2016 Annual REPORT
FLINDERS MINES LIMITED
FLINDERS MINES LIMITED
ABN 46 091 118 044
CONTENTS
Year in Review
Chairman’s Report
Projects & Exploration
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
1
2
3
7
8
18
19
20
21
22
23
24
49
50
53
CORPORATE DIRECTORY
DIRECTORS
Robert M Kennedy (Chairman)
Ian J Gordon (Managing Director)
(until 29th June 2016)
Kevin J Malaxos (Non-executive
Director) (until 19 October 2016)
Ewan J Vickery (Non-executive
Director) (until 19 October 2016)
Neil F Warburton (Non-executive
Director) (appointed 19 October 2016)
David K McAdam (Non-executive
Director) (appointed 19 October 2016)
Michael B Wolley (Non-executive
Director) (appointed 19 October 2016)
Evan W Davies (Non-executive
Director) (appointed 19 October 2016)
Nicholas J Smart
(Alternate for Mr Kennedy)
COMPANY SECRETARY
Justin Nelson
COMPETENT PERSONS
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 consultant to
Flinders Mines Ltd. 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.
REGISTERED AND
PRINCIPAL OFFICE
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
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
BANKER
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.
YEAR IN REVIEW
2016 ANNUAL REPORT
1
PILBARA IRON ORE
PROJECT
● Due to the TIO takeover
bid and previous to that the
Option and Sale Agreement
Darwin
NO RTHE RN
TE RRI TO RY
Townsville
signed with Todd Corporation,
Port Hedland
there were limited activities at
Pilbara Iron Ore Project
PIOP during the year.
CORPORATE
Tom Price
Mt Magnet
WESTERN
AUSTRALIA
● Alliance Agreement with Balla
Geraldton
Canegrass Project
Balla JV (Todd Corporation)
expired on 31 December 2015.
Perth
500km
● On 17 March 2016, TIO
(NZ) Limited (TIO), a wholly
owned subsidiary of Todd
Corporation, announced a
takeover bid for all of the
shares it did not hold in
Flinders for $0.013 per share.
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
● On 9 May 2016 Flinders
● The directors of Flinders have all accepted the Improved Offer in
announced that it had entered
respect of the shares they owned or controlled.
into a bid implementation
agreement with TIO under
which TIO agreed to vary
it’s offer, increasing the cash
● The improved Offer closed on 31 August 2016, at which point
TIO had voting power in Flinders shares of approximately
52.6 per cent.
consideration initially offered
● As announced on 29th July 2016, Flinders has entered into a
on 17 March 2016 from $0.013
loan facility agreement (Loan Agreement) with PIO Mines Pty Ltd
to $0.025 per Flinders share
(a subsidiary of TIO) to assist Flinders meet it’s short term capital
(Improved offer).
requirements. The loan facility was subsequently fully drawn
down in August 2016.
● On 7 October 2016 Flinders announced a non-renounceable
entitlement offer at $0.017 per share to raise approximately
AUD $5 million with proceeds to be used for, amongst other
things, repayment of the loan.
2
FLINDERS MINES LIMITED
CHAIRMAN’S REPORT
Dear fellow shareholders,
The last 12 months has been an
Following the expiry of the Alliance
At the time of writing this report,
eventful time for your Company.
Agreement, your Company pursued
the Company has also announced
During the first 6 months of the 2016
financial year, the agreement with
Todd Corporation to sell the PIOP
via an option was rejected by our
Shareholders (in September 2015).
Subsequently the Alliance Agreement
signed in February 2014, lapsed on
31 December 2015.
all viable alternative opportunities for
significant changes to the Board
the PIOP with the intent of securing
with the appointment of Mr Neil
development partners, off-take
Warburton and Mr David McAdam as
customers and transport solutions
independent non-executive directors
for the PIOP resource. These
and Mr Michael Wolley and Mr Evan
discussions, which continued after
Davies as non-executive directors.
the 17 March 2016 announcement
I welcome the newly appointed
of the $0.013 per share takeover bid
Directors and look forward to their
by TIO, ultimately did not yield any
contribution to Flinders
proposals for the development of
going forward.
the PIOP.
I take this opportunity to extend
In May 2016 TIO’s initial offer
my thanks to our former Managing
was varied and your Company
Director, Mr Ian Gordon and
entered into a bid implementation
recently retired non-executive
agreement under which TIO agreed
directors Messrs Kevin Malaxos and
to vary its offer, increasing the cash
Ewan Vickery for their significant
consideration initially offered from
contributions to the Board and
$0.013 to $0.025 per Flinders’ share
your Company.
(Improved Offer). The directors
of Flinders have all accepted the
Improved Offer.
With the Improved Offer closed and
TIO now the major shareholder,
holding approximately 53% of the
shares on issue, Flinders has entered
a new phase, with a dramatically
altered corporate ownership.
I also would also like to thank our
small team of staff for their efforts
over the last financial year.
Robert Kennedy
Chairman
2016 ANNUAL REPORT
3
°
8
1
1
Port Hedland
PROJECTS & EXPLORATION
PILBARA IRON ORE
PROJECT
The 2016 financial year has been
dominated by the TIO takeover bid.
APPROVALS
During the Financial year, the Company
received approval from the Environment
Minister in Western Australia (WA) for
the project. The Company also received
approval from the Minister for Aboriginal
Affairs (WA) in respect to heritage
aspects of the project. Final approval
from the Commonwealth Minister is
progressing.
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
There were no exploration activities
carried out on the Company’s Pilbara
Iron Ore Project tenements during
the year.
°
6
1
1
I N D I A N
O C E A N
Dampier
Cape
Preston
Karratha
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.
Metallurgy
A number of new ore optimisations were completed to assess the viability of the
project at lower Fe prices. Further work to minimise ore waste ratios was conducted,
together with metallurgical test work, and economic assessment of the projects
potential.
Resource Estimate
The total Mineral Resource estimate for the PIOP is 1,042Mt @ 55.6% Fe
(Table 1). 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.
4
FLINDERS MINES LIMITED
PROJECTS & EXPLORATION (cont.)
PILBARA IRON ORE PROJECT / Resource Estimate (cont.)
CANEGRASS PROJECT
Table 1: PIOP Mineral Resource Summary (as at 30/6/2016).
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.
'
5
2
°
7
1
1
'
0
3
°
7
1
1
Paragon
Ajax
Blackjack
Champion
Delta
Eagle
Badger
-22°10'
M47/1451
Indicated & Measured Resource (+50% Fe cutoff)
Indicated Resource (+50% Fe cutoff)
Inferred Resource (+50% Fe cutoff)
0
2 km
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 Project . A total of 31 holes
for 428m were drilled.
The drilling was designed to cover
the intersection of a major shear zone
and a secondary fault to the north of a
significant intersection of 8m @ 2.03 g/t
Au from 12m in hole HAC022. 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.
All assays from that round of drilling
have been received and there were no
significant intersections.
Figure 2: Location of drillholes,
highlighting significant Fe intersections.
2016 ANNUAL REPORT
5
SOUTH AUSTRALIA
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.
CANEGRASS PROJECT (cont.)
-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.
Resource Estimate
A resources estimate is current for the magnetite (Fe-Ti-V) mineralisation at
Canegrass (Tables 2 & 3). This Mineral Resource was compliled 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 2: Canegrass vanadium (V2O5) Inferred Mineral Resource tonnage
and grade report by area (as at 30/6/2016).
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
24.10
29.30
5.90
5.50
5.80
27.40
29.00
25.90
24.50
13.00
12.60
Table 3: Canegrass iron (Fe) Inferred Mineral Resource tonnage and grade
report by area (as at 30/6/2016).
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
0.53
5.10
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
6
FLINDERS MINES LIMITED
PROJECTS & EXPLORATION (cont.)
