2017
ANNUAL
REPORT
FOR THE YEAR ENDED
30 JUNE 2017
ABN 51 128 698 108
CORPORATE DIRECTORY
Share Registry
Security Transfer Registrars
770 Canning Highway
Applecross WA 6153
Telephone 08 9315 2333
registrar@securitytransfer.com.au
Auditors
PricewaterhouseCoopers
Level 11, 70 Franklin Street
Adelaide SA 5001
Telephone 08 8218 7000
Registered Office
Iron Road House
Level 6, 30 Currie Street
Adelaide SA 5000
Telephone 08 8214 4400
Postal Address
GPO Box 1164
Adelaide SA 5001
ASX Code IRD
Corporate Governance Statement
http://www.ironroadlimited.com.au/
about-us/corporate-governance
www.ironroadlimited.com.au
admin@ironroadlimited.com.au
ABN 51 128 698 108
Directors
Peter Cassidy
Chairman
Andrew Stocks
Managing Director
Jerry Ellis AO
Non-Executive Director
Leigh Hall AM
Non-Executive Director
Julian Gosse
Non-Executive Director
Ian Hume
Non-Executive Director
General Manager
Larry Ingle
Company Secretary
Jaroslaw (Jarek) Kopias
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CONTENTS
OVERVIEW
MANAGING DIRECTOR'S REPORT
Corporate Directory
Chairman's Letter
Year highlights
Central Eyre Iron Project
2
4
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11 Global Mineral Resource and
Ore Reserve Statement
DIRECTORS' REPORT
12 Directors' report overview
14
Remuneration report
OPERATING AND FINANCIAL REVIEW
24 Company strategy and operating activities
FINANCIAL STATEMENTS
27
Financial statements overview
28 Consolidated Income Statement
29 Consolidated Statement of Financial Position
30 Consolidated Statement of Change in Equity
31 Consolidated Statement of Cash flows
32 Notes to the financial statements
SIGNED STATEMENTS
49 Directors' declaration
ASX INFORMATION
55
ASX Additional Information
50
Independent auditor's report
IRON ROAD ANNUAL REPORT 2017
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION CHAIRMAN'S
LETTER
On behalf of the Board
of Iron Road Limited,
it is with pleasure
I present to you the
Annual Report
for the year ended
30 June 2017.
L-R Dr Peter Cassidy, Iron Road
Chairman, The Hon Darren Chester MP,
Minister for Infrastructure & Transport, Mr
Cai Zemin, Head of International Business
China Railway Group attending the
signing of the renewal of the Major Project
Facilitation for the CEIP.
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Dear Shareholder
It has been a year of great progress
for Iron Road. We have been able to
generate significant momentum towards
financing and construction of our flagship
Central Eyre Iron Project (CEIP) through
the achievement of key milestones and
necessary project approvals.
One of the year’s most significant
milestones was the April 2017
announcement that three major Chinese
banks - China Development Bank (CDB),
Industrial and Commercial Bank of China
Ltd (ICBC) and China Construction Bank
(CCB) - had formally indicated lending
appetite for the CEIP’s requisite debt
financing, with loan tenor of up to 15
years. The attendance of our project
partner China Railway Group Limited
(CREC) at various meetings with the
banks greatly contributed to this signal
of support for near-term financing of
the CEIP. A coordinated due diligence
process is underway for each of the
financial institutions following a year long
period of due diligence activities by CREC.
Another milestone occurred a month
later, when we were very pleased to
announce that the South Australian
Government had granted the CEIP
Mining Lease and Development Approval.
These two approvals are fundamental
to the development of the project and
acknowledgement by the SA Premier
and his Government of the importance
of this project to the State. It followed the
renewal of our Major Project Facilitation
status with the Federal Government
and the declaration of the rail and port
components as a ‘Priority Project’ by
Infrastructure Australia, a statutory
authority of the Australian Government.
The CEIP is only one of ten Projects
currently on the national Infrastructure
Priority List.
The only outstanding primary
government approval is a Commonwealth
environmental legislation decision
pertaining to the shipping component of
the CEIP, and we expect this approval
imminently. Secondary approval
applications are now being prepared and
we are moving towards reaching a Final
Investment Decision together with China
Railway Group Limited (CREC).
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During the year, the Project
Commercialisation Programme
undertaken in partnership with CREC
has delivered approximately US$300
million of capital savings. The new
capital estimate in 2017 real terms has
been a significant outworking of CREC’s
project familiarisation and due diligence
processes. Cost reductions were primarily
driven by CREC’s in-house procurement
systems and leverage associated with
key capital items and equipment required.
