ACN: 119 484 016
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2013
CLASSIC MINERALS LIMITED
C O N T E N T S
Corporate directory
Directors’ report
Directors’ declaration
Auditor’s independence declaration
Independent audit report
Statement of Profit or Loss and other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the financial statements
ASX Additional Information
Schedule of Mineral Tenements
PAGE
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13
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27
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54
57
CLASSIC MINERALS LIMITED
CORPORATE DIRECTORY
DIRECTORS
Justin Doutch
Stan Procak
Paul Lambrecht
COMPANY SECRETARY
Kent Hunter
A.B.N.
77 119 484 016
PRINCIPAL OFFICE
Suite 7, 30 Hasler Road
OSBORNE PARK WA 6021
REGISTERED OFFICE
Suite 7, 30 Hasler Road
OSBORNE PARK WA 6021
AUDITORS
Stantons International
Level 2, 1 Walker Avenue
WEST PERTH WA 6005
- 1 -
CLASSIC MINERALS LIMITED
CORPORATE GOVERNANCE STATEMENT
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 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. Details of all of the recommendations can be found
on the ASX Corporate Governance Council’s website at
http://www.asx.com.au/about/CorporateGovernance_AA2.shtm
PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
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 the senior executives 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, it has developed a Code of Conduct to guide the Directors, the
Managing Director and other senior executives in the performance of their roles. The Code of Conduct
addresses the maintenance of the confidence in the Company’s integrity, legal obligations and expectations
of shareholders, responsibility and accountability of individuals for reporting and investigating reports of
unethical behaviour. The Company’s Code of Conduct is located on its website
(www.classicminerals.com.au).
Responsibilities of the Board
1.2
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 Company’s risk
management, compliance, control and accountability systems and monitoring and directing the
financial and operational performance of the Company.
the development of
• Company Finances: approving expenses and approving and monitoring acquisitions, divestitures
and financial and other reporting.
• Human Resources: appointing, and, where appropriate, removing the Managing Director (“MD”) as
well as reviewing the performance of the MD and monitoring the performance of senior management
in their implementation of the Company’s strategy.
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CLASSIC MINERALS LIMITED
• 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 MD 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.
The Company’s Board Charter is located on its website (www.classicminerals.com.au).
1.3
Remuneration Committee
1.3.1 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 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.
1.3.2 Responsibilities
The responsibilities of a Remuneration Committee include setting policies for senior officers’ remuneration,
setting the terms and conditions of employment for the MD, reviewing and making recommendations to the
Board on the Company’s incentive schemes and superannuation arrangements, reviewing the remuneration
of both Executive and NED’s and making recommendations on any proposed changes and undertaking
reviews of the MD’s performance, including, setting with the MD goals and reviewing progress in achieving
those goals.
Remuneration Policy
1.4
Directors’ Remuneration for the majority of Directors will be approved at a Board meeting to be held after
the ASX listing of the Company.
1.4.1 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 and in accordance with
thresholds set in plans approved by 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.
There are no retirement benefits for senior executives.
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.
Where shares and options are granted to senior executives the value would be calculated using the Black-
Scholes method.
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.
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CLASSIC MINERALS LIMITED
Education and Induction
1.5
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:
formal policies on Director appointment as well as conduct and contribution expectations;
• details of the roles and responsibilities of a Director;
•
• 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;
• a copy of the Corporate Governance Statement, Charters, Policies and Memos; 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.
PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE
Composition of the Board
2.1
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. 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 NED’s and the external perspective and advice that NED’s can
offer. Paul Lambrecht and Stanislaw Procak are NED’s and are both independent Directors as they meet
the following criteria for independence adopted by the Company:
•
An Independent Director is a NED and:
is not a substantial shareholder of the Company or an officer of, or otherwise associated directly
with, a substantial shareholder of the Company;
• has not been employed in an executive capacity by the Company or another group member and
there has not been a period of at least three years between ceasing such employment and serving
on the Board;
• within the last three years has not been a principal of a material professional adviser or a material
consultant to the Company or another group member or an employee materially associated with the
service provided;
is not a material supplier or customer of the Company or another group member, or an officer of or
otherwise associated directly or indirectly with a material supplier or customer; and
•
• has no material contractual relationship with the Company or other group member other than as a
Director of the Company.
Justin Doutch is the MD and the Chairman of the Company and does not meet the Company’s criteria for
independence.
The skills, experience and expertise relevant to the position of Director held by each Director in office at the
date of the Annual Report is included in the Directors’ Report.
The term in office of each Director in office at the date of this report is as follows:
Name
Justin Doutch
Stanislaw Procak
Paul Lambrecht
Term in Office
Since 16 September 2011
Since 7 November 2012
Since 6 February 2012
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CLASSIC MINERALS LIMITED
Responsibilities of the Board
2.2
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 Company’s risk
management, compliance, control and accountability systems and monitoring and directing the
financial and operational performance of the Company.
the development of
• Company Finances: approving expenses and approving and monitoring acquisitions, divestitures
and financial and other reporting.
• Human Resources: appointing, and, where appropriate, removing the MD as well as reviewing the
performance of the MD 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 MD 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.
The Company’s Board Charter is located on its website (www.classicminerals.com.au).
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 are present in Directors on the Board at all times.
As the whole board 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.
2.3.2 Responsibilities
The responsibilities of a Nomination Committee would 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 MD 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. Matters such as remuneration, expectations, terms, the procedures for
dealing with conflicts of interest and the availability of independent professional advice are clearly
understood by all Directors, who are experienced public company Directors.
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CLASSIC MINERALS LIMITED
Criteria for selection of Directors
2.4
Directors are appointed based on the specific governance skills required by the Company. Given the size of
the Company and the business that it operates, the Company aims at all times to have at least two Directors
with experience appropriate to the Company’s target market. In addition, Directors should have the relevant
blend of personal experience in accounting and financial management and Director-level business
experience. The Nomination Committee is responsible for implementing a program to identify, assess and
enhance director competencies. In addition, the Nomination Committee puts in place succession plans to
ensure an appropriate mix of skills; experience, expertise and diversity are maintained on the Board. The
Company’s Director Selection Procedure is located on its website (www.classicminerals.com.au).
Performance Review/Evaluation
2.5
It is the policy of the Board to conduct a regular evaluation of its own performance, the committees’
performances and the Directors’ performances against appropriate measures. The evaluation process was
first introduced via the Board Charter adopted on 14 September 2011. It was implemented for the financial
year ended 30 June 2013. The objective of this evaluation is to provide ongoing best practice corporate
governance to the Company. The Company’s Performance Evaluation Policy is located on its website
(www.classicminerals.com.au).
Independent Professional Advice
2.6
The Board collectively and each Director has the right to seek independent professional advice at the
Company’s expense, up to specified limits, to assist them to carry out their responsibilities.
PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING
Role of the Board
3.1
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 the senior executives 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, it has developed a Code of Conduct to guide the Directors, the
MD and other senior executives in the performance of their roles. The Code of Conduct addresses the
maintenance of the confidence in the Company’s integrity, legal obligations and expectations of
shareholders, responsibility and accountability of individuals for reporting and investigating reports of
unethical behaviour.
its website
(www.classicminerals.com.au).
The Company’s Code of Conduct
located on
is
Trading in Company Shares
3.2
On 14 September 2011 the Board reviewed and adopted a Share Trading Policy which included restrictions
on trading in closed periods, complying with the ASX Listing Rule requirements. The Board periodically
reminds Directors, senior executives and employees of the prohibition in the Corporations Act 2001
concerning trading in the Company’s securities when in possession of “inside information”. The Board also
periodically reminds Directors of their obligations to notify the Company Secretary of any trade in securities
to ensure that ASX Listing Rule requirements are met. The Company’s Share Trading Policy is located on
its website (www.classicminerals.com.au).
3.3
Directors must:
Conflicts of Interest
•
• 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.
•
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CLASSIC MINERALS LIMITED
Commitments
3.4
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.
Confidentiality
3.5
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.
Related Party Transactions
3.6
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.
Diversity Policy
3.7
The Company recognises and respects the value of diversity at all levels of the organisation.
The Company is committed to setting measurable objectives for attracting and engaging women at the
Board level, in senior management and across the whole organisation.
As at the date of this report, the Company has the Company has the following proportion of women
appointed:
•
•
•
to the Board – 0%
to senior management – 0%
to the organisation as a whole – 12.5%
The Company’s objective is to promote a culture which embraces diversity through ongoing education,
succession planning, director and employee selection and recognising skills are not gender specific.
PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
Audit Committee
4.1
Due to the size and scale of operations of the Company the full Board undertakes the role of the Audit
Committee. 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. Below is a summary of the role and
responsibilities of an Audit Committee.
4.1.1 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. As the
Company moves towards becoming a mining company, an audit committee will be formed consisting
primarily of Independent Directors.
4.1.2 Responsibilities
The Audit Committee or as at the date of this report the full Board of the Company 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 or as at the date of this report the full Board of the Company 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 as at the date of this report the full Board of the Company is also responsible for
establishing policies on risk oversight and management.
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CLASSIC MINERALS LIMITED
Risk Management Policies
4.2
The Board’s Charter clearly establishes that it is responsible for ensuring there is a sound system for
overseeing and managing risk. As the whole Board only consists of three (3) members, the Company does
not have a Risk Management Committee because it would not be a more efficient mechanism than the full
Board for focusing the Company on specific issues.
The Board sets aside time at meetings to discuss any risk management issues and Directors are
encouraged to give priority to such issues. The Company has developed a Risk Assessment Record in
order to assist with the risk management of the Company.
In developing its risk management policies, the Board has taken into consideration any legal obligations and
the reasonable expectations of its stakeholders in relation to risk management. The Chair is accountable to
the Board for effective risk management. The Board undertakes to review the management of material
business risks at least annually.
The Board has received assurance from the Chair and the MD that the declaration provided in accordance
with section 295A of the Corporations Act is founded on a sound system of risk management and internal
control and that the system is operating effectively in all material respects in relation to financial reporting
risks.
The Company’s Risk Management Policy is located on its website (www.classicminerals.com.au).
PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE
Continuous Disclosure
5.1
The Board has adopted a continuous disclosure policy to ensure that the Company complies with the
disclosure requirements of the ASX Listing Rules, which is available on the Company’s website. The Board
and Senior Executives have 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’s Continuous Disclosure Policy is located on its website (www.classicminerals.com.au).
PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS
Shareholder Communication
6.1
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 and encourages shareholders to visit the Company’s website for information. The
Company’s Shareholder Communications Policy is located on its website (www.classicminerals.com.au).
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CLASSIC MINERALS LIMITED
PRINCIPLE 7: RECOGNISE AND MANAGE RISK
7.1
Risk Management
7.1.1 Risk Management Policies
The Company’s risk management strategy policy states that the Board as a whole is responsible for the
oversight of the Company’s risk management and control framework. The objectives of the Company’s risk
management strategy are to:
identify risks to the Company;
•
• balance risk to reward;
• ensure regulatory compliance is achieved; and
• ensure senior executives, the Board and investors understand the risk profile of the Company.
The Board monitors risk through various arrangements including:
•
regular Board meetings;
share price monitoring;
•
• market monitoring; and
•
regular review of financial position and operations.
The Company has developed a Risk Assessment Record in order to assist with the risk management of the
Company. The Company’s risk management strategy was formally reviewed by the Board on 14
September 2011 and was considered a sound strategy for addressing and managing risk. A copy of the
strategy is available on the Company’s website (www.classicminerals.com.au).
Attestations by CEO and CFO
7.2
It is the Board’s policy, that the CEO and the CFO make the attestations recommended by the ASX
Corporate Governance Council as to the Company’s financial condition prior to the Board signing the
Annual Report. However, as at the date of this report the Company does not have a designated CEO or
CFO. These roles are performed by the MD and Company Secretary. The MD and Company Secretary
have declared to the Board that the Company’s management of its material business risks is effective.
PRINCIPLE 8: RENUMERATE FAIRLY AND RESPONSIBLY
8.1
Remuneration Committee
8.1.1 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 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.