TENEMENT SCHEDULE
Tenement
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
Granted
Anvil
6/09/2007
5/09/2016
44.5
Flinders Mines Ltd
100% Prenti Agreement
L47/728
Granted
PIOP Airstrip
29/05/2015 28/05/2036
L47/730
Granted
PIOP Village
29/05/2015 28/05/2036
L47/731
Application Northern Road
1/09/2014
L47/734
Granted
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
Granted
Blacksmith ML 26/03/2012 25/03/2033
111.6
Flinders Mines Ltd
100% Prenti Agreement
Canegrass Project
E58/232
Granted
Boulder Well
29/07/2002 28/07/2016
16.1
E58/236
Granted
Challa
22/03/2002 21/03/2017
16.1
E58/282
Granted
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
Curnamona Project
EL 5739
Granted Wompine
12/02/2016 11/02/2017
96.00
Flinders Mines Ltd
100%
Gawler Ranges Project
EL 5761
Granted
Tin Hut
21/03/2016 20/03/2018
716.0
Flinders Mines Ltd
100%
EL 5762
Granted
Siam
21/03/2016 20/03/2018
379.0
Flinders Mines Ltd
100%
Jamestown Project
EL 5763
Granted
Caltowie
04/02/2016
9/11/2016
201.4
Flinders Mines Ltd Diamonds
EL 5557
Granted Washpool
10/11/2009
9/11/2016
135.0
Phoenix Copper
Ltd
and
non-metals
Diamonds,
barium,
talc and
phosphate
Copper Range
and Tarcowie
Phosphate
Agreements
Phoenix Copper
Agreement
2016 ANNUAL REPORT
7
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
Remuneration Report - Audited
Auditor’s Independence
Declaration
Corporate Governance Statement
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
8
13
18
19
20
21
22
23
24
49
50
53
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 2016
8
FLINDERS MINES LIMITED
DIRECTOR’S REPORT
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 2016.
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) (until 29 June 2016)
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 (2015:
$nil).
OPERATING RESULTS AND
FINANCIAL POSITION
The net result of operations for the
financial year was a loss of $4,057,012
(2015: $29,190,281).
The PIOP carrying value as at 30 June
2015 was $45,000,000. The carrying
value was based on an independent
expert report commissioned to report on
whether the option agreement signed
in May 2015 between Flinders Mines
Limited and the Todd Corporation was
fair and reasonable. The independent
experts report had valued the PIOP
project to be between $40-$50million
and, allowed shareholders to make an
informed decision relating to the option
agreement. At a general meeting of
the company held on 24 September
2015 shareholders decided to reject
the offer by voting against it. A further
impairment of $23,484,221 was made
at 31/12/2015 “using a market value
approach”. By this time the share price
had dropped to 1.3 cents per share
as there was now no offer for the
shares and the Alliance agreement had
terminated. As a result the PIOP project
carrying value as at 31 December 2015
was $22,345,329, impaired down from
$45,000,000. On 17 March 2016, TIO
(NZ) Limited (TIO), a wholly owned
subsidiary of Todd Corporation provided
an unconditional all-cash off-market
takeover bid to acquire all Flinders
Mines Limited shares, at an Offer Price
of $0.013 per Share. On 9 May 2016
TIO increased the cash consideration to
$0.025 per Share. Taking into account
the increased market value of the
company due to the TIO takeover, using
a market value approach the impairment
incurred as at 31 December 2015 was
reversed and all expenditure for the year
capitalised. The carrying value of PIOP
as at 30 June 2016 is $46,517,562.
The net assets of the Group have
decreased by $2,784,759 during the
financial year from $50,121,444 at 30
June 2015 to $47,336,685 at 30 June
2016.
REVIEW OF OPERATIONS
Corporate
On 9 May 2016 Flinders Mines Limited
(ASX: FMS) (Flinders) announced that it
had entered into a bid implementation
agreement with TIO (NZ) Limited (TIO),
a wholly owned subsidiary of Todd
Corporation, under which TIO agreed
to vary its offer, increasing the cash
consideration initially offered on 17
March 2016
(Initial Offer) from $0.013 to $0.025
per Flinders’ share (Improved Offer),
92% higher than the Initial Offer and a
premium of 213% to the closing price
and VWAP of Flinders shares before the
Initial Offer was announced.
The Directors of Flinders have all
accepted the Improved Offer in respect
of the shares they owned or controlled
and continue to recommend that
shareholders accept the Improved
Offer from TIO. The TIO offer ended 31
August 2016.
Pilbara Iron Ore Project
During the Financial year, the Company
received approval from the Environment
Minister in Western Australia (WA) for
the expanded project. The Company
also received approval from the Minister
for Aboriginal Affairs (WA) in respect
to heritage aspects of the project. A
number of new ore optimisations were
completed to assess the viability of the
project at lower Fe prices. Further work
to minimise ore to waste ratios were
conducted, together with metallurgical
test work, and economic assessment of
the projects potential.
2016 ANNUAL REPORT
9
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.
Canegrass and
South Australia
During the year a small follow up
air-core drilling program for gold was
undertaken at Canegrass (WA). All
assays from the current round of drilling
have now been received and there were
no significant intersections. There were
no exploration and evaluation activities
carried out on the Company’s South
Australian tenements during the year.
Significant changes in the state of affairs
Significant changes in the state of affairs
of the Group during the financial year
were as follows:
On 17 March 2016, TIO (NZ) Limited
(TIO), a wholly owned subsidiary of Todd
Corporation, announced a takeover bid
for all of the shares it did not hold in
Flinders for $0.013 per share. A Bidder’s
Statement was dispatched to Flinders’
shareholders on 31 March 2016
and Flinders dispatched its Target’s
Statement to shareholders on 15 April
2016.
On 9 May 2016 Flinders announced that
it had entered into a bid implementation
agreement with TIO under which TIO
agreed to vary its offer, increasing the
cash consideration initially offered on
17 March 2016 from $0.013 to $0.025
per Flinders’ share (Improved Offer).
The Directors of Flinders have all
accepted the Improved Offer in respect
of the shares they owned or controlled.
MATTERS SUBSEQUENT
TO THE END OF THE
FINANCIAL YEAR
The Company announced on 29 July
2016 that it has entered into a loan
facility agreement with PIO Mines Pty
Limited (a subsidiary of TIO (NZ) Limited)
to assist Flinders to meet its short term
capital requirements. The A$2,000,000
loan is available for drawing in a single
lump sum from the Loan Agreement
until 19 August 2016. The key terms
of the loan include an interest rate
equivalent to the 6-Month Bank Bill
Swap Rate (BBSW) Mid-Rate plus 2%
per annum with the repayment of the
principal outstanding to occur on
31 December 2016.
On 5 August 2016 loan funds to the
aggregate amount of A$2,000,000 were
received by the Company from PIO
Mines Pty Limited.
The Company proposes to undertake
a pro rata rights issue, at an issue
price and entitlement ratio yet to be
determined, before the end of the 2016
calendar year. The proceeds of the
Rights Issue will be used to, among
other things, repay the amounts drawn
under the Loan Agreement, pay annual
tenement rents and rates, comply with
minimum expenditure conditions for the
tenements, provide working capital and
meet administration expenses.
The funds raised under the Rights Issue
will not exceed A$5,000,000.
The Improved Offer closed on 31
August 2016, at which point TIO had a
voting power in Flinders shares of 52.64
per cent.
Other than the above, no matter or
circumstance has arisen since 30 June
2016 that has significantly affected, or
may significantly affect:
(a) the Group’s operations in future
financial years, or
(b) the results of those operations in
future financial years, or
(c) the Group’s state of affairs in future
financial years.
10
FLINDERS MINES LIMITED
DIRECTOR’S REPORT (CONT.)
INFORMATION ON DIRECTORS
Robert Michael Kennedy
Ian James Gordon
Kevin John Malaxos
KSJ, ASAIT, Grad Dip (Systems Analysis),
Dip Financial Planning,
Dip Financial Services, FCA, AGIA,
Life Member AIM, FAICD, FTI
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.
Other current directorships
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 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
Nil.
Bcom, MAICD
BEng, MAICD
Managing Director,
(until 29 June 2016).
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. He has significant
experience in project approvals,
feasibility studies, capital raising and
project finance.
Other current directorships
None.
Former directorships in last
3 years
Ramelius Resources Limited (until
31 August 2014).
Special responsibilities
Managing Director.
Interests in shares, options and
rights
Nil
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.
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 &
Risk Committee.
Member of the Corporate Governance
Committee.
Interests in shares and options
Nil.
2016 ANNUAL REPORT
11
Ewan John Vickery
Nicholas John Smart
Company secretary
LLB
Alternate Director for R M Kennedy
Non-executive Director.
