Genesis Minerals Limited
and controlled entities
ABN 72 124 772 041
Annual Financial Report and Directors’
Report
for the year ended 30 June 2014
Genesis Minerals Limited and controlled entities
Corporate Directory
ABN 72 124 772 041
Directors
Richard Hill (Non-Executive Chairman)
Michael Fowler (Managing Director)
Damian Delaney (Non-Executive Director)
Company Secretary
Damian Delaney
Registered Office and Principal Place of Business
Unit 6, 1 Clive Street
WEST PERTH WA 6005
Telephone: +61 8 9322 6178
Postal Address
PO Box 437
WEST PERTH WA 6872
Share Register
Computershare Investor Services Pty Ltd
Level 2, Reserve Bank Building
45 St George’s Terrace
PERTH WA 6000
Auditors
Bentleys
Level 1, 12 Kings Park Road
WEST PERTH WA 6005
Internet Address
www.genesisminerals.com.au
Email Address
info@genesisminerals.com.au
Securities Exchange Listing
Genesis Minerals Limited shares are listed on the Australian Securities Exchange (ASX code: GMD).
1
Genesis Minerals Limited and controlled entities
Contents
Chairman’s Report
Review of Operations
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 to Members
ASX Additional Information
3
4
13
21
22
27
28
29
30
31
50
51
53
2
Genesis Minerals Limited and controlled entities
Chairman’s Report
Dear Fellow Shareholder
I am pleased to present the Annual Report of the Company for the year ended 30 June 2014.
The 2013/14 year has in many ways been one of Genesis’ most busy years.
Genesis completed a significant acquisition in March 2014 with the purchase of the Viking Gold Project in Western Australia
from AngloGold Ashanti Australia. In August 2014 we completed our first drill program there which confirmed the potential of
the project with high-grade gold results intersected along with near surface oxide mineralisation. We believe the Viking
Project gives us the very real opportunity to discover economic gold resources that we can rapidly bring into production
through either standalone or toll treatment scenario. Exploration at Viking can be completed rapidly and at a low-cost with
the cost of drilling having dropped significantly over the past 12 months in Australia. We look forward to advancing Viking in
a significant way in the coming 12 months.
Early in 2014 Genesis renegotiated the agreement over the Las Opeñas precious and base-metal epithermal project located
in the pre-cordillera of San Juan Province, Argentina. Genesis completed a capital raising associated with the renegotiation
of the agreement. We were very pleased to welcome the Canadian resource major Teck Resources to the shareholder
register in a meaningful way and we were delighted that Genesis’ shareholders both old and new have benefited from our
ongoing involvement at Las Opeñas.
As part of the renegotiation of the Las Opeñas Project Genesis gained access to a suite of early stage but highly
prospective gold projects in San Juan in Argentina held by Teck Argentina Ltd. These Alliance projects, being the
Castaños, Espota, Fierro and Fortuna Projects, give Genesis the opportunity to discover significant epithermal and or
porphyry deposits by taking advantage of Teck’s geological knowledge of the San Juan pre-cordillera. Initial exploration can
be rapidly completed at low-cost with exploration to commence shortly and we look forward to bringing you news of on these
projects.
Genesis continues to pursue the acquisition of other highly prospective, advanced copper and gold projects in Australia,
Chile, Argentina and elsewhere in Latin America.
The junior equities markets remain difficult with restrictive access to capital however I remain optimistic about Genesis’
future.
On behalf of the Board I would like to thank you for your continued support and I look forward to keeping you informed of our
progress during the forthcoming year.
Richard Hill
Chairman
3
Genesis Minerals Limited and controlled entities
Review of Operations
During the year Genesis Minerals Limited (“Genesis”) purchased 100%
of the Viking Project (“Viking”) off AngloGold Ashanti Australia Limited
(“AngloGold Ashanti”). Viking comprises a significant landholding
(Figure 1) in the Proterozoic Albany-Fraser Orogen (“AFO”) and
adjoining eastern margin of the Archaean Yilgarn Craton in what is
considered an emerging mineral province that has delivered the
Tropicana gold and the Nova-Bollinger nickel discoveries. In August
2014 Genesis completed an initial short drilling program at Viking with
shallow drilling confirming the strong potential to rapidly define a high-
grade gold system and near surface oxide mineralisation at the high-
priority Beaker Prospect.
In March 2014 Genesis renegotiated the agreement with Teck
Argentina Ltd a wholly owned subsidiary of Teck Resources Limited
(“Teck”) over the Las Opeñas precious and base-metal epithermal
project (‘Las Opeñas’) located in the pre-cordillera of San Juan
Province, Argentina. Genesis was required to the complete a minimum
of 2,400m of drilling at Las Opeñas by September 30, 2014 with
Genesis retaining its 100% interest in the Las Opeñas Project during
this period. During June 2014 Genesis completed an eight-hole
2,400m Phase 2 drill program which targeted the main known zone of
extensive surface gold and base metal mineralisation, coincident with a
large breccia system and Induced Polarisation features. Wide zones of
low-grade gold and base metals mineralisation was returned along with
narrow high-grade gold
As part of the renegotiation of Las Opeñas Genesis also took up the
opportunity to explore a number of early stage but highly prospective
gold projects held by Teck being the Castaños, Espota, Fierro and
Fortuna Projects in San Juan, Argentina (Figure 2) (the "Alliance
Projects").
Viking Project
During August 2014 Genesis commenced the systematic test of a
series of high-grade vein targets and surface gold anomalies that have
been outlined to date at the 7km x 7km Beaker Prospect near the
historical gold centre of Norseman (Figure 3). The Viking Project offers
Genesis the unique opportunity to define shallow, high-grade gold
resources capable of being rapidly and cheaply advanced towards
development with the significant benefit that it is close to existing
mining infrastructure.
A thirteen-hole confirmatory 1,150m RC program (Figure 3) targeted
the Beaker 4 and Beaker 2 gold zones which form part of the extensive
Beaker Gold Prospect.
Figure 1
The initial shallow drilling at Beaker 4 focused on the Beaker 4 West
structure (Figures 4 and 5) the western most structure currently defined
at the Beaker 4 anomaly. High-grade gold mineralisation (See Figure 5
and Table 1) was confirmed from this drilling with best results including (see GMD ASX Release dated Septemb er 8, 2014):
Figure 2
14VKRC001 7m @ 4.02g/t gold from 31m
14VKRC002 6m @ 6.04g/t gold from 73m (includes 3m @ 11.35g/t gold)
Drilling highlighted a north-south trend to the Beaker 4 West structure with gold mineralisation open along strike and at
depth (see Figures 3 to 5). Future drilling at the Beaker 4 West structure will target the depth and strike extents of the
Beaker 4 West structure. Mineralisation is associated with a moderately east dipping zone of sulphidic quartz veining within
a biotite - sericite altered shear zone.
4
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Figure 3 Viking Project Location with regional geochemistry on 1VD magnetic image
Figure 4 Beaker 4 Summary Map on detailed 1VD Magnetic Image
5
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Figure 5 Beaker 4 Summary Map on detailed 1VD Magnetic Image
At Beaker 2 three RC holes were drilled across part
of the strike extensive Beaker 2 air core defined
gold anomaly that wraps around the eastern edge
intrusion which is spatially
of
associated with the Beaker Prospect.
the magnetic
Wide zones of near surface oxide mineralisation
(see Figures 6 to 7 and Table 1) were intersected at
Beaker 2 including:
14VKRC009
20m @ 0.74g/t gold from
10m (including 5m @ 1.88g/t gold)
14VKRC010
20m @ 0.59 g/t gold from
5m (including 5m @ 1.91g/t gold)
14VKRC011
15m @ 0.42g/t gold from
15m
These intersections form a +100m wide sub
horizontal blanket of oxide mineralisation at Beaker
2 which requires systematic follow up over the
1.5km strike of the Beaker 2 gold anomaly.
Potential exists to define a large oxide gold system
associated with a high-grade vein system.
Figure 6 Beaker 2 Drill Hole Plan (RHS)
6
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Figure 7 Beaker 2 Section 6,420,000N
Viking Background
The Project comprises 6 granted exploration licences
that cover some 530km 2 which are
located
approximately 600km east of Perth and 30km south
east of the town of Norseman (Figure 8). Access to
the project area from Kalgoorlie is via the sealed
Celebration and Kambalda roads to the Coolgardie–
Esperance Highway to Norseman then various 4WD
tracks within the Project. Access into the Project is
east along the old Telegraph Track, 18km south of
Norseman via the Coolgardie–Esperance Highway.
Genesis purchased AngloGold Ashanti Australia
Limited’s Viking Project Group 2 tenements during
the March 2014 Quarter (see GMD ASX Release
dated March 3, 2014). The total purchase price for
the project comprised:
i.
ii.
iii.
a $50,000 payment;
a Deferred Payment of $2 per Measured or
Indicated (JORC 2012) Resource ounce
defined on or partially on the Tenement Area
as quoted in the first public announcement
of a Measured or Indicated Resource on or
partially on the Tenement Area; and
a royalty payable to AngloGold Ashanti
equal to 1.25% of the Net Smelter Return
generated from the sale of any gold mined
or produced from the Tenement Area, after
commercial production of 25,000 ounces.
The Project had received limited exploration prior to
AngloGold Ashanti commencing ground acquisition in
Figure 8
7
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
2007. The majority of the historic work was completed in the Project area was by Western Collieries in the early 1980s
exploring for lignite/coal within palaeochannels along the eastern margin of the tenements. No economic occurrences were
identified.
The Project overlies the south-eastern margin of the Yilgarn Craton and the adjacent Northern Foreland zone of the Albany-
Fraser Orogen. The Northern Foreland zone is interpreted as variably reworked granites and metasediments of the Yilgarn.
Northwest-oriented Yilgarn structural trends can be identified within the Northern Foreland however the effects of the
northeast trending AFO becomes more pronounced towards the Biranup zone to the southeast. Well-developed pedogenic
calcrete commonly overprints recent cover sequences.
The Beaker prospect is located immediately southeast of the NE trending Jerdacuttup Fault within the Northern Foreland
zone of the Albany Fraser Orogen. Beaker is located dominantly within a block of variably sheared, folded and thrusted
Archaean granites that retain some Yilgarn structural trends (NW – SE) and are little affected by the Albany Fraser orogeny.
This block is bounded by a splay of the major Jerdacuttup Fault to the northwest and by a shear zone to the southeast.
Both of these structures trend approximately northeast-southwest, parallel to the AFO.
