Annual Report
2015
2015 ANNUAL REPORT
A
Flinders Mines Limited
ABN 46 091 118 044
CONTENTS
Highlights
Chairman’s Report
Projects
Exploration
Tenement Schedule
Financial Report
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Consolidated statement of
profit or loss and other
comprehensive income
Consolidated statement of
financial position
Consolidated statement of
changes in equity
Consolidated statement of
cash flows
Notes to the consolidated
financial statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Competent Persons
1
2
3
4
8
9
10
21
22
23
24
25
26
27
50
51
54
CORPORATE DIRECTORY
Directors
Robert M Kennedy (Chairman)
Ian Gordon (Managing Director)
Kevin J Malaxos
(Non-executive Director)
Ewan J Vickery (Non-executive Director)
Nicholas J Smart
(Alternate for Mr Kennedy)
Company Secretary
Justin Nelson
Share Registry
Computershare Investor Services
Level 5, 115 Grenfell Street
Adelaide, South Australia 5000
Telephone +61 8 8236 2300
Facsimile +61 8 8236 2305
Auditor
Grant Thornton Australia
Level 1, 67 Greenhill Road
Wayville, South Australia 5034
Registered and Principal Office
Banker
Level 1, 135 Fullarton Road
Rose Park, South Australia 5067
Telephone +61 8 8132 7950
Facsimile +61 8 8132 7999
Solicitor
DMAW Lawyers
Level 3, 80 King William Street
Adelaide, South Australia 5000
Telephone +61 8 8210 2222
Facsimile +61 8 8210 2233
The information in this report that relates to Exploration Targets, Exploration Results, or
Mineral Resources is based on information compiled by Dr Graeme McDonald who is
a member of the Australian Institute of Mining and Metallurgy and a full-time employee
of Flinders Mines Limited. Dr McDonald has sufficient experience that is relevant to the
styles of mineralisation and types of deposits under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of
the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Dr McDonald consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
Disclaimer
This report may include forward-looking statements. These forward-looking statements are
based on management’s expectations and beliefs concerning future events as of the time of
the release of this document. Forward-looking statements are necessarily subject to risks,
uncertainties and other factors, some of which are outside the control of Flinders Mines
Limited, that could cause actual results to differ materially from such statements. Flinders
Mines Limited makes no undertaking to subsequently update or revise the forward-looking
statements made in this report to reflect events or circumstances after the date of this report.
FLINDERS MINES LIMITED
National Australia Bank
Level 1, 161-167 Glynburn Road
Firle, South Australia 5070
Stock Exchange Listing
Australia Securities Exchange
Flinders Mines Limited shares are
listed on the Australian Securities
Exchange.
ASX code – FMS
Website
www.flindersmines.com
The website includes information
about the Company, its strategies,
projects, reports and ASX
announcements.
Front and back cover photo:
Blackjack Hills looking west-southwest.
Highlights
PILBARA IRON ORE
PROJECT
● Completion of infill RC and
Diamond drilling at PIOP to
move the majority of resources
Darwin
N o rt he rN
te r r ito r y
Townsville
into the Indicated and Measured
Port Hedland
JORC category.
Pilbara Iron Ore Project
● Finalisation of Metallurgical
testwork to determine the
Tom Price
Mt Magnet
WesterN
australia
appropriate processing method
Geraldton
Canegrass Project
for PIOP ore.
Perth
● New BID drilling identified
additional areas of high grade
BID mineralisation within the
PIOP area.
● The application for and granting
of ancillary titles required for
PIOP infrastructure including
CORPORATE
500km
Alice
Springs
QueeNsl aNd
a u s t r a l i a
south
australia
Brisbane
NeW sout h
Wales
Adelaide
Canberra
Sydney
Victoria
Melbourne
tasmaNia
Hobart
roads, camp and airstrip.
● Completion of a capital raising in November 2014 to raise
● Significant progress in gaining
approximately $5.3 million
additional environmental
● Finalisation of an agreement with Todd Corporation to sell
approvals for a 25Mtpa project,
the PIOP via an Option to Purchase which was rejected by
with EPA approval now received.
shareholders on 24 September 2015.
Delta prospect looking north-west.
2015 ANNUAL REPORT
1
Chairman’s Report
Dear fellow shareholders,
The 2015 financial year has been a
Your Company now has an iron ore
Your Company will need to continue
testing time for the resources industry,
resource that is understood and well
work at the PIOP in order to retain the
but particularly for the iron ore business.
drilled to Indicated and Measured
project and is planning to ensure that
The price of iron ore almost halved from
US$100 per tonne to US$55 per tonne
for 62% grade ores and continues to
fluctuate daily.
This sustained change in pricing
has had a significant effect on the
profitability of many smaller Australian
iron ore producers, most of which
have reported significant losses. These
effects have also flowed through to
prospective iron ore developers like
status. However, the market is not
the PIOP tenements are kept in good
prepared to support iron ore projects
standing until an improvement in iron
until commodity prices start to rise
ore prices can deliver a development
again.
solution.
In light of this, your Directors entered
I sincerely thank those shareholders
into an agreement with Todd
who supported the share purchase
Corporation in May 2015, to sell the
plan in November 2014 and the staff
PIOP via an option, where Flinders
and Directors of Flinders for their efforts
Mines receives a number of significant
during a most challenging year.
cash payments until Todd elects to
exercise the option.
Robert Kennedy
Chairman
Flinders Mines Limited.
This agreement was rejected by our
Capital markets are not prepared to
shareholders on 24 September, 2015.
support new iron ore developments
In respect to the future of the PIOP, your
in the current pricing environment, no
Directors now intend to examine any
matter the merits of the project.
further opportunities within the existing
Against this market sentiment, Flinders
has been well supported in its activities
over the past year by its major
Alliance Agreement with Todd and failing
that, other alternatives for development
of the project.
shareholder, Todd Corporation, which
The Alliance Agreement,signed in
has provided the majority of funding
February 2014 and remaining in effect
towards completing the drilling and
until 31 December this year regardless
other testwork required at our wholly
of the 24 September shareholder vote
owned Pilbara Iron Ore Project (PIOP) in
outcome, provides for ongoing feasibility
Western Australia. Without that support,
studies aimed at providing Flinders with
the majority of the now one billion tonne
access for its PIOP ore to Todd-backed
plus PIOP resource would still be in a
transport and port export infrastructure
formative state.
on the WA coast.
FLINDERS MINES LIMITED
2
Projects
PILBARA IRON ORE
PROJECT
The 2015 financial year has been
dominated by the signing of an Option
and Sale Agreement on 11 May 2015
with a subsidiary of Todd Corporation for
the sale of the PIOP.
Prior to this event, efforts were focussed
on progressing and completing activities
associated with the Bankable Feasibility
Study (BFS) as part of the Alliance
Agreement with the Balla Balla Joint
Venture partners.
Metallurgy
The Phase V metallurgy test work program
was completed. This program was
planned to provide all of the necessary
data needed for detailed design of a
robust processing flowsheet for the
production of 25Mtpa of -10mm sinter
fines. The process flowsheet selected for
the PIOP comprises primary crushing by a
gyratory crusher, scrubbing, crushing, wet
screening and desliming by hydrocyclone.
This is typical for a wet processing plant
for Pilbara iron ores. The processing option
is considered simple and suitable for the
ore types being mined and processed.
Pilot scale test work has been completed
with piloting results being consistent with
laboratory scale test work. This has further
reinforced the selected process option.
Samples for materials handling
characterisation tests were generated
and dispatched. Two 500kg samples
representing Year 1-5 and Life of Mine
at the PIOP were generated from
laboratory scale and pilot-plant scale
iron ore composites. This suite of tests
measures the flow properties of the iron
ore to provide parameters for the efficient
and reliable design of bulk storage and
handling facilities such as bins, chutes,
conveyors and train/ship loaders.
°
6
1
1
I N D I A N
O C E A N
Dampier
Cape
Preston
Karratha
°
8
1
1
Port Hedland
Anketell
Point
Cape Lambert
Proposed BBJV Port
Proposed BBJV conveyor alignment
Whim Creek
Pannawonica
Millstream Chichester
National Park
Proposed BBJV railway alignment
Mungaroona Range
Nature Reserve
Proposed BBJV conveyor alignment
-22°
Caliwingina North (RIO)
M47/1451
PIOP
E47/1560
Serenity (FMG)
Port: existing
Port: proposed
Existing railway
Locality
Tom Price
Karijini
National Park
0
50 km
Paraburdoo
Figure 1: Location of the PIOP relative to infrastructure in the Pilbara Region,
Western Australia.
Approvals
The configuration of the PIOP under the Alliance Agreement required a number of
amendments and additional approvals to those already granted. In particular these
relate to site dewatering and water use under the 25Mtpa production rate, on
site processing and tailings disposal and additional approvals required for airstrip,
camps and access roads that were not previously approved.
The approvals amendments were prepared and submitted to the Western
Australian EPA. The EPA advised that the referral will be assessed on proponent
information (API) Category A, indicating the proposal is straight forward and the
proponent has provided sufficient information on environmental impacts at the
referral stage.
2015 ANNUAL REPORT
3
Exploration
PILBARA IRON ORE
PROJECT
Flinders Mines’ Pilbara Iron Ore Project
(PIOP) is located in the Hamersley
Ranges approximately 70km northwest
of Tom Price in the Pilbara region
of Western Australia (Figure 1). The
project comprises two 100% owned
tenements, M47/1451 (Blacksmith) and
E47/1560 (Anvil). The key tenements
are located approximately 20km west
of Rio Tinto’s Paraburdoo to Dampier
rail track. Iron mineralisation on the
main project tenement (M47/1451)
is laterally associated with both Rio
Tinto’s (RIO) Caliwingina North deposit
and Fortescue Metals Group’s (FMG)
Serenity deposit, part of the Solomon
Hub.
Exploration & Evaluation
During the second half of 2014, the
Company completed its infill Reverse
Circulation (RC) drilling campaign
that began at the PIOP in April 2014.
The purpose of this campaign was to
upgrade the majority of the Mineral
Resource to the Indicated category
and provide key inputs to support
the Bankable Feasibility Study for
development of the PIOP. While this
drilling program was not targeting an
increase to the total global mineral
resource, it is an extremely important
step in ensuring bankability of the
mineable PIOP resource base.
A total of 887 RC drill holes for 36,592m
were completed across all deposits
within the Blacksmith tenement
(M47/1451) as part of this drilling
campaign (Figure 2).
In addition to the resource definition
drilling, 67 RC holes were drilled as part
of a BID targeted drilling campaign in
the hills surrounding known resource
areas. A list of the more significant
intersections is shown in Table 1.
Significant high grade iron mineralisation
continues to be intersected adjacent
to areas of known mineralisation
and outside of the current resource
boundary. All of these intersections are
from surface and have low levels of SiO2
and Al2O3.
'
5
2
°
7
1
1
'
0
3
°
7
1
1
Ajax
HPRC1641
HPRC1640
Blackjack
HPRC1653
HPRC1646
HPRC1651
HPRC1650
HPRC1649
HPRC3599
Paragon
Champion
HPRC5612
HPRC1276
Delta
HPRC5602
HPRC1277
HPRC5611
HPRC5604
HPRC5607
Badger
-22°10'
M47/1451
Eagle
2014 BID targeted RC drillholes
RC drillhole
Indicated & Measured Resource (+50% Fe cutoff)
Indicated Resource (+50% Fe cutoff)
Inferred Resource (+50% Fe cutoff)
0
2 km
Figure 2: Location of the 2014 BID targeted RC drillholes and highlighting significant Fe intersections as listed in Table 1.
FLINDERS MINES LIMITED
4
Resource Estimate
The extensive infill drilling and
subsequent geological modelling
undertaken throughout the year has
culminated in the release of an updated
Mineral Resource estimate for the PIOP.
The exploration activities resulted in an
increase over the past year of 13.6%
or 125Mt to the total Mineral Resource
at the PIOP.
The total Mineral Resource estimate
for the PIOP is 1,042Mt @ 55.6% Fe
(Table 2). Significantly, 86% of the total
Mineral Resource is reported in the
Indicated or Measured categories,with
792.2Mt @ 55.7% Fe in the Indicated
category and 105.3Mt @ 56.4% Fe in
the Measured category.
Table 1: Significant Fe intersections from surface, from 2014 BID targeted
RC drilling (refer to Figure 2).
Hole
From
(m)
To (m)
Interval
(m)
Fe%
SiO2% Al2O3%
P%
LOI%
HPRC1276
HPRC1277
HPRC1640
HPRC1641
HPRC1646
HPRC1649
HPRC1650
HPRC1651
HPRC1653
HPRC3599
HPRC5602
HPRC5604
HPRC5607
HPRC5611
HPRC5612
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
10
16
24
18
36
18
26
22
40
10
30
16
22
26
18
10
16
24
18
36
18
26
22
40
10
30
16
22
26
18
60.10
56.90
60.54
63.63
60.76
60.13
59.19
58.31
59.22
59.10
63.40
58.70
58.80
60.20
59.30
3.70
2.40
3.18
1.04
2.07
2.54
2.04
2.67
1.53
2.90
2.20
3.70
2.90
2.80
1.70
2.90
2.80
1.74
1.06
1.65
1.53
2.19
2.89
1.79
2.20
1.80
2.10
2.00
2.50
2.90
0.08
0.12
0.11
0.12
0.12
0.09
0.09
0.11
0.11
0.08
0.12
0.11
0.09
0.13
0.13
6.50
12.60
7.84
5.99
8.90
9.47
10.51
10.34
11.06
8.80
4.20
8.70
10.20
7.80
9.70
Table 2: PIOP Mineral Resource Summary (as at 30/6/2015).
M47/1451 - Blacksmith 1
JORC Classification
Tonnage Mt
Inferred
Indicated
Measured
TOTAL
62.00
792.20
105.30
959.50
E47/1560 - Anvil 2
JORC Classification
Tonnage Mt
82.40
-
-
Inferred
Indicated
Measured
TOTAL
PIOP - Total
Fe%
55.40
55.70
56.40
55.80
SiO2%
10.00
8.90
10.50
9.20
Al2O3%
4.80
4.50
5.10
4.60
Fe%
53.60
SiO2%
11.40
Al2O3%
5.80
-
-
-
-
-
-
P%
0.06
0.07
0.05
0.07
P%
0.05
-
-
LOI%
5.10
6.00
2.80
5.60
LOI%
4.90
-
-
82.40
53.60
11.40
5.80
0.05
4.90
JORC Classification
Tonnage Mt
Inferred
Indicated
Measured
TOTAL
144.40
792.20
105.30
1,042.00
Fe%
54.40
55.70
56.40
55.60
SiO2%
10.80
8.90
10.50
9.30
Al2O3%
5.30
4.50
5.10
4.70
P%
0.06
0.07
0.05
0.07
LOI%
5.00
6.00
2.80
5.50
Note: Tonnage figures have been rounded and as a result may not add up to the totals quoted.