8.1.2 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 MD, reviewing and making
recommendations to the Board on the Company’s incentive schemes and superannuation arrangements,
reviewing the remuneration of both Executive and NED’s, recommendations for remuneration by gender and
making recommendations on any proposed changes and undertaking reviews of the MD’s performance,
including, setting with the MD goals and reviewing progress in achieving those goals.
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CLASSIC MINERALS LIMITED
Remuneration Policy
8.2
Directors’ Remuneration for the majority of Directors will be approved at a Board meeting to be held after
the ASX listing of the Company.
8.2.1 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 and in accordance with
thresholds set in plans approved by 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;
long term incentives in the form of shares or options in the Company;
•
• participation in any share/option scheme with thresholds approved by shareholders;
•
statutory superannuation.
There are no retirement benefits for senior executives.
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.
Where shares and options are granted to senior executives the value would be calculated using the Black-
Scholes method.
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.
8.2.2 Non-Executive Director Remuneration Policy
NED’s are to be paid their fees out of the maximum aggregate amount approved by shareholders for the
remuneration of NED’s. NED’s do not receive performance based bonuses and do not participate in equity
schemes of the Company.
NED’s are entitled to but not necessarily paid statutory superannuation. There are no retirement benefits for
NED’s.
8.3
Full details regarding the remuneration of Directors, is included in the Directors’ Report.
Current Director Remuneration
The Company’s Remuneration Statement is located on its website (www.classicminerals.com.au).
Principle
Recommendation
/
Requirement
Compliance
Reference
Principle 1
Recommendation
1.1
Recommendation
1.2
Recommendation
1.3
Principle 2
Recommendation
2.1
Lay Solid Foundations for Management and
Oversight
Functions of the Board and Senior Executives
Performance Evaluation of Senior Executives
Reporting on Principle 1
Structure the Board to Add Value
Independent Directors
Yes
Yes
Yes
1.1, 1.2,
Website
1.4
1.1, 1.2,
Website
Yes
2.1
- 10 -
Recommendation
2.2
Recommendation
2.3
Recommendation
2.4
Recommendation
2.5
Recommendation
2.6
Principle 3
Recommendation
3.1
Recommendation
3.2
Recommendation
3.3
Recommendation
3.4
Recommendation
3.5
Principle 4
Recommendation
4.1
Recommendation
4.2
Recommendation
4.3
Recommendation
4.4
Principle 5
Recommendation
5.1
Recommendation
5.2
Principle 6
Recommendation
6.1
Recommendation
6.2
Principle 7
Recommendation
7.1
Recommendation
7.2
Recommendation
7.3
Recommendation
7.4
CLASSIC MINERALS LIMITED
Independent Chair
Role of the Chair and CEO
Establishment of Nomination Committee
Performance Evaluation Process
Reporting on Principle 2
Promote Ethical and Responsible Decision
Making
Directors’ and Senior Executives’ Code of Conduct
Diversity Policy
Diversity Policy Objectives
Diversity Reporting
Reporting on Principle 3
Safeguard Integrity in Financial Reporting
Establishment of Audit Committee
Structure of Audit Committee
Audit Committee Charter
Reporting on Principle 4
Make Timely and Balanced Disclosure
Policy for Compliance with Continuous Disclosure
Reporting on Principle 5
Respect the Rights of Shareholders
Communications Strategy
Reporting on Principle 6
Recognise and Manage Risk
Policies on Risk Oversight and Management of
Material Business Risks
Attestations by CEO and CFO
Risk Management and Internal Control
Reporting on Principle 7
- 11 -
No
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
2.1
2.1, 1.2
Website
2.3
2.5
Website
2.1, 2.6,
2.3.2, 2.5
Website
3.1, 3.2
Website
3.7
3.7
3.7
3.1, 3.2,
3.7
Website
4.1
4.1.2
4.1
4.1,
4.1.1, 4.2
Website
5.1
Website
5.1
Website
6.1
Website
6.1
Website
7.1.1
Website
7.2
7.1.1
Website
7.1.1
Website
CLASSIC MINERALS LIMITED
Principle 8
Recommendation
8.1
Recommendation
8.2
Recommendation
8.3
Recommendation
8.4
Renumerate Fairly and Responsibly
Establishment of Remuneration Committee
Structure of Remuneration Committee
Executive and Non-Executive Director Remuneration
Reporting on Principle 8
No
No
Yes
Yes
8.1, 8.3
Website
8.1
8.2.1,
8.2.2
8.1, 8.2.1
Website
- 12 -
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
The directors of Classic Minerals Limited submit herewith the financial report for the financial year ended 30
June 2013.
Non-executive Chairman
Kevin Robertson
(appointed 1 September 2010 and resigned 2 November 2012)
Directors
The names of directors in office at any time during or since the end of the financial year are:
Stanislaw Procak
Justin Doutch
Dennis Parsons
Paul Lambrecht
Kevin Robertson
(appointed 3 September 2010 and resigned 10 February 2012,
appointed 7 November 2012)
(appointed 16 September 2011)
(appointed 6 February 2012 and resigned 9 November 2012)
(appointed 6 February 2012)
(appointed 1 September 2010 and resigned 2 November 2012)
Company Secretary
The name of secretary in office at any time during or since the end of the financial year is:
Kent Hunter
Directors have been in office since the start of the financial year to the date of this report unless otherwise
stated.
Current Directors’ qualifications and experience
Justin Doutch (Executive Director)
Age: 31 years old
Qualifications and
Experience
Mr Doutch has served in the resource industry in Western Australia for the
past 11 years, where he has gained extensive experience in the areas of
drilling, mineral exploration and project financing. Justin has a background in
the establishment, development and operation of a successful business,
having formerly owned and operated a Goldfields engineering company.
More recently Mr Doutch has been serving as an Non-Executive Director of
Ironstone Resources Ltd, actively involved in the exploration and acquisition
of a diverse range of tenements in Western Australia. Further Justin is an
Non-Executive Director in Patron Commodity Partners specialising in
marketing and sales of iron ore in the international market place. Justin's
experience in exploration and the development of processes to expediently
access and explore Classic's tenements is invaluable as is its alignment to
the process of marketing its value to investors and end-users alike.
Shareholdings
2,500,004 ordinary shares
(500,000 ordinary shares are indirectly held by Ironstone Resources Limited)
500,000 Options exercisable at $0.20 on or before 30 June 2015.
- 13 -
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
Paul Lambrecht (Non-Executive Director)
Age: 43 years old
Qualifications and
Experience
B.Bus FFin
Mr Lambrecht is an investment advisor with over 17 years’ experience in the
financial services industry specialising in the natural resource sector. He has
worked for Trustee companies and stockbroking firms for both global and
local broking companies, including HSBC, Solomon Smith Barney and
Citigroup, providing advice and strategies to retail, institutional and corporate
client Paul holds a Bachelor of Business degree and has a Graduate
Diploma in Applied Finance and Investment.
Shareholdings
1,200,002 ordinary shares (held indirectly by Alouisus Pty Ltd)
600,001 Options exercisable at $0.20 on or before 30 June 2015.
Stanislaw Procak (Non-Executive Director)
Age: 70 years old
Qualifications and
Experience
Mr Procak is an experienced manager with over 35 years of mining industry
experience in Western Australia. His specific area of experience comprises
the coordinating of the complete set-up for mining projects from grass roots
including staffing, operating budgets,
financial management, mining
techniques and methods and staff motivation to attain significant project
milestones including throughput and grades. Immediately prior to joining
Classic, Mr Procak was project manager at Golden West Resources Limited
and prior to that General Manager Operations with Mawson West Limited.
Mr. Procak’s experience includes employment in senior positions at Telfer
Gold Mine, Big Bell Gold Mine, Golden Grove Polymetaliic Mine and
Kambalda Nickel Operations.
Shareholdings
1,650,002 ordinary shares
825,001 Options exercisable at $0.20 on or before 30 June 2015.
Principal activities
The principal activity of Classic Minerals Limited during the financial year was the exploration of mineral
resource based projects, focussing on nickel, copper, gold, base metals and uranium.
Operating results
The loss of the Company for the year ended 30 June 2013 amounted to $3,206,916 (2012- loss of
$1,075,274).
Dividends
No dividends were paid or declared for payment since the incorporation of the Company.
Review of operations
The company was engaged in acquiring tenements, conducting aeromagnetic surveys, conducting
geological assessment of other tenements as well as sourcing and gathering information on prospective new
tenements. The company also conducted drilling activities and geological assessment as well as preparing
Independent Geological Reports for the purposes of IPO.
Significant changes in state of affairs
As at 30 June 2012, the company had an outstanding loan from Murano Holdings Pty Ltd for $300,000. This
was subsequently converted to 11,000,000 shares at $0.03 per share representing $300,000 and $30,000 in
interest.
- 14 -
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
In the period from 1 September 2012 to 31 December 2012, 1,249,500 shares were issued to various
promoters and service providers for a total consideration of $59,900. Between 1 August 2012 and 31
December 2012, the Company issued 22,003,333 shares at 3 cents each to raise a gross $660,100, a
further 31,820,000 shares were issued at 5 cents each to raise a gross $1,591,000 and a further 9,320,000
shares were issued at 10 cents each to a gross $932,000.
With the consent of all Performance Shareholders, the Company varied the terms and conditions of the 112
Performance Shares previously issued by the Company. As at 14 November 2012, the Milestone events had
not been achieved and the 112 Performance Shares were converted into 112 ordinary shares.
In December 2012, the Company issued 400,000 shares at 2.5 cents each to extinguish a loan due of
$10,000, 1,982,800 shares were issued at 2.5 cents each to extinguish a loan owing of $49,570 and
1,200,000 shares were issued at 2 cents each to reduce a creditor balance by $24,000.
On 16 January 2013, the Company entered into a Sale and Purchase Agreement with Ironstone Resources
Limited (“Ironstone”) for the sale of the following tenements – EL38/2084, E25/421, E25/435, E25/453 and
E28/2138 to Ironstone. Under the terms of this agreement, Ironstone would pay $220,000 in cash (GST
inclusive) and 2.75 million shares in Ironstone to the Company.
On 22 May 2013, following the successful completion of its IPO, the Company issued and allotted
18,128,500 ordinary shares at $0.20 each to raise a gross $3,625,700.
There were no other significant changes in the state of affairs of the Company during the year ended 30
June 2013.
After reporting date events
Subsequent to year end, the following events have occurred:
On 31 July 2013, the Company exercised its Option to acquire 100% of Doherty’s (M57/619) for $93,130
(GST Inclusive) (cash) and 570,000 in shares.
On 20 August 2013, the Company announced a non-renounceable Option Entitlement issue to raise
$1,005,126 before expenses of the Issue. Shareholders as at 28 August 2013 were entitled to receive one
Option exercisable at 20 cents on or before 30 June 2015 for every two fully paid ordinary shares held.
Shareholders were required to pay $0.01 each for the Options. To date the Company has received $445,203
received as per bank statement and will seek to raise further monies via the shortfall.
On 26 August 2013, the Company acquired the exclusive marketing rights for iron ore over Exploration
Licence E28/2238 from Guide Resources Pty Ltd, under the terms of this Agreement Classic issued 5 million
ordinary shares to Guide and $225,000 as consideration, the Company will retain 30% of the revenue from
the sale of iron ore. The term of the appointment is six months. The Company paid the $225,000
consideration on 21 June 2013 and the amount is included as Other Assets in the Statement of Financial
Position at 30 June 2013.
Pursuant to a Sale and Purchase Agreement dated 16 January 2013, the Company sold the following
tenements – EL38/2084, E25/421, E25/435 and E28/2138 to Ironstone Resources Limited for 2.75 million
shares and $220,000 (cash) (GST Inclusive) payable 90 days after the signing of the Agreement. On 27
June 2013, a Deed of Variation was signed and allowed the cash component to be paid on 27 September
2013 and on 26 September 2013 the Company received the cash component.
Subsequent to year end and up to the date of this Report, the Company has sold 13,333,333 shares in
Fairstar Resources Limited (FAS) to realise proceeds of $429,942. At the date of this report the Company
holds a balance of 20,000,000 FAS shares valued at $340,000.