Table 1 Viking Intercepts - August 2014 Program
Hole
MGA_94_East MGA_94_North mRL
Total
Depth
Az
Dip
From
To
Interval
14VKRC001
407,874
6,420,998
14VKRC002
407,927
6,420,983
306
305
59
99
270
-60
270
-60
14VKRC004
407,916
6,420,946
14VKRC008
408,198
6,421,192
14VKRC009
412,871
6,419,979
305
304
302
79
90
98
inc
270
-60
270
-60
270
-60
inc
14VKRC010
412,914
6,419,991
302
98
270
-60
inc
14VKRC011
412,958
6,419,999
14VKRC014
407,909
6,420,946
302
305
93
68
270
-60
270
-50
Las Opeñas Project
31
73
73
88
63
0
10
20
5
10
15
50
38
79
76
89
66
10
30
25
25
15
30
55
7
6
3
1
3
10
20
5
20
5
15
5
Au
(ppm)
4.02
6.04
11.34
4.79
0.41
0.47
0.74
1.88
0.59
1.91
0.42
Comment
Composite samples
Composite samples
Composite samples
Composite samples
0.25
Composite samples
Following the renegotiation of the Las Opeñas agreement Genesis completed a 2,400m drilling program at Las Opeñas
during June 2014. The drilling targeted the very large, partially outcropping epithermal system with drilling intersecting wide
zones of encouraging mineralisation hosted in breccia. Results from the wide spaced program (see Table 2 and Figures 9
to 11) testing the breccia system include:
14LODH015 126.4m @ 0.17g/t gold, 3.2g/t silver and 0.20% zinc
14LODH015 27.8m @ 0.26g/t gold and 0.52% zinc
14LODH015 36.7m @ 0.23g/t gold, 5.6g/t silver, 1.00% zinc and 0.13% lead
High-grade mineralisation was also intersected associated with ENE trending structures. Results include:
14LODH019 2m @ 7.45g/t gold, 256g/t silver, 0.61% zinc and 1.03% lead
14LODH020 1m @ 5.26g/t gold and 31.0g/t silver
High grade mineralisation is within semi massive sulphide veins and veinlets associated with interpreted strike extensive
(+5km combined) high-grade structures (see Figure 9) that are untested by drilling and require systematic follow up
exploration. These structures are identified in part by mapping, surface rock chip sampling and magnetic interpretation.
Very wide zones of strongly anomalous base-metal mineralisation (see Figure 11 and Table 2) have been returned from
holes intersecting breccia hosted mineralisation at Las Opeñas, including:
14LODH015 - 307m @ 0.55% zinc from 98m
14LODH018 - 192.4m @ 0.50% zinc from 0m
14LODH020 - 31.2m @ 0.65% zinc and 0.19% lead from 14.7m
A large area (700m x 600m) of zinc – lead mineralisation has been outlined closely associated with the breccia system.
8
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Further structural interpretation, geochemical analysis and geophysical interpretation of the dacite-breccia complex is
required prior to considering further drilling to test for breccia-hosted mineralisation.
Figure 9 Drill hole locations with intercepts
Figure 10 Section 2,466,250E
9
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Figure 11 Anomalous base metal zone
Table 2 Las Opeñas Intercepts - June 2014 Program
Hole ID
East
North
Posgar2
Posgar2
mRL
Depth
Az
Dip
From
To
Interval
Au
Ag
(ppm)
(ppm)
14-LODH-015
2,466,229
6,705,141
3,429
405
0
-50
0
126.4
126.4
incl
38.6
61.5
204.7
232.5
296
332.7
98
405
14-LODH-016
2,466,250
6,704,971
3,435
215
0
-60
NSA
14-LODH-017
2,466,067
6,705,175
3,394
299
165
-60
NSA
14-LODH-018
2,466,080
6,705,332
3,370
249
0
-60
25.5
29.5
52.5
54.5
22.9
27.8
36.7
307
4
2
67.7
83.5
15.9
123.3
135.2
239.9
240.9
12
1
0
192.4
192.4
14-LODH-019
2,466,250
6,704,972
3,431
350
180
-60
73.5
82
322.8
327.6
incl
322.8
324.8
8.5
4.8
2
14-LODH-020
2,465,801
6,705,340
3,478
279
0
-60
14.75
45.95
31.2
14-LODH-021
2,466,370
6,705,257
3,370
333
200
-60
243
14-LODH-022
2,466,030
6,705,210
3,370
270
340
-70
143
93
94
267
206
1
24
63
10
0.17
0.30
0.26
0.23
0.27
0.49
0.32
0.19
5.26
0.17
3.23
7.45
0.06
0.23
3.2
7.5
1.6
5.6
7.2
17.1
7.4
1.9
31.0
12.8
112.5
256
3.34
12.50
Pb
(%)
0.07
0.15
0.03
0.13
0.01
0.04
0.04
0.04
0.10
0.44
1.03
0.20
1.38
0.16
Zn
(%)
0.20
0.35
0.52
1.00
0.55
0.99
1.53
0.80
0.40
0.50
0.54
0.26
0.61
0.67
3.02
0.57
0.43
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Alliance Projects
Genesis will explore for epithermal and porphyry hosted gold deposits within the Alliance Projects that are located in San
Juan, Argentina (Figure 2). The Projects lie within the north-south trending Upper Paleozoic-aged precious and base metal
belt of the Andes in Argentina. The Upper Paleozoic belt (Upper Carboniferous to Upper Permian) hosts several gold and
copper-gold occurrences of porphyry, epithermal and possibly Intrusive Related Gold (IRG) affinity. The belt is roughly 500
km long and 50 km wide, paralleling the north-south trending international border between Argentina and Chile.
Genesis intends to leverage off Teck’s geological knowledge of the San Juan pre-cordillera and rapidly complete initial low-
cost, exploration programs over the Alliance Projects. Exploration of the Alliance Projects in the 2nd half of 2014 will focus
on mapping, geochemical sampling and geophysical surveying at the Castaños Project (Figures 12 to 13) and initial
geochemical sampling of the Espota Project (Figure 14) which contains an untested, strike extensive vein and breccia
system.
Figure 12 Castaños Project Cerro Puerco Prospect
Figure 13 Photo showing the Castaños alteration system
11
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Other Projects
During the year Genesis withdrew from the Poncha Project in Argentina and the Cerro Verde Project in Chile.
Figure 14 Plan view of the Espota Project
COMPETENT PERSONS STATEMENTS
The information in this report that relates to Exploration Results is b ased on information compiled b y Mr. Michael Fowler
who is a full-time employee of the Company and is a memb er of the Australasian Institute of Mining and Metallurgy. Mr.
Fowler has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and
to the activity b eing undertaken 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’. Mr. Fowler consents to the inclusion in the
report of the matters b ased on his information in the form and context in which it appears.
12
Genesis Minerals Limited and controlled entities
Directors’ Report
Your directors submit their report on the consolidated entity (referred to hereafter as the Group) consisting of Genesis
Minerals Limited and the entities it controlled at the end of, or during, the year ended 30 June 2014.
DIRECTORS
The names and details of the Company's directors in office during the financial year and until the date of this report are as
follows. Directors were in office for this entire period unless otherwise stated.
Information on Directors
Richard Hill
Non-Executive Chairman
Qualifications
BSc (Hons), B.Juris, LLB.
Experience
Interest in shares and
options
Other directorships in
listed entities held in
the previous three
years
Mr Hill is a qualified solicitor and geologist with over 23 years experience in the Resource Industry.
During this period Mr Hill has performed roles as legal counsel, geologist and commercial manager
for several mid cap Australian mining companies and more recently as founding director for a series
of successful ASX-listed companies. Mr Hill was also co-founder of resources fund, Westoria
Resource Investments. During his time in the resource industry Mr Hill has gained a diversity of
practical geological experience as a mine based and exploration geologist in a range of
commodities and rock types. In his commercial and legal roles, he has been involved in project
generation and evaluation, acquisition and joint venture negotiation, company secretarial functions,
mining law and land access issues as well as local and overseas marketing and fund raising.
1,698,822 fully paid ordinary shares
Mr Hill resigned as a director of Centaurus Metals Limited 2 July 2014
Michael Fowler
Managing Director
Qualifications
BSc, MSc, MAusIMM
Experience
Mr Fowler is a geologist with 24 years of experience in the resources industry. He graduated from
Curtin University in 1988 with a bachelor of Applied Science degree majoring in geology and in
1999 received a Master of Science majoring in Ore Deposit Geology from the University of Western
Australia. On graduating he explored for gold and base metals for Dominion Mining in the
Murchison, Gascoyne and Eastern Goldfields Regions of Western Australia. In 1996, Mr Fowler
joined Croesus Mining NL and was made Exploration Manager in 1997. He oversaw all exploration
for Croesus until June 2004 and was then appointed Business Development Manager and
subsequently Managing Director in October 2005. Mr Fowler has overseen the discovery and
development of several significant gold deposits. He has been intimately involved in a number of
significant acquisitions and project reviews. He has recently worked as the Exploration Manager for
Castle Minerals in Ghana.
Interest in shares and
options
5,153,730 fully paid ordinary shares,
2,000,000 options expiring 31 Dec 2014 exercisable at 22 cents;
27,084 options expiring 1 March 2015 exercisable at 20 cents
Other directorships in
listed entities held in
the previous three
years
Mr Fowler has not held any other directorships in the last 3 years
Damian Delaney
Non-Executive Director
Qualifications
Chartered Accountant; MAICD
13
Genesis Minerals Limited and controlled entities
Directors' Report continued
Experience
Mr Delaney is a Chartered Accountant with many years of experience working with international
listed companies. Mr Delaney commenced his career in South Africa, qualifying with Coopers &
Lybrand, before taking up a series of positions in the United Kingdom. He has worked in the
resource sector for the past 8 years where he has been involved in numerous capital raisings. Mr
Delaney is fully conversant with all regulatory requirements of the Australian markets and has
significant experience managing all aspects of company financial and regulatory reporting.
Interest in shares and
options
1,600,000 fully paid ordinary shares;
4,000,000 options expiring 31 December 2014 exercisable at 22 cents;
115,001 options expiring 1 March 2015 exercisable at 20 cents
Other directorships in
listed entities held in
the previous three
years
Mr Delaney is also a director Redbank Copper Ltd.
COMPANY SECRETARY
Damian Delaney
PRINCIPAL ACTIVITIES
The principal activities of the Group during the year were the acquisition of mining tenements, and the exploration of these
tenements with the objective of identifying economic mineral deposits.
DIVIDENDS
No dividends were paid or declared during the year. No recommendation for payment of dividends has been made.
OPERATING AND FINANCIAL REVIEW
Finance Review
The Group has recorded an operating loss after income tax for the year ended 30 June 2014 of $1,757,105 (2013:
$2,952,294).
At 30 June 2014 cash assets available totalled $1,239,869 (2013: $1,109,319).
The net assets of the consolidated entity decreased from $916,020 in 2013 to $755,540 at June 30 2014. This decrease is
largely due to the following factors:
•
•
•
exploration of the Group’s projects;
raising $1.6 million from 2 placements during the year; and
normal operational overheads incurred in running a listed entity with an overseas subsidiary for 12 months.
Operating Review
A review of the operations of the Group during the financial year can be found on page 4 of the annual report.
Operating Results for the Year
Summarised operating results are as follows:
2014
2013
Revenues
$
Results
$
Revenues
$
Results
$
Group revenues and loss from ordinary activities before
income tax expense
15,952
(1,757,105)
39,907
(2,952,294)
Shareholder Returns
Basic and diluted loss per share (cents)
2014
(0.91)
2013
(2.17)
14
Genesis Minerals Limited and controlled entities
Directors' Report continued
DIRECTORS' MEETINGS
During the financial year three meetings of directors were held. Attendances by each director during the year were as
follows:
Richard Hill
Michael Fowler
Damian Delaney
Directors Meetings
A
4
4
4
B
4
4
4
Notes
A – Number of meetings attended.