1 The Blacksmith Mineral Resource includes the Ajax, Badger, Blackjack, Champion, Delta, Eagle,
and Paragon deposits. All of the estimates making up the Blacksmith Mineral Resource are
reported to JORC 2012 standards.
2 The Anvil Mineral Resource includes the Area F, Area G, Area H and Area J deposits. This Mineral
Resource is currently reported to JORC 2004 standards and will be updated to meet JORC 2012
standards according to development priorities.
2015 ANNUAL REPORT
5
Exploration (cont.)
CANEGRASS PROJECT
The Canegrass project area is located
in Western Australia’s Mid-West region,
approximately 60km southeast of Mt
Magnet and around 15km WSW of
Atlantic Limited’s Windimurra vanadium
project (Figure 3). The project hosts
Fe-V-Ti mineralisation and has the
potential for base metal and precious
metal mineralisation.
Exploration & Evaluation
During the year a small Air-Core (AC)
drilling program was undertaken
at the Honeypot and Boulder gold
prospects (Figure 3). This program was
designed to follow up the significant
Au in soil anomalies identified during
previous phases of exploration. The
aim of the drilling was to gain a better
understanding of the bedrock geology
and structures as well as to try and
identify the primary source of the gold
anomalism. A total of 106 holes for
1,904m were drilled at the Honeypot
Prospect and 30 holes for 753m at the
Boulder Prospect.
Significant intersections are shown
in Table 3, with the highlight being
an intersection of 8m @ 2.03 g/t Au
from 12m in hole HAC022 at the
Honeypot Prospect. Hole HAC022 is
located at the northern end of a trend
of anomalous holes that intersected a
deformed and foliated mafic schist as
well as late stage undeformed granitic
dykes and quartz veining. Mineralisation
remains open to the north (Figure 4).
At the Boulder Prospect, only low grade
mineralisation was intersected (Table 3)
with the best result being 4m @ 0.20 g/t
Au from 24m in hole BAC030.
FLINDERS MINES LIMITED
6
-28°
Mt Magnet
°
8
1
1
'
0
3
°
8
1
1
Sandstone Rd
Mt Magnet -
Honeypot
Challa HS
E58/236
Project Area
Prospect
Homestead
Boulder
0
10 km
E58/282
E58/232
Y
o
u
a
n
m
R
d
i
Figure 3: Canegrass Project located near Mt Magnet, Western Australia.
Table 3: Significant intersections summary for 2015 AC drillholes.
Hole ID
HAC022
BAC007
BAC025
BAC030
Prospect
From (m)
To (m)
Interval (m)
Au g/t
Honeypot
Boulder
Boulder
Boulder
12
16
12
24
20
20
16
28
8
4
4
4
2.03
0.13
0.13
0.20
All other holes returned intersections less than 0.10 g/t Au.
Resource Estimate
A resource estimate is current for the magnetite (Fe-Ti-V) mineralisation at
Canegrass (Tables 4 & 5). This Mineral Resource was compiled in accordance with
the 2004 JORC Code. The Resource has not been updated since to comply with
the 2012 JORC Code on the basis that the information has not materially changed
since it was last reported (refer to ASX announcement dated 10/08/2011).
Table 4: Canegrass vanadium (V2O5) Inferred Mineral Resource tonnage
and grade report by area (as at 30/6/2015).
Inferred Mineral Resource for V2O5 > 0.5%
Area
Fold Nose
Kinks
Total
Mt
87
20
107
Fe%
0.63
0.57
0.62
TiO2% V2O5% SiO2% Al2O3%
12.60
29.30
24.10
5.90
5.50
5.80
27.40
29.00
25.90
24.50
13.00
12.60
Table 5: Canegrass iron (Fe) Inferred Mineral Resource tonnage and grade
report by area (as at 30/6/2015).
Inferred Mineral Resource for Fe > 20%
Area
Fold Nose
Kinks
Total
Mt
157
59
216
Fe%
26.00
23.80
25.40
TiO2% V2O5% SiO2% Al2O3%
13.80
27.60
5.10
0.53
4.80
5.00
0.48
0.52
29.30
28.10
14.70
14.00
P%
0.005
0.009
0.006
P%
0.005
0.013
0.007
?
?
'
"
0
3
5
2
°
8
1
1
Felsic
-28°18'30"
HAC022
8m @ 2.01 g/t Au
Dyke
Fault
E58/236
E58/282
-28°19'
0
'
5
2
°
8
1
1
200 m
e
n
o
Z
r
a
e
h
S
RC drillhole
Anomalous zone
Target zone
Figure 4: Honeypot prospect AC drillholes over ground TMI (magnetic) image.
SOUTH AUSTRALIA
Flinders continued its on-going strategy to divest all diamond projects and continued
to seek interest in its remaining South Australian projects. There were no exploration
and evaluation activities carried out on South Australian tenements during the year.
GOVERNANCE
- RESOURCES
The resource estimates quoted in this
report were prepared by independent
geological consultants, Optiro Pty Ltd
(Optiro), based on data collated and
interpreted by Flinders Mines staff.
The majority of the total PIOP Mineral
Resource was estimated in accordance
with the guidelines of the Australasian
Code for the Reporting of Exploration
Results, Mineral Resources and Ore
Reserves (JORC Code 2012). However,
the Anvil tenement deposits have not
been updated to comply with the 2012
JORC Code on the basis that the
information has not materially changed
since they were last reported (refer to
ASX announcement dated 14/11/2011).
The Resource Models have been
estimated using Ordinary Kriging within
geological constraint domains. Average
in situ densities were derived via direct
measurement from the diamond holes.
Sample chain of custody is managed
by Flinders and all data is stored in a
secure Geobank database that is also
managed by Flinders staff. QAQC is
routinely monitored via field duplicates,
standards and check assays with
independent laboratories, with no
significant issues apparent. All PIOP
Mineral Resources quoted are based on
a +50% iron cut-off.
2015 ANNUAL REPORT
7
Exploration (cont.)
TENEMENT SCHEDULE
Tenement
Application/
No.
Status
Tenement
Name
Grant/
Application
Date
Expiry
Date
Area
(Sq Km)
Registered Holder/
Applicant
Interest
Related
Agreement
WESTERN AUSTRALIA
Pilbara Iron Ore Project
E47/1560
Live
Anvil
6/09/2007
5/09/2016
44.5
Flinders Mines Ltd
100%
Prenti Agreement
L47/728
Live
PIOP Airstrip
29/05/2015 28/05/2036
L47/730
Live
PIOP Village
29/05/2015 28/05/2036
L47/731
Pending Northern Road
1/09/2014
L47/734
Live
Southern Road 29/05/2015 28/05/2036
3.0
0.1
4.9
4.2
Flinders Mines Ltd
100%
Flinders Mines Ltd
100%
Flinders Mines Ltd
100%
Flinders Mines Ltd
100%
M47/1451
Live
Blacksmith ML 26/03/2012 25/03/2033
111.6
Flinders Mines Ltd
100%
Prenti Agreement
P47/1291
Live
Gap Area
27/09/2007 26/09/2015
0.2
Flinders Mines Ltd
100%
Prenti Agreement
Canegrass Project
E58/232
Live
Boulder Well
29/07/2002 28/07/2016
16.1
E58/236
Live
Challa
22/03/2002 21/03/2016
16.1
E58/282
Live
Honey Pot
3/05/2007
2/05/2016
27.2
Flinders Canegrass
Pty Ltd
Flinders Canegrass
Pty Ltd
Flinders Canegrass
Pty Ltd
100%
100%
100%
SOUTH AUSTRALIA
Jamestown Project
ELA182/14 Pending Caltowie
11/08/2014
201.4
Flinders Mines Ltd Diamonds
and
non-metals
EL 5557
Live
Washpool
10/11/2009
9/11/2016
135.0
Phoenix Copper Diamonds,
barium,
talc and
phosphate
Copper Range
and Tarcowie
Phosphate
Agreements
Phoenix Copper
Agreement
FLINDERS MINES LIMITED
8
Through the use of the internet,
we have ensured that our corporate
reporting is timely and complete.
All press releases, financial reports
and other information are available
on our website:
www.flindersmines.com
Flinders Mines Limited ABN 46 091 118 044
Contents
Directors’ Report
10
Remuneration Report - Audited 15
Auditor’s Independence
Declaration
21
Corporate Governance Statement 22
Financial Statements
Consolidated statement of
profit or loss and other
comprehensive Income
Consolidated statement of
financial position
Consolidated statement of
changes in equity
Consolidated statement of
cash flows
Notes to the consolidated
financial statements
Directors’ Declaration
Independent Auditor’s Report
to the Members
ASX Additional Information
23
24
25
26
27
50
51
54
These Financial Statements are the
consolidated Financial Statements
of the consolidated entity consisting
of Flinders Mines Limited and
its subsidiaries. The Financial
Statements are presented in the
Australian currency.
Flinders Mines Limited is a company
limited by shares, is listed on the
Australian Securities Exchange
(ASX) under the code “FMS” and
is incorporated and domiciled in
Australia. Its registered office and
principal place of business is:
Flinders Mines Limited
Level 1, 135 Fullarton Road
Rose Park
Adelaide, South Australia 5067
Registered postal address is:
Flinders Mines Limited
PO Box 4031
Norwood South
Adelaide, South Australia 5067
Financial Report
for the year ended 30 June 2015
2015 ANNUAL REPORT
9
Director’s Report
undertaken outside the current deposits
which highlighted several areas of
additional BID mineralisation.
The PIOP has now been drilled to an
appropriate industry standard and new
resource models were developed for
the Anvil, Blackjack, Champion, Delta
and Eagle deposits.
Drill samples were subjected to
relevant metallurgical test work from
which a proposed processing option
was selected. A series of economic
assessments were undertaken on the
project during the financial year.
Unfortunately, during this period there
was a significant drop in the iron ore
price that has had profound effects on
the iron ore industry as a whole and
has made development of the PIOP
uneconomic under the Todd / Rutila
Alliance. This deterioration in the iron
ore price lead to the proposal from Todd
to combine the PIOP and the now Todd
owned infrastructure projects via an
option agreement.
Canegrass and
South Australia
A small exploration program for gold
was undertaken at Canegrass (WA)
during the financial year, with an
anomalous intersection of 8m at 2g/t Au
intersected in one drill hole. This result
will be followed-up in the September
quarter 2015. No work was undertaken
on the South Australian projects during
the financial year.
oPerating results anD
financial Position
The net result of operations for the
financial year was a loss of $29,190,281
(2014: $4,648,747).
Having considered the independent
experts report, current market
conditions and the uncertainty
surrounding the sale of the Pilbara Iron
Ore Project (PIOP), the Company has
reduced the carrying value of the PIOP
exploration asset to $45m resulting in
an impairment of $26,763,089.
The net assets of the Group have
decreased by $23,632,114 during
the financial year from $73,753,558
at 30 June 2014 to $50,121,444 at
30 June 2015.
review of oPerations
Corporate
In November 2014 the Company
announced that it intended to raise
further funds from a placement and
share purchase plan for further work
on the PIOP in Western Australia.
This capital raising was successfully
concluded in the December quarter
2014, raising $5.3 million after share
issue costs.
In May 2015, the Company announced
it had entered into a conditional
option agreement to sell the PIOP to a
subsidiary of Todd Corporation.
Pilbara Iron Ore Project
During the Financial year, the Company
continued work on the PIOP to allow its
economic potential to be assessed. This
work included infill drilling, metallurgical
test work, environmental approvals and
economic assessment of the projects
potential. Further exploration was
Your Directors present their report on
the consolidated entity (referred to
hereafter as the Group, or Flinders)
consisting of Flinders Mines Limited
(Parent or Company) and the entities it
controlled at the end of or during, the
year ended 30 June 2015.
Directors
The following persons held office as
Directors of Flinders Mines Limited from
the start of the financial year to the date
of this report, unless otherwise stated.
Robert Michael Kennedy
(Non-executive Chairman)
Ian James Gordon
(Managing Director)
Kevin John Malaxos
(Non-executive Director)
Ewan John Vickery
(Non-executive Director)
Nicholas John Smart
(Alternate Director for RM Kennedy)
PrinciPal activities
The Group’s principal continuing
activities during the year consisted of
mineral exploration and development.
There were no significant changes in
the nature of the activities of the Group
during the year.
DiviDenDs
No dividends have been declared or
paid during the financial year
(2014: $nil).
10 FLINDERS MINES LIMITED
significant changes in
the state of affairs
•
Significant changes in the state of affairs
of the Group during the financial year
were as follows:
The Company entered into a transaction
implementation agreement (the
Deed) on 8 May 2015, which was
subsequently announced to the market
on 11 May 2015, with a subsidiary of
TIO (NZ) Limited (Todd), an existing
substantial shareholder of the Company
and subsidiary of New Zealand based
The Todd Corporation Limited (Todd
Corporation). If the conditions precedent
set out in the Deed are satisfied, an
option and sale agreement (the Option
Agreement) will be executed between
the Company and Todd in respect of the
potential acquisition of the Company’s
PIOP by Todd.
The terms of the Option Grant
Transaction include the following:
• an upfront payment of $10 million
payable to the Company upon
executing the Option Agreement
• an option exercise period up to and
including 31 December 2016, during
which time Todd will have exclusive
access to the PIOP, the right to
undertake exploration and feasibility
works on the PIOP, and may elect
to acquire the project. Todd may
extend the term of the option for a
further two periods, of two years
each (to 31 December 2018 and 31
December 2020 respectively), with
payment of an additional $10 million
to the Company for each two year
period
if Todd elects to exercise the option
and acquire the PIOP, an exercise
price of $55 million will be payable
to the Company. Todd will also pay
a production royalty to the Company
if it develops the PIOP. The payment
of the royalty is subject to a royalty
deed, which is to be executed if
Todd exercises the option and
acquires the PIOP. The production
royalty ranges from $0.60 to $1.40
per tonne on a straight line basis
between iron ore prices of United
States dollar (US$) 60 and US$80
per tonne (62% cost and freight
(CFR) price), with a minimum royalty
of $0.60 per tonne below this range
and a maximum royalty of $1.40 per
tonne above this range
if Todd has not commenced
construction of the PIOP within
two years of acquiring the PIOP
(following exercise of the option),
it must pay the Company a further
$20 million. The future royalties are
not affected by this further payment
in the event that the Option
Agreement lapses or Todd abandons
the option, the Company retains
ownership of the PIOP, as well as
any payments received to date.
