927,032)

(1,758,890)

Cash flows from investing activities

Purchase of plant and equipment

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issue of shares

Proceeds from issue of convertible notes

Capital raising costs

Net cash provided by financing activities

Net increase/(decrease) in cash held

Cash at 1 July

Change in foreign currency held

Cash at 30 June

The statement of cash flows is to be read in conjunction with the accompanying notes.

(2,361)

234,943

2,055,338

250,000

(15,000)

(21,732)

469,943

2,033,606

(1,457,089)

272,355

2,012,295

1,725,512

15,272

14,428

570,478

2,012,295

P a g e | 26

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

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 (Cth).

a. Basis of preparation

i. Statement of compliance

The financial statements are general purpose financial statements that have been prepared in accordance with
Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements
of the Australian Accounting Standards Board and the Corporations Act 2001 (Cth).

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 were authorised for issue on 30 September 2014 by the directors of the Company.

ii. Financial position

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.

iii. Going Concern

The Group incurred a loss for the year of $3,855,498 (2013: $2,756,341 loss) and a net cash out-flow of $1,457,089
(2013: $272,355 in-flow)

As at 30 June 2014, the Group had a working capital deficit of $30,423 (2013: $1,540,400 working capital), that
included the debt component of a convertible note of $188,600 of which $175,000 has subsequent to balance date
been converted to ordinary shares, refer note 25 Events Subsequent to Reporting Date.

The ability of the Group to continue as a going concern is principally dependent upon the ability of the Group to secure
funds by raising capital from equity markets or by other means, and by managing cash flows in line with available funds,
and / or the successful development of the Group's exploration assets. These conditions indicate a material uncertainty
that may cast doubt about the ability of the Group to continue as a going concern.

On 2 September 2014, the Company raised $1,572,855 before costs, via a non-renounceable rights issue (refer note 25
Events Subsequent to Reporting Date).

Based upon cash flow forecasts and other factors referred to above, the directors are satisfied that the going concern
basis of preparation is appropriate, including the meeting of exploration commitments. In addition, given the Group's
history of raising funds to date, the directors are confident of the Group's ability to raise additional funds as and when
they are required.

Should the Group be unable to continue as a going concern it may be required to realise its assets and extinguish its
liabilities other than in the normal course of business and at amounts different to those stated in the financial
statements.

The financial statements do not include any adjustments relating to the recoverability and classification of asset
carrying amounts or to the amount and classification of liabilities that might result should the Group be unable to
continue as a going concern and meet its debts as and when they fall due.

P a g e | 27

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

iv. Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets and liabilities, income and expenses. These estimates
and associated assumptions are based on historical experience and various factors that are believed to be reasonable
under the circumstances, the results of which form the basis of making the judgements about carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.

Judgements made by management in the application of Australian Accounting Standards that have significant effect on
the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in
note 1r Critical Accounting Estimates and Judgements on page 37.

v. Comparative figures

Where required by Accounting Standards comparative figures have been adjusted to conform with changes in
presentation for the current financial year.

b. 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 Controlled Entities on
page 53 of 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).

i. 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 acquired and liabilities (including contingent
liabilities) assumed is recognised (subject to certain limited exemptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a
contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration
classified as an asset or liability is remeasured each reporting period to fair value, recognising any change to fair value
in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the statement of profit or loss
and comprehensive income.

The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

c. Exploration and Development Expenditure

i. Recognition and measurement

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.

P a g e | 28

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

ii. Subsequent measurement

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.

iii. Site restoration and rehabilitation

Costs of site restoration will be provided over the life of the project, when such costs are incurred or the Group
becomes liable for, from when exploration commences and are included in the costs of that stage. Site restoration costs
will 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.

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.

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.

P a g e | 29

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Where the Group receives the Australian Government's Research and Development Tax Incentive, The Group accounts for
the refundable tax offset under AASB 112. Funds are received as a rebate through the parent company’s income tax return
and disclosed as such in Note 5 Income Tax, on page 45.

e. Plant and Equipment

i. Recognition and measurement

Each class of plant and equipment is measured at cost or fair value less, where applicable, any accumulated
depreciation and impairment losses.

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 asset’s employment and subsequent disposal. The expected net cash flows have not been
discounted to their present values in determining recoverable amounts.

Items of property, plant and equipment are measured at cost less accumulated depreciation (see below) and
impairment losses (refer Note 1m Impairment of non-financial assets and Note 1c Exploration and Development
Expenditure).

ii. 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:

Plant and equipment ........................................................ 20.00%
Computers ........................................................................ 33.00%
Motor Vehicles ................................................................. 25.00%

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period. 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.

f. Employee Benefits

For the period ending 30 June 2014 the Company has three employees.

i. Defined contribution superannuation funds

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions onto a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to
defined contribution superannuation funds are recognised as an expense in the income statement as incurred. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

ii. Short-term benefits

Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12 months
of the reporting date represent present obligations resulting from employees’ services provided to the reporting date
and are calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to
pay at the reporting date including related on-costs, such as workers compensation insurance and payroll tax.

Non-accumulating non-monetary benefits, such as medical care, housing, cars and free or subsidised goods and
services, are expensed based on the net marginal cost to the Group as the benefits are taken by the employees.

P a g e | 30

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

iii. Other long-term benefits

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.

g. 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.

h. 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 value added taxes (see Note 1i Value Added Taxes).

i. Value Added Taxes

Value-added taxes (VAT) is the generic term for the broad-based consumption taxes that the Group is exposed to such as:
Australia (GST); Sweden (MOMS); and in Mauritania (VAT).

Revenues, expenses, and assets are recognised net of the amount of VAT, except where the amount of VAT incurred is not
recoverable from the relevant country's taxation authority. In these circumstances the VAT 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 VAT.

Cash flows are presented in the statement of cash flows on a gross basis, except for the VAT component of investing and
financing activities, which are disclosed as operating cash flows.

Commitments and contingencies are disclosed net of the amount of VAT recoverable from, or payable to, the taxation
authority.

j. Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the
legal ownership, are transferred to entities in the Group are classified as finance leases.

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.

P a g e | 31

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

k. Financial Instruments

Initial recognition and measurement

i.
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 transaction 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.

ii. Non-derivative financial instruments

Non-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and
cash equivalents and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through
profit or loss, any directly attributable transactions costs. Subsequent to initial recognition non-derivative financial
instruments are measured as described below.

iii. Classification and Subsequent Measurement

(1) 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.

(2) Loans

Loans 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. Gains or losses are recognised in profit or loss through
the amortisation process and when the financial asset is derecognised.

Loans are included in current assets, except for those which are not expected to mature within 12 months after the
end of the reporting period.

(3) Trade and other receivables

Trade and other receivables are stated at amortised cost. Receivables are usually settled within 30 to 90 days.

Collectability of trade and other debtors is reviewed on an ongoing basis. An impairment loss is recognised for
debts which are known to be uncollectible. An impairment provision is raised for any doubtful amounts.

(4) Trade and other payables

Trade payables and other payable are recognised when the Group becomes obligated to make future payments
resulting from the purchase of goods and services which are unpaid and stated at their amortised cost. The
amounts are unsecured and are generally settled on 30 day terms.

(5) Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

(6) Share capital

Ordinary issued capital is recorded at the consideration received. Incremental costs directly attributable to the issue
of ordinary shares and share options are recognised as a deduction from equity, net of any related income tax
benefit. Ordinary issued capital bears no special terms or conditions affecting income or capital entitlements of the
shareholders.

P a g e | 32

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

iv. Amortised cost

Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation
of the difference between that initial amount and the maturity amount calculated using the effective interest method.

v. 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.

vi. Effective interest method

The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and
other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the contractual term) of
the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected
future net cash flows will necessitate an adjustment to the carrying amount with a consequential recognition of an
income or expense item in profit or loss.

vii. Impairment

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is
impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have
had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its
carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest
rate.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets
are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in the income statement.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss
was recognised. For financial assets measured at amortised cost the reversal is recognised in the income statement.

viii. 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.

ix. Financial income and expenses

Finance income comprises interest income on funds invested (including available-for-sale financial assets), gains on the
disposal of available-for-sale financial assets and changes in the fair value of financial assets at fair value through profit
or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Financial expenses comprise interest expense on borrowings calculated using the effective interest method, unwinding
of discounts on provisions, changes in the fair value of financial assets at fair value through profit or loss and
impairment losses recognised on financial assets. All borrowing costs are recognised in profit or loss using the effective
interest method.

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.

P a g e | 33

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Foreign currency gains and losses are reported on a net basis.

l. Earnings per share

i. Basic earnings per share

Basic earnings (or loss) per share is determined by dividing the profit or loss attributable to equity holders of the parent
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 (or loss) per share is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares
which comprise share options granted as share-based payments.

The Group does not report diluted earnings per share, as dilution is not applied to annual losses generated by the
Group.

m. Impairment of non-financial assets

The carrying amounts of the Company’s non-financial assets, other than deferred tax assets (refer Note 1d Income Tax) and
exploration and evaluation assets (refer Note 1c Exploration and Development Expenditure) are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable
amount is estimated.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are
independent from other assets and groups. Impairment losses are recognised in the income statement, unless the asset has
previously been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous
revaluation with any excess recognised through the income statement. Impairment losses recognised in respect of cash-
generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce
the carrying amount of the other assets in the unit on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its fair value less costs to sell and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that
does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to
which the asset belongs.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss
had been recognised.

n. 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 result and that outflow can be reliably measured.

o. Foreign Currency Transactions and Balances

i. 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.