B – Number of meetings held during the time the director held office during the year.
SHARES UNDER OPTION
At the date of this report there are 23,760,596 unissued ordinary shares in respect of which options are outstanding.
Balance at the beginning of the year
Movements of share options during the year
Expired on 23 August 2013, exercisable at 15 cents
Expired on 23 August 2013, exercisable at 20 cents
Expired on 24 Nov 2013, exercisable at 31 cents
Expired on 1 March 2014 exercisable at 15 cents
Total number of options outstanding as at 30 June 2014 and the date of this report
The balance is comprised of the following:
Expiry date
1 March 2015
31 December 2014
30 November 2015
Exercise price (cents)
20
22
12
Total number of options outstanding at the date of this report
Number of options
38,921,192
(75,000)
(75,000)
(2,400,000)
(13,510,596)
23,760,596
Number of options
13,510,596
9,500,000
750,000
23,760,596
No person entitled to exercise any option referred to above has or had, by virtue of the option, a right to participate in any
share issue of any other body corporate.
INSURANCE OF DIRECTORS AND OFFICERS
During or since the financial year, the company has paid premiums insuring all the directors of Genesis Minerals Limited
against costs incurred in defending proceedings for conduct involving:
(a) a wilful breach of duty; or
(b) a contravention of sections 182 or 183 of the Corporations Act 2001,
as permitted by section 199B of the Corporations Act 2001.
The total amount of insurance contract premiums paid is $10,348 (2013: $12,210).
NON-AUDIT SERVICES
There were no non-audit services provided by the entity's auditor, Bentleys, or associated entities.
15
Genesis Minerals Limited and controlled entities
Directors' Report continued
RISK MANAGEMENT
The board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that activities are
aligned with the risks and opportunities identified by the board.
The Group believes that it is crucial for all board members to be a part of this process , and as such the board has not
established a separate risk management committee.
The board has a number of mechanisms in place to ensure that management's objectives and activities are aligned with the
risks identified by the board. These include the following:
• Board approval of a strategic plan, which encompasses strategy statements designed to meet stakeholders needs and
manage business risk.
Implementation of board approved operating plans and budgets and board monitoring of progress against these budgets.
•
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
The Group raised $422,427 through the issue of 24,848,649 ordinary shares to institutional and sophisticated investors in
March 2014. The Group raised $1,179,585 through the issue of 69,331,464 ordinary shares in May 2014.
AFTER BALANCE DATE EV ENTS
No matters or circumstances, besides those disclosed at Note 19, have arisen since the end of the financial year which
significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group expects to maintain the present status and level of operations and hence there are no likely developments in the
entity's operations.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group is subject to significant environmental regulation in respect to its exploration activities.
The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of
and is in compliance with all environmental legislation. The directors of the Group are not aware of any breach of
environmental legislation for the year under review.
The directors have considered the National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which introduces a
single national reporting framework for the reporting and dissemination of information about greenhouse gas emissions,
greenhouse gas projects, and energy use and production of corporations. At the current stage of development, the directors
have determined that the NGER Act will have no effect on the Group for the current, nor s ubsequent, financial year. The
directors will reassess this position as and when the need arises.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility
on behalf of the Company for all or any part of those proceedings.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 21.
16
Genesis Minerals Limited and controlled entities
Directors' Report continued
REMUNERATION REPORT (AUDITED)
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act
2001.
REMUNERATION POLICY
The remuneration policy of Genesis Minerals Limited has been designed to align director and executive objectives with
shareholder and business objectives by providing a fixed remuneration component and offering specific long-term
incentives based on key performance areas affecting the Group's financial results. The board of Genesis Minerals
Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best
executives and directors to run and manage the Group.
The board's policy for determining the nature and amount of remuneration for board members and senior executives of the
Group is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was
developed by the board. All executives receive a base salary (which is based on factors such as length of service and
experience) and superannuation. The board reviews executive packages annually by reference to the Group's
performance, executive performance and comparable information from industry sectors and other listed companies in similar
industries.
The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to
attract the highest calibre of executives and reward them for performance that results in long-term growth in
shareholder wealth.
Executives are also entitled to participate in the employee share and option arrangements.
The executive directors and executives receive a superannuation guarantee contribution required by the government, which
is currently 9.25% (unless otherwise stated), and do not receive any other retirement benefits.
All remuneration paid to directors and executives is valued at the cost to the Group and expensed. Options are valued using
the Black-Scholes methodology.
The board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The board determines payments to the Non-Executive Directors and reviews their
remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when
required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by
shareholders at the Annual General Meeting (currently $300,000). Fees for non-executive directors are not linked to the
performance of the Group. However, to align directors' interests with shareholder interests, the directors are encouraged to
hold shares in the Group and are able to participate in the employee option plan.
PERFORMANCE BASED REMUNERATION
The Group currently has no performance based remuneration component built into Director and Executive
remuneration packages.
GROUP PERFORMANCE, SHAREHOLDER WEALTH AND DIRECTORS' AND EXECUTIVES' REMUNERATION
The remuneration policy has been tailored to increase the direct positive relationship between shareholders'
investment objectives and Directors and Executive's performance. The Group plans to facilitate this process by directors and
executives participating in future option issues to encourage the alignment of personal and shareholder interests. The Group
believes this policy will be effective in increasing shareholder wealth.
USE OF REMUNERATION CONSULTANTS
The Group did not employ the services of any remuneration consultants during the financial year ended 30 June 2014.
VOTING AND COMMENT MADE ON THE GROUP'S 2013 ANNUAL GENERAL MEETING
The Company received 100% of “yes” votes on its remuneration report for the 2013 financial year. The Company did not
receive any specific feedback at the AGM or throughout the year on its remuneration practices.
17
Genesis Minerals Limited and controlled entities
Directors' Report continued
DETAILS OF REMUNERATION
Details of the remuneration of the directors and the key management personnel of the Group are set out in the following table.
The key management personnel of the Group include the directors and company secretary as per page 13 above.
Given the size and nature of operations of the Group, there are no other employees who are required to have their
remuneration disclosed in accordance with the Corporations Act 2001.
Key management personnel of the Group
Short-Term
Post Employment
Share-based
Payments
Total
Non-Monetary Superannuation
$
$
Retirement
benefits
$
Options
$
$
Directors
Richard Hill
2014
2013
Michael Fowler
2014
2013
Damian Delaney
2014
2013
Salary
& Fees
$
55,000
18,167
275,000
275,000
66,000
60,000
Total key management personnel compensation
2014
2013
396,000
395,689
-
-
-
-
-
-
-
-
-
-
25,000
25,000
-
-
25,000
25,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
55,000
18,167
300,000
300,000
66,000
60,000
421,000
420,689
Equity instrument disclosures relating to key management personnel
(i) Options provided as remuneration and shares issued on exercise of such options
No options were provided as remuneration during the year. 2013:(nil).
(ii) Option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each director of Genesis
Minerals Limited and other key management personnel of the Group, including their personally related parties, are set out
below:
2014
Balance at
start of the
year
Granted as
compensati
on
Exercised
Other
changes
Balance at
end of the
year
Vested and
exercisable
Directors of Genesis Minerals Limited
Richard Hill
Michael Fowler
Damian Delaney
3,554,168
4,345,003
7,899,171
-
-
-
-
-
-
-
-
(1,527,084)
(230,002)
(1,757,086)
2,027,084
4,115,001
6,142,085
2,027,084
4,115,001
6,142,085
2013
Balance at
start of the
year
Granted as
compensati
on
Exercised
Other
changes
Balance at
end of the
year
Vested and
exercisable
Directors of Genesis Minerals Limited
Michael Haynes
Michael Fowler
Damian Delaney
Richard Hill
1,000,000
3,581,252
4,345,003
8,926,255
-
-
-
-
-
-
-
-
(1,000,000)
(27,084)
-
-
3,554,168
4,345,003
-
3,554,168
4,345,003
(1,027,084)
7,899,171
7,899,171
Service agreements
On appointment to the Board, all non-executive directors enter into a service agreement with the Group in the form of a
18
Genesis Minerals Limited and controlled entities
Directors' Report continued
letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the office
of director.
On 25 June 2007 the Company entered into an Executive Service Agreement with Mr Michael Fowler.
Under the Agreement, Mr Michael Fowler is engaged by the Company to provide services to the Company in the capacity
of Managing Director and CEO.
Mr Fowler was paid a salary of $275,000 per annum (plus 10% superannuation entitlement).
The Agreement was effective from the date the Company was admitted to the Official List (30 July 2007) and continues
until terminated by either Mr Fowler or the Company. Mr Fowler is entitled to a minimum notice period of three months
from the Company and the Company is entitled to a minimum notice period of three months from Mr Fowler.
Share based compensation
There were no share based payments granted to key management personnel during the year ended 30 June 2014.
Existing KMP Options
Grant Date
Granted
Number Vesting Date Expiry Date
Exercise
Price
(cents)
Value per
option at
grant date
(cents)
Exercised
Number
Directors
Michael Fowler
Damian Delaney
21/03/2012 2,000,000 11/04/2012 31/12/2014
21/03/2012 4,000,000 11/04/2012 31/12/2014
22.0
22.0
8.6
8.6
N/A
N/A
(iii) Share holdings
The numbers of shares in the Company held during the financial year by each director of Genesis Minerals Limited and other
key management personnel of the Group, including their personally related parties, are set out below. There were no shares
granted during the reporting period as compensation.
2014
Directors of Genesis Minerals Limited
Ordinary shares
Richard Hill
Michael Fowler
Damian Delaney
2013
Directors of Genesis Minerals Limited
Ordinary shares
Michael Haynes
Michael Fowler
Damian Delaney
Richard Hill
Balance at
start of the
year
Received during
the year on the
exercise of
options
Other
changes
during the
year
Balance at
end of the
year
448,822
3,430,730
1,100,000
-
-
-
1,250,000
1,723,000
500,000
1,698,822
5,153,730
1,600,000
Balance at
start of the
year
Received during
the year on the
exercise of
options
Other
changes
during the
year
Balance at
end of the
year
993,334
3,247,917
345,000
-
-
-
-
-
(993,334)
182,813
755,000
448,822
-
3,430,730
1,100,000
448,822
(c) Loans to key management personnel
There were no loans to key management personnel during the year.
END OF REMUNERATION REPORT
19
Genesis Minerals Limited and controlled entities
Directors' Report continued
This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board
of Directors.
Michael Fowler
Managing Director
Perth, 30 September 2014
20
To The Board of Directors
As lead audit director for the audit of the financial statements of Genesis Minerals
Limited for the financial year ended 30 June 2014, I declare that to the best of my
knowledge and belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
BENTLEYS
Chartered Accountants
DOUG BELL CA
Director
Dated at Perth this 30th day of September 2014
Genesis Minerals Limited and controlled entities
Corporate Governance Statement
The Board of Directors
The Company's constitution provides that the number of directors shall not be less than three and not more than nine.
