Chesser Resources Limited
ABN 14 118 619 042
Financial Report
for the year ended 30 June 2015
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Contents
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditors Report
3
18
19
29
30
31
32
33
34
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report
The directors of Chesser Resources Limited (the “Company”) submit herewith the annual report of the
Company and the entities it controlled for the financial year ended 30 June 2015. In order to comply with the
provisions of the Corporations Act 2001, the directors report as follows.
Directors and Company Secretary
The following persons were directors of Chesser Resources Limited during the whole of the year under review
and up to the date of this report, unless otherwise stated:
Mr Frank Terranova, Non-Executive Chairman (appointed 12 February 2015)
Mr Simon O’Loughlin, Non-Executive Director
Mr Simon Taylor, Non-Executive Director
Mr Philip Amery, Non-Executive Director (appointed 12 February 2015)
Mr Gabriel Radzyminski, Non-Executive Director (appointed 18 February 2015)
Mr Stephen Kelly, Executive Director (appointed 12 February 2015)
Mr Robert Reynolds (resigned 12 February 2015)
Dr Richard Valenta (resigned 30 January 2015)
Mr Morrice Cordiner (resigned 12 February 2015)
Mr Peter Lester (resigned 12 February 2015)
Mr Frank Terranova CA (Non-Executive Chairman)
Mr. Terranova has extensive global experience in corporate finance and executive management. He held
senior roles in a number of organisations including Normandy Mining Limited and Queensland Cotton Limited.
He later became Chief Financial Officer and ultimately Managing Director of Allied Gold PLC which was
subsequently acquired by St Barbara Limited in 2012. He was Managing Director of Polymetals Mining
Limited and led its transformation through a merger with Southern Cross Goldfields Limited in 2013 and
oversaw the combined group’s growth and recapitalisation program. He is currently Non-Executive Chairman
of Taruga Gold Limited and a Non-Executive Director of Unity Mining Limited. Mr. Terranova is a Fellow of the
Institute of Chartered Accountants of Australia and New Zealand.
Mr Terranova was appointed to the Board on 12 February 2015.
Former directorships in last 3 years
In the last 3 years Mr Terranova was a Director of Allied Gold Limited, Polymetals Mining Limited and
Southern Cross Goldfields Limited.
Mr Simon O'Loughlin, BA(Acc) (Non-Executive Director)
Mr O’Loughlin is the founding member of O’Loughlins Lawyers, an Adelaide based medium sized specialist
commercial law firm. For many years he has practiced both in Sydney and Adelaide, in the corporate and
commercial fields with, in more recent times, a particular focus on the resources sector. He also holds
accounting qualifications. He is the Chairman of Lawson Gold Limited and Petratherm Ltd and a Non-
executive Director of WCP Resources Limited, Lyell Resources Limited, Crest Minerals Ltd and King Solomon
Mines Ltd.
Mr O’Loughlin has extensive experience and involvement with companies in the small industrial and
resources sectors. He has also been involved in the listing and back-door listing of numerous companies on
the ASX and National Stock Exchanges. He is a former Chairman of the Taxation Institute of Australia (SA
Division) and Save the Children Fund (SA Division). Mr O’Loughlin is Chairman of the Audit Committee.
Former directorships in last 3 years
In the last 3 years he has been a director of Oncosil Ltd, Bondi Mining Ltd, Bioxyne Ltd, Avenue Resources
Ltd, Aura Energy Ltd, Living Cell Technologies Ltd, Wolf Petroleum Ltd, World Titanium Resources Ltd,
Reproductive Health Science Ltd, Kibaran Resources Ltd and Goldminex Ltd.
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
Mr Simon Taylor, BSc(Geology), MAIG, GCertAppFin (Finsia) (Non-Executive Director)
Mr Taylor is a geologist with over 25 years’ experience in exploration, project assessment and development in
the resources sector. He has had a diversified career as a resources professional providing services to
resource companies and financial corporations. His experience spans a range of commodities including gold,
fertilisers (phosphate and potash), base metals, nickel, uranium, coal and coal seam methane. Whilst his
experience includes Australia a majority of his projects have been in international countries including Brazil,
Turkey, Uganda, Tanzania, Mali, China, UK and North America.
His experience includes providing consulting services to resource companies and financial corporations as a
resource analyst. His analytical and technical expertise, combined with his corporate experience have given
him an ability to advise companies at a corporate and Board level including fund raising, acquisitions,
promotion and recognising opportunities to add shareholder value.
Mr Taylor is currently the Managing Director of Oklo Resources and a non executive Director of King
Solomon Mines and TW Holdings Limited.
Mr Taylor was appointed to the Audit Committee in February 2015.
Former directorships in last 3 years
Bondi Mining Limited, Probiomics Limited, Aguia Resources Limited.
Mr Gabriel Radzyminski BA (Hons), MCom. (Non-Executive Director)
Mr Radzyminski is the founder and managing director of Sandon. He is portfolio manager of the Sandon
Capital Activist Fund, a fund targeting underperforming companies. Mr Radzyminski also holds directorships
in Sandon Capital Investments Limited, Future Generation Investment Fund Limited, ASK Funding Ltd and
Mercantile Investment Company Limited.
Mr Radzyminski was appointed to the Board on 18 February 2015.
Former directorships in last 3 years
Onthehouse Holdings Limited, RHG Limited, Armidale Investment Corporation Limited.
Mr Philip Amery, LLB, BA (Non Executive Director)
Mr Amery is an experienced capital markets advisor and private banker. Mr Amery is the Managing Director
of Amery Associates a provider of wealth management and global trading services to high net worth clients
and corporate finance advice on associated transactions.
Mr Amery was appointed to the Board on 12 February 2015 and is a member of the Audit Committee.
Former directorships in last 3 years
Nil
Mr Stephen Kelly, B.Bus, ACA (Executive Director, Company Secretary and Chief Financial Officer)
Mr Kelly was appointed as the Company Secretary and Chief Financial Officer of the Company on 15
November 2012. A qualified Australian Chartered Accountant, Mr Kelly was previously Chief Financial Officer
at Allied Gold Mining PLC. He has more than 25 years’ international experience in the areas of external and
internal audit, risk management and compliance, treasury and corporate finance across a range of industry
sectors including mining, infrastructure, property development and banking and finance. Mr Kelly is a Member
of the Institute of Chartered Accountants in Australia and New Zealand.
Mr Kelly was appointed to the Board on 12 February 2015.
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
Former directorships in last 3 years
Nil
Interests in the shares and options of the Company
As at the date of this report, the interests of the directors in the shares and options of Chesser Resources
Limited were:
Mr Frank Terranova
Mr Simon O’Loughlin
Mr Simon Taylor
Mr Phillip Amery
Mr Gabriel Radzyminski
Mr Stephen Kelly
Number of Ordinary
Shares#
3,000,000
812,500
1,500,000
-
43,979,000
1,268,319
Number of Options over
Ordinary Shares#
-
-
-
-
-
600,000
# Includes shares in which the Director has an indirect interest through associated entities.
Meetings of Directors
The number of meetings of the Company’s board of directors and each board committee held during the year
ended 30 June 2015, and the numbers of meetings attended by each director were as follows:
Number of meetings held
Board Meetings
11
Audit, Risk and
Compliance Committee
Meetings
2
Number of
meetings
eligible to
attend
F Terranova (appointed 12 February 2015)
S Taylor
S O'Loughlin
P Amery (appointed 12 February 2015)
G Radzyminski (appointed 18 February
2015)
S Kelly (appointed 12 February 2015)
R Reynolds (resigned 12 February 2015)
R Valenta (resigned 30 January 2015)
M Cordiner (resigned 12 February 2015)
P Lester (resigned 12 February 2015)
7
11
11
7
5
7
4
4
4
4
Number of
meetings
attended
7
11
11
7
Number of
meetings
eligible to
attend
-
1
2
1
Number of
meetings
attended
-
1
2
1
5
7
4
4
4
4
-
-
1
-
1
-
-
-
1
-
1
-
Dividends
No dividends were paid or declared since the start of the financial period to the date of this report. No
recommendation for payments of dividends has been made
Principal activities
The principal activities of the Group during the financial year were the management of the Company’s
interests in the Kestanelik, Catak and Sisorta gold exploration projects, all of which are located in Turkey.
Due to adverse developments in the permitting and regulatory environment in Turkey and a challenging
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
financing environment for resources projects generally, the Company disposed of its interests in its gold
exploration projects as follows:
(a)
(b)
(c)
In October 2014, the Company sold the Kestanelik Gold Project to Nurol Holdings Limited for cash
consideration of US$40 million (A$45 million equivalent at the time of sale).
In January 2015, the Company terminated its option to acquire an interest in the Catak Gold Project
and completed the transfer of the tenement back to the underlying owner.
On 28 March 2015, the Company completed the sale of its 51% ownership interest in the Sisorta
Project for cash consideration of $162,023.
Note 24 to the financial statements provides additional information in relation to the effect on the financial
statements of the disposals referred to above.
Following the completion of the sale of the Kestanelik Gold Project, the Company made a capital return of 15
cents per share or approximately $33.15 million to shareholders.
Subsequent to the sale of the Kestanelik Project and the making of the 15 cent per share capital return,
significant changes occurred in relation to the composition of the Company’s share register and its Board of
Directors. The Company announced on 2 March 2015 that as a consequence of those changes, it had
suspended its consideration of resource project investment opportunities pending the reconstituted Board
completing a review of the Company’s strategic and capital management opportunities.
In June 2015, the Company announced that it would seek shareholder approval to implement a buy back of
the Company’s shares for 3.43 cents per share. On 4 September 2015 the buy back was approved at an
Extraordinary General Meeting of Shareholders.
Operating result
The Group’s profit after providing for income tax amounted to $18,987,687 (2014: Loss $9,766,173). Included
in the operating profit for the financial year was a profit from discontinued operations of $20,276,328 ( 2014:
Loss from discontinued operations of $7,862,433). The discontinued operations comprised the disposal of the
Company’s ownership interests in the Kestanelik, Catak and Sisorta Gold Projects and the disposal of the
Company’s Turkish subsidiaries.
KESTANELIK GOLD PROJECT
On 24 October 2014, the Company received US$40 million in cash from the sale of the Kestanelik Gold
Project to Nurol Holdings A.S., a leading Turkish industrial group.
The sale of the Kestanelik project delivered significant benefits for Chesser shareholders. Pitched at a
significant premium to the prevailing share market valuation of the Company, the sale crystallised the value of
the project for shareholders, reduced development and funding risks and enabled a capital return of 15 cents
per share paid to shareholders on 12 December 2014 and the 3.43 cent per share buy back that was
approved by shareholders on 4 September 2015.
Note 24 to the financial statements provides additional information in relation to the effect on the financial
statements of the disposal of the Kestanelik Project.
CATAK Gold
During the year the Company undertook a limited work program at the Catak Project which included an initial
program of mapping, surface sampling and geophysics at the Catak Project.
The Company also continued a surface sampling program aimed at collecting a representative suite of high
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
grade and low grade vein material for petrographic analysis.
Further to a strategic review announced in January 2015, the Company terminated its option to acquire an
interest in the Catak Project and completed the transfer of the tenement back to the underlying owner.
Note 24 to the financial statements provides additional information in relation to the effect on the financial
statements of the disposal of the Catak Project.
SISORTA Gold
No work was undertaken in relation to the Sisorta Project during the year.
On 4 March 2015, the Company announced that it had entered into legally binding agreements to dispose of
its 51% interest in the Sisorta Project for $162,023. The transaction settled on 28 March 2015. The Company
has no residual interest in the Sisorta Project.
Note 24 to the financial statements provides additional information in relation to the effect on the financial
statements of the disposal of the Sisorta Project.
CORPORATE
During the year the Company completed the sale of the third and final tranche of 312,500 Pilot Gold Inc
shares that were received pursuant to the sale of the Karaayi Project in September 2013.
On 12 December 2014, the Company paid $0.15 per share as a capital return to all shareholders. The capital
return, totalling approximately $33.15 million, was paid from the proceeds from the sale of the Kestanelik
project.
The Company took actions to reduce its corporate cost structure in Australia including reducing staffing levels
to reflect the current level of activity pending a review of the Company’s strategic direction by the Company.
The Company wound up its operations in Turkey, including the disposal of its Turkish subsidiaries and
commenced the process of winding up its other international subsidiary companies.
Matters subsequent to the end of the financial year
Other than as disclosed below, no matter or circumstance has arisen since the end of the financial year that
has significantly affected, or may significantly affect the Group’s operations, the result of those operations or
the Group’s state of affairs.
(a)
Equal Access Share Buy Back
On 4 September 2015 the Company held an Extraordinary General Meeting of Shareholders at which
Shareholders approved the implementation of an equal access buy back on the following terms:
Proposed buy back price
Maximum number of shares to be bought by the Company
Maximum cash to be returned to shareholders
Forecast cash balance after EABB if all shareholders participate fully
$0.0343 per share
220,636,100 shares
$7.57 million
$0.3 million
It is expected that payment will be made to participating Shareholders on or about 13 October 2015.
Likely developments and expected results of operations
The future strategic direction and expected results of operations will be dependent on the outcome of the
equal access share buy back approved by Shareholders on 4 September 2015. The Shareholder Booklet
dated 3 August 2015 sets out a number of potential impacts of the equal access buy bank on the future
operations and results of the Company including:
• Effect on the Company’s investment activities, business and growth opportunities. Following
implementation of the Buy Back, the Company will recommence a strategic review of the options and
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
investment opportunities available to it. The strategic review will take into consideration both the
Company’s cash reserves and the level of concentration of ownership of Shares following
implementation of the Buy Back.
• Effect on the Company’s listing on the Australian Stock Exchange (ASX). It is currently
unknown whether the Company will remain listed on the ASX for the following reasons :
- The Company has been asked by ASX to demonstrate that its business operations are at a level
that warrants the continued quotation of Shares and its continued listing on the ASX in
satisfaction of Listing Rule 12.1. ASX will suspend the Company’s securities from official
quotation following completion of the Buy Back until such time as the Company can demonstrate
it satisfies Listing Rule 12.1.
- The cancellation of Shares under the Buy Back, combined with the potential for a significant
concentration of share ownership, may reduce the liquidity of the remaining Shares. If the
Company is unable to maintain the level of spread required by the ASX Listing Rules, the ASX
may exercise its discretion to suspend quotation of the Shares and may de-list the Company.
• Effect on control of the Company. As a consequence of the cancellation of the Shares bought
back under the Buy Back, the percentage shareholding and voting power of Shareholders who do not
participate in the Buy Back, or only participate with respect to some of their Shares, will increase.
This may materially alter the ownership of the Company.
Environmental regulation
The Company was not subject to any significant environmental regulation under a law of the Commonwealth
or of a State or Territory of Australia.
Tenements
As at 30 June 2015 the Group did not have any interests in mining tenements.
