AVZ Minerals Limited
ABN 81 125 176 703
Annual Report 2014
Contents
Corporate Directory
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Corporate Governance Statement
Schedule of Mineral Tenements
1
2
11
12
13
14
15
16
34
35
37
38
44
Corporate Directory
Directors
Patrick Flint (Non-Executive Chairman)
Klaus Eckhof (Managing Director)
Gary Steinepreis (Non-Executive Director)
Company Secretary
Gary Steinepreis
Principal Place of Business
& Registered Office
Level 1
33 Ord Street
WEST PERTH
Western Australia 6005
Telephone: (08) 9420 9300
Facsimile: (08) 9420 9399
Share Registry
Security Transfer Registrars Pty Ltd
770 Canning Highway
APPLECROSS WA 6153
Telephone: (08) 9315 2333
Facsimile: (08) 9315 2233
Email: registrar@securitytransfer.com.au
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
SUBIACO WA 6008
Telephone: (08) 6382 4600
Securities Exchange Listing
Australian Securities Exchange
(Home branch: Perth, Western Australia)
ASX Code: AVZ
Website Address
www.avonleaminerals.com.au
AVZ Minerals Limited | 1
For personal use only
Director’s Report
Your directors submit their report on the consolidated entity consisting of AVZ Minerals Limited (ASX: AVZ)
(“AVZ”) and the entities it controlled for the financial year ended 30 June 2014. In order to comply with the
provisions of the Corporations Act 2001, the directors report as follows:
Directors
1.
The names of directors who held office during or since the end of the year and until the date of this report are
as follows. Directors were in office for the entire period unless otherwise stated.
Patrick Flint
Klaus Eckhof
Gary Steinepreis
Roger Steinepreis
David Riekie
Non-Executive Chairman (Appointed 12 May 2014)
Managing Director (Appointed 12 May 2014)
Non-Executive Director
Non-Executive Chairman (Resigned 12 May 2014)
Non-Executive Director (Resigned 12 May 2014)
Company Secretary
2.
The Company Secretary is Gary Steinepreis.
Principal Activities
3.
The principal activity of the consolidated entity during the financial year was mineral exploration. There were no
significant changes in the nature of the consolidated entity’s principal activities during the financial year.
4. Operating Results
The loss of the consolidated entity attributable to the owners of the company after providing for income tax
amounted to $1,031,442 (2013: $2,413,002 loss).
Dividends Paid or Recommended
5.
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way
of a dividend to the date of this report.
Review of Operations
6.
During the year, AVZ continued its business of mineral exploration in Namibia and as part of a broader strategic
review, AVZ is seeking, together with its current projects, new opportunities in the exploration and mining
sector.
Activities undertaken in Namibia during the year involved planning, on-going reporting and applying for a
number of licence renewals. A strategic review of the package of granted licences and applications was
commenced to determine the best approach to optimise the value of the Namibian assets.
On 12 May 2014, the Company announced a capital raising to provide additional funds for ongoing exploration
activities, working capital and new opportunities and changes to the Board. The capital raising comprised a
share placement of 62.5m new ordinary fully paid shares at 0.8 cents per share to raise a total of $500,000.
Firm commitments were received from sophisticated and professional investors pursuant to Section 708 of the
Corporations Act. The placement occurred in two tranches as follows:
Tranche 1 - 53.5 million shares at 0.8 cents to raise $428,000 under the Company’s placement capacity,
pursuant to ASX Listing Rule 7.1 and Listing Rule 7.1A; and
Tranche 2 - 9 million shares at 0.8 cents to raise $72,000 being the participation of the new Directors,
which was approved by shareholders, pursuant to ASX Listing Rule 10.11.
The Company is primarily engaged in mineral exploration in Namibia. The Company’s financial position, financial
performance and use of funds information for the financial year is provided in the financial statements that
follow this Directors’ Report.
As an exploration entity, the Company has no operating revenue or earnings and consequently the Company’s
performance cannot be gauged by reference to those measures. Instead, the Directors’ consider the Company’s
performance based on the success of exploration activity, acquisition of additional prospective mineral interests
and, in general, the value added to the Company’s mineral portfolio during the course of the financial year.
Whilst performance can be gauged by reference to market capitalisation, that measure is also subject to
numerous external factors. These external factors can be specific to the Company, generic to the mining
industry and generic to the stock market as a whole and the Board and management would only be able to
control a small number of these factors.
AVZ Minerals Limited | 2
Director’s Report
6.
Review of Operations (continued)
The Company’s business strategy for the financial year ahead and, in the foreseeable future, is to continue
exploration activity on the Company’s existing mineral projects, identify and assess new mineral project
opportunities and review development strategies where individual projects have reached a stage that allows for
such an assessment. Due to the inherent risky nature of the Company’s activities, the Directors are unable to
comment on the likely results or success of these strategies.
The Company’s activities are also subject to numerous risks, mostly outside the Board’s and management’s
control. These risks can be specific to the Company, generic to the mining industry and generic to the stock
market as a whole. The key risks, expressed in summary form, affecting the Company and its future
performance include but are not limited to:
geological and technical risk posed to exploration and commercial exploitation success;
security of tenure including licence renewal (no assurance can be given that the licence renewals and
licence applications that have been submitted will be successful), and inability to obtain regulatory or
landowner consents;
change in commodity prices and market conditions;
environmental and occupational health and safety risks;
government policy changes;
retention of key staff; and
capital requirement and lack of future funding.
This is not an exhaustive list of risks faced by the Company or an investment in it. There are other risks generic
to the stock market and the world economy as whole and other risks generic to the mining industry, all of
which can impact on the Company.
Significant Changes in the State of Affairs
7.
There have been no significant changes in the state of affairs of the group to the date of this report, not
otherwise disclosed in this report.
Significant Events After Balance Date
8.
On 1 September 2014, the Company lodged a Prospectus for a 1 for 3 entitlement issue at 0.5 cents per share
to raise $609,854 (gross proceeds based on the Company’s expanded issued capital). The offer closed fully
subscribed and on 23 September 2014 the Company issued 121,970,028 shares.
Other than as disclosed in this report, there has been no matter or circumstance that has arisen that has
significantly affected, or may significantly affect:
the group’s operations in future financial years, or
the results of those operations in future financial years, or
the group’s state of affairs in future financial years.
Likely Developments and Expected Results of Operations
9.
The group will continue its mineral exploration activity at and around its exploration projects as well as seeking
new opportunities in the exploration and mining sector with the objective of identifying commercial resources.
Further information on likely developments in the operations of the group and the expected results of
operations have not been included in the annual report because the directors believe it would be likely to result
in unreasonable prejudice to the group. Therefore, this information has not been presented in this report.
10. Environmental Regulation
The group is aware of its environmental obligations with regards to its exploration activities and ensures that
it complies with all regulations when carrying out any exploration work.
AVZ Minerals Limited | 3
Director’s Report
11.
this report)
Information on Directors and Company Secretary (including Director’s interests at the date of
Patrick Flint
Qualifications
Experience
Independent Non-Executive Chairman
B.Com, CA, MAICD
Mr Flint has been involved in the resources sector as a director or company secretary
of ASX and Toronto Stock Exchange listed companies with mineral projects in
Australia, Africa and Asia for the last 20 years. He is a Chartered Accountant and has
significant experience with project acquisitions, joint venture negotiations and
management, fundraisings and corporate matters.
Interest in Securities
Fully Paid Ordinary Shares
Performance Rights
4,000,000
4,000,000
Directorships in last 3 years
Mount Magnet South Limited (since 15 April 2011)
Nemex Resources Ltd (since 8 September 2010)
Explaurum Limited (since 28 November 2013)
Former Directorships in the Last Three Years:
Erongo Energy Limited (23 November 2006 to 17 February 2012)
Klaus Eckhof
Qualifications
Experience
Managing Director
Dip. Geol. TU, AusIMM
Mr Eckhof is a geologist with more than 20 years of experience identifying, exploring
and developing mineral deposits around the world. Mr Eckhof worked for Mount Edon
Gold Mines Ltd as Business Development Manager before it was acquired by Canadian
mining company Teck. In 1994, he founded Spinifex Gold Ltd and Lafayette Mining Ltd,
both of which successfully delineated gold and base metal deposits. In late 2003, Mr
Eckhof founded Moto Goldmines which acquired the Moto Gold Project in the
Democratic Republic of the Congo. There, Mr Eckhof and his team delineated more
than 20 million ounces of gold and delivered a feasibility study within four years from
the commencement of exploration. Moto Goldmines was subsequently acquired by
Randgold Resources who poured first gold in September 2013.
Interest in Securities
Fully Paid Ordinary Shares
8,000,000
Directorships in last 3 years
Burey Gold Ltd (since 6 February 2012)
Carnavale Resources Ltd (appointed 1 January 2008)
Panex Resources Inc. (appointed 30 May 2006)
Cardinal Resources Limited (appointed 1 February 2013)
Former Directorships in the Last Three Years:
Explaurum Limited (24 August 2011 to 4 October 2013)
Kilo Goldmines Limited (13 April 2009 – 31 December 2011)
Gary Steinepreis
Qualifications
Non-Executive Director / Company Secretary
B.Com, CA
Experience
Mr Steinepreis is a Chartered Accountant and holds a Bachelor of Commerce Degree
from the University of Western Australia.
Interest in Securities
Fully Paid Ordinary Shares
20,495,533
Directorships in last 3 years
Monto Minerals Ltd (since 16 June 2009)
Norseman Gold Plc (since 3 December 2007)
New Horizon Coal Ltd (since 4 June 2010)
Intercept Minerals Ltd (since 8 April 2014)
Former Directorships in the Last Three Years:
Minerals Corporation Limited (17 February 2011 to 14 October 2011)
WAG Limited (2 November 2006 to 23 May 2013)
Agri Energy Limited (22 June 2009 to 11 June 2012)
AVZ Minerals Limited | 4
Director’s Report
11.
this report) (continued)
Information on Directors and Company Secretary (including Director’s interests at the date of
Former Directors:
Roger Steinepreis
Qualifications
Experience
David Riekie
Qualifications
Experience
Non-Executive Director
B.Juris, LLB
Mr Steinepreis graduated from the University of Western Australia where he
completed his law degree. He was admitted as a barrister and solicitor of the
Supreme Court of Western Australia in 1987 and has been practising as a lawyer
for over 20 years. Mr Steinepreis is the legal advisor to a number of public
companies on a wide range of corporate related matters. His areas of practice
focus on company restructures, initial public offerings and takeovers.