There is no requirement for any shareholding qualification.
As and if the Company's activities increase in size, nature and scope the size of the Board will be reviewed periodically,
and as circumstances demand. The optimum number of directors required to supervise adequately the Company's
constitution will be determined within the limitations imposed by the constitution.
The membership of the Board, its activities and composition, is subject to periodic review. The criteria for determining the
identification and appointment of a suitable candidate for the Board shall include quality of the individual, background of
experience and achievement, compatibility with other Board members, credibility within the Company's scope of activities,
intellectual ability to contribute to Board's duties and physical ability to undertake Board's duties and responsibilities.
Directors are initially appointed by the full Board subject to election by shareholders at the next general meeting. Under the
Company's constitution the tenure of a director (other than managing director, and only one managing director where the
position is jointly held) is subject to reappointment by shareholders not later than the third anniversary following his or her
last appointment. Subject to the requirements of the Corporations Act 2001, the Board does not subscribe to the principle
of retirement age and there is no maximum period of service as a director. A managing director may be appointed for any
period and on any terms the directors think fit and, subject to the terms of any agreement entered into, may revoke any
appointment.
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the
formation of separate or special committees (other than an Audit Committee) at this time. The Board as a whole is able to
address the governance aspects of the full scope of the Company's activities and to ensure that it adheres to appropriate
ethical standards.
Role of the Board
The Board's primary role is the protection and enhancement of long-term shareholder value.
To fulfil this role, the Board is responsible for oversight of management and the overall corporate governance of the
Company including its strategic direction, establishing goals for management and monitoring the achievement of these
goals.
Appointments to Other Boards
Directors are required to take into consideration any potential conflicts of interest when accepting appointments to other
boards.
Independent Professional Advice
The Board has determined that individual directors have the right in connection with their duties and responsibilities as
directors, to seek independent professional advice at the Company's expense. With the exception of expenses for legal
advice in relation to director's rights and duties, the engagement of an outside adviser is subject to prior approval of the
Chairman and this will not be withheld unreasonably.
Continuous Review of Corporate Governance
Directors consider, on an ongoing basis, how management information is presented to them and whether such information
is sufficient to enable them to discharge their duties as directors of the Company. Such information must be sufficient to
enable the directors to determine appropriate operating and financial strategies from time to time in light of changing
circumstances and economic conditions. The directors recognise that mining exploration is an inherently risky business
and that operational strategies adopted should, notwithstanding, be directed towards improving or maintaining the net
worth of the Company.
ASX Principles of Good Corporate Governance
The Board has reviewed its current practices in light of the revised ASX Corporate Governance Principles and
Recommendations with a view to making amendments where applicable after considering the Company's size and the
resources it has available.
As the Company's activities develop in size, nature and scope, the size of the Board and the implementation of any
additional formal corporate governance committees will be given further consideration.
The Board has adopted the revised Recommendations and the following table sets out the Company's present position in
relation to each of the revised Principles.
22
Genesis Minerals Limited and controlled entities
Corporate Governance Statement continued
ASX Principle
Status Reference/comment
Principle 1: Lay solid foundations for
2.1
2.2
2.3
2.4
2.5
2.6
1.1
1.2
1.3
management and oversight
Companies should establish the
functions reserved to the board
and those delegated to senior
executives and disclose those
functions
Companies should disclose the
process for evaluating the
performance of senior executives
A
A
Companies should provide the
information indicated in the Guide
to reporting on Principle 1
A
(in part)
Principle 2: Structure the board to add
value
A majority of the board should be
independent directors
The chair should be an
independent director
The roles of chair and chief
executive officer should not be
exercised by the same individual
The board should establish a
nomination committee
A
A
A
A
Matters reserved for the Board are included on the Company
website in the Corporate Governance Section.
The remuneration of management and employees is reviewed
by the Managing Director and approved by the Board.
Acting in its ordinary capacity the Board from time to time
carries out the process of considering and determining
performance issues.
Matters reserved for the Board can be viewed on the Company
website.
Given the Group’s background, the nature and size of its
business and the current stage of its development, the board
comprises three directors, two of whom are non-executive. The
board believes that this is both appropriate and acceptable at
this stage of the Group’s development.
The position of Chairman and Managing Director are held by
separate persons.
The full Board is the Nomination Committee. Acting in its
ordinary capacity from time to time as required, the Board
carries out the process of determining the need for screening
and appointing new Directors. In view of the size and resources
available to the Group it is not considered that a separate
Nomination Committee would add any substance to this
process.
Companies should disclose the
process for evaluating the
performance of the board, its
committees and individual
directors
Companies should provide the
information indicated in the Guide
to reporting on Principle 2
N/A Given the size and nature of the Group a formal process for
performance evaluation has not been developed.
A
(in part)
The skills and experience of the Directors are set out in the
Group’s Annual Report and on the website.
Principle 3: Promote ethical and
3.1
3.2
3.3
responsible decision-making
Companies should establish a
code of conduct and disclose the
code
Companies should establish a
policy concerning diversity and
disclose the policy or a summary
of that policy. The policy should
include requirements for the
Board to establish measurable
objectives for achieving gender
diversity and for the Board to
assess annually both the
objectives and progress in
achieving them
Companies should disclose in
each annual report the
measurable objectives for
achieving gender diversity set by
A
N/A
The Group has established a Code of Conduct which can be
viewed on its website.
The Company has established a Diversity Policy, however, the
policy does not include requirements for the board to establish
measurable objectives for achieving gender diversity. Given the
Company’s size and stage of development as an exploration
company, the board does not think it is yet appropriate to
include measurable objectives in relation to gender. As the
Company grows and requires more employees, the Company
will review this policy and amend as appropriate.
N/A
The Company has established a Diversity Policy, however, the
policy does not include requirements for the board to establish
measurable objectives for achieving gender diversity. Given the
Company’s size and stage of development as an exploration
23
Genesis Minerals Limited and controlled entities
Corporate Governance Statement continued
ASX Principle
Status Reference/comment
the Board in accordance with the
diversity policy and progress
towards achieving them
company, the board does not think it is yet appropriate to
include measurable objectives in relation to gender.
A = Adopted
N/A = Not adopted
3.4
3.5
Companies should disclose in
each annual report the proportion
of women employees in the whole
organisation, women in senior
executive positions and women
on the board.
Companies should provide the
information indicated in the Guide
to reporting on Principle 3
Principle 4: Safeguard integrity in financial
4.1
4.2
4.3
4.4
•
reporting
The board should establish an
audit committee
The audit committee should be
structured so that it:
•
consists only of non-executive
directors
consists of a majority of
independent directors
is chaired by an independent
chair, who is not chair of the
board
•
has at least three members
The audit committee should have
a formal charter
Companies should provide the
information indicated in the Guide
to reporting on Principle 4
•
5.1
Principle 5: Make timely and balanced
disclosure
Companies should establish
written policies designed to
ensure compliance with ASX
Listing Rule disclosure
requirements and to ensure
accountability at a senior
executive level for that
compliance and disclose those
policies or a summary of those
policies
Companies should provide the
information indicated in the Guide
to reporting on Principle 5
5.2
Principle 6: Respect the rights of
6.1
shareholders
Companies should design a
communications policy for
promoting effective
communication with shareholders
and encouraging their
participation at general meetings
and disclose their policy or a
summary of that policy
A
A
A
A
A
A
N/A
A
A
A
A
A
The proportion of women employees in the whole organisation
is 33% (excluding directors).
There are currently no women in senior executive positions.
There are currently no women on the board.
The Company only has two non-executive directors.
Directors must obtain the approval of the Chairman of the Board
and notify the Company Secretary before they buy or sell
shares in the Company, and it is subject to Board veto.
Directors must provide the information required by the
Company to ensure Compliance with Listing Rule 3.19A.
The Board receives monthly reports on the status of the
Group’s activities and any new proposed activities. Disclosure is
reviewed as a routine agenda item at each Board Meeting.
In line with adherence to continuous disclosure requirements of
the ASX all shareholders are kept informed of major
developments affecting the Group. This disclosure is through
regular shareholder communications including the Annual
report, Quarterly Reports, the Company Website and the
distributions of specific releases covering major transactions
and events.
24
Genesis Minerals Limited and controlled entities
Corporate Governance Statement continued
ASX Principle
Status Reference/comment
6.2
Companies should provide the
information indicated in the Guide
to reporting on Principle 6
A
The Group has formulated a Communication Policy which is
included in its Corporate Governance Statement on the
Company Website.
A = Adopted
N/A = Not adopted
Principle 7: Recognise and manage risk
7.1
Companies should establish
policies for the oversight and
management of material business
risks and disclose a summary of
those policies
7.2
7.3
7.4
The board should require
management to design and
implement the risk management
and internal control system to
manage the Company’s material
business risks and report to it on
whether those risks are being
managed effectively. The board
should disclose that management
has reported to it as to the
effectiveness of the company’s
management of its material
business risks
The board should disclose
whether it has received assurance
from the chief executive officer (or
equivalent) and the chief financial
officer (or equivalent) that the
declaration provided in
accordance with section 295A of
the Corporations Act is founded
on a sound system of risk
management and internal control
and that the system is operating
effectively in all material respects
in relation to financial reporting
risks
Companies should provide the
information indicated in the Guide
to reporting on Principle 7
Principle 8: Remunerate fairly and
8.1
responsibly
The board should establish a
remuneration committee
N/A While the Group does not have formalised policies on risk
management the Board recognises its responsibility for
identifying areas of significant business risk and for ensuring
that arrangements are in place for adequately managing these
risks. This issue is regularly reviewed at Board meetings and
risk management culture is encouraged amongst employees
and contractors.
Determined areas of risk which are regularly considered
include:
•
performance and funding of exploration activities
budget control and asset protection
status of mineral tenements
compliance with government laws and regulations
safety and the environment
continuous disclosure obligations
•
•
•
•
•
N/A While the Group does not have formalised risk management
policies it recognises its responsibility for identifying areas of
significant business risk and ensuring that arrangements are in
place to adequately manage these risks. This issue is regularly
reviewed at Board meetings and a risk management culture is
encouraged amongst employees and contractors.
A
Assurances received from CEO and CFO (or equivalent) each
year.
A
A
25
Genesis Minerals Limited and controlled entities
Corporate Governance Statement continued
ASX Principle
Status Reference/comment
8.2
The remuneration committee
should be structured so that it:
consists of a majority of
•
independent directors
N/A
•
is chaired by an independent
director
N/A
The Group established a Remuneration Committee consisting
of three non-executive directors, only one of whom is classified
as independent. As there is only one independent director, it is
not possible to have an independent chair that is not chair of
the board. Sourcing alternative directors to strictly comply with
this Principle is considered expensive with costs outweighing
the potential benefits.
The Group has established a Remuneration Committee
consisting of three non-executive directors, only one of whom is
classified as independent. As there is only one independent
director, it is not possible to have an independent chair that is
not chair of the board. Sourcing alternative directors to strictly
comply with this Principle is considered expensive with costs
outweighing the potential benefits.