There are no other matters or circumstances that have arisen since 30 June 2013 that have or may
significantly affect the operations, results, or state of affairs of the Company in future financial years.
- 15 -
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
Details of Remuneration for Year Ended 30 June 2013 and 30 June 2012
The remuneration for each key management personnel of the Company during the
year was as follows:
SHORT-TERM BENEFITS
POST EMPLOYMENT
SHARE-BASED
PAYMENT
TOTAL
Salary
Other
Non-
Monetary
Superann-
uation
Retirement
Benefits
Equity
Options
$
Directors
Kevin Robertson
2013
2012
Angelo Ikonomou
2013
2012
Stanislaw Procak
2013
2012
Justin Doutch
2013
2012
Jacob Doutch
2013
2012
Paul Lambrecht
2013
2012
James Passaris
100,000
-
-
39,000
84,366
2,000
133,963
-
149,422
-
58,288
-
2013
169,521
-
-
-
-
-
-
-
-
-
-
13,541
5,294
21,300
4,224
-
-
375
-
52,100
55,264
-
-
-
-
-
4,224
11,049
-
-
-
-
12,205
-
4,224
375
-
-
-
-
-
2012
-
Total Remuneration Key Management Personnel
-
2013
2012
695,560
41,000
73,400
55,264
12,672
13,541
24,004
5,294
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29,990
60,000
-
-
29,990
-
-
60,000
59,980
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
REPRE-
SENTED
BY
EQUITY/
OPTIONS
%
-
-
-
-
-
-
-
35%
100,000
-
-
57,835
110,265
2,000
201,336
85,254
221,627
27%
-
62,887
29,990
169,521
-
865,636
175,079
-
-
100%
-
-
-
-
i)
ii)
iii)
iv)
v)
vi)
vii)
In 2013, an aggregate amount of $201,336 (2012: $85,254) was paid or was due and payable to Mr. Justin Doutch for
consulting services and as a directors’ salary.
In 2013, an aggregate amount of $221,627 was paid or was due and payable to Mr. Jacob Doutch in his capacity as tenement
manager and included the granting of 2,000,000 shares at nil consideration.
In 2013, an aggregate amount of $100,000 (2012- Nil) was paid or due and payable to Mr. Kevin Robertson as directors’ fees
this related to directors fee for a twenty-four month period.
In 2013, an aggregate amount of $62,887 (2012- $29,990) was paid or due and payable to Alouisus Pty Ltd, a company
associated with Mr. Paul Lambrecht.
In 2013, an aggregate amount of $110,265 (2012:$NIL) was paid or due and payable to Mr. Stan Procak as directors’and
consulting fees.
In 2013, an aggregate amount of $ 169,521 (2012: nil) was paid or due and payable to Mr. James Passaris as consulting fees.
In 2012, an aggregate amount of $57,835 was paid, or was due and payable to Mr Ikonomou for consulting services. Mr
Ikonomou resigned in November 2011.
- 16 -
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
Employment Details of Members of Key Management Personnel
On 19 November 2012, the Company entered into a services agreement with Mr. Justin Doutch effective
from 9 November 2012. Under this Agreement, Mr Doutch has been engaged by the Company to provide
services to the Company in the capacity of Managing Director. There is no fixed term to this Agreement.
Under this Agreement there are standard termination provisions under which the Company can give notice of
termination, or alternatively, payment in lieu of services. In addition, Mr Doutch is entitled to all unpaid
remuneration and entitlements up to the date of termination. Mr. Doutch was paid an annual remuneration of
$180,000 plus statutory superannuation and is entitled to the supply of a motor vehicle. Following the
Company’s successful IPO Mr. Doutch’s salary has been increased to $250,000 plus statutory
superannuation. This increase was approved at a Director’s Meeting by the Board. Upon termination or after
a period of 5 years, the motor vehicle ownership will be transferred to Mr. Doutch at nil consideration at
which point all running costs will be at the expense of Mr. Doutch. Mr. Doutch will also be reimbursed for
reasonable expenses incurred in carrying out his duties.
In the event that Mr Justin Doutch’s contract is terminated after one year of service, he will be entitled to an
additional week’s notice and any annual leave and long service leave entitlements will be paid.
Non-Executive Director Letter Agreements
The Company has entered into non-executive director letter agreements with Kevin Robertson, Paul
Lambrecht and Stan Procak, to provide for the terms and conditions on which the Non-Executive Directors
would carry out their duties to the Company and the Non-Executive Directors agreed to act as non-Executive
Directors to the Company. Mr. Roberston, Mr. Lambrecht and Mr. Procak were paid an annual remuneration
of $50,000 plus statutory superannuation and are reimbursed for reasonable expenses incurred in carrying
out their duties.
Executive Agreements
The Company has entered into an employment contract with Jacob Doutch as Tenement Manager effective
from 15 June 2012 at an agreed salary of $133,328 inclusive of superannuation. Following the Company’s
successful IPO, Jacob Doutch’s salary has been increased to $165,000 plus superannuation.
In the event that Mr Jacob Doutch’s employment is terminated after one year of service, he will be entitled to
receive an additional week’s notice and any annual leave and long service leave entitlements will be paid.
Consultancy Agreement
The company has entered into a consultancy agreement with Aneles Consulting Pty Ltd, a company in which
James Passaris has an interest to provide business services at the rate of $2,500 per week plus GST.
Following the Company’s successful IPO this was increased to $4,820 per week.
Either party may terminate the Agreement at any time by providing the other Party with a written notice of
termination equal to the Notice period and in the case of the principal paying the Contractor an amount equal
to the Fee the contractor would otherwise earn during the Notice period. The Notice period is 90 days.
Future developments
The Company will continue to explore its exploration areas and look to establish its exploration interest in
prospective fields.
Environmental regulation
The Company is aware of its environmental obligations and acts to ensure its environmental commitments
are met. The directors are not aware of any significant breaches during the year.
Meetings of directors
The number of Directors’ meetings (including committees) held during the financial period each Director held
office during the financial year, and the number of meetings attended by each director are:
- 17 -
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
Director
Board of Directors
Meetings.
Attended
Number
Eligible to Attend
Justin Doutch
Paul Lambrecht
Stan Procak
Kevin Robertson
Dennis Parsons
5
5
1
3
3
5
5
2
3
3
Options Reserve
There is no option reserve as at 30 June 2013.
Non-Audit Services
Non-audit services of $15,250 (2012 - $18,575) have been provided by the auditor or a related practice of
the auditor during the year for the preparation of an Investigating Accountants Report for the Initial Public
Offering (“IPO”). The directors believe that the non-audit services provided by Stantons International do not
impair the objectivity or independence of the auditor.
Auditor’s independence declaration
The auditor’s independence declaration for the year ended 30 June 2013 has been received, forms part of
the Director’s Report, and can be found on page 21.
Indemnification of Officers
In accordance with the Company’s constitution, except as may be prohibited by the Corporations Act 2001,
every Officer or agent of the Company shall be indemnified out of the property of the Company against any
liability incurred by him in his capacity as Officer or agent of the Company or any related corporation in
respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings,
whether civil or criminal.
During the financial year, the Company has paid insurance premiums in respect of directors’ and officers’
liability insurance. The insurance premiums relate to:
•
Costs and expenses incurred by the relevant officers in defending legal proceedings, whether civil or
criminal and whatever their outcome; and
Other liabilities that may arise from their position, with the exception of conduct involving wilful
breach of duty or improper use of information to gain a personal advantage.
•
During the financial year, the Company paid premiums for Directors and Officers liability insurance of
$12,672 (2012: $13,541).
Options
Options to subscribe for unused fully paid ordinary shares in the Company at the date of this report held by
directors and other Key Management Personnel.
Status
Directors
Justin Doutch
Paul Lambrecht
Stan Procak
Senior Executives
Jacob Doutch
James Passaris
Number
Exercise Price
Expiry Date
500,000 Options
600,001 Options
825,001 Options
Nil Options
20,000 Options
1,945,002
Options
$0.20
$0.20
$0.20
$0.20
$0.20
- 18 -
On or before 30 June 2015
On or before 30 June 2015
On or before 30 June 2015
On or before 30 June 2015
On or before 30 June 2015
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
Options to subscribe for unused fully paid ordinary shares in the Company at the date of this report held by
other option holders:
Status
Number
Exercise Price
Expiry Date
Other Option holders
42,445,298 Options
$0.20
On or before 30 June 2015
No person entitled to exercise any of these options had or has any right by virtue of the option to participate
in any share issue of any other body corporate.
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 those proceedings. The Company has not a party to any such proceedings
during the year.
Signed in accordance with a resolution of the Board of Directors.
Justin Doutch
Executive Director
Dated this 2nd day of October 2013
- 19 -
CLASSIC MINERALS LIMITED
It is the opinion of the directors of Classic Minerals Limited (the “Company”);
1.
the financial statements and notes are in accordance with the Corporations Act 2001 and:
a.
b.
comply with Australian Accounting Standards and the Corporations Regulations 2001; and
give a true and fair view of the financial position of the Company as at 30 June 2013 and of
the performance as represented by the results of its operations and its cashflows for the
year ended on that date;
2.
in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay
its debts as and when they become due and payable.
3. the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in note 2.
This declaration is made in accordance with a resolution of the Board of Directors.
Justin Doutch
Executive Director
Dated this 2nd day of October 2013
- 20 -
CLASSIC MINERALS LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2013
30 June 2013
$
30 June 2012
$
45,659
334,000
(1,216,836)
(77,890)
(9,569)
(18,527)
(1,116,475)
(258,545)
(176,643)
(64,274)
(275,000)
(372,816)
(3,206,916)
-
7,882
-
(473,510)
(73,878)
(78,364)
(9,352)
(176,726)
(59,980)
(8,844)
(39,579)
-
(162,923)
(1,075,274)
-
(3,206,916)
(1,075,274)
-
-
66,667
-
66,667
(3,140,249)
(3,206,916)
-
(3,206,916)
(3,140,249)
-
(3,140,249)
(1.821)
(1.821)
-
-
-
(1,075,274)
(1,075,274)
-
(1,075,274)
(1,075,274)
-
(1,075,274)
(1.103)
(1.103)
Revenue from continuing operations
Profit on the sale of mining tenements
Employee benefits and consultants expense
Legal expenses & professional fees
Commissions paid
Depreciation and amortisation expense
Exploration expense
Share-based payments
Travel expenses
Occupancy expenses
Provision for diminution in value of shares
received as consideration
Administration expenses
Loss before income tax expense
Income tax benefit
Note
3
3
10
4
5
Loss for the year
Other Comprehensive Income
-
Items that will not be reclassified to
profit or loss
Items
reclassified to profit or loss
that may subsequently be
-
Income tax on other comprehensive Income
Total Other Comprehensive Income
Total Comprehensive loss for year
Loss for the year
Attributable to members of Classic Minerals
Limited
Attributable to non-controlling interest
Total Comprehensive loss for year
Attributable to members of Classic Minerals
Limited
Attributable to non-controlling interest
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
6
6
The accompanying notes form part of this financial report.
- 24 -
CLASSIC MINERALS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2013
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial Assets
Available for sale financial assets
Other
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Other assets
Available for sale financial assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee provision
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS/ (LIABILITIES)
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY(DEFICIENCY)
Note
7
8
9
12
10
11
12
13
14
15
15
16
17
18
The accompanying notes form part of this financial report.