The Company appointed Deloitte
Corporate Finance to complete the
Independent Expert’s Report in
respect of the Todd transaction. This
Report was provided to shareholders
together with the Notice of Meeting on
21 August 2015.
Matters subsequent
to the enD of the
financial year
At the General Meeting held in Adelaide
on 24 September 2015, shareholders
rejected the proposed finalisation of an
agreement with Todd Corporation to sell
the PIOP via an option to purchase.
environMental
regulation
The Group’s operations are subject
to significant environmental regulation
under both Commonwealth and
relevant State legislation in relation to
the discharge of hazardous waste and
materials arising from any exploration
or mining activities and development
conducted by the Group on any of
its tenements. The Group believes it
has complied with all environmental
obligations.
•
•
The Directors of the Company advised
that in order to conserve funds, the
Company’s activities to complete the
Bankable Feasibility Study for the PIOP
under the Alliance Agreement, would be
suspended pending the outcome of the
shareholders meeting in respect to the
Option Agreement with Todd.
2015 ANNUAL REPORT 11
Director’s Report (cont.)
inforMation on
Directors
Robert Michael Kennedy
ASAIT, Grad Dip (Systems Analysis),
FCA, ACIS, Life Member AIM, FAICD
the Board. In taking all of these issues
into account, the Board (excluding
Mr Kennedy), were unanimous in
declaring Mr Kennedy as independent.
He has significant experience in project
approvals, feasibility studies, capital
raising and project finance.
Other current directorships
Other current directorships
None.
Mr Kennedy is a director of ASX listed
companies, Tychean Resources Limited
(since 2006), Maximus Resources
Limited (since 2004), Monax Mining
Limited (since 2004), and Ramelius
Resources Limited (since 2003).
Former directorships in last 3 years
Formerly he was a director of Beach
Energy Limited (from December 1991
to December 2012), Crestal Petroleum
Limited formerly Tellus Resources
Limited (from December 2013 to
February 2015) and Marmota Energy
Limited (from April 2006 to April 2015).
Special responsibilities
Chairman of the Board.
Member of the Audit Committee.
Interests in shares and options
44,000,000 ordinary shares in the
Company.
Ian James Gordon
Bcom, MAICD
Managing Director
Experience and expertise
A director since June 2014, Mr Gordon
is a mining executive with experience in
a variety of management positions and
commodities. He has held management
roles at Delta Gold Limited, Rio Tinto
Exploration and Gold Fields. From
2007 until 2014 he was the COO
and Managing Director of Ramelius
Resources Limited, where he was
responsible for the development of a
number of mining operations.
Former directorships in last 3 years
Ramelius Resources Limited (until
31 August 2014).
Special responsibilities
Managing Director.
Interests in shares, options and
rights
3,033,334 ordinary shares in the
Company.
10,000,000 rights to acquire ordinary
shares in the Company.
Kevin John Malaxos
BSc, MAICD
Non-executive Director
Experience and expertise
A director since December 2010,
Mr Malaxos, a mining engineer, has
over 27 years’ experience in the
resources sector in senior management
and executive roles across a suite of
commodities including gold, nickel, iron
ore, silver, lead, zinc and chromium.
He has managed large and small
scale surface and underground mining
operations and brings a wealth of
experience in project evaluation and
development, project approval and
Government liaison.
Mr Malaxos’ previous roles include CEO
for Mt Gibson Mining (MGX) and COO
of listed iron ore developer Centrex
Metals Limited (CXM), where he was
responsible for project development,
project approvals and community and
government consultation.
Independent Non-executive Chairman
Experience and expertise
Mr Kennedy, a Chartered Accountant,
has been non-executive chairman of
Flinders Mines Limited since December
2001.
Mr Kennedy brings to the Board his
expertise and extensive experience as
chairman and non-executive director of
a range of listed public companies in the
resources sector.
Apart from his attendance at Board
and Committee meetings, Mr Kennedy
leads the development of strategies for
the development and future growth of
the Company. Mr Kennedy leads the
Board’s external engagement of the
Company meeting with Government,
investors and is engaged with the
media. He is a regular attendee of
Audit Committee functions of the
major accounting firms. He conducts
the review of the Board including the
Managing Director in his executive role.
Independence
In assessing Mr Kennedy’s
independence, the Board (excluding
Mr Kennedy), took into account
his stamina, his ability to think
independently across a wide range of
issues and his relentless availability.
Whilst Mr Kennedy has been appointed
to a number of Resource Industry
Boards, due to his extensive knowledge
of the industry, the time required across
these companies in no way impedes on
his dedication to his role as Chairman of
12 FLINDERS MINES LIMITED
Other current directorships
Other current directorships
Mr Malaxos is also the Managing
Director of ASX listed company
Maximus Resources Limited (since
December 2010).
Former directorships in last 3 years
None.
Special responsibilities
Member of the Audit Committee.
Member of the Corporate Governance
Committee.
Interests in shares and options
3,200,000 ordinary shares in the
Company.
Ewan John Vickery
LLB
Non-executive Director
Experience and expertise
A director since June 2001, Mr Vickery
is a corporate and business lawyer with
over 40 years’ experience in private
practice in Adelaide. He has acted as
an advisor to companies on a variety of
corporate and business issues including
capital and corporate restructuring,
native title and land access issues,
and as lead native title advisor and
negotiator for numerous mining and
petroleum companies.
He is a member of the Exploration
Committee of the South Australian
Chamber of Mines and Energy Inc, the
International Bar Association Energy and
Resources Law Section, the Australian
Institute of Company Directors and is a
past national president and Life Member
of Australian Mining and Petroleum Law
Association (AMPLA Limited).
Mr Vickery is also a Non-Executive
Director of ASX listed company
Maximus Resources Limited (since
2004) and he re-joined the Board of
Tychean Resources Limited (formerly
ERO Mining Limited) in May 2013.
Mr Smart currently consults to various
public and private companies.
Other current directorships
Alternate director for Maximus
Resources Limited (since 2005).
Former directorships in last 3 years
Former directorships in last 3 years
None.
None.
Special responsibilities
Special responsibilities
None.
Chairman of the Audit Committee.
Interests in shares and options
Chairman of the Risk Committee.
Member of Nominations and
Remuneration Committee.
Member of the Corporate Governance
Committee.
838,095 ordinary shares in the
Company.
Company secretary
Justin Nelson, LLB, B.A.(Jur)
Experience and expertise
Mr Nelson is a Principal at DMAW
Lawyers with expertise in the ASX
Listing Rules and all other aspects of
ASX-related matters. He was previously
with the ASX in Adelaide, initially as
Listings Advisor and then as South
Australian State Manager for eight years,
until the ASX offices were consolidated
nationally. Mr Nelson has experience
in relation to compliance issues in the
resources and energy industries and is
company secretary of three ASX-listed
entities. He has been the Company
Secretary since July 2014.
Interests in shares and options
7,000,000 ordinary shares in the
Company.
Nicholas John Smart
Alternate Director for R M Kennedy
(Non-executive)
Experience and expertise
An alternate director since December
2009, Mr Smart has held positions
as a general manager in Australia
and internationally. Previously a full
Associate Member of the Sydney
Futures Exchange and adviser with a
national share broking firm, with over
25 years’ experience in the corporate
arena including capital raising for
private and listed companies. Other
experience includes startup companies
in technology development including
commercialisation of the Synroc
process for safe storage of high level
nuclear waste, controlled temperature
and atmosphere transport systems
and the beneficiation of low rank coals.
2015 ANNUAL REPORT 13
insurance PreMiuMs
Since the end of the previous year the
Group has paid insurance premiums
of $51,750 to insure the directors and
officers in respect of directors’ and
officers’ liability and legal expenses
insurance contracts.
ProceeDings on behalf
of the grouP
No 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 to which the Group
is a 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.
Director’s Report (cont.)
Meetings of Directors
The numbers of meetings of the Company’s board of Directors and of each board
committee held during the year ended 30 June 2015, and the numbers of meetings
attended by each Director were:
Full
meetings of
directors
Audit
Meetings of committees
Nominations
& Remun-
eration
Corporate
Governance
Risk
A
16
16
16
16
-
B
16
16
16
16
-
A
2
-
2
2
-
B
2
-
2
2
-
A
-
-
-
-
B
-
-
-
-
A
-
-
-
-
B
A
B
-
-
-
-
-
-
-
-
-
-
-
-
Robert Michael Kennedy
Ian James Gordon
Kevin John Malaxos
Ewan John Vickery
Nicholas John Smart*
A = Number of meetings attended
B = Number of meetings held during the time the Director held office or was a member of
the committee during the period
* = Alternate Director
unissueD shares unDer right
Unissued ordinary shares of Flinders Mines Limited under right at the date of this
report are as:
Date rights granted
Expiry date
Exercise price
of shares
Number under
right
1 July 2014
12 November 2014
Total under option
30 June 2016
30 June 2016
Nil
Nil
12,796,000
10,000,000
22,796,000
The share rights do not entitle the holder to participate in any share issue of the
Company.
inDeMnification anD insurance of officers
The Group is required to indemnify the directors and other officers of the Company
and its Australian-based controlled entities against any liabilities incurred by the
directors and officers that may arise from their position as directors and officers
of the Group. No costs were incurred during the financial year pursuant to this
indemnity.
The Parent Entity has entered into deeds of indemnity with each director whereby, to
the extent permitted by the Corporations Act 2001, the Group agreed to indemnify
each director against all loss and liability incurred as an officer of the company,
including all liability in defending any relevant proceedings.
14 FLINDERS MINES LIMITED
non-auDit services
The Board of Directors, in accordance
with advice received from the Audit
Committee, is satisfied that the
provision of 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
external auditor’s independence for the
following reasons:
• all non-audit services are reviewed
and approved by the Audit
Committee prior to commencement
to ensure they do not adversely
impact the integrity and objectivity of
the auditor; and
•
the nature of the services provided
do not compromise the general
principles relating to auditor
independence in accordance
with APES 110 Code of Ethics for
Professional Accountants set by the
Accounting Professional and Ethical
Standards Board.
There were no fees paid or payable
for non-audit services provided by
the auditor of the Parent, its related
practices and non-related audit firms
during the year ended 30 June 2015.
reMuneration rePort
- auDiteD
The Directors are pleased to present
your Company’s 2015 remuneration
report which sets out remuneration
information for Flinders Mines Limited’s
non-executive Directors, executive
Directors and other key management
personnel.
The remuneration report is set out under
the following headings:
A Directors and key management
personnel disclosed in this
report
B Remuneration governance
C Use of remuneration consultants
D Executive remuneration policy
and framework
E Non-executive director
remuneration policy
F Voting and comments made
at the company’s 2014 Annual
General Meeting
G Details of remuneration
H Service agreements
I Share-based compensation
J Equity instrument disclosures
relating to key management
personnel
The information provided in this
remuneration report has been audited
as required by section 308(3C) of the
Corporations Act 2001.
A Directors and key
management personnel
disclosed in this report
Non-executive and executive
Directors
- see pages 12 to 13 above
Robert Michael Kennedy
Ian James Gordon
Kevin John Malaxos
Ewan John Vickery
Nicholas John Smart
Other key management personnel
Miro Rapaic
General Manager - Project Development
Jim Panagopoulos
Chief Financial Officer
David Wayne Godfrey
Company Secretary (until 15 July 2014)
B Remuneration governance
The Nominations & Remuneration
Committee is a committee of the Board.
It is primarily responsible for making
recommendations and to assist the
Board to:
• ensure that it is of an effective
composition, size and commitment
to adequately discharge its
responsibilities and duties; and
•
independently ensure that the
Company adopts and complies with
remuneration policies that attract,
retain and motivate high caliber
executives and directors so as to
encourage enhanced performance
by the Company; and
• motivate directors and management
to pursue the long-term growth and
success of the Company within an
appropriate framework.
2015 ANNUAL REPORT 15
the Company. Under the terms of the
Plan, rights to acquire ordinary fully paid
shares at no cost may be offered to
the Company’s eligible employees as
determined by the Board in accordance
with the terms and conditions of the
Plan. The objective of the Plan is to
align the interests of employees and
shareholders by providing employees
of the Company with the opportunity to
participate in the equity of the Company
as a long term incentive to achieve
greater success and profitability for the
Company and to maximise the long
term performance of the Company.
The Employee Incentive Rights Plan is
designed to focus executives and staff
on delivering long-term shareholder
returns. Under the Plan, participants
are granted rights which vest only if
positive performance conditions are met
and the employees are still employed
by the Group at the end of the vesting
period. Participation in the Plan is at the
Board’s discretion and no individual has
a contractual right to participate in the
Plan.
The issues have various vesting periods
and are based on personal criteria.
22,796,000 performance and incentive
rights were granted during the 2015
financial year, of which 15,576,000 were
issued to key management personnel.
Director’s Report (cont.)
reMuneration rePort
- auDiteD (cont.)
The committee did not meet during
the financial year as the full Board was
able to deal efficiently and effectively
with remuneration issues. Executive
performance and remuneration
packages are reviewed on a regular
basis. The review process includes
consideration of individual performance,
as well as overall performance of the
Group.
C Use of remuneration
consultants
The Nominations and Remuneration
Committee seeks external remuneration
advice as required. No such advice was
obtained during the financial year ending
30 June 2015.
D Executive remuneration
policy and framework
The Group’s policy for determining the
nature and amounts of emoluments of
senior executives is as follows:
In determining executive remuneration,
the Board aims to ensure that
remuneration practices are:
• competitive and reasonable,
enabling the Company to attract and
retain key talent;
• aligned to the Company’s strategic
and business objectives and the
creation of shareholder value.
The remuneration of the Managing
Director is determined by the non-
executive directors on the Board as
part of the terms and conditions of his
employment which are subject to review
from time to time. The employment
conditions of the Managing Director
were formalised in a contract of
employment. The base salary as set out
16 FLINDERS MINES LIMITED
in the employment contract is reviewed
regularly. The Managing Director’s
contract may be terminated by mutual
agreement or by the Managing Director
on three months written notice and
by the Company on six months
written notice. The Company may
terminate the contract without notice in
serious instances of misconduct. The
remuneration of the other executive
officers and employees is determined
by the Managing Director subject to the
approval of the Board.
