Genesis Minerals Limited
and controlled entities
ABN 72 124 772 041
Annual Financial Report and Directors’
Report
for the year ended 30 June 2015
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
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4
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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 2015.
Genesis has continued to shift the focus of its exploration activities from South America back to Australia whilst maintaining
a presence in South America. Our focus has been on the Australian gold sector where there has been a significant
strengthening in the A$ gold price since the start of 2015.
During the year Genesis agreed to acquire the Ulysses Gold Project located south of Leonora in the highly prospective
Eastern Goldfields of Western Australia. The Ulysses Project contains a significant gold resource that we believe has the
potential for high-grade open pit development with toll treatment of the ore and low capital start-up costs. The Company
believes that Ulysses can be brought into production within a 9 to 18 month timeframe with the project situated on a granted
Mining Lease with no obvious impediments to mining. The Project is close to mining infrastructure which will allow toll
treatment of ore from Ulysses. A Mining Study has recently commenced at Ulysses.
The acquisition of Ulysses builds on the Company’s strategy to cheaply acquire low-risk gold projects with strong potential
for shallow, high-grade resources capable of rapid and cheap development. This fits very well with the Viking Project where
exploration during the year has identified shallow, high-grade mineralisation at the Beaker Prospect.
Genesis continues to review both advanced and early stage gold and copper projects in both Australia and South America
focussing on near term cash generating opportunities.
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
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Genesis Minerals Limited and controlled entities
Review of Operations
During the year Genesis Minerals Limited (“Genesis”) has continued to shift the focus of its activities from South America
back to Western Australia whilst maintaining a presence in South America. Genesis commenced exploration of the Viking
Gold Project (“Viking” or “the Viking Project”) in the second half of 2014 and also announced the acquisition of the Ulysses
Gold Project (“Ulysses” or “the Ulysses Project”) located in Western Australia in June 2015.
Ulysses Gold Project
There is excellent potential at the Ulysses Project to develop a significant mine life based on the existing resource and the
estimated extensions at depth and along strike of the known resource and the adjacent exploration targets on the Ulysses
mining lease. Ulysses contains a shallow JORC compliant resource of 138,000 ounces of gold (see GMD ASX Release
dated June 9, 2015) with numerous, shallow high-grade drill intersections within the resource including:
13m @ 6.0g/t gold
9m @ 6.7g/t gold
9.1m @ 7.6 g/t gold
11m @ 5.1 g/t gold
8m @ 6.1 g/t gold
21m @ 2.0g/t gold
11.4m @ 3.7 g/t gold
12m @ 3.3 g/t gold
It is anticipated the mining study and negotiation over the toll treatment of ore from Ulysses will be completed by the end of
2016. Permitting to allow the commencement of mining activities will be ongoing during the coming months and it is
expected to be completed in the first quarter of 2016. There is a significant amount of technical data available to Genesis to
assist in the evaluation of the Ulysses Project.
Ulysses is centred about 30km south of Leonora and 200km
north of Kalgoorlie in Western Australia (Figure 1). The
Project comprises a granted mining lease and two granted
exploration licences
Genesis announced the acquisition of Ulysses from a private
group Ulysses Mining Pty Ltd in June 2015. The mining
lease (M40/166) was the subject of a joint venture until early
2015 between St Barbara Ltd (60%) and Dalrymple/Norilsk
(40%).
Ulysses is located in the minerals rich and highly prospective
Eastern Goldfields of Western Australia. It is located 30km
south of the Sons of Gwalia (6Moz of Production and 1.8Moz
Reserve) mine and along strike of Orient Well and Kookynie
mine camps (Figure 3) which have produced over 0.7Moz. It
is close to world leading mining infrastructure which will allow
toll treatment of ore from Ulysses.
The Ulysses Deposit was mined by Sons of Gwalia in 2002
producing 266,358 t @ 2.92 g/t Au for 24,985 Oz Au. Ore
was treated at the Gwalia Treatment plant. St Barbara
Limited acquired the project in April 2004 as part of the
purchase of the Sons of Gwalia Gold Division.
No exploration has been completed on M40/166 since mining
was completed in 2002. Exploration on the two exploration
licences has been restricted to surface geochemical
sampling and first pass, wide spaced drill testing. No
significant exploration has occurred on the exploration
licences since 2004 and numerous high priority exploration
targets remain at the Project.
Fi gure 1 Project l ocation with distance to potential treatment
opti ons
4
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Figure 2 Ulysses Mineralised Belt
M40/166
Figure 3 Ulysses deposit drill hole plan in local grid
5
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Figure 4 Ulysses Deposit Section 11,800E
Viking Project
During the year Genesis completed two RC drilling
programs targeting the Beaker 4 and Beaker 2 anomalies
with significant results returned from both of these
prospects.
This drilling confirmed the potential to host near surface
resources capable of being toll treated or potentially in a
standalone scenario.
The Viking Project comprises 5 granted exploration
licences that cover some 500km 2 and is located
approximately 600km east of Perth and 30km south east
of the town of Norseman (see adjacent Figure) in Western
Australia. 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
Viking Project is east along the old Telegraph Track,
18km south of Norseman via the Coolgardie–Esperance
Highway.
The Viking Project offers Genesis the unique opportunity
to define shallow, high-grade gold resources capable of
being rapidly advanced towards development in a new
geological terrane. Genesis has taken advantage of the
high-quality +$5 million dataset and near surface drill
targets that had been rapidly generated by AngloGold
Ashanti between 2010 and 2013.
Figure 5 Viking Location
6
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Viking is close to existing under-utilised gold mills and mining infrastructure and Genesis is focussed on defining shallow
gold resources capable of being rapidly and cheaply advanced towards development.
Genesis purchased Viking from AngloGold Ashanti Australia Limited during the March 2014 Quarter. The Viking Project
comprises a significant landholding 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
Nova-Bollinger nickel discoveries.
AngloGold Ashanti completed regional and infill auger sampling between 2010 and 2012 at Viking. The extensive and
coherent Beaker Prospect was identified from this geochemical survey (see Figure 6). Beaker comprises four zones of
anomalous gold (+20 ppb gold) in soil (peak 356.5 ppb gold) nested within a broad 7km by 6km anomaly (Beaker 1 through
4). Mineralised trends at Beaker are interpreted to be orientated north to north west similar to the Kalgoorlie Greenstone
Terrane and north east parallel to the Albany Fraser Orogeny. Wide spaced aircore and diamond drilling by AngloGold in
2012 returned a number of highly anomalous intersections
A number of auger defined geochemical anomalies remain to be drill tested at Viking.
Figure 6 Prospect Locations
RC drilling by Genesis at the aircore defined Beaker 2 gold geochemical anomaly (Figure 8) has identified a significant wide
zone of near surface oxide mineralisation. Drilling in the 2nd half of 2015 will focus on this 1.5km long oxide gold zone with
drilling centred on the +100m wide sub horizontal blanket of oxide mineralisation (Figure 7) (see GMD ASX Release dated
Feb ruary 9, 2015 and April 8, 2015). Future drilling over the 1.5km strike length will include shallow extensional and infill
drilling to identify the limits of the oxide mineralisation as well as deeper drilling to identify the source of primary
mineralisation. A resource estimate is targeted for completion soon after receipt of future drilling results (if drilling is
successful).