30 June 2013
$
30 June 2012
$
1,284,830
588,702
300,000
266,667
75,000
2,515,199
213,274
215,642
-
428,916
2,944,115
663,259
29,753
13,368
706,380
62,898
62,898
769,278
2,174,837
8,936,046
66,667
(6,827,877)
2,174,837
93,937
-
-
-
93,937
32,129
58,500
-
90,629
184,566
443,175
2,500
892,878
1,338,553
-
-
1,338,553
(1,153,987)
2,466,974
-
(3,620,961)
(1,153,987)
- 25 -
CLASSIC MINERALS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2013
Balance at 30 June 2011
Total Comprehensive Loss for the year
Loss for the year
Other Comprehensive Income
Total Comprehensive Loss
Transactions with owners recorded directly
in equity
Shares issued during the year
Issued
Capital
$
1,849,693
Accumulated
Losses
$
(2,545,687)
Total
Equity
$
(695,994)
-
-
-
(1,075,274)
-
(1,075,274)
(1,075,274)
-
(1,075,274)
617,281
-
617,281
Balance at 30 June 2012
2,466,974
(3,620,961)
(1,153,987)
Balance at 30 June 2012
Total Comprehensive Loss for the year
Loss for the year
Other Comprehensive Income
Total Comprehensive Income/(Loss)
Transactions with owners recorded directly
in equity
Shares issued (net of expenses) during
the year
Issued
Capital
$
2,466,974
-
-
-
Financial Asset
Reserve
$
-
-
66,667
66,667
Accumulated
Losses
$
(3,620,961)
(3,206,916)
-
(3,206,916)
Total
Equity
$
(1,153,987)
(3,206,916)
66,667
(3,140,249)
6,469,072
-
-
6,469,072
Balance at 30 June 2013
8,936,046
66,667
(6,827,877)
2,174,836
The accompanying notes form part of this financial report.
- 26 -
CLASSIC MINERALS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2013
Note
21(a)
30 June 2013
$
30 June 2012
$
(3,210,989)
45,659
(3,165,330)
(774,638)
7,882
(766,756)
(123,406)
(200,000)
(248,681)
(14,339)
(300,000)
(75,000)
-
(961,426)
5,850,777
(533,128)
-
-
5,317,649
1,190,893
93,937
1,284,830
-
-
-
-
-
(31,000)
(31,000)
557,301
(46,133)
300,000
(6,581)
804,587
6,831
87,106
93,937
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Net cash (outflows) from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Fixed Assets
Purchase of shares in listed company Fairstar Resources Ltd
Loans to employees/consultants
Loans to related entities
Refundable Deposit subject to due diligence
Payments for other assets
Payment of options agreement
Net cash (outflows) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Share Capital received (net)
Loans received/(repaid)
Proceeds of a Short-term loan
Repayment of interest bearing borrowings
Net cash inflows from financing activities
Net increase in cash held
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
21(b)
The accompanying notes form part of this financial report.
- 27 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
1. Corporate Information
The financial report of Classic Minerals Limited (the Company) for the year ended 30 June 2013 was
authorised for issue in accordance with a resolution of the directors on 2nd October 2013.
2. Summary of Significant Accounting Policies
Basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with
Interpretations), other
Australian Accounting Standards (including
authoritative pronouncements of the Australian Accounting Standards Board and the Corporation Act
2001.
the Australian Accounting
Australian Accounting Standards set out accounting policies that the AASB has concluded would
result in a financial report containing relevant and reliable information about transactions, events and
conditions. Compliance with Australian Accounting Standards ensures that the financial statements
and notes also comply with International Financial Reporting Standards. Material accounting policies
adopted in the preparation of this financial report are presented below and have been consistently
applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets, financial
assets and financial liabilities.
(a) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash in banks and investments in money
market instruments, net of outstanding bank overdrafts.
(b) Employee benefits
Provision is made for benefits accruing to employees in respect of wages and salaries, annual
leave, and sick leave when it is probable that settlement will be required and they are capable of
being measured reliably.
Provisions made in respect of employee benefits expected to be settled within 12 months, are
measured at their nominal values using the remuneration rate expected to apply at the time of
settlement.
Provisions made in respect of employee benefits which are not expected to be settled within 12
months are measured as the present value of the estimated future cash outflows to be made by
the entity in respect of services provided by employees up to reporting date.
(c) Financial assets
Investments are recognised and derecognised on trade date where purchase or sale of an
investment is under a contract whose terms require delivery of the investment within the
timeframe established by the market concerned, and are initially measured at fair value, net of
transaction costs.
Subsequent to initial recognition, investments in subsidiaries are measured at cost.
Other financial assets are classified into the following specified categories: financial assets ‘at fair
value through profit or loss’, ‘available-for-sale’ financial assets, and ‘loans and receivables’. The
classification depends on the nature and purpose of the financial assets and is determined at the
time of initial recognition.
- 28 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2.
Summary of Significant Accounting Policies (continued)
Available-for-sale financial assets
Shares and options held by the company are classified as being available-for-sale and are stated
at fair value less impairment. Gains and losses arising from changes in fair value are recognised
directly in the available-for-sale revaluation reserve, until the investment is disposed of or is
determined to be impaired, at which time the cumulative gain or loss previously recognised in the
available-for-sale revaluation reserve is included in the Statement of Profit or Loss and Other
Comprehensive Income for the year.
Financial assets at fair value through the Statement of Profit or Loss and Other
Comprehensive Income
The Company classifies certain shares as financial assets at fair value through profit or loss.
Financial assets held for trading purposes are classified as current assets and are stated at fair
value, with any resultant gain or loss recognised in the Statement of Profit or Loss and Other
Comprehensive Income for the year.
Loans and receivables
Trade receivables, loans, and other receivables are recorded at amortised cost less impairment.
(d) Financial instruments issued by the company
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the
substance of the contractual arrangement.
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity instruments are recognised directly in equity as a
reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs
are the costs that are incurred directly in connection with the issue of those equity instruments
and which would not have been incurred had those instruments not been issued.
- 29 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2. Summary of Significant Accounting Policies (continued)
(e) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax
(GST), except:
i. where the amount of GST incurred is not recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST;
ii.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash
flows arising from investing and financing activities which is recoverable from, or payable to, the
taxation authority is classified as operating cash flows.
(f) Impairment of assets
At each reporting date, the Company reviews the carrying amounts of its tangible and intangible
assets to determine whether there is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where the asset does not generate cash flows
that are independent from other assets, the entity estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are
tested for impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised in the Statement of Profit or Loss and Other
Comprehensive Income immediately, unless the relevant asset is carried at fair value, in which
case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-
generating unit) is increased to the revised estimate of its recoverable amount, but only to the
extent that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset (cash-generating unit) in
prior years. A reversal of an impairment loss is recognised in the Statement of Profit or Loss and
Other Comprehensive Income immediately, unless the relevant asset is carried at fair value, in
which case the reversal of the impairment loss is treated as a revaluation increase.
(g) Income tax
Current tax
Current tax is calculated by reference to the amount of income tax payable or recoverable in
respect of the taxable profit or tax loss for the year. It is calculated using tax rates and tax laws that
have been enacted or substantively enacted by reporting date. Current tax for current and prior
years is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the statement of financial position liability method in respect of
temporary differences arising from differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax base of those items.
- 30 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2. Summary of Significant Accounting Policies (continued)
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred
tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be
available against which deductible temporary differences or unused tax losses and tax offsets can
be utilised. However, deferred tax assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial recognition of assets and liabilities (other than
as a result of a business combination) which affects neither taxable income nor accounting profit.
Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences
arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in
subsidiaries, branches, associates and joint ventures except where the entity is able to control the
reversal of the temporary differences and it is probable that the temporary differences will not
reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with these investments and interests are only recognised to the extent that it
is probable that there will be sufficient taxable profits against which to utilise the benefits of
thetemporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
year(s) when the asset and liability giving rise to them are realised or settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted by reporting date. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would follow
from the manner in which the entity expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same
taxation authority and the entity intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the year
Current and deferred tax is recognised as an expense or income in the statement of
comprehensive income, except when it relates to items credited or debited directly to equity, in
which case the deferred tax is also recognised directly in equity, or where it arises from the initial
accounting for a business combination, in which case it is taken into account in the determination
of goodwill or excess.
(h) Operating cycle
The operating cycle of the entity coincides with the annual reporting cycle.
(i) Payables
Trade payables and other accounts payable are recognised when the entity becomes obliged to
make future payments resulting from the purchase of goods and services.
(j) Presentation currency
The entity operates entirely within Australia and the presentation currency is Australian dollars.
(k) Plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable,
any accumulated depreciation. The carrying amount of plant and equipment is reviewed annually
by directors to ensure it is not in excess of the recoverable amount from these assets.
- 31 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2. Summary of Significant Accounting Policies (continued)
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over their
useful lives to the Company commencing from the time the asset is held ready for use. The
depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Caravan
Motor vehicles and Quad Bikes
Office equipment
Depreciation Rate
18.75%
18.75% - 37.5%
7.5% - 100%
(l) Exploration and Evaluation Expenditure
Identifiable exploration assets acquired are recognised as assets at their cost of acquisition.
Subsequent exploration and evaluation costs related to an area of interest are written off as inc
except they may be carried forward as an item in the statement of financial position where the rig
tenure of an area are current and one of the following conditions is met:
•
•
the costs are expected to be recouped through successful development and exploitation
area of interest, or alternatively, by its sale; and
exploration and/or evaluation activities in the area of interest have not at the reporting date rea
a stage which permits a reasonable assessment of the existence or otherwise of econom
recoverable reserves, and active and significant operations in, or in relation to, the area of in
are continuing.
Acquired exploration assets are not written down below acquisition cost until such time a
acquisition cost is not expected to be recovered through use or sale.
(m) Provisions
Provisions are recognised when the entity has a present obligation, the future sacrifice of
economic benefits is probable, and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at reporting date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the cashflows estimated to settle
the present obligation, its carrying amount is the present value of those cashflows.
When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, the receivable is recognised as an asset if it is virtually certain that
recovery will be received and the amount of the receivable can be measured reliably.
(n) Revenue recognition
Interest revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective
yield on the financial asset.
(o) Equity based compensation
The Company expenses equity based compensation such as share and option issues after
ascribing a fair value to the shares and/or options issued. If options vest at date of grant, the
expense is taken up at date of grant and a corresponding Option Reserve is credited.
(p) Issued capital
Issued capital is recognised at the fair value of the consideration received by the Company. Any
transaction costs on the issue of shares are recognised directly in equity as a reduction of the
share proceeds received.
- 32 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2. Summary of Significant Accounting Policies (continued)
(q) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of
the asset, but not the legal ownership that it transferred to the company, are classified as finance
leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts
equal to the fair value of the leased property or the present value of the minimum lease payments,
including any guaranteed residual values. Lease payments are allocated between the reduction
of the lease liability and the lease interest expense for the year.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful
lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with
the lessor, are charged as expenses in the years in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-
line basis over the life of the lease term.
(r) Earnings per share
Basic earnings per share is calculated as a net profit attributable to members, adjusted to exclude
any costs of servicing equity (other than dividends) and preference share dividends, divided by
the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members, adjusted for:
• costs of servicing equity (other than dividends) and preference share dividends;
• the after tax effect of dividends and interest associated with dilutive potential ordinary shares
that have been recognised as expenses; and
• other non-discretionary changes in revenues or expenses during the year that would result
from the dilution of potential ordinary shares; divided by the weighted average number of ordinary
shares and dilutive potential ordinary shares, adjusted for any bonus element.
(s) Going Concern
At 30 June 2013, the Company had net assets of $2,174,837, and had incurred a net loss of
$3,206,916 for the year then ended, with a cash and cash equivalents balance of $1,284,830 and
a net working capital totaling $1,808,819.
As at the date of this Report the Company had cash reserves of $629,257. These cash reserves
along with readily realisable equity investments are considered to be sufficient to meet forecast
outgoings for a period of at least 12 months from the date of this report.
The Directors believe it is appropriate to prepare these accounts on a going concern basis.
The financial report has therefore been prepared on a going concern basis, which assumes
continuity of normal business activities and the realisation of assets and the settlement of
liabilities in the ordinary course of business.
Should the Company be unable to continue as a going concern, it may be required to realise their
assets and extinguish their liabilities other than in the ordinary course of business, and at amounts
that differ from those stated in the financial statements.
- 33 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2. Summary of Significant Accounting Policies (continued)
These financial statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts or classification of liabilities and
appropriate disclosures that may be necessary should the entity and the parent be unable to
continue as a going concern.
The Directors acknowledge that the Company will need to adopt further strategies to ensure that
funding is maintained. This includes, but is not limited to further costs reduction strategies, further
debt/capital funding seeking, and seeking other prospective projects.