(Non-executive)
Justin Nelson
LLB, B.A.(Jur), GradDipACG
Experience and expertise
Experience and expertise
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, 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.
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).
Other current directorships
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.
Former directorships in last
3 years
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.
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
None.
Special responsibilities
None.
Interests in shares and options
None.
Nil.
Special responsibilities
Chairman of the Audit Committee & Risk
Committee.
Member of Nominations &
Remuneration Committee.
Member of the Corporate Governance
Committee.
Interests in shares and options
Nil.
12
FLINDERS MINES LIMITED
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 2016, 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
18
18
18
17
-
B
18
18
18
18
-
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
There are no unissued ordinary shares of Flinders Mines Limited under right at the
date of this report.
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.
•
INSURANCE PREMIUMS
Since the end of the previous year the Group has paid insurance premiums of
$78,189 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.
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 2016.
REMUNERATION REPORT
- AUDITED
The Directors are pleased to present
your Company’s 2016 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:
Page
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 2015
Annual General Meeting
G Details of remuneration
H Service agreements
13
13
13
13
14
14
15
16
I Share-based compensation 16
J Equity instrument disclosures
relating to key management
personnel
17
The information provided in this
remuneration report has been audited
as required by section 308(3C) of the
Corporations Act 2001.
2016 ANNUAL REPORT
13
A Directors and key
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 2016.
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 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.
management personnel
disclosed in this report
Non-executive and executive
Directors - see pages 10 to 11 above
Robert Michael Kennedy
Ian James Gordon (to 29 June 2016)
Kevin John Malaxos
Ewan John Vickery
Nicholas John Smart
Other key management personnel
Miro Rapaic
General Manager - Project
Development (until 31 July 2015)
Jim Panagopoulos
Chief Financial Officer
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.
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.
14
FLINDERS MINES LIMITED
DIRECTOR’S REPORT (CONT.)
REMUNERATION REPORT
- AUDITED (cont.)
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 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.
During the 2016 financial year 19,866,000
performance and incentive rights vested
and 2,930,000 did not vest and were
forfeited.
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
2015 Annual General
Meeting
At the Company’s last Annual General
Meeting, there were no comments or
queries on the remuneration report.
However, 51.8 per cent of shareholders
voted against the remuneration report,
constituting a first strike. As there has
been a significant change to the state
of affairs of the Company during the
financial year arising from the takeover
bid by TIO (NZ) Limited, a wholly
owned subsidiary of Todd Corporation,
announced in March 2016, no action has
been taken in response to first strike.
2016 ANNUAL REPORT
15
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.
142,466
78,000
71,233
291,699
-
-
-
Short-term
employee benefits
Director’s
fees
$
Salary
$
Post-
employment
benefits
Super-
annuation
Termination
benefits
Share based
payments
Rights
$
Total
$
$
13,534
-
6,767
20,301
-
-
-
-
-
-
-
-
-
-
-
-
156,000
78,000
78,000
312,000
384,931
38,220
237,634
89,932
750,717
27,523
195,722
11,062
18,593
189,085
-
-
19,566
227,670
233,881
291,699
608,176
88,176
426,719
109,498
1,524,268
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
164,384
90,000
82,192
336,576
-
-
-
-
2016
Name
Non-executive Directors
Robert Michael Kennedy
Kevin John Malaxos 1
Ewan John Vickery
Sub-total non-executive directors
Executive Directors
Ian James Gordon 3
Other key management personnel (Group)
Miro Rapaic 3
Jim Panagopoulos 2
Total key management personnel
compensation (group)
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 3
Other key management personnel (Group)
Miro Rapaic 3
David Wayne Godfrey 3
Jim Panagopoulos 2
Total key management personnel
compensation (group)
336,576
1,016,798
101,449
160,900
1,615,723
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 Rapaic was made redundant 31 July 2015. Mr Gordon was made redundant 29 June 2016. Mr Godfrey retired 15 July 2014.
16
FLINDERS MINES LIMITED
DIRECTOR’S REPORT (CONT.)
REMUNERATION REPORT - AUDITED (cont.)
G Details of remuneration (continued)
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
David Wayne Godfrey
Jim Panagopoulos
Fixed remuneration
2015
2016
%
%
At risk - LTI 1
2016
%
2015
%
88
100
-
92
88
83
78
92
12
-
-
8
12
17
22
8
*
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.
H Service agreements
Mr Ian James Gordon, Managing Director, 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. Mr Gordon’s
contract was terminated 29 June 2016. Under Mr Gordon’s employment contract,
the Company may terminate the Employment at any time without cause by giving
Employee not less than six months’ notice in writing or payment in lieu.
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 2016.
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
(2015: Nil).
Options granted as remuneration
No options were granted to directors,
key management personnel or
employees of the Company during the
financial year (2015: 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. 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. During the 2016 financial
year 19,866,000 performance and
incentive rights vested and 2,930,000
did not vest and were forfeited.
There were no rights issued to
employees during the current financial
year.
2016 ANNUAL REPORT
17
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.
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 18.
This report is made in accordance with
a resolution of Directors.
Consolidated entity 2016
Name
I Gordon
M Rapaic
Balance at
start of
the year
10,000,000
3,609,000
J Panagopoulos
1,967000
Granted as
compensation
-
-
-
Forfeited
Balance at
the end of
the year
Exercised
(option)/
Vested (rights)
(10,000,000)
(3,609,000)
-
-
-
(1,967,000)
-
-
-
Robert Michael Kennedy
Director
Adelaide
27 September 2016
(iii) Share holdings
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 2016
Name
Balance at
start of
the year
Granted as
compensation
Exercised
(option)/
Vested (rights)
Acquired/
(disposed)
Balance at
the end of
the year
R M Kennedy
44,000,000
I J Gordon
K J Malaxos
E J Vickery
N J Smart
3,033,334
3,200,000
7,000,000
838,095
-
-
-
-
-
-
-
-
-
-
(44,000,000)
(3,033,334)
(3,200,000)
(7,000,000)
(838,095)
-
-
-
-
-
There were no related party transactions with key management personnel related
entities during the year.
18
FLINDERS MINES LIMITED
AUDITOR’S INDEPENDENCE DECLARATION
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
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF FLINDERS MINES LIMITED
AUDITOR’S INDEPENDENCE DECLARATION
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
TO THE DIRECTORS OF FLINDERS MINES LIMITED
auditor for the audit of Flinders Mines Limited for the year ended 30 June 2016, I declare 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
auditor for the audit of Flinders Mines Limited for the year ended 30 June 2016, I declare that, to
no contraventions of the auditor independence requirements of the Corporations Act 2001
a
the best of my knowledge and belief, there have been:
in relation to the audit; and
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001
no contraventions of any applicable code of professional conduct in relation to the audit.
in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
b
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Sheenagh Edwards
Partner - Audit & Assurance
Adelaide, 27 September 2016
Sheenagh Edwards
Partner - Audit & Assurance
Adelaide, 27 September 2016
Grant Thornton Audit Pty Ltd ACN 130 913 594
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applies.
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.
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Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme
applies.
CORPORATE GOVERNANCE STATEMENT
2016 ANNUAL REPORT
19
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 2016 is dated as at 27 September 2016 and was approved by the Board
on 27 September 2016. The Corporate Governance Statement is available on the
Company’s website at http://www.flindersmines.com/Corporate/Governance.aspx
20
FLINDERS MINES LIMITED
Consolidated statement of
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the year ended 30 June 2016
Consolidated Year ended
30 June 2016
30 June 2015
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
Impairment of financial assets
Administrative expenses
Finance costs
(Loss) before income tax
Income tax benefit/(expense)
(Loss) for the year
4
5
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:
Owners of Flinders Mines Limited
Earnings per share for loss attributable to the
ordinary equity holders of the Company:
Basic earnings per share
Diluted earnings per share
84,990
319,279
1,768
(1,452,131)
(117,352)
(392,691)
(292,847)
(82,450)
(563,280)
(128,579)
(26,763,089)
-
(2,633,115)
(2,492,540)
(4,795)
(3,977)
(4,806,173)
(29,714,636)
749,161
524,355
(4,057,012)
(29,190,281)
(500)
(500)
700
700
(4,057,512)
(29,189,581)
(4,057,512)
(29,189,581)
(4,057,512)
(29,189,581)
Cents
Cents
28
28
(0.144)
(0.144)
(1.117)
(1.117)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
Consolidated statement of
FINANCIAL POSITION
As at 30 June 2016
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
Total equity
2016 ANNUAL REPORT
21
Consolidated
30 June 2016
30 June 2015
Notes
$
$
7
8
9
10
11
12
13
14
15
16
550,804
851,320
296,667
1,698,791
4,500
216,372
3,770,160
815,393
266,049
4,851,602
37,611
418,297
46,517,562
45,273,862
7,000
46,745,434
48,444,225
1,070,999
36,541
1,107,540
-
-
1,107,540
47,336,685
27,000
45,756,770
50,608,372
231,958
204,685
436,643
50,285
50,285
486,928
50,121,444
17
18(a)
125,239,150
124,414,150
-
(77,902,465)
47,336,685
268,830
(74,561,536)
50,121,444
The above consolidated statement of financial position should be read in conjunction
with the accompanying notes.