P a g e | 34

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

ii. 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.

iii. 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;

income and expenses are translated at average exchange rates for the period; and

retained earnings are translated at the exchange rates prevailing at the date of the transaction.

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.

p. Fair value estimation

A number of the group’s accounting policies and disclosures require the determination of fair value, for both financial and
non-financial assets and liabilities. Information about the assumptions made in determining fair values of assets and
liabilities is disclosed in the notes specific to that asset or liability.

q. Fair Value of Assets and Liabilities

The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending
on the requirements of the applicable Accounting Standard.

Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly
(i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.

As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine
fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.

To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most
advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts
from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction
costs and transport costs).

For non-financial assets, the fair value measurement also takes into account a market participant's ability to use the asset
in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.

The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective
note to the financial statements.

P a g e | 35

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

i. Valuation techniques

In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation
techniques to measure the fair value of the asset or liability, The Group selects a valuation technique that is
appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of
sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured.
The valuation techniques selected by the Group are consistent with one or more of the following valuation approaches:

(1) Market approach: valuation techniques that use prices and other relevant information generated by market

transactions for identical or similar assets or liabilities.

(2) Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a

single discounted present value.

(3) Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service

capacity.

Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing
the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority
to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs
that are developed using market data (such as publicly available information on actual transactions) and reflect the
assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable,
whereas inputs for which market data is not available and therefore are developed using the best information available
about such assumptions are considered unobservable.

ii. Fair value hierarchy

AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair
value measurements into one of three possible levels based on the lowest level that an input that is significant to the
measurement can be categorised into as follows:

(1) Level 1

Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date.

(2) Level 2

Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly or indirectly.

(3) Level 3

Measurements based on unobservable inputs for the asset or liability.

The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or
more significant inputs are not based on observable market data, the asset or liability is included in Level 3.

The Group would change the categorisation within the fair value hierarchy only in the following circumstances:

if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or

if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.

When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy
(i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances
occurred.

P a g e | 36

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

r. Critical Accounting Estimates and Judgements

The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends
and economic data, obtained both externally and within the Group.

i. Key Judgements – 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 Note 1c Exploration and Development
Expenditure).The carrying value of capitalised expenditure at reporting date is $12,726,303.

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 Exploration And Evaluation Assets on page 49.

ii. Key Judgements – 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 Group’s development
and its current environmental impact, the Directors believe such treatment is reasonable and appropriate.

iii. 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 Group 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 (refer Note 5 Income Tax on page 45).

iv. 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.

v. 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 Share-Based Payments on page 55.

s. Application of new and revised Australian Accounting Standards ("AASBs")

In the current year, the Group has applied a number of new and revised AASs issued by the Australian Accounting Standards Board (AASB)
that are mandatorily effective for an accounting period that begins on or after 1 January 2013.

i. AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure

Requirements
Applicable for annual reporting periods commencing on or after 1 July 2013.

The Standard amends AASB 124 Related Party Disclosures to remove the individual key management personnel (KMP) disclosures
required by Australian specific paragraphs. This amendment reflects the AASB’s view that these disclosures are more in the nature of
governance disclosures that are better dealt within the legislation, rather than by the AASBs.

As a result the Company only discloses the KMP compensation in total and for each of the categories required in AASB 124.

In the current year the individual KMP disclosure previously required by AASB 124 (note 24 in the 30 June 2013 financial statements) is
now disclosed in the remuneration report on page 17, due to an amendment to Corporations Regulations 2001 issued in June 2013.

P a g e | 37

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

ii. AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities

Applicable for annual reporting periods commencing on or after 1 January 2013.

This Standard amends the required disclosures in AASB 7 to include information that will enable users of an entity’s financial
statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s
recognised financial assets and recognised financial liabilities, on the entity’s financial position.

This Standard also amends AASB 132 to refer to the additional disclosures added to AASB 7 by this Standard.

The amendments have been applied retrospectively. As the Company does not have any offsetting arrangements in place, the
application of the amendments does not have any material impact on the financial statements.

iii. AASB 2012-5: Amendments to Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle

Applicable for annual reporting periods commencing on or after 1 January 2013.

These amendments are a consequence of the annual improvements process, which provides a vehicle for making non-urgent but
necessary amendments to Standards.

The amendments made are largely of the nature of clarifications or removals of unintended inconsistencies between Australian
Accounting Standards (for example, AASB 101 is amended to clarify that related notes to an additional statement of financial position
are not required in the event of a change in accounting policy, reclassification or restatement).

These amendments have had no significant impact on the entity for the 2014 financial year, given that they are largely of the nature of
clarifications or removals of unintended inconsistencies between Australian Accounting Standards.

iv. AASB 2012-9 Amendment to AASB 1048 arising from the Withdrawal of Australian Interpretation 1039

This standard makes amendment to AASB 1048 Interpretation of Standards following the withdrawal of Australian Interpretation 1039
Substantive Enactment of Major Tax Bills in Australia.

The adoption of this amending standard does not have any material impact on the financial statements.

v. AASB CF 2013-1 Amendments to the Australian Conceptual Framework and AASB 2013-9 Amendments to Australian Accounting

Standards – Conceptual Framework, Materiality and Financial Instruments (Part A Conceptual Framework)
This amendment has incorporated IASB’s Chapters 1 and 3 Conceptual Framework for Financial Reporting as an Appendix to the
Australian Framework for the Preparation and Presentation of Financial Statements. The amendment also included not-for-profit
specific paragraphs to help clarify the concepts from the perspective of not-for-profit entities in the private and public sectors.

As a result the Australian Conceptual Framework now supersedes the objective and the qualitative characteristics of financial
statements, as well as the guidance previously available in Statement of Accounting Concepts SAC 2 Objective of General Purpose
Financial Reporting. The adoption of this amending standard does not have any material impact on the financial statements.

t. New and revised Standards on consolidation, joint arrangements, associates and disclosures

In August 2011, a package of five standards on consolidation, joint arrangements, associates and disclosures was issued comprising AASB
10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities, AASB 127 (as revised
in 2011) Separate Financial Statements and AASB 128 (as revised in 2011) Investments in Associates and Joint Ventures. Subsequent to the
issue of these standards, amendments to AASB 10, AASB 11 and AASB 12 were issued to clarify certain transitional guidance on the first-
time application of the standards.

In the current year, the Company has applied for the first time AASB 10, AASB 11, AASB 12 and AASB 128 (as revised in 2011) together with
the amendments to AASB 10, AASB 11 and AASB 12 regarding the transitional guidance. AASB 127 (as revised in 2011) is not applicable to
the Company as it deals only with separate financial statements.

The impact of the application of these standards is set out below.

i. AASB 10 Consolidated Financial Statements (issued August 2011)

Applicable for annual reporting periods commencing on or after 1 January 2013.

AASB 10 establishes a revised control model that applies to all entities. It replaces the consolidation requirements in AASB 127
Consolidated and Separate Financial Statements and AASB Interpretation 112 Consolidation – Special Purpose Entities.

P a g e | 38

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The revised control model broadens the situations when an entity is considered to be controlled by another entity and includes
additional guidance for applying the model to specific situations, including when acting as an agent may give control, the impact of
potential voting rights and when holding less than a majority voting rights may give ‘de facto’ control. This is likely to lead to more
entities being consolidated into the Company.

This Standard was first adopted for the year ended 30 June 2014. There was no impact on the transactions and balances recognised in
the financial statements. The Group does not utilise any special purpose entities.

ii. AASB 11: Joint Arrangements (issued August 2011)

Applicable for annual reporting periods commencing on or after 1 January 2013.

AASB 11 replaces AASB 131 Interests in Joint Ventures and AASB Interpretation 113 Jointly- controlled Entities – Non-monetary
Contributions by Ventures. AASB 11 uses the principle of control in AASB 10 to define joint control, and therefore the determination of
whether joint control exists may change. In addition, AASB 11 removes the option to account for jointly-controlled entities (JCEs) using
proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of the rights and obligations
arising from the arrangement. Joint operations that give the venturers a right to the underlying assets and obligations for liabilities are
accounted for by recognising the share of those assets and liabilities. Joint ventures that give the venturers a right to the net assets are
accounted for using the equity method.

This Standard was first adopted for the year ended 30 June 2014. There was no impact on transactions and balances recognised in the
financial statements because the Group has no arrangements crystallised into joint arrangements and require reporting as such.

iii. AASB 12 Disclosure of Interests in Other Entities (issued August 2011)

Applicable for annual reporting periods commencing on or after 1 January 2013.

AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities.
New disclosures introduced by AASB 12 include disclosures about the judgements made by management to determine whether
control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries
with non-controlling interests.

As this is a disclosure standard only, there will be no impact on amounts recognised in the financial statements. Additional disclosure
will be required for interests in associates, joint arrangements, and unconsolidated structured entities, should the Company acquire
interests in such entities in the future.

iv. AASB 13: Fair Value Measurement (issued September 2011)

Applicable for annual reporting periods commencing on or after 1 January 2013.

AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when
an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or
permitted by other Standards.

AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the
assumptions made and the qualitative impact of those assumptions on the fair value determined.

This Standard was first adopted for the year ended 30 June 2014.The Group does not have any material assets or liabilities significantly
impacted by this Standard. Consequently, additional disclosures under this Standard, required about fair values, have had minimal
impact to the financial statements.

v. AASB 2012-10 Amendments to Australian Accounting Standards – Transition Guidance and Other Amendments

Applicable for annual reporting periods commencing on or after 1 January 2013.

AASB 2012-10 clarifies the transition guidance in AASB 10 Consolidated Financial Statements.

It also provides additional transition relief in AASB 10, AASB 11 Joint Arrangements and AASB 12 Disclosure of Interests in Other
Entities by limiting the requirement to provide adjusted comparative information only to the immediately preceding comparative
period. In addition, for disclosures related to unconsolidated structured entities, AASB 2012-10 removes the requirement to present
comparative information for any periods beginning before the first annual reporting period for which AASB 12 is applied.

P a g e | 39

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Furthermore, AASB 2012-10 defers the mandatory effective date of AASB 10, AASB 11, AASB 12, AASB 127 Separate Financial
Statements (August 2011) and AASB 128 Investments in Associates and Joint Arrangements (August 2011) for not-for-profit entities
from 1 January 2013 to 1 January 2014.

This Standard was first adopted for the year ended 30 June 2014. There was no impact on transactions and balances recognised in the
financial statements because the Group has no arrangements.

u. Other new and revised Standards

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:

i. AASB 119 Employee Benefits (September 2011)

Applicable for annual reporting periods commencing on or after 1 January 2013.

Consequential amendments were also made to other standards via AASB 2011-10.

Main changes include:

Elimination of the ‘corridor’ approach for deferring gains/losses for defined benefit plans
Actuarial gains/losses on remeasuring the defined benefit plan obligation/asset to be recognised in OCI rather than in profit or
loss, and cannot be reclassified in subsequent periods
Subtle amendments to timing for recognition of liabilities for termination benefits
Employee benefits ‘expected to be settled’ (as opposed to ‘due to be settled’ under current standard) within 12 months after the
end of the reporting period are short-term benefits, and therefore not discounted when calculating leave liabilities. Annual leave
not expected to be used within 12 months of end of reporting period will in future be discounted when calculating leave liability.

The Company does not have any defined benefit plans. Therefore, these amendments will have no significant impact on the Company.

v. New Accounting Standards for Application in Future Periods

At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yet effective.

i. AASB 9 Financial Instruments (issued December 2009 and amended December 2010)
Applicable for annual reporting periods commencing on or after 1 January 2015.

AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities.

These requirements improve and simplify the approach for classification and measurement of financial assets compared with the
requirements of AASB 139. The main changes are:

Financial assets that are debt instruments will be classified based on (1) the objective of the entity’s business model for managing
the financial assets; and (2) the characteristics of the contractual cash flows.
Allows 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 (instead of in profit or loss). 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.
Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or
significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or
recognising the gains and losses on them, on different bases.
Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows:

 The change attributable to changes in credit risk are presented in other comprehensive income (OCI); and

 The remaining change is presented in profit or loss.

P a g e | 40

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also
presented in profit or loss.

Otherwise, the following requirements have generally been carried forward unchanged from AASB 139 into AASB 9:

Classification and measurement of financial liabilities; and
Derecognition requirements for financial assets and liabilities.

Consequential amendments arising from AASB 9 are contained in AASB 2010-7 Amendments to Australian Accounting Standards
arising from AASB 9 (December 2010), AASB 2010-10 Further Amendments to Australian Accounting Standards – Removal of Fixed
Dates for First-time Adopters and AASB 2012-6 Amendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9
and Transition Disclosures.

The entity has not yet assessed the full impact of AASB 9 as this standard does not apply mandatorily before 1 January 2018 and the
IASB is yet to finalise the remaining phases of its project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB
139 in Australia).

ii. AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities

Applicable for annual reporting periods commencing on or after 1 January 2014.

AASB 2012-3 adds application guidance to AASB 132 to address inconsistencies identified in applying some of the offsetting criteria of
AASB 132, including clarifying the meaning of “currently has a legally enforceable right of set-off” and that some gross settlement
systems may be considered equivalent to net settlement.

When AASB 2012-3 is first adopted for the year ended 30 June 2015, there will be no impact on the Group as this standard merely
clarifies existing requirements in AASB 132.

iii. AASB 2013-3 Recoverable Amount Disclosures for Non-Financial Assets

Applicable for annual reporting periods commencing on or after 1 January 2014.

These narrow-scope amendments address disclosure of information about the recoverable amount of impaired assets if that amount
is based on fair value less costs of disposal.

When developing IFRS 13 Fair Value Measurement, the IASB decided to amend IAS 36 Impairment of Assets to require disclosures
about the recoverable amount of impaired assets. The IASB noticed however that some of the amendments made in introducing those
requirements resulted in the requirement being more broadly applicable than the IASB had intended. These amendments to IAS 36
therefore clarify the IASB’s original intention that the scope of those disclosures is limited to the recoverable amount of impaired
assets that is based on fair value less costs of disposal.

AASB 2013-3 makes the equivalent amendments to AASB 136 Impairment of Assets.

When these amendments are first adopted for the year ending 30 June 2015, they are unlikely to have any significant impact on the
entity given that they are largely of the nature of clarification of existing requirements

iv. AASB 1031 Materiality (December 2013)

Applicable for annual reporting periods commencing on or after 1 January 2014.

The revised AASB 1031 is an interim standard that cross-references to other Standards and the Framework for the Preparation and
Presentation of Financial Statements (issued December 2013) that contain guidance on materiality. The AASB is progressively
removing references to AASB 1031 in all Standards and Interpretations, and once all these references have been removed, AASB 1031
will be withdrawn.

When the revised AASB 1031 is first adopted for the year ending 30 June 2015, it is unlikely to have any significant impact on the entity.

v. AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments (Part

B: Materiality)
Applicable for annual reporting periods commencing on or after 1 January 2014.

Part B of AASB 2013-9 deletes references to AASB 1031 in various Australian Accounting Standards (including Interpretations).

When these amendments are first adopted for the year ending 30 June 2015, they are unlikely to have any significant impact on the
entity.

P a g e | 41

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

vi. AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments (Part

C: Financial Instruments)
Applicable for annual reporting periods commencing on or after 1 January 2015.

These amendments:

add a new chapter on hedge accounting to AASB 9 Financial Instruments, substantially overhauling previous accounting
requirements in this area;
allow the changes to address the so-called ‘own credit’ issue that were already included in AASB 9 to be applied in isolation
without the need to change any other accounting for financial instruments; and
defer the mandatory effective date of AASB 9 from ‘1 January 2015’ to ‘1 January 2017’.

Note that, subsequent to issuing these amendments, the AASB has issued AASB 2014-1 which defers the effective date of AASB 9 to ‘1
January 2018’.

The entity has not yet assessed the full impact of these amendments.

vii. AASB 2014-1 Amendments to Australian Accounting Standards (Part A: Annual Improvements 2010–2012 and 2011–2013 Cycles)

Applicable for annual reporting periods commencing on or after 1 July 2014

Part A of AASB 2014-1 makes amendments to various Australian Accounting Standards arising from the issuance by the International
Accounting Standards Board (IASB) of International Financial Reporting Standards Annual Improvements to IFRSs 2010-2012 Cycle and
Annual Improvements to IFRSs 2011-2013 Cycle.

Among other improvements, the amendments arising from Annual Improvements to IFRSs 2010-2012 Cycle:

(1)

clarify that the definition of a ‘related party’ includes a management entity that provides KMP services to the reporting entity
(either directly or through a group entity); and

(2) amend AASB 8 Operating Segments to explicitly require the disclosure of judgements made by management in applying the

aggregation criteria.

Among other improvements, the amendments arising from Annual Improvements to IFRSs 2011-2013 Cycle clarify that an entity
should assess whether an acquired property is an investment property under AASB 140 Investment Property and perform a separate
assessment under AASB 3 Business Combinations to determine whether the acquisition of the investment property constitutes a
business combination.

When these amendments are first adopted for the year ending 30 June 2015, there will be no material impact on the entity.

viii. AASB 2014-1 Amendments to Australian Accounting Standards (Part B: Defined Benefit Plans: Employee Contributions (Amendments

to AASB 119))
Applicable for annual reporting periods commencing on or after 1 July 2014

Part B of AASB 2014-1 makes amendments to AASB 119 Employee Benefits to incorporate the IASB’s practical expedient amendments
finalised in International Financial Reporting Standard Defined Benefit Plans: Employee Contributions (Amendments to IAS 19) in
relation to the requirements for contributions from employees or third parties that are linked to service.

The amendments clarify that if the amount of the contributions is independent of the number of years of service, an entity is
permitted to recognise such contributions as a reduction in the service cost in the period in which the related service is rendered,
instead of attributing the contributions to the periods of service. In contrast, if the amount of the contributions is dependent on the
number of years of service, an entity is required to attribute those contributions to periods of service using the same attribution
method required by paragraph 70 of AASB 119 for the gross benefit.