7
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Figure 7 Beaker 2 Section
Figure 8 Beaker 2 Plan
8
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Shallow RC drilling by Genesis in 2014 targeted the western mineralised trend at Beaker 4 prospect. High-grade gold
intersected from this drilling included 7m @ 4.02g/t gold from 31m and 6m @ 6.04g/t gold from 73m (includes 3m @
11.35g/t Au). Gold mineralisation is hosted by sheared pyrite-bearing quartz veins within moderately east dipping shear
zones. Mafic enclaves within the granitoids are thought to provide a rheological contrast within the competent host allowing
gold mineralisation to develop. Visible gold has also been observed in drill core within these mineralised intervals. Three
open ended mineralised trends (+2km) remain to be targeted by follow up RC and aircore.
Figure 9 Beaker 4 Plan
Figure 10 Beaker 4 Section
9
Genesis Minerals Limited and controlled entities
Review of Operations (continued)
Las Opeñas
Genesis has continued discussions with third parties regarding
funding opportunities for further exploration at Las Opeñas as well
as potential joint venture and divestment opportunities.
Alliance Projects
Genesis has delayed exploration at the Alliance Projects in San
Juan. Exploration programs have been developed which will focus
on the Espota high grade vein system, the Fierro Project and a
geophysical survey and surface sampling program at the Castaños
Project.
Background
Genesis has the opportunity to explore a number of early stage but
highly prospective gold projects in Argentina held by Teck Argentina
Ltd, a wholly owned subsidiary of Teck, being the Castaños, Espota,
Fierro and Fortuna Projects (Figure 11) in San Juan, Argentina (the
"Alliance Projects"). Under this arrangement (see GMD ASX
Announcements March 21, 2014 and April 29, 2014), Genesis will
have an option to earn up to a 100% interest in the Alliance
Projects. 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.
Figure 11 San Juan Project locations
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, a shareholder of Genesis Minerals Limited 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.
The Information in this report that relates to Mineral Resources is b ased on information compiled b y Mr Paul Payne, a
Competent Person who is a Memb er of the Australasian Institute of Mining and Metallurgy. Mr Payne is a full-time
employee of Payne Geological Services and is a shareholder of Genesis Minerals Limited. Mr Payne has sufficient
experience that 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 Payne consents to the inclusion in the report of the matters
b ased on his information in the form and context in which it appears.
10
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 2015.
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
Mr Hill is a qualified solicitor and geologist with over 25 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.
Interest in shares and
options
3,198,822 fully paid ordinary shares
312,500 options expiring 10 Dec 2015 ex at 1.6 cents
312,500 options expiring 10 Dec 2016 ex at 3.2 cents
Other directorships in
listed entities held in
the previous three
years
Mr Hill resigned as a director of Centaurus Metals Limited 2 July 2014
Mr Hill is a director of Strandline Resources Limited
Michael Fowler
Managing Director
Qualifications
BSc, MSc, MAusIMM
Experience
Mr Fowler is a geologist with 25 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
8,903,730 fully paid ordinary shares,
937,500 options expiring 10 Dec 2015 ex at 1.6 cents
937,500 options expiring 10 Dec 2016 ex at 3.2 cents
Other directorships in
listed entities held in
the previous three
years
Mr Fowler is a director of Coventry Resources Inc.
Damian Delaney
Non-Executive Director
Qualifications
Chartered Accountant; MAICD
11
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
7,002,292 fully paid ordinary shares;
1,250,000 options expiring 10 Dec 2015 ex at 1.6 cents
1,250,000 options expiring 10 Dec 2016 ex at 3.2 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 2015 of $1,527,678 (2014:
$1,757,105).
At 30 June 2015 cash assets available totalled $110,830 (2014: $1,239,869).
The net assets of the consolidated entity decreased from $755,540 in 2014 to ($228,577) at June 30 2015. This decrease is
largely due to the following factors:
•
•
exploration of the Group’s projects;
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:
2015
2014
Revenues
$
Results
$
Revenues
$
Results
$
Group revenues and loss from ordinary activities before
income tax expense
3,615
(1,527,678)
15,952
(1,757,105)
Shareholder Returns
Basic and diluted loss per share (cents)
2015
(0.51)
2014
(0.91)
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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 43,250,000 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 31 Dec 2014, exercisable at 22 cents
Expired on 1 Mar 2015, exercisable at 20 cents
Expiry on 10 Dec 2015, exercisable at 1.6 cents
Expiry on 10 Dec 2016 exercisable at 3.2 cents
Total number of options outstanding as at 30 June 2015 and the date of this report
The balance is comprised of the following:
Expiry date
30 November 2015
10 December 2015
10 November 2016
Exercise price (cents)
12
1.6
3.2
Total number of options outstanding at the date of this report
Number of options
23,760,596
(9,500,000)
(13,510,596)
21,250,000
21,250,000
43,250,000
Number of options
750,000
21,250,000
21,250,000
43,250,000
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.
13
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 $561,000 through the issue of 70,000,000 ordinary shares to institutional and sophisticated during the
year. Directors, after shareholder approval, received 8,750,000 shares in lieu of $70,000 in accrued salary and directors
fees. Exploration expenses of $50,000 were paid for via the issue of 6,250,000 ordinary shares.
AFTER BALANCE DATE EV ENTS
On 23 July 2015 the Company had firm commitments to raise $700,000 from sophisticated and professional investors to
fund further drilling at the Ulysses Project, of which $405,000 has been placed and received in cash as at the reporting date.
Subsequent to year end, the Group paid the following amounts as part of the share sale agreement to acquire 100% of
Ulysses Mining Limited:
• Share consideration of $100,000 in shares issued on 14 August 2015; and
•
Tranche 1 Consideration of $75,000 cash paid on 19 August 2015
As at the reporting date, the final consideration of Tranche 2, being $200,000 in cash, has not been paid pending the
finalisation of final due diligence on the acquisition.
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 subsequent, 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 20.
14
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% (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 2015.
VOTING AND COMMENT MADE ON THE GROUP'S 2014 ANNUAL GENERAL MEETING
The Company received 100% of “yes” votes on its remuneration report for the 2014 financial year. The Company did not
receive any specific feedback at the AGM or throughout the year on its remuneration practices.