22
FLINDERS MINES LIMITED
Consolidated statement of
CHANGES IN EQUITY
For the year ended 30 June 2016
Consolidated entity
Balance at 1 July 2014
Loss for the year
Revaluation of financial assets (net of tax)
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction
costs and tax
Rights expensed during the year
Balance at 30 June 2015
Balance at 1 July 2015
Loss for the year
Revaluation of financial assets (net of tax)
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction costs
Rights expensed during the year
Transfer of expired rights
Transfer of available for sale reserve to
impairment expense
Balance at 30 June 2016
Attributable to owners of Flinders Mines Limited
Contributed
equity
Reserves
Notes
$
$
Retained
losses
$
Total
equity
$
119,106,233
18,580
(45,371,255)
73,753,558
-
-
-
-
700
700
(29,190,281)
(29,190,281)
-
700
(29,190,281)
(29,189,581)
17
18
17
18
18
18
5,307,917
-
5,307,917
124,414,150
124,414,150
-
-
-
825,000
-
-
-
825,000
125,239,150
-
249,550
249,550
268,830
268,830
-
(500)
(500)
-
154,904
(716,083)
292,849
(268,330)
-
-
-
(74,561,536)
(74,561,536)
(4,057,012)
-
5,307,917
249,550
5,557,467
50,121,444
50,121,444
(4,057,012)
(500)
(4,057,012)
(4,057,512)
-
-
716,083
-
716,083
825,000
154,904
-
292,849
1,272,753
-
(77,902,465)
47,336,685
The above consolidated statement of changes in equity should be read in conjunction
with the accompanying notes.
Consolidated statement of
CASH FLOWS
For the year ended 30 June 2016
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
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
Proceeds from sale of available-for-sale financial assets
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) in cash and cash equivalents
2016 ANNUAL REPORT
23
Consolidated Year ended
30 June 2016
30 June 2015
Notes
$
$
27
11
32,723
(3,107,078)
(3,074,355)
578,100
45,110
(2,451,145)
-
2,666
40,764
(1,636,641)
(1,593,211)
825,000
-
825,000
(3,219,356)
3,770,160
550,804
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
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
7
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes.
2424
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016
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 years
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 27 September 2016.
(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
A number of new and revised standards became effective
for the first time to annual periods beginning on or after
1 July 2015. Information on the more significant standard(s)
is presented below.
• AASB 2015-4 Amendments to Australian Accounting
Standards - Financial Reporting Requirements for
Australian Groups with a Foreign Parent
• AASB 2015-4 amends AASB 128 Investments in
Associates and Joint Ventures to ensure that its reporting
requirements on Australian groups with a foreign
parent align with those currently available in AASB 10
Consolidated Financial Statements for such groups. AASB
128 will now only require the ultimate Australian entity
to apply the equity method in accounting for interests in
associates and joint ventures, if either the entity or the
group is a reporting entity, or both the entity and group are
reporting entities.
• AASB 2015-4 is applicable to annual reporting periods
beginning on or after 1 July 2015.
The adoption of this amendment has not had a material
impact on the Group.
(b) Basis of consolidation
The Group financial statements consolidate those of the Parent
Company and all of its subsidiaries as of 30 June 2016. 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.
2016 ANNUAL REPORT
25
(d)
Investments in associates and
joint ventures
(f) Revenue recognition
Interest income
Associates are those entities over which the Group is able to
exert significant influence but which are not subsidiaries.
Interest income is recognised on a proportional basis taking
into account the interest rates applicable to the financial assets.
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.
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.
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.
2626
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
1
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
(g)
Income tax (cont.)
Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to
offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case,
the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(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.
(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.
(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.
(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.
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).
2016 ANNUAL REPORT
27
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
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.
2828
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
1
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (cont.)
(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.
(o) Employee benefits
Short-term obligations
(i)
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
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.
(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.
(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.
2016 ANNUAL REPORT
29
(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:
(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. The Group
assesses key assets using a market value approach.
(ii)
Exploration and evaluation
The Group’s policy for exploration and evaluation is
discussed in note 1 (q). 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.
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.
3030
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
(v) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for June 2016 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.
New / revised
pronounce-
ment
B 1057
Application
of Australian
Accounting
Standards
AASB 15
Revenue from
Contracts with
Customers
Superseded
pronouncement
None
AASB 118
Revenue AASB
111 Construction
ContractsInt.
13 Customer Loyalty
Programmes Int. 15
Agreements for the
Construction of Real
EstateInt.
18 Transfer of Assets
from Customers Int.
131 Revenue –
Barter Transactions
Involving Advertising
Services Int.
1042 Subscriber
Acquisition
Costs in the Tele
communications
Industry
Nature of change
In May 2015, the AASB decided to revise Australian
Accounting Standards that incorporate IFRSs to
minimise Australian-specific wording even further. The
AASB noted that IFRSs do not contain application
paragraphs that identify the entities and financial reports
to which the Standards (and Interpretations) apply. As
a result, the AASB decided to move the application
paragraphs previously contained in each Australian
Accounting Standard (or Interpretation), unchanged, into
a new Standard AASB 1057 Application of Australian
Accounting Standards.
AASB 15: replaces AASB 118 Revenue, AASB 111
Construction Contracts and some revenue-related
Interpretations:
- establishes a new revenue recognition model
- changes the basis for deciding whether revenue is to
be recognised over time or at a point in time
- provides new and more detailed guidance on specific
topics (e.g. multiple element arrangements, variable
pricing, rights of return, warranties and licensing)
- expands and improves disclosures about revenue
In May 2015, the AASB issued ED 260 Income of
Not-for-Profit Entities, proposing to replace the income
recognition requirements of AASB 1004 Contributions
and provide guidance to assist not-for-profit entities to
apply the principles of AASB 15.
The ED was open for comment until 14 August
2015 and the AASB is currently in the process of
redeliberating its proposals with the aim of releasing the
final amendments in late 2016.
Effective date
(annual reporting
periods beginning
on or after...)
1 January 2016
Likely impact on
initial application
When this Standard is first
adopted for the year ending
30 June 2017, there will be
no impact on the financial
statements.
1 January 2018
The entity is yet to
undertake a detailed
assessment of the impact
of AASB 15. However,
based on the entity’s
preliminary assessment, the
Standard is not expected
to have a material impact
on the transactions and
balances recognised in the
financial statements when it
is first adopted for the year
ending 30 June 2019.
Effective date
(annual reporting
periods beginning
on or after...)
1 January 2019
New / revised
pronounce-
ment
AASB 16
Leases
Superseded
pronouncement
AASB 117
Leases Int. 4
Determining
whether an
Arrangement
contains a
Lease Int. 115
Operating
Leases–Lease
Incentives Int.
127 Evaluating
the Substance
of Transactions
Involving the
Legal Form of a
Lease
Nature of change
AASB 16:
• replaces AASB 117 Leases and some
lease-related Interpretations
• requires all leases to be accounted for
‘on-balance sheet’ by lessees, other
than short-term and low value asset
leases
• provides new guidance on the
application of the definition of lease and
on sale and lease back accounting
• largely retains the existing lessor
accounting requirements in AASB 117
• requires new and different disclosures
about leases
2016 ANNUAL REPORT
31
Likely impact on
initial application
The entity is yet to undertake a detailed
assessment of the impact of AASB 16.