•
has at least three members
A = Adopted
N/A = Not adopted
8.3
8.4
Companies should clearly
distinguish the structure of non-
executive directors’ remuneration
from that of executive directors
and senior executives
Companies should provide the
information indicated in the Guide
to reporting on Principle 8
A
A
A
Refer to the Annual Report and the Corporate Governance
section of the Company’s website.
A = Adopted
N/A = Not adopted
26
Genesis Minerals Limited and controlled entities
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
YEAR ENDED 30 JUNE 2014
Notes
REVENUE
EXPENDITURE
Depreciation expense
Salaries and employee benefits expense
Exploration expenses
Impairment expense
Corporate expenses
Administration costs
Share based payments expense
2014
$
15,952
(473)
(451,586)
(995,148)
-
(143,777)
(168,526)
(13,547)
2013
$
39,907
(3,573)
(459,759)
(2,008,625)
(22,834)
(156,823)
(308,950)
(31,637)
LOSS BEFORE INCOME TAX
(1,757,105)
(2,952,294)
INCOME TAX BENEFIT/(EXPENSE)
2
-
-
LOSS FOR THE YEAR
(1,757,105)
(2,952,294)
OTHER COMPREHENSIVE (LOSS)/INCOME
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive (loss)/income for the year, net of tax
14,308
14,308
34,512
34,512
TOTAL COMPREHENSIVE LOSS FOR THE YEAR ATTRIBUTABLE
TO MEMBERS OF GENESIS MINERALS LIMITED
(1,771,413)
(2,917,782)
Basic and diluted loss per share (cents per share)
9
(0.91)
(2.17)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction w ith the Notes to the
Consolidated Financial Statements.
27
Genesis Minerals Limited and controlled entities
Consolidated Statement of Financial Position
AT 30 JUNE 2014
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
3
4
5
6
7
8
2014
$
1,239,869
8,415
1,248,284
2013
$
1,109,319
4,477
1,113,796
7,964
7,964
9,333
9,333
1,256,248
1,123,129
410,071
58,942
469,013
31,695
31,695
128,344
53,347
181,691
25,418
25,418
500,708
207,109
755,540
916,020
16,009,161
1,309,634
(16,563,255)
14,440391
1,281,779
(14,806,150)
755,540
916,020
The above Consolidated Statement of Financial Position should be read in conjunction w ith the Notes to the Consolidated Financial
Statements.
28
Genesis Minerals Limited and controlled entities
Consolidated Statement of Changes in Equity
YEAR ENDED 30 JUNE 2014
Notes
Ordinary
Share
Capital
$
Accumulated
Losses
$
Foreign
Currency
Translation
Reserve
$
Options
Reserve
$
Total
$
BALANCE AT 1 JULY 2012
Loss for the year
OTHER COMPREHENSIVE INCOME
Exchange differences on translation of
foreign operations
TOTAL COMPREHENSIVE LOSS
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
Shares issued during the year
Share issue transaction costs
Share based payments
Sub-total
12,397,575
-
11,853,856
(2,952,294)
76,556
-
11,139,075
-
1,759,350
(2,952,294)
8
-
-
-
(2,952,294)
34,512
34,512
-
-
34,512
(2,917,782)
2,201,292
(158,476)
-
2,042,816
-
-
-
(2,952,294)
-
-
-
34,512
-
-
31,636
31,636
2,201,292
(158,476)
31,636
(843,330)
BALANCE AT 30 JUNE 2013
14,440,391
(14,806,150)
111,068
1,170,711
916,020
BALANCE AT 1 JULY 2013
Loss for the year
OTHER COMPREHENSIVE LOSS
Exchange differences on translation of
foreign operations
TOTAL COMPREHENSIVE LOSS
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
Shares issued during the year
Share issue transaction costs
Share based payments
Sub-total
8
7
7
14,440,391
-
(14,806,150)
(1,757,105)
111,068
-
1,170,711
-
916,020
(1,757,105)
-
-
-
(1,757,105)
14,308
14,308
-
-
14,308
(1,742,797)
1,602,012
(33,242)
-
1,568,770
-
-
-
(1,757,105)
-
-
-
14,308
-
-
13,547
13,547
1,602,012
(33,242)
13,547
(160,480)
BALANCE AT 30 JUNE 2014
16,009,161
(16,563,255)
125,376
1,184,258
755,540
The above Consolidated Statement of Changes in Equity should be read in conjunction w ith the Notes to the Consolidated Financial
Statements.
29
Genesis Minerals Limited and controlled entities
Consolidated Statement of Cash Flows
YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Payments for exploration expenditure
Interest received
NET CASH OUTFLOW FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
NET CASH OUTFLOW FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Proceeds from issues of ordinary shares
Payments of share issue costs
NET CASH INFLOW FROM FINANCING ACTIVITIES
NET INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Notes
2014
$
(471,462)
(995,148)
15,952
(1,450,658)
19
2013
$
(957,980)
(1,984,626)
39,907
(2,902,699)
171
171
(21,216)
(21,216)
1,602,013
(33,243)
1,568,770
118,283
1,109,319
12,267
-
2,151,578
(158,476)
1,993,102
(930,813)
2,040,132
-
CASH AND CASH EQUIVALENTS AT THE END OF THE
FINANCIAL YEAR
3
1,239,869
1,109,319
The above Consolidated Statement of Cash Flow s should be read in conjunction w ith the Notes to the Consolidated Financial Statements.
30
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the 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
Group consisting of Genesis Minerals Limited and its subsidiaries (“the Group”). The financial statements are presented in
the Australian currency. Genesis Minerals Limited is a company limited by shares, domiciled and incorporated in Australia.
The financial statements were authorised for issue by the directors on 30 September 2014. The directors have the power
to amend and reissue the financial statements.
(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. Genesis Minerals
Limited is a for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of the Genesis Minerals 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 b y the Group
None of the new standards and amendments to standards that are mandatory for the first time for the financial year
beginning 1 July 2013 affected any of the amounts recognised in the current period or any prior period and are not likely to
affect future periods.
(iii) Early adoption of standards
The Group has not elected to apply any pronouncements before their operative date in the annual reporting period
beginning 1 July 2013.
(iv) Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of
available-for-sale financial assets, which have been measured at fair value.
(v) Going concern
The accounts have been prepared on the going concern basis, which contemplates continuity of normal business activities
and the realisation of assets and settlement of liabilities in the ordinary course of business. The Group incurred a loss from
ordinary activities of $1,757,105 for the year ended 30 June 2014 (2013: $2,952,294). Included within this loss was
exploration expenditure of $995,148 (2013: $2,008,625).
The net working capital position of the Group at 30 June 2014 was $779,271 (2013: $932,105) and the net increase in
cash held during the year was $130,550 (2013: ($930,813)).The Group has expenditure commitments relating to work
programme obligations of their assets of $398,000 which potentially could fall due in the twelve months to 30 June 2015.
The ability of the Group to continue to pay its debts as and when they fall due is dependent upon the Group successfully
raising additional share capital and ultimately developing one of its mineral properties. These conditions indicate a material
uncertainty that may cast significant doubt about the ability of the Group to continue as a going concern.
The Directors believe it is appropriate to prepare these accounts on a going concern basis because:
•
•
the Directors have an appropriate plan to raise additional funds as and when it is required. In light of the Group’s
current exploration projects, the Directors believe that the additional capital required can be raised in the market; and
the Directors have an appropriate plan to contain certain operating and exploration expenditure if appropriate funding is
unavailable.
Should the Group not be able to successfully raise capital if required, it may be necessary to sell some of its assets, farm out
exploration projects, reduce exploration expenditure by various methods including surrendering less prospective tenements.
Although the Directors believe that they will be successful in these measures, if they are not, the Group may be unable to
continue as a going concern and therefore may be unable to realise its assets and extinguish its liabilities in the normal
course of business and at the amounts stated in the financial report.
(b) Principles of consolidation
The financial statements incorporate the assets, liabilities and results of entities controlled by Genesis Minerals Limited at
the end of the reporting period. A controlled entity is any entity over which Genesis Minerals Limited has the power to
govern the financial and operating policies so as to obtain benefits from its activities. Control will generally exist when the
parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the
power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.
A list of controlled entities is contained in Note 15 to the financial statements.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the financial statements
as well as their results for the year then ended.
31
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In preparing the financial statements, all inter-group balances and transactions between entities in Genesis Minerals
Limited have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with those adopted by the parent entity.
(c) Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses and results in the
consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or
businesses under common control. The acquisition method requires that for each business combination, one of the
combining entities must be identified as the acquirer (i.e. parent entity). The business combination will be accounted for as
at the acquisition date, which is the date that control over the acquiree is obtained by the parent entity. At this date, the
parent shall recognise, in the consolidated accounts and subject to certain limited exceptions, the fair value of the
identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised
where a present obligation has been incurred and its fair value can be reliably measured.
The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted for the
measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised in the
acquiree where less than 100% ownership interest is held in the acquiree.
The consideration transferred for a business combination shall form the cost of the investment in the separate financial
statements. Such consideration is measured at fair value at acquisition date and consists of the sum of the assets
transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interes ts
issued by the acquirer.
Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration
arrangement. Any obligation incurred relating to contingent consideration is classified as either a financial liability or equity
instrument, depending upon the nature of the arrangement. Rights to refunds of consideration previously paid are
recognised as a receivable. Subsequent to initial recognition, contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset
or a liability is remeasured each reporting period to fair value through the statement of comprehensive income, unless the
change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to Statement of Profit or Loss
and Other Comprehensive Income.
(c) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the full Board of Directors.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollars, which is Genesis Minerals Limited's functional and presentation currency.
(ii) Transactions and b alances
Foreign currency transactions are recorded at the spot rate on the date of the transaction.
At the end of the reporting period:
•
Foreign currency monetary items are translated using the closing rate;
• Non-monetary items that are measured at historical cost are translated using the exchange rate at the date of
the transaction; and
• Non-monetary items that are measured at fair value are translated using the rate at the date when fair value
was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different
from those at which they were translated on initial recognition or in prior reporting periods are recognised through
profit or loss, except where they relate to an item of other comprehensive income or whether they are deferred in
equity as qualifying hedges.
32
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The financial results and position of foreign operations whose functional currency is different from Genesis Minerals
Limited's presentation currency are translated as follows:
•
•
•
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period where the average rate
approximates the rate at the date of the transaction; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to Genesis Minerals Limited's
foreign currency translation reserve in the consolidated statement of financial position. These differences are
recognised in the consolidated statement of profit or loss and other comprehensive income in the period in which the
operation is disposed.
(e) Revenue and other income
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised.
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
assets.
(f) Income tax
The income tax expense for the year comprises current income tax expense and deferred tax expense.
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities
(assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted by the balance date
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year
as well as unused tax losses.
Current and deferred income tax expense is charged or credited directly to equity instead of the profit or loss when the
tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from
the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or
taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting year.
Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of
the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference
can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available
against which deductible temporary differences can be utilised.
33
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Current assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities
where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
(g) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the
legal ownership that are transferred to the Group are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of
the leased property or the present value of the minimum lease payments, including any guaranteed residual values.