When these amendments are first adopted for the year ending 30 June 2015, there will be no material impact on the entity.

ix. AASB 2014-1 Amendments to Australian Accounting Standards (Part C: Materiality)

Applicable for annual reporting periods commencing on or after 1 July 2014

Part C of AASB 2014-1 makes amendments to particular Australian Accounting Standards to delete their references to AASB 1031
Materiality, which historically has been referenced in each Australian Accounting Standard.

When these amendments are first adopted for the year ending 30 June 2015, there will be no material impact on the entity.

P a g e | 42

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

x. AASB 2014-1 Amendments to Australian Accounting Standards (Part D: Consequential Amendments arising from AASB 14)

Applicable for annual reporting periods commencing on or after 1 January 2016

Part D of AASB 2014-1 makes consequential amendments arising from the issuance of AASB 14.

When these amendments become effective for the first time for the year ending 30 June 2017, they will not have any impact on the
entity.

xi. AASB 2014-1 Amendments to Australian Accounting Standards (Part E: Financial Instruments)

Applicable for annual reporting periods commencing on or after 1 January 2015

Part E of AASB 2014-1 makes amendments to Australian Accounting Standards to reflect the AASB’s decision to defer the mandatory
application date of AASB 9 Financial Instruments to annual reporting periods beginning on or after 1 January 2018. Part E also makes
amendments to numerous Australian Accounting Standards as a consequence of the introduction of Chapter 6 Hedge Accounting into
AASB 9 and to amend reduced disclosure requirements for AASB 7 Financial Instruments: Disclosures and AASB 101 Presentation of
Financial Statements.

The entity has not yet assessed the full impact of these amendments.

P a g e | 43

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 2 REVENUE AND OTHER INCOME

a. Revenue

Interest received from financial institutions

Management fees

Total Revenue

b. Other Income

Interest on convertible note

Foreign exchange gain

Total Other Income

NOTE 3 LOSS BEFORE INCOME TAX

The following significant revenue and (expense) items are relevant in explaining
the financial performance:

Superannuation expense

NOTE 4 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

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

2014

8,332

48,684

30,767

79,451

2014

2013

25,578

843

26,421

4,736

2013

(77,725)

(65,642)

2014

32,950

3,000

35,950

2013

34,950

10,150

45,100

P a g e | 44

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 5

INCOME TAX

Note

Income tax expense / (benefit)

Current tax

Deferred tax

Tax rebate for Research and Development

2014

2013

(405,629)

(1,077,378)

(405,629)

(1,077,378)

Deferred income tax expense included in income tax expense comprises:

Increase / (decrease) in deferred tax assets

(Increase) / decrease in deferred tax liabilities

279,000

(279,000)

12,664

(12,664)

b. Reconciliation of income tax expense to prima facie tax payable

The prima facie tax payable / (benefit) on loss from ordinary activities before
income tax is reconciled to the income tax expense as follows:

Prima facie tax on operating loss at 30% (2013: 30%)

(1,278,338)

(1,150,116)

Add / (Less)

Tax effect of:

Capital-raising costs deductible

Capitalised Australian Exploration and Evaluation expenditure

Share-based payments

Write-off of exploration assets

Deferred tax asset not brought to account

Income tax expense / (benefit) attributable to operating loss

Less rebates:

Tax rebate for Research and Development

Income tax expense / (benefit)

The applicable weighted average effective tax rates attributable to operating
profit are as follows

Balance of franking account at year end

(70,691)

14,983

864,057

469,989

(65,487)

(16,791)

45,830

532,956

653,608

(405,629)

(1,077,378)

(405,629)

(1,077,378)

nil

P a g e | 45

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 5

INCOME TAX

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

Unused tax losses for which no deferred tax asset has been recognised, that
may be utilised to offset tax liabilities:

Revenue losses

Capital losses

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

2014

2013

3,132,262

2,755,968

69,337

105,563

72,406

173,659

3,307,162

3,002,033

(279,000)

3,307,162

2,723,033

(3,307,162)

(2,723,033)

279,000

(279,000)

10,790,535

9,076,778

691,104

11,481,639

9,767,882

Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not been brought to
account at 30 June 2014 because the Directors do not believe it is appropriate to regard realisation of the deferred tax assets as
probable at this point in time. These benefits will only be obtained if:

the Group 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 Group continues to comply with conditions for deductibility imposed by law; and

iii. no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the loss and

exploration expenditure.

P a g e | 46

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 6 EARNINGS PER SHARE

2014

2013

a. Reconciliation of earnings to net profit or loss

(3,855,498)

(2,756,341)

b. Weighted average number of ordinary shares outstanding during the year used

in calculation of basic EPS

186,055,240

166,669,039

2014

No.

2013

No.

2014

₵

2013

₵

c. Basic and diluted earnings per share (cents per share)

(2.07)

(1.65)

The Group is in a loss making position and it is unlikely that the conversion to, calling of, or subscription for, ordinary
share capital in respect of potential ordinary shares would lead to diluted earnings per share that shows an inferior
view of the earnings per share. Therefore in the event the Group has dilutionary equity instruments on issue, the
diluted loss per share for the year ended 30 June 2014 is the same as basic loss per share, whilst the Company
remains loss making.

ii.

There are 59,534,218 (2013: 41,434,218) unissued shares under option which are anti-dilutive.

NOTE 7 CASH AND CASH EQUIVALENTS

Cash at bank

Short-term bank deposits

2014

554,953

15,525

2013

1,919,517

92,778

570,478

2,012,295

Short-term deposits are made for varying periods of between 1 day and 6 months depending on the immediate cash
requirements of the Group, and earn interest at the respective short-term deposit rates. The bank deposit is held by
Westpac as security for their guarantee. The effective interest rate on short-term term deposits and maturity date was as
follows:

Aura Energy Limited

Terms

(Days)

Interest rate

Maturity

Date

3.57 29 August 2014(1)

Principal

15,525

(1) This account was subsequent rolled over for a further 90 days

b. The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note

24 Financial Risk Management on page 62.

P a g e | 47

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 8 TRADE AND OTHER RECEIVABLES

Current
Value-added tax receivable

Trade debtors

Other

Less: Provision for Impairment

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

2014

31,065

29,728

37,075

(5,038)

2013

26,725

52,038

36,167

(12,004)

92,830

102,926

a. Value-added tax (VAT) is a generic term for the broad-based consumption taxes that the Group is exposed to such as:

Australia (GST); Sweden (MOMS); and in Mauritania (VAT).

The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note
24 Financial Risk Management on page 62.

NOTE 9 FINANCIAL ASSETS

Current

Mauritanian cautions / bonds receivable

NOTE 10

PLANT AND EQUIPMENT

Non-current
Plant and equipment

Accumulated depreciation

Motor vehicles

Accumulated depreciation

Total plant and equipment

a. Movements in Carrying Amounts

Balance at the beginning of year

Additions

Depreciation expense

Carrying amount at the end of year

2014

64,453

2014

2013

156,818

182,366

(153,824)

(172,672)

2,994

9,694

(6,700)

2,994

9,694

62,948

(62,948)

9,694

21,943

2,361

(14,610)

9,694

P a g e | 48

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 11

EXPLORATION AND EVALUATION ASSETS

Non-current
Exploration expenditure capitalised:

Exploration and evaluation phase at cost

Other

2014

2013

15,089,645

15,922,505

Add:

Effect of exchange rate changes on exploration and evaluation assets

516,849

841,850

Less:

Exploration expenditure impairment

11b

(2,880,191)

(1,747,939)

Net carrying value

11a,c

12,726,303

15,016,416

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 jurisdictional equivalent), or contain
sacred sites, or sites of significance to the indigenous people of Sweden and Mauritania.

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.

The Group relinquished a number of tenements during the financial year resulting in an impairment loss of $2,880,191
(2013: $1,747,939).

The Group is currently appealing a decision made by the Swedish mining authorities not to grant an extension to one of its
tenements, which has capital costs associated to it with a carrying value of A$243,939. The Group is confident it will be
successful with its appeal

NOTE 12

TRADE AND OTHER PAYABLES

Current
Unsecured
Trade payables

Accrued expenses

Other taxes payable

2014

2013

12a

229,901

137,937

63,249

250,057

108,341

68,976

431,087

427,374

a. Trade payables are non-interest bearing and arise from the usual operating activities of the Group. Trade payables and

other payables and accruals, except directors' fees, are usually settled within the lower of terms of trade or 30 days.

b. The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note

24 Financial Risk Management on page 62.

P a g e | 49

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 13

SHORT-TERM PROVISIONS

Current
Employee benefits

Number of employees at year end

NOTE 14

BORROWINGS

Current
Short-term Borrowings

Convertible note

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

2014

2013

106,081

116,311

106,081

116,311

2014

No.

2014

32,416

188,600

221,016

2013

No.

2013

31,136

14a

Short-term borrowings comprise premium funding for insurance policies, repayable within 12 months.

b. On 28 February 2014, the Company entered into a financing arrangement providing up to $3,775,000 over 24 months.
Under the agreement with The Australian Special Opportunity Fund, LP, managed by The Lind Partners, LLC, Aura received
$325,000, in the form of a $250,000 convertible note and $75,000 as a prepayment for placement of ordinary shares in
Aura. Lind will further invest in tranches of $75,000, in monthly share subscriptions, over the next two years. The note and
shares will be issued at a 10% discount to a specified three day volume weighted share price.