However, based on the entity’s preliminary
assessment, the likely impact on the first time
adoption of the Standard for the year ending
30 June 2020 includes:
• there will be a significant increase in lease
assets and financial liabilities recognised
on the balance sheet
• the reported equity will reduce as the
carrying amount of lease assets will reduce
more quickly than the carrying amount of
lease liabilities
• EBIT in the statement of profit or loss and
other comprehensive income will be higher
as the implicit interest in lease payments
for former off balance sheet leases will be
presented as part of finance costs rather
than being included in operating expenses
• operating cash outflows will be lower
and financing cash flows will be higher in
the statement of cash flows as principal
repayments on all lease liabilities will now
be included in financing activities rather
than operating activities. Interest can also
be included within financing activities
When these amendments become effective
for the first time for the year ending 30 June
2017, they will not have any impact on the
entity.
AASB 2014-1
Amendments
to Australian
Accounting
Standards
(Part D:
Consequential
Amendments
arising from
AASB 14)
AASB 2014-5
Amendments
to Australian
Accounting
Standards
arising from
AASB 15
AASB 2015-1
Amendments
to Australian
Accounting
Standards
– Annual
Improvements
to Australian
Accounting
Standards
2012-2014
Cycle
None
Part D of AASB 2014-1 makes
consequential amendments arising from
the issuance of AASB 14.
1 January 2016
None
None
AASB 2014-5 incorporates the
consequential amendments arising from
the issuance of AASB 15.
1 January 2018
Refer to the section on AASB 15 above.
1 January 2016
When these amendments are first adopted
for the year ending 30 June 2017, there
will be no material impact on the financial
statements.
These amendments arise from the
issuance of Annual Improvements to IFRSs
2012-2014 Cycle in September 2014 by
the IASB. Among other improvements, the
amendments clarify that when an entity
reclassifies an asset (or disposal group)
directly from being held for sale to being
held for distribution (or vice-versa), the
accounting guidance in paragraphs 27-29
of AASB 5 Non-current Assets Held for
Sale and Discontinued Operations does
not apply. The amendments also state that
when an entity determines that the asset
(or disposal group) is no longer available
for immediate distribution or that the
distribution is no longer highly probable,
it should cease held-for-distribution
accounting and apply the guidance in
paragraphs 27-29 of AASB 5.
3232
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
1
(v)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
New accounting standards and interpretations (cont.)
New / revised
pronounce-
ment
Superseded
pronounce-
ment
Nature of change
None
AASB 2014-5 incorporates the consequential amendments arising from
the issuance of AASB 15.
AASB 2014-5
Amendments
to Australian
Accounting
Standards
arising from
AASB 15
AASB 2015-1
Amendments
to Australian
Accounting
Standards
– Annual
Improvements
to Australian
Accounting
Standards
2012-2014
Cycle
AASB 2015-2
Amendments
to Australian
Accounting
Standards
– Disclosure
Initiative:
Amendments
to AASB 101
None
None
None
AASB 2015-8
Amendments
to Australian
Accounting
Standards –
Effective Date
of AASB 15
These amendments arise from the issuance of Annual Improvements to
IFRSs 2012-2014 Cycle in September 2014 by the IASB.
Among other improvements, the amendments clarify that when an entity
reclassifies an asset (or disposal group) directly from being held for sale
to being held for distribution (or vice-versa), the accounting guidance
in paragraphs 27-29 of AASB 5 Non-current Assets Held for Sale and
Discontinued Operations does not apply.
The amendments also state that when an entity determines that the
asset (or disposal group) is no longer available for immediate distribution
or that the distribution is no longer highly probable, it should cease held-
for-distribution accounting and apply the guidance in paragraphs 27-29
of AASB 5.
The Standard makes amendments to AASB 101 Presentation of
Financial Statements arising from the IASB’s Disclosure Initiative project.
The amendments:
• clarify the materiality requirements in AASB 101, including an
emphasis on the potentially detrimental effect of obscuring useful
information with immaterial information
• clarify that AASB 101’s specified line items in the statement(s) of
profit or loss and other comprehensive income and the statement of
financial position can be disaggregated
• add requirements for how an entity should present subtotals in the
statement(s) of profit and loss and other comprehensive income and
the statement of financial position
• clarify that entities have flexibility as to the order in which they
present the notes, but also emphasise that understandability and
comparability should be considered by an entity when deciding that
order
• remove potentially unhelpful guidance in AASB 101 for identifying a
significant accounting policy
AASB 2015-8 amends the mandatory application date of AASB 15
Revenue from Contracts with Customers so that AASB 15 is required to
be applied for annual reporting periods beginning on or after 1 January
2018 instead of 1 January 2017. It also defers the consequential
amendments that were originally set out in AASB 2014-5 Amendments
to Australian Accounting Standards arising from AASB 15.
Effective date
(annual reporting
periods beginning
on or after...)
1 January 2018
Likely impact on
initial application
Refer to the
section on AASB
15 above.
1 January 2016
1 January 2016
When these
amendments are
first adopted for
the year ending
30 June 2017,
there will be no
material impact
on the financial
statements.
When these
amendments are
first adopted for
the year ending
30 June 2017,
there will be no
material impact
on the financial
statements.
1 January 2017
Refer to the
section on AASB
15 above.
2016 ANNUAL REPORT
33
Effective date
(annual reporting
periods beginning
on or after...)
1 January 2018
Likely impact on
initial application
The entity is yet to
undertake a detailed
assessment of the
impact of AASB 15.
However, based
on the entity’s
preliminary
assessment, the
Standard is not
expected to have a
material impact on
the transactions and
balances recognised
in the financial
statements when it is
first adopted for the
year ending
30 June 2019.
New / revised
pronounce-
ment
Superseded
pronounce-
ment
None
Clarifications
to IFRS 15
Revenue from
Contracts with
Customers
Nature of change
The amendments clarify the application of IFRS 15 in three (3)
specific areas to reduce the extent of diversity in practice that
might otherwise result from differing views on how to implement the
requirements of the new standard. They will help companies:
1 Identify performance obligations (by clarifying how to apply the
concept of ‘distinct’);
2 Determine whether a company is a principal or an agent in a
transaction (by clarifying how to apply the control principle);
3 Determine whether a licence transfers to a customer at a point
in time or over time (by clarifying when a company’s activities
significantly affect the intellectual property to which the customer
has rights).
The amendments also create two (2) additional practical expedients
available for use when implementing IFRS 15:
1 For contracts that have been modified before the beginning of
the earliest period presented, the amendments allow companies
to use hindsight when identifying the performance obligations,
determining the transaction price, and allocating the transaction
price to the satisfied and unsatisfied performance obligations.
2 Companies applying the full retrospective method are permitted to
ignore contracts already complete at the beginning of the earliest
period presented.
The AASB is expected to publish the equivalent Australian
amendments in quarter 2 of 2016.
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.
3434
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
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.
The Group holds the following financial instruments.
Financial assets
Cash and cash equivalents
Trade and other receivables
Available-for-sale financial assets
Consolidated
30 June 2016
30 June 2015
$
$
550,804
851,320
4,500
3,770,160
815,393
37,611
1,406,624
4,623,164
(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.
Financial liabilities
Trade and other payables
1,070,999
231,958
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 2016
30 June 2015
Weighted average
interest rate
Balance
Weighted average
interest rate
Balance
%
$
%
$
2.46%
550,804
550,804
3.12%
3,770,160
3,770,160
Consolidated entity
Cash and cash equivalents
Net exposure to cash flow interest rate risk
Sensitivity
At 30 June 2016, if interest rates had increased by 200 or decreased by 200 basis points from the year end rates with all other
variables held constant, post-tax profit for the year would have been $11,016 higher/$11,016 lower (2015 changes of 200
bps/200 bps: $75,403 lower/$75,403 higher), mainly as a result of higher/lower interest income from cash and cash equivalents.
Other components of equity would have been $11,016 lower/$11,016 higher (2015: $75,403 lower/$75,403 higher) mainly as a
result of an increase/decrease in the fair value of the cash and cash equivalents.
2016 ANNUAL REPORT
35
(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 $150,000 (2015: $2,750,000) 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 2016 and
30 June 2015:
Level 1
$
Level 2
$
Level 3
$
Total
$
Consolidated entity - at 30 June 2016
Assets
Available-for-sale financial assets
Phoenix Copper Limited
Total assets
Consolidated entity - at 30 June 2015
Assets
Available-for-sale financial assets
Maximus Resources Limited
Phoenix Copper Limited
Total assets
4,500
4,500
32,611
5,000
37,611
-
-
-
-
-
-
-
-
-
-
4,500
4,500
32,611
5,000
37,611
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.