15
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 compensation
Short-term benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
Key management personnel of the Group
2015
$
263,000
21,250
-
-
84,817
369,067
2014
$
396,000
25,000
-
-
-
421,000
Short-Term
Salary
& Fees
$
44,5001
55,000
192,5002
275,000
59,0003
66,000
296,000
396,000
Post
Employment
Share-based Payments
Total
Superannuation
Shares
Options
$
$
$
$
-
-
21,2502a
25,000
-
-
21,250
25,000
11,250
-
22,500
-
12,000
-
45,750
-
867
-
1,733
-
3,467
-
6,067
-
56,617
55,000
237,983
300,000
74,467
66,000
369,067
421,000
Directors
Richard Hill
2015
2014
Michael Fowler
2015
2014
Damian Delaney
2015
2014
2015
2014
1.
2.
3.
Includes unpaid amount of $18,166
Includes unpaid amount of $46,667; 2a. Includes unpaid amount of $4,667
Includes unpaid / accrued amount of $56,000
Equity instrument disclosures relating to key management personnel
(i) Options provided as remuneration and shares issued on exercise of such options
Directors received 4,375,000 options valued at $6,067 during the year. 2014:(nil).
16
Genesis Minerals Limited and controlled entities
Directors' Report continued
(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:
2015
Balance at
start of the
year
Granted as
compensation Exercised
Other
changes
Balance at end
of the year
Vested and
exercisable
Directors of Genesis Minerals Limited
Richard Hill
Michael Fowler
Damian Delaney
-
2,027,084
4,115,001
6,142,085
625,000
1,250,000
2,500,000
4,375,000
-
-
-
-
-
625,000
(1,402,084) 1,875,000
(4,115,001) 2,500,000
(5,517,085) 5,000,000
625,000
1,875,000
2,500,000
5,000,000
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
Service agreements
On appointment to the Board, all non-executive directors enter into a service agreement with the Group in the form of a
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.
In September 20014, Mr Fowler agreed to reduce his salary to $200,000 per annum.
Share based compensation
In lieu of directors fees and salary, 8,750,000 ordinary shares were issued to key management personnel during the year
ended 30 June 2015.
(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.
2015
Directors of Genesis Minerals Limited
Ordinary shares
Richard Hill
Michael Fowler
Damian Delaney
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
1,698,822
5,153,730
1,600,000
17
-
-
-
1,500,000
3,750,000
5,402,292
3,198,822
8,903,730
7,002,292
Genesis Minerals Limited and controlled entities
Directors' Report continued
2014
Directors of Genesis Minerals Limited
Ordinary shares
Richard Hill
Michael Fowler
Damian Delaney
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
(c) Loans to key management personnel
There were no loans to key management personnel during the year.
Other key management personnel transactions with Directors and Director-related entities
Some key management persons, or their related parties, hold positions in other entities that result in them having control or
significant influence over the financial or operating policies of those entities.
Some of these entities transacted with the Company or its subsidiaries in the reporting period.
The following fees were incurred on normal commercial terms and conditions to the following Director related entities:
Related Parties
Transaction
R Hill – Westoria Capital Pty Ltd
Consulting Services
Transactions value
year ended 30 June
Balance outstanding
as at 30 June
2015
$
14,283
2014
$
29,993
2015
$
4,620
2014
$
14,731
END OF REMUNERATION REPORT
18
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 2015
19
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 2015, 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 2015
Genesis Minerals Limited and controlled entities
Corporate Governance Statement
In fulfilling its obligations and responsibilities to its various stakeholders, the board of directors of the Company
advocates the adoption of and adherence to a framework of rules, relationships, systems and processes within
and by which authority is exercised and controlled within the corporation – this is what is meant in this manual
when reference is made to corporate governance. This manual outlines the Company’s principal corporate
governance procedures. The Board supports a system of corporate governance to ensure that the management
of the Company is conducted in a manner which is directed at achieving the Company’s objectives in a proper
and ethical manner.
Except to the extent indicated herein, the Company has resolved that for so long as it is admitted to the official
lists of the ASX it shall abide by the ASX Recommendations.
Due to the exigencies and vagaries of commercial life and changing circumstances, there will, no doubt, be
occasions when, especially because of the size of the Company and the composition of its Board, that it can be
expected to depart from the policies and charters which it has adopted. These policies have been adopted on the
basis that, in the circumstances of the Company, they reflect what is considered to reflect a reasonable aspiration.
It is not expected that these guidelines will be slavishly adhered to. Their object is to focus attention upon the
issues they address and provoke thought about and awareness of those issues and the pitfalls that one could
otherwise fall into inadvertently. The important thing is to develop a culture conducive only to good and
appropriate conduct and practices.
Honesty and integrity must be the overriding and guiding principle in all things- substance must prevail over form
and lip service. Adhering to the following policies is a condition of each contract of employment or service.
The Board encourages all key management personnel, other employees, contractors and other stakeholders to
monitor compliance with this Corporate Governance manual and periodically, by liaising with the Board,
management and staff; especially in relation to observable departures from the intent of hereof and with and any
ideas or suggestions for improvement.
21
Corporate Governance Statement
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1
A listed entity should disclose:
(a)
(b)
the respective roles and responsibilities of its board and management; and
those matters expressly reserved to the board and those delegated to
management.
1.2
A listed entity should:
(a) undertake appropriate checks before appointing a person, or putting forward
to security holders a candidate for election, as a director; and
(b) provide security holders with all material information in its possession relevant
to a decision on whether or not to elect or re-elect a director.
Information about the respective roles and responsibilities of our Board and
management (including those matters expressly reserved to the Board and
those delegated to management) is found under the Board Charter.
The appointment of directors is undertaken under the purveyance of the
Nomination committee.
The function of the Nomination Committee is to identify and recommend
candidates to fill vacancies and to determine the appropriateness of director
nominees for election to the Board as well as undertake appropriate checks
before appointing a person to the Board. The Board recognises the benefits
arising from diversity and aims to promote an environment conducive to the
appointment of well qualified Board candidates so that there is appropriate
diversity to maximise the achievement of corporate goals.
As required under the ASX Listing Rules and the Corporations Act, election or
re-election of directors is a resolution put to members at each Annual General
Meeting. The notice of meeting contains all material information relevant to a
decision on whether or not to elect or re-elect a director.
1.3
1.4
A listed entity should have a written agreement with each director and senior
executive setting out the terms of their appointment.
Letters of appointment for each director and senior executive have been
entered into by the Company.
The company secretary of a listed entity should be accountable directly to the
board, through the chair, on all matters to do with the proper functioning of the
board.
The company secretary reports directly to the Board through the Chairman and
is accessible to all directors. The function performed by the company secretary
is noted in the letter of appointment of the company secretary
1.5
A listed entity should:
(a) have a diversity policy which includes requirements for the board or a relevant
committee of the board to set measurable objectives for achieving gender
diversity and to assess annually both the objectives and the entity’s progress
in achieving them;
(b) disclose that policy or a summary of it; and
(c)
disclose as at the end of each reporting period the measurable objectives for
achieving gender diversity set by the board or a relevant committee of the
board in accordance with the entity’s diversity policy and its progress towards
achieving them and either:
(1) the respective proportions of men and women on the board, in senior
executive positions and across the whole organisation (including how the
entity has defined “senior executive” for these purposes); or
(2) if the entity is a “relevant employer” under the Workplace Gender Equality
Act, the entity’s most recent “Gender Equality Indicators”, as defined in
and published under that Act.