(t) Critical accounting judgments, estimates and assumptions
The preparation of financial statements in conformity with AIFRS required the use of certain
critical estimates. It also requires management to exercise its judgment in the process of
applying the Company’s accounting policies. The areas involving a higher degree of judgment or
complexity, or areas where assumptions and estimates are significant to the financial statements
are:
Exploration and evaluation costs
Exploration and evaluation costs are written off in the year they are incurred apart from
acquisition costs which 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 statement of financial
position date reached a stage that permits reasonable assessment of the existence of
economically recoverable reserves.
(u) Adoption of New and Revised Accounting Standard
New Accounting Standards for Application in Future Periods
The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory
application dates for future reporting periods, some of which are relevant to the Group.
At the date of the authorization of the financial statements, the standards and Interpretations listed below were in issue
but not yet effective.
Standard/Interpretation
AASB 9 ‘Financial Instruments’, AASB 2010-7 ‘Amendments to Australian
Accounting Standards arising from AASB 9 (December 2010)’, and AASB
to Australian Accounting Standards-Mandatory
2012-6
Effective date of AASB 9 and Transition Disclosures’
‘Amendments
AASB 10 ‘Consolidated Financial Statements’
AASB 11 ‘Joint Arrangements’
AASB 12 ‘Disclosure of Interests in Other Entities’
AASB 13 ‘Fair Value Measurement’ and AASB 2011-8 ‘Amendments to
Australian Accounting Standards arising from AASB 13’
Effective for
annual reporting
periods beginning
on or after
Expected to be
initially applied
in the financial
year ending
1 January 2015
30 June 2016
1 January 2013
30 June 2014
1 January 2013
30 June 2014
1 January 2013
30 June 2014
1 January 2013
30 June 2014
AASB 119 ‘Employee Benefits’ (2011) and AASB 2011-10 ‘Amendments to
Australian Accounting Standards arising from AASB 19 (2011)’
1 January 2013
30 June 2014
‘Separate Financial Statements
AASB 127
‘Amendments
Consolidation and Joint Arrangements standards’
to Australian Accounting Standards arising
(2011), AASB 2011-7
the
from
1 January 2013
30 June 2014
AASB 128 ‘Investments in Associates and Joint Ventures’ (2011), AASB
2011-7 ‘Amendments to Australian Accounting Standards arising from the
Consolidation and Joint Arrangements standards’
1 January 2013
30 June 2014
- 34 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2. Summary of Significant Accounting Policies (continued)
AASB 2011-4 ‘Amendments to Australian Accounting Standards to Remove
Individual Key Management Personnel Disclosure Requirements’
1 July 2013
30 June 2014
AASB 2011-7 ‘Amendments to Australian Accounting Standards arising from
the Consolidation and Joint Arrangements standards’
1 January 2013
30 June 2014
AASB 2012-2
to Australian Accounting Standards-
Disclosures-Offsetting Financial Assets and Liabilities’ (Amendments to
AASB 7)
‘Amendments
AASB 2012-3
to Australian Accounting Standards-
Disclosures-Offsetting Financial Assets and Liabilities’ (Amendments to
AASB 132)
‘Amendments
1 January 2013
30 June 2014
1 January 2014
30 June 2015
AASB 2012-5 ‘Amendments to Australian Accounting Standards arising from
Annual Improvements cycle’
1 January 2013
30 June 2014
AASB 2012-6 ‘Amendments to Australian Accounting Standards-Mandatory
Effective date of AASB 9 and Transition Disclosures’
1 January 2013
30 June 2014
Interpretation 20 ‘Stripping Costs in the Production Phase of a Surface Mine’
and AASB 2011-12 ‘Amendments to Australian Accounting Standards
arising from Interpretation 20’.
1 January 2013
30 June 2014
The Group has decided not to early adopt any of the new and amended pronouncements. Of the above new and amended
Standards and Interpretations the Group's assessment of those new and amended pronouncements that are relevant to the Group
but applicable in future reporting periods is set out below:
−
AASB 9: Financial Instruments (December 2010) and AASB 2010-7 and AASB 2012-6: Amendments to Australian Accounting
Standards arising from AASB 9 (December 2010). These Standards are applicable retrospectively and include revised
requirements for the classification and measurement of financial instruments, as well as recognition and derecognition
requirements for financial instruments.
The key changes made to accounting requirements include:
−
−
−
−
−
−
−
simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost;
allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments
that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return
on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument
requiring financial assets to be reclassified where there is a change in an entity's business model as they are initially
classified based on: (a) the objective of the entity's business model for managing the financial assets; and (b) the
characteristics of the contractual cash flows; and
requiring an entity that chooses to measure a financial liability at fair value to present the portion of the change in its fair
value due to changes in the entity's own credit risk in other comprehensive income, except when that would create an
accounting mismatch. If such a mismatch would be created or enlarged, the entity is required to present all changes in
fair value (including the effects of changes in the credit risk of the liability) in profit or loss.
The Group has not yet been able to reasonably estimate the impact of these pronouncements on its financial statements.
−
AASB 10: Consolidated Financial Statements, AASB 11: Joint Arrangements, AASB 12: Disclosure of Interests in Other
Entities, AASB 127: Separate Financial Statements (August 2011), AASB 128: Investments in Associates and Joint Ventures
(August 2011) and AASB 2011-7: Amendments to Australian Accounting Standards arising from the Consolidation and Joint
Arrangements Standards (applicable for annual reporting periods commencing on or after 1 January 2013).
- 35 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2. Summary of Significant Accounting Policies (continued)
AASB 10 replaces parts of AASB 127: Consolidated and Separate Financial Statements (March 2008, as amended) and
Interpretation 112: Consolidation - Special Purpose Entities. AASB 10 provides a revised definition of control and additional
application guidance so that a single control model will apply to all investees. The Group has not yet been able to reasonably
estimate the impact of this Standard on its financial statements.
AASB 11 replaces AASB 131: Interests in Joint Ventures (July 2004, as amended). AASB 11 requires joint arrangements to be
classified as either "joint operations" (whereby the parties that have joint control of the arrangement have rights to the assets
and obligations for the liabilities) or 'joint ventures" (where the parties that have joint control of the arrangement have rights to
the net assets of the arrangement). Joint ventures are required to adopt the equity method of accounting (proportionate
consolidation is no longer allowed).
AASB 12 contains the disclosure requirements applicable to entities that hold an interest in a subsidiary, joint venture, joint
operation or associate. AASB 12 also introduces the concept of a "structured entity", replacing the 'special purpose entity"
concept currently used in Interpretation 112, and requires specific disclosures in respect of any investments in unconsolidated
structured entities. This Standard will only affect disclosures and is not expected to significantly impact the Group.
To facilitate the application of AASBs 10, 11 and 12, revised versions of AASB 127 and AASB 128 have also been issued.
These Standards are not expected to significantly impact the Group.
−
AASB 13: Fair Value Measurement and AASB 2011-8: Amendments to Australian Accounting Standards arising from AASB 13
(applicable for annual reporting periods commencing on or after 1 January 2013).
AASB 13 defines fair value, sets out in a single Standard a framework for measuring fair value, and requires disclosures about
fair value measurements.
AASB 13 requires:
−
−
inputs to all fair value measurements to be categorised in accordance with a fair value hierarchy; and
enhanced disclosures regarding all assets and liabilities (including, but not limited to, financial assets and financial
liabilities) measured at fair value.
These Standards are not expected to significantly impact the Group.
−
AASB 2011-4: Amendments to Australian Accounting Standards to remove the individual ley management Personnel
Disclosure Requirements ((applicable for annual reporting periods commencing on or after 1 January 2013).
This standard makes amendments to AASB 124; Related Party Disclosures to remove the individual key management
personnel disclosure requirements (including paras Aus 29.1 to Aus 29.9.3). These amendments serve a number of purposes,
including furthering the trans-Tasman conversion, removing differences from IFRSs, and avoiding any potential confusion with
the equivalent Corporations Act 2001 disclosure requirements.
This standard is not expected to significantly impact the Group’s financial report as a whole.
AASB 119 (September 2011) includes changes to the accounting for termination benefits.
The Group has not yet been able to reasonably estimate the impact of these changes to AASB 119.
AASB 2012-2 ‘Amendments to Australian Accounting Standards-Disclosures-Offsetting Financial Assets and Liabilities’
(Amendments to AASB 7); AASB 2012-3 ‘Amendments to Australian Accounting Standards-Disclosures-Offsetting Financial
Assets and Liabilities’ (Amendments to AASB 132); AASB 2012-5 ‘Amendments to Australian Accounting Standards arising
from Annual Improvements cycle’; AASB 2012-6 ‘Amendments to Australian Accounting Standards-Mandatory Effective date
of AASB 9 and Transition Disclosures’; and Interpretation 20 ‘Stripping Costs in the Production Phase of a Surface Mine’ and
AASB 2011-12 ‘Amendments to Australian Accounting Standards arising from Interpretation 20’.
These standards are not expected to impact the Group.
- 36 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 3: REVENUE FROM CONTINUING OPERATIONS
Profit on sale of mining tenements
Interest revenue
NOTE 4: LOSS BEFORE INCOME TAX
The loss before income tax has been arrived at after
charging the following expenses:
Telephone expenses
Insurance expense
Other administration expenses
NOTE 5: INCOME TAX
(a) Recognised in the Statement of
Comprehensive Income
Current tax expense
Current year
Attributable to:
Continuing operations
Discontinuing operations
(b) Numerical reconciliation between tax expense and pre tax net profit
Loss before tax
Income tax benefit calculated at 30%
Tax effect of:
- Non-deductible expenses
- Tax effect of current year revenue losses for which no
deferred tax asset has been recognised
Income tax expense
Income tax expense on pre-tax net profit
(c) Unrecognised deferred tax balances
The following deferred tax assets (at 30%) have not been
brought to account:
Unrecognised deferred tax asset – tax losses
Unrecognised deferred tax asset- unrealised capital losses
Unrecognised deferred tax asset- other timing differences
Net deferred tax assets
30 June 2013
$
334,000
45,659
379,659
30 June 2012
$
-
7,882
7,882
30 June 2013
$
30 June 2012
$
12,290
25,765
334,761
372,816
5,188
24,307
133,428
162,923
30 June 2013
$
30 June 2012
$
-
-
-
-
-
-
-
-
(3,206,916)
(1,075,724)
(962,075)
(322,717)
80,085
881,990
-
-
-
322,717
-
-
1,913,652
82,500
332,406
2,328,558
1,073,557
-
-
1,073,557
The net deferred tax assets not brought into account will only be of a benefit to the Company if future assessable income is derived
of a nature and amount sufficient to enable the benefits to be realised, the conditions for deductibility imposed by the tax legislation
continue to be complied with and the Company are able to meet the continuity of ownership and/or continuity of business tests.
- 37 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
30 June 2013
$
30 June 2012
$
(3,206,916)
(3,206,916)
(1,075,274)
(1,075,274)
NOTE 6: EARNINGS PER SHARE
Loss for the year
Loss attributable to ordinary shareholders
a.
b.
Weighted average number of ordinary shares for the purpose of basic earnings
per share
Weighted average number of ordinary shares at 30 June
176,120,830
176,120,830
97,440,702
97,440,702
Potential ordinary shares are not considered dilutive as their conversion does not show an inferior view of the earnings performance
of the Company. Accordingly diluted earnings per share are the same as earnings per share.
Earnings per share – cents
Dilutive earnings per share – cents
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at bank
(1.821)
(1.821)
(1.103)
(1.103)
30 June 2013
$
30 June 2012
$
1,284,830
93,937
- 38 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 8: TRADE AND OTHER RECEIVABLES
CURRENT
Unpaid Share Capital
Receivable from Ironstone Resources Limited (i)
Loan to John Doutch(ii)
Loan to James Passaris(iii)
Receivable from Jett Holdings
Other receivables
30 June 2013
$
30 June 2012
$
2,020
200,000
14,339
248,681
27,519
96,143
588,702
-
-
-
-
-
-
-
As at 30 June 2013 trade and other receivables do not contain impaired assets and are not past due.