3636
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
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
Consolidated entity 2016
Revenue from
Segment Result / Adjusted EBITDA
Impairment of assets (note 5)
Capital expenditure
Total segment assets
Total segment liabilities
Consolidated entity 2015
Total segment revenue
Segment result / Adjusted EBITDA
Impairment of assets
Capital expenditure
Total segment assets
Total segment liabilities
Pilbara
Iron Ore
$
Canegrass
Magnetite
$
Other
Minerals
$
Total
$
-
-
1,517,562
46,517,562
6,235
61,132
(26,701,957)
(26,763,089)
7,724,684
45,386,296
22,094
(360,213)
(360,213)
86,351
-
10,658
-
(6,914)
(6,914)
280,776
273,862
343
(149,830)
(149,830)
149,830
-
-
-
(121,665)
(121,665)
121,665
-
100
(510,043)
(510,043)
1,753,743
46,517,562
16,893
61,132
(26,830,536)
(26,891,668)
8,127,125
45,660,158
22,537
2016 ANNUAL REPORT
37
(c) Other segment information
(i) Segment revenue
Segment revenue reconciles to total revenue from continuing
operations as follows:
Consolidated Year ended
30 June 2016
30 June 2015
$
-
52,267
32,723
84,990
$
61,132
207,228
50,919
319,279
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 Year ended
30 June 2016
30 June 2015
(iii) Segment assets
Reportable segments’ assets are reconciled to total assets as
follows:
Consolidated
30 June 2016
30 June 2015
$
$
46,517,562
45,660,158
Segment assets
Unallocated:
Cash and cash equivalents
550,804
3,770,160
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
851,320
296,667
4,500
216,372
7,000
754,261
266,049
37,611
93,133
27,000
48,444,225
50,608,372
$
$
(iv) Segment liabilities
Adjusted EBITDA
(510,043)
(26,830,536)
Other revenue from ordinary
activities
Loss on disposal of assets
84,990
1,768
258,147
(82,450)
Marketing expenses
(1,452,131)
(563,280)
Administrative expenses
(2,633,115)
(2,492,540)
Impairment of financial assets
(292,847)
-
Finance costs
(4,795)
(3,977)
Profit/loss before income tax
(4,806,173)
(29,714,636)
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 2016
30 June 2015
$
$
16,893
22,537
1,054,106
36,541
209,421
254,970
1,107,540
486,928
Consolidated Year ended
30 June 2016
30 June 2015
$
$
52,267
32,723
84,990
207,228
112,051
319,279
3838
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
5
EXPENSES
6
INCOME TAX EXPENSE
Consolidated
(a)
Income tax expense
30 June 2016
30 June 2015
$
$
Profit before income tax includes
the following specific expenses:
Finance costs
Bank fees
Exploration expenses
4,795
4,795
3,977
3,977
Deferred tax
Adjustments for Research &
Development Tax Concession
Income tax benefit for the year
Consolidated Year ended
30 June 2016
30 June 2015
$
$
-
52,021
(749,161)
(749,161)
(576,376)
(524,355)
General exploration written off
117,352
128,579
Impairment of exploration assets*
392,691
26,763,089
(b) Numerical reconciliation of income tax
expense to prima facie tax payable
510,043
26,891,668
Impairment of financial assets
Available for sale financial assets
292,847
-
Marketing expenses
Marketing and promotion
Administrative expenses
Compliance
Depreciation
Administration costs
Legal fees
Employment costs
Impairment of receivables
Share based payments
Superannuation
Rental
1,452,131
1,452,131
36,821
82,156
935,305
206,398
847,757
89,245
154,907
125,979
154,547
563,280
563,280
181,014
127,042
778,149
157,714
608,720
-
249,550
201,200
189,151
2,633,115
2,492,540
*
Impairment of exploration assets consists of the following
projects: Gawler Ranges ($6,028); Curamona ($2,183);
Jamestown ($1,325); Coonalpyn ($22,942) and
Canegrass ($360,213).
Consolidated Year ended
30 June 2016
30 June 2015
$
$
(4,806,173)
(29,714,636)
(1,441,852)
(8,914,391)
Loss from continuing operations
before income tax expense
Tax at the Australian tax rate of
30% (2015 - 30%)
Tax effect of amounts which are
not deductible (taxable)
in calculating taxable income:
Other non-allowable items
47,378
78,885
Tax losses not brought to
account
Transfer of available sale reserve
to impairment expense
Adjustment for Research and
Development tax offset
Income tax expense
1,306,770
8,887,527
87,704
-
(749,161)
(749,161)
(576,376)
(524,355)
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 $22,611,288
(2015: $21,803,960) 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%
2016 ANNUAL REPORT
39
7
CURRENT ASSETS - CASH
AND CASH EQUIVALENTS
9
CURRENT ASSETS - OTHER
CURRENT ASSETS
Consolidated
30 June 2016
30 June 2015
$
$
Consolidated
30 June 2016
30 June 2015
$
$
Cash at bank and in hand
400,804
1,020,160
Pre-paid rates and insurance
296,667
266,049
10 NON-CURRENT ASSETS - AVAILABLE-
FOR-SALE FINANCIAL ASSETS
Available-for-sale financial assets include the following classes
of financial assets:
Consolidated
30 June 2016
30 June 2015
$
$
Listed securities
Shares in listed companies
4,500
37,611
(a) Listed securities
Available for sale financial assets comprise investments
in the ordinary capital of PNX Metals Limited formerly
(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 do not include investments in
related parties.
Term deposits
150,000
2,750,000
550,804
3,770,160
(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 2.46% (2015: 3.12%). The term
deposits have an average period to repricing of 65 days
(2015: 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 2016
30 June 2015
$
$
152,544
239,864
(145,559)
6,985
95,174
749,161
844,335
851,320
(56,314)
183,550
50,921
580,922
631,843
815,393
(a) Past due but not impaired
As at 30 June 2016 there were no material trade and other
receivables that were considered to be past due and not
impaired (2015: Nil).
4040
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
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 2014
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2015
971,833
(571,283)
400,550
325,717
(181,338)
144,379
382,695
(263,430)
119,265
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 or fair value
Accumulated depreciation
Net book amount
Consolidated entity
Year ended 30 June 2016
Opening net book amount
Disposals
Depreciation charge
Closing net book amount
At 30 June 2016
Cost
Accumulated depreciation
Net book amount
-
-
(120,811)
279,739
971,833
(692,094)
279,739
279,739
-
(119,218)
160,521
971,833
(811,312)
160,521
-
(82,450)
(24,231)
37,698
179,706
(142,008)
37,698
37,698
(1,643)
(12,798)
23,257
172,069
(148,812)
23,257
-
-
(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
71,428
20,527
-
(45,581)
25,847
382,695
(356,848)
25,847
-
(15,534)
4,993
539,004
(534,011)
4,993
8,905
(1,023)
(6,128)
1,754
418,297
(2,666)
(199,259)
216,372
460,048
2,525,649
(458,294)
(2,309,277)
1,754
216,372
During the year $117,102 (2015 $118,375) of depreciation was included in the amount capitalised as exploration and evaluation.