Further key terms of the agreement are as follows:

The $250,000 convertible note is secured by the issue of 2,200,000 shares. Aura has the ability to repurchase the note

at a premium to the issue price during the first 90 days of the agreement.

An issue of 2,946,378 shares as a commencement fees for the provision of the funding facility,

The issue of 2,600,000 options with an exercise price of 4.8 cents and the three year expiration date.

The convertible note liability is measured at its present value.

P a g e | 50

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 15

ISSUED CAPITAL

Note

2014

2013

The Company has issued share capital amounting to 195,825,149 (2013:
183,285,591) fully paid ordinary shares at no par value.

15a

27,935,558

27,759,558

a. Ordinary shares

At the beginning of the reporting period

Shares issued during the year:

9,090,909 Shares issued on 9 November 2012
10,498,750 Shares issued on 20 May 2013
4,073,392 Shares issued on 26 June 2013
2,946,378 Shares issued on 6 March 2014
2,200,000 Shares issued on 6 March 2014
2,272,727 Shares issued on 8 April 2014
2,777,778 Shares issued on 13 May 2013
1,433,067 Shares issued on 13 May 2014
555,816 Shares issued on 6 June 2014
353,792 Shares issued on 10 June 2014

Transaction costs relating to share issues

At reporting date

At the beginning of the reporting period

Shares issued during the year:

9,090,909 Shares issued on 9 November 2012
10,498,750 Shares issued on 20 May 2013
4,073,392 Shares issued on 26 June 2013
2,946,378 Shares issued on 6 March 2014
2,200,000 Shares issued on 6 March 2014
2,272,727 Shares issued on 8 April 2014
2,777,778 Shares issued on 13 May 2014
1,433,067 Shares issued on 13 May 2014
555,816 Shares issued on 6 June 2014
353,792 Shares issued on 10 June 2014

15a.ii

15a.iii

15a.iv

15a.v

15a.vi

27,759,558

25,723,535

125,000

nil

75,000

56,031

16,855

12,058

1,000,000

839,900

325,871

(183,944)

(129,748)

27,935,558

27,759,558

2014

No.

2013

No.

183,285,591

159,622,540

9,090,909

10,498,750

4,073,392

15a.ii

15a.iii

15a.iv

15a.v

15a.vi

2,946,378

2,200,000

2,272,727

2,777,778

1,433,067

555,816

353,792

At reporting date

195,825,149

183,285,591

P a g e | 51

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 15

ISSUED CAPITAL (cont.)

i. 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.

ii.

iii.

iv.

vi.

Shares issued under financing agreement with The Australian Special Opportunity Fund LP (ASOF) to settle $125,000
facility fee

Issued as collateral for the $250,000 convertible note from ASOF

Issued to settle $75,000 funding tranche under ASOF financing agreement

Issued to directors in lieu of fees, as approved at a general meeting of shareholders on 8 May 2014

Issued to suppliers in lieu of payment for services

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 19 Share-based Payments
on page 55 The total number of options on issue are as follows:

Listed options

Unlisted options

c. Capital Management

Capital management policy

2014

No.

2013

No.

35,789,218

23,745,000

5,645,000

59,534,218

41,434,218

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.

ii. Current ratio

The current ratio the Group at 30 June 2014 and 30 June 2013 were as follows:

Current ratio

2014

0.96

2013

3.68

P a g e | 52

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 15

ISSUED CAPITAL (cont.)

iii. Working capital position

The working capital position of the Group at 30 June 2014 and
30 June 2013 were as follows:

Cash and cash equivalents

Trade and other receivables

Financial assets

Trade and other payables

Short-term provisions

Short-term borrowings

Working capital position / (deficit)

NOTE 16

RESERVES

Option reserve

Foreign exchange reserve

a. Option reserve

Note

2014

No.

2013

No.

16a

16b

570,478

2,012,295

92,830

64,453

(431,087)

(106,081)

(221,016)

102,926

(427,374)

(116,311)

(31,136)

(30,423)

1,540,400

2014

749,118

489,001

2013

642,516

783,742

1,198,708

1,426,258

The option reserve records items recognised as expenses on the value of employee and consultant share options.

Foreign Exchange Translation Reserve

The foreign exchange reserve records exchange differences arising on translation of foreign controlled subsidiary.

NOTE 17

CONTROLLED ENTITIES

Controlled Entities

Keyano Jack Pty Limited

Aura Energy Sweden AB

Country of
Incorporation

Australia

Sweden

GCM Africa Uranium Limited

United Kingdom

Investments in subsidiaries are accounted for at cost.

Class of
Shares

Ordinary

Percentage Owned

2014

100%

2013

100%

P a g e | 53

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 18

CASH FLOW INFORMATION

Note

2014

a. Reconciliation of Cash Flow from Operations to Loss After Income Tax

Loss after income tax

(3,855,498)

(2,756,341)

Cash flows excluded from profit attributable to operating activities

Non-cash flows in profit from ordinary activities:

Share-based payments expense
Consulting fees payable settled through the issue of options
Net interest on convertible notes
Depreciation
Effects of foreign exchange on translation
Impairment
Reclassification of insurance funding
Write-off of capitalised exploration
Capitalised exploration expenditure included in cash flows from

operations

Changes in assets and liabilities, net of the effects of purchase and disposal
of subsidiaries:

(Increase)/decrease in receivables and prepayments
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions

Cash flow from operations

b. Credit Standby Facilities

The Group has no credit standby facilities.

c. Non-Cash Investing and Financing Activities

The Group has no non-cash investing and financing activities.

49,944

(48,684)

6,700

(89,053)

152,765

82,483

14,610

(25,603)

11,388

31,136

2,880,191

1,747,939

(846,242)

(1,202,076)

10,096

(24,256)

(10,230)

135,635

(23,814)

72,988

(1,927,032)

(1,758,890)

P a g e | 54

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 19

SHARE-BASED PAYMENTS

Note

2014

2013

Share-based payment expense

49,944

152,765

The above share-based payment expense is comprised of the following arrangements in place at 30 June 2014:
On 24 November 2013, the follow share options were granted to directors to take up ordinary shares:

(i) 2,000,000 at an exercise price of $0.15 each. The options are exercisable on or before 13 January 2015;

(ii) 2,250,000 at an exercise price of $0.20 each. The options are exercisable on or before 13 January 2016;

(iii) 2,000,000 at an exercise price of $0.20 each. The options are exercisable on or before 13 July 2016;

(iv) 4,625,000 at an exercise price of $0.15 each. The options are exercisable on or before 13 January 2015; and

(v) 4,625,000 at an exercise price of $0.20 each. The options are exercisable on or before 13 July 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 15,500,000 options remain.

The above share-based payment expense is comprised of the following arrangements in place at 30 June 2013:
i. On 24 November 2011, 3,500,000 share options were granted to Directors under the Aura Energy Limited Incentive
Option Plan to take up ordinary shares at an exercise price of $0.31 each. The options are exercisable on or before 31
October 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 3,500,000 options remain.

ii. On 4 December 2012, 200,000 share options were granted to an employee under the terms of an employment
contract at an exercise price of $0.20 each. The options are exercisable on or before 14 December 2016. The options
hold no voting or dividend rights. Options are not transferable. At balance date, no share option has been exercised
or forfeited and 200,000 options remain.

iii. On 15 January 2013, 3,000,000 listed share options were granted to consultants as settlement of an invoice of
$82,483 in connection with corporate promotion and marketing services at an exercise price of $0.20 each. The
options are exercisable on or before 1 December 2014. The options hold no voting or dividend rights. Listed options
are transferable. These options are recognised in public relations in the Consolidated Statement of Profit or Loss and
Other Comprehensive Income on page 23.

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.

c. Share-based payments recognised directly in equity and in place at 30 June 2014:

i. On 8 March 2014, 2,600,000 options were issued under an agreement with The Australian Special Opportunity Fund,
LP, managed by The Lind Partners, LLC, to take up ordinary shares at an exercise price of $0.048 each. The options
expire 6 March 2017. Value of $56,661 was deemed a transaction costs under the agreement and has been
recognised as such in the consolidated statement of changes in equity.

d. Share-based payments recognised directly in equity and in place at 30 June 2013:

i. On 24 February 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 expired 24
April 2014 and the related option reserve was applied to accumulated losses.

ii. On 8 February 2011, two tranches of 650,000 share options (1,300,000) were granted to Gold Resources Limited to
take up ordinary shares at an exercise price of $0.69 and $1.05 each for each tranche. The options expired 30 March
2014 and the related option reserve was applied to accumulated losses.