Significant changes in state of affairs
Other than as disclosed in this report and the accompanying financial report, there were no significant
changes in the Group’s state of affairs during the course of the financial year.
Shares under Option
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Grant
Date
Vest Date
Expiry
Date
Exercise
Price(1)
$0.35
Number
of options
14/12/2012
14/12/2012 13/12/2016
500,000
14/12/2012
14/12/2012 13/12/2016
1,000,000
$0.40
14/12/2012
14/12/2012 13/12/2016
1,500,000
$0.45
14/12/2012
14/12/2012 13/12/2016
1,000,000
$0.50
14/12/2012
14/12/2012 13/12/2016
1,000,000
$0.55
14/12/2012
14/12/2012 13/12/2016
1,000,000
$0.60
01/2/2013
01/02/2013 31/01/2017
01/2/2013
01/02/2014 31/01/2017
01/2/2013
01/02/2015 31/01/2017
20/10/2014
20/10/2014 31/12/2016
$0.20
$0.25
$0.30
$0.11
200,000
200,000
200,000
500,000
7,100,000
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
(1) In accordance with the Listing Rules of the Australian Stock Exchange Limited, the exercise price of
issued options was reduced by $0.15 per share on 12 December 2014 following the completion of a $0.15
capital return to shareholders.
Shares issued as a result of the exercise of options
No shares were issued during the financial year as a result of the exercise of options.
REMUNERATION REPORT
(a) Policy for determining the nature and amount of key management personnel remuneration
The Board of Chesser Resources Limited is responsible for determining and reviewing compensation
arrangements for the Directors, Managing Director and the Executive Team. The Board’s remuneration
policy is to ensure that the remuneration package properly reflects the person’s duties and responsibilities,
with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board
and executive team. Such officers are given the opportunity to receive their base emolument in a variety of
forms. It is intended that the manner of payment chosen will be optimal for the recipient without creating
undue cost to the Group. In accordance with best practice corporate governance, the structure of non-
executive director and executive remuneration is separate and distinct.
(i) Non-Executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Group with the ability to
attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
Remuneration of non-executive directors is determined by the Board, within the maximum amount approved
by the shareholders from time to time (currently set at an aggregate of $400,000 per annum). The Board
intends to undertake an annual review of its performance and the performance of the Board committees
against goals set at the start of the year.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst directors is reviewed annually. The Board considers the fees paid to non-executive
directors of comparable companies when undertaking the annual review process. At the AGM held on 21
November 2012 the Company’s shareholders approved an increase in the aggregate per annum fees payable
to non-executive directors to $400,000.
Each non-executive director receives a fee for being a director of the Group. Effective from 18 February
2015, fees were payable to Non-Executive Directors on the following basis:
• The Non-Executive Chairman receives an annual fee of $30,000 plus superannuation. Prior to 18
February 2015,
fee of $60,000 plus
superannuation. The Non-Executive Chairman did not receive any fees for the period 12 February
2015 to 1 April 2015.
the Non-Executive Chairman received an annual
• Other Non-Executive Directors receive an annual fee of $25,000 per annum plus superannuation.
Prior to 18 February 2015, the Non-Executive Directors received an annual fee of $40,000 plus
superannuation. Mr Amery and Mr Radzyminski did not receive any fees for the period from the
date of the their appointment to 1 April 2015.
Directors who are called upon to perform extra services beyond the director’s ordinary duties may be paid
additional fees for those services. No additional fees were paid to Non-Executive Directors during the
financial year.
(ii) Senior Executive Remuneration
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their position
and responsibilities within the Group so as to:
• Reward executives for Group and individual performance against agreed targets;
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
•
•
•
Align the interest of executives with those of shareholders;
Link reward with the strategic goals and performance of the Group; and
Ensure total remuneration is competitive by market standards.
Structure
In determining the level and make-up of executive remuneration, the Board has had regard to market levels
of remuneration for comparable executive roles. It is the Board’s policy that employment contracts are
entered into with all senior executives.
(iii) Variable Remuneration – Short and Long Term Incentives
Objective
The objectives of the incentives plan are to:
• Recognise the ability and efforts of the employees of the Group who have contributed to the success of
•
•
the Group and to provide them with rewards where deemed appropriate;
Provide an incentive to the employees to achieve the long term objectives of the Group and improve
the performance of the Group; and
Attract persons of experience and ability to employment with the Group and foster and promote loyalty
between the Group and its employees.
Structure
Long term incentives granted to senior executives are delivered in the form of options in accordance with an
Employee Share Option Plan. As part of the Group’s annual strategic planning process, the Board and
management agree upon a set of financial and non-financial objectives for the Group. The objectives form
the basis of the assessment of management performance and vary but are targeted directly to the Group’s
business and financial performance and thus to shareholder value.
(b) Remuneration, Group performance and shareholder wealth
The development of remuneration policies and structures is considered in relation to the effect on Group
performance and shareholder wealth. They are designed by the Board to align Director and Executive
behaviour with improving Group performance and ultimately shareholder wealth.
The Board considers at this stage in the Group’s development, that share price growth itself is an adequate
measure of total shareholder return.
Executives are currently remunerated by a combination of cash base remuneration and options. The options
granted are considered by the Board to provide an alignment between the employees and shareholders
interests.
The table below shows for the current financial year and previous four financial years the total remuneration
cost of the key management personnel, earnings per ordinary share (EPS), dividends paid or declared, and
the closing price of ordinary shares on ASX at year end.
Total
Remuneration
$
1,282,075
1,182,962
1,845,018
832,632
541,461
Financial Year
EPS
(Cents)
Dividends
(Cents)
Share Price
(Cents)
2015
2014
2013
2012
2011
8.59
(3.27)
(2.72)
(2.16)
(1.28)
# The share price at 2015 reflects the impact of the capital return of 15 cents per share made by the Company
in December 2014.
-
-
-
-
-
3.4#
12
10
30
54
Given the stage of the Company’s development and the fact that it does not currently have any revenue
producing operations, the Board does not consider EPS or dividends paid or declared to be meaningful
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
measures for assessing executive performance.
Key management personnel
The following persons were key management personnel of the Group during the financial year (unless noted
otherwise the persons listed were key management personnel for the whole of the financial year):
Name
Frank Terranova
Philip Amery
Gabriel Radzyminski
Simon O’Loughlin
Simon Taylor
Stephen Kelly
Rob Reynolds
Richard Valenta
Morrice Cordiner
Peter Lester
Nigel Ricketts
Position Held
Non-Executive Chairman (appointed 12 February 2015)
Non-Executive Director (appointed 12 February 2015)
Non-Executive Director (appointed 18 February 2015)
Non-Executive Director
Non-Executive Director
Executive Director (appointed 12 February 2015), CFO and Company Secretary (full
time employee until 4 June 2015, part time contractor from 4 June 2015).
Non-Executive Chairman (Resigned 12 February 2015)
Managing Director (Resigned 30 January 2015)
Non-Executive Director (Resigned 12 February 2015)
Non-Executive Director (Resigned 12 February 2015)
Project Director (Resigned 26 September 2014)
(c) Details of remuneration
Compensation paid, payable or provided by the Group or on behalf of the Group, to key management
personnel is set out below. Key management personnel include all Directors of the Group and certain
executives who, in the opinion of the Board and Managing Director, have authority and responsibility for
planning, directing and controlling the activities of the Group directly or indirectly.
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
2015
Name
Non-Executive Directors
Frank Terranova
Simon O’Loughlin
Simon Taylor
Phillip Amery
Gabriel Radzyminski
Robert Reynolds
Peter Lester
Morrice Cordiner
Total Non-Executive Directors
Executive Directors
Richard Valenta
Stephen Kelly
Total Executive Directors
Other Key Management Personnel
Nigel Ricketts
Total Other Key Management Personnel
Total Key Management Personnel
Compensation
Short-term employee
benefits
Post-
employmen
t benefits
Total
Cash
payments
Share-
based
payments
Termination
Benefits
Super-
annuation
Options(1)
Total
remunerati
on
Proportion
of
remuneratio
n that is
performanc
e based(2)
$
$
$
$
$
%
Cash
Bonuses(3)
$
-
-
-
-
-
-
-
-
-
Cash
salary
and fees
$
5,000
36,667
36,667
4,167
4,167
36,747
24,641
24,641
172,697
165,846
263,564
429,410
62,960
62,960
40,000
75,000
115,000
50,000
50,000
327,989
19,282
347,271
-
-
-
-
-
-
-
-
-
-
-
463
3,392
3,392
385
385
3,399
2,279
2,279
15,974
19,638
33,706
53,344
11,036
11,036
5,463
40,059
40,059
4,552
4,552
40,146
26,920
26,920
188,671
553,474
391,551
945,025
123,996
123,996
-
-
-
-
-
-
-
-
-
-
6,883
6,883
17,500
17,500
5,463
40,059
40,059
4,552
4,552
40,146
26,920
26,920
188,671
553,474
398,434
951,908
141,496
141,496
-
-
-
-
-
-
-
-
-
7%
19%
35%
665,067
165,000
347,271
80,354
1,257,692
24,383
1,282,075
(1) The value of options and rights granted to key management personnel as part of their remuneration is calculated as at the grant date using the Black Scholes option
pricing model. The amounts disclosed as part of remuneration for the financial year have been determined by allocating the grant date value on a straight line basis
over the period from grant date to vesting date.
(2) The only vesting conditions attached to options outstanding at the end of the year were service based conditions on options issued to Mr Kelly in the prior period.
(3) During the financial year the Company paid cash bonuses to Mr Valenta and Mr Kelly for the negotiation and completion of the sale of the Kestanelik Project and to
Mr Ricketts for meeting key performance indicators in relation to the Pre Feasibility Study for the Kestanelik Project.
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Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
2014
Name
Non-Executive Directors
Robert Reynolds
Simon O’Loughlin
Simon Taylor
Peter Lester
Morrice Cordiner
Total Non-Executive
Directors
Executive Directors
Richard Valenta
Total Executive
Directors
Other Key Management
Personnel
Stephen Kelly
Nigel Ricketts
Total Other Key
Management Personnel
Total Key Management
Personnel
Compensation
Short-term
employee
benefits
Post-
employment
benefits
Total
Cash
payments
Share-
based
payments
Total
remuneration
Proportion of
remuneration
that is
performance
based(2)
Options(1)
$
$
%
Cash
salary and
fees
$
Super-
annuation
$
60,000
40,000
40,000
40,000
40,000
5,550
3,700
3,700
3,700
3,700
$
65,550
43,700
43,700
43,700
43,700
220,000
20,350
240,350
280,000
25,901
305,901
280,000
25,901
305,901
-
-
-
-
-
-
-
-
65,550
43,700
43,700
43,700
43,700
240,350
305,901
305,901
283,333
275,000
26,208
25,437
309,541
300,437
26,733
-
336,274
300,437
558,333
51,645
609,978
26,733
636,711
1,058,333
97,896
1,156,229
26,733
1,182,962
-
-
-
-
-
-
-
-
-
-
-
-
(1) The value of options and rights granted to key management personnel as part of their remuneration is
calculated as at the grant date using the Black Scholes option pricing model. The amounts disclosed as
part of remuneration for the financial year have been determined by allocating the grant date value on a
straight line basis over the period from grant date to vesting date.
(2) The only vesting conditions attached to options issued during the year were service based conditions on
options issued to Mr Kelly.
(d) Service agreements
On appointment to the Board, all non-executive directors enter into a service agreement with Chesser
Resources Limited in the form of a letter of appointment. The letter summarises the Board policies and terms,
including compensation, relevant to the office of director.
Remuneration and other terms of employment for the Managing Director and the other key management
personnel are also formalised in service agreements. The material provisions of the agreements relating to
remuneration are set out below.
Richard Valenta, Managing Director
•
Term of agreement – open ended commencing 1 July 2007. Mr Valenta was made redundant on 30
January 2015.
Base Salary, inclusive of superannuation, of $305,900 per annum effective 1 June 2015.
•
• Contract may be terminated by the Company by the giving of 12 months’ notice or the payment of 12
month’s salary in lieu of notice.
• Contract may be terminated by Mr Valenta by the giving of 12 months’ notice or the forfeiture of 12
month’s salary in lieu of notice.
13 | P a g e
Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
Stephen Kelly, Executive Director, Company Secretary and Chief Financial Officer
• Up to and including 4 June 2015 Mr Kelly was contracted as a full time employee on the following terms:
- Term of agreement – open ended commencing 15 November 2012.
- Base annual salary of $283,333, exclusive of superannuation.
- Contract may be terminated by either party with one month’s notice or payment in lieu thereof.
• On 4 June 2015 Mr Kelly’s employment contract was terminated and Mr Kelly was engaged as a part time
contractor on the following terms:
- Monthly retainer of $6,150 inclusive of superannuation.
- Hours worked in excess of 38 hours per month are to be paid at an hourly rate of $225 inclusive of
superannuation.
- The agreement may be terminated by either party providing one month’s notice.
Term of agreement – open ended commencing 13 May 2013.
Base annual salary of $275,000, exclusive of superannuation.
Nigel Ricketts, Project Director
•
•
• Contract may be terminated by either party with one month’s notice or payment in lieu thereof.
• Mr Ricketts was made redundant on 26 September 2014 as a consequence of the decision to dispose of
the Kestanelik Project.
(e) Share-based compensation
Details of options over ordinary shares in the Group provided as remuneration to each director of Chesser
Resources Limited and each of the key management personnel of the parent entity and the Group are set out
below. When exercisable, each option is convertible into one ordinary share of Chesser Resources Limited.
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting
period are as follows:
Grant Date
Date vested
and
exercisable
Expiry
Date
Exercise
Price
Value per
option at
grant date
(cents)
Vested
Financial
year in
which
vested
Maximum
total value of
grant yet to
vest
$
1/2/2013
1/2/2015
31/1/2017
20/10/2014
20/10/2014
31/12/2016
$0.30
$0.11
$0.12
$0.035
100%
100%
2015
2015
-
-
(1) In accordance with the Listing Rules of the Australian Stock Exchange Limited, the exercise price of issued options
was reduced by $0.15 per share on 12 December 2014 following the completion of a $0.15 capital return to
shareholders.
Options are granted to attract, retain and incentivise key management personnel.
The board has rules that contain restrictions on removing the ‘at risk’ aspect of the options granted to executives.
Executives may not enter into any transactions designed to remove the ‘at risk’ aspect of an instrument before it
vests.
There are no performance hurdles attaching to the options granted other than service vesting conditions. In the
event of termination (specified circumstances) only vested options are entitled to be exercised. Unvested
options are forfeited.