2016 ANNUAL REPORT
41
12 NON-CURRENT ASSETS
14 CURRENT LIABILITIES
- EXPLORATION AND EVALUATION
- TRADE AND OTHER PAYABLES
Exploration and evaluation
assets
Movement:
Opening balance
Consolidated
30 June 2016
30 June 2015
$
$
45,273,862
64,038,405
Trade payables
Accrued expenses
Credit cards
Consolidated
30 June 2016
30 June 2015
$
386,676
684,323
-
$
203,886
24,152
3,920
1,070,999
231,958
Expenditure incurred
1,753,743
8,127,125
Less: expenditure written off /
impaired
(510,043)
(26,891,668)
Closing balance
46,517,562
45,273,862
Closing balance comprises
Exploration and evaluation -
100% owned
Exploration and evaluation
phases - Joint Venture
Operations
44,360,549
43,155,863
2,157,013
2,117,999
46,517,562
45,273,862
15 CURRENT LIABILITIES - PROVISIONS
Consolidated
30 June 2016
30 June 2015
$
$
Employee entitlements
36,541
204,685
16 NON-CURRENT LIABILITIES
- PROVISIONS
13 NON-CURRENT ASSETS
- OTHER NON-CURRENT ASSETS
Consolidated
Employee entitlements
Security bonds
30 June 2016
30 June 2015
$
$
7,000
27,000
Consolidated
30 June 2016
30 June 2015
$
$
-
50,285
4242
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
17 CONTRIBUTED EQUITY
(a) Share capital
Ordinary shares
Ordinary shares - fully paid
30 June 2016
30 June 2015
30 June 2016
30 June 2015
Shares
Shares
$
$
2,947,152,568
2,762,995,689
125,239,150
124,414,150
(b) Movements in ordinary share capital
Date
1 July 2014
25 November 2014
19 December 2014
30 June 2015
30 June 2015
7 August 2015
14 December 2015
2 March 2016
29 April 2016
29 June 2016
30 June 2016
30 June 2016
Details
Opening balance
Share issue - Proceeds received
Share issue - Proceeds received
Balance
Transaction costs arising on share issue
Deferred tax credit recognised directly in equity
Balance
Conversion of employee rights
Conversion of employee rights
Share issue - Proceeds received
Conversion of employee rights
Conversion of employee rights
Balance
Transaction costs arising on share issue
Deferred tax credit recognised directly in equity
Balance
Number of shares
2,400,995,602
313,333,334
48,666,753
2,762,995,689
-
-
2,762,995,689
6,063,430
589,635
165,000,000
2,503,814
10,000,000
2,947,152,568
-
-
2,947,152,568
Issue price $
$
.015
.015
.005
119,106,233
4,700,000
730,000
124,536,233
(174,404)
52,321
124,414,150
-
-
825,000
-
-
125,239,150
-
-
125,239,150
(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.
(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.
18 RESERVES
(a) Other reserves
Available-for-sale investments
revaluation reserve
Share-based payments
Movements:
Available-for-sale financial assets
Opening balance
Revaluation
Transfer of available for sale
reserve to impairment expense
Balance 30 June
Share-based payments
Opening balance
Rights expired during the year
Rights issued during the year
Balance 30 June
Consolidated
30 June 2016
30 June 2015
$
$
-
-
-
(292,349)
561,179
268,830
(292,349)
(293,049)
(500)
292,849
700
-
-
(292,349)
561,179
311,629
(716,083)
154,904
-
-
249,550
561,179
(b) Nature and purpose of other reserves
(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.
2016 ANNUAL REPORT
43
19 KEY MANAGEMENT PERSONNEL
DISCLOSURES
(a) Key management personnel
compensation
Consolidated Year ended
30 June 2016
30 June 2015
$
$
Short-term employee benefits
899,875
1,353,374
Post-employment benefits
Termination benefits
Share-based payments
88,176
426,719
109,498
101,449
-
160,900
1,524,268
1,615,723
Detailed remuneration disclosures are provided in the
remuneration report on pages 10 to 16.
20 REMUNERATION OF AUDITORS
During the year 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
Audit and other assurance
services
Audit and review of financial
statements
Total remuneration for audit and
other assurance services
Total remuneration for other
services
Consolidated Year ended
30 June 2016
30 June 2015
$
$
32,500
32,000
32,500
32,000
-
-
There were no other services provided.
21 CONTINGENCIES
Contingent liabilities
The Group had no contingent liabilities at 30 June 2016
(2015: nil).
4444
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
22 COMMITMENTS
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
There were no transactions with related parties other than
those listed above during the year ended 30 June 2016.
(a) Lease commitments: group as lessee
Non-cancellable operating leases
On 1 July 2014 the Group leased one office under a non-
cancellable operating lease. This lease is due to expire within
one year of the end of the 2016 financial year. On renewal, the
terms of the lease will be renegotiated.
Consolidated
30 June 2016
30 June 2015
$
$
Commitments for minimum lease
payments in relation to non-
cancellable operating leases are
payable as follows:
Within one year
116,600
139,920
Later than one year but not later
than five years
-
116,600
116,600
256,520
(b) Commitments for exploration and
joint venture expenditure
In order to maintain current rights of tenure to exploration
tenements the Group will be required to outlay amounts
totaling approximately $2,658,237 during the year ending 30
June 2017 (2016: $1,433,690) to meet minimum expenditure
requirements.
(c) Bank guarantees
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 2016, the Group had
$178,978 of bank guarantees in place for these purposes
(2015: $178,978).
2016 ANNUAL REPORT
45
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
2016 %
2015 %
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 PNX
Metals Ltd formerly
(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
The Company announced on 29 July 2016 that it has entered into a loan facility agreement with PIO Mines Pty Limited (a
subsidiary of TIO (NZ) Limited) to assist Flinders to meet its short term capital requirements. The A$2,000,000 loan is available
for drawing in a single lump sum from the Loan Agreement until 19 August 2016. The key terms of the loan include an interest
rate equivalent to the 6-Month Bank Bill Swap Rate (BBSW) Mid-Rate plus 2% per annum with the repayment of the principal
outstanding to occur on 31 December 2016.
On 5 August 2016 loan funds to the aggregate amount of A$2,000,000 were received by the Company from PIO Mines Pty Limited.
The Company proposes to undertake a pro rata rights issue, at an issue price and entitlement ratio yet to be determined, before
the end of the 2016 calendar year. The proceeds of the Rights Issue will be used to, among other things, repay the amounts
drawn under the Loan Agreement, pay annual tenement rents and rates, comply with minimum expenditure conditions for the
tenements, provide working capital and meet administration expenses.
The funds raised under the Rights Issue will not exceed A$5,000,000.
4646
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
27 RECONCILIATION OF LOSS FOR THE
28 EARNINGS PER SHARE
YEAR TO NET CASH INFLOW FROM
OPERATING ACTIVITIES
Consolidated Year ended
30 June 2016
30 June 2015
$
$
(4,057,012)
(29,190,281)
82,156
127,042
128,579
Loss for the year
Depreciation
Exploration expenditure written off
117,352
Non-cash employee benefits
expense - share-based payments
Impairment of exploration
expenditure
154,904
249,250
392,691
26,771,104
Impairment of financial assets
292,849
-
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
(1,768)
82,450
(35,926)
(478,247)
(30,618)
(3,773)
852,656
(349,685)
(218,429)
(5,864)
(2,451,145)
(2,669,425)
(a) Basic earnings per share
Consolidated Year ended
30 June 2016
30 June 2015
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
(0.144)
(1.117)
(0.144)
(1.117)
(b) Reconciliation of earnings used in
calculating earnings per share
Consolidated Year ended
30 June 2016
30 June 2015
$
$
Basic earnings per share
Profit (loss) attributable to the
ordinary equity holders of the
Company used in calculating
basic earnings per share:
From continuing operations
(4,057,012)
(29,190,281)
(c) Weighted average number of
shares used as denominator
Consolidated Year ended
30 June 2016
30 June 2015
Shares
Shares
Weighted average number of
ordinary shares used as the
denominator in calculating
basic earnings per share
2,823,300,003 2,613,012,086
(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
$4,057,012 this financial year (2015: $29,190,281), 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.
2016 ANNUAL REPORT
47
29 SHARE-BASED PAYMENTS
(b) Employee Incentive Rights Plan
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 22,796,000 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:
2015
Outstanding at beginning of the year
Granted
Outstanding at the end of the year
2016
Number of rights
-
22,796,000
22,796,000
Outstanding at beginning of the year
Exercised / expired
Outstanding at the end of the year
22,796,000
(22,796,000)
-
(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:
2015
Outstanding at beginning
of the year
Granted
Exercised
Expired
Outstanding at the end of the year
2016
Outstanding at beginning
of the year
Granted
Exercised
Expired
Outstanding at the end of the year
Number of
options
Weighted
average
exercise price
120,000
$0.085
-
-
(120,000)
-
$0.00
$0.085
-
-
-
-
-
-
-
-
-
-
-
-
There are no options outstanding at 30 June 2016.
There were no options granted during the year ended 30 June
2016.
4848
FLINDERS MINES LIMITED
NOTES to the consolidated financial statements 30 June 2016 (cont.)