Non-Executive Director
B.Ec, Dip Acc, CA, MAICD
Mr Riekie was previously an Executive Director of a boutique corporate advisory
company for over 13 years. During this time has held a variety of non-executive
board position with both resource and industrial companies. He has a significant
level of experience in capital raising initiatives (public and private), and corporate
matters strategies, both in Australia and overseas. David is a Chartered
Accountant, a Member of the Institute of Company Directors and holds a Bachelor
of Economics Degree and a Diploma of Accounting.
Audited Remuneration Report
12.
This report details the nature and amount of remuneration for all key management personnel of AVZ Minerals
Limited and its subsidiaries. The information provided in this remuneration report has been audited as required
by section 308(C) of the Corporations Act 2001. For the purposes of this report, key management personnel of
the Group are defined as those persons having authority and responsibility for planning, directing and controlling
the major activities of the Company and the Group, directly or indirectly, including any Director (whether
executive or otherwise) of the Group.
The individuals included in this report are:
Patrick Flint
Klaus Eckhof
Gary Steinepreis
Roger Steinepreis
David Riekie
Non-Executive Chairman (Appointed 12 May 2014)
Managing Director (Appointed 12 May 2014)
Non-Executive Director
Non-Executive Chairman (Resigned 12 May 2014)
Non-Executive Director (Resigned 12 May 2014)
All of the key management personnel held their positions for the entire financial year and up to the date of the
report except as noted above.
Remuneration Policy
(a)
The remuneration policy of AVZ Minerals Limited has been designed to align director objectives with shareholder
and business objectives by providing a fixed remuneration component which is assessed on an annual basis in line
with market rates. By providing components of remuneration that are indirectly linked to share price
appreciation (in the form of options), executive, business and shareholder objectives are aligned. The board of
AVZ Minerals Limited believes the remuneration policy to be appropriate and effective in its ability to attract
and retain the best directors to run and manage the company, as well as create goal congruence between
directors and shareholders. The board’s policy for determining the nature and amount of remuneration for board
members is as follows:
AVZ Minerals Limited | 5
Director’s Report
(a)
Remuneration Policy (continued)
(i)
Executive Directors & Other Key Management Personnel
The remuneration policy and the relevant terms and conditions has been developed by the full Board of
Directors as the company does not have a Remuneration Committee due to the size of the Company and
the Board. In determining competitive remuneration rates, the Board reviews local and international
trends among comparative companies and industry generally. It examines terms and conditions for
employee incentive schemes, benefit plans and share plans. Reviews are performed to confirm that
executive remuneration is in line with market practice and is reasonable in the context of Australian
executive reward practices.
If entitled, the executive directors and other key management personnel receive a superannuation
guarantee contribution required by the government, which is currently 9.25% and do not receive any
other retirement benefits.
The Company is an exploration entity, and therefore speculative in terms of performance. Consistent
with attracting and retaining talented executives, directors and senior executives are paid market rates
associated with individuals in similar positions, within the same industry.
The Managing Director, Mr Eckhof, is responsible for completing the strategic review of the Company’s
mineral projects in Namibia, as well as identifying new project opportunities. Mr Eckhof will receive
annual remuneration of $180,000 through a consulting letter agreement with an entity which will provide
his services. The arrangement can be terminated by either party on a month’s notice. At this stage due
to the size of the Company, no remuneration consultants have been used. The Board’s remuneration
policies are outlined below:
Fixed Remuneration
All executives receive a base cash salary which is based on factors such as length of service and experience
as well as other fringe benefits. If entitled, all executives also receive a superannuation guarantee
contribution required by the government, which is currently 9.25% and do not receive any other
retirement benefits.
Short-term Incentives (STI)
Under the group’s current remuneration policy, executives can from time to time receive short-term
incentives in the form of cash bonuses. However, as the company is currently undertaking a strategic
review, there are currently no short-term incentives anticipated and therefore no key performance targets
determined. Pending the strategic review, the Board will determine the criteria of eligibility for short-
term incentives and set key performance indicators to appropriately align shareholder wealth and
executive remuneration.
Long-term Incentives (LTI)
Executives are encouraged by the Board to hold shares in the company and it is therefore the Group’s
objective to provide incentives for participants to partake in the future growth of the group and, upon
becoming shareholders in the Company, to participate in the group’s profits and dividends that may be
realised in future years.
The Board considers that this equity performance linked remuneration structure is effective in aligning
the long-term interests of group executives and shareholders as there exists a direct correlation between
shareholder wealth and executive remuneration.
(ii) Non-Executive Directors
The board policy is to remunerate non-executive directors at market rates for comparable companies for
time, commitment and responsibilities. In determining competitive remuneration rates, the Board review
local and international trends among comparative companies and the industry generally. Typically the
Company will compare non-executive remuneration to companies with similar market capitalisations in
the exploration and resource development business group.
These on-going reviews are performed to confirm that non-executive remuneration is in line with market
practice and is reasonable in context of Australian executive reward practices. The maximum aggregate
amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the
Annual General Meeting. Fees for non-executive directors are not linked to the performance of the
Company. However, to align directors’ interests with shareholder interests, the directors are encouraged
to hold shares in the company and from time to time, non-executive’s may receive options or performance
rights subject to shareholder approval, to further align directors’ interests with shareholders.
AVZ Minerals Limited | 6
Director’s Report
(a)
Remuneration Policy (continued)
The non-executive remuneration is set at $3,000 per month for the Chairman, $2,000 per month for
Directors and a daily rate is payable on additional work performed.
(b) Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration
No relationship exists between the Company performance, earnings, shareholder wealth and Directors’ and
Executive Remuneration for this financial period and the previous 4 financial periods. As at the date of the report,
the Company is currently undergoing a strategic review. With the exception of the Managing Director, no
executive is receiving any base remuneration however, this will be reassessed upon completion of the strategic
review. Given the review, no remuneration is currently performance related.
Voting and comments made at the company’s 2013 Annual General Meeting
At the 2013 Annual general Meeting the Company remuneration report was passed by the requisite majority of
shareholders (100% by a show of hands).
(b) Details of Key Management Personnel Remuneration
2014
Name
Executive Director:
Klaus Eckhof 2
Non-Executive
Directors:
Roger Steinepreis 1
David Riekie 1
Gary Steinepreis
Patrick Flint 2
TOTAL
Short term employee
benefits
Salary
$
-
-
-
-
4,517
4,517
Consulting
fees
$
25,000
20,000
20,000
24,000
-
89,000
Post-
employment
benefits
Superannuation
$
-
-
-
-
418
418
Total
$
25,000
20,000
20,000
24,000
4,935
93,935
1: Mr David Riekie and Mr Roger Steinepreis resigned as Non-Executive Directors on 12 May 2014.
2: Mr Klaus Eckhof and Mr Patrick Flint were appointed on 12 May 2014.
AVZ Minerals Limited | 7
Director’s Report
(b) Details of Key Management Personnel Remuneration (continued)
2013
Name
Executive Director:
David Riekie 2
Non-Executive
Directors:
Roger Steinepreis
David Riekie 2
Gary Steinepreis 4
David Macoboy 1
Hamish Halliday 3
Stephen Parsons 3
Key Executives:
Alex Aitken
TOTAL
Short term employee
benefits
Salary
$
Consulting
fees
$
Post-
employment
benefits
Superannuation
$
Total
$
38,175
-
3,435
41,610
-
-
-
3,822
-
-
69,350
111,347
14,000
24,000
24,000
-
-
-
-
62,000
-
-
-
344
-
-
14,000
24,000
24,000
4,166
-
-
6,241
10,020
75,591
183,367
1: Mr David Macoboy was appointed Non-Executive Chairman on 22 September 2011 and resigned on 3 August 2012.
2: Mr David Riekie resigned as Managing Director on 3 August 2012, however remains as a non-executive director.
3: Mr Hamish Halliday and Mr Stephen Parsons resigned as Non-Executive Directors on 30 November 2012.
4: Mr Gary Steinepreis was appointed on 30 November 2012.
(d) Details of Share Based Payments
There have been no options issued to current directors and executives as part of their remuneration.
On 8 August 2014, 4,000,000 Performance Rights were issued to Mr Flint. The Performance Rights vest if the closing
price of Shares on the ASX is $0.015 or higher (as adjusted) for 10 consecutive Business Days. These Performance
Rights have a period of 3 years from the date of issue to vest or they will lapse.
(e)
Employment Contracts of Directors and Senior Executives
The Managing Director, Mr Eckhof, is responsible for completing the strategic review of the Company’s mineral projects
in Namibia, as well as identifying new project opportunities. Mr Eckhof will receive annual remuneration of $180,000
through a consulting letter agreement with an entity which will provide his services. The arrangement can be terminated
by either party on a month’s notice. There were no performance bonuses paid during the year ended 30 June 2014.
(f) Key Management Personnel Compensation
Options provided as remuneration and shares issued on exercise of such options
(i)
No options were provided as remuneration during the year. All options held by key management personnel of
the group at the start of the current year expired during the financial year.
Loans to key management personnel
(ii)
No loans were made to any director or other key management personnel of the group, including their personally
related parties during the financial year.
(iii) Other transactions with key management personnel
Transactions with Director Related Parties
The following transactions occurred with related parties:
AVZ Minerals Limited | 8
Director’s Report
(f) Key Management Personnel Compensation (continued)
Consolidated
Purchases from director related entities
Payments for shared services costs to Gryphon Minerals Limited
Payments for shared services costs to Venture Minerals Limited
Payment to Steinepreis Paganin for legal fees
Payment to Ascent Capital – rent
2014
$
-
-
200
26,250
Outstanding balances arising from recharges/purchases with Director Related Parties
Current payables (purchases)
3,045
2013
$
29,481
19,291
28,030
30,000
-
Terms and conditions of related party transactions
Transactions between related parties are on commercial terms and conditions, no more favourable than those
available to other parties unless otherwise stated.
(iv) Option holdings
The number of options over ordinary shares in the company held during the financial year by each director of
AVZ Minerals Limited and other key management personnel of the group, including their personally related
parties, are set out below. Directors and other key management personnel did not hold options in the period if
they are not stated below:
Balance
at start of
the year
Granted as
remuneration
Exercised
Other
changes
Balance at
end of the
year
Vested and
exercisable
2014 Directors of AVZ Minerals Limited
Roger Steinepreis
David Riekie
1,500,000
14,000,000
-
-
-
-
(1,500,000)
(14,000,000)
-
-
-
-
Ordinary shareholdings
(v)
The number of shares in the company held during the financial year by each director of AVZ Minerals
Limited and other key management personnel of the group, including their personally related parties, are
set out below. There were no shares granted during the period as remuneration.