P a g e | 55

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 19 SHARE-BASED PAYMENTS (cont.)

e. Movement in share-based payment arrangements during the period

A summary of the movements of all Company options issued as share-based payments is as follows:

Outstanding at the beginning of the year

Issued

Exercised

Expired

2014

2013

Number of Options

Weighted Average
Exercise Price

Number of Options

Weighted Average
Exercise Price

18,645,000

15,500,000

$0.1767

$0.1599

17,145,000

$0.2348

3,200,000

$0.2000

(1,700,000)

$0.8065

Outstanding at year-end

34,145,000

$0.1952

18,645,000

Exercisable at year-end

29,895,000

$0.1917

18,645,000

$0.1767

The weighted average remaining contractual life of options outstanding at year end was 1.496 years. The weighted
average exercise price of outstanding shares at the end of the reporting period was $0.1767

Fair value of options grants during the period

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 $0.00407 (2013: $0.0284). These values were
calculated using the Black-Scholes option pricing model, applying the following inputs to options issued this year:

Grant date:

28 October 2013 (ratified at AGM 21 November 2013)

21 November 2013

Grant date share price:

Option exercise price:

$0.15

$0.052

$0.20

$0.15

$0.200

$0.044

Number of options issued:

2,000,000

2,250,000

2,000,000

4,625,000

Remaining life (years):

0.540

1.540

Expected share price volatility:

Risk-free interest rate:

0.540

2.038

69.63%

2.77%

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.

P a g e | 56

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 20 KEY MANAGEMENT PERSONNEL COMPENSATION

a. Key management personnel ("KMP")

The names are positions of KMP are as follows:

Chairman (1)

Non-executive Director

Peter Reeve
Robert (Bob) Beeson Managing Director
Brett Fraser
Julian (Jules) Perkins
Simon O’Loughlin
Jay Stephenson
Leigh Junk
Stanley Zillwood
James Merrillees

Non-executive Director
Non-executive Director (2)
Non-executive Director (2)
Non-executive Director (2)

Exploration Manager

Company Secretary and Chief Financial Officer

(1)

Appointed Chairman 13 July 2013

(2)

Resigned as director 12 July 2013

b. KMP compensation

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

2014

545,744

49,917

49,944

2013

674,368

40,725

145,213

645,605

860,306

Refer to the Remuneration Report contained in the Director’s Report commencing on page 15 for details of the remuneration
paid to each member of the Group’s KMP for the year ended 30 June 2014.

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.

Other than those transactions contained in section 17.7 Other transactions with key management personnel on page 21 of the
Remuneration Report, there are no other related party transactions.

P a g e | 57

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 22

COMMITMENTS

a. Exploration expenditure commitments:

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

2014

2013

Exploration tenement minimum expenditure requirements

588,912

340,029

Payable:

not later than 12 months
between 12 months and 5 years
greater than 5 years

The Group has no contracted exploration expenditure, however the Group
has treatment core asset tenement renewals as expenditure the Group is
committed to.

b. Operating lease commitments:

Operating leases contracted for or committed to but not capitalised in the
financial statements

Payable:

not later than 12 months
between 12 months and 5 years
greater than 5 years

212,647

376,265

340,029

588,912

340,029

19,900

13,618

141,938

280,723

33,518

422,661

The Group shares premises with a number of companies. Balances stated represent the maximum gross amount payable,
prior to reimbursement from other parties.

NOTE 23 OPERATING SEGMENTS

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 two principal locations of its
projects – Sweden and West Africa. The Group also maintains a treasury function, primarily responsible for raising capital
and managing and distributing those funds raised.

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.

P a g e | 58

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 23 OPERATING SEGMENTS (cont.)

b. Basis of accounting for purposes of reporting by operating segments

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.

ii.

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.

iii. 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.

iv. 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.

v. 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:

Non-exploration 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

P a g e | 59

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 23 OPERATING SEGMENTS (cont.)

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

For the Year to 30 June 2014

Segment revenue

Segment results

Amounts not included in segment results but
reviewed by Board:
Expenses not directly allocable to identifiable
segments or areas of interest
Accounting and audit fees
Business development
Computers and communications
Depreciation
Employee benefits expense
Financing costs
Impairment
Insurance
Legal and consulting
Public relations
Rent and utilities
Share-based payment expenses
Share registry and listing fees
Travel and accommodation
Other unallocated expenses
Tax rebate for Research and Development

Loss after income tax

As at 30 June 2014

Segment assets
Unallocated assets:

Trade and other receivables
Plant and equipment
Other non-current assets

Total assets

Segment asset increases for the period:
Capital expenditure - exploration
Less: Write-off of exploration assets

Segment liabilities
Unallocated liabilities:

Trade and other payables
Short-term provisions
Short-term borrowings

Total liabilities

Australian
Exploration
$

Sweden
Exploration
$

African
Exploration
$

Treasury
$

Total
$

87,783

(954,767)

(1,559,848)

(365,576)

82,998

(2,797,193)

(190,577)
(26,419)
(29,025)
(6,700)
(562,693)
(3,064)
-
(36,223)
(67,229)
(94,165)
(123,832)
(49,944)
(69,517)
(162,686)
(41,860)
405,629

(3,855,498)
(3,855,498)

6,327,428

6,500,553

533,254

13,361,235

92,829
2,994
-

13,457,058

-
(954,767)

349,250
(1,559,848)

555,901
(365,576)

(954,767)

(1,210,598)

190,325

-
-

905,151
(2,880,191)

(1,975,040)

3,300

41,967

68,550

75,000

188,817

242,270
106,081
221,016

758,184

P a g e | 60

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 23 OPERATING SEGMENTS (cont.)

Australian
Exploration
$

Sweden
Exploration
$

African
Exploration
$

Treasury
$

Total
$

843

30,314

31,157

(365,907)

(370,652)

(1,344,932)

30,314

(2,051,177)

(142,228)
(6,051)
(54,041)
(14,610)
(760,773)
(755)
(11,388)
(52,740)
(98,706)
(137,892)
(154,124)
(152,765)
(61,527)
(51,937)
(83,005)
1,077,378

(2,756,341)

954,767

7,808,174

6,233,845

2,031,925

17,028,711

57,789
(362,584)

1,448,303
(35,745)

719,683
(1,378,190)

(304,795)

1,412,558

(658,507)

6,163

56,948

69,986

-
-

102,926
9,694
-

17,141,331

2,225,775
(1,776,519)

449,256

133,097

294,276
116,311
31,136

574,820

For the Year to 30 June 2013

Segment revenue

Segment results

Loss after income tax

As at 30 June 2013

Segment assets
Unallocated Assets:
Trade and other receivables
Plant and equipment
Other non-current assets

Total assets

Segment asset increases for the period:
Capital expenditure - exploration
Less: Write-off of exploration assets

Segment liabilities
Unallocated Liabilities:

Trade and other payables
Short term provisions
Short-term borrowings

Total liabilities

P a g e | 61

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 24

FINANCIAL RISK MANAGEMENT

Financial Risk Management Policies

This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and
procedures for measuring and managing risk, and the management of capital.

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

Financial Assets

 Cash and cash equivalents

570,478

 Trade and other receivables

 Financial assets

Total Financial Assets

570,478

Fixed
Interest
Rate

Non-
interest
Bearing

2014
Total

Floating
Interest
Rate

570,478

2,012,295

92,830

64,453

157,283

727,761

2,012,295

Fixed
Interest
Rate

Non-
interest
Bearing

2013
Total

2,012,295

102,926

2,115,221

Financial Liabilities

Financial liabilities at amortised
cost

 Trade and other payables

 Short-term borrowings

Total Financial Liabilities

431,087

221,016

431,087

652,103

427,374

31,136

427,374

458,510

Net Financial Assets

570,478

(221,016)

(273,804)

75,658

2,012,295

(31,136)

(324,448)

1,656,711

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.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
The Board adopts practices designed to identify significant areas of business risk and to effectively manage those risks in
accordance with the risk profile. This includes assessing, monitoring and managing risks for the Group and setting
appropriate risk limits and controls. The Group is not of a size nor is its affairs of such complexity to justify the
establishment of a formal system for risk management and associated controls. Instead, the Board approves all
expenditure, is intimately acquainted with all operations and discuss all relevant issues at the Board meetings. The
operational and other compliance risk management have also been assessed and found to be operating efficiently and
effectively.

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.

P a g e | 62

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 24

FINANCIAL RISK MANAGEMENT

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 financial institutions
residing in Australia, where ever possible.

Impairment losses

None of the Group’s financial assets are past due (2013: $nil).

There has been no allowance for impairment in respect of the financial assets of the Group during this year.

ii. 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.

iii. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices
will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the
return.

The Board meets on a regular basis and considers the Group’s exposure currency and interest rate risk.

(1)

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, and movement
in interest rates on the Group’s financial assets is not material.

(2) 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.

P a g e | 63

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 24

FINANCIAL RISK MANAGEMENT

(3) 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.

iv. Sensitivity Analyses

(1)

Interest rates

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.

A change of 100 basis points in the interest rates at the reporting date would have increased/(decreased) equity
and profit or loss by the amounts shown below. The analysis was performed on a change of 100 basis points for
2014.

Profit
$

Equity
$

Year ended 30 June 2014

± 100 basis points change in interest rates

± 5,705

Year ended 30 June 2013

± 100 basis points change in interest rates

± 20,123

(2) Foreign exchange

The Group main exposure to foreign currency risk is to Swedish Krona (SEK) for assets the Group holds through
its Swedish subsidiary, Aura Energy Sweden AB. The following table illustrates sensitivities to the Group’s
exposures to changes in the SEK rate. 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 2014

± 10% of Australian dollar strengthening/weakening against the SEK

Year ended 30 June 2013

± 10% of Australian dollar strengthening/weakening against the SEK

Profit
$

± nil

Equity
$

+ 572,914

- 700,228

+ 790,554

- 646,817

P a g e | 64

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 24

FINANCIAL RISK MANAGEMENT

v. Net Fair Values

(1) Fair value estimation

The fair values of financial assets and financial liabilities are presented in the table below 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.