The Company has a Diversity policy which can be found on its website under
the Corporate Governance section. The Company’s Diversity policy does not
include requirements for the board to set measurable objectives for achieving
gender diversity and given the size and nature of the Company at this stage,
the Board considers this course of action reasonable.
The Company recognises that a diverse and talented workforce is a
competitive advantage and that the Company’s success is the result of the
quality and skills of our people. Our policy is to recruit and manage on the
basis of qualification for the position and performance, regardless of gender,
age, nationality, race, religious beliefs, cultural background, sexuality or
physical ability. It is essential that the Company employs the appropriate
person for each job and that each person strives for a high level of
performance.
The Company has not set measurable objectives for achieving gender diversity
during the reporting period of 2014 – 2015.
There are no women on the Board.
22
Corporate Governance Statement
1.6
A listed entity should:
Process for Evaluating Board Performance is detailed in the Board Charter.
Information on Performance Evaluations is included in the remuneration report
section of the Annual Report.
A performance assessment for the Managing Director took place during the
year in accordance with the Company’s agreed policy. Briefly, this involved the
review of the performance against agreed KPI’s and feedback was received
from the Board where appropriate.
The Board does not have a Nomination Committee.
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.
(a) have and disclose a process for periodically evaluating the performance of the
board, its committees and individual directors; and
(b) disclose, in relation to each reporting period, whether a performance
evaluation was undertaken in the reporting period in accordance with that
process.
1.7
A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of its
senior executives; and
(b) disclose, in relation to each reporting period, whether a performance
evaluation was undertaken in the reporting period in accordance with that
process.
PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE
2.1
The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are independent directors;
and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee
met throughout the period and the individual attendances of the members
at those meetings; or
(b)
if it does not have a nomination committee, disclose that fact and the
processes it employs to address board succession issues and to ensure that
the board has the appropriate balance of skills, knowledge, experience,
independence and diversity to enable it to discharge its duties and
responsibilities effectively.
23
Corporate Governance Statement
2.2
A listed entity should have and disclose a board skills matrix setting out the mix of
skills and diversity that the board currently has or is looking to achieve in its
membership.
The Board has identified that the appropriate mix of skills and diversity required
of its members on the Board to operate effectively and efficiently is achieved
by directors having substantial skills and experience in operational
management, exploration and geology, corporate law, finance, listed resource
companies, equity markets.
The Board Skills matrix for the current Board is as follows:
operational management
exploration and geology
corporate law
accounting & finance
listed
companies
equity markets
resource
Richard
Hill
Michael
Fowler
Damian
Delaney
-
2.3
A listed entity should disclose:
(a)
the names of the directors considered by the board to be independent
directors;
(b)
if a director has an interest, position, association or relationship of the type
described in Box 2.3 but the board is of the opinion that it does not
compromise the independence of the director, the nature of the interest,
position, association or relationship in question and an explanation of why the
board is of that opinion; and
(c)
the length of service of each director.
The Company considers that Richard Hill and Damian Delaney are
independent directors.
Although Damian Delaney provides services, as Company Secretary, the
board considers that this does not interfere, or might reasonably be seen to
interfere, with his capacity to bring an independent judgement to bear on
issues before the board and to act in the best interests of the entity and its
security holders generally.
Richard Hill has been a director since 13 February 2013
Michael Fowler has been a director since 16 April 2007.
Damian Delaney has been a director since 21 March 2012.
2.4
2.5
2.6
A majority of the board of a listed entity should be independent directors.
The majority of the board are independent directors.
The chair of the board of a listed entity should be an independent director and, in
particular, should not be the same person as the CEO of the entity.
A listed entity should have a program for inducting new directors and provide
appropriate professional development opportunities for directors to develop and
maintain the skills and knowledge needed to perform their role as directors
effectively.
Richard Hill is the Chairman and is an independent director. The Board
believes the Chairman is the most suitable director to undertake this role.
Michael Fowler is the CEO.
The Company will provide induction material for any new directors and,
depending on specific requirements, will provide appropriate professional
development opportunities for directors.
24
Corporate Governance Statement
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY
3.1
A listed entity should:
(a) have a code of conduct for its directors, senior executives and employees; and
(b) disclose that code or a summary of it.
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING
4.1
The board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive directors and a
majority of whom are independent directors; and
(2) is chaired by an independent director, who is not the chair of the board,
and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of the
committee; and
(5) in relation to each reporting period, the number of times the committee met
throughout the period and the individual attendances of the members at
those meetings; or
(b)
if it does not have an audit committee, disclose that fact and the processes it
employs that independently verify and safeguard the integrity of its corporate
reporting, including the processes for the appointment and removal of the
external auditor and the rotation of the audit engagement partner.
The board of a listed entity should, before it approves the entity’s financial
statements for a financial period, receive from its CEO and CFO a declaration that,
in their opinion, the financial records of the entity have been properly maintained
and that the financial statements comply with the appropriate accounting standards
and give a true and fair view of the financial position and performance of the entity
and that the opinion has been formed on the basis of a sound system of risk
management and internal control which is operating effectively.
A listed entity that has an AGM should ensure that its external auditor attends its
AGM and is available to answer questions from security holders relevant to the
audit.
4.2
4.3
Code of Conduct sets out the principles and standards which the Board,
management and employees of the Company are encouraged to strive to
abide by when dealing with each other, shareholders and the broad community
The Company’s Audit committee comprises all directors and is Chaired by an
independent director.
The Audit Committee charter is disclosed on the Company’s website under the
Corporate Governance link
Qualifications and experience of members of the Audit Committee are found
under the directors profile in both the Annual report and on the Company’s
website at Directors and Management
Details of meetings of the audit committee are to be found in the Annual report
of the company.
The CEO (Michael Fowler) provides a declaration in relation to full year and
half year statutory financial reports during the reporting period in accordance
with section 295A of the Corporations Act.
The audit engagement partner attends the AGM and is available to answer
shareholder questions from shareholders relevant to the audit.
25
Corporate Governance Statement
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1
A listed entity should:
(a) have a written policy for complying with its continuous disclosure obligations
under the Listing Rules; and
(b) disclose that policy or a summary of it.
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1
A listed entity should provide information about itself and its governance to investors
via its website.
The Company’s continuous Disclosure Policy can be found under the
Corporate Governance section of the Company’s website
The Company’s website provides information on the Company including its
background, objectives, projects and contact details. The Corporate
Governance page provides access to key policies, procedures and charters of
the Company, such as the Board and Committee charters, securities trading
policy, diversity policy and the latest Corporate Governance Statement.
ASX announcements, Company reports and presentations are uploaded to the
website following release to the ASX and editorial content is updated on a
regular basis.
A listed entity should design and implement an investor relations program to
facilitate effective two-way communication with investors.