The Company’s remuneration structure
is based on a number of factors
including the particular experience and
performance of the individual in meeting
key objectives of the Company. The
Board is responsible for assessing
relevant employment market conditions
and achieving the overall, long term
objective of maximising shareholder
benefits, through the retention of high
quality personnel.
The Company does not presently
emphasise payment for results through
the provision of cash bonus schemes
or other incentive payments based
on key performance indicators of
the Company given the nature of the
Company’s business as a listed mineral
exploration entity and the current status
of its activities. However, the Board may
approve the payment of cash bonuses
from time to time in order to reward
individual executive performance in
achieving key objectives as considered
appropriate by the Board.
Long-term incentives
The Company has an Employee
Incentive Rights Plan (Plan) approved
by shareholders at the 2010 Annual
General Meeting that enables the Board
to offer eligible employees rights to
acquire ordinary fully paid shares in
E Non-executive director remuneration policy
Non-executive directors receive a Board fee and are eligible for fees for extra exertion or chairing or participating on Board
Committees, at the discretion of the full Board. Fees provided to non-executive directors are inclusive of superannuation.
Fees are reviewed periodically by the Board’s Nominations & Remunerations Committee taking into account comparable roles
and market data provided by the Board’s independent remuneration adviser. The current base fees were reviewed with effect
from 1 January 2010 and have not been increased since that time.
Non-executive director fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for
approval by shareholders. The maximum currently stands at $750,000 per annum and was approved by shareholders at the
Annual General Meeting on 6 November 2009. Directors may apportion any amount up to this maximum amount amongst the
non-executive directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other
expenses incurred in performing their duties as directors.
Non-executive director remuneration is by way of fee, statutory superannuation contributions and salary sacrifice. Non-executive
directors do not participate in schemes designed for remuneration of executives, nor do they receive options or bonus payments
and are not provided with retirement benefits other than salary sacrifice and statutory superannuation.
F Voting and comments made at the company’s 2014 Annual General Meeting
At the Company’s last Annual General Meeting, there were no comments or queries on the remuneration report and a proxy
vote of 81% for the resolution to adopt the remuneration report indicated a good level of support for, and understanding of the
Company’s remuneration structure and practices.
G Details of remuneration
The following tables show details of the remuneration received by the Directors and the key management personnel of the Group
for the current and previous financial year.
2015
Name
Non-executive Directors
Robert Michael Kennedy
Kevin John Malaxos 1
Ewan John Vickery
Sub-total non-executive directors
Executive Directors
Ian James Gordon 2
Other key management personnel (Group)
Miro Rapaic 2
David Wayne Godfrey 4
Jim Panagopoulos 2
Total key management personnel
compensation (group)
164,384
90,000
82,192
336,576
-
-
-
-
Short-term
employee benefits
Post-employment
benefits
Share based
payments
Director’s fees
Salary
Superannuation
Rights
$
$
$
$
-
-
-
-
15,616
-
7,808
23,424
-
-
-
-
Total
$
180,000
90,000
90,000
360,000
421,031
30,000
59,955
510,986
335,505
35,262
225,000
26,147
503
21,375
71,800
9,579
19,566
433,452
45,344
265,941
336,576
1,016,798
101,449
160,900
1,615,723
2015 ANNUAL REPORT 17
Director’s Report (cont.)
reMuneration rePort - auDiteD (cont.)
G Details of remuneration (cont.)
Short-term
employee benefits
Post-employment
benefits
Share based
payments
Director’s fees
Salary
Superannuation
Rights
$
$
$
$
2014
Name
Non-executive Directors
Robert Michael Kennedy
Kevin John Malaxos 1
Ewan John Vickery
Sub-total non-executive directors
Executive Directors
Ian James Gordon 2
Other key management personnel (Group)
Nicholas John Corlis 3
Miro Rapaic 2
Michael Anstey 3
David Wayne Godfrey 4
Jim Panagopoulos 2
164,760
100,000
85,410
350,170
250,000
-
-
250,000
15,240
-
14,590
29,830
-
-
-
-
-
-
20,191
-
292,700
337,368
53,509
144,174
207,116
17,748
25,459
2,980
13,151
19,158
Total
$
430,000
100,000
100,000
630,000
20,191
310,448
362,827
56,489
157,325
226,274
1,763,554
-
-
-
-
-
-
-
-
-
-
-
Total key management personnel
compensation (group)
350,170
1,305,058
108,326
1 Director’s fees for Mr Malaxos were paid to a related party of the director.
2 During the 2015 financial year selected executives were granted performance and incentive rights which have a three year vesting
period and performance conditions. In accordance with the requirements of the Australian Accounting Standards, remuneration
includes a proportion of the notional value of equity compensation granted or outstanding during the year. The fair value of equity
instruments which do not vest during the reporting period is determined as at the grant date and is progressively allocated over
the vesting period. The amount included as remuneration is not related to or indicative of the benefit (if any) that individuals may
ultimately realise should the rights vest. The fair value of the rights as at the date of their grant has been determined in accordance
with the Employee Incentive Rights Plan as set out in note 29.
3 Mr Anstey and Mr Corlis resigned during the 2014 financial year.
4 Mr Godfrey retired 15 July 2014.
The directors conclude that there are no executives requiring disclosure other than those listed.
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Other key management personnel of the group
Ian Gordon
Miro Rapaic
Jim Panagopoulos
David Wayne Godfrey
Fixed remuneration
At risk - LTI 1
2015
%
88
83
92
78
2014
%
100
100
100
100
2015
%
12
17
8
22
2014
%
-
-
-
-
1
Long-term incentives (LTI) include equity grants issued via the Company’s Employee Share Option and Incentive Rights Plans. These
plans are designed to provide long-term incentives for executives to deliver long-term shareholder returns.
18 FLINDERS MINES LIMITED
H Service agreements
Mr Ian James Gordon was appointed
as Managing Director of the Company.
Mr Gordon commenced on 17 June
2014 on a contract with no fixed term
at a gross remuneration of $450,000
per annum inclusive of base salary
and superannuation contributions,
reviewable annually.
Messrs Kennedy, Vickery and Malaxos
are elected as non-executive directors,
without formal employment agreements.
Remuneration and other terms of
employment of group executives
(Managing Director’s direct reports) are
formalised in service contracts. Each of
the agreements is similar in nature and
provides for the level of remuneration
and other benefits relevant to each
executive’s role and responsibilities.
Either party may terminate the
agreement on the provision of an agreed
notice period, or if terminated by the
employer, a payment in lieu of notice.
On termination, executives are entitled
to receive statutory entitlements of
accrued annual and long service leave
plus superannuation benefits.
I Share-based
compensation
Options
In past years, options over fully-paid
ordinary shares in the capital of the
Company were granted to employees
under the Flinders Mines Limited
Employee Share Option Plan (ESOP).
The ESOP enabled the Board, at
its discretion, to issue options to
employees of the Company or its
associated companies. Each option has
a life of five years and was exercisable
at a price determined by the Board. This
price was not below the market price of
a share at the time of issue.
The options granted under the ESOP carry no voting or dividend rights. There were
no options granted under the ESOP during the year ended 30 June 2015.
No option holder has any rights under the options to participate in any other share
issue of the Company or any other entity.
Shares provided on exercise of remuneration options
No shares were issued to directors as a result of the exercise of remuneration
options during the financial year (2014: Nil).
Options granted as remuneration
No options were granted to directors, key management personnel or employees of
the Company during the financial year (2014: Nil).
Employee Incentive Rights
The Company has an Employee Incentive Rights Plan that enables the Board to
offer eligible employees rights to acquire ordinary fully paid shares in the Company.
Under the terms of the Plan, rights to acquire ordinary fully paid shares at no cost
may be offered to the Company’s eligible employees as determined by the Board in
accordance with the terms and conditions of the Plan. During past years a total of
23,325,700 rights were issued to employees with 17,673,728 subsequently lapsing
prior to vesting pursuant to the rules of the Plan.
During the current financial year 22,796,000 rights were issued to employees. The
accounting value of the rights does not represent actual cash payments to the
employees and is not related to or indicative of the benefit, if any, that individuals
may ultimately realise should the rights vest, but is a recognition of the value of the
rights at grant date progressively allocated over the vesting period.
Start Date
Expiry Date
Share price at
grant date
Exercise price
Fair value at
grant date
01/07/2014
12/11/2014
30/06/2016
30/06/2016
$0.02
$0.014
-
-
$0.02
$0.02
J Equity instrument disclosures relating to key management
personnel
(i) Option holdings
There are no options over ordinary shares held by key management personnel.
(ii) Rights holdings
The numbers of rights to acquire ordinary shares in the Company held during the
financial year by each Director of Flinders Mines Limited and other key management
personnel of the Group, including their personally related parties, are set out below.
15,576,000 performance and incentive rights were granted during the reporting
period as compensation.
2015 ANNUAL REPORT 19
Director’s Report (cont.)
J Equity instrument disclosures relating to key management personnel (cont.)
(ii) Rights holdings (cont.)
Consolidated entity 2015
Name
I Gordon
M Rapaic
J Panagopoulos
(iii) Share holdings
Balance at start
of the year
Granted as
compensation
Exercised
(option)/ Vested
(rights)
Balance at the
end of the year
Vested and
exercisable
Unvested
-
-
-
10,000,000
3,609,000
1,967,000
-
-
-
10,000,000
3,609,000
1,967,000
-
-
-
10,000,000
3,609,000
1,967,000
The numbers of shares in the Company held during the financial year by each Director of Flinders Mines 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.
Consolidated entity 2015
Name
R M Kennedy
I J Gordon
K J Malaxos
E J Vickery
N J Smart
Balance at start
of the year
Granted as
compensation
Exercised
(option)/ Vested
(rights)
Acquired/
(disposed)
Balance at the
end of the year
40,000,000
500,000
2,200,000
6,000,000
838,095
-
-
-
-
-
-
-
-
-
-
4,000,000
44,000,000
2,533,334
1,000,000
1,000,000
-
3,033,334
3,200,000
7,000,000
838,095
auDitor’s inDePenDence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 21.
This report is made in accordance with a resolution of Directors.
Robert Michael Kennedy
Director
Adelaide
15 September 2015
20 FLINDERS MINES LIMITED
Auditor’s Independence Declaration
Level 1,
67 Greenhill Rd
Wayville SA 5034
Correspondence to:
GPO Box 1270
Level 1,
Adelaide SA 5001
67 Greenhill Rd
Wayville SA 5034
T 61 8 8372 6666
F 61 8 8372 6677
Correspondence to:
E info.sa@au.gt.com
GPO Box 1270
W www.grantthornton.com.au
Adelaide SA 5001
T 61 8 8372 6666
F 61 8 8372 6677
E info.sa@au.gt.com
W www.grantthornton.com.au
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF FLINDERS MINES LIMITED
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
AUDITOR’S INDEPENDENCE DECLARATION
auditor for the audit of Flinders Mines Limited for the year ended 30 June 2015, I declare
TO THE DIRECTORS OF FLINDERS MINES LIMITED
that, to the best of my knowledge and belief, there have been:
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
no contraventions of the auditor independence requirements of the Corporations Act
a
auditor for the audit of Flinders Mines Limited for the year ended 30 June 2015, I declare
2001 in relation to the audit; and
that, to the best of my knowledge and belief, there have been:
b
a
b
no contraventions of any applicable code of professional conduct in relation to the
no contraventions of the auditor independence requirements of the Corporations Act
audit.
2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the
audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
S K Edwards
Partner – Audit & Assurance
Adelaide, 15 September 2015
S K Edwards
Partner – Audit & Assurance
Adelaide, 15 September 2015
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
Grant Thornton Audit Pty Ltd ACN 130 913 594
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
scheme applies.
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
2015 ANNUAL REPORT 21
Corporate Governance Statement
The Board is committed to achieving and demonstrating the highest standards
of corporate governance. As such, Flinders Mines Limited has adopted the third
edition of the Corporate Governance Principles and Recommendations which was
released by the ASX Corporate Governance Council on 27 March 2014 and became
effective for financial years beginning on or after 1 July 2014.
The Company’s Corporate Governance Statement for the financial year ending
30 June 2015 is dated as at 13 October 2015 and was approved by the Board
on 13 October 2015. The Corporate Governance Statement is available on the
Company’s website at http://www.flindersmines.com/Corporate/Governance.aspx
22 FLINDERS MINES LIMITED
Consolidated statement of profit or loss
and other comprehensive income
For the year ended 30 June 2015
Consolidated Year ended
30 June 2015
30 June 2014
Notes
$
$
Revenue from continuing operations
Other revenue from ordinary activities
Other expenses from ordinary activities
Loss on disposal of assets
Marketing expenses
Exploration expenditure written off
Impairment of exploration assets
Administrative expenses
Finance costs
(Loss) before income tax
Income tax benefit/(expense)
(Loss) for the year
4
5
5
5
5
5
6
Item that may be reclassified to profit or loss
Changes in the fair value of available-for-sale financial assets
18(a)
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
(Loss) is attributable to:
Owners of Flinders Mines Limited
Total comprehensive income for the year is attributable to:
319,279
200,601
(82,450)
(563,280)
(128,579)
(26,763,089)
(2,492,540)
(3,977)
(29,714,636)
524,355
(29,190,281)
700
700
(25,628)
(1,610,205)
(388,073)
-
(3,501,323)
(11,409)
(5,336,037)
687,290
(4,648,747)
(4,900)
(4,900)
(29,189,581)
(4,653,647)
(29,190,281)
(4,648,747)
Owners of Flinders Mines Limited
(29,189,581)
(4,653,647)
Earnings per share for loss attributable to the
ordinary equity holders of the Company:
Basic earnings per share
Diluted earnings per share
Cents
Cents
28
28
(1.117)
(1.117)
(0.235)
(0.235)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
2015 ANNUAL REPORT 23
Consolidated statement of financial position
As at 30 June 2015
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Available-for-sale financial assets
Plant and equipment
Exploration and evaluation
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained losses
Capital and reserves attributable to owners of Flinders Mines Limited
Total equity
Consolidated
30 June 2015
30 June 2014
Notes
$
$
7
8
9
10
11
12
13
14
15
16
3,770,160
815,393
266,049
9,868,548
337,146
262,276
4,851,602
10,467,970
37,611
418,297
36,611
727,328
45,273,862
64,038,405
27,000
45,756,770
50,608,372
231,958
204,685
436,643
50,285
50,285
486,928
50,121,444
27,000
64,829,344
75,297,314
1,282,922
207,149
1,490,071
53,685
53,685
1,543,756
73,753,558
17
18(a)
124,414,150
119,106,233
268,830
18,580
(74,561,536)
(45,371,255)
50,121,444
50,121,444
73,753,558
73,753,558
The above consolidated statement of financial position should be read in conjunction
with the accompanying notes.