Other Changes
Balance at the
start of the year
Received on
exercise of options
Balance at the end
of the year
2014
Directors of AVZ Minerals Limited
Patrick Flint 1
Klaus Eckhof 1
Roger Steinepreis 2
David Riekie 2
Gary Steinepreis
-
-
24,051,442
16,365,696
15,371,649
1 Patrick Flint and Klaus Eckhof were appointed on 12 May 2014.
2 Roger Steinepreis and David Riekie resigned on 12 May 2014.
This is the end of the audited remuneration report.
-
-
-
-
-
-
-
(24,051,442)
(16,365,696)
-
-
-
-
-
15,371,649
AVZ Minerals Limited | 9
Director’s Report
13. Meetings of Directors
The number of directors' meetings held during the financial year and the number of meetings attended by each
director is:
Director
P Flint
K Eckhof
G Steinepreis
D Riekie
R Steinepreis
Directors Meetings
Number Eligible to Attend
1
1
3
2
2
Meetings Attended
1
1
3
2
2
The company does not have a formally constituted audit committee as the board considers that the company’s
size and type of operation do not warrant such a committee.
Insurance of Officers
14.
During the financial year, AVZ Minerals Limited paid a premium of $13,140 (2013: $17,820) to insure the
directors and secretary of the company and its controlled entities.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of entities in the Group, and any other payments arising
from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities
that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of
their position or of information to gain advantage for themselves or someone else or to cause detriment to the
company. It is not possible to apportion the premium between amounts relating to the insurance against legal
costs and those relating to other liabilities.
15. Shares under Option
Unissued ordinary shares of AVZ Minerals Limited under option at the date of this report are as follows:
Date options granted
31 Jan 11
4 Nov 11
12 Jan 12
Expiry Date
30 Nov 14
31 Oct 14
31 Oct 14
Exercise Price
20.0 cents
11.0 cents
11.0 cents
Number under Option
2,000,000
1,500,000
400,000
No option holder has any right under the options to participate in any other share issue of the company or any
other entity.
16. Proceedings on behalf of the 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 these proceedings. The company was not a party to any such proceedings during the year.
17. Auditor’s Independence Declaration
Section 307c of the Corporations Act 2001 requires our auditors, BDO Audit (WA) Pty Ltd, to provide the
directors of the Company with an Independence Declaration in relation to the audit of the annual report. This
Independence Declaration is set out on page 11 and forms part of this directors’ report for the year ended 30
June 2014.
18. Non-Audit Services
No fees were paid or payable to the auditors for non-audit services performed during the year ended 30 June
2014 (2013: nil).
Signed in accordance with a resolution of the Board of Directors.
Gary Steinepreis
Non-Executive Director
West Perth, 26 September 2014
AVZ Minerals Limited | 10
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY BRAD MCVEIGH TO THE DIRECTORS OF AVZ MINERALS LIMITED
As lead auditor of AVZ Minerals Limited for the year ended 30 June 2014, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of AVZ Minerals Limited and the entities it controlled during the period.
Brad McVeigh
Director
BDO Audit (WA) Pty Ltd
Perth, 30 September 2014
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN
77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2014
Revenue from continuing operations
Other income
Administrative costs
Consultancy expenses
Employee benefits expense
Occupancy expenses
Compliance and regulatory expenses
Insurance expenses
Depreciation expense
Exploration impaired
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income:
Items that may be reclassified to profit or loss
Exchange differences arising on translation of foreign operations
Other comprehensive income
Note
3
3
9
10
6
Consolidated
2014
$
2013
$
42,619
-
(29,118)
(94,282)
(46,975)
(57,000)
(56,741)
(9,855)
(9,421)
(770,669)
30,753
40,089
(135,380)
(56,100)
(68,571)
(63,033)
(70,639)
(18,081)
(26,502)
(2,045,538)
(1,031,442)
(2,413,002)
-
-
(1,031,442)
(2,413,002)
(123,877)
(123,877)
24,632
24,632
Total comprehensive loss for the year
(1,155,319)
(2,388,370)
Loss for the year is attributable to:
Owners of AVZ Minerals Limited
Non-controlling interests
Total comprehensive loss for the year attributable to:
Owners of AVZ Minerals Limited
Non-controlling interests
(902,725)
(128,717)
(1,031,442)
(2,308,824)
(104,178)
(2,413,002)
(1,020,406)
(134,913)
(1,155,319)
(2,270,413)
(117,957)
(2,388,370)
Basic and diluted loss per share (cents per share)
16
(0.33)
(1.20)
The accompanying notes form part of these financial statements.
AVZ Minerals Limited | 12
Consolidated Statement of Financial Position
As at 30 June 2014
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non Current Assets
Property, plant and equipment
Exploration & evaluation expenditure
Total Non Current Assets
Total Assets
Current Liabilities
Trade and other payables
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Reserves
Accumulated losses
Capital and reserves attributable to owners of AVZ Minerals Ltd
Non-controlling interests
12
14
Total Equity
The accompanying notes form part of these financial statements.
Note
7
8
9
10
Consolidated
2014
$
2013
$
1,986,678
29,978
1,834,742
28,925
2,016,656
1,863,667
5,763
-
15,607
867,567
5,763
2,022,419
883,174
2,746,841
11
57,017
25,152
57,017
57,017
1,965,402
25,152
25,152
2,721,689
13,340,115
642,268
(11,736,425)
2,245,958
(280,556)
12,941,083
759,949
(10,833,700)
2,867,332
(145,643)
1,965,402
2,721,689
AVZ Minerals Limited | 13
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2014
Consolidated
Contributed
Equity
Accumulated
Losses
Option
Reserve
$
$
$
Foreign
Currency
Translation
Reserve
$
Total
Non-
controlling
Interests
Total Equity
$
$
$
Balance at 1 July 2013
Total comprehensive
income for the year:
Loss for the year
Exchange differences on
translation of foreign
operations
Contributions of equity
(net of transaction costs)
Balance at 30 June
2014
Balance at 1 July 2012
Total comprehensive
income for the year:
Loss for the year
Exchange differences on
translation of foreign
operations
Contributions of equity
(net of transaction costs)
Balance at 30 June
2013
12,941,083
(10,833,700) 1,310,448
(550,499) 2,867,332 (145,643) 2,721,689
-
-
-
(902,725)
-
(902,725)
399,032
399,032
-
-
-
-
-
-
-
-
(902,725)
(128,717)
(1,031,442)
(117,681)
(117,681)
(117,681) (1,020,406)
(6,196)
(134,913)
(123,877)
(1,155,319)
-
-
399,032
399,032
-
-
399,032
399,032
13,340,115
(11,736,425) 1,310,448
(668,180) 2,245,958 (280,556) 1,965,402
11,115,614
(8,524,876) 1,310,448
(588,910) 3,312,276
(27,686) 3,284,590
-
-
-
(2,308,824)
-
(2,308,824)
1,825,469
1,825,469
-
-
-
-
-
-
-
- (2,308,824)
(104,178)
(2,413,002)
38,411
38,411
38,411 (2,270,413)
(13,779)
(117,957)
24,632
(2,388,370)
-
-
1,825,469
1,825,469
-
-
1,825,469
1,825,469
12,941,083
(10,833,700) 1,310,448
(550,499) 2,867,332 (145,643) 2,721,689
The accompanying notes form part of these financial statements.
AVZ Minerals Limited | 14
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2014
Note
Consolidated
2014
$
2013
$
Cash Flows from Operating Activities
Payments to suppliers and employees (inclusive of GST)
Interest received
(219,480)
42,619
(705,148)
30,753
Net cash outflow from operating activities
17
(176,861)
(674,395)
Cash Flows from Investing Activities
Payments for (proceeds from) property, plant and equipment
Payments for exploration and evaluation
Credit card deposit returned
-
(70,236)
-
26,023
(139,851)
30,000
Net cash outflow from investing activities
(70,236)
(83,828)
Cash Flows from Financing Activities
Proceeds from issue of shares and other equity securities
Share issue transaction costs
428,000
(28,967)
1,967,062
(141,593)
Net cash inflow from financing activities
399,033
1,825,469
Net increase in cash and cash equivalents
151,936
1,067,246
Cash and cash equivalents at the start of the year
1,834,742
767,496
Cash and cash equivalents at the end of the year
7
1,986,678
1,834,742
The accompanying notes form part of these financial statements.
AVZ Minerals Limited | 15
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
1.
Summary of Significant Accounting Policies
The principal accounting policies adopted in the preparation of these financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated. These financial statements
present the financial information for AVZ Minerals Limited as a consolidated entity consisting of AVZ Minerals Limited
and the entities is controlled throughout the year (‘group’ or ‘consolidated entity’).
Basis of Preparation
(a)
The financial report is a general purpose financial report which has been prepared in accordance with the requirements
of Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board,
Accounting Interpretations and the Corporations Act 2001.
(i)
(ii)
(b)
Statement of Compliance
The financial report complies with Australian Accounting Standards which include International Financial
Reporting Standards as adopted in Australia. Compliance with these standards ensures that the consolidated
financial statements and notes as presented comply with International Financial Reporting Standards (IFRS).
Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the
revaluation of available for sale financial assets.
Basis of Consolidation
Subsidiaries
(i)
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of AVZ Minerals NL
as at 30 June 2014 and the results of all subsidiaries for the year then ended. AVZ Minerals NL and its subsidiaries
together are referred to in this financial report as the group or the consolidated entity.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls
an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
(ii)
Joint arrangements
Under AASB 11 Joint Arrangements investments in joint arrangements are classified as either joint operations
or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather
than the legal structure of the joint arrangement.
(iii) Joint operations
The group recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its
share of any jointly held or incurred assets, liabilities, revenues and expenses.
(iv) Joint ventures
Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in
the consolidated balance sheet
Segment reporting
(c)
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the board of directors.
AVZ Minerals Limited | 16
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
1.
Summary of Significant Accounting Policies (continued)
Revenue recognition
(d)
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are
net of returns, trade allowances and amounts collected on behalf of third parties. Revenue is recognised for the business
activities as follows:
Interest income
(i)
Interest income is recognised as the interest accrues (using the effective interest method, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net
carrying amount of the financial asset.
Income tax
(e)
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on
the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the
assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for
each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising
from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these
temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction
did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible
temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise
those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances
attributable to amounts recognised directly in equity are also recognised directly in equity.