Details of changes during the financial year in options over ordinary shares in the Group provided as
remuneration to each director of Chesser Resources Limited and each of the key management personnel of the
group are set out below. Further information on the options is set out in note 22 to the financial statements. No
options were issued during the prior financial year
14 | P a g e
Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
No. options
granted
during the
year
Fair value per
option at
grant date
(cents)
No. options
vested during
the year
Number of
options
lapsed during
the year
Value at
lapse date
($)
Key management personnel
-
S Kelly
500,000
N. Ricketts
-
3.5
200,000
500,000
-
-
-
-
The assessed fair value at grant date of options granted to the individuals is allocated equally over the period
from grant date to vesting date, and the amount is included in the remuneration tables above. Fair values at
grant date are independently determined using a Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk-free interest rate for the term of the option.
Shares provided on exercise of remuneration options
No shares were issued as a result of the exercise of options during the year.
(f) Unlisted option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each director
and each key management person of the Group, including their personally related parties, are set out below:
2015
Name
Balance at
start of
year
Granted
as
compen-
sation
Ceasing to be
a key
management
person
Balance
at end of
the year
Vested
and
exercise-
able
Exercised
Unvested
Directors of Chesser Resources Limited
F Terranova
-
-
S Taylor
-
-
S O'Loughlin
-
-
G Radzyminski
-
P Amery
-
S Kelly
600,000
R Valenta
-
R Reynolds
2,000,000
P Lester
2,000,000
M Cordiner
2,000,000
Other key management personnel of the Group
N Ricketts
-
-
-
-
-
-
-
6,600,000
500,000
500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,000,000)
(2,000,000)
(2,000,000)
-
-
-
-
-
600,000
-
-
-
-
-
-
-
-
-
600,000
-
-
-
-
(500,000)
(6,500,000)
-
600,000
-
600,000
-
-
-
-
-
-
-
-
-
-
-
-
(g) Share holdings
The number of shares in the Company held during the financial year by each director of Chesser Resources
Limited and other key management personnel of the Group, including their personally related parties, are set
out below. There were no shares granted during the reporting period as compensation (2014: nil).
15 | P a g e
Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
Balance at the
start of the
year
2015
Shares held on
appointment as
key
management
personnel
Purchases /
(disposals)
during the year
Shares held on
ceasing to be
key
management
personnel
Balance at
the end of the
year
Directors of Chesser Resources Limited
Ordinary shares
F Terranova
S Taylor
S O'Loughlin
G Radzyminski
P Amery
S Kelly
R Reynolds
R Valenta
P Lester
M Cordiner
N Ricketts
-
1,500,000
1,625,000
-
-
1,181,818
2,372,728
3,065,000
200,000
807,773
13,300,000
-
-
43,979,000
832,577
-
-
-
-
-
(10,300,000)
-
-
-
(832,577)
86,501
-
-
-
-
-
-
-
-
-
(2,372,728)
(3,065,000)
(200,000)
(807,773)
3,000,000
1,500,000
1,625,000
43,979,000
-
1,268,319
-
-
-
-
Other key management personnel of the Group
-
10,752,319
-
58,111,577
-
(10,746,076)
-
(6,445,501)
-
51,372,319
No shares were received by key management personnel on the exercise of options during the year.
(i) Loans to key management personnel
There were no loans to key management personnel at any time during the financial year.
(j) Other transactions with key management personnel
There were no other transactions with key management personnel.
(k) Voting and comments made at the Company’s 2014 Annual General Meeting
The Company received more than 97% of “yes” votes on its remuneration report for the financial year ended 30
June 2014. The Company did not receive any specific feedback at the AGM or throughout the year on its
remuneration practices.
End of Remuneration Report
Insurance of officers
To the extent permitted by law, the Company has indemnified (fully insured) each director and the secretary of
the Company for a premium of $25,924 (2014: $22,468). The liabilities insured include costs and expenses that
may be incurred in defending civil or criminal proceedings (that may be brought) against the officers in their
capacity as officers of the Company or a related body, and any other payments arising from liabilities incurred by
the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a
willful breach of duty by the officers or the improper use by the officers of their position or of information to gain
advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion
the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.
Proceedings on behalf of the Group
The Group is not aware that any person has applied to the court under section 237 of the Corporations Act 2001
for leave to bring proceedings on behalf of the Group, or to intervene in any proceedings in which the Group is a
16 | P a g e
Chesser Resources Limited
Financial Report for the year ended 30 June 2015
Directors’ report (continued)
party, for the purpose of taking responsibility on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the court under section
237 of the Corporations Act 2001.
Non-audit Services
The Group may decide to employ the auditor on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the Group and/or the Group are important.
The Board of directors has considered the position and, in accordance with advice received from the audit
committee, is satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision
of non-audit services by the auditor, as set out below, did not compromise the auditor independence
requirements of the Corporations Act 2001 for the following reasons:
•
all non-audit services have been reviewed to ensure they do not impact the impartiality and objectivity of
the auditor;
none of the services undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants.
•
Details of the amounts paid or payable to the auditor, Pitcher Partners for audit services provided during the
year are set out in note 19 to the financial report.
Non-audit services
Pitcher Partners
Tax advice services
Tax compliance services
Total remuneration for non-audit services
2015
$
2014
$
-
-
-
13,000
5,542
18,542
Auditor's Independence Declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
attached to this report.
Auditor
Pitcher Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors.
__________________________________
Stephen Kelly, Executive Director
Brisbane, 30 September 2015
17 | P a g e
The Directors
Chesser Resources Limited
96 Stephens Road
South Brisbane QLD 4101
Auditor’s Independence Declaration
As lead auditor for the audit of Chesser Resources Limited for the year ended 30 June 2015, I declare that,
to the best of my knowledge and belief, there have been:
(i) no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Chesser Resources Limited and the entities it controlled during the year.
PITCHER PARTNERS
J.J. EVANS
Partner
Brisbane, Queensland
30 September 2015
Chesser Resources Limited
Financial report for the year ended 30 June 2015
Corporate Governance Statement
This Corporate Governance Statement sets out Chesser Resources Limited’s compliance with the third
edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations
(ASX Principles and Recommendations). The ASX Principles and Recommendations are not mandatory,
however the Company is required to provide this statement disclosing the extent to which it has followed the
recommendations contained in the ASX Principles and Recommendations. This corporate governance
statement is current as at 30 June 2015 and has been approved by the Board of the Company (Board).
ASX Principles and Recommendations
Comply
(Yes /
No)
Commentary
1. Lay solid foundations for management and oversight
1.1 A listed entity should disclose:
(a) the respective roles and
responsibilities of its board and
management; and
(b) those matters expressly reserved
to the board and those delegated
to management.
Yes
Yes
The Board is accountable to the Shareholders for
the performance of the Company and has overall
to day
for
responsibility
management of
the
implementation of the corporate strategy and policy
initiatives, are formally delegated by the Board to
the Managing Director and ultimately to senior
executives.
its operations. Day
the Group’s affairs and
The key responsibilities of the board include:
•
•
Approving the strategic direction and related
objectives of
the Group and monitoring
management performance in the achievement
of these objectives;
Adopting budgets and monitoring the financial
performance of the Group;
• Reviewing annually the performance of the
managing director and senior executives
against
the objectives and performance
indicators established by the Board;
the
and
maintenance of adequate internal controls and
effective monitoring systems;
• Overseeing
establishment
• Overseeing
effective
implementation
safety
the
management
of
environmental performance systems;
Ensuring all major business risks are identified
and effectively managed;and
Ensuring that the Group meets its legal and
statutory obligations.
and
and
•
•
the Directors are entitled
For the purposes of the proper performance of their
to seek
duties,
independent professional advice at the Group’s
expense, unless the Board determines otherwise.
The Board schedules meetings on a regular basis
and other meetings as and when required.
The Company has adopted a Board Charter that
may be viewed on
the Company’s website
www.chesserresources.com.au.
19 | P a g e
Chesser Resources Limited
Financial report for the year ended 30 June 2015
Corporate Governance Statement
ASX Principles and Recommendations
1.2 A listed entity should :
(a) undertake appropriate checks
before appointing a person, or
putting forward to security
holders a candidate for election
as a director; and
(b) provide security holders with all
material information in its
possession relevant to a decision
on whether or not to elect or re-
elect a director.
Comply
(Yes /
No)
Yes
Commentary
The Company undertakes appropriate checks
before appointing a person as a Director of
the Company.
Yes
When the election of Directors are put to security
holders at a meeting of members, all material
information relevant to the vote are incorporated in
the meeting documents, which
their
includes
relevant professional history and qualifications.
1.3 A listed entity should have a written
Yes
agreement with each director and
senior executive setting out the terms
of their appointment.
1.4 The company secretary of a listed
Yes
entity should be accountable directly
to the board, through the Chair on all
matters to do with the proper
functioning of the Board.
1.5 A listed entity should :
Yes
(a) have a diversity policy which
includes the requirement for the
board or a relevant committee of
the board to set measurable
objectives for achieving gender
diversity and to assess annually
both the objectives and the
entity’s progress in achieving
them;
(b) disclose that policy or a summary
of it; and
(c) disclose as at the end of each
reporting period the measurable
objectives for achieving gender
diversity set by the board or a
relevant committee of the board
in accordance with the entity’s
diversity policy and its progress
towards achieving them, and
either:
(1) the respective proportions of
men and women on the
board, in senior executive
positions across the whole
organisation; or
(2) if the entity is a “relative
employer” under the
Workplace Gender Equality
Act, the entity’s most recent
Gender Equality Indicators
as defined and published
The Company has written agreements in place
with each of its Directors and senior executives.
is directly
The Company Secretary position
accountable to the Board on all matters to do
with the proper functioning of the Board.
The board has adopted a diversity policy that
applies to all directors and officers of the Company.
The Company is committed to diversity across the
organisation. Diversity includes, but is not limited
to, gender, age, experience, ethnicity and cultural
background.
To the extent practicable and appropriate, the
Company will address the recommendations and
guidance provided
the ASX Corporate
Governance Council's Corporate Governance
Principles and Recommendations.
in
The Board has not yet set measurable objectives for
achieving gender diversity. The Board is committed
to actively supporting and managing diversity as a
means of enhancing the Company’s performance by
recognizing and utilizing the contribution of diverse
skills and
its directors, officers,
employees and consultants. However, at this stage
of the Company’s operations and the limited number
of employees, the Board has determined that no
specific measurable objectives will be established.
The Board will
the
Company’s circumstances change.
this position as
review
talent
from
The Board will however, conduct all Board
appointment processes in a manner that promotes
gender diversity, including establishing a structured
approach for identifying a pool of candidates, using
external experts where necessary. As at the date of
following
the Company has
this
report,
the
20 | P a g e
Chesser Resources Limited
Financial report for the year ended 30 June 2015
Corporate Governance Statement
ASX Principles and Recommendations
Comply
(Yes /
No)
Commentary
under that Act.
proportion of women appointed:
1.6 A listed entity should :
No
(a) have and disclose a process for
periodically evaluating the
performance of the board, its
committees and individual
directors; and
(b) disclose, in relation to each
reporting period, whether a
performance evaluation was
undertaken in the reporting
period in accordance with that
process.
1.7 A listed entity should :
(a) have and disclose a process for
periodically evaluating the
performance of its senior
executives; and
(b) disclose in relation to each
reporting period, whether a
performance evaluation was
undertaken in the reporting
period in accordance with that
process.
2. Structure the board to add value
2.1 The board of a listed entity should:
(a) have a nomination
committee which:
(1) has at least three
members, a majority of
whom are independent
directors; and
(2) is chaired by an
independent
director,
and disclose:
(3) the charter of
the committee;
(4) the members of
the committee;
and
(5) as at the end of each
reporting period, the
number of times the
committee met throughout
No
No
No
•
•
•
to the Board – 0% (nil out of six)
to senior management – 0% (nil out of nil)
to the organisation as a whole – 0% (nil out
of six)
the Board and
The performance of
individual
Directors are evaluated in accordance with the
Performance Evaluation Policies
introduced via
Board Charter. The objective of this evaluation will
be to provide best practice corporate governance to
the Company.
As of the end of this reporting period, the Board has
not completed the performance evaluation of its
Committees and its individual Directors.
Given the size of the Company, the Board does not
consider it appropriate to have a process for
periodically evaluating the performance its senior
executives. Notably, the performance of Executive
Directors fall within the ambit of the Nomination
Committee, and its functions are carried out by the
full Board.
There is no nomination committee separate to the
full Board. The role of the nomination committee is
undertaken by the full Board. The Board considers
that, given the Board is comprised of six Directors
and given the current size and scope of the
Company’s operations, no efficiencies or other
benefits would be gained by establishing a separate
nomination committee.
As the Company’s operations grow and evolve, the
Board will reconsider the appropriateness of forming
a separate nomination committee.
Board Renewal and Succession Planning
The appointment of directors is governed by the
Company’s Constitution and the Appointment and
Selection of New Directors policy. In accordance
with the Constitution of the Company, no director
except a Managing Director shall hold office for a
continuous period in excess of three years or past
21 | P a g e
Chesser Resources Limited
Financial report for the year ended 30 June 2015
Corporate Governance Statement
ASX Principles and Recommendations
Comply
(Yes /
No)
Commentary
the third annual general meeting following the
director's appointment, whichever is the longer,
without submitting for re-election. The Company has
not adopted a policy in relation to the retirement or
tenure of directors.
The appointment of the Company Secretary is a
matter for the Board. Information on the skills,
the Company
experience and qualifications of
Secretary can be found in the Directors’ Report.
the period and the
individual attendances of
the members at those
meetings; or if it does not
have a nomination
committee, disclose that
fact and the processes it
employs to address board
succession issues and to
ensure that the board has
the appropriate balance of
skills, knowledge,
experience, independence
and diversity to enable it to
discharge its duties and
responsibilities effectively.
2.2 A listed entity should have and
No
disclose a board skills matrix setting
out the mix of skills and diversity that
the board currently has or is looking to
achieve in its membership.
Yes
2.3 A listed entity should disclose:
(a) the names of the directors
considered by the board to
be independent directors;
(b) if a director has an interest,
position, association or
relationship of the type
described in Box 2.3 but the
board is of the opinion that it
does not compromise the
independence of the director,
the nature of the interest,
position, association or
relationship in question and
an explanation of why the
board is of that opinion;
andthe length of service of
each director
The Board has not considered it necessary to
the
create a
particular skills of the existing Board.
formal document
that sets out
is
the Board
is present
However, pursuant to the Board Charter (which
forms part of the Corporate Governance Plan), the
to be reviewed
composition of
regularly to ensure the appropriate mix of skills and
expertise
facilitate successful
to
strategic direction. Furthermore, the Board Charter
notes that the Board should comprise Directors
with a mix of qualifications, experience and
expertise which will assist the Board in fulfilling its
responsibilities, as well as assisting the Company
to
in achieving growth and delivering value
shareholders.