24 FLINDERS MINES LIMITED
Consolidated statement of changes in equity
For the year ended 30 June 2015
Attributable to owners of Flinders Mines Limited
Contributed
equity
Reserves
Notes
$
$
Retained
losses
$
105,277,581
1,257,521
(41,956,549)
-
(4,648,747)
-
Total
equity
$
64,578,553
(4,648,747)
(4,900)
Consolidated entity
Balance at 1 July 2013
Loss for the year
Revaluation of financial assets (net of tax)
Total comprehensive income for the period
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction
costs and tax
Rights expired during the year
Balance at 30 June 2014
Balance at 1 July 2014
Loss for the year
Revaluation of financial assets (net of tax)
Total comprehensive income for the period
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction costs
Rights expensed during the year
Balance at 30 June 2015
-
-
-
13,828,652
-
13,828,652
119,106,233
119,106,233
-
-
-
5,307,917
-
5,307,917
124,414,150
17
18
17
18
(4,900)
(4,900)
-
(1,234,041)
(1,234,041)
18,580
18,580
-
700
700
-
249,550
249,550
268,830
(4,648,747)
(4,653,647)
-
13,828,652
1,234,041
1,234,041
(45,371,255)
(45,371,255)
-
13,828,652
73,753,558
73,753,558
(29,190,281)
(29,190,281)
-
700
(29,190,281)
(29,189,581)
-
-
-
5,307,917
249,550
5,557,467
(74,561,536)
50,121,444
The above consolidated statement of changes in equity should be read in conjunction
with the accompanying notes.
2015 ANNUAL REPORT 25
Consolidated statement of cash flows
For the year ended 30 June 2015
Consolidated Year ended
30 June 2015
30 June 2014
Notes
$
$
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of GST)
Research and Development tax incentive received
Interest received
Net cash (outflow) from operating activities
Cash flows from investing activities
Payments for plant and equipment
Proceeds from sale of plant and equipment
Payments for exploration activities
Net cash (outflow) from investing activities
Cash flows from financing activities
Proceeds from issues of shares and other equity securities
Transaction costs
Net cash inflow from financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
27
11
Cash and cash equivalents at the end of the financial year
7
112,052
(3,070,943)
(2,958,891)
-
289,466
(2,669,425)
(18,836)
-
(8,665,723)
(8,684,559)
5,430,000
(174,404)
5,255,596
(6,098,388)
9,868,548
3,770,160
-
(4,970,019)
(4,970,019)
917,100
219,124
(3,833,795)
(34,509)
71,604
(5,931,942)
(5,894,847)
13,828,653
(227,710)
13,600,943
3,872,301
5,996,247
9,868,548
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes.
26 FLINDERS MINES LIMITED
Notes to the consolidated financial statements
30 June 2015
1
suMMary of significant
accounting Policies
The principal accounting policies adopted in the preparation
of these consolidated Financial Statements are set out below.
These policies have been consistently applied to all the
periods presented, unless otherwise stated. The Financial
Statements are for the consolidated entity consisting of
Flinders Mines Limited and its subsidiaries.
The financial statements were authorised for issue, in
accordance with a resolution of directors, on 15 September
2015.
(a) Basis of preparation
These general purpose financial statements have been
prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting
Standards Board and The Corporations Act 2001. Flinders
Mines Limited is a for-profit entity for the purpose of preparing
the financial statements.
(i)
Compliance with IFRS
The consolidated financial statements of the Flinders Mines
Limited group also comply with International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
(ii)
New and amended standards adopted
by the group
The group has applied the following standards and
amendments for the first time for their annual reporting period
commencing 1 July 2014.
• AASB 2013-3 Amendments to AASB 136 - Recoverable
Amount Disclosures for Non-Financial Assets
• AASB 2013-4 Amendments to Australian Accounting
Standards - Novation of Derivatives and Continuation of
Hedge Accounting
•
Interpretation 21 Accounting for Levies
• AASB 2014-1 Amendments to Australian Accounting
Standards
Management has reviewed the requirements of the above
standards and has concluded that there was no effect on the
classification or presentation of balances.
(b) Basis of consolidation
The Group financial statements consolidate those of the Parent
Company and all of its subsidiaries as of 30 June 2015. The
Parent controls a subsidiary if it is exposed, or has rights, to
variable returns from its involvement with the subsidiary and
has the ability to affect those returns through its power over the
subsidiary. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and
losses on transactions between Group companies. Where
unrealised losses on intra-group asset sales are reversed on
consolidation, the underlying asset is also tested for impairment
from a group perspective. Amounts reported in the financial
statements of subsidiaries have been adjusted where necessary
to ensure consistency with the accounting policies adopted by
the Group.
Profit or loss and other comprehensive income of subsidiaries
acquired or disposed of during the year are recognised from
the effective date of acquisition, or up to the effective date of
disposal, as applicable.
(c) Business combinations
The Group applies the acquisition method in accounting for
business combinations. The consideration transferred by the
Group to obtain control of a subsidiary is calculated as the
sum of the acquisition-date fair values of assets transferred,
liabilities incurred and the equity interests issued by the Group,
which includes the fair value of any asset or liability arising from
a contingent consideration arrangement. Acquisition costs are
expensed as incurred.
The Group recognises identifiable assets acquired and liabilities
assumed in a business combination regardless of whether they
have been previously recognised in the acquiree’s financial
statements prior to the acquisition. Assets acquired and liabilities
assumed are generally measured at their acquisition-date fair
values.
Goodwill is stated after separate recognition of identifiable
intangible assets. It is calculated as the excess of the sum of
(a) fair value of consideration transferred, (b) the recognised
amount of any non-controlling interest in the acquired entity, and
(c) acquisition-date fair value of any existing equity interest in
the acquiree, over the acquisition-date fair values of identifiable
net assets. If the fair values of identifiable net assets exceed the
sum calculated above, the excess amount (i.e. gain on a bargain
purchase) is recognised in profit or loss immediately.
2015 ANNUAL REPORT 27
Notes to the consolidated financial statements
30 June 2015 (cont.)
1
(d)
suMMary of significant
accounting Policies (cont.)
Investments in associates and
joint ventures
Associates are those entities over which the Group is able to
exert significant influence but which are not subsidiaries.
A joint venture is an arrangement that the Group controls
jointly with one or more other investors, and over which the
Group has rights to a share of the arrangement’s net assets
rather than direct rights to underlying assets and obligations
for underlying liabilities. A joint arrangement in which the
Group has direct rights to underlying assets and obligations
for underlying liabilities is classified as a joint operation.
Investments in associates and joint ventures are accounted
for using the equity method. Interests in joint operations are
accounted for by recognising the Group’s assets (including its
share of any assets held jointly), its liabilities (including its share
of any liabilities incurred jointly), its revenue from the sale of its
share of the output arising from the joint operation, its share of
the revenue from the sale of the output by the joint operation
and its expenses (including its share of any expenses incurred
jointly).
Any goodwill or fair value adjustment attributable to the
Group’s share in the associate or joint venture is not
recognised separately and is included in the amount
recognised as investment.
The carrying amount of the investment in associates and joint
ventures is increased or decreased to recognise the Group’s
share of the profit or loss and other comprehensive income of
the associate and joint venture, adjusted where necessary to
ensure consistency with the accounting policies of the Group.
Unrealised gains and losses on transactions between the
Group and its associates and joint ventures are eliminated
to the extent of the Group’s interest in those entities. Where
unrealised losses are eliminated, the underlying asset is also
tested for impairment.
(e) 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 has been identified
as the Board of Directors.
There have been no changes from prior periods in the
measurement methods used to determine reported segment
profit or loss.
(f) Revenue recognition
Interest income
Interest income is recognised on a proportional basis taking
into account the interest rates applicable to the financial
assets.
Other income
Other income includes fees for services provided to external
parties and fuel tax rebate.
(g)
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
applicable income tax rate for each jurisdiction 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 the initial
recognition of goodwill. Deferred income tax is also not
accounted for if it arises 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 end of the reporting period and are expected
to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
28 FLINDERS MINES LIMITED
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 amount and tax
bases of investments in foreign operations where the company
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.
(i) Cash and cash equivalents
For the purpose of presentation in the consolidated statement
of cash flows, cash and cash equivalents includes cash on
hand, deposits held at call with financial institutions, other
short term, highly liquid investments with original maturities
of 12 months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk
of changes in value, and bank overdrafts. Any bank overdrafts
the Group has are shown within borrowings in current liabilities
in the consolidated statement of financial position.
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.
(j)
Trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Trade
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.
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.
(h)
Impairment of non-financial assets
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 tested 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 an impairment are reviewed for
possible reversal of the impairment at each reporting date.
(k) Research and development
tax incentive fund
Refund amounts received or receivable under the Federal
Government’s Research and Development Tax Incentive are
recognised on an accruals basis at the point the asset can
be reliably measured. The research and development tax
incentive fund is recognised as a tax expense credit.
(l)
Investments and other financial assets
Recognition and derecognition
Regular purchases and sales of financial assets are recognised
on trade-date - the date on which the Group commits to
purchase or sell the asset. Financial assets are derecognised
when the rights to receive cash flows from the financial assets
have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
When securities classified as available-for-sale are sold,
the accumulated fair value adjustments recognised in other
comprehensive income are reclassified to profit or loss as
gains and losses from investment securities.
Measurement
At initial recognition, the Group measures a financial asset at
its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at fair value through profit or
loss are expensed in profit or loss.
2015 ANNUAL REPORT 29
Notes to the consolidated financial statements
30 June 2015 (cont.)
1
(l)
suMMary of significant
accounting Policies (cont.)
Investments and other financial
assets (cont.)
Loans and receivables and held-to-maturity investments are
subsequently carried at amortised cost using the effective
interest method.
Available-for-sale financial assets and financial assets at fair
value through profit or loss are subsequently carried at fair
value. Gains or losses arising from changes in the fair value
of the ‘financial assets at fair value through profit or loss’
category are presented in profit or loss within other income
or other expenses in the period in which they arise. Dividend
income from financial assets at fair value through profit or
loss is recognised in profit or loss as part of revenue from
continuing operations when the Group’s right to receive
payments is established. Interest income from these financial
assets is included in the net gains/(losses).
Changes in the fair value of monetary securities denominated
in a foreign currency and classified as available-for-sale
are analysed between translation differences resulting from
changes in amortised cost of the security and other changes
in the carrying amount of the security. The translation
differences related to changes in the amortised cost are
recognised in profit or loss, and other changes in carrying
amount are recognised in other comprehensive income.
Changes in the fair value of other monetary and non-monetary
securities classified as available-for-sale are recognised in
other comprehensive income. Details on how the fair value of
financial instruments is determined are disclosed in note 2.
Fair value
The fair values of quoted investments are based on current bid
prices. If the market for a financial asset is not active (and for
unlisted securities), the Group establishes fair value by using
valuation techniques. These include the use of recent arm’s
length transactions, reference to other instruments that are
substantially the same, discounted cash flow analysis, and
option pricing models making maximum use of market inputs
and relying as little as possible on entity specific inputs.
Impairment
The Group assesses at the end of each reporting period
whether there is objective evidence that a financial asset or
group of financial assets is impaired. A financial asset or a
group of financial assets is impaired and impairment losses
30 FLINDERS MINES LIMITED
are incurred only if there is objective evidence of impairment
as a result of one or more events that occurred after the initial
recognition of the asset (a ‘loss event’) and that loss event
(or events) has an impact on the estimated future cash flows
of the financial asset or group of financial assets that can be
reliably estimated. In the case of equity investments classified
as available for sale, a significant or prolonged decline in
the fair value of the security below its cost is considered an
indicator that the assets are impaired.
If there is evidence of impairment for any of the Group’s
financial assets carried at amortised cost, the loss is measured
as the difference between the asset’s carrying amount and the
present value of estimated future cash flows, excluding future
credit losses that have not been incurred. The cash flows are
discounted at the financial asset’s original effective interest
rate. The loss is recognised in profit or loss.
(m) Plant and equipment
Each class of plant and equipment is carried at historical cost or
fair value less, where applicable, any accumulated depreciation
and impairment losses. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Plant and equipment
Plant and equipment is measured on a cost basis. The
carrying amount of plant and equipment is reviewed annually
by directors to ensure it is not in excess of the recoverable
amount. The recoverable amount is assessed on the basis
of the expected net cash flows that will be received from the
assets’ employment and subsequent disposal. The expected
net cash flows have been discounted to their present values in
determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amounts
or recognised as separate assets, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the Group and the cost can be measured
reliably. All other repairs and maintenance are charged to the
statement of comprehensive income during the financial year
in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated
on a straight line basis over their useful lives to the Group
commencing from the time the asset is held ready for use. The
depreciation rates used for plant and equipment range from
12.5 to 40%.
The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount (note 1(h)).
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in the
consolidated statement of comprehensive income. When
revalued assets are sold, it is Group policy to transfer any
amounts included in other reserves in respect of those assets
to retained earnings.
(n) Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of 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.
market yields at the end of the reporting period of government
bonds with terms to maturity and currency that match, as
closely as possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the
consolidated statement of financial position if the Group does
not have an unconditional right to defer settlement for at least
12 months after the reporting date, regardless of when the
actual settlement is expected to occur.
(iii) Share-based payments
Share based compensation benefits are provided to
employees via the Flinders Mines Limited Employee Incentive
Rights Plan. Information relating to the scheme is set out in
note 29.
The cost of equity settled transactions is measured by the
fair value at the date at which the equity instruments are
granted. The fair value is determined using the Black Scholes
or Binomial pricing model. The cost is recognised as an
expense in the statement of comprehensive income with a
corresponding increase in the share based payments reserve
or issued capital when the options, rights or shares are issued.
(o) Employee benefits
(i)
Short-term obligations
Liabilities for wages and salaries, including non-monetary
benefits and annual leave expected to be settled within 12
months 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. The liability for annual leave is recognised
in the provision for annual leave. All other short term employee
benefit obligations are presented as payables.
(ii) Other long-term employee benefit obligations
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 non-current liabilities provisions 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 expected future wage and salary
levels, experience of employee departures and periods of
service. Expected future payments are discounted using
(p) Earnings per share
(i)
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
the profit attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary
shares
• by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year and
excluding treasury shares.
(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.