Lease payments are allocated between the reduction of the lease liability and the lease interest expense for that period.
Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the Group
will obtain ownership of the asset or over the term of the lease.
Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged
as expenses on a straight-line basis over the life of the lease term.
(h) Impairment of assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be
impaired. The assessment will include the consideration of external and internal sources of information. If such an
indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being
the higher of the asset's fair value less costs to sell and value in use to the asset's carrying value. Value in use is
calculated by discounting the estimated future cash flows of the asset or cash-generating unit (CGU) at a pre-tax
discount rate reflecting the specific risks in the asset / CGU. Any excess of the asset's carrying value over its recoverable
amount is expensed to the consolidated statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Where the future economic benefits of the asset are not primarily dependent upon the asset's ability to generate
net cash inflows and when Genesis Minerals Limited would, if deprived of the asset, replace its remaining future
economic benefits, value in use is determined as the depreciated replacement cost of an asset.
Impairment losses recognised in respect of CGU's are allocated first to reduce the carrying amount of goodwill to nil and
then to the other assets in the unit in proportion to their carrying amount.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Assets, other than goodwill that have an allocated impairment loss are reviewed for reversal indicators at the end of
each reporting period. After recognition of an impairment loss, the amortisation charge for the asset is adjusted in future
periods to allocate the asset's revised carrying amount on a systematic basis over its remaining useful life.
Impairment losses are recognised as an expense immediately, unless the relevant asset is property, plant and
equipment held at fair value (other than investment property carried at a revalued amount) in which case the
impairment loss is treated as a revaluation decrease as described in the accounting policy for property, plant and
equipment.
Where an impairment loss on a revalued asset is identified, this is debited against the revaluation surplus in respect
of the same class of asset to the extent that the impairment loss does not exceed the amount in the revaluation
surplus for that same class of asset.
34
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less which are convertible to a known amount of cash and subject
to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are shown within short-term borrowings
in current liabilities on the consolidated statement of financial position.
FINANCIAL INSTRUMENTS
INITIAL RECOGNITION AND MEASUREMENT
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is the equivalent to the date that the Group commits itself to either
the purchase or sale of the asset.
Financial instruments are initially measured at fair value plus transactions costs, except where the instrument is classified
'at fair value through profit or loss' in which case transaction costs are expensed to profit or loss immediately.
CLASSIFICATION AND SUBSEQUENT MEASUREMENT
Financial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate
method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled,
between knowledgeable, willing parties in arm's length transaction. Where available, quoted prices in an active market are
used to determine fair value. In other circumstances, valuation techniques are adopted.
The classification of financial instruments depends on the purpose for which the investments were acquired.
Management determines the classification of its investments at initial recognition and at the end of each reporting
period for held-to-maturity assets.
Loans and receivab les
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to mature within 12
months after the end of the reporting period.
SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and
share options for immediate are recognised as a deduction from equity, net of any tax effects.
DERECOGNITION
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and
benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either
discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or
transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognised in profit or loss.
(M) PROPERTY, PLANT AND EQUIPMENT
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any
accumulated depreciation and impairment losses.
35
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
PLANT AND EQUIPMENT
Plant and equipment are measured on the cost basis. Cost includes expenditure that is directly attributable to the asset.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash
flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have
been discounted to their present values in determining recoverable amounts.
DEPRECIATION
The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding
freehold land, is depreciated on a straight-line basis over the asset's useful life to the Group commencing from the time
the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period
of the lease or the estimated useful lives of the improvements. Land is not depreciated.
The estimated useful lives used for each class of depreciable assets are:
CLASS OF FIXED ASSET USEFUL LIFE (YEARS)
Plant and Equipment 2 to 5
The assets' residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, at the end
of each reporting period.
(N) EXPLORATION AND DEVELOPMENT EXPENDITURE
Exploration, evaluation costs are expensed as incurred.
(O) TRADE AND OTHER PAYABLES
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services
received by the Group during the reporting period which remain unpaid. The balance is recognised as a current liability
with the amounts normally paid within 30 days of recognition of the liability.
(P) PROVISIONS
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it
is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are measured at the present value of management's best estimate of the outflow required to settle the
obligation at the end of the reporting period. The discount rate used is a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision due
to the unwinding of the discount is taken to finance costs in the consolidated statement of profit or loss and other
comprehensive income.
Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of the
reporting period.
(Q) EMPLOYEE BENEFITS
Provision is made for the Group's liability for employee benefits arising from services rendered by employees to the end
of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the
amounts expected to be paid when the liability is settled.
36
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Employee benefits payable later than one year have been measured at the present value of the estimated future cash
outflows to be made for those benefits. In determining the liability, consideration is given to employee wage
increases and the probability that the employee may satisfy vesting requirements. Those cashflows are discounted
using market yields on national government bonds with terms to maturity that match the expected timing of cashflows.
EQUITY-SETTLED COMPENSATION
The Group operates equity-settled share-based payment share, right and option schemes. The fair value of the equity to
which personnel become entitled is measured at grant date and recognised as an expense over the vesting period,
with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The
fair value of options is ascertained using a Black-Scholes pricing model which incorporates all market vesting conditions.
The amount to be expensed is determined by reference to the fair value of the options, rights or shares granted. This
expense takes in account any market performance conditions and the impact of any non-vesting conditions but ignores
the effect of any service and non-market performance vesting conditions.
Non-market vesting conditions are taken into account when considering the number of options expected to vest. At the end
of each reporting period, the Group revises its estimate of the number of options or rights which are expected to vest
based on the non-market vesting conditions. Revisions to the prior period estimate are recognised in profit or loss and
equity.
(R) BORROWING COSTS
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a
substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time
as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(S) EARNINGS PER SHARE
Genesis Minerals Limited presents basic and diluted earnings per share information for its ordinary shares.
Basic earnings per share is calculated by dividing the profit attributable to owners of the company by the weighted
average number of ordinary shares outstanding during the year.
Diluted earnings per share adjusts the 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.
(T) GOODS AND SERVICES TAX (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the
cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the consolidated
statement of financial position are shown inclusive of GST.
Cash flows are presented in the consolidated statement of cash flows on a gross basis, except for the GST
component of investing and financing activities, which are disclosed as operating cash flows.
(U) CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The directors evaluate estimates and judgments incorporated into the financial statements based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events and are
based on current trends and economic data, obtained both externally and within the Group.
37
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending
on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (ie
unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine
fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (ie the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most
advantageous market available to the entity at the end of the reporting period (ie the market that maximises the receipts
from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction
costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant's ability to use the asset
in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective
note to the financial statements.
Valuation techniques
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation
techniques to measure the fair value of the asset or liability, The Group selects a valuation technique that is appropriate in
the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant
data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques
selected by the Group are consistent with one or more of the following valuation approaches:
Market approach: valuation techniques that use prices and other relevant information generated by market transactions for
identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single
discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the
asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those
techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are
developed using market data (such as publicly available information on actual transactions) and reflect the assumptions
that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs
for which market data is not available and therefore are developed using the best information available about such
assumptions are considered unobservable.
Fair value hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value
measurements into one of three possible levels based on the lowest level that an input that is significant to the
measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly or indirectly
38
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Level 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all
significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more
significant inputs are not based on observable market data, the asset or liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
(i) if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or
(ii) if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy (i.e.
transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances occurred.
KEY ESTIMATES - IMPAIRMENT
The Group assesses impairment at the end of each reporting year by evaluating conditions specific to the Group that may
be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use
calculations which incorporate various key assumptions.
KEY ESTIMATES - SHARE BASED PAYMENTS
The Group measures the cost of equity-settled transactions with personnel by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by an external valuer using a Black
and Scholes model in the case of options and, in the case of performance rights, a hybrid share option pricing model
that simulates the share price as at the expiry date using a Monte-Carlo model. The valuation involves making key
estimates such as volatility and expected exercise date.
(V) ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS
New and revised AASB’s affecting amounts reported and/or disclosures in the financial statements
In the current year, the Group has applied a number of new and revised AASB’s issued by the Australian Accounting
Standards Board (AASB) that are mandatorily effective from an accounting period on or after 1 January 2013.
The Group has applied AASB 13 ‘Fair Value Measurement’ for the first time in the current year. AASB 13 establishes a
single source of guidance for fair value measurements and disclosures about fair value measurements. The scope of
AASB 13 is broad; the fair value measurement requirements of AASB 13 apply to both financial instrument items and non-
financial instrument items.
AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair
value under AASB 13 is an exit price regardless of whether that price is directly observable or estimated using another
valuation technique. Also, AASB 13 includes extensive disclosure requirements.
In addition, standards on consolidation, joint arrangements, associates and disclosures were adopted. The impact of the
application of these standards is not material.
Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not
yet effective.
The Group does not anticipate that there will be a material effect on the financial statements from the adoption of these
standards.
39
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Standard/Interpretation
Effective for annual
reporting periods
beginning on or after
Expected to be initially
applied in the financial
year ending
AASB 9 ‘Financial Instruments’, and the relevant amending standards
1 January 2017
30 June 2018
AASB 1031 ‘Materiality’ (2013)
1 January 2014
30 June 2015
AASB 2012-3 “Amendments to Australian Accounting Standards –
Offsetting Financial Assets and Financial Liabilities’
1 January 2014
30 June 2015
AASB 2013-3 “Amendments to AASB 135 – Recoverable Amount
Disclosures for Non Financial Assets’
1 January 2014
30 June 2015
AASB 2013-5 “Amendments to Australian Accounting Standards –
Investment Entities’
1 January 2014
30 June 2015
AASB 2013-9 “Amendments to Australian Accounting Standards –
Conceptual Framework, Materiality and Financial Instruments’
1 January 2014
30 June 2015
30 JUNE 2014
2014
$
2013
$
2. INCOME TAX EXPENSE
(a) The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax expense as
follows:
Statement of Profit or Loss and Other Comprehensive Income
Current income tax
Deferred tax
-
-
-
-
-
-
(b) The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax expense as
follows:
Loss from continuing operations before income tax expense
(1,757,105)
(2,952,294)
Prima facie tax benefit at the Australian tax rate of 30%
Add:
Tax effect of :
Share-based payments
Expenses incurred in deriving non-assessable non-exempt income
Sundry items
Movements in unrecognised temporary differences
Tax effect of current year tax losses for which no deferred tax
asset has been recognised
Income tax expense
(527,132)
(885,688)
4,064
298,686
3,630
(76,339)
(297,090)
297,090
17,205
602,238
1,276
23,540
(241,429)
241,429
-
-
40
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
2. INCOME TAX EXPENSE (continued)
At 30 June 2014 Genesis Minerals Limited had unused tax losses for which no deferred tax asset has been recognised
in the amount of approximately $2,980,207 (2013: $2,690,317). The availability of these losses is subject to
satisfying Australian taxation legislation requirements. The deferred tax asset attributable to tax losses has not been
brought to account in these financial statements because the Directors believe it is not presently appropriate to regard
realisation of the future income tax benefits probable.
3. CASH AND CASH EQUIVALENTS
The following table details the components of cash and cash equivalents as reported in the statement of financial
position.