Furthermore, we still see additional
scope for reducing costs materially for
the CEIP, which would maintain the
trend established from our first studies
demonstrating continual reductions in risk
and cost profiles.
Despite ongoing volatility, average iron ore
prices for the year showed a significant
improvement over the previous period.
Looking forward, the general outlook for
world seaborne iron ore trade remains
very positive despite a levelling out of the
previous strong growth in Chinese steel
production and an expected continuation
in price volatility in the short term as
new ore production is absorbed into
the market.
China’s dominance of the seaborne
iron ore trade is set to continue as their
domestic iron ore production further
declines and restructuring of the steel
industry continues to meet stricter
environmental standards, improved steel
quality and mill efficiency initiatives. This of
course drives increased demand for high
quality imported iron ore feedstocks and
the CEIP is very well positioned to fill part
of this ongoing demand. Discussions with
major Chinese steel mills regarding future
offtake remain extremely positive.
Our progress this year has been backed
by a strong relationship with our strategic
partner China Railway Group Limited. I
feel it has been one of significant progress
on both a project and corporate level.
We are grateful to all our shareholders for
your support during the year. The ground
work has been set to take the project to
a Final Investment Decision, and we look
forward to updating shareholders on our
progress in the coming year.
Peter Cassidy
Chairman
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
MANAGING
DIRECTOR'S
REPORT
Iron Road continues to make
considerable progress towards
development and Final Investment
Decision (FID) for the Central Eyre Iron
Project (CEIP). There were several
highlights during the past year,
the most significant being:
» The granting of the two key South
Australian Government approvals
required for the CEIP. On 3 May 2017
Minister Tom Koutsantonis granted
the Mining Lease for the Company’s
proposed magnetite mining and
minerals processing operation
(CEIP Mine) near Warramboo on
the central Eyre Peninsula for a
term of 21 years. Concurrently, His
Excellency the Honourable Hieu Van
Le AC, Governor of South Australia,
on advice from Executive Council,
granted Development Approval for
the infrastructure components of
the CEIP (CEIP Infrastructure).
» The declaration of the CEIP
infrastructure (rail and port) a Priority
Project by Infrastructure Australia, a
statutory authority of the Australian
Government, during September
2016. The CEIP is one of only ten
Projects on the national Infrastructure
Priority List and the only ‘Opportunity
for Growth Project’ nationwide.
» The National Native Title Tribunal
registered the Indigenous Land
Use Agreement (ILUA) negotiated
between Iron Road and the Barngarla
Aboriginal Corporation (on behalf of
the Barngarla Native Title Claimants).
» Iron Road’s April 2017 announcement
regarding debt financing expressions
of interest received from major
Chinese banks was a breakthrough
milestone for the Company,
indicating credible near-term
project financing prospects.
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His Excellency Mr Cheng Jingye (centre),
Ambassador of China to Australia,
at Iron Road House, Adelaide, October 2016
In addition to the above, Iron Road
spent considerable effort working
with China Railway Group (CREC) on
their value engineering and capital
re-estimate components of the Project
Commercialisation Programme, including
a comprehensive review of the basis of
design for the project. As a consequence
the estimated capital cost of the CEIP
reduced by nearly US$300 million to
US$3.7 billion, primarily driven by CREC’s
in-house procurement systems and
leverage associated with key capital items
and equipment required.
Iron Road had the pleasure of hosting
His Excellency Mr Cheng Jingye,
Ambassador of China to Australia,
at Iron Road House, Adelaide. The
Ambassador’s visit coincided with
the arrival of two teams of specialist
CREC engineers from Kuala Lumpur
and Beijing, accompanied by senior
CREC executives.
The Company’s proposed deep water
port will be a first for South Australia,
with the export and import infrastructure
expected to become a strong catalyst for
further development in the region. Iron
Road’s intent to allow third party access
to the Cape Hardy port facilities was
further strengthened by the successful
Registration of Preliminary Interest
process led by Regional Development
Australia Whyalla and Eyre Peninsula on
behalf of the Company.
The ongoing strengthening of the
partnership between Iron Road and
Emerald Grain, a subsidiary of Sumitomo
Corporation, is important in realising
maximum benefit for local communities
and grain producers by offering choice
and a more competitive market in
relation to the export of grain on
the Eyre Peninsula.