At the date of this statement the board consists of
five non-executive directors, four of whom are
considered to be independent, and one executive
director. Directors
bring
are
independent views and judgement to the Board’s
deliberations. The independent directors are:
expected
to
• Mr Frank Terranova Non-Executive Chairman
(Appointed 12 February 2015)
• Mr Simon O’Loughlin Non-Executive Director
(Appointed 2 March 2006)
• Mr Simon Taylor Non-Executive Director
(Appointed 29 march 2007)
• Mr Phillip Amery Non-Executive Director
(Appointed 12 February 2015)
The Board considers this to be an appropriate
composition given the size and development of the
22 | P a g e
Chesser Resources Limited
Financial report for the year ended 30 June 2015
Corporate Governance Statement
ASX Principles and Recommendations
Comply
(Yes /
No)
Commentary
Group at the present time. The names of directors
including details of
their qualifications and
experience are set out in the Directors' Report of
this Financial Report.
Yes
A majority of the directors are independent.
Yes
The chair of the Board is independent.
2.4 A majority of the board of a listed
entity should be independent
directors.
2.5 The chair of the board of a listed
entity should be an independent
director and, in particular, should not
be the same person as the CEO of
the entity.
2.6 A listed entity should have a
No
program for inducting new directors
and provide appropriate professional
development opportunities for
directors to develop and maintain the
skills and knowledge needed to
perform their role as directors
effectively.
3. Act ethically and responsibly
3.1 A listed entity should:
(a) have a code of conduct for its
directors, senior executives
and employees; and
(b) disclose that code or
a summary of it.
Yes
Yes
4 Safeguard integrity in financial reporting
4.1 The board of a listed entity should:
(a) have an audit committee which:
Yes
(1) has at least three
members, all of whom are
non- executive directors
and a majority of whom are
independent directors; and
(2) is chaired by an
independent director, who
is not the chair of the
board,
and disclose:
(3) the charter of
the committee;
(4) the relevant qualifications
and experience of the
members of the
committee; and
(5) in relation to each
The Company does not have a formal program in
place. However, as part of their individual
appointments, the Board (carrying out the functions
of the Nomination Committee) carefully reviews the
suitability of every Director, which includes an
assessment of their skills and qualifications
The Board has adopted a Corporate Code of
Conduct, which forms part of its Corporate
Governance Plan.
A copy of the Corporate Governance Plan can
be accessed via the Company’s website.
The Audit, Risk and Compliance Committee
comprises Mr Simon O’Loughlin (Chairman), Mr
Simon Taylor and Mr Phillip Amery, all of whom are
independent Non-Executive Directors. The Board
has approved a Charter for the Audit, Risk and
Compliance Committee which may be viewed on
the
at
www.chesserresources.com.au.
Company’s
website
The Audit, Risk and Compliance Committee’s
primary responsibilities are to:
a) review and assess the Company’s processes
the
financial
which ensure
reporting, and associated
statements and
compliance with
regulatory
and
legal
requirements, including applicable accounting
standards;
integrity of
b) review
and
assess
the
appointment,
23 | P a g e
Chesser Resources Limited
Financial report for the year ended 30 June 2015
Corporate Governance Statement
ASX Principles and Recommendations
Comply
(Yes /
No)
Commentary
reporting period, the
number of times the
committee met throughout
the period and the
individual attendances of
the members at those
meetings; or
(b) if it does not have an audit
committee, disclose that fact
and the processes it employs
that independently verify and
safeguard the integrity of its
corporate reporting, including
the processes for the
appointment and removal of
the external auditor and the
rotation of the audit
engagement partner.
4.2 The board of a listed entity should,
before it approves the entity’s
financial statements for a financial
period, receive from its CEO and
CFO a declaration that, in their
opinion, the financial records of the
entity have been properly
maintained and that the financial
statements comply with the
appropriate accounting standards
and give a true and fair view of the
financial position and performance
of the entity and that the opinion
has been formed on the basis of a
sound system of risk management
and internal control which is
operating effectively.
4.3 A listed entity that has an AGM
should ensure that its external
auditor attends its AGM and is
available to answer questions
from security holders relevant to
the audit.
Yes
Yes
c) oversee
qualifications, independence, performance and
remuneration of, and relationship with, the
Company’s external auditors and the integrity
of the audit process as a whole;
the effectiveness of
the Group’s
risk
systems of
management
the
appropriateness of implementing an internal
audit function; and
controls and
considering
internal
including
d) oversee
the policies and procedures
for
ensuring the Group's compliance with relevant
regulatory and legal requirements.
It is the Board’s policy, that the CEO (or equivalent)
and the CFO (or equivalent) 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. The
CEO and CFO, or persons acting in those roles,
have declared to the Board that the Company’s
is
management of
effective.
its material business risks
Yes
The Company’s auditor will attend its AGM and will
be available to answer questions from security
holders relevant to the audit.
5. Make timely and balanced disclosure
5.1 A listed entity should:
(a) have a written policy for
complying with its continuous
disclosure obligations under
the Listing Rules; and
(b) disclose that policy or
a summary of it.
Yes
Yes
The Continuous Disclosure Policy sets out the key
obligations of the Directors and employees in
relation to continuous disclosure as well as the
Company’s obligations under the Listing Rules and
the Corporations Act. The Policy also provides
procedures for internal notification and external
disclosure, as well as procedures for promoting
understanding of compliance with the disclosure
requirements for monitoring compliance. The Board
24 | P a g e
Chesser Resources Limited
Financial report for the year ended 30 June 2015
Corporate Governance Statement
ASX Principles and Recommendations
Comply
(Yes /
No)
Commentary
6. Respect the rights of security holders
6.1 A listed entity should provide
Yes
information about itself and
its governance to investors
via its website.
6.2 A listed entity should design and
implement an investor relations
program to facilitate effective two-
way communication with
investors.
Yes
6.3 A listed entity should disclose the
No
policies and processes it has in
place to facilitate and encourage
participation at meetings of
security holders.
6.4 A listed entity should give
Yes
security holders the option to
receive communications from,
and send communications to, the
entity and its security registry
electronically.
7. Recognise and manage risk
7.1 The board of a listed entity should:
(a) have a committee or
Yes
committees to oversee
risk, each of which:
1. has at least three
members, a majority of
whom are independent
directors; and
is chaired by an
independent director,
2.
3. and disclose:
4.
the charter of the
committee;
has designated the Company Secretary as the
person responsible for overseeing and coordinating
disclosure of information to the ASX as well as
communicating with the ASX.
The Company’s website:
www.chesserresources.com.au contains all
relevant information about the Company.
The Company has not designed or publicly
disclosed a communications policy and therefore
has not complied with recommendation 6.2 of the
Corporate Governance Council. Given the size of
the Company, the board does not consider design
of, or disclosure of a communications policy to be
appropriate. The board takes ultimate responsibility
for these matters.
The Company has not designed or publicly
disclosed a communications policy and therefore
has not complied with recommendation 6.3 of the
Corporate Governance Council. Given the size of
the Company, the board does not consider design
of, or disclosure of a communications policy to be
appropriate. The board takes ultimate responsibility
for these matters.
Shareholders can register with the Company’s
Registrar to receive email notifications of when an
announcement is made by the Company to the
ASX, including the release of the annual, half
yearly and quarterly reports. Links are made
available to the Company’s website on which all
information provided to the ASX is immediately
posted.
The Board has identified the significant areas of
potential business and legal risk of the Group. The
identification, monitoring and, where appropriate,
the reduction of significant risk to the Group is the
responsibility of the Managing Director and the
Board. The Board has also established the Audit,
Risk and Compliance committee which addresses
the risk of the Group.
The Board reviews and monitors the parameters
risks will be managed.
under which such
Management accounts are prepared and reviewed
with the Managing Director at subsequent Board
25 | P a g e
Chesser Resources Limited
Financial report for the year ended 30 June 2015
Corporate Governance Statement
ASX Principles and Recommendations
Comply
(Yes /
No)
Commentary
5.
the members of the
committee; and
6. as at the end of each
reporting period, the
number of times the
committee met throughout
the period and the
individual attendances of
the members at those
meetings; or
(b) if it does not have a risk
committee or committees
that satisfy (a) above,
disclose that fact and the
processes it employs for
overseeing the entity’s risk
management framework.
meetings. Budgets are prepared and compared
against actual results.
Management and the Board monitor the Group’s
material business risks and reports are considered
at regular meetings.
The Board has approved a Risk Management Policy
and related Risk Management Framework that is in
implemented. The Risk
the process of being
Management Policy may be viewed on
the
Company’s website www.chesserresources.com.au.
7.2 The board or a committee of
the board should:
(a) review the entity’s risk
management framework at
least annually to satisfy itself
that it continues to be sound;
and
(b) disclose, in relation to each
reporting period, whether such
a review has taken place.
Yes
Yes
The Board is responsible for overseeing the
Company’s risk management systems, practices
and procedures to ensure effective risk
identification and management and compliance
with internal guidelines and external
requirements.
As of the end of this reporting period, the
Board has completed its review.
7.3 A listed entity should disclose:
(a) if it has an internal audit
No
function, how the function
is structured and what role
it performs; or
(b) if it does not have an internal
audit function, that fact and
the processes it employs for
evaluating and continually
improving the effectiveness of
its risk management and
internal control processes.
7.4 A listed entity should
Yes
disclose whether it has any
material exposure to
economic, environmental
and social sustainability risks
and, if it does, how it
manages or intends to
manage those risks.
Due to the size and scale of operations of the
Company the Board considers that it would not be
efficient to implement an internal audit function at
this time.
The Board is responsible for overseeing the
Company’s risk management systems, practices
and procedures to ensure effective risk
identification and management and compliance
with internal guidelines and external requirements.
As a former mining explorer, the Company is
faced with a number of economic, environmental
and social sustainability risks. The Board,
carrying out the functions of the Audit and Risk
Committee, and as guided by the Risk
Management Review Procedure reviews and
manages these risks on a regular basis.
26 | P a g e
Chesser Resources Limited
Financial report for the year ended 30 June 2015
Corporate Governance Statement
ASX Principles and Recommendations
8. Remunerate fairly and responsibly
8.1 The board of a listed entity should:
(a) have a remuneration
committee which:
(1) has at least three
Comply
(Yes /
No)
Yes
members, a majority of
whom are independent
directors; and
(2) is chaired by an
independent
director,
and disclose:
(3) the charter of
the committee;
(4) the members of
the committee;
and
(5) as at the end of each
reporting period, the
number of times the
committee met throughout
the period and the
individual attendances of
the members at those
meetings; or
(b) if it does not have a
remuneration committee,
disclose that fact and the
processes it employs for
setting the level and
composition of remuneration
for directors and senior
executives and ensuring that
such remuneration is
appropriate and not excessive.
Yes
8.2 A listed entity should separately
Yes
disclose its policies and practices
regarding the remuneration of
non- executive directors and the
remuneration of executive
directors and other senior
executives.
Commentary
in
The Remuneration Committee has delegated
responsibilities
the Company’s
relation
remuneration policies as set out in the Nomination
and Remuneration Committee Charter. The Charter
reflects the matters set out in the commentary and
guidance for Recommendation 8.1.
to
the
role of
remuneration committee
The
is
undertaken by the full Board. The Board considers
that, given the Board is comprised of six Directors
and given the current size and scope of the
Company’s operations, no efficiencies or other
benefits would be gained by establishing a separate
remuneration committee. Items that are usually
required
to be discussed by a Remuneration
Committee are marked as separate agenda items at
Board meetings, when required. The Board deals
with any conflicts of interest that may occur when
convening in the capacity of the Remuneration
Committee by ensuring that no Directors participate
in
own
remuneration or related issues.
deliberations
regarding
their
any
As the Company’s operations grow and evolve, the
Board will reconsider the appropriateness of forming
a separate Remuneration Committee.
Non-executive Directors’ remuneration is currently
clearly distinguished from that of executives.
Non-executive Directors are remunerated at fixed
rates which are in line with market rates (for
comparable companies) for time, commitment and
responsibilities. Remuneration for non-executives is
not linked to the performance of the Company.
Given
its early stage of
is at
development and the financial restrictions placed on
it
it,
the Company has, and may consider
appropriate
to non-
executive Directors, subject to obtaining the relevant
approvals. This policy is subject to annual review.
issue unlisted options
the Company
to
All of
disclosed.
the Directors option holdings are
fully
27 | P a g e
Chesser Resources Limited
Financial report for the year ended 30 June 2015
Corporate Governance Statement
ASX Principles and Recommendations
Comply
(Yes /
No)
Commentary
Non-Executive Directors are to be paid their fees
out of the maximum aggregate amount approved by
shareholders for the remuneration of Non-Executive
Directors. Non-Executive Directors are also entitled
to but not necessarily paid statutory superannuation.
The Corporate Governance Guidelines and
Recommendations recommend that non-executive
Directors should not receive options or participate in
schemes designed
remuneration of
executives.
the
for
Executive Directors’ Remuneration Policy
As noted previously, executive Directors are
employed pursuant to employment agreements.
Summaries of these employment agreements are
set out in the Remuneration Report.
Executive payroll and rewards consist of a base
salary and performance incentives. No short term
bonus incentive mechanism is currently in place,
due to the size of the Company and cash limitations
imposed as a result of the Company’s stage of
development. Long term performance incentives
may include options or performance rights granted
at the discretion of the Board, and subject to
obtaining the relevant shareholder approvals.
The grant of options and performance rights are
designed to recognize and reward efforts as well as
provide an additional incentive and may be subject
to
the successful completion of performance
hurdles.
Executives are offered competitive levels of base
salary at market rates (for comparable companies)
and are reviewed annually
to ensure market
competiveness.
Although the company did not have a formal
policy during the reporting period, the Company
had a Securities Trading Policy that restricted the
trading of the Company’s securities by those who
have equity interests in the Company.
28 | P a g e
8.3 A listed entity which has an equity-
based remuneration scheme
should:
(a) have a policy on whether
participants are permitted to
enter into transactions (whether
through the use of derivatives
or otherwise) which limit the
economic risk of participating in
the scheme; and
(b) disclose that policy or
a summary of it.