Leases
(f)
Leases of property, plant and equipment where the group has substantially all the risks and rewards of ownership are
classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the
leased property and the present value of the minimum lease payments. The corresponding rental obligations, net of
finance charges, are included in other long-term payables.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the statement of
comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated
over the shorter of the asset’s useful life and the lease term.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to
the statement of comprehensive income on a straight-line basis over the period of the lease.
Impairment of assets
(g)
At each reporting date the group assesses whether there is any indication that an asset may be impaired. An impairment
loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other
than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
(h) Cash and cash equivalents
For the purpose of presentation of the statement of cash flows, cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months
or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes
in value, and bank overdrafts.
AVZ Minerals Limited | 17
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
1.
Summary of Significant Accounting Policies (continued)
Trade and other receivables
(i)
Trade and other receivables are initially recognised initially at fair value and subsequently measured at amortised costs
using the effective interest method, less provision for impairment. Trade and other receivables are generally due for
settlement within 30 days. Collectability of trade receivables is reviewed on an ongoing basis. Amounts that are known
to be uncollectible are written off by reducing the carrying amount directly.
Exploration and evaluation expenditure
(j)
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of
interest. These costs are carried forward only if they relate to an area of interest for which rights of tenure are current
and in respect of which:
Such costs are expected to be recouped through successful development and exploitation or from sale of the area:
or
Exploration and evaluation activities in the area have not, at balance date, reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations
in, or relating to, the area are continuing.
Accumulated costs in respect of areas of interest which are abandoned are written off in full against profit in the year
in which the decision to abandon the area is made. A regular review is undertaken of each area of interest to determine
the appropriateness of continuing to carry forward costs in relation to that area of interest.
Property, plant and equipment
(k)
All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance
are charged to the statement of comprehensive income during the financial period in which they are incurred.
Depreciation on Australian assets is calculated using the straight line method (Namibian assets using diminishing value)
to allocate their cost, net of their residual values, over their estimated useful lives, as follows:
Plant and equipment - office
Furniture and equipment - office
Plant and equipment – field (Australia)
Plant and equipment – field (Namibia)
Motor Vehicles (Namibia)
40.0%
20.0%
20.0%
22.5%
22.5%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date. 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 (note 1(g)). Gains and losses on disposals are determined by comparing proceeds
with carrying amount. These are included in the statement of comprehensive income.
Trade and other payables
(l)
These amounts represent liabilities for goods and services provided to the company prior to the end of financial year
which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12
months.
Provisions
(m)
Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, it
is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably
estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of
management’s best estimate of the expenditure required to settle the present obligation at the balance date. The
discount rate used to determine the present value reflects current market assessments of the time value of money and
the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest
expense.
AVZ Minerals Limited | 18
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
1.
(n)
Summary of Significant Accounting Policies (continued)
Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12
months of the reporting date are recognised in respect of employee’s services up to the end of the reporting period
and are measured at the amounts expected to be paid when liabilities are settled. The liability for annual leave is
recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as
other payables.
(ii) Long service leave
The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end
of the period in which the employees render the related service is recognised in the provision for employee benefits
and measured as the present value of expected future payments to be made in respect of services provided by employees
up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and
salary levels, experience of employee departures and periods of service. Expected future payments are discounted using
market yields at the reporting date on national government bonds with terms to maturity and currency that match, as
closely as possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right
to defer settlement for at least twelve months after the reporting date, regardless of when the actual settlement is
expected to occur.
(iii) Share-based payments
The company provides benefits to employees (including directors) of the company in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled
transactions’).The cost of these equity-settled transactions with employees is measured by reference to the fair value
at the date at which they are granted.
The fair value is determined using an appropriate option pricing model that takes into account the exercise price, the
term of the option, the impact of dilution, the share price at grant date and expected volatility of the underlying share,
the expected dividend yield and the risk free interest rate for the term of the option. In valuing equity-settled
transactions, no account is taken of any performance conditions, other than conditions linked to the price of shares of
AVZ Minerals Limited (‘market conditions’).
(o) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares
for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
(p)
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit/loss attributable to equity holders of the company excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after tax effect of interest and other financing costs associated with the dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
(q) Goods and services tax (GST) and Value added tax (VAT)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as
part of the expense. Revenue, expenses and assets incurred in Namibia are recorded inclusive of VAT and no receivable
or payable is recorded as the recoverability of the VAT from the relevant taxation authority is uncertain.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement
of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing
or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash
flows.
AVZ Minerals Limited | 19
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
1.
(r)
Summary of Significant Accounting Policies (continued)
Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements
are presented in Australian dollars, which is AVZ Mineral’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in the statement of comprehensive income, except when they are deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
Translation differences on financial assets and liabilities carried at fair value are reported as part of the fair value gain or
loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through
profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-
monetary financial assets such as equities classified as available for sale financial assets are included in the fair value
reserve in equity.
(iii) Group companies
Assets and liabilities for each statement of financial position presented are translated at the closing rate at the
The results and financial position of all the group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows:
date of that statement of financial position
Income and expenses for the statement of comprehensive income are translated at average exchange rates
(unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated at the dates of the transactions), and
All resulting exchange differences are recognised as a separate component of comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are
repaid, a proportionate share of such exchange differences are recognised in the statement of comprehensive income,
as part of the gain or loss on sale where applicable. Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entities and translated at the closing rate.
(s) New accounting standards and interpretations
The accounting policies have been consistently applied by the Consolidated Group and are consistent with those applied
in the previous financial year and those of the corresponding interim reporting period, except the following:
- AASB 10 Consolidated Financial Statements
- AASB 11 Joint Arrangements
- AASB 13 Fair Value Measurement
- AASB 119 Employee benefits
- AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011
Cycle
Adoption of new and revised accounting standards
In the year ended 30 June 2014, the Company has reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after
1 July 2013. It has been determined by the Company that, there is no impact, material or otherwise, of the new and
revised standards and interpretations on its business and therefore no change is necessary to Company accounting
policies.
No retrospective change in accounting policy or material reclassification has occurred requiring the inclusion of a
third Statement of Financial Position as at the beginning of the comparative financial period, as required under AASB
101.
Parent Entity Financial Information
(t)
The financial information for the parent entity, AVZ Minerals Limited, disclosed in note 23 has been prepared on the
same basis as the consolidated financial statements.
AVZ Minerals Limited | 20
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
2.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under
the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting
estimates and judgements may differ from the related actual results and may have a significant effect on the carrying
amount of assets and liabilities within the next financial year and on the amounts recognised in the financial statements.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
Impairment of deferred exploration and evaluation expenditure
(a)
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 balance date reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves. The Board and Management have assessed the
carrying value of the Exploration and Evaluation Expenditure to be impaired. Refer to the accounting policy stated in
note 1(j) and to note 11 for movements in the exploration and evaluation expenditure balance.
Share based payment transactions
(b)
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.
3.
(a)
Revenue
From continuing operations
Interest received
(b) Other income
Refund of VAT
Proceeds from sale of plant and equipment
Total revenue from other revenue
4.
(a)
(b)
(c)
5.
(a)
Loss for the Year
Depreciation of non-current assets
Plant and equipment - office
Plant and equipment - field
Motor vehicle
Total depreciation
Asset write-down expense
Write-down of fixed assets
Total asset write-down expense
Foreign exchange loss
Net foreign exchange loss
Total foreign exchange loss
Auditor’s Remuneration
Remuneration of the auditors of the consolidated entity for:
Auditing or reviewing the financial statements:
BDO Audit (WA) Pty Ltd
-
Non-assurance services
Total remuneration of auditors
Consolidated
2014
$
2013
$
42,619
30,753
-
-
42,619
2,778
6,643
-
9,421
-
-
-
-
21,539
18,550
40,089
12,209
13,825
468
26,502
1,313
1,313
3,224
3,224
32,698
-
32,698
33,000
-
33,000
AVZ Minerals Limited | 21
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
6.
(a)
Income Tax Expense
Income tax expense
Current tax
Deferred tax
Total income tax expense
Deferred income tax expense included in income tax expense comprises:
Decrease/(Increase) in deferred tax assets (note 6(c))
Increase/(Decrease) in deferred tax liabilities (note 6(d))
Consolidated
2014
$
2013
$
-
-
-
-
-
-
-
-
-
-
-
-
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Tax at the tax rate of 30.0% (2013: 30.0%)
(1,031,442)
(309,433)
(2,413,002)
(723,901)
Tax effect of amounts which are not deductible in calculating taxable income:
Exploration written off
Share based payments
Other non-deductible amounts
Differences in overseas tax rates
Unrecognised tax losses
Income tax expense/(benefit)
(c) Deferred tax asset not recognised
Tax losses
Exploration and expenditure
Other
Net deferred tax recognised
231,200
-
13,257
-
64,976
607,297
-
29,098
4,444
83,062
-
-
1,654,138
1,281,824
7,031
2,942,993
1,605,478
316,444
7,198
1,929,120
1: The deferred tax asset attributable to tax losses does not exceed taxable amounts arising from the reversal of existing
assessable temporary differences.
7.
(a)
Cash & Cash Equivalents
Cash & cash equivalents
Cash at bank & in hand
Total cash & cash equivalents
(b) Cash at bank and in hand
Consolidated
2014
$
2013
$
1,986,678
1,986,678
1,834,742
1,834,742
Cash on hand is non-interest bearing. Cash at bank bears interest rates between 0.00% and 2.25% (2013:
0.00% and 3.50 %). Refer to note 15 for the group’s exposure to interest rate and credit risk.
AVZ Minerals Limited | 22
For personal use only
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
Trade & Other Receivables
Current
Other receivables
Total current trade & other receivables
Consolidated
2014
$
29,978
29,978
2013
$
28,925
28,925
Past due and impaired receivables
As at 30 June 2014, there were no other receivables that were past due or impaired (2013: nil).
Effective interest rates and credit risk
Information concerning effective interest rates and credit risk of both current and non-current trade and
other receivables is set out in note 15.
8.
(a)
(b)
(c)
Property, Plant & Equipment
9.