(i) Pursuant to a Sale and Purchase Agreement dated 16 January 2013, the Company sold the following tenements –
EL38/2084, E25/421, E25/435 and E28/2138 to a public unlisted company, Ironstone Resources Limited for 2.75 million
shares and $220,000 (cash) (GST inclusive) payable 90 days after the signing of the Agreement. A Deed of Variation was
signed on 27 June 2013 and extended the date for the settlement of the $220,000 (cash) until 27th September 2013.
On 26th September 2013, the Company received payment for the abovementioned tenements.
(ii) The loan advanced to John Doutch will be repaid in two instalments over a two-month period. This loan is unsecured and
interest free.
(iii) The loan advanced to James Passaris (a consultant to the Company) will be repaid in four instalments over a three-month
period with interest charged at 13.00% per annum payable monthly in arrears. The funds advanced are unsecured.
NOTE 9: FINANCIAL ASSETS
CURRENT
Refundable Deposit with Nex Metals Exploration Limited
30 June 2013
$
30 June 2012
$
300,000
300,000
-
-
On 27 May 2013, the Company entered into an agreement with Nex Metals Exploration Limited (“Nex Metals”) to place a refundable
deposit of $300,000 with Nex Metals pending due diligence on up to 16 tenements. As at the date of this report, the Company
continues to carry out its due diligence on these tenements and no decision has been made as to whether the Company will proceed
with the purchase to these tenements. The funds deposited are unsecured.
NOTE 10: PLANT AND EQUIPMENT
Cost
Motor vehicles and Quad Bikes
Opening balance
Acquisitions
Disposals
Closing balance
Office equipment
Opening balance
Acquisitions
Disposals
Closing balance
Fixtures & Fittings
Opening balance
Acquisitions
Disposals
Closing balance
- 39 -
30 June 2013
$
30 June 2012
$
83,350
69,091
-
152,441
38,642
12,843
-
51,485
2,452
-
-
2,452
83,350
-
-
83,350
38,642
-
-
38,642
2,452
-
-
2,452
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
30 June 2013
$
30 June 2012
$
Plant & Equipment
Opening balance
Acquisitions
Disposals
Closing balance
Caravan
Opening balance
Acquisitions
Disposals
Closing balance
Motor Vehicle under Hire Purchase
Opening balance
Acquisitions
Disposals
Closing balance
Total Cost
Accumulated Depreciation
Motor vehicles and Quad Bikes
Opening balance
Depreciation charge for year
Impairment losses
Disposals
Closing balance
Office equipment
Opening balance
Depreciation charge for year
Impairment losses
Disposals
Closing balance
Fixtures & Fittings
Opening balance
Depreciation charge for year
Impairment losses
Disposals
Closing balance
Plant & Equipment
Opening balance
Depreciation charge for year
Impairment losses
Disposals
Closing balance
Caravan
Opening balance
Depreciation charge for year
Impairment losses
- 40 -
8,863
-
-
8,863
-
40,025
-
40,025
-
77,500
-
77,500
332,766
57,999
9,156
-
-
67,155
37,793
1,297
-
-
39,090
1,073
345
-
-
1,418
4,313
2,007
-
-
6,320
-
1,876
-
8,863
-
-
8,863
-
-
-
-
-
-
-
-
133,307
52,157
5,842
-
-
57,999
36,840
953
-
-
37,793
613
460
-
-
1,073
2,216
2,097
-
-
4,313
-
-
-
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Disposals
Closing balance
Motor Vehicle under Hire Purchase
Opening balance
Depreciation charge for year
Impairment losses
Disposals
Closing balance
Total Accumulated Depreciation
Carrying Amount
Motor vehicles and Quad Bikes
At 1 July
At 30 June
Office equipment
At 1 July
At 30 June
Fixtures & Fittings
At 1 July
At 30 June
Plant & Equipment
At 1 July
At 30 June
Caravan
At 1 July
At 30 June
Motor Vehicle under Hire Purchase
At 1 July
At 30 June
Total Carrying Amount
Note: The assets recoverable amounts are based on fair value less costs to sell.
NOTE 11: OTHER ASSETS
Non - Current
Prepaid Deposit with Guide Resources Pty Ltd (i)
Option agreements (ii)
Bond on tenements
-
1,876
-
3,633
-
-
3,633
119,492
25,351
85,286
849
12,395
-
-
-
-
-
-
-
101,178
31,193
25,351
1,802
849
30 June 2013
$
30 June 2012
$
1,379
1,034
4,550
2,543
-
38,149
-
73,867
213,274
1,839
1,379
6,647
4,550
-
-
-
-
32,129
30 June 2013
$
30 June 2012
$
200,000
12,000
3,642
215,642
-
53,000
5,500
58,500
(i)
Under an agreement with Guide Resources Pty Ltd (“Guide”) (Refer to Note 25), Classic has been granted the rights to
market the iron ore rights owned by Guide over exploration license E28/2238. Pursuant to this agreement the Company
deposited a sign-on deposit of $225,000 with Guide of which $25,000 was not refundable and has been expensed. The
remaining $200,000 is refundable to Classic in the event that the Company fails to find a Party willing to purchase iron ore
from Guide within six months of the signing of the Agreement.
(ii) The Company has been granted options to acquire interests in mineral prospects.
- 41 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 12: AVAILABLE FOR SALE FINANCIAL ASSETS
Current
Investment in shares in a Listed Company(at market value)(i)
Non Current
Shares received in consideration for the sale of mining tenements (at fair value) (ii)
Less: Provision for diminution in values of shares
30 June 2013
$
30 June 2012
$
266,667
275,000
(275,000)
-
-
-
-
-
AVAILABLE FOR SALE FINANCIAL ASSETS (CURRENT)
(i)
As at 30 June 2013, the Company held 33,333,333 shares in Fairstar Resources Limited. At the date of this report the
company held 20,000,000 shares with a market value of $340,000.
AVAILABLE FOR SALE FINANCIAL ASSETS (NON-CURRENT)
(ii) As at 30 June 2013, the Company held 2,750,000 shares in Ironstone Resources Limited, a public unlisted company. A
provision for the diminution in value of these shares has been made.
NOTE 13: TRADE AND OTHER PAYABLES
Trade and other payables (i)
Accruals
(i)
Trade payables are non-interest bearing and are normally
settled on 30-60 day terms. The amount of payables at
balance date exceeding normal trading terms is estimated
at $50,000.
NOTE 14: PROVISION FOR EMPLOYEE BENEFITS
Provision for Annual Leave
NOTE 15: BORROWINGS
Current
Hire purchase contract (i)
Loans from associated parties
Non-Current
Hire purchase contract (i)
(i) The hire purchase contract is secured against a motor vehicle.
- 42 -
30 June 2013
$
30 June 2012
$
419,770
243,489
663,259
243,422
199,753
443,175
30 June 2013
$
30 June 2012
$
29,753
29,753
2,500
2,500
30 June 2013
$
30 June 2012
$
13,368
-
13,368
62,898
62,898
-
892,878
892,878
-
-
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 16: ISSUED CAPITAL
Ordinary shares
At the beginning of the reporting year
Seed Capital issued to promoters at a deemed value (29 August 2011)
Seed Capital issued to settle contract (29 August 2011)
Seed Capital issued to promoters ( February 2012)
Seed Capital issued to promoters (June 2012)
Seed Capital issued at 3 cents (May 2012)
Seed Capital issued at 5 cents May 2012)
Seed Capital issued at 10 cents (19 August 2011, 26 August 2011,
19 September 2011)
At the end of the reporting year
Ordinary shares
At the beginning of the reporting year
Conversion of Performance shares (November 2012)
Shares based payments (refer to Note 26)
Seed Capital issued at 3 cents (1 August 2012 to 31 December 2012 )
Seed Capital issued at 5 cents ( 1 August 2012 to 31 December 2012 )
Seed Capital issued at 10 cents ( 1 August 2012 to 31 December 2012)
Shares cancelled
Capital Raising in Initial Public Offering (“IPO”) (i)
Less: expenses related to capital Raisings
At the end of the reporting year
(i) $2,000 of the IPO funds were unpaid at 30
June 2013.
Cancellation of Performance shares
Note
30 June 2012
$
1,849,693
16
5
50,010
2,250
100,000
395,000
70,000
2,466,974
Note
30 June 2013
$
2,466,974
-
653,145
660,100
1,591,000
932,000
(2,000)
3,625,700
(990,873)
8,936,046
Number of Shares
81,995,135
1,625,000
500,000
3,000,000
15,000
3,333,333
7,900,000
700,000
99,068,468
Number of Shares
99,068,468
112
20,154,800
22,003,333
31,820,000
9,320,000
(40,000)
18,128,500
-
200,455,213
In November 2012 with the consent of all 23 Performance Shareholders, Classic varied the Terms and Conditions of the
Performance Shares effectively bringing forward the date for the achievement of the Milestone events from three years after date the
Company is admitted to the Official List of the ASX to 14 November 2012. As no Milestone event occurred by 14 November 2012
every Performance Share converted into one ordinary share.
NOTE 17: FINANCIAL ASSET RESERVE
Balance at the beginning of the year
Movement
Balance at the end of the financial year
NOTE 18: ACCUMULATED LOSSES
Balance at the beginning of the year
Loss for the year
Accumulated losses at the end of the financial year
30 June 2013
$
30 June 2012
$
-
66,667
66,667
-
-
-
30 June 2013
$
30 June 2012
$
(3,620,961)
(3,206,916)
(6,827,877)
(2,545,687)
(1,075,274)
(3,620,961)
- 43 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 19: EXPENDITURE COMMITMENTS
(a) Exploration Expenditure Commitments
Payable
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
(b) Rental Commitments
Payable
Not later than 1 year
Later than 1 year but not later than 5 years
30 June 2013
$
30 June 2012
$
206,038
304,768
303,600
814,406
206,038
273,451
321,200
800,689
30 June 2013
$
30 June 2012
$
106,546
26,182
132,728
-
-
-
The Company has entered into a contract to lease office premises located at Suite 7, 30 Hasler Road, Osborne Park. The lease
commences from 1 October 2013 for one year. The annual rental is for approximately $67,200 plus variable outgoings of $ 27,029
per annum and GST. In addition, the lease agreement provides for seven car bays at $10,500 per annum. The Company also
entered into an agreement for the lease of a factory/ warehouse located at Rowallan Street, Osborne Park, this lease commenced on
1 July 2013 for an annual fee of $28,000 plus GST. This lease agreement is for a term of one year with an option for a further two
years.
(c) Finance lease commitments – Company as lessee
Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are
as follows:
30 June 2013
$
30 June 2012
$
19,608
73,529
93,137
(16,871)
76,266
13,368
-
62,898
76,266
-
-
-
-
-
-
-
-
Within one year
After one year but not more than five years
Total minimum lease repayments
Less amounts representing finance charges
Present value of minimum lease payments
Included in the financial statements as:
Current interest-bearing liabilities
Non-current interest-bearing liabilities
Total included in interest-bearing liabilities
(d) Capital Expenditure Commitments
There were no capital expenditure commitments at 30 June 2013.
(e) Remuneration Commitments
There were no remuneration commitments at 30 June 2013.
- 44 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 19: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Pursuant to an Option Agreement of 1 May 2009, the Company had the option (“Dohertys Project Option”) to acquire up to a 90%
interest in mining licence ML57/619 from Golden West Resources Limited (“GWR”). The Dohertys Project Option fee was the
payment of $2,000 in cash (paid) and completing a minimum of $200,000 in exploration expenditure in relation to the Dohertys
Project within three years of the Golden West Agreement being signed.
On 31 July 2013, Classic exercised the Dohertys Option by paying GWR the sum of $93,130 (cash) (GST Inclusive) and issuing
570,000 shares. The Company acquired 100% of the tenement (previously a 90%interest) subject of the original Agreement.
The Company has an Agreement for Sourcing Tenements (“AST”) with Guide Resources Pty Ltd (“Guide”) whereby if Guide
introduces tenements to Classic and Classic enters into arrangements to acquire a relevant interest in such tenements (and other
tenements acquired within a 20km radius), Guide Resources is entitled to receive a minimum fee of $10,000 relating to each
tenement. Furthermore, Guide Resources would be entitled to conduct exploration on each relevant tenement for all minerals other
than uranium, gold and silver. If production commences from gold, silver or uranium on a relevant tenement, Guide Resources is
entitled to a royalty of $2.50 per wet tonne.