No
No
Chesser Resources Limited
Consolidated Income Statement
For the year ended 30 June 2015
Revenue and other income
Employee benefits expense
Depreciation expense
Share options expense
Professional fees
Auditors remuneration
Rental expense for office lease
Share registry fees
Loss on sale of financial assets at fair value through
profit or loss
Other expenses
Note
7
2015
$
2014
$
790,396
(1,188,568)
(27,520)
(24,384)
(408,919)
(26,000)
(42,773)
(99,497)
364,312
(1,324,713)
(30,429)
(26,733)
(301,072)
(76,000)
(70,657)
(60,656)
(70,149)
(191,227)
-
(377,792)
Loss before income tax from continuing operations
Income tax benefit from continuing operations
Loss for the period from continuing operations
9
(1,288,641)
-
(1,288,641)
(1,903,740)
-
(1,903,740)
Discontinued operations
Profit / (loss) from discontinued operations
24
20,276,328
(7,862,433)
Profit / (loss) for the period
18,987,687
(9,766,173)
Profit / (loss) attributable to:
Owners of the parent – continuing operations
Owners of the parent – discontinued operations
Non-controlling interests – discontinued operations
(1,288,641)
20,276,328
-
18,987,687
(1,903,740)
(4,668,794)
(3,193,639)
(9,766,173)
Earnings per share:
Basic and diluted profit / (loss) per share – continuing
and discontinued operations
Basic and diluted profit / (loss) per share – continuing
operations
21
Cents
Cents
8.59
(3.27)
(0.58)
(0.95)
The above Consolidated Income Statement should be read in conjunction with the accompanying notes
29 | P a g e
Chesser Resources Limited
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2015
Note
2015
$
2014
$
Profit / (loss) for the period
18,987,687
(9,766,173)
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Reclassification of adjustments related to foreign
operations disposed of during the year
Income tax relating to these items
-
(2,482,458)
(2,412,785)
-
-
-
Other comprehensive income for the period, net of
tax
(2,412,785)
(2,482,458)
Total comprehensive loss for the period
16,574,902
(12,248,631)
Total comprehensive Loss attributable to:
Owners of the Chesser Resources Limited
Non-controlling interests
16,574,902
-
(7,768,568)
(4,480,063)
16,574,902
(12,248,631)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the
accompanying notes
30 | P a g e
Chesser Resources Limited
Consolidated Statement of Financial Position
As at 30 June 2015
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit or loss
Other financial assets
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Exploration and evaluation assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Accumulated losses
Reserves
Parent interests
Non-controlling interest
TOTAL EQUITY
Note
20(a)
10
11
12
13
10
14
15
2015
$
2014
$
7,894,885
46,179
-
-
-
1,070,536
401,186
454,344
85,021
203,029
7,941,064
2,214,116
-
19,312
-
15,000
159,525
22,956,296
19,312
23,130,821
7,960,376
25,344,937
16
116,221
948,994
116,221
948,994
116,221
948,994
7,844,155
24,395,943
17
18
18
9,325,822
(3,395,526)
1,913,859
7,844,155
-
42,476,896
(18,485,795)
(1,687,941)
22,303,160
2,092,783
7,844,155
24,395,943
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
31 | P a g e
Chesser Resources Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2015
Issued
Capital
Ordinary
shares
$
Balance at 1 July 2014
42,476,896
Accumulated
Non-
controlling
Losses
$
(18,485,795)
Reserves
$
(1,687,941)
Interest
$
Total
$
2,092,783
24,395,943
Total comprehensive
income
Profit for the year
Other comprehensive Loss
Total comprehensive profit
/ (loss) for the year
Transactions with owners
in their capacity as owners
Return of capital paid
Share options issued
Balance at 30 June 2015
Balance at 1 July 2013
Total comprehensive
income
Loss for the year
Other comprehensive loss
Total comprehensive loss
for the year
Transactions with owners
in their capacity as owners
Shares issued
Transaction costs
Share options issued
Balance at 30 June 2014
-
-
-
18,987,687
(3,897,418)
-
3,577,416
-
(2,092,783)
18,987,687
(2,412,785)
15,090,269
3,577,416
(2,092,783)
16,574,902
(33,151,074)
-
9,325,822
-
-
(3,395,526)
-
24,384
1,913,859
-
-
-
(33,151,074)
24,384
7,844,154
Issued
Capital
Ordinary
Shares
$
35,563,669
Accumulated
Losses
$
(11,913,261)
Non-
controlling
Reserves
$
Interest
$
Total
$
(518,640)
6,572,846
29,704,614
-
-
-
(6,572,534)
-
-
(1,196,034)
(3,193,639)
(1,286,424)
(9,766,173)
(2,482,458)
(6,572,534)
(1,196,034)
(4,480,063)
(12,248,631)
7,528,958
(615,731)
-
42,476,896
-
-
-
(18,485,795)
-
-
26,733
(1,687,941)
-
-
-
2,092,783
7,528,958
(615,731)
26,733
24,395,943
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
32 | P a g e
Chesser Resources Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2015
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Research and development tax offset received
Net cash outflows used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation expenditure
Net proceeds from sale of exploration property
Net proceeds from disposal of subsidiaries
Proceeds from the sale of financial assets at fair value through
profit or loss
Net cash inflows / (outflows) used in investing activities
Cash flows from financing activities
Capital return paid to shareholders
Proceeds from issue of shares
Share issue costs
Net cash inflows/(outflows) provided by financing
activities
Net increase / (decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at the end of the year
Notes
2015
$
2014
$
206,520
(3,112,649)
216,930
(2,689,199)
72,515
(3,315,062)
-
(3,242,547)
20(b)
-
(1,397,692)
-
43,294,945
(8,018)
(5,063,288)
236,703
-
384,195
42,281,448
1,173,412
(3,661,191)
(33,151,074)
-
-
-
7,301,847
(615,732)
(33,151,074)
6,686,115
6,441,175
1,070,536
383,174
7,894,885
(217,623)
1,224,078
64,081
1,070,536
20(a)
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
33 | P a g e
Chesser Resources Limited
Financial report or the year ended 30 June 2015
Contents of the notes to the financial statements
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11
12
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
General information
Application of new and revised Accounting Standards
Significant accounting policies
Financial risk management
Critical accounting estimates and judgements
Operating segments
Revenue
Expenses
Income tax
Trade and other receivables
Financial assets at fair value through profit or loss
Other financial assets
Other current assets
Property, plant and equipment
Exploration and evaluation expenditure
Trade and other payables
Contributed equity
Reserves and accumulated losses
Remuneration of auditors
Cash flow information
Earnings per share
Share-based payments
Parent entity disclosures
Subsidiaries
Related parties
Key management personnel compensation
Commitments and Contingent Liabilities
Events occurring after the reporting period
35
35
36
45
47
48
50
50
51
52
52
52
52
52
53
53
53
54
55
56
56
57
59
60
62
62
62
63
34 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
1. General information
Chesser Resources Limited (the Company) is a listed public company incorporated in Australia. The address
of its registered office and principal place of business is 96 Stephens Road, South Brisbane, QLD 4101.
The entity’s principal activities during the financial year was the development and disposal of its gold projects
located in Turkey.
2. Application of new and revised Accounting Standards
In the current financial year, the Company has adopted all of the new and revised Standards and
Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its
operations and effective for the current annual reporting period. The adoption of these new and revised
Standards and Interpretations has not resulted in any material changes to the Company’s accounting policies
or application of those policies.
Standards and Interpretations not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in
issue but not yet effective.
Standard/Interpretation
Effective for
annual reporting
periods
beginning on or
after
Expected to be
initially applied in
the financial year
ending
AASB 9 ‘Financial Instruments’, and the relevant amending
standards1
1 January 2018
30 June 2019
AASB 15 ‘Revenue from Contracts with Customers’ and AASB
2014-15 ‘Amendments to Australian Accounting Standards arising
from AASB 15’
AASB 2014-3 ‘Amendments to Australian Accounting Standards –
Accounting for Acquisitions of Interests in Joint Operations’
1 January 2018
30 June 2019
1 January 2016
30 June 2017
AASB 2014-4 ‘Amendments to Australian Accounting Standards –
Clarification of acceptable Methods of Depreciation and
Amortisation’
AASB 2014-9 ‘Amendments to Australian Accounting Standards –
Equity Method in Separate Financial Statements’
AASB 2014-10 ‘Amendments to Australian Accounting Standards –
Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture’
AASB 2015-1 ‘Amendments to Australian Accounting Standards –
Annual Improvements to Australian Accounting Standards 2012-
2014 Cycle’
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
AASB 2015-2 ‘Amendments to Australian Accounting Standards –
Disclosure Initiative: Amendments to AASB101’
1 Jan 2016
1 Jul 2016
AASB 2015-3 ‘Amendments to Australian Accounting Standards
arising from the Withdrawal of AASB 1031 Materiality’
1 July 2015
30 June 2016
35 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
Standard/Interpretation
AASB 2015-5 ‘Amendments to Australian Accounting Standards –
Investment Entities: Applying the Consolidation Exception’
Effective for
annual reporting
periods
beginning on or
after
Expected to be
initially applied in
the financial year
ending
1 January 2016
30 June 2017
The Directors anticipate that the adoption of these Standards and Interpretations in future years may have the
following impacts:
AASB 9 – This revised standard provides guidance on the classification and measurement of financial assets,
which is the first phase of a multi-phase project to replace AASB 139 Financial Instruments: Recognition and
Measurement. Under the new guidance, a financial asset is to be measured at amortised cost only if it is held
within a business model whose objective is to collect contractual cash flows and the contractual terms of the
asset give rise on specified dates to cash flows that are payments solely of principal and interest (on the
principal amount outstanding). All other financial assets are to be measured at fair value. Changes in the fair
value of investments in equity securities that are not part of a trading activity may be reported directly in
equity, but upon realisation those accumulated changes in value are not recycled to the profit or loss.
Changes in the fair value of all other financial assets carried at fair value are reported in the profit or loss. The
Group is yet to assess the impact of the new standard. In the second phase of the replacement project, the
revised standard incorporates amended requirements for the classification and measurement of financial
liabilities. The new requirements pertain to liabilities at fair value through profit or loss, whereby the portion of
the change in fair value related to changes in the entity’s own credit risk is presented in other comprehensive
income rather than profit or loss. There will be no impact on the Group’s accounting for financial liabilities, as
the Group does not have any liabilities at fair value through profit or loss. Recent amendments as part of the
project introduced a new hedge accounting model to simplify hedge accounting requirements and more
closely align hedge accounting with risk management activities. There will be no impact on the Group’s
accounting, as the Group does not utilise hedge accounting.
Other than as noted above, the Directors do not anticipate that the adoption of the various Australian
Accounting Standards and Interpretations and IFRSs on issue but not yet effective will not impact the Group’s
accounting policies. However, the pronouncements may result in changes to information currently disclosed
in the financial statements. The Group does not intend to adopt any of these pronouncements before their
effective dates.
3.
Significant accounting policies
(a) Statement of compliance
The financial statements comprise the consolidated financial statements of the Group consisting of Chesser
Resources Limited and its subsidiaries. The Company is a for-profit entity for the purpose of preparing the
financial statements.
These financial statements are general purpose financial statements that have been prepared in accordance
with the Corporations Act 2001, Accounting Standards and Interpretations, and comply with the other
requirements of the law. Accounting Standards include Australian Accounting Standards. Compliance with
Australian Accounting Standards ensures that the financial statements and notes of the Company and the
Group comply with International Financial Reporting Standards (‘IFRS’).
The financial statements were authorised for issue by the Directors on 30 September 2015.
(b) Basis of preparation
The consolidated financial statements have been prepared on the basis of historical cost, except for certain
36 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
financial instruments that are measured at revalued amounts or fair values at the end of each reporting
period, as explained in the accounting policies below. Historical cost is generally based on the fair values of
the consideration given in exchange for goods and services. All amounts are presented in Australian dollars,
unless otherwise noted. Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date, regardless of whether
that price is directly observable or estimated using another valuation technique. In estimating the fair value of
an asset or liability, the Group takes into account the characteristics of the asset or liability if market
participants would take those characteristics into account when pricing the asset or liability at the
measurement date. Fair value for measurement and / or disclosure purposes in these consolidated financial
statements is determined on such a basis, except for share-based payment transactions that are within the
scope of AASB2 and measurements that have some similarities to fair value but are not fair value such as
value in use in AASB136.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3
based on the degree to which the inputs to the fair value measurement are observable and the significance of
the inputs to the fair value measurement in its entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that
that the entity can access at the measurement date.
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the
asset or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
The principal accounting policies are set out below.
(c) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Chesser
Resources Limited (“Company” or “parent entity”) as at 30 June 2015 and the results of all subsidiaries for the
year then ended. Chesser Resources Limited and its subsidiaries together are referred to in this financial
report as the Group or the consolidated entity.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group (refer
to note 3(g).
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment
of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
income statement, statement of comprehensive income, statement of changes in equity and balance sheet
respectively.
Investments in subsidiaries are accounted for at cost in the individual financial statements of the Company.
37 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
(d)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the Managing Director or, in
the absence of the Managing Director, the Chief Financial Officer.
(e)
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of returns, trade allowances and rebates and amounts collected on behalf of third parties.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that
future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s
activities as described below.
Government grants
Grants from government, including Australian Research and Development tax offsets, are recognised at their
fair value where there is a reasonable assurance that the grant will be received and the Company will comply
with all attached conditions.
Where a grant is received relating to research and development costs that have been expensed, the grant is
recognised as other income when the grant becomes receivable.
When the grant relates to an asset, the fair value is credited to a deferred income account and is released to
the Statement of Financial Performance over the expected useful life of the relevant asset by equal annual
instalments.
Interest revenue
Interest is recognised using the effective interest method.
(f)
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income
based on the national income tax rate adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period in the countries where the Company’s subsidiaries and associates operate and
generate taxable income, Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised if they arise from initial recognition of an asset or liability in
a transaction other than a business combination that at the time of the transaction affects neither accounting
nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantially enacted by the balance sheet date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amounts
and tax bases of investments in controlled entities where the parent entity is able to control the timing of the
reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable
future.
38 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised
in other comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
(g)
Business combinations
The acquisition method of accounting is used to account for all business combinations regardless of whether
equity instruments or other assets are acquired. The consideration transferred for the acquisition of a
subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests
issued by the Group. The consideration transferred also includes the fair value of any contingent
consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-
related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions, measured initially at their fair values at the
acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in
the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net
identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and
the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s
share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair
value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been
reviewed, the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
(h) Impairment of assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment or more frequently if events or changes in circumstances indicate that they might be impaired.
Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s
fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash inflows which are largely independent of the
cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for possible reversal of impairment at each reporting date.
(i) Cash and cash equivalents
For cash-flow presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions, other short-term, highly liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value.
39 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
(j) Exploration and evaluation expenditure
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and
evaluation assets on an area of interest basis. Costs incurred before the consolidated entity has obtained the
legal rights to explore an area are recognised in profit or loss.
Exploration and evaluation assets are only recognised if the rights to the area of interest are current and
either:
•
the expenditures are expected to be recouped through successful development and exploitation of
the area of interest or by its sale; or
• activities in the area of interest have not at the reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical
feasibility and commercial viability and facts and circumstances suggest that the carrying amount exceeds the
recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated
to cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger
than the area of interest.
Once the technical feasibility and commercial viability of an area of interest are demonstrable, exploration and
evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from
exploration and evaluation expenditure to property and development assets within property, plant and
equipment.
Restoration costs that are expected to be incurred are provided for as part of the cost of the exploration and
evaluation phases that give rise to the need for restoration. Accordingly, these costs will be recognised
gradually over the life of the project as the phases occur.