(a) Year ended 30 June 2014
Opening net book amount
Additions
Disposals/write-offs/adjustments
Depreciation charge
Closing net book amount
At 30 June 2014
Cost
Disposals/write-offs/adjustments
Accumulated depreciation
Net book amount
(b) Year ended 30 June 2013
Opening net book amount
Additions
Disposals/write-offs/adjustments
Depreciation charge
Closing net book amount
At 30 June 2013
Cost
Accumulated depreciation
Net book amount
Consolidated
Motor
Vehicles
$
Plant &
Office Field
$
Plant & Office
Equipment
$
-
-
-
-
-
-
-
-
-
30,878
-
(30,410)
(468)
-
11,068
-
(423)
(6,643)
4,002
58,896
2,188
(57,082)
4,002
21,819
-
3,074
(13,825)
11,068
4,539
-
-
(2,778)
1,761
28,544
-
(26,783)
1,761
16,748
-
-
(12,209)
4,539
-
-
-
58,896
28,544
(47,828)
11,068
(24,005)
4,539
Total
$
15,607
-
(423)
(9,421)
5,763
87,440
2,188
(83,865)
5,763
69,445
-
(27,336)
(26,502)
15,607
87,440
(71,833)
15,607
AVZ Minerals Limited | 23
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
Exploration & Evaluation Expenditure
10.
Exploration and evaluation phase
Opening balance
Exploration and acquisition costs
Impairment expense1
Foreign Exchange Movement
Closing balance
Consolidated
2014
$
2013
$
867,567
-
(770,669)
(96,898)
-
2,752,038
139,851
(2,024,322)
-
867,567
1 Board and Management have assessed the carrying value of the Exploration and Evaluation Expenditure to
be impaired and have provided for an impairment expense to reduce the carrying value to the expected
recoverable amount.
The value of the group’s interest in exploration expenditure is dependent upon:
the continuance of the company’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.
11. Trade & Other Payables
Current
Trade Payables
Total current trade & other payables
The group’s exposure to foreign currency risk is noted in note 15.
Consolidated
2014
$
2013
$
57,017
57,017
25,152
25,152
Consolidated
2014
Shares
2013
Shares
Consolidated
2014
$
2013
$
12. Contributed Equity
(a) Contributed Equity
Ordinary shares - fully paid
356,912,482
303,412,482
13,340,115
12,941,083
Total Contributed Equity
356,912,482
303,412,482
13,340,115
12,941,083
(b) Ordinary Shares
Ordinary shares participate in dividends and the proceeds on winding up of the company in proportion to the
number of shares held and in proportion to the amount paid up on the shares held. At shareholders meetings
each ordinary share is entitled to one vote in proportion to the paid up amount of the share when a poll is
called, otherwise each shareholder has one vote on a show of hands.
(c) Options
Information relating to options including details of options issued, exercised and lapsed during the financial
year and options outstanding at the end of the financial year, is set out in note 15.
(d) Performance incentive shares
All performance incentive shares have lapsed as the conditions were not met in the required timeframe.
AVZ Minerals Limited | 24
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
12.
Contributed Equity (continued)
Date
Number of
Shares
$
Issue
Price
$
Total
$
(e) Movements in contributed equity
Opening Balance 1 July 2012
Issue of shares: Placement
Issue of shares: Placement
Issue of shares: Placement
Less: Transaction costs arising on share issues
Closing Balance at 30 June 2013
Opening Balance 1 July 2013
Issue of shares: Placement
Less: Transaction costs arising on share issues
Closing Balance at 30 June 2014
121,706,241
23 Oct 12
29 Jan 13
23 Oct 12
18,250,000 $0.015
151,706,241 $0.01
18,250,000 $0.015
303,412,482
303,412,482
21 May 2014
53,500,000 $0.008
356,912,482
11,115,614
273,750
1,517,062
273,750
(141,593)
12,941,083
12,941,083
428,000
(28,968)
13,340,115
Granted
during the
year
Exercised
during the
year
Cancelled/
lapsed during
the year
Balance at
end of the
year
Expiry
date
Exercise
price
Balance at
start of year
13. Share Options
(a) 2014 unlisted share option details
31 Aug 13
31 Aug 13
31 Aug 13
31 Aug 13
31 Aug 13
14 Nov 13
31 Mar 14
22 May 14
22 May 14
22 May 14
31 May 14
31 May 14
31 May 14
30 Nov 14
31 Oct 14
15.0 cents
20.0 cents
25.0 cents
30.0 cents
45.0 cents
15.0 cents
10.0 cents
20.0 cents
30.0 cents
45.0 cents
11.0 cents
20.0 cents
25.0 cents
20.0 cents
11.0 cents
3,250,000
2,500,000
2,500,000
2,500,000
2,500,000
6,000,000
400,000
7,125,000
7,125,000
7,125,000
400,000
2,500,000
2,500,000
2,000,000
1,900,000
49,925,000
Expiry
date
Exercise
price
Balance at
start of year
(b) 2013 unlisted share option details
Granted
during the
year
31 Aug 13
31 Aug 13
31 Aug 13
31 Aug 13
31 Aug 13
14 Nov 13
31 Mar 14
22 May 14
22 May 14
22 May 14
30 Nov 14
31 May 14
31 May 14
31 May 14
31 Oct 14
15.0 cents
20.0 cents
25.0 cents
30.0 cents
45.0 cents
15.0 cents
10.0 cents
20.0 cents
30.0 cents
45.0 cents
20.0 cents
11.0 cents
20.0 cents
25.0 cents
11.0 cents
3,250,000
2,500,000
2,500,000
2,500,000
2,500,000
6,000,000
400,000
7,125,000
7,125,000
7,125,000
2,000,000
400,000
2,500,000
2,500,000
1,500,000
49,925,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Exercised
during the
year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,250,000
2,500,000
2,500,000
2,500,000
2,500,000
6,000,000
400,000
7,125,000
7,125,000
7,125,000
400,000
2,500,000
2,500,000
-
-
46,025,000
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
1,900,000
3,900,000
Cancelled/
lapsed during
the year
Balance at
end of the
year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,250,000
2,500,000
2,500,000
2,500,000
2,500,000
6,000,000
400,000
7,125,000
7,125,000
7,125,000
2,000,000
400,000
2,500,000
2,500,000
1,500,000
49,925,000
AVZ Minerals Limited | 25
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
14. Reserves
(a)
Unlisted option reserve
Opening balance
Unlisted options issued as remuneration during the year
Closing balance
Consolidated
2014
$
2013
$
1,310,448
-
1,310,448
1,310,448
-
1,310,448
The unlisted option reserve records items recognised on valuation of director, employee and
contractor share options as well as share options issued during the course of a business combination.
Information relating to the details of options issued, exercised and lapsed during the financial year
and options outstanding at the end of the financial year, is set out in note 13.
(b)
Foreign Currency Translation Reserve
Opening balance
Exchange difference arising on translation of foreign
operations
Closing balance
(550,499)
(588,910)
(117,681)
(668,180)
38,411
(550,499)
The foreign currency translation reserve records exchange differences arising on translation of
foreign controlled entities. The exchange differences arising are recognised in other comprehensive
income as detailed in note 1(r) and accumulated within a separate reserve within equity. The
cumulative amount is reclassified to the statement of profit or loss or other comprehensive income
when the net investment is disposed of.
(c)
Total reserves
Unlisted option reserve
Foreign currency translation reserve
Total reserves
1,310,448
(668,180)
642,268
1,310,448
(550,499)
759,949
15. Financial Instruments, Risk Management Objectives and Policies
The consolidated entity’s principal financial instruments comprise cash and cash equivalents. The main purpose of the
financial instruments is to earn the maximum amount of interest at a low risk to the company. The consolidated entity
also has other financial instruments such as trade debtors and creditors which arise directly from its operations. For
the year under review, it has been the consolidated entity’s policy not to trade in financial instruments. The main risks
arising from the consolidated entity’s financial instruments are interest rate risk and credit risk. The board reviews and
agrees policies for managing each of these risks and they are summarised below:
(a)
Interest Rate Risk
The group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a
result of changes in market interest rates and the effective weighted average interest rate for each class of
financial assets and financial liabilities comprises:
Consolidated
2014
Financial assets
Cash and cash equivalents
Trade & other receivables - current
Financial Liabilities
Trade and other payables - current
Weighted
Average
Interest
Rate
%
2.25%
0.00%
0.00%
Floating
Interest Rate
Fixed
Interest
$
1,986,678
-
1,986,678
-
-
$
-
-
-
-
-
Total
Non-
interest
bearing
$
$
-
29,978
29,978
1,986,678
29,978
2,016,656
57,017
57,017
57,017
57,017
AVZ Minerals Limited | 26
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
15. Financial Instruments, Risk Management Objectives and Policies (continued)
Consolidated
2013
Financial assets
Cash and cash equivalents
Trade & other receivables - current
Financial Liabilities
Trade and other payables - current
Weighted
Average
Interest
Rate
3.50%
0.00%
0.00%
Floating
Interest Rate
Fixed
Interest
Total
Non-
interest
bearing
1,834,742
-
1,834,742
-
-
-
-
-
-
-
28,925
28,925
1,834,742
28,925
1,863,667
25,152
25,152
25,152
25,152
The maturity date for all cash, current receivables and trade and other payable financial instruments included in
the above tables is one year or less from balance date. The maturity for the non-current receivables is between
1 and 3 years from balance date.
(i)
Sensitivity analysis
The group’s main interest rate risk arises from cash equivalents with variable and fixed interest rates. At
30 June 2014 and 30 June 2013, the group’s exposure to interest rate risk is not deemed material.
(b) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the group. The group has adopted the policy of only dealing with credit worthy counterparties and
obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial
loss from defaults. The group does not have any significant credit risk exposure to any single counterparty or
any group of counterparties having similar characteristics. The carrying amount of financial assets recorded in
the financial statements, net of any provisions for losses, represents the group’s maximum exposure to credit
risk. All cash equivalents are held with financial institutions with a credit rating of A1+ or above, with the
exception of cash on hand of $NIL (2013: $NIL) which is not rated.
(c)
Foreign Currency Risk
The group is exposed to fluctuations in foreign currencies arising from exploration commitments in currencies
other than the group’s presentational currency (Australian Dollars).
The group operates internationally and is exposed to foreign exchange risk arising from currency exposures to
the Namibian Dollar (NAD). The group has not formalised a foreign currency risk management policy, however
it monitors its foreign currency expenditure in light of exchange rate movements, and retains the right to
withdraw from the foreign exploration commitments after the minimum expenditure targets have been met.
(i)
Sensitivity analysis
The group’s main foreign currency risk arises from cash equivalents held in foreign currency denominated
bank accounts and other payable amounts denominated in currencies other than the group’s functional
currency. At 30 June 2014 and 30 June 2013, the group’s exposure to foreign currency risk is not deemed
material as the cash held in overseas financial institutions is not considered material to the group.