A Shareholder Communication Policy can be found on the Company’s
website.
6.2
6.3
A listed entity should disclose the policies and processes it has in place to facilitate
and encourage participation at meetings of security holders.
6.4
A listed entity should give security holders the option to receive communications
from, and send communications to, the entity and its security registry electronically.
The Company encourages shareholders to attend all general meetings of the
Company and sets the time and place of each meeting to promote maximum
attendance by Shareholders.
The Company encourages Shareholders to submit questions in advance of a
general meeting, and for the responses to these questions to addressed
through disclosure relating to that meeting.
The Company’s Shareholder Communication Policy is disclosed on the
Company’s website.
It is the Company’s desire that shareholders receive communications
electronically in the interests of the environment and constraining costs. In an
endeavour to drive this objective the Company has a policy of providing hard
materials at least cost (which will generally involve a black & white presentation
even where the electronic version is full colour).
26
Corporate Governance Statement
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK
7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors;
and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee
met throughout the period and the individual attendances of the members
at those meetings; or
(b)
if it does not have a risk committee or committees that satisfy (a) above,
disclose that fact and the processes it employs for overseeing the entity’s risk
management framework.
7.2
The board or a committee of the board should:
(a)
review the entity’s risk management framework at least annually to satisfy
itself that it continues to be sound; and
(b) disclose, in relation to each reporting period, whether such a review has taken
place.
7.3
A listed entity should disclose:
(a)
(b)
if it has an internal audit function, how the function is structured and what role
it performs; or
if it does not have an internal audit function, that fact and the processes it
employs for evaluating and continually improving the effectiveness of its risk
management and internal control processes.
7.4
A listed entity should disclose whether it has any material exposure to economic,
environmental and social sustainability risks and, if it does, how it manages or
intends to manage those risks.
The Board has not established a Risk committee however it does have a Risk
Policy which can be found on the company’s website.
Risk management is specifically discussed at the Company’s board meetings
during the year.
The Company reviews its risk management framework annually and this
information is disclosed in the Annual Report.
The Company currently does not have any staff with bookkeeping and
accounting skills so these tasks are undertaken by external consultants. The
external consultant discusses with its external auditor each end of year and
half year whether there are any issues with internal control and improvements
which could be undertaken to improve them.
The Company is subject to, and responsible for, existing environmental
liabilities associated with its tenements. The Company will continually monitor
its ongoing environmental obligations and risks, and implement rehabilitation
and corrective actions as appropriate to remain compliant. These risks may be
impacted by change in Government policy.
The Company does not believe it has any significant exposure to economic
and social sustainability risks.
27
Corporate Governance Statement
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of whom are independent directors;
and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee
met throughout the period and the individual attendances of the members
at those meetings; or
(b)
if it does not have a remuneration committee, disclose that fact and the
processes it employs for setting the level and composition of remuneration for
directors and senior executives and ensuring that such remuneration is
appropriate and not excessive.
The Company does not have a Remuneration committee as the Company
does not have any staff.
The whole board considers the level and composition of remuneration for
directors with reference to remuneration levels set by its peers in the mining
industry.
8.2
A listed entity should separately disclose its policies and practices regarding the
remuneration of non-executive directors and the remuneration of executive directors
and other senior executives.
Non-executive directors and executive directors are paid amounts equivalent to
the remuneration received by other non-executive directors working in similarly
sized exploration companies.
8.3
A listed entity which has an equity-based remuneration scheme should:
The Company does not have an equity based remuneration scheme.
(a) have a policy on whether participants are permitted to enter into transactions
(whether through the use of derivatives or otherwise) which limit the economic
risk of participating in the scheme; and
(b) disclose that policy or a summary of it.
28
Genesis Minerals Limited and controlled entities
Consolidated Statement of Profit or Loss and
Comprehensive Income
YEAR ENDED 30 JUNE 2015
Notes
REVENUE
EXPENDITURE
Depreciation expense
Salaries and employee benefits expense
Exploration expenses
Corporate expenses
Administration costs
Share based payments expense
2015
$
3,615
(2,238)
(293,179)
(1,036,705)
(121,006)
(78,165)
-
2014
$
15,952
(473)
(451,586)
(995,148)
(143,777)
(168,526)
(13,547)
LOSS BEFORE INCOME TAX
(1,527,678)
(1,757,105)
INCOME TAX BENEFIT/(EXPENSE)
2
-
-
LOSS FOR THE YEAR
(1,527,678)
(1,757,105)
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
(152,294)
(152,294)
14,308
14,308
TOTAL COMPREHENSIVE LOSS FOR THE YEAR ATTRIBUTABLE
TO MEMBERS OF GENESIS MINERALS LIMITED
(1,679,972)
(1,771,413)
Basic and diluted loss per share (cents per share)
9
(0.51)
(0.91)
The above Consolidated Statement of Profit or Loss and Comprehensive Income should be read in conjunction w ith the Notes to the
Consolidated Financial Statements.
29
Genesis Minerals Limited and controlled entities
Consolidated Statement of Financial Position
AT 30 JUNE 2015
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 (LIABILITIES) / ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Notes
3
4
5
6
7
8
2015
$
110,830
6,949
117,779
6,433
6,433
2014
$
1,239,869
8,415
1,248,284
7,964
7,964
124,212
1,256,248
287,746
46,590
334,336
25,829
25,829
410,071
58,942
469,013
31,695
31,695
360,165
500,708
(235,953)
755,540
16,691,573
1,163,407
(18,090,933)
16,009,161
1,309,634
(16,563,255)
TOTAL (DEFICIENCY IN SHAREHOLDERS FUNDS) / EQUITY
(235,953)
755,540
The above Consolidated Statement of Financial Position should be read in conjunction w ith the Notes to the Consolidated Financial
Statements.
30
Genesis Minerals Limited and controlled entities
Consolidated Statement of Changes in Equity
YEAR ENDED 30 JUNE 2015
Notes
Ordinary
Share
Capital
$
Accumulated
Losses
$
Foreign
Currency
Translation
Reserve
$
Options
Reserve
$
Total
$
BALANCE AT 1 JULY 2013
14,440,391
(14,806,150)
111,068
1,170,711
916,020
Loss for the year
-
(1,757,105)
-
-
(1,757,105)
OTHER COMPREHENSIVE LOSS
Exchange differences on translation of
foreign operations
8
TOTAL COMPREHENSIVE LOSS
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
-
-
-
(1,757,105)
14,308
14,308
Shares issued during the year
Share issue transaction costs
Share based payments
7
7
1,602,012
(33,242)
-
-
-
-
-
-
-
-
-
-
-
14,308
(1,742,797)
1,602,012
(33,242)
13,547
13,547
Sub-total
1,568,770
(1,757,105)
14,308
13,547
(160,480)
BALANCE AT 30 JUNE 2014
16,009,161
(16,563,255)
125,376
1,184,258
755,540
BALANCE AT 1 JULY 2014
16,009,161
(16,563,255)
125,376
1,184,258
755,540
Loss for the year
OTHER COMPREHENSIVE LOSS
Exchange differences on translation of
foreign operations
8
TOTAL COMPREHENSIVE LOSS
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
-
-
-
-
(1,527,678)
-
-
-
-
(152,294)
(1,527,678)
(152,294)
Shares issued during the year
Share issue transaction costs
Share based payments
7
7
680,000
(6,338)
8,750
-
-
-
-
-
-
Sub-total
683,412
(1,527,678)
(152,294)
-
-
-
-
-
6,067
6,067
(1,527,678)
(152,294)
(1,679,972)
680,000
(6,338)
14,817
(991,493)
BALANCE AT 30 JUNE 2015
16,691,573
(18,090,933)
(26,918)
1,190,325
(235,953)
The above Consolidated Statement of Changes in Equity should be read in conjunction w ith the Notes to the Consolidated Financial
Statements.