(k)
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method, less provision for impairment. Trade and other receivables are
generally due for settlement within 30 days. They are presented as current assets unless collection is not
expected for more than 12 months after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectable are written off by reducing the carrying amount directly.
(l)
Investments and other financial assets
The Group classifies its financial assets in the following categories: financial assets at fair value through profit
or loss, available-for-sale, loans and receivables and held-to-maturity investments. The classification depends
on the purpose for which the assets were acquired.
The Group has no held-to-maturity investments or available-for-sale financial assets.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except for those with maturities greater than
12 months after the balance sheet date which are classified as non-current assets.
Subsequent to initial recognition, loans and receivables are carried at amortised cost using the effective
interest rate method. The Group assesses at each balance date whether there is objective evidence that a
financial asset or group of financial assets is impaired.
40 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
Financial assets at fair value through profit or loss
The Company has classified certain financial assets that were acquired principally for the purpose of being
sold in the near term as financial assets at fair value through profit or loss. Financial assets at fair value
through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in
profit or loss. Fair value is determined using quoted market prices. The net gain or loss recognised
recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included
in revenue. Fair value is determined in the manner described in note 11.
(m) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12
months from the reporting date. They are recognised initially at their fair value and subsequently measured at
amortised cost using the effective interest method.
(n) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of
tax, from the proceeds.
(o) Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and
rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception
at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The
corresponding rental obligations, net of finance charges, are included in liabilities. Each lease payment is
allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period. The property, plant and equipment acquired under finance leases is depreciated over the estimated
useful life of the asset. Where there is no reasonable certainty that the lessee will obtain ownership, the asset
is depreciated over the shorter of the lease term and the asset’s useful life.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as
lessee are classified as operating leases. Payments made under operating leases are charged to profit or
loss on a straight-line basis over the period of the lease.
(p) Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to
the income statement during the financial period in which they are incurred.
Depreciation of assets is calculated on the straight line method to allocate their cost, net of their residual
values, over their estimated useful lives. The depreciation rates used for each class of depreciable asset are:
Classification
Rate
Plant and equipment
5 – 50%
Depreciation
Basis
Straight Line
41 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet
date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount (note 3(h)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in profit or loss.
(q) Employee benefits
(i)
(ii)
(iii)
(iv)
(r)
(i)
Short-term obligations
Liabilities for wages and salaries, expected to be settled within 12 months after the end of the period
in which the employees render the related service are recognised in respect of employees' services
up to the end of the reporting period and are measured at the amounts expected to be paid when the
liabilities are settled. All other short-term employee benefit obligations are presented as payables.
Other long-term employee benefits
The liability for long service leave and annual leave which is not expected to be settled within 12
months after the end of the period in which the employees render the related service is recognised in
the provision for employee benefits and measured as the present value of expected future payments
to be made in respect of services provided by employees up to the end of the reporting period using
the projected unit credit method. Consideration is given to expect future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the end of the reporting period on corporate bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
Superannuation
The Group makes contributions to defined contribution superannuation funds. Contributions are
recognised as an expense as they become payable.
Share-based payments
Share-based compensation benefits are provided to employees.
The fair value at grant date is determined using an option pricing model that takes into account the
exercise price, the term of the option, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.
The fair value of options granted is recognised as an employee benefits expense with a
corresponding increase in equity. The total amount to be expensed is determined by reference to the
fair value of the options granted, which includes any market performance conditions but excludes the
impact of any service and non-market performance vesting conditions and the impact of any non-
vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are
expected to vest. The total expense is recognised over the vesting period, which is the period over
which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity
revises its estimates of the number of options that are expected to vest based on the non-marketing
vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss,
with a corresponding adjustment to equity.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the year and excluding treasury shares.
42 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
(ii)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share
to take into account the after income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
(s)
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in
the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to, the taxation authority, are presented as
operating cash flows.
(t)
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at
the discretion of the entity, on or before the end of the financial year but not distributed at balance date.
(u)
Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operated (“the functional currency”).
The consolidated financial statements are presented in Australian dollars, which is Chesser Resources
Limited’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are
deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are
attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the income statement,
within finance costs. All other foreign exchange gains and losses are presented in the income statement
on a net basis within other income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined. Translation differences on assets and
liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation
differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss
are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-
monetary assets such as equities classified as available-for-sale financial assets are recognised in other
comprehensive income.
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
43 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
•
•
•
assets and liabilities for each balance sheet presented are translated at the closing rate at the
date of that balance sheet
income and expenses for each statement of comprehensive income are translated at average
exchange rates (unless this is not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income and expenses are translated at
the dates of the transactions), and
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities,
and of borrowings and other financial instruments designated as hedges of such investments, are recognised
in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net
investment are repaid, a proportionate share of such exchange difference is reclassified to profit or loss, as
part of the gain or loss on sale where applicable.
(v)
Financial guarantee contracts
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The
liability is initially measured at fair value and subsequently at the higher of the amount determined in
accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially
recognised less cumulative amortisation, where appropriate.
The fair value of financial guarantees is determined as the present value of the difference in net cash flows
between the contractual payments under the debt instrument and the payments that would be required
without the guarantee, or the estimated amount that would be payable to a third party for assuming the
obligations.
Where guarantees in relation to loans or other payables of subsidiaries or associates are provided for no
compensation, the fair values are accounted for as contributions and recognised as part of the cost of the
investment.
(w)
Parent entity financial information
The financial information for the parent entity Chesser Resources Limited, disclosed in note 23 has been
prepared on the same basis as the consolidated financial statements except as set out below.
(i)
(ii)
(iii)
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the
financial statements of the Company. Dividends received from associates are recognised in the
parent entity’s profit or loss when its right to receive the dividend is established.
Financial guarantees
Where the Company has provided financial guarantees in relation to loans and payables of
subsidiaries for no compensation, the fair values of these guarantees are accounted for as
contributions and recognised as part of the cost of the investment.
Share based payments
The grant by the Company of options over its equity instruments to the employees of subsidiary
undertakings in the Group is treated as a capital contribution to that subsidiary undertaking. The fair
value of employee services received, measured by reference to the grant date fair value, is
recognised over the vesting period as an increase to investment in subsidiary undertakings, with a
corresponding credit to equity.
44 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
4. Financial risk management
The Group’s principal financial instruments comprise cash and cash equivalents, term deposits, trade and
other receivables, financial assets at fair value through profit or loss and trade and other payables. The
Group does not currently have any projects in production and as such the main purpose of these financial
instruments is to provide liquidity to finance the Group’s development and exploration activities. It is, and has
been throughout the financial year, the Group’s policy that no trading in speculative financial instruments
shall be undertaken. The main risks arising from the Group’s use of financial instruments are liquidity risk,
counterparty or credit risk, interest rate risk and foreign currency risk. During the year the Group has had
some transactional currency exposures, principally to the US dollar and Turkish Lira. The Group has not
entered into forward currency contracts to hedge these exposures due to the short time frame associated
with the currency exposure and the relatively modest overall exposure at any one point in time.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class
of financial asset and financial liability are disclosed in note 3 to the financial statements.
Primary responsibility for identification and control of financial risk rests with the board of directors. However,
the day-to-day management of these risks is under the control of the Managing Director and the Chief
Financial Officer. The Board agrees the strategy for managing future cash flow requirements and
projections.
The Group holds the following financial instruments:
Financial Assets
Cash and cash equivalents *
Trade and other receivables *
Financial assets at fair value through profit or loss**
Other financial assets *
Financial Liabilities
Trade and other payables ***
Loans and receivables category
*
** Financial assets at fair value through profit or loss category
*** Financial liabilities at amortised cost category
(a) Market risk
2015
$
7,894,885
46,179
-
-
7,941,064
2014
$
1,070,536
416,186
454,344
85,021
2,026,087
116,221
116,221
948,994
948,994
Foreign exchange risk
(i)
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures. The Group’s policy is to convert its local currency to the foreign currency at the time of the
transaction. Foreign exchange risk arises from future commercial transactions and recognised financial
liabilities denominated in a currency that is not the Group’s functional currency (which is the Australian
dollar).
The Group manages foreign exchange risk on an as-needs basis. The risk is measured using sensitivity
analysis and cash-flow forecasting. The Group’s exposure to foreign currency risk, expressed in Australian
dollars at the reporting date was as follows:
45 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
2015
USD
$
2014
USD
$
2,671,924 290,068
-
-
Cash and cash equivalents
Trade and other receivables
Financial assets at
through profit or loss
Other financial assets
fair value
Trade and other payables
-
-
Total assets 2,671,924 290,068
17,000
-
-
-
Net exposure 2,671,924 273,068
2015
TL
$
-
-
-
-
-
-
-
2014
TL
$
11,485
380,221
-
85,021
476,727
432,409
44,318
2015
CAD
$
-
-
-
-
-
-
-
2014
CAD
$
6,841
-
454,344
-
461,185
2,256
458,929
The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian dollar
against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk
internally to key management personnel and represents management’s assessment of the reasonably
possible change in foreign exchange rates. A negative number in the table represents a decrease in the
operating profit before tax and reduction in equity where the Australian dollar strengthens against the relevant
currency. For a 10% strengthening of the Australian dollar against the relevant currency, there would be a
comparable impact on the loss or equity, and the balances below would be positive.
Profit / (loss) before tax
Equity
2015
USD
$
(267,192)
(267,192)
2014
USD
$
(27,307)
(27,307)
2015
TL
$
-
-
2014
TL
$
(4,431)
(4,431)
2015
CAD
$
2014
CAD
$
-
-
(45,892)
(45,892)
Price risk
(ii)
At the end of the prior reporting period the Group was exposed to equity security price risk arising from equity
securities that it held in Pilot Gold Inc that are traded on the Toronto Stock Exchange. Those equity securities
were classified as financial assets at fair value through profit or loss and had a carrying value of $Nil as at the
reporting date (2014:$454,344). Had the value of the equity securities held at 30 June 2015 increased /
decreased by 10% with all other variables held constant, the Group’s post tax loss for the year would have
been $Nil lower / higher (2014: $45,434 higher / $45,434 lower).
Interest rate risk
(iii)
The Group’s exposure to interest rate risk arises predominantly from cash and cash equivalents bearing
variable interest rates, as the Group intends to hold any fixed rate financial assets to maturity. At the end of
the reporting period the Group maintained the following variable rate accounts:
30 June 2015
30 June 2014
Weighted
average
interest rate
%
Balance
$
Weighted
average
interest rate
%
Balance
$
Cash and cash equivalents
2.15%
7,894,885
2.33%
1,070,536
At the end of the reporting period, if the interest rates had changed, as illustrated in the table below, with all
other variables remaining constant, after-tax profit and equity would have been affected as follows:
46 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
After-tax profit
higher / (lower)
Equity higher /
(lower)
2015
$
2014
$
2015
$
2014
$
+1% (100bp)
-1% (100bp)
78,949
(78,949)
10,705
(10,705)
78,949
(78,949)
10,705
(10,705)
(b) Credit risk
Credit risk primarily arises from cash and cash equivalents and term deposits deposited with banks and
receivables. Cash and cash equivalents and term deposits are primarily placed with National Australia Bank
Limited and AMP Bank Limited, which have independently rated credit rating of AA- and A+ respectively.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents in order to meet
the Group’s forecast requirements. The Group manages liquidity risk by continuously monitoring forecast
and actual cash flows and matching the maturity profiles of financial assets and liabilities. Surplus funds are
generally only invested in bank deposits. At reporting date, the Group did not have access to any undrawn
borrowing facilities.
Maturity of financial liabilities
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the
remaining period at the reporting date to the contractual maturity date.
30 June 2015
Less than 3
months
$
Total contractual
cash flows
$
Carrying amount
$
Trade and other payables
116,222
116,222
116,222
30 June 2014
Less than 3
months
$
Total contractual
cash flows
$
Carrying amount
$
Trade and other payables
948,994
948,994
948,994
(d) Fair value estimation
Financial assets at fair value through profit or loss are carried at their fair value as determined by reference to
quoted bid prices in an active, liquid market (Level 1).
The carrying amount of other financial assets (net of any provision for impairment) and financial liabilities as
disclosed above is assumed to approximate their fair values primarily due to their short maturities
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the entity and that are
believed to be reasonable under the circumstances.
5. Critical accounting estimates and judgements
The Group makes estimates and assumption concerning the future. The resulting accounting estimates will,
by definition, seldom equal the actual results. As at 30 June 2015 there were no critical estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
47 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
6. Operating segments
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by
the Managing Director, or in the absence of the Managing Director, the Chief Financial Officer (chief operating
decision maker) in assessing performance and determining the allocation of resources.
The Group is managed primarily on a geographic basis, that is, the location of the respective Projects the
Group is seeking to explore and develop. Operating segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are
considered to have similar economic characteristics and meet the other aggregation criteria of AASB 8
Operating Segments.
Activity by segment
Kestanelik Project
The Kestanelik Project is situated in north western Turkey. During the financial year the Company disposed of
its 100% ownership interest in the Kestanelik Project for cash consideration of US$40 million.
Karaayi Project
The Karaayi Project is approximately 40 kilometers south west of the Kestanelik Project in north western
Turkey. The Karaayi Project was sold in September 2013.
Sisorta Project
The Sisorta project is in north-eastern Turkey in which the Group had a 51% ownership interest. During the
year the Company disposed of its interest in the SIsorta Project for cash consideration of $162,023.
Catak Project
During the year, the Company terminated its option to acquire an interest in the Catak Project.
Corporate
Expenditure incurred that is not directly allocated to the Kestanelik, Karaayi, Sisorta or Catak Projects is
reported as corporate costs in the internal reports prepared for the chief operating decision maker.
Accounting policies adopted
The Chief Operating Decision Maker assesses the performance of the operating segments based on a
measure of gross expenditure that includes both expenditure that is capitalised in these financial statements
and expenditure that is expensed in the income statement in these financial statements. The measurement of
gross expenditure does not include the impairment of exploration expenditure but does include non-cash
items such as depreciation expense and share based payments expense. Interest revenue is allocated to the
Corporate segment. Other items of revenue are not allocated to segments.