AVZ Minerals Limited | 27
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
15. Financial Instruments, Risk Management Objectives and Policies (continued)
(d)
Liquidity risk
The group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities. Due to the dynamic nature of the underlying businesses, the
group aims at ensuring flexibility in its liquidity profile by maintaining the ability to undertake capital raisings. The
current trade and other payables are due and payable within 3 to 6 months.
Contractual
maturities of
financial liabilities
At 30 June 2014
Trade and other
payables
At 30 June 2013
Trade and other
payables
Less than
6 months
$
6-12
months
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5
years
$
57,017
25,152
-
-
-
-
-
-
-
-
Total
contractual
cashflows
$
Carrying
amount
liabilities
$
57,017
57,017
25,152
25,152
(e) Net fair value
The carrying value and net fair values of financial assets and liabilities at balance date are:
Consolidated
Financial assets
Cash and cash equivalents
Trade & other receivables - current
Financial Liabilities
Trade and other payables - current
2014
2013
Carrying
Amount
$
Net fair
Value
$
Carrying
Amount
$
Net fair
Value
$
1,986,678
29,978
2,016,656
1,986,678
29,978
2,016,656
1,834,742
28,925
1,863,667
1,834,742
28,925
1,863,667
57,017
57,017
57,017
57,017
25,152
25,152
25,152
25,152
(f)
Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or
for disclosure purposes. AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements
by level of the following fair value measurement hierarchy:
i) Quoted prices in active markets for identical assets or liabilities (level 1)
ii)
Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (level 2); and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
iii)
Due to their short term nature, the carrying amount of the current receivables and current payables is
assumed to approximate their fair value.
16. Earnings per Share
(a)
Earnings/(Loss)
Earnings/(loss) used in the calculation of basic EPS
Consolidated
2014
$
2013
$
(1,031,442)
(2,413,002)
(b) Weighted average number of ordinary shares (‘WANOS’)
WANOS used in the calculation of basic earnings per share:
309,422,071
204,239,388
Diluted earnings per share is equal to basis loss per share as the company is in a loss position.
AVZ Minerals Limited | 28
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
Consolidated
2014
$
2013
$
17. Cash Flow Information
(a)
Reconciliation of cash flows from operating activities with loss from ordinary activities after income tax:
Loss for the year
(1,031,442)
(2,413,002)
Depreciation
Asset write-down expense
Exploration impaired
Other
Changes in assets and liabilities:
(Increase) in operating receivables & prepayments
(Decrease) in trade and other payables
9,421
-
770,669
43,679
(1,053)
31,865
26,502
1,313
2,024,322
24,632
58,756
(396,918)
Net cash outflows from Operating Activities
(176,861)
(674,395)
(b)
Non-cash investing and financing activities
There are no non-cash investing and financing activities during the year (2013: nil).
18. Segment Information
(a) Description of segments
Management has determined the operating segments based on the reports reviewed by the chief operating
decision maker that are used to make strategic decisions. For the purposes of segment reporting the chief
operating decision maker has been determined as the board of directors. The board monitors the entity primarily
from a geographical perspective, and has identified two operating segments, being exploration for mineral
reserves within Africa and the corporate/head office function.
(b)
Segment information provided to the board of directors
The segment information provided to the board of directors for the reportable segments for the year ended 30
June 2014 as follows:
2014
Total segment revenue
Interest revenue
Depreciation and amortisation expense
Exploration impairment expense
Total segment loss before income tax
Total segment assets
Total segment liabilities
Africa
$
Corporate
$
Total
$
-
-
-
770,669
815,512
42,619
42,619
9,421
-
215,930
42,619
42,619
9,421
770,669
1,031,442
29,081
1,993,338
2,022,419
1,049
55,968
57,017
AVZ Minerals Limited | 29
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
18. Segment Information (Continued)
(b)
Segment information provided to the board of directors (continued)
(c)
(d)
(e)
2013
Total segment revenue
Interest revenue
Depreciation and amortisation expense
Exploration impairment expense
Total segment loss before income tax
Total segment assets
Total segment liabilities
Africa
$
Corporate
$
Total
$
-
-
930
2,024,322
2,083,569
30,753
30,753
25,572
-
329,433
30,753
30,753
26,502
2,024,322
2,413,002
900,567
1,846,274
2,746,841
1,160
23,992
25,152
Measurement of segment information
All information presented in part (b) above is measured in a manner consistent with that in the financial
statements.
Segment revenue
No inter-segment sales occurred during the current or previous financial year. The entity is domiciled in Australia.
No revenue was derived from external customers in countries other than the country of domicile. Revenues of
$42,619 (2013: $30,753) were derived from one Australian financial institution during the period. These revenues
are attributable to the corporate segment.
Reconciliation of segment information
Total segment revenue, total segment profit/loss before income tax, total segment assets and total segment
liabilities as presented in part (b) above, equal total entity revenue, total entity profit/loss before income tax,
total entity assets and total entity liabilities respectively, as reported within the financial statements.
19. Commitments and Contingencies
There are no commitments or contingent liabilities outstanding at the end of the year.
20. Subsidiaries and non-controlling entities
(a) Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1(b):
Name of entity
Northam Resources Ltd2
Himba Iron Exploration (Pty) Ltd
Eris Mining (Pty) Ltd
Tumba Base Metals X (Pty) Ltd
Country of
incorporation
Australia
Namibia
Namibia
Namibia
Class
of shares
Ordinary
Ordinary
Ordinary
Ordinary
Equity holding1
2014
%
100
95
95
95
2013
%
100
95
95
95
1: The proportion of ownership interest is equal to the proportion of voting power held.
2: Company is dormant.
AVZ Minerals Limited | 30
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
20. Subsidiaries and non-controlling entities (continued)
(b) Non-controlling entities
The following table sets out the summarised financial information for each subsidiary that has non-controlling
interests that are material to the group. Amounts disclosed are before intercompany eliminations (AASB 12.B11)
30 June 2013 30 June 2014
Summarised statement of Himba Iron Exploration (Pty) Ltd Tumba Base Metals X (Pty) Ltd
30 June 2013
Financial Position
$’000
-
1
1
29
-
29
(27)
(1)
Current Assets
Non-current Assets
Total Assets
Current Liabilities
Non-current Liabilities
Total Liabilities
Net Assets
Accumulated NCI
30 June 2014
$’000
-
-
-
1,205
-
1,205
(1,205)
(60)
$’000
-
-
-
26
-
26
(26)
(1)
$’000
-
1,332
1,332
1,332
-
1,332
-
-
Eris Mining (Pty) Ltd
30 June 2014
$’000
25
81
106
2,496
-
2,496
(2,390)
(119)
30 June 2013
$’000
29
1,465
1,494
2,692
-
2,692
(1,198)
(60)
Summarised statement of
Profit or Loss and Other
Comprehensive Income
Revenue
Profit for the period
Other comprehensive income
Total comprehensive income
Profit/(Loss) allocated to NCI
Dividends paid to NCI
Himba Iron Exploration (Pty) Ltd Tumba Base Metals X (Pty) Ltd
30 June
2014
$’000
-
(1,205)
-
(1,205)
(60)
-
30 June
2013
$’000
-
-
-
-
-
-
30 June
2014
$’000
-
(1)
-
(1)
-
-
30 June
2013
$’000
-
-
-
-
-
-
Eris Mining (Pty) Ltd
30 June
30 June
2013
2014
$’000
$’000
21
-
(2,084)
(1,368)
-
-
(2,084)
(1,368)
(104)
(68)
-
-
Summarised cash flows
Himba Iron Exploration (Pty)
Ltd
Tumba Base Metals X (Pty)
Ltd
Eris Mining (Pty) Ltd
30 June
2014
$’000
30 June
2013
$’000
30 June
2014
$’000
30 June
2013
$’000
30 June
2014
$’000
30 June
2013
$’000
Cash flows from operating
activities
Cash flows from investing
activities
Cash flows from financing
activities
Net increase/(decrease) in cash
and cash equivalents
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1)
-
-
(1)
-
-
-
-
AVZ Minerals Limited | 31
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
21. Related Party Information
(a)
(b)
(c)
Parent entity
The ultimate parent entity within the group is AVZ Minerals Limited.
Subsidiaries
Interests in subsidiaries are set out in note 20.
Key management personnel
Disclosures relating to key management personnel are set out in Directors’ Report.
2014
$
2013
$
Key Management Personnel Compensation
Summary remuneration
Short-term employee benefits
173,347
Post-employment benefits
10,020
Long-term benefits
-
Share-based payments
-
183,367
Total key management personnel compensation
Details of remuneration disclosures are provided within the audited remuneration report which can be
found on pages 5 to 9 of the directors’ report.
93,517
418
-
-
93,935
22. Share Based Payments
The Directors have not issued any options as remuneration during the current year (2013: nil).
23.
(a)
(b)
(c)
(d)
Parent Entity Information
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Equity
Contributed equity
Accumulated losses
Option reserve
Total equity
Total Comprehensive loss for the year
Loss for the year
Other comprehensive income for the year
Total comprehensive loss for the year
Company
2014
$
2013
$
1,991,577
1,761
1,993,338
1,835,091
878,749
2,713,840
55,967
55,968
23,992
23,992
13,340,115
(12,713,193)
1,310,448
1,937,370
12,941,083
(11,561,683)
1,310,448
2,689,848
(1,151,510)
-
(1,151,510)
(2,353,755)
-
(2,353,755)
The parent entity has not guaranteed any loans for any entity during the year. The parent entity does not have any
contingent liabilities, or capital commitments.
AVZ Minerals Limited | 32
Notes to the Consolidated Financial Statements for the year ended 30 June 2014
24. Significant Events After Balance Date
On 1 September 2014, the Company lodged a Prospectus for a 1 for 3 entitlement issue at 0.5 cents per share to raise
$609,854 (gross proceeds based on the Company’s expanded issued capital). The offer closed offer closed fully
subscribed and on 23 September 2014 the Company issued 121,970,028 shares.
Other than as disclosed in this report, there has been no matter or circumstance that has arisen that has significantly
affected, or may significantly affect:
the group’s operations in future financial years, or
the results of those operations in future financial years, or
the group’s state of affairs in future financial years.