31
Genesis Minerals Limited and controlled entities
Consolidated Statement of Cash Flows
YEAR ENDED 30 JUNE 2015
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
2015
$
(266,067)
(1,260,562)
3,615
(1,523,014)
19
2013
$
(471,462)
(995,148)
15,952
(1,450,658)
(189)
(189)
171
171
561,000
(7,339)
553,661
(969,542)
1,239,869
(159,498)
1,602,013
(33,243)
1,568,770
118,283
1,109,319
12,267
CASH AND CASH EQUIVALENTS AT THE END OF THE
FINANCIAL YEAR
7
110,830
1,239,869
The above Consolidated Statement of Cash Flow s should be read in conjunction w ith the Notes to the Consolidated Financial Statements.
32
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
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 2014 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 2014.
(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 $1,527,678 for the year ended 30 June 2015 (2014: $1,757,105). Included within this loss was
exploration expenditure of $1,036,705 (2014: $995,148).
The net working capital deficit position of the Group at 30 June 2015 was $216,557 (2014: $779,271 surplus).The Group
has expenditure commitments relating to work programme obligations of their assets of $480,000 which could potentially
fall due in the twelve months to 30 June 2016.
These conditions indicate a material uncertainty that may cast significant doubt about the ability of the Group to continue
as a going concern.
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.
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
which has been evident by the Group raising $405,000 subsequent to year end as disclosed in Note 18; and
the Directors have an appropriate plan to contain certain operating and exploration expenditure if appropriate
funding is unavailable.
The Directors have prepared a cash flow forecast, which indicates that the Group will have sufficient cash flows to meet all
commitments, creditor arrangements and working capital requirements for the 12 month period from the date of signing
this financial report. Included in this cash flow forecast are capital raisings of $300,000 in both October and November
2015, of which the Group has received $300,000 of firm commitments.
Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that the going concern
basis of preparation is appropriate. In particular, given the Group’s history of raising capital to date, and the interest in the
anticipated acquisition of the Ulysses Gold Project, the directors are confident of the Group’s ability to raise additional
funds as and when they are required.
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, and 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.
33
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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.
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.
(d) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the full Board of Directors.
(e) 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.
34
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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.
(f) 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.
(g) Income tax
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.
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.
35
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
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 receivables
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.
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.
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:
36
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
EXPLORATION AND DEVELOPMENT EXPENDITURE
Exploration, evaluation costs are expensed as incurred.
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.
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.
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.
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.
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.
37
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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.
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.
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.
38
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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
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 - 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.
KEY ESTIMATE – TAXATION
Balances disclosed in the consolidated financial statements and the notes thereto, related to taxation, are based on the
best estimates of directors. These estimates take into account both the financial performance and position of the Group as
they pertain to current income taxation legislation, and the directors understanding thereof. No adjustment has been made
for pending or future taxation legislation. The current income tax position represents that directors’ best estimate, pending
an assessment by the Australian Taxation Office.
KEY JUDGEMENT – ENVIRONMENTAL ISSUES
Balances disclosed in the consolidated financial statements and notes thereto are not adjusted for any pending or enacted
environmental legislation, and the directors understanding thereof. At the current stage of the Group’s development and its
current environmental impact the directors believe such treatment is reasonable and appropriate.
KEY JUDGEMENT – COMPARATIVE FIGURES
When required by accounting standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
39
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
When the Group applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its
consolidated financial statements, a consolidated statement of financial position as at the beginning of the earliest
comparative period will be disclosed.
ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS
Amendments to AASBs and the new Interpretation that are mandatorily effective for the current year
In the current year, the Group has applied a number of amendments to AASBs and a new interpretation issued by
the Australian Accounting Standards Board (AASB) that is mandatorily effective from an accounting period on or
after 1 July 2014.
The application of these amendments and interpretation does not have any material impact on the Group’s
consolidated financial statements.
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.
Effective
for
annual reporting
periods
beginning on or
after
1 January 2018
to
Expected
be
initially
applied in the
financial year
ending
30 June 2019
1 January 2017
30 June 2018
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 July 2015
30 June 2016
1 July 2015
30 June 2016
1 January 2016
30 June 2017
Standard/Interpretation
AASB 9 ‘Financial Instruments’, and the relevant amending
standards
AASB 15 ‘Revenue from Contracts with Customers’ and
AASB 2014-5 ‘Amendments to Australian Accounting
Standards arising from
AASB 15’
AASB 2014-3 ‘Amendments to Australian Accounting
Standards – Accounting for Acquisitions of Interests in
Joint Operations’
AASB 2014-4 ‘Amendments to Australian Accounting
Standards – Clarification of Acceptable Methods of
Depreciation and Amortisation’
AASB 2014-6 ‘Amendments to Australian Accounting
Standards – Agriculture: Bearer Plants’
AASB 2014-9 ‘Amendments to Australian Accounting
in Separate Financial
Standards – Equity Method
Statements’
AASB 2014-10 ‘Amendments to Australian Accounting
Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture’
AASB 2015-1 ‘Amendments to Australian Accounting
Standards – Annual Improvements to Australian Accounting
Standards 2012-2014 Cycle’
AASB 2015-2 ‘Amendments to Australian Accounting
Standards – Disclosure Initiative: Amendments to AASB
101’
AASB 2015-3 ‘Amendments to Australian Accounting
Standards arising from the Withdrawal of AASB 1031
Materiality’
AASB 2015-4 ‘Amendments to Australian Accounting
for
Standards – Financial Reporting Requirements
Australian Groups with a Foreign Parent’
AASB 2015-5 ‘Amendments to Australian Accounting
Standards – Investment Entities: Applying the Consolidation
Exception’
40
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Note that the following new Standards and Interpretations are not applicable for the Group but are relevant for the
period:
AASB 14 ‘Regulatory Deferral Accounts’ and AASB 2014-1 ‘Amendments to Australian Accounting Standards –
Part D: ’Consequential Amendments arising from AASB 14’ is not applicable to the Group as the Group is not a
first-time adopter of Australian Accounting Standards.