In August 2013, an unsecured creditor, Mavia Pty Ltd wrote to the Company alleging that it had not been paid for several outstanding
invoices. The Company has sought legal advice on this matter and considers that the liability owed to Mavia as at 30 June 2013 had
been correctly stated at $56,750. This amount has already been recognised in the Company’s financial statements as part of trade
creditors. The Company disputes the claims made against it by Mavia Pty Ltd.
NOTE 20: SEGMENT REPORTING
The Company operates predominantly in the mineral exploration industry in Australia. For management purposes, the Company is
organised into one main operating segment which involves the exploration of minerals in Australia. All of the Company’s activities are
interrelated and discrete financial information is reported to the Board (Chief Operating Decision Maker) as a single segment.
Accordingly, all significant operating decisions are based upon analysis of the Company’s as one segment. The financial results from
this segment are equivalent to the financial statements of the Company’s as a whole.
NOTE 21: STATEMENT OF CASH FLOWS
a.
Reconciliation of the net loss after income tax to net
cash flows from operating activities
Net loss for the year
Non-cash Items
Depreciation and amortisation
Share based payments
Provision for non-recovery of investment
Gain on sale of mineral tenements
Carrying value of mineral tenements sold
Changes in assets and liabilities
(Increase)/decrease in debtors/receivables
(Increase)/decrease in Other Assets
Increase/(decrease) in trade creditors and accruals
Increase/(decrease) in provisions
Cash outflows from operations
30 June 2013
$
30 June 2012
$
(3,206,916)
(1,075,274)
18,527
258,545
275,000
(334,000)
(41,000)
(225,682)
(157,142)
220,084
27,254
(3,165,330)
9,352
59,980
-
-
-
13,473
-
223,213
2,500
(766,756)
During the year, non-cash share based payments amounted to $654,145. For further information refer to Note 26.
b. Reconciliation of cash and equivalents
Cash and equivalents comprise
- cash at bank and in hand
1,284,830
93,937
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates.
Short term deposits are made for varying years of between one day and three months depending on the immediate cash
requirements of the Company, and earn interest at the respective short-term deposit rates.
- 45 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 22: KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Details of key management personnel
(i) Directors
Kevin Robertson
Stanislaw Procak
Justin Doutch
Dennis Parsons
Paul Lambrecht
(ii) Senior Executives
Jacob Doutch
James Passaris
(appointed 1 September 2010 and resigned 2 November 2012)
(appointed 3 September 2010 and resigned 10 February 2012 , appointed 7 November 2012)
(appointed 16 September 2011)
(appointed 6 February 2012 and resigned 9 November 2012)
(appointed 6 February 2012)
(appointed 15 June 2012)
(appointed 2 August 2009)
(b) Compensation of key management personnel by category
Short-term employee benefits
Post employment benefits
Share-based payment
30 June 2013
$
30 June 2012
$
781,632
24,004
60,000
865,636
109,805
5,294
59,980
175,079
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member
of the Company’s key management personnel for the year ended 30 June 2013.
(c) Number of ordinary shares held by key management personnel during the year
Kevin Robertson(i)
Angelo Ikonomou(i)
Gary Lyons (i)
Stanislaw Procak
Justin Doutch
Paul Lambrecht
Jacob Doutch
James Passaris
Balance
1 July 2012
Received as
remuneration
Net Change
Other
Balance
30 June 2013
600,000
1,000,000
1,000,000
1,650,000
2,000,000
1,200,000
-
2,240,000
9,690,000
-
-
-
-
-
-
1,960,000
-
1,960,000
-
-
-
2
4
2
-
10
18
600,000
1,000,000
1,000,000
1,650,002
2,000,004
1,200,002
1,960,000
2,240,010
11,650,018
-46 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Kevin Robertson
Angelo Ikonomou
Gary Lyons
Stanislaw Procak
Justin Doutch
Paul Lambrecht
Dennis Parsons
Jacob Doutch
James Passaris
Balance
1 July 2011
Received as
remuneration
Net Change
Other
Balance
30 June 2012
600,000
1,000,000
1,000,000
1,150,000
-
-
2,240,000
5,990,000
-
-
-
500,000
1,000,000
1,000,000
-
-
2,500,000
-
-
-
-
1,000,000
200,000
-
-
1,200,000
600,000
1,000,000
1,000,000
1,650,000
2,000,000
1,200,000
-
2,240,000
9,690,000
(i) Number of shares held at time of Resignation
d) Number of performance shares held by key management personnel during the year
Cancellation of Performance shares
In November 2012 with the consent of all 23 Performance Shareholders, Classic varied the Terms and Conditions of the
Performance Shares effectively bringing forward the date for the achievement of the Milestone events from three years after date the
Company is admitted to the Official List of the ASX to 14 November 2012. As no Milestone event occurred by 14 November 2012
every Performance Share converted into one ordinary share. All of the Performance Shares issued to Key Management Personnel
have been included in the Issued share capital note above.
Kevin Robertson
Angelo Ikonomou
Gary Lyons
Stanislaw Procak
Justin Doutch
Dennis Parsons
Paul Lambrecht
Balance
1 July 2011
Received as
remuneration
Net Change
Other
Balance
30 June 2012
2
2
2
2
-
-
-
8
-
-
-
-
-
-
-
-
-
-
-
-
4
2
2
8
2
2
2
2
4
2
2
16
(e) Loans to key management personnel or their related parties:
Loan to John Doutch(ii) (refer Note 8)
Loan to James Passaris(iii) (refer Note 8)
Loan to Jett Holdings (refer Note 8)
30 June 2013
$
14,339
248,681
27,519
-
47 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 23: RELATED PARTY TRANSACTIONS
Transactions with Directors, Director Related Entities and other Related Entities are:
•
•
•
•
•
In 2013, an aggregate amount of $385,283 was paid or due and payable to Namija Pty Ltd (“Namija”), a company in
which John Doutch has a beneficial interest. In accordance with an Agreement between the Company and Namija dated
30 January 2012, Namija Pty Ltd has been engaged to provide business strategy, capital raising and indigenous affairs
support and consulting services. In June 2013, Namija Pty Ltd, received a payment of $125,000 plus GST as a success
fee for the introduction of investors to the Company’s Initial Public Offering (‘IPO”); the details of this transaction have
been disclosed in the Company’s Replacement Prospectus dated 1 March 2013 and forms part of the aggregate amount
mentioned above.
In 2013, an aggregate amount of $313,166 was paid or due and payable to Denarda Holdings Pty Ltd (“Denarda”), a
company in which John Doutch has a beneficial interest. Denarda is in the business of providing drilling services to
mining companies and these services were provided to this Company at commercial rates.
In 2013, an aggregate amount of $74,372 was paid or due and payable to Mining Corporate Pty Ltd, (“Mining Corporate”)
in regard to the provision of corporate advisory services, assistance with the Company’s IPO and corporate secretarial
services. Mr. Kent Hunter, the Company Secretary has an interest in Mining Corporate.
In 2013, an aggregate amount of $407,527 was paid or due and payable to Jett Holdings Pty Ltd in relation to
commissions as part of the Company’s IPO.
In 2013, an aggregate amount of $187,000 was paid or due and payable to Guide Resources Pty Ltd, these payments
related to the renewal of options over several mining tenements. Mr. James Passaris is a director of Guide Resources Pty
Ltd. In addition to these payments, the Company acquired the rights to market iron ore to potential purchasers,
consideration for this transaction was a $225,000 refundable deposit paid 21 June 2013, of which $25,000 has been
expensed, and five million shares in this Company.
• On 26th September 2013, after the end of the financial year, the Company received a $220,000 (cash) (GST inclusive)
payment relating to the sale of mining tenements to Ironstone Resources Limited. The details of this transaction have
been disclosed in Notes 8(i) and Note 12(ii).
• As at 30 June 2013, an amount of $4,180 was due to Philip Capital Limited, this amount represented commissions
relating to the raising of capital in the Company’s IPO. Mr. Paul Lambrecht, a director of the Company is an employee of
Philip Capital.
• As at 30 June 2013, an amount of $14,339 was due from John Doutch, Justin Doutch’s father.
•
In 2013, an aggregate amount of $201,336 was paid or due and payable to Justin Doutch and included an amount of
$52,100 was paid to a company related to Justin Doutch.
In the financial year ended 30 June 2013, an aggregate amount of $62,887 was paid, or due and payable to Alouisus Pty
Ltd, a company related to Mr. Paul Lambrecht as Directors’ Fees, for the preceding fifteen month period.
In the financial year ended 30 June 2013, an aggregate amount of $110,265 was paid, or due and payable to Mr. Procak
for consulting services and Directors’ Fees for the fifteen months ended 30 June 2013;
In financial year ended 30 June 2013, an aggregate amount of $100,000 was paid or due and payable to Mr. Kevin
Robertson as Director’s Fees for the 24 months ending November 2012;
In the financial year ended 30 June 2012, Mr Lambrecht received 1,000,000 shares representing a share-based payment
of $29,990.
In the financial year ended 30 June 2012, an aggregate amount of $ 2,000 was paid, or due and payable to Mr. Procak for
consulting services.
In financial year ended 30 June 2012, an aggregate amount of $55,264 was paid, or was due and payable to Mr Justin
Doutch for consulting services. Mr Justin Doutch received a further $29,990 in a share-based payment.
In 2012, an aggregate amount of $ 57,835 was paid, or due and payable to Mr. Ikonomou for consulting service.
•
•
•
•
•
•
•
- 48 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 24: FINANCIAL RISK MANAGEMENT AND POLICIES
The Company’s activities expose it to a variety of financial risks: market risk (interest rate risk), credit risk and liquidity risk. The
Company’s overall risk management program focuses on the unpredictability of the financial markets and seeks to minimise potential
adverse effects on the financial performance of the Company. The Company does not use derivative financial instruments; however
the Company uses different methods to measure different types of risk to which it is exposed.
Risk management is carried out by the Board of Directors with assistance from suitably qualified external advisors. The Board
provides written principles for overall risk management and further policies will evolve commensurate with the evolution and growth
of the Company.
The carrying value of the Company’s and the Company’s financial instruments are as follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other Financial Assets
Financial liabilities
Trade and other payables
Borrowings
30 June 2013
$
30 June 2012
$
1,284,830
588,702
566,667
2,440,199
663,259
76,266
739,525
93,937
-
-
93,937
443,175
892,878
1,336,053
The Company’s principal financial instruments comprise cash and short-term deposits, trade and other receivables, listed shares and
other financial assets. The Company does not have any borrowings, other than a Hire Purchase liability for a motor vehicle and trade
and other payables in the normal course of business.
The main purpose of these financial instruments is to fund the Company’s operations.
It is, and has been throughout the year under review, the Company’s policy that no trading in financial instruments shall be
undertaken. The main risks arising from the Company are cash flow (interest rate risk, liquidity risk and credit risk). The Board
reviews and agrees policies for managing each of these risks and they are summarised below.
(a)
Market risk
Foreign exchange risk
(i)
The Company’s exposure to foreign exchange risk arising from currency exposures is limited.
Cash flow and interest rate risk
(ii)
The Company’s only interest rate risk arises from cash and cash equivalents held. Term deposits and current accounts held with
variable interest rates expose the Company to cash flow interest rate risk. The Company does not consider this to be material and
has therefore not undertaken any further analysis of risk exposure.
(b)
Credit risk
Credit risk is managed by the Board and arises from cash and cash equivalents as well as credit exposure including outstanding
receivables and committed transactions.
All cash balances held at banks are held at internationally recognised institutions.
- 49 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 24: FINANCIAL RISK MANAGEMENT AND POLICIES (continued)
The maximum exposure to credit risk at reporting date is the carrying amount of the financial assets as summarised at the start of
Note 24. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit
ratings (if available) or to historical information about default rates.