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
MANAGING DIRECTOR'S REPORT
HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2017
Figure 1: Location of the CEIP, showing the mine, infrastructure corridor and port
Central Eyre Iron Project (CEIP, IRD 100%)
Iron Road continues to work towards
development of a new credible and cost
competitive iron concentrate export and
infrastructure businesses, unlocking
significant benefits well beyond the
life of the mining and ore processing
operations. The proposed deep water
port at Cape Hardy, capable of handling
the largest bulk cargo vessels, alongside
a substantial heavy haulage railway, will
be a first for South Australia and a radical
improvement on the State’s existing
infrastructure base.
The CEIP is located on the Eyre
Peninsula, South Australia. The proposed
mine is located approximately 30
kilometres southeast of the regional
centre of Wudinna and the proposed port
is seven kilometres south of Port Neill at
Cape Hardy. The mine and the port will
be linked by an infrastructure corridor
containing rail, water and power.
The CEIP will produce a high quality, low
impurity iron concentrate that will serve
as a clean, superior blending product for
steel manufacturers. An output of 24Mtpa
of approximately 67% iron concentrate
is planned over 30 years. With a
competitive projected operating cost,
CEIP iron concentrate is well positioned
to actively displace lower quality iron
ores as customers increasingly focus
on high quality, low impurity steel
making feedstocks.
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IRON ROAD ANNUAL REPORT 2017 Figure 1: Location of the CEIP, showing the mine, infrastructure corridor and port
MANAGING DIRECTOR'S REPORT
HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2017
Project Commercialisation Programme
During April 2016 Iron Road announced
the signing of a Strategic Co-operation
Agreement with a wholly owned
subsidiary of China Railway Group.
CREC is one of the world’s largest
infrastructure construction companies,
and the key development and financing
partner for the CEIP.
The Agreement with CREC includes
a Commercialisation Programme,
consisting of 11 key elements. Each
element is a distinct cooperative activity
between Iron Road and CREC in support
of a FID and securing project finance.
Significant time and effort has been
spent working with CREC on the value
engineering and capital re-estimate
component of the commercialisation
programme, including a comprehensive
review of the basis of design for the
project. A CREC Project Manager,
resident in the Iron Road office, assisted
with information transfer to numerous
large engineering teams based in
China and Malaysia.
Following detailed site visits by CREC
port, rail, mine and process plant
specialists, information exchange and
detailed question and answer sessions,
CREC have reviewed and refined the
capital requirement for the project
and together with Iron Road, formed a
picture of how the implementation of the
Project could occur. As a consequence
the estimated capital cost of the CEIP
has reduced by nearly US$300 million
to US$3.7 billion, primarily driven by
CREC’s in-house procurement systems
and leverage associated with key capital
items and equipment required.
Apart from the Commercialisation
Programme’s objective of pursuing
capital cost efficiencies, another major
element is ensuring that the industry
competitive operating cost structure that
Iron Road has demonstrated through its
detailed studies may be underpinned by
competitive future power pricing in South
Australia. Iron Road, together with major
power utilities and service providers,
continue to examine optimal long-term
solutions for securing both a competitive
and secure supply of power with the
CEIP expected to draw a significant
electrical load as the mine and process
plant progressively ramp-up from a
currently projected 2020 start-up.
Debt financing talks commenced with
meetings held in Beijing and Shanghai
during February and March 2017.
Attended jointly by Iron Road and CREC,
detailed presentations were given
to China Development Bank (CDB),
Industrial and Commercial Bank of China
Ltd (ICBC) and China Construction Bank
(CCB). CREC is an important strategic
partner for major Chinese financial
institutions given its status as one of
China’s largest State Owned Enterprises.
Following a further meeting in Sydney,
formal Expression of Interest (EOI)
Letters were received from each of the
three banks indicating strong lending
appetite for US$3 billion debt financing.
The EOI’s indicated a willingness and
ability to provide senior debt with loan
tenors of up to 15 years, subject to
satisfactory due diligence, completion
of formal financing documentation and
credit committee approval. Letters of
credit, working capital and financial
instrument facilities were also offered.
Each of the banks also clearly signalled
that CREC’s commitment for 10Mtpa
of high quality iron concentrate offtake,
proposed equity investment at both the
Iron Road and CEIP levels, together with
the provision of a Project Completion
Guarantee was driving their strong
support and appetite to lend.
Equity finance interest is gaining
momentum as a result of the strong
debt financing feedback described
above. Iron Road continues to focus
on discussions with highly experienced
local, potential project engineering and
construction partners that forsee a
clear strategic opportunity in positioning
themselves to work with CREC.