AASB 1056 ‘Superannuation Entities’ is not applicable to the Group as the Group is not a superannuation entity.
AASB 2015-6 ‘Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not-for-
Profit Public Sector Entities’ is not applicable to the Group as the Group is a for-profit entity.
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
30 JUNE 2015
2015
$
2014
$
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
(1,527,678)
(1,757,105)
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
41
(458,303)
(527,132)
4,445
148,430
67
(50,569)
(355,931)
4,064
298,686
3,630
(76,339)
297,090)
355,931
297,090
-
-
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
2. INCOME TAX EXPENSE (continued)
At 30 June 2015 Genesis Minerals Limited had unused tax losses for which no deferred tax asset has been recognised
in the amount of approximately $4,166,642 (2014: $2,931,746). 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
2015
$
49,009
61,821
110,830
2014
$
321,530
918,339
1,239,869
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
2015
$
6,949
6,949
2014
$
8,415
8,415
The Group expects the above trade and other receivables to be recovered within 12 months of 30 June 2015 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
Dispoals / (Additions)
Depreciation charge
Closing net book amount
6. TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
18,543
(12,110)
6,433
7,964
895
(188)
(2,238)
6,433
17,470
(9,506)
7,964
9,333
(724)
172
(473)
7,964
116,735
163,615
280,350
86,794
323,277
410,071
42
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
7.
ISSUED CAPITAL
344,837,912 (30 June 2014: 259,837,912) 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
Balance at 1 July 2014
Capital Raising October 2014
Issue January 2015
Capital raising February 2015
Less: share issue costs
17,501,688
16,821,937
25,633
25,633
(844,749)
(838,409)
16,691,573
16,009,161
No.
165,657,799
24,848,649
69,331,464
-
259,837,912
37,500,000
10,000,000
37,500,000
344,837,912
$
14,440,391
422,427
1,179,585
(33,242)
16,009,161
300,000
88,751
300,000
(6,339)
16,691,573
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 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
Exercisable at 1.6 cents, on or before 10 Dec 2015
Exercisable at 3.2 cents, on or before 10 Dec 2016
(b) Movements in options on issue
2015
-
-
750,000
21,250,000
21,250,000
2014
9,500,000
13,510,596
750,000
-
-
43,250,000
23,760,596
Beginning of the financial year
23,760,596
53,681,788
− 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
− Expired on 31 Dec 2014, exercisable at 22 cents
− Expired on 1 Mar 2015, exercisable at 20 cents
Issued during the year:
− Exercisable at 1.6 cents, on or before 10 Dec 2015
− Exercisable at 3.2 cents, on or before 10 Dec 2016
-
-
-
-
(9,500,000)
(13,510,596)
21,250,000
21,250,000
(75,000)
(75,000)
(2,400,000)
(13,510,596)
-
-
-
-
End of the financial year
43,250,000
23,760,596
43
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
7.
ISSUED CAPITAL (continued)
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.
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 2015 is ($216,557). (2014: $779,271)
8. RESERVES AND ACCUMULATED LOSSES
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
2015
$
2014
$
(1,527,678)
(1,757,105)
(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
301,591,337
193,346,503
EPS (cents per share)
(0.51)
(0.91)
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
Greater than one year but less than five years
480,000
350,000
830,000
398,000
398,000
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.
44
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
11. FINANCIAL RISK MANAGEMENT (continued)
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:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial Liabilities
Trade and other payables
Total financial liabilities
2015
$
110,830
6,949
117,779
2014
$
1,239,869
8,415
1,248,284
287,746
287,746
410,071
410,071
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.
45
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
11. FINANCIAL RISK MANAGEMENT (continued)
(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.
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 $17,552,493 (2014: ($5,979,348)) which translated to $21,124 (2014: $11,523) AUD.
Had the AUD weakened/strengthened by 10% against the CLP, there would have been a nil (2014: 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
2015
2014
890
9,750
(890)
(9,750)
890
9,750
(890)
(9,750)
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
South America (Chile & Argentina) 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.
46
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
12. OPERATING SEGMENTS (continued)
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.
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
SOUTH AMERICA
AUSTRALIA
TOTAL
2015
$
2014
$
2015
$
2014
$
2015
$
2014
$
3,615
15,952
3,615
15,952
3,615
15,952
3,615
15,952
(190,556)
(361,042)
(190,556)
(361,042)
(129)
(214)
(129)
(214)
(247,127)
(451,586)
-
(13,547)
(247,127)
-
(451,586)
(13,547)
(1,093,481)
(946,668)
(1093,481)
(946,668)
(190,556)
(361,042)
(1,337,122)
(1,396,063)
(1,527,678)
(1,757,105)
Segment operating assets
50,858
31,147
50,858
31,147
Other assets
Total segment assets
73,354
1,225,101
73,354
1,225,101
50,858
31,147
73,354
1,225,101
124,212
1,256,248
47
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
12. OPERATING SEGMENTS (continued)
SOUTH AMERICA
AUSTRALIA
TOTAL
2015
2014
$
$
2015
$
2015
2014
$
$
2015
$
SEGMENT LIABILITIES
Segment operating liabilities
Inter-segment eliminations
Other corporate and admin
liabilities
(4,842,330)
(4,180,888)
4,778,292
4,148,533
(4,842,330)
4,778,292
(4,180,888)
4,148,533
(296,127)
(468,353)
(296,127)
(468,353)
Total segment liabilities
(4,842,330)
(4,180,888)
4,482,165
3,680,180
(360,165)
(500,708)
13. KEY MANAGEMENT PERSONNEL DISCLOSURES
Key management personnel compensation
Short-term benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
14. REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by
the auditor of the parent entity, its related practices and non-related audit firms:
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.
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.
2015
$
263,000
21,250
-
-
84,817
369,067
2015
$
2014
$
396,000
25,000
-
-
-
421,000
2014
$
25,500
25,500
25,000
25,000
(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.
48
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
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.
Genesis Minerals (Argentina) SA
Chile
Argentina
Ordinary
Ordinary
(1) The proportion of ownership interest is equal to the proportion of voting power held.
2015
%
100
100
2014
%
100
-
18. EVENTS AFTER THE BALANCE SHEET DATE
On 23 July 2015 the Company had firm commitments to raise $700,000 from sophisticated and professional investors to
fund further drilling at the Ulysses Project, of which $405,000 has been placed and received in cash as at the reporting date.
Subsequent to year end, the Group paid the following amounts as part of the share sale agreement to acquire 100% of
Ulysses Mining Limited:
• Share consideration of $100,000 in shares issued on 14 August 2015; and
•
Tranche 1 Consideration of $75,000 cash paid on 19 August 2015
As at the reporting date, the final consideration of Tranche 2, being $200,000 in cash, has not been paid pending the
finalisation of final due diligence on the acquisition.