48 | P a g e
598,473
(27,520)
(24,384)
20,276,328
628,018
18,987,687
Total
$
77,092
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
i. Segment performance
30 June 2015
Total segment revenue
Kestanelik
Project
$
Karaayi
Project
$
Sisorta
Project
$
Catak
Project
$
-
Corporate
costs
$
191,924
Total
$
191,924
(2,027,133)
(1,835,209)
(2,655,152)
(2,463,228)
-
-
-
-
-
-
-
(75,041)
(75,041)
Total segment expenditure
Segment result
(552,978)
(552,978)
Reconciliation of segment result to net loss before tax
Other income
Depreciation
Share based payments
Profit from discontinued operations
Capitalised expenditure
Net profit before tax
30 June 2014
Total segment revenue
Kestanelik
Project
$
Karaayi
Project
$
Sisorta
Project
$
Catak
Project
$
-
-
-
-
Corporate
costs
$
77,092
Total segment expenditure
Segment result
(5,101,805)
(5,101,805)
(218,997)
(218,997)
(145,856)
(145,856)
(25,441)
(25,441)
(2,210,890)
(2,133,798)
(7,702,989)
(7,625,897)
Reconciliation of segment result to net loss before tax
Other income
Depreciation
Share based payments
Loss from discontinued operations
Capitalised expenditure
Net loss before tax
287,220
(30,429)
(26,733)
(7,862,433)
5,492,099
(9,766,173)
ii.
Segment assets and liabilities
The segment information presented to the Managing Director does not include the reporting of assets and
liabilities or cash flows by segment. As at 30 June 2015 the Group’s assets are located primarily in
Australia.
30 June 2015
Segment assets
Segment assets includes:
Additions to non-current assets (other than
financial assets and deferred tax)
Disposals of non-current assets (refer note 24)
Turkey
$
Australia and
Other
$
Total
$
-
7,960,376
7,960,376
628,018
(23,116,628)
-
-
628,018
(23,116,628)
Segment liabilities
-
116,222
116,222
49 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
30 June 2014
Segment assets
Segment assets includes:
Additions to non-current assets (other than
financial assets and deferred tax)
Impairments
Disposals of non-current assets
Turkey
$
Australia and
Other
$
Total
$
23,607,384
1,737,553
25,344,937
5,551,740
(6,500,000)
(1,790,358)
4,286
-
-
5,556,026
(6,500,000)
(1,790,358)
Segment liabilities
573,974
375,020
948,994
Revenue and other income – continuing operations
7.
Interest revenue
Gain on sale of financial assets at fair value through profit or loss
Foreign exchange gains
Research and development tax offset
2015
$
2014
$
191,923
-
381,543
216,930
790,396
71,214
293,098
-
364,312
During the financial year the Group received $216,930 (2014:$Nil) research and development refundable tax
offset which has been accounted for as a government grant and included in other income. There are no
unfulfilled conditions or other contingencies attaching to this grant, The Group did not benefit directly from
any other forms of government assistance.
Gain on sale of financial assets at fair value through profit or loss includes $Nil in unrealised gains as at 30
June 2015 (2014:$131,055 unrealised gains).
8.
Expenses – continuing operations
Loss before income tax includes the following specific expenses:
Rental expenses relating to operating leases – minimum lease rentals
68,155
93,821
Superannuation contributions
Net foreign exchange losses
82,931
140,947
-
163,273
50 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
9.
Income tax – continuing operations
(a) Income tax benefit
Current tax
Deferred tax
(b) Deferred income tax/(revenue)
Deferred income tax/(revenue) included in tax expense comprises:
(Increase)/decrease in deferred tax assets
Increase/(decrease) in deferred tax liabilities
2015
$
2014
$
-
-
-
-
-
-
(148,290)
148,290
-
(2,198,620)
2,198,620
-
(c) Reconciliation of income tax expense to prima facie income tax
Loss before income tax from continuing operations
(1,288,641)
(1,903,740)
Tax at the Australian tax rate of 30% (2014: 30%)
Tax effect of amounts which are not deductible/(taxable) in calculating
taxable income:
Share-based payments
Research and development offset
Other non-deductible expenses
Capital raising costs
Deferred tax assets not recognised
Income tax benefit
(d) Deferred tax assets / liabilities comprise
Interest receivable
Accruals
Unrealised foreign exchange gains
S 40-880 capital raising expenses and legal fees
Unrealised fair value adjustments
Tax losses available for offset against future taxable income
Net deferred tax assets
Deferred tax assets not recognised
(e) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following
items:
(386,592)
(571,122)
7,315
(65,079)
154,637
(107,597)
(397,316)
397,316
-
(2,369)
11,216
(175,662)
148,548
-
2,751,695
2,733,428
(2,733,428)
-
8,020
-
228,449
(123,575)
(458,228)
458,228
-
(1,613)
15,544
-
256,144
(39,316)
2,354,379
2,585,138
(2,585,138)
-
Temporary differences and tax losses at 30% (2014: 30%)
2,733,428
2,585,138
Tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect
of these items because it is not probable that future taxable profit will be available against which the Group can
utilise the benefits from the deferred tax assets. The benefit of the tax losses will only be available if the
Company, or a tax consolidated group of which it is a member, derives future assessable income of a nature
and of an amount sufficient to enable the benefit from the tax losses to be realised, has complied and continues
to comply with conditions for deductibility imposed by current tax legislation and there are no adverse changes
to such legislation. The conditions for deductibility of the carried forward tax losses (continuity of ownership test
and continuity of business test) will need to be considered in light of any changes that may occur in both the
ownership of the Company and the nature of the Company’s business activities.
51 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
10.
Trade and other receivables
Current
Other receivables
Non-current
Other receivables
2015
$
2014
$
46,179
401,186
-
15,000
46,179
416,186
Other receivables in the prior period mainly represent VAT in Turkey and deposits and guarantees for
tenements. None of the balances within other receivables are past due or contain impaired assets.
Financial assets at fair value through profit or loss
11.
Current
Listed equity securities
-
454,344
The fair value of the listed equity securities in the prior period was based on unadjusted quoted market prices for
the shares (level 1 as defined in AASB 13).
Other financial assets
12.
Current
Term deposits
13.
Other current assets
Prepayments
Property, plant and equipment
14.
Plant and equipment
At cost
Accumulated depreciation
Movements in property, plant and equipment during the year were as follows:
Carrying amount at beginning of year
Impact of movements in foreign exchange rates
Additions
Disposals
Depreciation
Carrying amount at end of year
-
-
85,021
203,029
127,945
(108,633)
19,312
433,066
(273,541)
159,525
159,525
-
-
(112,693)
(27,520)
19,312
213,407
(30,494)
56,365
-
(79,753)
159,525
Depreciation amounting to $Nil was capitalised to exploration and evaluation expenditure during the year (2014:
$48,303).
52 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
15.
Exploration and evaluation expenditure
At cost
Carrying amount at beginning of year
Impact of movements in foreign exchange rates
Additions
Disposals
Impairment of exploration and evaluation expenditure
2015
$
2014
$
-
22,956,296
22,956,296
532,079
628,018
(24,116,393)
-
28,092,408
(2,337,853)
5,492,099
(1,790,358)
(6,500,000)
Carrying amount at end of year
-
22,956,296
The ultimate recoupment of these costs is dependent on the successful development and commercial
exploitation, or alternatively, sale of the respective areas of interest.
Impairment charge
The impairment charge of $6,500,000 in the year ended 30 June 2014 arose in relation to the Sisorta Project
and represents the excess of the capitalised exploration and evaluation expenditure for the Sisorta Project over
the Company’s estimated value of the consideration, net of disposal costs, that would be receivable by the
Company in an arm’s length disposal of the project. The estimated consideration receivable was based on
recent comparable transactions for exploration stage gold projects with similar characteristics to the Sisorta
Project.
Trade and other payables
16.
Trade payables
Accruals
Total trade and other payables
79,605
36,616
116,221
690,298
258,696
948,994
Trade payables and accruals are unsecured, non-interest bearing and due 30 days from the date of
recognition.
17.
Contributed equity
Ordinary shares – fully paid
9,325,822
42,476,896
Effective 1 July, 1998 the Corporations legislation in place abolished the concepts of authorised capital and par
value shares. Accordingly, the parent does not have authorised capital nor par value in respect of its issued
shares.
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company
in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of
ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share
is entitled to one vote.
53 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
(a)
Movements in share capital
Date
Details
No. of
shares
Issue
Price
$
23 August 2013
23 September 2013
17 October 2013
3 April 2014
12 December 2014
Balance 30 June 2013
Issue of shares – pursuant to option to acquire
Karaayi project
Issue of shares – Placement @$0.11 per
share
Issue of shares – Entitlement offer @$0.11 per
share
Issue of shares – pursuant to option to acquire
Catak project
Issue costs
Balance 30 June 2014
Capital return paid to shareholders
Balance 30 June 2015
153,000,729
35,563,669
525,000
$0.16
84,000
22,400,000
$0.11
2,464,000
43,981,432
$0.11
4,837,958
1,100,000
-
221,007,161
$0.13
-
- $0.15
221,007,161
143,000
(615,731)
42,476,896
(33,151,074)
9,325,822
Capital management
(b)
When managing capital, management’s objective is to ensure the entity continues as a going concern and to
maintain a structure that ensures the lowest cost of capital available and to ensure adequate capital is available
to meet the Group’s forecast expenditure commitments.
In order to maintain or adjust the capital structure, the Group may seek to issue new shares.
Total capital is calculated as ‘equity’ as shown in the statement of financial position.
(c)
At 30 June 2015, the following options for ordinary shares in the Company were on issue:
Share options
Director and employee options
18.
Reserves and accumulated losses
Reserves
(a)
Share-based payments reserve
Foreign currency translation reserve
Movements:
Share based payments reserve
Balance at beginning of year
Options issued
Balance at end of year
2015
Number
2014
Number
7,100,000
6,705,000
2015
$
2014
$
1,914,271
(412)
1,913,859
1,889,887
(3,577,828)
(1,687,941)
1,889,887
24,384
1,914,271
1,863,154
26,733
1,889,887
54 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
Movements:
Foreign currency translation reserve
Balance at beginning of year
Derecognition on disposal of overseas subsidiaries
Net exchange differences on translation of foreign controlled entities
Balance at end of year
(b)
Accumulated losses
2015
$
2014
$
(3,577,828)
3,577,416
-
(412)
(2,381,794)
-
(1,196,034)
(3,577,828)
Movements:
Balance at beginning of year
Net profit / (loss) for the year
Derecognition of foreign currency translation reserve attributable to non-
controlling interests in overseas subsidiaries disposed of
Balance at end of year
(18,485,795)
18,987687
(11,913,261)
(6,572,534)
(3,897,418)
(3,395,526)
-
(18,485,795)
(c)
Nature and purpose of reserves
Share based payments reserve
The share based payments reserve is used to recognise the fair value of options issued but not exercised.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the financial statements of foreign controlled subsidiaries.
19.
Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity
and its related practices:
(b) Pitcher Partners Brisbane
(i) Audit and assurance services
Audit and review of financial reports
(ii) Non-audit services
Tax advice and compliance services
Total remuneration of Pitcher Partners Brisbane
(c) Network firms – Baker Tilly Gureli Turkey
(i) Audit and assurance services
Audit and review of financial reports
Total remuneration of network firms of Pitcher Partners Brisbane
26,000
35,000
-
-
-
-
18,542
53,542
30,000
30,000
Total auditors’ remuneration
26,000
83,542
55 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
2015
$
2014
$
20. Cash flow information
(a)
Cash and cash equivalents
Cash at bank and on hand
7,894,885
1,070,536
(b)
Reconciliation of loss after income tax to net cash outflow from
operating activities
Profit / (loss) for the year
Gain on disposal of subsidiaries
Provision for impairment
Share based payments
Depreciation and amortisation
(Gain) / loss on disposal of financial assets at fair value through profit or loss
Net exchange differences
18,987,687
(21,244,676)
-
24,384
27,520
70,149
(349,535)
(9,766,173)
-
6,500,000
26,733
30,950
(289,982)
163,273
Change in operating assets and liabilities (net of disposals):
(Increase)/decrease in trade or other receivables
(Increase)/decrease in other assets
Increase/(decrease) in trade and other payables
47,441
-
(252,169)
(17,338)
13,189
96,801
Net cash outflow from operating activities
(2,689,199)
(3,242,547)
The Group entered into the following non-cash investing and financing activities which are not reflected in the
consolidated statement of cash flows:
• The Group received equity securities as partial consideration for the
sale of the Karaayi project.
• The Group issued equity securities as consideration for the Group
acquiring or maintaining its interest in the Karaayi and Catak projects.
-
-
1,371,250
228,000
21. Earnings per share
2015
Cents
2014
Cents
Basic and diluted profit / (loss) per share – continuing and discontinued
operations
Basic and diluted profit / (loss) per share – continuing operations
8.59
(0.58)
(3.27)
(0.95)
(b) Weighted average number of ordinary shares used as the denominator
Number used in calculating basic earnings per share
221,007,161
201,104,865
2015
Number
2013
Number
56 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
(c) Information concerning earnings per share:
Options granted are considered to be potential ordinary shares and have been included in the determination of
diluted earnings per share to the extent to which they are dilutive. Details relating to options are set out in note
22. In 2015 and 2014 the options were anti-dilutive and are therefore not included in the calculation of diluted
earnings per share. The options could potentially dilute basic earnings per share in the future.
22.
Share based payments
Employee Share Option Plan
The Group has established the Chesser Resources Limited Employee Share Option Plan and a summary of the
Rules of the Plan are set out below:
• Eligible participants shall be full time or part time employees of the Company or an Associated Body
Corporate.
• Options are granted under the Scheme at the discretion of the Board and if permitted by the Board, may be
issued to an employee's nominee.
• Each option entitles the holder to subscribe for and be allotted one Share. Shares issued pursuant to the
exercise of Options will in all respects, including bonus issues and new issues, rank equally and carry the
same rights and entitlements as other Shares on issue. The Options may not be exercised until the Shares
have been quoted on ASX throughout the 12 month period immediately preceding that exercise of the
Options, without suspension during that period exceeding in total 2 trading days.
• Unless the Directors in their absolute discretion determine otherwise, Options shall lapse upon the earlier of:
a. The expiry of the exercise period;
b. The Option holder ceasing to be within the category of Eligible Participant by reason of dismissal,
resignation or termination of employments, office or services for any reason, except the Directors may
resolve within 30 days of such dismissal, resignation or termination, that the Options shall lapse on other
terms they consider appropriate;
c. The expiry of 1 year after the Option holder ceases to be within the category of Eligible Participant by
reason of retirement; and
d. A determination by the Directors that the Option holder has acted fraudulently, dishonestly or in breach
of his or her obligations to the Company or an Associated Body Corporate.
• An option may not be transferred or assigned except that a legal personal representative of a holder of an
Option who has died or whose estate is liable to be dealt with under laws relating to mental health will be
entitled to be registered as the holder of that Option after that production to the Directors of such documents
or other evidence as the Directors may reasonably require to establish that entitlement.
• Options will not be quoted on ASX. However, application will be made to ASX for official quotation of the
shares allotted pursuant to the exercise of options if the Company’s shares are listed on ASX at that time.
• Option holders may only participate in new issues of securities by first exercising their options.
The Board may amend the Scheme Rules subject to the requirements of the Australian Securities Exchange
listing Rules.
The options hold no voting or dividend rights and are not transferable.