Financial assets that are neither past due and not impaired are as follows:-
Cash and cash equivalents
AA S&P rating
Trade and Other receivables
-
Unsecured
Financial Assets
Unsecured (i)
30 June 2013
$
30 June 2012
$
1,284,830
93,937
588,702
566,667
-
-
(i) An amount of $300,000 was deposited into an ASX Listed entity, Nex Metals Ltd. The directors believe that this amount will
be fully recovered and accordingly no provision has been made. It is noted that this company has received a disclaimer of
opinion with respect to going concern.
(c)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash balances and access to equity funding.
The Company’s exposure to the risk of changes in market interest rates relate primarily to cash assets and floating interest rates.
The Company does not have significant interest-bearing assets and is not materially exposed to changes in market interest rates.
The directors monitor the cash-burn rate of the Company on an on-going basis against budget and the maturity profiles of financial
assets and liabilities to manage its liquidity risk.
The Company has subsequent to the reporting date announced and completed an Option Entitlement Issue which has provided
funding to the Company for operations for the next twelve months. In addition, the Company has made a number of strategic
investments which can be realised at short notice.
The financial liabilities the Company had at reporting date were trade payables incurred in the normal course of the business and a
hire purchase liability.
- 50 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 24: FINANCIAL RISK MANAGEMENT AND POLICIES (continued)
The following table sets out the carrying amount, by maturity, of the financial assets and liabilities:
Year ended 30 June 2013
<1 year
1 - 5
Years
Over 5
Years
Financial Assets:
Cash and Cash equivalents
Trade and other Receivables
Financial Asset
Financial Assets
Financial Liabilities:
Trade and other payables
Hire purchase liabilities
Borrowings
1,284,830
588,702
300,000
-
2,173,532
663,259
13,368
-
676,627
-
266,667
266,667
62,898
-
62,898
Year ended 30 June 2012
<1 year
1 - 5
Years
Over 5
Years
Financial Liabilities:
Hire purchase liabilities
Borrowings
(d)
Fair value estimation
-
892,878
892,878
-
-
-
Total
contractual
cashflows
Weighted
average
effective
interest rate %
1,284,830
588,702
300,000
266,667
2,440,199
663,259
76,266
-
739,525
-
-
Total
contractual
cashflows
Weighted
average
effective
interest rate %
-
892,878
892,878
-
-
-
-
-
-
-
-
-
-
-
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure purposes.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to
their short term nature.
The fair value of long term borrowings is not materially different from their carrying value.
The entity’s principle financial instruments consist of cash and deposits with banks, accounts receivable, trade payables and loans
payable. The main purpose of these non-derivative financial instruments is to finance the entity’s operations.
(e)
Capital risk
The Company determines capital to be the equity as shown in the statement of financial position plus net debt (being total
borrowings less cash and cash equivalents).
The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
During 2013, the Company’s strategy, which was unchanged from 2012, was to keep borrowings to a minimum. The company’s
equity management is determined by funds required to undertake its development activities and meet its corporate and other costs.
- 51 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 25: SUBSEQUENT EVENTS
Subsequent to year end, the following events have occurred:
On 31 July 2013, the Company exercised the Option granted to it by Golden West Resources Limited and acquired a 100% interest
(increased from the original Options terms - 90% Interest) in mining licence M57/619. The Company paid $93,130 (GST Inclusive)
and 570,000 fully paid ordinary shares.
On 20 August 2013, the Company announced a non-renounceable Option Entitlement issue to raise $1,005,126 before expenses of
the Issue. Shareholders as at 28 August 2013 were entitled to receive one Option exercisable at 20 cents on or before 30 June 2015
for every two fully paid ordinary shares held. Shareholders were required to pay $0.01 per Option. At the date of this Report the
Company had raised over $443,903 from this Issue (of 44,390,300 Options) and will seek to raise the ‘shortfall’ over the next three
months.
On 26 August 2013, the Company acquired the exclusive marketing rights for iron ore over Exploration Licence E28/2238 from
Guide Resources Pty Ltd. Under the terms of this Agreement, Classic issued 5 million ordinary shares to Guide and paid $225,000
as consideration, Guide will pay the Company 30% of the Sale Price.
Subsequent to year end and up to the date of this Report, the Company has sold 13,333,333 shares in Fairstar Resources Limited
(FAS) to realise proceeds of $429,942. At the date of this report the Company holds a balance of 20,000,000 FAS shares valued at
$340,000.
There are no other matters or circumstances that have arisen since 30 June 2013 that have or may significantly affect the
operations, results, or state of affairs of the Company in future financials years.
NOTE 26: SHARE BASED PAYMENTS
Shares granted to promoters, senior executives and advisers as share based payments during the year are as follows:
Name
Grant Date
Vesting Date
Number of
shares
Total Value
Reason for Issue
Carol Mason(i)
Thomas Giri (i)
Noel Mather(i)
Murano Holidngs Pty
Ltd(ii)
Portable XRF Services
KT Investments
Paul Ravesi
Mavia Pty Ltd
Denarda Holdings
Malcolm Doutch
Namija Pty Ltd
Jacob Doutch
Jeffrey Nurse
13 June 2011
13 June 2011
13 June 2011
15 June 2012
27 August 2012
27 August 2012
27 August 2012
31 December 2012
24September 2012 24 September 2012
5 November 2012
10 December 2012
4 April 2012
18 December 2012
18 December 2012
18 December 2012
27 August 2012
27 August 2012
5 November 2012
10 December 2012
4 April 2012
18 December 2012
18 December 2012
18 December 2012
27 August 2012
27 August 2012
247,500
875,000
450,000
11,000,000
49,500
500,000
700,000
250,000
400,000
1,982,800
1,200,000
2,000,000
500,000
20,154,800
$ 7,425
$ 26,250
$ 13,500
$330,000
$ 9,900
$ 15,000
$ 35,000
$ 57,500
$ 10,000
$ 49,570
$ 24,000
$ 60,000
$ 15,000
$653,145
Promoters fee
Promoters fee
Promoters fee
Conversion of loan
Pay creditor
Promoters Fee
In lieu of Commissions
Pay creditor
Conversion of Loan
Conversion of loan
Pay Creditor
Senior Employee
Senior Employee
(i)
(ii)
On 13 June 2011, several shareholders were granted shares in the Company; these shares were only allotted by the
directors in August 2012 and accordingly have recognised as a share based payment in the 2012/13 financial year.
On 15 June 2012, Murano Holdings Pty Ltd lent the Company $300,000 which was subsequently converted from a loan
with interest ($30,000) into shares.
- 52 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 27: AUDITORS REMUNERATION
Auditors remuneration
Other services – Preparation of Investigating Accountant’s Report
30 June 2013
$
30 June 2012
$
30,411
15,250
45,661
52,171
18,575
70,746
NOTE 28: COMPANY DETAILS
The principal place of business of the Company is Suite 7, 30 Hasler Road, Osborne Park WA 6017.
- 53 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
ASX INFORMATION
AS AT 18 OCTOBER 2013
The following additional information is required by the ASX Limited in respect of listed public companies and was
applicable at 18 October 2013.
1.
Shareholding
a.
Distribution of Shareholders
Number (as at 18 October 2013)
Category (size of holding)
Shareholders
Ordinary Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
12
7
142
232
178
571
35
31,704
1,395,653
10,391,196
194,206,625
206,025,213
b.
The number of shareholdings held in less than marketable parcels is 27 shareholders amounting to 89,392
shares.
c.
The followings securities are restricted at 18 October 2013:
- 39,667,783 ordinary shares fully paid until between Nov and Dec 2013
- 74,565,112 ordinary shares fully paid until 24 May 2015
d.
The names of substantial shareholders listed in the company’s register as at 18 October 2013 are:
Shareholder
Ordinary Shares
Sheldon Coates& Harvey Coates
Gurindji Pty Ltd
Murano Holdings Pty Ltd
Viking Equities Pty Ltd
16,000,000
14,000,000
12,300,000
10,674,526
%Held of Total
Ordinary Shares
7.766
6.795
5.970
5.181
e.
Voting Rights
The voting rights attached to the ordinary shares are as follows:
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or
by proxy has one vote on a show of hands.
- 54 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
f.
20 Largest Shareholders as at 18 October 2013 — Ordinary Shares
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Sheldon & Harvey Coates < Sheldon Coates Superannuation
Fund>
Gurindji Pty Ltd
Murano Holdings Pty Ltd
Viking Equities Pty Ltd
Dominic Virgara
Conray Micheal Passaris
Robert Floreani & Yvonne Floreani
13. Morelshy Pty Ltd
Rockcom Pty Ltd
14.
15.
Adaven Pty Ltd
16. Merlin Fortune Limited
17.
18. Mr Raymore John Millard & Jacinta Louise Reynolds
Aneles Consulting Services Pty Ltd
19.
20. Mrs. Lynette Kay Samuel
Number of
Ordinary Fully
Paid Shares
Held
% Held of
Issued
Ordinary
Capital
16,000,000
14,000,000
12,300,000
10,674,526
6,400,000
4,783,333
4,600,000
4,020,000
3,737,653
3,725,004
3,400,000
3,373,333
3,000,008
3,000,008
3,000,000
2,500,000
2,450,000
7.766
6.795
5.970
5.181
3.106
2.322
2.233
1.951
1.814
1.808
1.650
1.637
1.456
1.456
1.456
1.213
1.189
2,350,000
2,200,000
2,130,000
107,643,865
1.141
1.068
1.034
52.248
2.
The name of the company secretary is Kent Hunter.
3.
The address of the principal registered office in Australia is: Suite 7, 30 Hasler Road, Osborne Park WA, 6917
4.
Registers of securities are held at the following address: Advanced Share Registry Limited, 150 Stirling Highway,
Nedlands, WA, 6009.
5.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company (with the exception of those shares
detailed in 1c above) on all Member Exchanges of the ASX Limited.
6.
Unquoted Securities
The Company has no unquoted securities as at 18 October 2013 with the exception of those shares detailed in
1c (above).
- 55 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
7.
Quoted Options over Unissued Shares ($0.20 options – expiry 30 June 2015)
A total of 44,390,353 $0.20 options are on issue. Each option can be exercised upon the payment of $0.20
and will receive one ordinary share. The expiry date for the options is 30 June 2015.
20 Largest Option Holders as at 18 October 2013 — $0.20 options expiring on or before 30 June 2015
1.
2.
3.
4.
5.
6.
7.
8.
9.
Sheldon Coates and Harvey Coates
Viking Equities Pty Ltd
Dominic Virgara
Mr Steven Karl Hegyi
Robert Franco Floreani
HSBC Custody Nominees (Australia) Limited
Mrs Lynette Kay Samuel
G K Investments Pty Ltd
Mr Raymore John Millard & Jacinta Louise Reynolds < R J Millard
Super Fund A/C>
Chatenois Pty Ltd < Chatenois Super Fund Acc>
10.
Ray Wright
11.
12.
Amin Francis Chehade & Jacqueline Lewis
13.
Stan Procak
14. Miss Eyvonne Piwen
15.
16. Mr Michael Lediaev
17. Mr Issa Boulos
18. Mr Sheldon Philip Coates
19.
20.
Harvey Coates, Coates Super Fund A/C>
Justin Aron Doutch
Stuttgart Pty Ltd
Number of
$0.20 Options
Held
6,000,000
5,374,763
3,225,000
2,273,803
1,862,502
1,700,000
1,065,000
1,000,000
1,000,000
1,000,000
1,000,000
918,700
825,001
630,000
621,250
600,000
562,500
520,000
505,000
500,000
31,183,519
% Held of
$0.20
Options
13.516
12.108
7.265
5.122
4.196
3.830
2.399
2.253
2.253
2.253
2.253
2.070
1.859
1.419
1.400
1.352
1.267
1.171
1.138
1.126
70.248
8.
Use of Cash and Assets
The Company used the cash and assets in a form readily convertible to cash that it had at the time of admission
in a way consistent with its business objectives stated in the company’s replacement prospectus dated 1 March
2013.
- 56 -
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
SCHEDULE OF MINERAL TENEMENTS
AS AT 18 OCTOBER 2013
Project
Doherty’s
Tenement
M57/619
East Kalgoorlie
E28/2238
Fraser Range
E28/1904
Mount Maitland
E51/1267, E51/1485
Interest held by
Classic Minerals Limited
100%
100%
100%
100%
- 57 -