Cash at bank and in hand
Short-term deposits
Cash and cash equivalents
2014
$
2013
$
321,530
918,339
1,239,869
50,251
1,059,068
1,109,319
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash
requirements of the Group, and earn interest at the respective short-term deposit rates.
4. TRADE AND OTHER RECEIVABLES
Other receivables
2014
$
8,415
8,415
2013
$
4,477
4,477
The Group expects the above trade and other receivables to be recovered within 12 months of 30 June 2014 and
therefore considers the amounts shown above at cost to be a close approximation of fair value.
Trade and other receivables expose Genesis Minerals Limited to credit risk as potential for financial loss arises should a
debtor fail to repay their debt in a timely manner. Disclosure on credit risk can be found at Note 11(a).
5. PLANT AND EQUIPMENT
Plant and equipment
Cost
Accumulated depreciation
Net book amount
Plant and equipment
Opening net book amount
Exchange differences
Disposals
Depreciation charge
Closing net book amount
6. TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
17,470
(9,506)
7,964
9,333
(724)
172
(473)
7,964
86,794
323,277
410,071
28,194
(18,861)
9,333
12,906
-
-
(3,573)
9,333
78,177
50,167
128,344
41
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
7.
ISSUED CAPITAL
259,837,912 (30 June 2013: 165,657,799) Ordinary shares
Value of conversion rights - Convertible Notes
Share issue costs written off against issued capital
MOVEMENT IN ORDINARY SHARES
Balance at 1 July 2013
Capital Raising 27 March 2014
Capital raising 14 May 2014
Less share Issue Costs
16,821,937
15,243,924
25,633
25,633
(838,409)
(829,166)
16,009,161
14,440,391
No.
165,657,799
24,848,649
69,331,464
-
$
14,440,391
422,427
1,179,585
(33,242)
259,837,912
16,009,161
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to
the number of shares held
At the shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise
each shareholder has one vote on a show of hands
OPTIONS
(a) Options on issue
Exercisable at 15 cents, on or before 23 August 2013
Exercisable at 20 cents, on or before 23 August 2013
Exercisable at 31 cents, on or before 30 November 2013
Exercisable at 15 cents, on or before 1 Mar 2014
Exercisable at 22 cents, on or before 31 Dec 2014
Exercisable at 20 cents, on or before 1 Mar 2015
Exercisable at 12 cents, on or before 30 Nov 2015
(b) Movements in options on issue
Beginning of the financial year
Issued during the year:
− Exercisable at 12 cents, on or before 30 Nov 2015
− Expired on 15 May 2013, exercisable at 20 cents
− Expired on 15 May 2013, exercisable at 20 cents
− Expired on 15 May 2013, exercisable at 20 cents
− Expired on 23 August 2013, exercisable at 20 cents
− Expired on 23 August 2013, exercisable at 20 cents
− Expired on 24 Nov 2013, exercisable at 31 cents
− Expired on 1 March 2014, exercisable at 15 cents
2014
9,500,000
13,510,596
750,000
2013
75,000
75,000
2,400,000
13,510,596
9,500,000
13,510,596
750,000
23,760,596
39,821,192
39,821,192
53,681,788
750,000
(600,000)
(13,510,596)
(500,000)
(75,000)
(75,000)
(2,400,000)
(13,510,596)
End of the financial year
23,760,596
39,821,192
CAPITAL MANAGEMENT
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they
may continue to provide returns for shareholders and benefits for other stakeholders.
42
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
ISSUED CAPITAL (continued)
7.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit
facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk
management is the current working capital position against the requirements of the Group to meet exploration programmes
and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating
requirements, with a view to initiating appropriate capital raisings as required.
The working capital position of the Group at 30 June 2014 is $779,271 (2013: $932,105)
8. RESERVES
Nature and purpose of reserves
(i) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency translation
reserve, as described in note 1(d). The reserve is recognised in profit and loss when the net investment is disposed of.
(ii) Share-b ased payments reserve
The share-based payments reserve is used to recognise the fair value of options issued.
9.
LOSS PER SHARE
(a) Reconciliation of earnings used in calculating loss per share
Loss attributable to the owners of the Company used in calculating
basic and diluted loss per share
2014
$
2013
$
(1,757,105)
(2,952,294)
(b) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator
in calculating basic and diluted loss per share
Number of shares Number of shares
193,346,503
135,675,986
EPS (cents per share)
(0.91)
(2.17)
10. COMMITMENTS
Exploration commitments
The Group has certain commitments to meet minimum expenditure requirements on the mineral exploration assets it has an
interest in. Outstanding exploration commitments are as follows:
within one year
398,000
398,000
500,000
500,000
11. FINANCIAL RISK MANAGEMENT
The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects and ensure that net cash flows are sufficient to support the delivery of the Company's
financial targets whilst protecting future financial security. The Group continually monitors and tests its forecasted
financial position against these objectives.
The main risks Genesis Minerals Limited is exposed to through its financial instruments are credit risk, liquidity risk and
market risk consisting of interest rate risk, currency risk and commodity price risk.
The Group's financial instruments consist mainly of deposits with banks, accounts receivable and payable and loans to
subsidiaries.
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the
accounting policies to these financial statements, are as follows:
43
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
11. FINANCIAL RISK MANAGEMENT (continued)
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial Liabilities
Trade and other payables
Total financial liabilities
2014
$
1,239,869
8,415
1,248,284
2013
$
1,109,319
4,477
1,113,796
410,071
410,071
128,344
128,344
FINANCIAL RISK MANAGEMENT POLICIES
The Board of Directors has overall responsibility for the establishment of Genesis Minerals Limited’s financial risk
management framework. This includes the development of policies covering specific areas such as foreign exchange
risk, interest rate risk, credit risk and the use of derivatives.
Mitigation strategies for specific risks faced are described below:
The main risks Genesis Minerals Limited is exposed to through its financial instruments are credit risk, liquidity risk and
market risk relating to interest rate risk, currency risk and commodity price risk.
(A) CREDIT RISK
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of
contract obligations that could lead to a financial loss to Genesis Minerals Limited and arises principally from Genesis
Minerals Limited's receivables.
The Group’s maximum exposure to credit risk at the reporting date in relation to each class of recognised financial
assets is the carrying amount of those assets as indicated in the statement of financial position. Other than cash
balances and term deposits held at bank the Group does not have any significant credit risk exposure to any single
counterparty or any group of counterparties having similar characteristics.
The Group's policy for reducing credit risk is to ensure cash is only invested with counterparties with Standards and
Poor rating of at least -AA.
(B) LIQUIDITY RISK
Liquidity risk arises from the possibility that Genesis Minerals Limited might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following
mechanisms:
•
preparing forward-looking cash flow analysis in relation to its operational, investing and financial
activities which are monitored on a monthly basis;
• monitoring the state of equity markets in conjunction with the Group's current and future funding
requirements, with a view to appropriate capital raisings as required;
• managing credit risk related to financial assets;
•
•
only investing surplus cash with major financial institutions; and
comparing the maturity profile of current financial liabilities with the realisation profile of current financial
assets.
(C) MARKET RISK
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices.
44
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
11. FINANCIAL RISK MANAGEMENT (continued)
i. Price risk
Given the current level of operations, the Group is not exposed to price risk.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the Chilean Peso ("CLP"). Foreign exchange risk arises from future commercial
transactions and recognises assets and liabilities denominated in a currency that is not the Group's functional currency
and net investments in foreign operations. The Group has not formalised a foreign currency risk management policy
however, it monitors its foreign currency expenditure in light of exchange rate movements. At 2014, the Group's Net
CLP exposure was $5,979,348 (2013: ($1,541,672)) which translated to $11,523 (2013: ($3,237)) AUD.
Had the AUD weakened/strengthened by 10% against the CLP, there would have been a nil (2013: nil) impact on the
Group's post tax losses and an immaterial movement to the Group's equity for both years.
iii. Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the
reporting period, whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate
financial instruments. The Group is also exposed to earnings volatility on floating rate instruments.
Interest rate risk is managed by maintaining cash in interest bearing accounts and having no interest bearing liabilities.
ii. Sensitivity analysis
The following sensitivity analysis is based on the interest rate risk exposures in existence at the end of the reporting
period.
This analysis assumes that other variables are held constant.
PROFIT
EQUITY
80 BASIS POINTS
INCREASE
80 BASIS POINTS
DECREASE
80 BASIS POINTS
INCREASE
80 BASIS POINTS
DECREASE
2014
2013
9,750
9,500
(9,750)
(9,500)
9,750
9,500
(9,750)
(9,500)
The net exposure at the end of the reporting period is representative of what Genesis Minerals Limited was and is
expecting to be exposed to at the end of the next twelve months.
(D) FAIR VALUE ESTIMATION
The fair values of financial assets and financial liabilities can be compared to their carrying values as presented in the
consolidated statement of financial position. Fair values are those amounts at which an asset could be exchanged, or
a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
There are no financial assets or liabilities which are required to be revalued on a recurring basis.
12. OPERATING SEGMENTS
Identification of reportable segments
For management purposes, the Group is organised into two main operating segments, the exploration of minerals in
Chile and the corporate activities and administrative costs in Australia. The accounting policies applied for internal
reporting purposes are consistent with those applied in the preparation of these financial statements.
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the 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.
45
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
12. OPERATING SEGMENTS (continued)
Inter-segment transactions
An internally determined transfer price is set for all inter-entity sales. This price is re-set quarterly and is based on what
would be realised in the event the sale was made to an external party at arm’s-length. All such transactions are eliminated
on consolidation for the Group’s financial statements.
Inter-segment loans payable and receivable are initially recognised at the consideration received net of transaction costs. If
inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on
market interest rates. This policy represents a departure from that applied to the statutory financial statements.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of
economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their
nature and physical location.
Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible
assets have not been allocated to operating segments.
Segment liab ilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of
the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated.
Segment liabilities include trade and other payables and certain direct borrowings.
Unallocated items
The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not
considered part of the core operations of the segment:
•
Head office and other administration costs.
SEGMENT PERFORMANCE
REVENUE
Corporate interest revenue
Interest - investment
Total segment revenue
SEGMENT RESULTS
Depreciation expense
Employee benefits expense
Share based payments
Other expenses
SEGMENT ASSETS
Segment operating assets
Other assets
Total segment assets
SEGMENT LIABILITIES
Segment operating
liabilities
Inter-segment
eliminations
CHILE
AUSTRALIA
TOTAL
2014
$
2013
$
2014
$
2013
$
2014
$
15,952
15,952
39,850
57
39,907
15,952
15,952
2013
$
39,850
57
39,907
(361,042)
(690,244)
-
(361,042)
(690,244)
(214)
(451,586)
(2,241)
(459,759)
(214)
(451,586)
(2,241)
(459,759)
(13,547)
(31,636)
(13,547)
(31,636)
(946,668)
(1,808,321)
(946,668)
(1,808,321)
(361,042)
(690,244)
(1,396,063)
(2,262,050)
(1,757,105) (2,952,294)
31,147
28,210
-
1,225,101
-
1,094,919
31,147
1,225,101
28,210
1,094,919
31,147
28,210
1,225,101
1,094,919
1,256,248
1,123,129
(4,180,888)
(4,237,890)
-
(4,180,888)
(4,237,890)
4,148,533
4,201,499
4,148,533
4,201,499
46
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
12. OPERATING SEGMENTS (continued)
Other corporate and
administrative liabilities
(468,353)
(170,718)
(468,353)
(170,718)
Total segment liabilities
(4,180,888)
(4,237,890)
3,680,180
4,030,781
(500,708)
(207,109)
13. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Key management personnel compensation
Short-term benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
396,000
25,000
-
-
-
421,000
395,689
25,000
-
-
-
420,689
Detailed remuneration disclosures are provided in the remuneration report on pages 17-19..