2015 ANNUAL REPORT 31
Notes to the consolidated financial statements
30 June 2015 (cont.)
1
suMMary of significant
accounting Policies (cont.)
(q) Exploration and evaluation expenditure
Exploration and evaluation costs related to an area of interest
are written off as incurred except they may be carried forward
as an item in the consolidated statement of financial position
where the rights of tenure of an area are current and one of
the following conditions is met:
•
the costs are expected to be recouped through successful
development and exploitation of the area of interest, or
alternatively, by its sale; and
• exploration and/or evaluation activities in the area of
interest have not at the end of each reporting period
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.
Capitalised costs include costs directly related to exploration
and evaluation activities in the relevant area of interest. General
and administrative costs are allocated to an exploration or
evaluation asset only to the extent that those costs can be
related directly to operational activities in the area of interest to
which the asset relates.
Capitalised exploration and evaluation expenditure is written
off where the above conditions are no longer satisfied.
Exploration and evaluation expenditure incurred subsequent
to the acquisition in respect of an exploration asset acquired is
accounted for in accordance with the policy outlined above.
All capitalised exploration and evaluation expenditure is
assessed for impairment if facts and circumstances indicate
that an impairment may exist. Exploration and evaluation
assets are also tested for impairment once commercial
reserves are found, before the assets are transferred to
development properties.
(r) 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 consolidated
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.
(s) Comparative figures
Comparative figures are adjusted to conform to Accounting
Standards when required.
(t) 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.
Where any group company purchases the Company’s equity
instruments, for example as the result of a share buy-back or
a share-based payment plan, the consideration paid, including
any directly attributable incremental costs (net of income
taxes) is deducted from equity attributable to the owners of
Flinders Mines Limited as treasury shares until the shares
are cancelled or reissued. Where such ordinary shares are
subsequently reissued, any consideration received, net of
any directly attributable incremental transaction costs and the
related income tax effects, is included in equity attributable to
the owners of Flinders Mines Limited.
(u) Key estimates
The preparation of the consolidated financial statements
requires management to make estimates and judgments.
These estimates and judgments 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 Group and that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below:
32 FLINDERS MINES LIMITED
(i)
Estimated impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to
impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use
calculations performed in assessing recoverable amounts incorporate a number of key estimates.
(ii)
Exploration and evaluation
The Group’s policy for exploration and evaluation is discussed in note 1 (p). The application of this policy requires management
to make certain assumptions as to future events and circumstances. Any such estimates and assumptions may change as new
information becomes available. If, after having capitalised exploration and evaluation expenditure, management concludes that
the capitalised expenditure is unlikely to be recovered by future sale or exploration, then the relevant capitalised amount will be
written off through the statement of profit or loss. The related carrying amounts are disclosed in note 3 and note 12.
(iii) Share-based payments
The Group measures share based payments at fair value at the grant date using the Black Scholes or Binomial formula taking
into account the terms and conditions upon which the instrument was granted, as discussed in note 29.
(v) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for June 2015 reporting
periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and
interpretations is set out below.
Title of
standard
AASB 9
Financial
Instruments
Nature of change
Impact
Mandatory application
date/ Date of adoption
by group
AASB 9 addresses
the classification,
measurement and
derecognition of
financial assets and
financial liabilities
and introduces new
rules for hedge
accounting.
In December 2014,
the AASB made
further changes to
the classification
and measurement
rules and also
introduced a new
impairment model.
These latest
amendments now
complete the new
financial instruments
standard.
Following the changes approved by the AASB in December 2014
the group no longer expects any impact from the new classification,
measurement and derecognition rules on the group’s financial assets
and financial liabilities.
Must be applied
for financial years
commencing on or after
1 January 2018.
While the group has yet to undertake a detailed assessment of the
debt instruments currently classified as available-for-sale assets, it
would appear that they would satisfy the conditions for classification
as at fair value through other comprehensive income (FVOCI) and
hence there will be no change to the accounting for these assets.
There will also be no impact on the group’s accounting for financial
liabilities, as the new requirements only affect the accounting for
financial liabilities that are designated at fair value through profit or
loss and the group does not have any such liabilities.
The new hedging rules align hedge accounting more closely with the
group’s risk management practices. As a general rule it will be easier
to apply hedge accounting going forward as the standard introduces
a more principles-based approach. The new standard also introduces
expanded disclosure requirements and changes in presentation.
The new impairment model is an expected credit loss (ECL) model
which may result in the earlier recognition of credit losses.
The group has not yet assessed how its own hedging arrangements
and impairment provisions would be affected by the new rules.
Based on the
transitional provisions
in the completed
IFRS 9, early adoption
in phases was only
permitted for annual
reporting periods
beginning before
1 February 2015. After
that date, the new rules
must be adopted in
their entirety.
2015 ANNUAL REPORT 33
Notes to the consolidated financial statements
30 June 2015 (cont.)
1
suMMary of significant accounting Policies (cont.)
(v) New accounting standards and interpretations (cont.)
Title of
standard
AASB 15
Revenue from
Contracts with
Customers
Nature of change
Impact
The AASB has issued a new standard
for the recognition of revenue.
This will replace AASB 118 which
covers contracts for goods and
services and AASB 111 which covers
construction contracts. The new
standard is based on the principle that
revenue is recognised when control
of a good or service transfers to a
customer - so the notion of control
replaces the existing notion of risk
and rewards. The standard permits a
modified retrospective approach for
the adoption. Under this approach
entities will recognise transitional
adjustments in retained earnings on
the date of initial application (e.g.
1 July 2017), i.e. without restating
the comparative period. They will
only need to apply the new rules to
contracts that are not completed as of
initial application.
Management is currently assessing the impact
of the new rules and has identified the following
areas that are likely to be affected. (i) extended
warranties, which will need to be accounted for
as separate performance obligations, which will
delay the recognition of a portion of the revenue
(ii) consignment sales where recognition of
revenue will depend on the passing of control
rather than the passing of risks and rewards (iii)
IT consulting services where the new guidance
may result in the identification of separate
performance obligations which could again
affect the timing of the recognition of revenue,
and (iv) the balance sheet presentation of rights
of return, which will have to be grossed up
in future (separate recognition of the right to
recover the goods from the customer and the
refund obligation) At this stage, the group is not
able to estimate the impact of the new rules on
the group’s financial statements. The group will
make more detailed assessments of the impact
over the next twelve months.
Mandatory application
date/ Date of adoption
by group
Mandatory for financial
years commencing
on or after 1 January
2017. Expected date of
adoption by the group:
1 July 2017.
There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future transactions.
(w) Parent entity financial information
The financial information for the parent entity, Flinders Mines Limited, disclosed in note 30 has been prepared on the same basis
as the consolidated financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost less impairment, in the financial
statements of Flinders Mines Limited.
2
financial risk ManageMent
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk),
credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial performance of the Group.
Risk management is carried out by management under policies approved by the Board of Directors. Management identifies,
evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides principles
for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, use of financial
instruments and investment of excess liquidity where appropriate.
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, available-for-sale
investments and loans to associated companies.
34 FLINDERS MINES LIMITED
2
financial risk ManageMent
(cont.)
The Group holds the following financial instruments:
Consolidated
30 June 2015
30 June 2014
$
$
Financial assets
Cash and cash equivalents
3,770,160
9,868,548
Trade and other receivables
Available-for-sale financial assets
815,393
37,611
337,146
36,611
4,623,164
10,242,305
Financial liabilities
Trade and other payables
231,958
1,282,922
(a) Market risk
(i) Foreign exchange risk
Foreign exchange risk is the risk that financial loss will be
suffered due to adverse movements in exchange rates. The
Group is not exposed to foreign exchange risk.
(ii) Price risk
Price risk is the risk that the fair value of future cash flows of
a financial instrument will fluctuate as a result of changes in
market prices (other than those arising from foreign exchange
or interest rate risk). The Group is not exposed to any material
price risk.
The Group is exposed to equity securities price risk. This
arises from investments held by the Group and classified in the
balance sheet as available-for-sale. The Group is not exposed
to commodity price risk.
To manage its price risk arising from investments in equity
securities, the Group marks-to-market its listed investments
twice yearly and writes down any losses through profit and
loss.
All of the Group’s equity investments are publicly traded on the
ASX and are therefore readily converted into cash.
(iii) Cash flow and fair value interest rate risk
Interest rate risk is the risk that a financial instrument’s value
will fluctuate as a result of changes in market interest rates
and the effective weighted interest rates on classes of financial
assets and financial liabilities. Interest rate risk is managed by
the Group with the use of rolling short term deposits.
The Group has no long term financial liabilities upon which it pays interest.
As at the end of the reporting period, the Group had the following variable rate cash and cash equivalent holdings:
30 June 2015
30 June 2014
Weighted average
interest rate
Balance
Weighted average
interest rate
Balance
%
$
%
$
3.12%
3,770,160
3,770,160
3.73%
9,868,548
9,868,548
Consolidated entity
Cash and cash equivalents
Net exposure to cash flow interest rate risk
Sensitivity
At 30 June 2015, if interest rates had increased by 200 or decreased by 200 basis points from the period end rates with all
other variables held constant, post-tax profit for the period would have been $75,403 higher/$75,403 lower (2014 changes of
200 bps/200 bps: $197,370 lower/$197,370 higher), mainly as a result of higher/lower interest income from cash and cash
equivalents. Other components of equity would have been $75,403 lower/$75,403 higher (2014: $197,370 lower/$197,370
higher) mainly as a result of an increase/decrease in the fair value of the cash and cash equivalents.
2015 ANNUAL REPORT 35
Notes to the consolidated financial statements
30 June 2015 (cont.)
2
financial risk ManageMent (cont.)
(b) Credit risk
Credit risk is the risk of default by borrowers and transactional counterparties as well as the loss of value of assets due to
deterioration in credit quality. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions,
as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. For
banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. Individual risk limits
are set based on internal or external ratings in accordance with limits set by the board. Sales to retail customers are required to
be settled in cash or using major credit cards, mitigating credit risk. There are no significant concentrations of credit risk, whether
through exposure to individual customers, specific industry sectors and/or regions.
(c) Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulty in settling its debts or otherwise meeting its obligations. The Group
manages liquidity risk by monitoring cash flows and ensuring that adequate funds are available to meet cash demands. At the
reporting date the Group held deposits at call of $2,750,000 (2014: $9,350,000) as disclosed in note 7.
(d) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
(b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or
indirectly (derived from prices) (level 2), and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
The following table presents the Group’s assets and liabilities measured and recognised at fair value at 30 June 2015 and 30 June
2014:
Level 1
$
Level 2
$
Level 3
$
Total
$
Consolidated entity - at 30 June 2015
Assets
Available-for-sale financial assets
Maximus Resources Limited
Carvel Energy Ltd (formerly Copper Range Limited)
Phoenix Copper Limited
Total assets
Consolidated entity - at 30 June 2014
Assets
Available-for-sale financial assets
Maximus Resources Limited
Phoenix Copper Limited
Total assets
32,611
-
5,000
37,611
32,611
4,000
36,611
-
-
-
-
-
-
-
-
-
-
-
-
-
-
32,611
-
5,000
37,611
32,611
4,000
36,611
The fair value of financial instruments traded in active markets (such as available-for-sale securities) is based on quoted market
prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid
price. These instruments are included in Level 1.
36 FLINDERS MINES LIMITED
3
segMent inforMation
(a) Description of segments
Identification of reportable segments
Management has determined the operating segments based on the reports reviewed and used by the Board of Directors
(the chief operating decision maker) that are used to make strategic decisions. The Group is managed primarily on the basis
of geographical area of interest, since the diversification of Group operations inherently has notably different risk profiles and
performance assessment criteria. 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 are also similar with respect to the following:
• external regulatory requirements
• geographical and geological styles
Operations
The Group has exploration operations in two styles of iron mineralisation, gold and base metals. The costs associated with these
operations are reported on in this segment.
Accounting policies developed
Unless stated otherwise, all amounts reported to the Board of Directors as chief decision maker with respect to operating
segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial
statements of the Group.
(b) Business segments
Pilbara
Iron Ore
$
Canegrass
Magnetite
$
Other
Minerals
$
Total
$
Consolidated entity 2015
Total segment revenue
Segment Result / Adjusted EBITDA
Impairment of assets (note 5)
Capital expenditure
61,132
(26,701,957)
(26,763,089)
7,724,684
Capital expenditure written off / impaired for the year
(26,763,089)
Total segment assets
Total segment liabilities
Consolidated entity 2014
Segment result / Adjusted EBITDA
Impairment of assets
Capital expenditure
Capital expenditure written off / impaired for the year
Total segment assets
Total segment liabilities
45,386,296
22,094
-
-
5,662,757
-
64,038,405
986,765
-
(6,914)
(6,914)
280,776
(6,914)
273,862
343
(201,946)
(201,946)
201,946
(201,946)
-
19,176
-
61,132
(121,665)
(121,665)
121,665
(26,830,536)
(26,891,668)
8,127,125
(121,665)
(26,891,668)
-
100
45,660,158
22,537
(186,128)
(186,128)
186,128
(186,128)
-
-
(388,074)
(388,074)
6,050,831
(388,074)
64,038,405
1,005,941
2015 ANNUAL REPORT 37
Notes to the consolidated financial statements
30 June 2015 (cont.)
3
segMent inforMation (cont.)