The methods and assumptions used in determining the fair values of financial instruments are disclosed in the
accounting policy notes specific to the asset or liability.

vi. Financial Liability and Asset Maturity Analysis

Financial liabilities due for payment
Trade and other payables
Short-term borrowings

Within 1 Year

2014
$

431,087

221,016

2013
$

410,672

31,136

Total

2014
$

431,087

221,016

2013
$

410,672

31,136

Total contractual outflows

652,103

441,808

652,103

441,808

Financial assets

Cash and cash equivalents
Trade and other receivables
Financial assets

570,478

2,012,295

570,478

2,012,295

92,830

64,453

102,926

92,830

64,453

102,926

Total anticipated inflows

727,761

2,115,221

727,761

2,115,221

Net (outflow)/inflow on financial instruments

75,658

1,673,413

75,658

1,673,413

NOTE 25

EVENTS SUBSEQUENT TO REPORTING DATE

The Company received notice from The Australian Special Opportunities Fund (ASOF) on 18 July 2014 for the conversion of
$175,000 of the $250,000 convertible note that it had issued to ASOF on 6 March 2014.

The exercise price on conversion was $0.018 per share and consequently 9,722,222 fully paid ordinary shares were issued to
the nominee of ASOF on 24 July 2014.

On 5 August 2014 the Company announced a non-renounceable issue to eligible shareholders of 1 new share at $0.03 per share
for every 4 shares held on the record date, together with an option to acquire another share for every two new shares
acquired. The option exercise price is $0.06 and the expiry date is 1 September 2015.

The issue closed on 2 September 2014 fully subscribed to by rights holders and shortfall applications. The issue raised
$1,572,855 before costs that will be applied, in accordance with the prospectus for the issue, to commencing a feasibility study
for the Reguibat Project in Mauritania and for general working capital purposes.

There are no other significant events subsequent to report date.

P a g e | 65

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 26

PARENT ENTITY DISCLOSURES

Financial Position of Aura Energy Limited

Current assets

Cash and cash equivalents

Trade and other receivables

Financial assets

Total current assets

Non-current assets
Plant and equipment

Financial assets

Other assets

Total non-current assets

Total assets

Current liabilities
Trade and other payables

Short-term provisions

Short-term borrowings

Total current liabilities

Total liabilities

Net assets

Equity
Issued capital

Option reserve

Accumulated losses

Total equity

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

2014

2013

545,183

550,325

64,453

1,932,039

259,457

1,159,961

2,191,496

26b

2,994

8,177,908

4,485,341

9,694

8,503,031

5,937,790

12,666,243

14,450,515

13,826,204

16,642,011

410,605

122,782

32,416

565,803

410,672

133,012

31,136

574,820

13,260,401

16,067,191

28,354,502

27,759,558

653,046

642,516

(15,747,147)

(12,334,883)

13,260,401

16,067,191

Financial assets

Loans to subsidiaries

Shares in controlled entities at cost

Net carrying value

26b.i

6,108,675

2,069,233

6,433,798

2,069,233

8,177,908

8,503,031

Loans are provided by the parent entity to its controlled entities to fund their activities. The eventual recovery of
loans and investments will be dependent upon the successful commercial application of these projects or their sale to
third parties.

P a g e | 66

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 26 PARENT ENTITY DISCLOSURES (cont.)

Financial Performance of Aura Energy Limited

Loss for the year

Other comprehensive income

Total comprehensive income

2014

2013

(3,451,677)

(2,576,142)

(3,451,677)

(2,576,142)

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 2014
(2013: none).

e. Contingent liabilities of Aura Energy Limited

There are no contingent liabilities as at 30 June 2014, other than as detailed in note 27 Contingent Liabilities on page 68
(2013: none).

Commitments by Aura Energy Limited

Exploration expenditure commitments:

2014

2013

Exploration tenement minimum expenditure requirements

588,912

340,029

Payable:

not later than 12 months
between 12 months and 5 years
greater than 5 years

The Group has no contracted exploration expenditure, however the
Group has treatment core asset tenement renewals as expenditure the
Group is committed to.

ii. Operating lease commitments:

Operating leases contracted for or committed to but not capitalised in
the financial statements

Payable:

not later than 12 months
between 12 months and 5 years
greater than 5 years

212,647

376,265

340,029

588,912

340,029

19,900

13,618

141,938

280,723

33,518

422,661

The Aura Group shares premises with a number of companies. Balances stated represent the maximum gross amount
payable, prior to reimbursement from other parties.

The amounts noted above are applicable for both Aura Energy Limited (the parent) and the Consolidated Group.

P a g e | 67

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014

NOTE 27

CONTINGENT LIABILITIES

The Group has a contingent consideration of US$2,000,000 to the vendors of GCM Africa Uranium Limited if the uranium
resource it holds exceeds 75,000,000Lbs, and up to an additional US$4,000,000 plus 4,000,000 Aura shares if the resource
significantly exceeds this 75,000,000Lbs.

There are no other contingent liabilities as at 30 June 2014.

NOTE 28

COMPANY DETAILS

The registered office and principal place of the Company is:
Address:
Street:

Suite 3, Level 1
19-23 Prospect Place
Box Hill VIC 3128
+61 (0)8 6141 3570
+61 (0)8 6141 3599
www.auraenergy.com.au
info@auraenergy.com.au

Telephone:
Facsimile:
Website:
E-mail:

P a g e | 68

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

DIRECTORS’ DECLARATION

The directors of the Company declare that:

The financial statements and notes, as set out on pages 23 to 68, are in accordance with the Corporations Act 2001 (Cth)
and:

(a)

comply with Accounting Standards;

(b)

(c)

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

give a true and fair view of the financial position as at 30 June 2014 and of the performance for the year ended on
that date of the Company and Consolidated Group.

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 (Cth);

(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.

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:

PETER REEVE

Chairman

Dated this Tuesday, 30 September 2014

P a g e | 69

We have audited the accompanying financial report of Aura Energy Limited (“the

Company”) and Controlled Entities (“the Consolidated Entity”), which comprises the

statement of financial position as at 30 June 2014, and the statement of profit or loss and

other comprehensive income, statement of changes in equity and statement of cash

flows for the year then ended, notes comprising a summary of significant accounting

policies and other explanatory information, and the directors’ declaration of the

Consolidated Entity, comprising the Company and the entities it controlled at the year’s

end or from time to time during the financial year.

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:

giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2014 and of its

performance for the year ended on that date; and

ii.

complying with Australian Accounting Standards and the Corporations Regulations 2001;

b. The financial statements also comply with International Financial Reporting Standards as disclosed in

Note 1.

Without qualifying our opinion, we draw attention to Note 1 in the financial report which indicates that the

Consolidated Entity incurred a net loss of $3,855,498 during the year ended 30 June 2014. This condition,

along with other matters as set forth in Note 1, indicate the existence of a material uncertainty which may cast

significant doubt about the ability of the Consolidated Entity to continue as a going concern and whether it will

realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the

financial report.

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2014.

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report

in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on

the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

In our opinion, the Remuneration Report of Aura Energy Limited for the year ended 30 June 2014, complies

with section 300A of the Corporations Act 2001.

BENTLEYS
Chartered Accountants

DOUG BELL CA
Director

Dated at Perth this 30th day of September 2014

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

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. BOARD OF DIRECTORS

The Board is accountable to shareholders for the performance of the Company.

1.1. Roles and functions of the board and senior management

(ASX Corporate Governance Principles and Recommendations: 1.1, 1.3, 2.3)

Roles and Responsibilities:

The roles and responsibilities carried out by the Board are to:
 Oversee control and accountability of the Group;
 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 Group’s auditor(s);
 Appoint and assess the performance of the Managing Director and members of the senior management team;
 Report to shareholders.

1.2:

Companies should disclose the process for evaluating the performance of senior executives.
The Board periodically reviews the performance of senior executives.

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.
2.1:

A majority of the Board should be independent Directors.
The majority of the Board is independent. Refer general comments below.

2.2:

The Chairperson should be an independent Director.
The Chairman is not independent. Refer general comments below.

2.3: The roles of the Chairperson and Chief Executive should not be exercised by the same individual.

Refer general comments below.

2.4: Establishment of a nominations committee.

Refer general comments below.

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

CORPORATE GOVERNANCE STATEMENT

2.5: Disclose the process for performance evaluation of the board, its committees and individual directors, and key

executives.
Refer general comments below.

2.6: Provide the information indicated in the ASX Corporate Governance Council’s Guide to Reporting on Principle 2.

Refer general comments below.

GENERAL COMMENTS:
Membership

The Board’s membership and structure is selected to provide the Group with the most appropriate direction in the
areas of business controlled by the parent company. The Board of the parent company currently consists of four
members; a Managing Director, and three non-executive Directors. Refer to the Directors’ Report: Information on
Directors on page 11 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 Group.

Performance Evaluation

The Board assesses its performance, the performance of individual directors and the performance of its
committees annually through a process of internal review. The Board also formally reviews its governance
arrangements on a similar basis annually.