Set out below are summaries of options granted as share-based payments for services provided by directors
and employees.
57 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
Expiry
Date
Exercise
Price(1)
Balance at
start of the
year
Number
Granted
during the
year
Number
Exercised
during the
year
Number
Lapsed
during the
year
Number
Balance at
30 June
2015
Grant
Date
2015
Vested
and
exercisabl
e at end of
the year
Number
04/03/2010
02/03/2015
14/12/2012
13/12/2016
14/12/2012
13/12/2016
14/12/2012
13/12/2016
14/12/2012
13/12/2016
14/12/2012
13/12/2016
14/12/2012
13/12/2016
01/2/2013
31/1/2017
01/2/2013
31/1/2017
01/2/2013
31/1/2017
20/10/2014
31/12/2016
$0.03
$0.35
$0.40
$0.45
$0.50
$0.55
$0.60
$0.20
$0.25
$0.30
$0.11
105,000
500,000
1,000,000
1,500,000
1,000,000
1,000,000
1,000,000
200,000
200,000
200,000
-
-
-
-
-
-
-
-
-
-
-
500,000
6,705,000
500,000
-
-
-
-
-
-
-
-
-
-
-
-
(105,000)
-
-
-
-
-
-
-
-
-
-
-
-
500,000
500,000
1,000,000
1,000,000
1,500,000
1,500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
200,000
200,000
200,000
500,000
200,000
200,000
200,000
500,000
(105,000)
7,100,000
7,100,000
Weighted average exercise price
$0.46
$0.11
$0.03
$0.44
(1) In accordance with the Listing Rules of the Australian Stock Exchange Limited, the exercise price of issued
options was reduced by $0.15 per share on 12 December 2014 following the completion of a $0.15 capital
return to shareholders. The adjusted exercise price is shown in the tables for both 2015 and 2014.
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Lapsed
during
year
the
Number
Number
Number
Number
Balance at
30
June
2014
Vested
and
exercisabl
e at end of
the year
Number
Expiry
Date
Exercise
Price
Grant Date
2014
20/04/2010
19/04/2015
04/03/2010
02/03/2015
14/12/2012
13/12/2016
14/12/2012
13/12/2016
14/12/2012
13/12/2016
14/12/2012
13/12/2016
14/12/2012
13/12/2016
14/12/2012
13/12/2016
01/2/2013
31/1/2017
01/2/2013
31/1/2017
01/2/2013
31/1/2017
Weighted average exercise price
$0.40
$0.03
$0.35
$0.40
$0.45
$0.50
$0.55
$0.60
$0.20
$0.25
$0.30
2,200,000
105,000
500,000
1,000,000
1,500,000
1,000,000
1,000,000
1,000,000
200,000
200,000
200,000
8,905,000
$0.55
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,200,000)
-
-
-
-
-
-
-
-
-
-
-
105,000
500,000
-
105,000
500,000
1,000,000
1,000,000
1,500,000
1,500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
200,000
200,000
200,000
200,000
200,000
-
(2,200,000)
6,705,000
6,505,000
$0.40
$0.61
$0.61
The weighted average remaining contractual life of share options outstanding at the end of the period was 1.5
years (2014 – 2.44 years). The assessed fair value at grant date of options issued is determined using the Black
Scholes option pricing model which takes into account the exercise price, the term of the option, the share price
58 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free
rate for the term of the option.
The model inputs for options granted during the year ended 30 June 2015 included:
Option premium
Exercise price (before capital return)
Expiry date
Vesting conditions
Share price at grant date
Expected price volatility of the Company’s shares
Expected dividend yield
Risk free interest rate
Employee Options
issued
20 October 2014
$Nil
$0.26
31 December 2016
Vest immediately
$0.15
66%
0%
2.53%
No options were grated during the year ended 30 June 2014.
The weighted average fair value of options granted was $0.035 (2014: $Nil). The expected price volatility is
based on historic volatility (based on the remaining life of the options) adjusted for any expected changes to
future volatility due to publicly available information.
2015
$
2014
$
Expenses arising from share-based transactions
Options issued to directors and employees
24,384
26,733
Parent entity disclosures
23.
As at and throughout the financial year ending 30 June 2015 and 30 June 2014 the parent entity of the Group
was Chesser Resources Limited.
a)
The individual financial statements for the parent entity show the following aggregations.
Summary financial information
59 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
Results
Profit / (loss) for the year
2015
$
2014
$
Chesser Resources Limited
16,863,868
(6,810,764)
Total comprehensive income for the year
16,863,868
(6,810,764)
Financial Position
Current assets
Non-current assets
Current liabilities
Net Assets
Contributed equity
Share-based payments reserve
Accumulated losses
7,936,027
21,507
7,957,534
107,725
107,725
1,507,524
22,971,183
24,478,707
366,075
366,075
7,849,809
24,112,632
9,325,822
1,914,271
(3,390,284)
7,849,809
42,476,896
1,889,887
(20,254,151)
24,112,632
Guarantees entered into by the parent entity
b)
Chesser Resources Limited has not entered into any guarantees in the current or previous financial year, in
relation to the debt of its subsidiaries.
c)
Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2015 or 30 June 2014.
d)
Contractual commitments for capital expenditure
The parent entity did not have any contractual commitments for capital expenditure as at 30 June 2015 (2014:
$nil).
24.
Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in note 3(c).
Name of entity
Country of
incorporation
Class of
shares
Equity holding (1)
2015
%
2014
%
Bati Anadolu Madencilik Sanayi Ve Ticaret
A.S.(2)
EBX Holdings Pty Ltd
Chesser Resources Holding Cooperatief U.A.
Dharana B.V.
EBX Madencilik Ltd. A.S
EBX (BVI) Ltd.
Kaletepe Madencilik Sanayi Ve Ticaret A.S
Turkey
Australia
Netherlands
Netherlands
Turkey
British Virgin Isles
Turkey
Ordinary
Ordinary
Membership
Ordinary
Ordinary
Ordinary
Ordinary
-
100
100
100
-
-
-
99
100
100
100
51
51
100
(1) The proportion of ownership interest is equal to the proportion of voting power held.
(2) Dr Richard Valenta, Managing Director owned 50 shares (1%) of Bati Anadolu Madencilik Sanayi Ve
Ticaret A.S.
60 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
During the financial year, the Company disposed of the following subsidiaries:
i. On 24 October 2014 the Company disposed of its wholly owned subsidiary Bati Anadolu Madencilik Sanayi
Ve Ticaret A.S. (Bati) the owner of the Kestanelik Gold Project. The proceeds of US$40 million were
received in cash. No tax charge or credit arose in relation to the disposal.
ii. On 26 March 2015 the Company disposed of its 51% owned subsidiaries EBX Madencilik Ltd. A.S and EBX
(BVI) Ltd (EBX entities). Through which the Company held its ownership interest in the Sisorta Gold Project.
The proceeds of $162,023 were received in cash. No tax charge or credit arose in relation to the disposal.
iii. On 26 June 2015 the Company disposed of its wholly owned subsidiary Kaletepe Madencilik Sanayi Ve
Ticaret A.S (Kalatepe). The Company received $Nil consideration for the disposal of Kalatepe. No tax
charge or credit arose in relation to the disposal.
A.
Consideration received
Consideration received in cash and cash
equivalents
B.
Net assets disposed of
Bati
$
EBX entities
$
Kalatepe
$
Total
$
45,454,545
162,023
-
45,616,568
Bati
$
EBX entities
$
Kalatepe
$
Total
$
Net assets disposed of
Including cash and cash equivalents
22,650,939
4,758
465,989
11,242
-
23,116,628
1,510
17,510
C.
Financial performance and cash flow information
The financial performance and cash flow information presented are the period from 1 July 2014 to the date on
which the relevant subsidiary was disposed (2015 column) and for the year ended 30 June 2014.
Revenue
Expenses
Loss before income tax of discontinued operations
Income tax expense
Loss before income tax of discontinued operations
Gain on sale of subsidiaries after income tax
2015
$
2014
$
98,923
(1,067,271)
(968,348)
-
(968,348)
21,244,676
2,763
(7,865,194)
(7,862,431)
-
(7,862,431)
-
Profit / (loss) from discontinued operations
20,276,328
(7,862,431)
Net cash outflow from operating activities
Net cash inflow from investing activities
Net cash decrease attributable to disposed subsidiaires
(946,663)
(1,654,802)
(2,601,465)
(1,362,431)
(4,826,585)
(6,189,006)
61 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
D.
Gain / (loss) on disposal of subsidiaries
Consideration received
Transaction costs
Net assets disposed of
Non-controlling interests
Bati
$
45,454,545
(2,321,623)
(22,650,939)
-
EBX entities
$
162,023
-
(465,689)
3,033,743
Kalatepe
$
Total
$
-
-
-
-
45,616,568
(2,321,623)
(23,116,628)
3,033,743
Cumulative exchange gain in respect of the net
assets of the subsidiary reclassified from equity to
profit and loss on loss of control of subsidiary
619,420
(2,587,239)
435
(1,967,384)
Gain / (loss) on disposal
21,101,403
142,838
435
21,244,676
25.
Related parties
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in this note.
There were no transactions between the Group and other related parties in the current or prior financial year.
26.
Key management personnel compensation
The aggregate compensation paid to directors and other members of key management personnel of the
Company and the Group is set out below:
Short term employee benefits
Post employment benefits
Termination benefits
Share based payments
27.
Commitments and contingent liabilities
Operating leases
2015
$
2014
$
830,067
80,354
347,271
24,383
1,282,075
1,058,333
97,896
-
26,733
1,182,962
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as
follows:
Within one year
Later than one year but not later than five years
Contingent liabilities
61,299
-
61,299
72,376
70,333
142,709
The Company did not have any material contingent liabilities as at 30 June 2015.
62 | P a g e
Chesser Resources Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2015
28. Events occurring after the reporting period
Other than as disclosed below, no matter or circumstance has arisen since the end of the financial year that has
significantly affected, or may significantly affect the Group’s operations, the result of those operations or the
Group’s state of affairs.
(a)
Equal access share buy back
On 4 September, 2015 the Company held an Extraordinary General Meeting of Shareholders at which
Shareholders approved the implementation of an equal access buy back on the following terms:
Proposed buy back price
Maximum number of shares to be bought by the Company
Maximum cash to be returned to shareholders
Forecast cash balance after EABB if all shareholders participate fully
$0.0343 per share
220,636,100 shares
$7.57 million
$0.3 million
It is expected that payment will be made to participating Shareholders on or about 13 October 2015.
63 | P a g e
CHESSER RESOURCES LIMITED
DIRECTORS’ DECLARATION
In the directors’ opinion:
(a)
the attached financial statements and notes are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
giving a true and fair view of the Group’s financial position as at 30 June 2015 and of its
performance, as represented by the results of its operations and its cash flows, for the financial
year ended on that date;
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in
note 3(a); and
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
The directors have been given the declarations by the chief executive officer and chief financial officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of directors.
Stephen Kelly
Executive Director
Dated 30 September 2015
64 | P a g e
Independent Auditor’s Report to the Members of Chesser Resources Limited
Report on the Financial Report
We have audited the accompanying financial report of Chesser Resources Limited, which comprises the
consolidated statement of financial position as at 30 June 2015, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year then ended, notes comprising a summary of significant accounting policies and other
explanatory information, and the directors’ declaration of the consolidated entity comprising the company
and the entities it controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1,
the directors also state, in accordance with Accounting Standard AASB101 Presentation of Financial
Statements, that the financial statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgement, including the assessment of
the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the company’s preparation of the financial
report that gives a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation
of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001.
Opinion
In our opinion:
a) the financial report of Chesser Resources Limited is in accordance with the Corporations Act 2001,
including:
a) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of
its performance for the year ended on that date; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b) the consolidated financial report also complies with International Financial Reporting Standards as
disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 16 of the directors’ report for the year
ended 30 June 2015. The directors of the company are responsible for the preparation and presentation of
the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion the Remuneration Report of Chesser Resources Limited for the year ended 30 June 2015
complies with Section 300A of the Corporations Act 2001.
PITCHER PARTNERS
J.J. Evans
Partner
Brisbane, Queensland
30 September 2015
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 15 October 2015
A. Distribution of securities
Analysis of the number of equity securities by size of holding:
Holding
1 to 1000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Number of Holders
Shares
Options
79
162
146
353
128
868
-
-
-
-
5
5
There were 431 holders of less than a marketable parcel of ordinary shares.
B. Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Shareholder
One Managed Investment Funds Limited
National Nominees Limited
Jetosea Pty Ltd
CPO Superannuation Fund Pty Ltd
Chifley Portfolios Pty Ltd
Calama Holdings Pty Ltd
Mr A W Johnson & Mrs L Johnson
Greenslade Holdings Pty Ltd
Corporate Property Services Pty Ltd
Mr K T Tan & Mrs S K Tan
Taycol Nominees Pty Ltd
Citicorp Nominees Pty Limited
Mr L C Anderson
Darroch Family Pty Ltd
AWJ Family Pty Ltd
Mr M R Schapel & Mrs E Schapel
Mr C P Ball & Mrs S K Ball
Souttar Superannuation Pty Ltd
Mr S Taylor & Mrs S A Taylor
Mr C D Taylor
% of total
shares on
issue
Units
20,061,242
16.81%
6,917,758
5,819,481
4,600,839
4,061,134
3,125,000
2,727,500
2,671,269
2,126,520
2,122,779
1,701,418
1,498,057
1,410,000
1,410,000
1,296,940
1,253,919
1,142,523
1,125,000
1,025,870
1,019,000
5.80%
4.88%
3.86%
3.40%
2.62%
2.29%
2.24%
1.78%
1.78%
1.43%
1.26%
1.18%
1.18%
1.09%
1.05%
0.96%
0.94%
0.86%
0.85%
67,116,249
56.24%
SHAREHOLDER INFORMATION
Unquoted equity securities
Shareholder
Number on
issue
Number
of
holders
Options issued to former Directors
Options issued under the Chesser Resources Limited Employee Option
Plan to take up ordinary shares
6,000,000
1,100,000
3
2
Unquoted equity securities represent options to acquire ordinary shares. Each option entitles the holder to
acquire one ordinary share. The names of the holders of the unlisted options are as follows:
Option holder
Mr R G Reynolds
M & S Super Investments Pty Ltd
Mr P Lester
Mr S Kelly
Mr N Ricketts
C. Substantial shareholders
Substantial shareholders in the company are set out below:
Shareholder
Sandon Capital Pty Ltd
D. Voting rights
Options
2,000,000
2,000,000
2,000,000
600,000
500,000
7,100,000
% of total
options on
issue
28.17%
28.17%
28.17%
8.45%
7.04%
100.00%
Number
held
26,979,000
Percentage
22.61%
The voting rights attaching to each class of equity securities are set out below:
(a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
(b) Options
No voting rights.