Apart from the above, 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
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
(Decrease ) / Increase in provisions
Net cash outflow from operating activities
2015
$
2014
$
(1,527,678)
(1,757,105)
2,238
84,817
50,000
8,773
473
13,547
2,765
1,578
(124,523)
(18,218)
(1,523,014)
(3,937)
281,727
11,872
(1,450,658)
(b) Non-cash investing and financing activities
There were no non-cash investing and financing activities during either the 2015 or 2014 financial years.
49
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
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
Set out below are summaries of the options granted:
Options outstanding at 30 June 2013
Granted during the year
Expired during the year
Options outstanding at 30 June 2014
Granted during the year
Expired during the year
Options outstanding at 30 June 2015
Number of
options
Weighted
average exercise
price (cents)
13,900,000
-
(3,650,000)
10,250,000
4,375,000
(9,500,000)
5,125,000
22.4
-
28.2
21.3
2.4
22.0
3.8
The options that were issued during the year had their price calculated by using a Black-Scholes option pricing model
applying the following inputs:
Grant date
Grant date fair value
Grant date share price
Exercise price
Expected volatility
Option life
Expiry date
Risk-free interest rate
Series 2
08/12/14
$0.0013
$0.009
$0.032
83.14%
2 years
10/12/16
2.31%
Series 1
08/12/14
$0.0014
$0.009
$0.016
83.14%
1 year
10/12/15
2.31%
50
Genesis Minerals Limited and controlled entities
Notes to the Consolidated Financial Statements continued
30 JUNE 2015
21. PARENT ENTITY INFORMATION
The following information relates to the parent entity, Genesis Minerals Limited, at 30 June 2015. The information presented
here has been prepared using accounting policies consistent with those presented in Note 1.
2015
$
2014
$
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Issued capital
Share-based payments reserve
Accumulated losses
Total (deficiency in shareholders funds) / equity
Loss for the year
Total comprehensive loss for the year
73,162
193
73,355
(270,299)
(25,829)
(296,128)
1,224,779
321
1,225,100
(436,658)
(31,695)
(468,353)
16,667,573
1,207,329
(18,097,675)
(222,773)
15,985,161
1,184,278
(16,412,692)
756,747
(1,684,983)
(1,684,983)
(1,749,791)
(1,749,791)
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 2014 or 30 June 2015.
51
Genesis Minerals Limited and controlled entities
Directors' Declaration
In the directors’ opinion:
(a)
(b)
(c)
the financial statements and notes set out on pages 29 to 51 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 2015 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 2015
52
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 2015, 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 of the financial report
that gives a true and fair view in accordance with Australian Accounting Standards and
the Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error. In Note 1, the
directors also state, in accordance with Accounting 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 of the financial report that
gives a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the 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 have complied with the independence requirements of 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 2015 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 1a(v) in the financial report which indicates that the
Consolidated Entity incurred a loss after tax of $1,527,678 during the year ended 30 June 2015. This
condition, along with other matters as set forth in note 1a(v), 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 2015.
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
In our opinion, the Remuneration Report of Genesis Minerals Limited for the year ended 30 June 2015,
complies with section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
DOUG BELL CA
Director
Dated at Perth this 30th day of September 2015
Genesis Minerals Limited and controlled entities
ASX Additional Information continued
Additional information required by Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The
information is current as at 29 September 2015.
(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
241
236
565
52
788
90,085
404,962
10,195,631
384,337,912
395,337,912
Rank
Name
Units
% of Units
MR MICHAEL GEORGE FOTIOS
BOTSIS HOLDINGS PTY LTD
TECK RESOURCES LIMITED
BJM SUPERANNUATION FUND A/C
MGB SUPERANNUATION FUND A/C
MR DENIS JOHN REYNOLDS
INVESTMET LIMITED
MR ROBERT JOHN SMITH
WYLLIE GROUP PTY LTD
22,314,415
21,764,706
16,321,283
14,800,000
14,750,000
12,000,000
11,945,383
11,400,000
9,747,224
VIRIDIAN ASSET HOLDINGS PTY LTD
8,683,402
1
2
3
4
5
6
7
8
9
10
11
MR GRANT POVEY
12 WESTORIA RESOURCE INVESTMENTS LTD
13
SHARIC SUPERANNUATION PTY LTD
14 MR DAMIAN PAUL DELANEY
15 MANAFIELD HOLDINGS PTY LTD
16
17
18
19
20
RESOURCE ASSETS PTY LTD
ARGONAUT EQUITY PARTNERS PTY LIMITED
MR ANDREW WILLIAM SPENCER
ARGONAUT SECURITIES (NOMINEES) PTY LTD
ORANGE CORPORATION PTY LTD
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL)
Total Remaining Holders Balance
55
8,167,052
7,121,324
6,961,889
6,400,000
6,250,000
6,000,000
5,535,939
5,422,480
5,000,000
5,000,000
205,585,097
189,752,815
5.64
5.51
4.13
3.74
3.73
3.04
3.02
2.88
2.47
2.2
2.07
1.8
1.76
1.62
1.58
1.52
1.4
1.37
1.26
1.26
52
48
Genesis Minerals Limited and controlled entities
ASX Additional Information continued
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations
Act 2001 are:
Number of Shares
(d) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(e) Unquoted Securities
As at 29 September 2015, the Company has a total of unlisted options as follows:
Number of Options
Number of Holders
Exercise Price
21,250,000
21,250,000
750,000
23,760,596
31
31
1
32
$0.016
$0.032
$0.12
Unlisted Option holder holding greater than 20% of a class of unlisted options
Expiry Date
10/12/2015
10/12/2016
30/11/2015
Unlisted options exercisable at $0.12 expiring on 30/11/215
Mr S Mandujano
No of Options Held
750,000
% Held
100%
(f) Schedule of interests in mining tenements
Project
Country
Tenement Name
Tenement ID
Retain Right To Earn
Interest
Viking
Viking
Viking
Viking
Viking
Australia
Australia
Australia
Australia
Australia
Ulysses
Australia
Ulysses
Australia
Ulysses
Australia
Las Opeñas
Argentina
Espota
Argentina
Espota
Argentina
Fierro
Argentina
Fierro
Argentina
Fortuna
Argentina
Fortuna
Argentina
Castaños
Argentina
Castaños
Argentina
Castaños
Argentina
Castaños
Argentina
Castaños
Argentina
E63/1085
E63/1086
E63/1087
E63/1196
E63/1198
M40/166
E40/295
E40/312
1249-T-05
Moria
Tocota
Fierro 2
Fierro 1
414.537-T-04
414.577-T-2004
425.342-T-03
425.343-T-03
RTE 100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
RTE 100%
1124.022-T-2014
RTE 100%
425.450-T-03
RTE 100%
1124.208-T-09
RTE 100%
041124.208-T-09
RTE 100%
1124.609-T-10
RTE 100%
414.138-T-04
414.137-T-04
RTE 100%
RTE 100%
56
100%
100%
100%
100%
100%
100
0
0
0
0
0
0
0
0
0
0
0