The performance of Key Management Personnel ("KMP") is reviewed on an annual basis by the Board and
remuneration committee.

The performance of each member of KMP is assessed against their individual performance plans, which comprise
target performance indicators. Performance indicators for each KMP are set annually in consultation with KMP.
Consideration is also given to the contribution each member of KMP makes to board meetings. Further details
regarding the Board’s remuneration policy for KMP is provided in the Remuneration Report on page 15.

Nomination Committee

The parent 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.

P a g e | 73

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

CORPORATE GOVERNANCE STATEMENT

3. PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING.
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;
3.1.3 The responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

The Group 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 parent company policies. Each staff member is
issued with the parent company’s Policies and Procedures manual at the beginning of their employment.

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 parent company has a diversity policy included in its Corporate Governance Policy.

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 Board has established and disclosed its policy concerning diversity. However, the Board considers due to the size of
the Company that setting measurable diversity objectives is not appropriate. The Company currently has no employees
and utilises external consultants and contractors as and when required.

The Board will review this position on an annual basis and will implement measurable objectives as and when they
deem the Company to require them.

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 four women employees and contractors in the whole organisation in varying positions. Given the
present size of the Group, 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 Group increases.

3.5:

Provide the information indicated in the ASX Corporate Governance Council’s Guide to Reporting on Principle 3.
A summary of both the parent company’s Code of Conduct and its Share Trading Policy is included on the Aura’s
website at http://auraenergy.com.au/ourcompany-corporategovernance.html.

4. SAFEGUARD INTEGRITY IN FINANCIAL REPORTING.
The Board should establish an audit committee.
4.1:
Refer general comments below.

4.2:

Structure the audit committee so that it consists of:

Only non-executive Directors;
A majority of independent Directors;
An independent Chairperson, who is not Chairperson of the Board;
At least three members.
Refer general comments below.

4.3:

The Audit Committee should have a formal charter.
Refer general comments below.

GENERAL COMMENTS:

Integrity of Company’s Financial Condition
The Group’s Company Secretary and CFO 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 Group’s financial condition and operational results are in accordance with relevant
accounting standards.

P a g e | 74

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

CORPORATE GOVERNANCE STATEMENT

Audit Committee

Aura has a formal charter for an Audit Committee. Currently the board as a whole acts as the audit committee as
and when required to be 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.

Audit Committee Meetings

Details of meetings held can be found in the Directors' Report: Meetings of Directors on page 13.

5. MAKE TIMELY AND BALANCED DISCLOSURE.
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 Australian Securities Exchange (ASX), the parent company has an obligation under the ASX
Listing Rules to maintain an informed market with respect to its securities. Accordingly, Aura advises the market of all
information required to be disclosed under the Rules that the Board believes would have a material effect on the price
of the parent company's securities.

The Company Secretary has been appointed as the person responsible for communication with the 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 Group's annual report.

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.
6.1: Design and disclose a communications strategy to promote effective communication with shareholders and encourage

effective participation at general meetings.
Refer general comments below.

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.
Refer general comments below.

GENERAL COMMENTS:

Aura is committed to keeping shareholders fully informed of significant developments in the Group. In addition to
public announcements of its financial statements and significant matters, Aura provides the opportunity for
shareholders to question the Board and management about its activities at the parent company's annual general
meeting.

The Group's auditor, Bentleys, will be in attendance at the annual general meeting and be available to answer
questions from shareholders about the conduct of the audit and the preparation and content of the auditor's
report.

7. RECOGNISE AND MANAGE RISK
7.1:

The Board or appropriate Board committee should establish policies on risk oversight and management.
Refer general comments below.

P a g e | 75

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

CORPORATE GOVERNANCE STATEMENT

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.
Refer general comments below.

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.
Refer general comments below.

7.4:

Provide the information indicated in the ASX Corporate Governance Council’s Guide to reporting on Principle 7.
Refer general comments below.

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 Company Secretary and CFO 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.

In addition to their regular reporting on business risks, risk management and internal control systems, the CEO
and Chief Financial Officer also provide the Board with written assurance that the directors’ declaration provided
with the annual report is founded on a sound system of risk management and internal control, and that this
system is operating effectively in all material respects in relation to the financial reporting risks. This assurance is
provided prior to the meeting at which the directors are due to authorise and sign the company’s financial
statements.

8. REMUNERATE FAIRLY AND RESPONSIBLY
8.1: The Board should establish a Remuneration Committee.

Currently in the circumstances of the Company, the full board acts as the Remuneration Committee. This will be
reviewed in future when the activity of the Company and the size of the board warrants..

8.2

The remuneration committee should be structured so that it:

consists of a majority of independent directors;
is chaired by an independent director; and
has at least three members.
Refer general comments below.

8.3: Clearly distinguish the structure of non-executive Directors' remuneration from that of executives.

Refer general comments below.

8.4:

Provide the information indicated in the ASX Corporate Governance Council’s Guide to Reporting on Principle 8.
Refer general comments below.

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.

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

CORPORATE GOVERNANCE STATEMENT

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.

The Company has structured an executive remuneration framework that
complimentary to the reward strategy of the organisation.

is market competitive and

Remuneration Committee

Currently all non-executive directors.

Remuneration Committee Meetings

Details of meetings held can be found in the Directors' Report: Meetings of Directors on page 13.

Directors' Remuneration

Further information on Directors' and executives' remuneration is set out in the Directors' Report: Remuneration
Report on page 15 and Note 20 Key Management Personnel Compensation to the financial statements on page
57.

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

The following additional information is required by the Australian Securities Exchange in respect of listed public companies.

SHAREHOLDING AS AT 22 SEPTEMBER 2014

a. Distribution of Shareholders

Category (size of holding)

Total Holders

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 – and over

b. Unmarketable Parcels

214

179

769

281

1,539

Number
Ordinary

11,890

689,515

1,488,138

28,786,678

231,166,327

262,142,548

% Held of Issued
Ordinary Capital

0.01

0.26

0.57

10.98

88.18

100.00

Minimum $500.00 parcel at $ 0.0370 per unit

13,514

588

3,364,743

Minimum Parcel Size

Holders

Units

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.

20 Largest Shareholders — Ordinary Shares as at 22 September 2014.

Rank Name

Number of Ordinary
Fully Paid Shares Held

% Held of Issued
Ordinary Capital

UBS NOMINEES PTY LTD

BBY NOMINEES LIMITED

PRE-EMPTIVE TRADING PTY LTD

WISEVEST PTY LTD

ASHABIA PTY LTD

MR MICHAEL BUSHELL

YARANDI INVESTMENTS PTY LTD

PASAGEAN PTY LIMITED

SAMBOLD PTY LTD

10. DRAKE RESOURCES LIMITED

11. SUVALE NOMINEES PTY LTD

12. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

13. MRS JENNY LEE BUSHELL

14. DIRDOT PTY LTD

15. CITICORP NOMINEES PTY LIMITED

16. SLADE TECHNOLOGIES PTY LTD

17. DUNDEE COURT INVESTMENTS

18. DRAKE RESOURCES LIMITED

19. PAN AUSTRALIAN NOMINEES PTY LTD

20. CRX INVESTMENTS PTY LIMITED

TOTAL

The name of the Company Secretary is Stanley Zillwood

31,459,794

25,502,230

8,000,000

6,750,000

6,330,212

5,975,903

5,754,793

5,625,000

5,000,000

4,795,000

3,776,043

3,384,817

3,091,182

2,787,500

2,613,330

2,554,608

2,500,000

2,333,334

2,202,386

2,046,875

12.00

9.73

3.05

2.57

2.41

2.28

2.20

2.15

1.91

1.83

1.44

1.29

1.18

1.06

1.00

0.97

0.95

0.89

0.84

0.78

132,483,007

50.53

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AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

PRINCIPAL REGISTERED OFFICE

As disclosed in Note 28 Company Details on page 68 of this Annual Report.

REGISTERS OF SECURITIES ARE HELD AT THE FOLLOWING ADDRESSES

As disclosed in the Corporate Directory on page 1 of this Annual Report.

STOCK EXCHANGE LISTING

Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian
Securities Exchange Limited, as disclosed in the Corporate Directory on page 1 of this Annual Report.

UNQUOTED SECURITIES

a. Options over Unissued Shares

A total of 59,534,218 options are on issue of which 14,779,306 options are issued to the four (4) Directors as at 22
September 2014.

USE OF FUNDS

The Company has used its funds in accordance with its initial business objectives.

P a g e | 79

TENEMENT REPORT

As at 30 June 2014

Europe

SWEDEN

Häggån Project

 Gurumyren nr 1

 Häggån nr 1

 Häggån nr 2

 Marby nr 1

 Koborgsmyren nr 1

 Häggån nr 3

Kallsedet Project

 Hamborg nr 1

100%

West Africa

MAURITANIA

Reguibat Project

 Oued El Foule Est

 Ain Sder

 Oum Ferkik

 Oum Ferkik Sud

 Saabia

 Oued El Foule Nord

 Oued El Merre

 Aguellet

Tiris Joint Venture

 Oued Bel Guerdane

 Oued El Keheb

AURA ENERGY LIMITED
AND CONTROLLED ENTITIES
ABN 62 115 927 681
ANNUAL REPORT 30 JUNE 2014

100%

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