(iii) Segment assets
(c) Other segment information
(i) Segment revenue
Segment revenue reconciles to total revenue from continuing
operations as follows:
Consolidated Year ended
30 June 2015
30 June 2014
$
$
61,132
207,228
50,919
319,279
-
200,601
-
200,601
Total segment revenue
Interest revenue
Other revenue
Total revenue (note 4)
(ii) Adjusted EBITDA
A reconciliation of adjusted EBITDA to operating profit/loss
before income tax is provided as follows:
Consolidated
30 June 2015
30 June 2014
$
$
Adjusted EBITDA
(26,830,536)
(388,073)
Other revenue from ordinary
activities
Loss on disposal of assets
258,147
(82,450)
200,601
(25,628)
Marketing expenses
(563,280)
(1,610,205)
Administrative expenses
(2,492,540)
(3,501,323)
Finance costs
(3,977)
(11,409)
Profit/loss before income tax
(29,714,636)
(5,336,037)
Reportable segments’ assets are reconciled to total assets as
follows:
Consolidated
30 June 2015
30 June 2014
$
$
45,660,158
64,038,405
Segment assets
Unallocated:
Cash and cash equivalents
3,770,160
9,868,548
Trade and other receivables
Other current assets
Available-for-sale financial assets
Plant and equipment
Other non-current assets
Total assets as per the
consolidated statement of
financial position
(iv) Segment liabilities
754,261
266,049
37,611
93,133
27,000
337,146
262,276
36,611
727,328
27,000
50,608,372
75,297,314
Reportable segments’ liabilities are reconciled to total liabilities
as follows:
Segment liabilities
Unallocated:
Trade and other payables
Provisions
Total liabilities as per the
consolidated statement of
financial position
4
revenue
From continuing operations
Other revenue
Interest received
Other revenue
Consolidated
30 June 2015
30 June 2014
$
$
22,537
1,005,941
209,421
254,970
276,980
207,149
486,928
1,490,070
Consolidated
30 June 2015
30 June 2014
$
$
207,228
112,051
319,279
200,601
-
200,601
38 FLINDERS MINES LIMITED
5
exPenses
6
incoMe tax exPense
Consolidated
(a)
Income tax expense
30 June 2015
30 June 2014
$
$
Profit before income tax
includes the following specific
expenses:
Finance costs
Bank fees
Deferred tax
Adjustments for Research &
Development Tax Concession
Income tax benefit for the year
3,977
3,977
11,409
11,409
Consolidated Year ended
30 June 2015
30 June 2014
$
$
52,021
229,810
(576,376)
(524,355)
(917,100)
(687,290)
Exploration expenses
General exploration written off
120,565
134,564
Impairment of exploration assets
26,763,089
-
Capitalised exploration
expenditure impaired *
Marketing expenses
8,014
26,891,668
253,510
388,074
Marketing and promotion
563,280
1,610,205
Administrative expenses
Compliance
Depreciation
563,280
1,610,205
181,014
127,042
443,538
174,904
Administration costs
778,149
1,256,262
Legal fees
Employment costs
Scheme of arrangement costs
Share based payments
Superannuation
Rental
157,714
608,720
-
249,550
201,200
189,151
73,269
934,256
33
-
218,652
400,409
2,492,540
3,501,323
* Capitalised exploration expenditure impaired consists of the
following projects: Canegrass ($6,914); Springfield ($400);
Jamestown ($700).
(b) Numerical reconciliation of income tax
expense to prima facie tax payable
Consolidated Year ended
30 June 2015
30 June 2014
$
$
(29,714,636)
(5,336,037)
(8,914,391)
(1,600,811)
Loss from continuing operations
before income tax expense
Tax at the Australian tax rate of
30% (2014 - 30%)
Tax effect of amounts which
are not deductible (taxable) in
calculating taxable income:
Other non-allowable items
78,885
8,421
Tax losses not brought to
account
Adjustment for Research and
Development tax offset
Income tax expense
8,887,527
1,822,200
(576,376)
(524,355)
(917,100)
(687,290)
A deferred tax asset (DTA) on the timing differences has not
been recognised as they do not meet the recognition criteria
as outlined in Note 1(e) of the financial statements. A DTA
has not been recognised in respect of tax losses either as
realisation of the benefit is not regarded as probable.
The Group has net DTAs arising in Australia of $21,803,960
(2014: $13,300,684) that are available for offset indefinitely
against future taxable profits of the companies in which the
losses arose.
The tax rates applicable to each potential tax benefit are as
follows:
•
•
timing differences 30%
tax losses 30%
2015 ANNUAL REPORT 39
Notes to the consolidated financial statements
30 June 2015 (cont.)
7
current assets - cash anD cash
equivalents
9
current assets - other
current assets
Consolidated
30 June 2015
30 June 2014
$
$
Consolidated
30 June 2015
30 June 2014
$
$
Cash at bank and in hand
1,020,160
518,548
Pre-paid insurance
266,049
262,276
10 non-current assets - available-
for-sale financial assets
Available-for-sale financial assets include the following classes
of financial assets:
Consolidated
30 June 2015
30 June 2014
$
$
Listed securities
Shares in listed companies
37,611
36,611
(a) Listed securities
Available for sale financial assets comprise investments in
the ordinary capital of Maximus Resources Limited, and
Phoenix Copper Limited. There are no fixed returns or fixed
maturity dates attached to these investments. On occasion,
the Company acquires shares in listed entities through
consideration for commercial transactions. The shares are
held as available for sale and their value is marked to market
at financial year end.
(b)
Investments in related parties
Available for sale financial assets include shares in Maximus
Resources Limited with a fair value of $32,611 (2014:
$32,611). Messrs Kennedy, Malaxos and Vickery are directors
of Maximus.
Term deposits
2,750,000
9,350,000
3,770,160
9,868,548
(a) Risk exposure
The Group’s exposure to interest rate risk is discussed in note
2. The maximum exposure to credit risk at the end of the
reporting period is the carrying amount of each class of cash
and cash equivalents mentioned above.
(b) Cash weighted average interest rate
The cash at bank and term deposits are bearing a weighted
average interest rate of 3.12% (2014: 3.73%). The term
deposits have an average period to repricing of 65 days
(2014: 65 days).
8
current assets - traDe anD
other receivables
Trade receivables
Provision for impairment of
receivables
GST clearing account
Income tax receivables
Consolidated
30 June 2015
30 June 2014
$
$
239,864
391,251
(56,314)
183,550
50,921
580,922
631,843
815,393
(56,314)
334,937
(313)
2,522
2,209
337,146
(a) Past due but not impaired
As at 30 June 2015 there were no material trade and other
receivables that were considered to be past due and not
impaired (2014: Nil).
40 FLINDERS MINES LIMITED
11 non-current assets - Plant anD equiPMent
Plant and
equipment
Furniture,
fittings and
equipment
Machinery and
vehicles
Computer
software
Computer
hardware
Total
$
$
$
$
$
$
Consolidated entity
At 1 July 2013
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2014
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2014
Cost or fair value
Accumulated depreciation
Net book amount
Consolidated entity
Year ended 30 June 2015
1,032,298
(500,576)
531,722
531,722
-
(9,484)
(121,688)
400,550
971,833
(571,283)
400,550
319,767
(143,578)
176,189
176,189
5,950
-
(37,760)
144,379
325,717
(181,338)
144,379
616,768
(358,236)
258,532
258,532
-
(82,079)
(57,188)
119,265
382,695
(263,430)
119,265
493,333
(457,658)
35,675
492,352
2,954,518
(410,629)
(1,870,677)
81,723
1,083,841
35,675
26,836
-
(31,576)
30,935
81,723
1,723
(5,668)
(45,579)
32,199
1,083,841
34,509
(97,231)
(293,791)
727,328
520,168
(489,233)
30,935
481,884
2,682,297
(449,685)
(1,954,969)
32,199
727,328
Opening net book amount
400,550
144,379
119,265
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2015
Cost
Accumulated depreciation
Net book amount
-
-
(120,811)
279,739
971,833
(692,094)
279,739
-
(82,450)
(24,231)
37,698
179,706
(142,008)
37,698
-
-
(47,837)
71,428
382,695
(311,267)
71,428
30,935
18,836
-
(29,244)
20,527
32,199
-
-
(23,294)
8,905
727,328
18,836
(82,450)
(245,417)
418,297
539,004
(518,477)
20,527
481,884
2,555,122
(472,979)
(2,136,825)
8,905
418,297
During the year $118,375 (2014 $118,887) of depreciation was included in the amount capitalised as exploration and evaluation.
2015 ANNUAL REPORT 41
Notes to the consolidated financial statements
30 June 2015 (cont.)
12 non-current assets
14 current liabilities
- exPloration anD evaluation
- traDe anD other Payables
Exploration and evaluation
assets
Movement:
Opening balance
Consolidated
30 June 2015
30 June 2014
$
$
64,038,405
58,375,649
Trade payables
Accrued expenses
Credit cards
Consolidated
30 June 2015
30 June 2014
$
$
203,886
1,221,699
24,152
3,920
21,000
40,223
231,958
1,282,922
Expenditure incurred
8,127,125
6,050,829
Less: expenditure written off
/ impaired
(26,891,668)
(388,073)
Closing balance
45,273,862
64,038,405
Closing balance comprises
Exploration and evaluation
- 100% owned
Exploration and evaluation
phases - Joint Venture
Operations
43,155,863
57,797,307
2,117,999
6,241,098
45,273,862
64,038,405
The Company reviewed the carrying value of the PIOP project
having regard to it’s potential sale and assessed it be impaired
by $26,763,089.
13 non-current assets
- other non-current assets
Security bonds
Consolidated
30 June 2015
30 June 2014
$
$
27,000
27,000
15 current liabilities - Provisions
Consolidated
30 June 2015
30 June 2014
$
$
Employee entitlements
204,685
207,149
16 non-current liabilities
- Provisions
Consolidated
30 June 2015
30 June 2014
$
$
Employee entitlements
50,285
53,685
42 FLINDERS MINES LIMITED
17 contributeD equity
(a) Share capital
Ordinary shares
30 June 2015
30 June 2014
30 June 2015
30 June 2014
Shares
Shares
$
$
Ordinary shares - fully paid
2,762,995,689
2,400,995,602
124,414,150
119,106,233
Number of shares
Issue price $
$
(b) Movements in ordinary share capital
Date
1 July 2013
18 July 2013
Details
Opening balance
Conversion of employee rights
19 December 2013
Conversion of employee rights
4 February 2014
Exercise of options - Proceeds received
10 March 2014
Share issue - Proceeds received
11 April 2014
11 April 2014
30 June 2014
Share issue - Proceeds received
Share issue - Proceeds received
Balance
Transaction costs arising on share issue
Deferred tax credit recognised directly in equity
30 June 2014
Balance
25 November 2014
Share issue - Proceeds received
19 December 2014
Share issue - Proceeds received
30 June 2015
Balance
Transaction costs arising on share issue
Deferred tax credit recognised directly in equity
1,821,300,404
3,543,272
1,873,072
150,000
274,000,000
220,328,329
79,800,525
2,400,995,602
-
-
2,400,995,602
313,333,334
48,666,753
2,762,995,689
-
-
.045
.025
.025
.025
.015
.015
30 June 2015
Balance
2,762,995,689
105,277,581
-
-
6,750
6,850,000
5,508,213
1,995,013
119,637,557
(759,034)
227,710
119,106,233
4,700,000
730,000
124,536,233
(174,404)
52,321
124,414,150
(c) Ordinary 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.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
(d) Options and rights
Information relating to the Flinders Mines Limited Employee Option and Incentive Rights Plans, including details of options and
rights issued, exercised and lapsed during the financial year and options and rights outstanding at the end of the financial year, is
set out in note 29.
2015 ANNUAL REPORT 43
Notes to the consolidated financial statements
30 June 2015 (cont.)
17 contributeD equity (cont.)
(b) Nature and purpose of other reserves
(e) Capital risk management
The Group’s debt and capital includes ordinary share capital
supported by financial assets. There are no externally imposed
capital requirements.
Management effectively manages the Group’s capital by
assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the
market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by
management to control the capital of the Group since the prior
year. This strategy is to ensure that the Group has no debt.
(i)
Available-for-sale financial assets
Changes in the fair value of instruments, such as equities,
classified as available-for-sale financial assets, are recognised
in other comprehensive income as described in note 1(l) and
accumulated in a separate reserve within equity. Amounts are
reclassified to profit or loss when the associated assets are
sold or impaired.
(ii)
Share-based payments
The share based payments reserve records items recognised
as expenses on valuation of employee options, employee
rights and options issued to external parties in consideration
for goods and services rendered.
19 key ManageMent Personnel
Disclosures
(a) Key management personnel
compensation
Consolidated Year ended
30 June 2015
30 June 2014
$
$
Short-term employee benefits
1,353,374
1,655,228
Post-employment benefits
Share-based payments
101,449
160,900
108,326
-
1,615,723
1,763,554
Detailed remuneration disclosures are provided in the
remuneration report on pages 15 to 20.
18 reserves
(a) Other reserves
Available-for-sale investments
revaluation reserve
Share-based payments
Movements:
Available-for-sale financial assets
Opening balance
Revaluation
Balance 30 June
Share-based payments
Opening balance
Rights issued/(expired) during
the year
Balance 30 June
Consolidated
30 June 2015
30 June 2014
$
$
(292,347)
(293,047)
561,177
268,830
311,627
18,580
(293,049)
(288,149)
700
(4,900)
(292,349)
(293,049)
311,629
1,545,670
249,550
(1,234,041)
561,179
311,629
44 FLINDERS MINES LIMITED
20 reMuneration of auDitors
(b) Commitments for exploration and
During the period the following fees were paid or payable for
services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
Grant Thornton
Consolidated Year ended
30 June 2015
30 June 2014
joint venture expenditure
In order to maintain current rights of tenure to exploration
tenements the Group will be required to outlay amounts
totalling approximately $1,433,690 during the year ending 30
June 2016 (2015: $3,185,600) to meet minimum expenditure
requirements.
$
$
(c) Bank guarantees
Audit and other assurance
services
Audit and review of financial
statements
Total remuneration for audit and
other assurance services
Total remuneration for other
services
32,000
31,500
32,000
31,500
-
-
The State Government departments responsible for mineral
resources require performance bonds for the purposes of
rehabilitation of areas disturbed by exploration activities.
Financial institutions similarly require guarantees for credit card
automatic payment facilities. At 30 June 2015, the Group had
$178,978 of bank guarantees in place for these purposes
(2014: $345,656).
There were no other services provided.
21 contingencies
Contingent liabilities
The Group had no contingent liabilities at 30 June 2015
(2014: nil).
22 coMMitMents
(a) Lease commitments: group as lessee
Non-cancellable operating leases
At 30 June 2015 the Group leased one office under a non-
cancellable operating lease. This lease is due to expire within
two years of the end of the 2015 financial year. On renewal,
the terms of the lease will be renegotiated.
Consolidated
30 June 2015
30 June 2014
$
$
Commitments for minimum
lease payments in relation to
non-cancellable operating leases
are payable as follows:
Within one year
139,920
116,600
Later than one year but not later
than five years
116,600
256,520
256,520
373,120
23 relateD Party transactions
(a) Parent entity
The Parent Entity within the Group is Flinders Mines Limited.
(b) Subsidiaries
Interests in subsidiaries are set out in note 24.
(c) Key management personnel
Disclosures relating to key management personnel are set out
in note 19.
(d) Transactions with other related parties
Transactions with other related parties are on normal
commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
Transactions between the Parent Entity and its wholly owned
subsidiaries, which are related parties of the Parent, are
eliminated on consolidation and are not disclosed in this note.