14. REMUNERATION OF AUDITORS
2014
$
2013
$
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:
Audit services
Bentleys - audit and review of financial reports
Total remuneration for audit services
15. CONTINGENCIES
There are no contingent liabilities or contingent assets of the Group at balance date.
25,000
25,000
27,500
27,500
16. RELATED PARTY TRANSACTIONS
(a) Parent entity
The ultimate parent entity within the Group is Genesis Minerals Limited.
(b) Subsidiaries
Interests in subsidiaries are set out in note 17.
(c) Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including any director (whether executive or otherwise) of that entity are considered key
management personnel.
For details of remuneration disclosures relating to key management personnel, refer to Note 13: Key management
Personnel Disclosures (KMP) and the remuneration report in the Directors' Report.
There were no other related party transactions during the year.
47
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
17. CONTROLLED ENTITIES
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
Country of
Incorporation
Class of Shares
Equity Holding
(1)
Genesis Minerals (Chile) S.A.
Chile
Ordinary
(1) The proportion of ownership interest is equal to the proportion of voting power held.
2014
%
100
2013
%
100
18. EVENTS AFTER THE BALANCE SHEET DATE
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly
affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial
years.
19. CASH FLOW INFORMATION
(a) Reconciliation of net loss after income tax to net cash outflow
from operating activities
Net loss for the year
Non-Cash Items
Depreciation of non-current assets
Share based payments expense
Shares issued in satisfaction of exploration expenses
Accretion expense on convertible notes
Net exchange differences
Change in operating assets and liabilities, net of effects from
purchase of controlled entities
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Increase in provisions
Net cash outflow from operating activities
2014
$
2013
$
(1,757,105)
(2,952,294)
473
13,547
2,765
3,573
81,350
-
-
-
(3,937)
281,727
11,872
(1,450,658)
14,072
(83,411)
34,011
(2,902,699)
(b) Non-cash investing and financing activities
There were no non-cash investing and financing activities during either the 2014 or 2013 financial years.
20. SHARE BASED PAYMENTS
The Group established the Genesis Minerals Limited Option Plan on 15 May 2007. On 7 November 2012 the Group
came to an agreement to grant 750,000 options to the Chilean Manager of the Group's South American asset base.
The fair value for the options granted is deemed to represent the value of the employee services received over the
vesting period. The 750,000 options were issued in 3 tranches, each containing 250,000 options. Each tranche
contained the following vesting conditions:
•
•
•
Tranche 1 - vest immediately
Tranche 2 - vest on 1 November 2013
Tranche 3 - vest on 1 November 2014
The expense arising from the options issued during year was nil 2013: ($31,637). The value was calculated by using
a Black- Scholes option pricing model applying the following inputs:
48
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2014
20.
SHARE BASED PAYMENTS (continued)
Underlying share price (cents):
Weighted average exercise price (cents):
Weighted average life of the option (years):
Expected share price volatility (%):
Risk-free interest rate (%):
Set out below are summaries of the options granted:
Options outstanding at 1 July 2012
Granted during the year
Options outstanding at 30 June 2013
Granted during the year
Expired during the year
Options outstanding at 30 June 2014
2014
2013
-
-
-
-
-
9.0
12
3
128.00
2.79
Number of
options
Weighted
average exercise
price (cents)
13,150,000
750,000
13,900,000
-
3,650,000
10,250,000
23.0
12.0
22.4
-
28.2
21.3
2014
$
2013
$
21. PARENT ENTITY INFORMATION
The following information relates to the parent entity, Genesis Minerals Limited, at 30 June 2014. The information presented
here has been prepared using accounting policies consistent with those presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Loss for the year
Total comprehensive loss for the year
1,224,779
321
1,225,100
(436,658)
(31,695)
(468,353)
1,094,382
5,35
1,094,917
(145,299)
(25,417)
(170,716)
15,985,161
1,184,278
(16,412,692)
756,747
14,440,391
1,170,711
(14,686,901)
924,201
(1,749,791)
(1,749,791)
(2,871,464)
(2,871,464)
The parent entity did not have any contingent liabilities, or any contractual commitments for the acquisition of property, plant
and equipment, as at 30 June 2013 or 30 June 2014.
49
Genesis Minerals Limited and controlled entities
Directors' Declaration
In the directors’ opinion:
(a)
(b)
(c)
the financial statements and notes set out on pages 27 to 49 are in accordance with the Corporations Act 2001,
including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
giving a true and fair view of the Group’s financial position as at 30 June 2014 and of its performance for the
financial year ended on that date;
(ii)
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due
and payable; and
a statement that the attached financial statements are in compliance with International Financial Reporting Standards
has been included in the notes to the financial statements.
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 the directors.
Michael Fowler
Managing Director
Perth, 30 September 2014
50
We have audited the accompanying financial report of Genesis Minerals Limited (“the
Company”) and Controlled Entities (“the Consolidated Entity”), which comprises the
statement of financial position as at 30 June 2014, and the statement of profit or loss and
other comprehensive income, statement of changes in equity and statement of cash
flows for the year then ended, notes comprising a summary of significant accounting
policies and other explanatory information, and the directors’ declaration of the
Consolidated Entity, comprising the Company and the entities it controlled at the year’s
end or from time to time during the financial year.
The directors of the Company are responsible for the preparation and fair presentation of
the financial report in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that is free from material
misstatement, whether due to fraud or error. In Note 1, the directors also state, in
accordance with Accounting Standards AASB 101: Presentation of Financial Statements,
that the financial statements comply with International Financial Reporting Standards.
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. These Auditing
Standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance whether
the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgment, 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 entity’s preparation and fair presentation of the
financial report 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 entity’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.
In conducting our audit, we followed applicable independence requirements of Australian professional ethical
pronouncements and the Corporations Act 2001.
In our opinion:
a. The financial report of Genesis Minerals Limited is in accordance with the Corporations Act 2001,
including:
i.
giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2014 and of its
performance for the year ended on that date; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001;
b. The financial statements also comply with International Financial Reporting Standards as disclosed in
Note 1.
Without qualifying our opinion, we draw attention to Note 1 in the financial report which indicates that the
Consolidated Entity had operating cash outflows of $1,757,105 during the year ended 30 June 2014. This
condition, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty which
may cast significant doubt about the ability of the Consolidated Entity to continue as a going concern and
whether it will realise its assets and extinguish its liabilities in the normal course of business and at the
amounts stated in the financial report.
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2014.
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
In our opinion, the Remuneration Report of Genesis Minerals Limited for the year ended 30 June 2014,
complies with section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
DOUG BELL CA
Director
Dated at Perth this 30th day of September 2014
Genesis Minerals Limited and controlled entities
ASX Additional Information
Additional information required by Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The
information is current as at 26 September 2014.
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
and over
The number of shareholders holding less than a marketable parcel of shares are:
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted ordinary shares are:
Ordinary shares
Number of holders Number of shares
15
27
47
256
216
561
52
788
90,085
413,850
10,811,584
248,521,605
259,837,912
GENESIS MINERALS LIMITED
Rank Name
1
2
3
4
5
MR MICHAEL GEORGE FOTIOS
TECK RESOURCES LIMITED
INVESTMET LIMITED
BOTSIS HOLDINGS PTY LTD
MR DENIS JOHN REYNOLDS
6 WYLLIE GROUP PTY LTD
7 WESTORIA RESOURCE INVESTMENTS LTD
8
9
ARGONAUT EQUITY PARTNERS PTY LIMITED
ARGONAUT SECURITIES (NOMINEES) PTY LTD
10 MR GRANT POVEY
11
12
13
14
15
PERSHING AUSTRALIA NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
STATELINE INVESTMENTS PTY LTD
MR JEFFREY ARTHUR BROOKS + MRS CAMILLE DIANNE BROOKS
TAMPILO PTY LTD
16 WALLOON SECURITIES PTY LTD
17 MR NICHOLAS SIMON DRAPER + MRS MELINDA JANE DRAPER
18
19
DELTA RESOURCE MANAGEMENT PTY LTD
BUNDA HOLDINGS PTY LTD
20 MR HENRY WIECHECKI
Total
Units %
19,064,415
16,321,283
11,945,383
11,764,706
10,000,000
9,747,224
7,121,324
5,535,939
5,000,000
4,442,052
4,413,000
3,680,000
3,081,000
3,038,860
3,000,000
3,000,000
2,941,177
2,937,500
2,843,750
2,750,000
7.34
6.28
4.60
4.53
3.85
3.75
2.74
2.13
1.92
1.71
1.70
1.42
1.19
1.17
1.15
1.15
1.13
1.13
1.09
1.06
132,627,613
51.04
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations
Act 2001 are:
Investmet Ltd
(d) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
Number of Shares
16,321,283
53
Genesis Minerals Limited and controlled entities
ASX Additional Information continued
(e) Unquoted Securities
As at 26 September 2014, the Company has a total of unlisted options as follows:
Number of Options
Number of Holders
Exercise Price
9,500,000
13,510,596
750,000
23,760,596
5
207
1
635
$0.22
$0.20
$0.12
Unlisted Option holder holding greater than 20% of a class of unlisted options
Expiry Date
31/12/2014
01/03/2015
30/11/2015
Unlisted options exercisable at $0.20 expiring on 31/12/2014
Mr D Delaney
Mr M Fowler
Mr M Fotios
No of Options Held
4,000,000
2,000,000
2,000,000
Unlisted options exercisable at $0.12 expiring on 30/11/215
Mr S Mandujano
No of Options Held
750,000
% Held
42%
21%
21%
% Held
100%
(f) Schedule of interests in mining tenements
Project
Country
Tenement Name
Tenement ID
Interest
Viking
Viking
Viking
Viking
Viking
Viking
Viking
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Las Opeñas
Argentina
Espota
Espota
Fierro
Fierro
Fortuna
Fortuna
Castaños
Castaños
Castaños
Castaños
Castaños
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
E63/1078
E63/1085
E63/1086
E63/1087
E63/1172
E63/1196
E63/1198
1249-T-05
414.537-T-04
414.577-T-2004
425.342-T-03
425.343-T-03
1124.022-T-2014
425.450-T-03
1124.208-T-09
041124.208-T-09
1124.609-T-10
414.138-T-04
414.137-T-04
100%
100%
100%
100%
100%
100%
100%
100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
Moria
Tocota
Fierro 2
Fierro 1
54