AVZ Minerals Limited | 33
Directors’ Declaration
In the directors’ opinion:
(a) the financial statements and notes set out on pages 12 to 33 are in accordance with the Corporations Act 2001,
including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) giving a true and fair view of the group’s financial position as at 30 June 2014 and of its performance for the
financial year ended on that date; and
(b) the audited remuneration disclosures set out on pages 5 to 9 of the directors’ report comply with section 300A
of the Corporations Act 2001; and
(c) at the date of this declaration, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable; and
(d) the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued
by the International Accounting Standards Board.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
Gary Steinepreis
Non-Executive Director
West Perth, Western Australia
26 September 2014
AVZ Minerals Limited | 34
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of AVZ Minerals Limited
Report on the Financial Report
We have audited the accompanying financial report of AVZ Minerals Limited, which comprises the
consolidated statement of financial position as at 30 June 2014, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In Note 1(a)(i), the directors also state, in accordance with Accounting Standard AASB
101 Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view 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 company’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.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN
77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of AVZ Minerals Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a)
the financial report of AVZ Minerals Limited is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1(a)(i).
Report on the Remuneration 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.
Opinion
In our opinion, the Remuneration Report of AVZ Minerals Limited for the year ended 30 June 2014
complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Brad McVeigh
Director
Perth, 30 September 2014
Shareholder Information
Shareholding
The distribution of members and their holdings of equity securities
25 September 2014 was as follows:
in the holding company as at
Number Held as at 25 September 2014
1- 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Holders of less than a marketable parcel: 250
Substantial Shareholders
The names of the substantial shareholders as at 25 September 2014.
Class of Equity Securities
Fully Paid Ordinary Shares
15
18
61
156
188
324
Shareholder
Ranchland Holdings Pty Ltd
Number
32,068,590
%
6.57
Voting Rights - Ordinary Shares
In accordance with the holding company's Constitution, on a show of hands every member present in person or by
proxy or attorney or duly authorised representative has one vote. On a poll every member present in person or by
proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held.
Twenty Largest Shareholders
The names of the twenty largest ordinary fully paid shareholders as at 25 September 2014 are as follows:
Shareholder
JP Morgan Nominees Australia Ltd
HSBC Custody Nominees Australia Ltd
Oakhurst Enterprises Pty Ltd
Leilani Inv Pty Ltd
Ranchland Holdings Pty Ltd
Seventy Three Pty Ltd
N&J Mitchell Holdings Pty Ltd
Wilhaja Pty Ltd
J & J Brady Nominees Pty Ltd
Merrill Lynch Aust Nom Pty Ltd
Blueknight Pty Ltd
Aviemore Cap Pty Ltd
Talltree Holdings Pty Ltd
Manuela Reitmeier
Pershing Australia Nominees Pty Ltd
Calama Holdings Pty Ltd
Symorgh Inv Pty Ltd
Talltree Holdings Pty Ltd
Axino Investments Gmbh
Piat Corp Pty Ltd
Number
% Held of Issued
Ordinary Capital
36,785,863
21,603,752
20,495,533
20,089,276
19,235,256
17,920,308
15,162,199
11,228,814
11,120,308
10,290,131
9,333,334
8,994,638
8,445,920
8,333,400
8,000,000
7,983,334
7,210,000
7,152,229
7,000,000
6,002,206
262,386,501
7.54%
4.43%
4.20%
4.12%
3.94%
3.67%
3.11%
2.30%
2.28%
2.11%
1.91%
1.84%
1.73%
1.71%
1.64%
1.64%
1.48%
1.47%
1.43%
1.23%
53.78%
AVZ Minerals Limited | 37
Corporate Governance
Corporate Governance
The Company is committed to implementing the highest standards of corporate governance. In determining what those
high standards should involve the Company has turned to the ASX Corporate Governance Council’s Principles of Good
Corporate Governance and Best Practice Recommendations. The Company is pleased to advise that the Company’s
practices are largely consistent with those ASX guidelines. As consistency with the guidelines has been a gradual process,
where the Company did not have certain policies or committees recommended by the ASX Corporate Governance
Council (the Council) in place during the reporting period, we have identified such policies or committees.
Where the Company’s corporate governance practices do not correlate with the practices recommended by the
Council, the Company is working towards compliance however it does not consider that all the practices are appropriate
for the Company due to the size and scale of Company operations.
To illustrate where the Company has addressed each of the Council’s recommendations, the following table cross-
references each recommendation with sections of this report. The table does not provide the full text of each
recommendation but rather the topic covered.
Recommendation
Recommendation 1.1 Functions of the Board and Management
Section
1.1
Recommendation 1.2 Evaluation of Board, Directors and Key Executives
1.4.10
Recommendation 1.3 Reporting on Principle 1
Recommendation 2.1 Independent Directors
Recommendation 2.2 Independent Chairman
Recommendation 2.3 Role of the Chairman and CEO
Recommendation 2.4 Establishment of Nomination Committee
Recommendation 2.5 Evaluation of Board, Committees and Directors
Recommendation 2.6 Reporting on Principle 2
1.1 and 1.4.10
1.2 and 1.3
1.2 and 1.3
1.2 and 1.3
2.3
1.4.10
1.2, 1.4.6, 1.4.10, 2.3.1 and the
Directors’ Report
Recommendation 3.1 Code of Conduct
Recommendation 3.2 Diversity Policy
Recommendation 3.3 Reporting on Principle 3
Recommendation 3.4 Disclosure of Diversity
Recommendation 4.1 Establishment of Audit Committee
Recommendation 4.2 Structure of Audit Committee
Recommendation 4.3 Audit Committee Charter
Recommendation 4.4 Reporting on Principle 4
3
3.2
3.3
3.4
2.1
2.1.1
2.1
2.1
Recommendation 5.1 Policy for Compliance with Continuous Disclosure
1.4.4
Recommendation 5.2 Reporting on Principle 5
Recommendation 6.1 Communications Strategy
Recommendation 6.2 Reporting on Principle 6
Recommendation 7.1 Policies on Risk Oversight and Management
Recommendation 7.2 Managing and Implementing Risk Management
Recommendation 7.3 Attestations by CEO and CFO
Recommendation 7.4 Reporting on Principle 7
Recommendation 8.1 Establishment of Remuneration Committee
Recommendation 8.2 Statement of Remuneration Committee
1.4.4
1.4.8
1.4.8
2.1.3
2.1.3
2.1.3
2.1.3
2.2
2.2.1
Recommendation 8.3 Executive and Non-Executive Director Remuneration 2.2.3.1 and 2.2.3.2
Recommendation 8.4 Reporting on Principle 8
1.2, 2.2.1 and 2.2.3.2
AVZ Minerals Limited | 38
Corporate Governance
1.
Board of Directors
Role of the Board
1.1
The Board’s role is to govern the Company rather than to manage it. In governing the Company, the Directors must
act in the best interests of the Company as a whole. It is the role of senior management to manage the Company in
accordance with the direction and delegations of the Board and the responsibility of the Board to oversee the activities
of management in carrying out these delegated duties.
In carrying out its governance role, the main task of the Board is to drive the performance of the Company. The Board
must also ensure that the Company complies with all of its contractual, statutory and any other legal obligations, including
the requirements of any regulatory body. The Board has the final responsibility for the successful operations of the
Company.
To assist the Board carry out its functions, the Company has adopted a Charter. A copy is available for inspection on
the Company’s website.
1.2 Composition of the Board
To add value to the Company the Board has been formed so that it has effective composition, size and commitment to
adequately discharge its responsibilities and duties given its current size and scale of operations. The names of the
Directors and their qualifications and experience are stated in the Directors’ Report along with the term of office held
by each of the Directors. Directors are appointed based on the specific skills required by the Company and on their
decision-making and judgment skills.
The Company recognises the importance of Non-Executive Directors and the external perspective and advice that Non-
Executive Directors can offer.
The Board currently comprises of three Directorsand only Mr Flint is considered independent, therefore the Company
does not have a majority of independent directors. Due to the size of the Company and the experience of the Directors,
the Company believes that the current composition of the Board remains appropriate.
Responsibilities of the Board
1.3
In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices,
management and operations of the Company. It is required to do all things that may be necessary to be done in order
to carry out the objectives of the Company.
Without intending to limit this general role of the Board, the principal functions and responsibilities of the Board include
the following.
Leadership of the Organisation: overseeing the Company and establishing codes that reflect the values of the
Company and guide the conduct of the Board.
Strategy Formulation: to set and review the overall strategy and goals for the Company and ensuring that there
are policies in place to govern the operation of the Company.
Overseeing Planning Activities: the development of the Company’s strategic plan.
Shareholder Liaison: ensuring effective communications with shareholders through an appropriate communications
policy and promoting participation at general meetings of the Company.
Monitoring, Compliance and Risk Management: the development of the Company’s risk management, compliance,
control and accountability systems and monitoring and directing the financial and operational performance of the
Company.
Company Finances: approving budgets and approving and monitoring acquisitions, divestitures and financial and
other reporting.
Human Resources: appointing, and, where appropriate, removing the Chief Executive Officer (CEO) and Chief
Financial Officer (CFO) as well as reviewing the performance of the CEO and monitoring the performance of
senior management in their implementation of the Company’s strategy.
Ensuring the Health, Safety and Well-Being of Employees: in conjunction with the senior management team,
developing, overseeing and reviewing the effectiveness of the Company’s occupational health and safety systems
to ensure the well-being of all employees.
Delegation of Authority: delegating appropriate powers to the CEO to ensure the effective day-to-day
management of the Company and establishing and determining the powers and functions of the Committees of the
Board.
Full details of the Board’s role and responsibilities are contained in the Board Charter, a copy of which is available for
inspection on the Company’s website.
AVZ Minerals Limited | 39
Corporate Governance
1.
Board of Directors (continued)
1.4 Board Policies
1.4.1 Conflicts of Interest
Directors must:
disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to exist
between the interests of the Director and the interests of any other parties in carrying out the activities of the
Company; and
if requested by the Board, within seven days or such further period as may be permitted, take such necessary and
reasonable steps to remove any conflict of interest.
If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as per the Corporations
Act, absent himself or herself from the room when discussion and/or voting occurs on matters about which the conflict
relates.
1.4.2 Commitments
Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director
of the Company.
1.4.3 Confidentiality
In accordance with legal requirements and agreed ethical standards, Directors and key executives of the Company have
agreed to keep confidential, information received in the course of the exercise of their duties and will not disclose non-
public information except where disclosure is authorised or legally mandated.
1.4.4 Continuous Disclosure
The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure
of information to the ASX as well as communicating with the ASX. In accordance with the ASX Listing Rules the
Company immediately notifies the ASX of information:
concerning the Company that a reasonable person would expect to have a material effect on the price or value of
the Company’s securities; and
that would, or would be likely to, influence persons who commonly invest in securities in deciding whether to
acquire or dispose of the Company’s securities.