30 PARENT ENTITY FINANCIAL
31 GOING CONCERN
This financial report has been prepared on the basis of going
concern.
The Group incurred a loss of $4,057,012 and net cash outflow
from operating and investing activities of $4,044,356 for the
year ended 30 June 2016. The Group expects to undertake a
pro-rata rights issue before the end of the 2016 calendar year.
In this regard, TIO (NZ) Limited and Flinders Mines Limited
have entered into a subscription agreement dated 29 July
2016 under which TIO has agreed to subscribe for the number
of Flinders shares equal to its pro rata entitlement under the
Rights Issue.
The Group’s ability to continue as a going concern is
contingent upon obtaining additional capital. If additional
capital is not obtained, the going concern basis may not be
appropriate, with the result that the group may have to realise
its assets and extinguish its liabilities, other than in the ordinary
course of business and in amounts different from those stated
in the financial report. No allowance for such circumstances
has been made in the financial report.
INFORMATION
(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
$
$
2,527,402
5,355,601
Non-current assets
46,147,819
45,427,378
Total assets
Current liabilities
Total liabilities
Net assets
Shareholders’ equity
Issued capital
Reserves
Available-for-sale financial
assets
Share-based payments
48,675,221
50,782,979
1,338,536
1,338,536
661,535
661,535
47,336,685
50,121,444
125,239,150
124,414,150
-
-
(292,347)
561,177
Retained losses
(77,902,465)
(74,561,536)
47,336,685
50,121,444
Profit or loss for the year
(4,057,512)
(28,186,050)
Total comprehensive income
(4,057,512)
(28,185,350)
(b) Guarantees entered into by the
parent entity
The Parent Entity did not provide any guarantees during the
year ended 30 June 2016 (2015: Nil).
(c) Contingent liabilities of the
parent entity
The parent entity did not have any contingent liabilities as at
30 June 2016 (2015: Nil).
(d) Contractual commitments for
the acquisition of property,
plant or equipment
As at 30 June 2016, the Parent Entity had no contractual
commitments for the acquisition of property, plant or
equipment (2015: Nil).
2016 ANNUAL REPORT
49
DIRECTORS’ DECLARATION
30 June 2016
In the Directors’ opinion:
(a) the Financial Statements and notes set out on pages 20 to 48 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 2016 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
27 September 2016
5050
FLINDERS MINES LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS 30 June 2016
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
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
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 “Company”),
TO THE MEMBERS OF FLINDERS MINES LIMITED
which comprises the consolidated statement of financial position as at 30 June 2016, the
consolidated statement of profit or loss and other comprehensive income, consolidated
Report on the financial report
statement of changes in equity and consolidated statement of cash flows for the year then ended,
We have audited the accompanying financial report of Flinders Mines Limited (the “Company”),
notes comprising a summary of significant accounting policies and other explanatory information
which comprises the consolidated statement of financial position as at 30 June 2016, the
and the directors’ declaration of the consolidated entity comprising the Company and the entities
consolidated statement of profit or loss and other comprehensive income, consolidated
it controlled at the year’s end or from time to time during the financial year.
statement of changes in equity and consolidated statement of cash flows for the year then ended,
notes comprising a summary of significant accounting policies and other explanatory information
Directors’ responsibility for the financial report
and the directors’ declaration of the consolidated entity comprising the Company and the entities
The Directors of the Company are responsible for the preparation of the financial report that
it controlled at the year’s end or from time to time during the financial year.
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001. The Directors’ responsibility also includes such internal control as the
Directors’ responsibility for the financial report
Directors determine is necessary to enable the preparation of the financial report that gives a true
The Directors of the Company are responsible for the preparation of the financial report that
and fair view and is free from material misstatement, whether due to fraud or error. The
gives a true and fair view in accordance with Australian Accounting Standards and the
Directors also state, in the notes to the financial report, in accordance with Accounting Standard
Corporations Act 2001. The Directors’ responsibility also includes such internal control as the
AASB 101 Presentation of Financial Statements, the financial statements comply with
Directors determine is necessary to enable the preparation of the financial report that gives a true
International Financial Reporting Standards.
and fair view and is free from material misstatement, whether due to fraud or error. The
Directors also state, in the notes to the financial report, in accordance with Accounting Standard
Auditor’s responsibility
AASB 101 Presentation of Financial Statements, the financial statements comply with
Our responsibility is to express an opinion on the financial report based on our audit. We
International Financial Reporting Standards.
conducted our audit in accordance with Australian Auditing Standards. Those standards require
us to comply with relevant ethical requirements relating to audit engagements and plan and
Auditor’s responsibility
perform the audit to obtain reasonable assurance whether the financial report is free from
Our responsibility is to express an opinion on the financial report based on our audit. We
material misstatement.
conducted our audit in accordance with Australian Auditing Standards. Those standards 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 free from
material misstatement.
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 are not liable for one another’s
Grant Thornton Audit Pty Ltd ACN 130 913 594
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.
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
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
‘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
applies.
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.
2016 ANNUAL REPORT
51
2
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
2016 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.
Material uncertainty regarding continuation as a going concern
Without qualifying our opinion, we draw attention to Note 31 in the financial report which
indicates that the consolidated entity incurred a net loss of $4,057,012 and a net cash outflow
from operating activities of $4,044,356 during the year ended 30 June 2016. These conditions,
along with other matters as set forth in Note 31, indicate the existence of a material uncertainty
which may cast significant doubt about the consolidated entity’s ability to continue as a going
concern and therefore, the consolidated entity may be unable to realise its assets and discharge its
liabilities in the normal course of business and at the amounts stated in the financial report.
5252
FLINDERS MINES LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS 30 June 2016
3
Report on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended
30 June 2016. 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.
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Flinders Mines Limited for the year ended 30 June
2016, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Sheenagh Edwards
Partner - Audit & Assurance
Adelaide, 27 September 2016
2016 ANNUAL REPORT
53
ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as
at 27 September 2016.
B. DISTRIBUTION OF EQUITY
SECURITIES
A. EQUITY SECURITY HOLDERS
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity
securities are listed below:
Name
Ordinary shares
Number
held
Percentage
of issued
shares
TIO (NZ) Limited
1,551,482,738
OCJ Investment (Australia) Pty Ltd
586,600,000
52.64
19.90
1.73
1.60
1.16
0.73
0.66
50,990,209
47,213,107
34,110,200
21,610,162
19,500,000
Analysis of numbers of equity security holders by size of
holding:
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Class of equity security
Shares
Options
341
513
691
2,087
942
4,574
-
-
-
-
-
-
There were 2,066 holders of less than a marketable
parcel of ordinary shares. At a share price of 2.5 cents, an
unmarketable parcel is 20,000 shares.
C. SUBSTANTIAL HOLDERS
Substantial holders in the company are set out below:
Mr Kenneth Martin Keane
Citicorp Nominees Pty Ltd
JP Morgan Nominees (Australia)
Limited
Miss Shuohang Wang
Mr Chunlei Ouyang
Mr Ian Drummond & Mrs Janice
Drummond
Mr Kenneth Martin Keane + Ms
Sally Morton Roberts
Mr Grant Russell McGarry
Mr Samuel Gwynne Walker
Mr Brendon Tony Dunstan
Mr Ashley Martin Newland
Mr Kie Yik Wong
Mr Bobby Papadopoulos
Mr Sanoj Xavier &
Mrs Maria Xavier
Ms Nicole Maxime Bruce
Mr Alexander Ilievski
Mr Wayne Raymond Kearney +
Mrs Robyn Kearney
Mr Wayne Raymond Kearney
16,450,000
0.56
TIO (NZ) Limited
Number held
Percentage
1,551,482,738
52.64%
OCJ Investment (Australia) Pty Ltd
586,600,000
19.90%
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.
13,018,061
9,000,000
7,770,939
7,206,173
7,000,000
6,720,000
6,000,000
6,000,000
5,250,000
4,971,711
0.44
0.31
0.26
0.24
0.24
0.23
0.20
0.24
0.18
0.17
4,884,339
0.17
4,873,530
2,410,651,169
0.17
81.83
Flinders Mines Limited
ABN 46 091 118 044
Level 1, 135 Fullarton Road
Rose Park 5067
South Australia
ASX code: FMS
www.flindersmines.com