There were no transactions with related parties other than
those listed above during the year ended 30 June 2015.
2015 ANNUAL REPORT 45
Notes to the consolidated financial statements
30 June 2015 (cont.)
24 subsiDiaries
Significant investments in subsidiaries
The consolidated Financial Statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 1(b):
Name of entity
Country of incorporation
Class of shares
2015 %
2014 %
FME Exploration Services Pty Ltd
Flinders Canegrass Pty Ltd
Flinders Diamonds Pty Ltd
Flinders Iron Pty Ltd
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
100
100
Equity holding 1
1
The proportion of ownership interest is equal to the proportion of voting power held.
25
interests in Joint venture oPerations
The Group has the following interests in unincorporated joint venture operations:
State
SA
Agreement name
Parties
Summary
Consideration
Copper Range
Agreement
FMS and Copper
Range Ltd
Copper Range holds a 100% interest in
the metal rights for EL4368.
SA
Phoenix Agreement
FMS and Phoenix
Copper Ltd
SA
Tarcowie Agreement
FMS and Tarcowie
Phosphate Pty Ltd
FMS sold most of its mineral rights in
EL4370 to Phoenix but has retained the
right to explore for and, if warranted,
develop mining operations on the
tenement for diamonds, barium, talc
and phosphate.
FMS received a cash payment and
shares in Phoenix for sale of its
other mineral rights in EL4370. FMS
to receive a production royalty from
Phoenix.
Tarcowie phosphate has the right to
peg mining leases for phosphate on
nominated small parcels of land within
EL4368.
If Tarcowie Phosphate proceeds to
mine phosphate from the nominated
areas Tarcowie Phosphate will pay
FMS a 1% gross sales royalty.
WA
Prenti Settlement
Deed
FMS and Prenti
Exploration Pty Ltd
FMS has earned a 100% interest in the
tenements. Prenti retain the rights over
non-iron ore minerals.
26 events occurring after the rePorting PerioD
At the General Meeting held in Adelaide on 24 September 2015, shareholders rejected the proposed finalisation of an agreement
with Todd Corporation to sell the PIOP via an option to purchase.
46 FLINDERS MINES LIMITED
27 reconciliation of loss for the
year to net cash inflow froM
oPerating activities
(b) Reconciliation of earnings used in
calculating earnings per share
Consolidated Year ended
30 June 2015
30 June 2014
$
$
Basic earnings per share
Consolidated Year ended
30 June 2015
30 June 2014
$
$
Profit (loss) attributable to the
ordinary equity holders of the
Company used in calculating
basic earnings per share:
From continuing operations
(29,190,281)
(4,648,747)
(c) Weighted average number of
shares used as denominator
Consolidated Year ended
30 June 2015
30 June 2014
Shares
Shares
Weighted average number of
ordinary shares used as the
denominator in calculating
basic earnings per share
2,613,012,086 1,977,164,601
(d)
Information on the classification
of securities
Options and Rights granted to employees under Flinders
Mines Limited Employee Share Option and Rights Plan are
considered to be potential ordinary shares. These have a
dilutive effect on the weighted average number of ordinary
shares. As Flinders Mines Limited has reported a loss of
$29,190,281 this financial year (2014: $4,648,747), the
options have not been included in the determination of
earnings per share. Details relating to the options and rights
are set out in note 29.
Loss for the year
Depreciation
Exploration expenditure
written off
Deferred tax asset written off
Non-cash employee benefits
expense - share-based payments
Impairment of exploration
expenditure
Net loss on disposal of
non-current assets
Change in operating assets
and liabilities:
(Increase) / decrease in trade
and other receivables
(Increase) / decrease in other
current assets
Increase / (decrease) in trade
payables and accruals
Increase / (decrease) in
provisions
Net cash inflow (outflow) from
operating activities
(29,190,281)
(4,648,747)
127,042
174,904
128,579
-
134,564
229,810
249,250
-
26,771,104
253,509
82,450
25,628
(478,247)
(117,317)
(3,773)
(194,540)
(349,685)
472,397
(5,864)
(164,003)
(2,669,425)
(3,833,795)
28 earnings Per share
(a) Basic earnings per share
Consolidated Year ended
30 June 2015
30 June 2014
Cents
Cents
From continuing operations
attributable to the ordinary equity
holders of the company
Total basic earnings per share
attributable to the ordinary equity
holders of the Company
(1.117)
(0.235)
(1.117)
(0.235)
2015 ANNUAL REPORT 47
Notes to the consolidated financial statements
30 June 2015 (cont.)
29 share-baseD PayMents
(b) Employee Incentive Rights Plan
(a) Employee Option Plan
The Flinders Mines Limited Employee Share Option Plan
enables the Board, at its discretion, to issue options to
employees of the Company or its associated companies.
Each option will have a life of five years and be exercisable at
a price determined by the Board. This price will not be below
the market price of a share at the time of issue. The options
granted under the plan are un-listed and carry no voting or
dividend rights.
Set out below is a summary of options granted under the plan:
Number of
options
Weighted
average
exercise price
The Flinders Mines Limited Employee Incentive Rights
Plan enables the Board, at its discretion, to issue rights to
employees of the Company or its associated companies. The
vesting periods of the rights are set at the Board’s discretion
and all rights have conditions that must be met before they
vest. All rights are un-listed and non-transferable. The rights
granted under the plan carry no voting or dividend rights.
On 1 July 2014 12,796,000 rights were issued to nine
Company employees under the Company’s Employee
Incentive Rights Plan. The rights expire on 30 June 2016.
Set out below is a summary of incentive rights granted under
the plan:
1,741,666
$0.054
Outstanding at beginning of the year
2014
-
(150,000)
(1,471,666)
-
$0.045
$0.054
$0.085
Converted to ordinary shares
Lapsed
Outstanding at the end of the year
2015
Outstanding at beginning of the year
Granted
120,000
$0.085
Outstanding at the end of the year
Number of rights
14,434,800
(5,651,872)
(8,782,928)
-
-
22,796,000
22,796,000
Outstanding at the end of the year
120,000
2014
Outstanding at beginning
of the year
Granted
Exercised
Expired
2015
Outstanding at beginning
of the year
Granted
Exercised
Expired
-
-
-
-
(120,000)
$0.085
Outstanding at the end of the year
-
-
There are no options outstanding at 30 June 2015.
Fair value of options granted
There were no options granted during the year ended 30 June
2015. The fair value of options at grant date is determined
using a Black Scholes option pricing model that takes into
account the exercise price, the term of the option, the impact
of dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option.
48 FLINDERS MINES LIMITED
Start
Date
Expiry
Date
Share price
at grant
date
Exercise
price
01/07/2014
30/06/2016
$0.02
12/11/2014
30/06/2016
$0.014
-
-
Fair value
at grant
date
$0.02
$0.015
The value of the rights are based on the VWAP for the ten
days up to and including the reporting period. The accounting
value of the rights does not represent actual cash payments to
the employees and is not related to or indicative of the benefit,
if any, that individuals may ultimately realise should the rights
vest.
30 Parent entity financial
(b) Guarantees entered into by the
inforMation
parent entity
The Parent Entity did not provide any guarantees during the
year ended 30 June 2015 (2014: Nil).
(c) Contingent liabilities of the
parent entity
The parent entity did not have any contingent liabilities as at
30 June 2015 (2014: Nil).
(d) Contractual commitments for
the acquisition of property,
plant or equipment
As at 30 June 2015, the Parent Entity had no contractual
commitments for the acquisition of property, plant or
equipment (2014: Nil).
(a) Summary financial information
The individual Financial Statements for the parent entity show
the following aggregate amounts:
Balance sheet
Current assets
30 June 2015
30 June 2014
$
$
5,355,601
11,641,584
Non-current assets
45,427,378
64,836,447
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Issued capital
Reserves
Available-for-sale financial
assets
Share-based payments
50,782,979
76,478,031
661,535
2,663,784
-
53,685
661,535
2,717,469
50,121,444
73,760,562
124,414,150
118,878,526
(292,347)
561,177
945,894
311,627
Retained earnings
(74,561,536)
(46,375,486)
50,121,444
73,760,561
Profit or loss for the period
(28,186,050)
(4,419,937)
Total comprehensive income
(28,185,350)
(4,653,647)
2015 ANNUAL REPORT 49
Directors’ Declaration
30 June 2015
In the Directors’ opinion:
(a) the Financial Statements and notes set out on pages 23 to 49 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance for the
year ended on that date, and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable, and
(c) the financial statements comply with International Financial Reporting Standards as confirmed in note 1(a).
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.
Robert Michael Kennedy
Director
Adelaide
15 September 2015
50 FLINDERS MINES LIMITED
Independent auditor’s report to the members
30 June 2015
Level 1,
67 Greenhill Rd
Wayville SA 5034
Correspondence to:
Level 1,
GPO Box 1270
67 Greenhill Rd
Adelaide SA 5001
Wayville SA 5034
T 61 8 8372 6666
Correspondence to:
F 61 8 8372 6677
GPO Box 1270
E info.sa@au.gt.com
Adelaide SA 5001
W www.grantthornton.com.au
T 61 8 8372 6666
F 61 8 8372 6677
E info.sa@au.gt.com
W www.grantthornton.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FLINDERS MINES LIMITED
Report on the financial report
INDEPENDENT AUDITOR’S REPORT
We have audited the accompanying financial report of Flinders Mines Limited (the
TO THE MEMBERS OF FLINDERS MINES LIMITED
“Company”), which comprises the consolidated statement of financial position as at 30 June
Report on the financial report
2015, the consolidated statement of profit or loss and other comprehensive income,
We have audited the accompanying financial report of Flinders Mines Limited (the
consolidated statement of changes in equity and consolidated statement of cash flows for
“Company”), which comprises the consolidated statement of financial position as at 30 June
the year then ended, notes comprising a summary of significant accounting policies and
2015, the consolidated statement of profit or loss and other comprehensive income,
other explanatory information and the directors’ declaration of the consolidated entity
consolidated statement of changes in equity and consolidated statement of cash flows for
comprising the Company and the entities it controlled at the year’s end or from time to time
the year then ended, notes comprising a summary of significant accounting policies and
during the financial year.
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
Directors’ responsibility for the financial report
during the financial year.
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
Directors’ responsibility for the financial report
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
The Directors of the Company are responsible for the preparation of the financial report
the Directors determine is necessary to enable the preparation of the financial report that
that gives a true and fair view in accordance with Australian Accounting Standards and the
gives a true and fair view and is free from material misstatement, whether due to fraud or
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
error. The Directors also state, in the notes to the financial report, in accordance with
the Directors determine is necessary to enable the preparation of the financial report that
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
gives a true and fair view and is free from material misstatement, whether due to fraud or
statements comply with International Financial Reporting Standards.
error. The Directors also state, in the notes to the financial report, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
Auditor’s responsibility
statements comply with International Financial Reporting Standards.
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
Auditor’s responsibility
require us to comply with relevant ethical requirements relating to audit engagements and
Our responsibility is to express an opinion on the financial report based on our audit. We
plan and perform the audit to obtain reasonable assurance whether the financial report is
conducted our audit in accordance with Australian Auditing Standards. Those standards
free from material misstatement.
require us to comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether the financial report is
Grant Thornton Audit Pty Ltd ACN 130 913 594
free from material misstatement.
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
Grant Thornton Audit Pty Ltd ACN 130 913 594
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
scheme applies.
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
2015 ANNUAL REPORT 51
Independent auditor’s report to the members
30 June 2015 (cont.)
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.
Auditor’s opinion
In our opinion:
a
the financial report of Flinders Mines Limited is in accordance with the Corporations
Act 2001, including:
i
ii
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
complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
b
the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.
Report on the remuneration report
We have audited the remuneration report included in 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.
52 FLINDERS MINES LIMITED
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Flinders Mines Limited for the year ended 30
June 2015, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
S K Edwards
Partner – Audit & Assurance
Adelaide, 15 September 2015
2015 ANNUAL REPORT 53
ASX Additional Information
The shareholder information set out below was applicable as
at 18 September 2015.
b
equity security holDers
Twenty largest quoted equity security holders
a Distribution of equity
securities
Analysis of numbers of equity security holders by size of
holding:
The names of the twenty largest holders of quoted equity
securities are listed below:
Class of equity security
Name
Shares
Options
TIO (NZ) Limited
540,356,842
OCJ Investment (Australia) Pty Ltd
382,000,000
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
411
933
1,330
4,829
2,471
9,974
-
-
-
-
-
-
There were 5,665 holders of less than a marketable
parcel of ordinary shares. At a share price of 1.2 cents, an
unmarketable parcel is 41,667 shares.
Ordinary shares
Number
held
Percentage
of issued
shares
19.51
13.80
3.38
1.80
1.61
1.09
0.78
0.59
93,642,723
49,800,363
44,608,921
30,205,715
21,610,162
16,400,000
15,827,636
0.57
15,175,148
0.55
13,638,414
0.49
13,150,000
0.47
12,000,001
11,000,000
10,000,000
10,000,000
9,949,286
9,900,000
9,292,952
8,359,244
0.43
0.40
0.36
0.36
0.36
0.36
0.35
0.30
1,316,917,407
47.56
Number on
issue
Number of
holders
Citicorp Nominees Pty Ltd
J P Morgan Nominees (Australia)
Limited
Mr Kenneth Martin Keane
RMK Super Pty Ltd
Miss Shuohang Wang
Mr Ian Drummond & Mrs Janice
Drummond
HSBC Custody Nominees
(Australia) Limited
Forsyth Barr Custodians Ltd
Triple Eight Gold Pty Ltd
HSBC Custody Nominees
(Australia) Limited -
Mr Grant Russell McGarry
Mr Chunlei Ouyang
Mr Nicholas Baradakis
McNeil Nominees Pty Ltd
Dr Wanfu Huang
Mr Peter John Klasen
HSBC Custody Nominees
(Australia) Limited -
Mr John B Roberts
Unquoted equity securities
Incentive rights, expiring
30 June 2016
16,732,570
7
These securities were issued under employee incentive
schemes.
54 FLINDERS MINES LIMITED
c. substantial holDers
Substantial holders in the company are set out below:
TIO (NZ) Limited
Number held
Percentage
540,356,842
19.51%
OCJ Investment (Australia) Pty Ltd
382,000,000
13.80%
D. voting rights
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 and rights
No voting rights.
2015 ANNUAL REPORT 55
flinders Mines limited
ABN 46 091 118 044
Level 1, 135 Fullarton Road
Rose Park 5067
South Australia
ASX code: fMs
www.flindersmines.com