The Company has a Continuous Disclosure Policy which is available for inspection on the Company’s website.
1.4.5 Education and Induction
It is the policy of the Company that new Directors undergo an induction process in which they are given a full briefing
on the Company. Where possible this includes meetings with key executives, tours of the premises, an induction
package and presentations. Information conveyed to new Directors include:
details of the roles and responsibilities of a Director;
formal policies on Director appointment as well as conduct and contribution expectations;
access to a copy of the Board Charter;
guidelines on how the Board processes function;
details of past, recent and likely future developments relating to the Board;
background information on and contact information for key people in the organisation;
an analysis of the Company;
a synopsis of the current strategic direction of the Company; and
a copy of the Constitution of the Company.
In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo continual
professional development. Specifically, Directors are provided with the resources and training to address skills gaps
where they are identified.
1.4.6 Independent Professional Advice
The Board collectively and each Director has the right to seek independent professional advice at the Company’s
expense, to assist them to carry out their responsibilities.
AVZ Minerals Limited | 40
Corporate Governance
1.
Board of Directors (continued)
1.4.7 Related Party Transactions
Related party transactions include any financial transaction between a Director and the Company. Unless there is an
exemption under the Corporations Act from the requirement to obtain shareholder approval for the related party
transaction, the Board cannot approve the transaction.
1.4.8 Shareholder Communication
The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights the Company
is committed to:
communicating effectively with shareholders through releases to the market via ASX, information mailed to
shareholders and the general meetings of the Company;
giving shareholders ready access to balanced and understandable information about the Company and corporate
proposals;
making it easy for shareholders to participate in general meetings of the Company; and
requesting 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.
The Company also makes available a telephone number and email address for shareholders to make enquiries of the
Company. The Company has a Shareholder Communication Policy which is available for inspection on the Company’s
website.
1.4.9 Trading in Company Shares
The Company has had a formal Share Trading Policy in place since May 2007 and subsequently reviewed and updated in
December 2010. A copy of the policy is available for inspection on the Company’s website.
1.4.10 Performance Review/Evaluation
It is the policy of the Board to conduct annual evaluations of its effectiveness and that of individual Directors. Each
Directors performance is appraised personally by the Chairman and in a meeting led by the other independent Director,
the Chairman’s performance is assessed.
The evaluation process in the current year was overseen by the Chairman. The evaluation process of the Chairman
was led by the other independent Director in conjunction with the Managing Director. The objective of this evaluation
is to provide best practice corporate governance to the Company.
2.
Board Committees
Audit Committee
2.1
Due to the size and scale of operations of the Company the full Board undertakes the role of the Audit Committee. As
the full Board undertakes the role of the Audit Committee, no formal Charter has been adopted however below is a
summary of the role and responsibilities of an Audit Committee.
2.1.1 Role
The Audit Committee is responsible for reviewing the integrity of the Company’s financial reporting and overseeing the
independence of the external auditors.
As the whole Board only consists of three (3) members, the Company does not have an audit committee because it
would not be a more efficient mechanism than the full Board for focusing the Company on specific issues and an audit
committee cannot be justified based on a cost-benefit analysis.
In the absence of an audit committee, the Board sets aside time to deal with issues and responsibilities usually delegated
to the audit committee to ensure the integrity of the financial statements of the Company and the independence of the
external auditor.
2.1.2 Responsibilities
The Audit Committee reviews the audited annual and half-yearly financial statements and any reports which accompany
published financial statements and recommends their approval to the members.
The Audit Committee each year reviews the appointment of the external auditor, their independence, the audit fee, and
any questions of resignation or dismissal.
The Audit Committee or is also responsible for establishing policies on risk oversight and management.
AVZ Minerals Limited | 41
Corporate Governance
2.
Board Committees (continued)
2.1.3 Risk Management Policies
The Board’s Charter clearly establishes that it is responsible for ensuring there is a good sound system for overseeing
and managing risk. Due to the size and scale of operations, risk management issues are considered by the Board as a
whole.
A risk management plan has been developed and implemented by AVZ. The plan provides a framework for systematically
understanding and identifying the types of business risks threatening AVZ as whole and specific business activities within
the Company. A risk register has been developed through the implementation and review of the risk management plan
which has identified material business risk of the Company. The risk register also provides the controls in place to
mitigate the material business risks and management’s assessment of residual risk.
The board believes that it has a thorough understanding of the Company’s key risks and is managing them appropriately.
The board is responsible for reviewing annually its risk management system. This includes reviewing operational,
financial, compliance, systems and risk management procedures. A copy of the company’s risk management statement
is available from the corporate governance section of the company’s website.
The Board takes responsibility for the declaration in accordance with S295A of the Corporations Act signed by the
CEO and CFO that the financial statements are founded on a sound system of risk management and internal compliance.
Their statement assured the Board that the risk management and internal compliance and control system is operating
efficiently and effectively in all material respects.
Remuneration Committee
2.2
2.2.1 Role
The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing
appropriate remuneration levels and incentive policies for employees.
As the whole Board only consists of three (3) members, the Company does not have a remuneration committee because
it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues. As the full
Board undertakes the role of the Remuneration Committee, no formal Charter has been adopted however below is a
summary of the role and responsibilities of a Remuneration Committee.
2.2.2 Responsibilities
The responsibilities of a Remuneration Committee, or the full Board include setting policies for senior officers’
remuneration, setting the terms and conditions of employment for the Chief Executive Officer, reviewing and making
recommendations to the Board on the Company’s incentive schemes and superannuation arrangements, reviewing the
remuneration of both Executive and Non-Executive Directors and making recommendations on any proposed changes
and undertaking reviews of the Chief Executive Officer’s performance, including, setting with the Chief Executive Officer
goals and reviewing progress in achieving those goals.
2.2.3 Remuneration Policy
Directors’ Remuneration was approved by the Board.
2.2.3.1 Senior Executive Remuneration Policy
The Company is committed to remunerating its senior executives in a manner that is market-competitive and consistent
with best practice as well as supporting the interests of shareholders. Consequently, under the Senior Executive
Remuneration Policy the remuneration of senior executive may be comprised of the following:
fixed salary that is determined from a review of the market and reflects core performance requirements and
expectations;
a performance bonus designed to reward actual achievement by the individual of performance objectives and
for materially improved Company performance;
participation in any share/option scheme with thresholds approved by shareholders;
statutory superannuation.
By remunerating senior executives through performance and long-term incentive plans in addition to their fixed
remuneration the Company aims to align the interests of senior executives with those of shareholders and increase
Company performance.
The value of shares and options granted to senior executives are calculated using the Black and Scholes method.
AVZ Minerals Limited | 42
Corporate Governance
2.
Board Committees (continued)
The objective behind using this remuneration structure is to drive improved Company performance and thereby increase
shareholder value as well as aligning the interests of executives and shareholders. The Board may use its discretion with
respect to the payment of bonuses, stock options and other incentive payments.
2.2.3.2 Non-Executive Director Remuneration Policy
Non-Executive Directors are to be paid their fees out of the maximum aggregate amount approved by shareholders for
the remuneration of Non-Executive Directors. Non-Executive Directors do not receive performance based bonuses
however they do participate in option schemes as it is considered an appropriate method of providing sufficient reward
whilst maintaining cash reserves. Non-Executive Directors are entitled to but not necessarily paid statutory
superannuation. Non-Executive Directors are not provided with any retirement benefits other than superannuation.
2.2.4 Current Director Remuneration
Full details regarding the remuneration of Directors, is included in the Directors’ Report.
2.3 Nomination Committee
2.3.1 Role
The role of a Nomination Committee is to help achieve a structured Board that adds value to the Company by ensuring
an appropriate mix of skills and diversity are present in Directors on the Board at all times.
As the whole Board only consists of three (3) members, the Company does not have a nomination committee because
it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues. As the full
Board undertakes the role of the Nomination Committee, no formal Charter has been adopted however below is a
summary of the role and responsibilities of a Nomination Committee. The Company has adopted a Diversity Policy and
is available for inspection on the Company’s website.
2.3.2 Responsibilities
The responsibilities of a Nomination Committee include devising criteria for Board membership, regularly reviewing the
need for various skills and experience on the Board and identifying specific individuals for nomination as Directors for
review by the Board. The Nomination Committee also oversees management succession plans including the CEO and
his/her direct reports and evaluate the Board’s performance and make recommendations for the appointment and
removal of Directors. Currently the Board as a whole performs this role.
2.3.3 Criteria for selection of Directors
Directors are appointed based on the specific governance skills required by the Company. Directors should have the
relevant blend of personal experience in accounting and financial management and Director-level business experience.
3. Diversity
3.1 Diversity and inclusion
AVZ and all its related bodies corporate are committed to workplace diversity in relation to genders, age, ethnicity and
background. The Company recognises the benefits arising from employee and Board diversity, including a broader pool
of high quality employees, improving employee retention, accessing different perspectives and ideas and benefiting from
all available talent. Diversity includes, but is not limited to, gender, age, ethnicity and cultural background.
3.2 Diversity Policy
The Company has developed a Diversity Policy during the current period which was formally adopted in June 2012. A
copy of the policy is available for inspection on the Company’s website.
3.3 Measurable Objectives for Gender Diversity
Due to the size and nature of the company’s operations, AVZ has yet to establish measurable objectives for gender
diversity.
Proportion of women employees and board members
3.4
As at 30 June 2014, the Group had a total of four employees and board members. The proportion of women on the
Board and in senior management positions was nil. The proportion of women in our workplace was 0%.
4. Company Code of Conduct
The Company has had a formal Code of Conduct which provides guidelines aimed at maintaining high ethical
standards, corporate behaviour and accountability within the Company. A copy of the Code of Conduct is available
for inspection on the Company’s website.
AVZ Minerals Limited | 43
Schedule of Mineral Tenements
Tenement
Interest
Status
EPL 4436
EPL 4437
EPL 4438
EPL 4439
EPL 4440
EPL 4286
EPL 4283
EPL 4284
EPL 4285
EPL 4788
EPL 5503
EPL 5502
95%
95%
95%
95%
95%
95%
95%
95%
95%
95%
95%
95%
Granted
Granted
(renewal lodged)
Granted
(renewal lodged)
Granted
(renewal lodged)
Granted
(renewal lodged)
Granted
(renewal lodged)
Application
Application
Application
Application
Application
Application
Project
Tumba
Himba
Brandberg
Hammerhead/Thresher
Abenab
Key
All licences are in Namibia, Africa
EPL: Exploration Licence
AVZ Minerals Limited | 44