Advanced talks have also taken place
with large global mining contractors
that have identified and appreciated
the scale of the CEIP to respective
forward order books and work in hand.
Thiess-RWE, leading experts in
continuous mining systems such as In-
pit Crushing and Conveying (IPCC) and
mining contracting, recently conducted
a preliminary mine plan review at the
CEIP. The review indicates that significant
mine establishment efficiencies and
cost savings around the planned use of
selective in-pit crushing and conveying
technologies are likely. Further detailed
work is anticipated that is expected
to result in a significant reduction in
up-front capital costs and shape a key
component of the Independent Technical
Expert report to be provided to the Banks
and other financial institutions during their
due diligence processes. In addition, the
engagement of a suitably experienced
law firm specialising in project finance
to undertake comprehensive legal
services as well as the commissioning
of an updated market report from a well
credentialed and independent resources
consultancy, is in progress.
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MANAGING DIRECTOR'S REPORT
HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2017
Central Eyre Iron Project (CEIP, IRD 100%)
Project Approvals & Environmental
On 3 May 2017, and following an 18
month assessment period, the Premier
of South Australia, the Hon Jay Weatherill
MP, and the Minister for Mineral
Resources and Energy, the Hon Tom
Koutsantonis MP, jointly announced the
approval of Iron Road’s Mining Lease and
Development Applications. Mineral Lease
6467 for the mine at Warramboo was
granted for a term of 21 years, and may
be renewed for a further term, while the
Development Approval (DA) in respect of
the CEIP infrastructure does not have an
expiry date.
The last outstanding primary approval
for the CEIP is a decision by the
Commonwealth Minister for the
Environment and Energy (DoEE) in
respect of the offshore / shipping
component of the CEIP under the
Environment Protection and Biodiversity
Conservation Act 1999 (Cth). The
decision relates to the port and the
potential impact that increased shipping
movements in the Spencer Gulf could
have on the Southern Right Whale, a
protected species. Approval has been
delayed to later in the year due to work
volumes within DoEE.
Work on the two largest secondary
approvals required prior to the
commencement of construction
activities, being the Program
for Environment Protection and
Rehabilitation for the mine and the
Construction Environmental Management
Plan for the infrastructure is well
advanced with the intention of submitting
applications to the South Australian
Government in the final Quarter of 2017.
Community & Stakeholder Engagement
Ongoing engagement continued during
the year with various stakeholders
including Regional Development
Australia Whyalla and Eyre Peninsula,
the Eyre Peninsula Local Government
Association, impacted District
Councils (Wudinna, Cleve, Kimba
and Tumby Bay), representatives of
the Barngarla Aboriginal Corporation
and various community members
and landowners. Briefings were also
provided to Government agencies
and State and Federal politicians
and, together with Emerald Grain, to
the broader agricultural industry.
The Company’s participation in the
Wudinna Community Centenary and
Annual District show, part of the town’s
100 year celebrations, also provided
an opportunity to give interested
community members a project update.
The CEIP Community Consultative
Committee (CCC), formed by the
Warramboo and Wudinna communities
in 2013 to provide a key mechanism for
community engagement relating to the
CEIP, held its final meeting in April 2017.
It is envisaged that a committee
comprising various stakeholders
and Iron Road, chaired by Wudinna
District Council, will perform a
similar role going forward.
Iron Road contributed to the South
Australian Government’s review of the
Mining Act 1971, making a submission
in its own right and contributing to two
others. Of particular importance to the
Company is a regulatory and policy
regime that improves Government
efficiencies, has clear timeframes for the
assessment of tenement applications,
reduces fees and charges in line with
other Australian jurisdictions and provides
a mechanism for changes to mining
operations to occur.
Planning for ongoing engagement
post-major approvals is underway.
This includes various opportunities
for seeking feedback from community
members in relation to the Program
for Environment Protection and
Rehabilitation, in particular demonstrating
how Iron Road intends meeting its
environmental outcomes for the mine.
On 1 December 2016, the National
Native Title Tribunal registered the
Indigenous Land Use Agreement (ILUA)
negotiated between Iron Road and
the Barngarla Aboriginal Corporation
(on behalf of the Barngarla Native Title
Claimants (SAD 6011/1998)). The ILUA
covers all areas of the CEIP and its
registration pursuant to the Native Title
Act 1993 (Cth) was the final process
required to bring the ILUA into effect.
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IRON ROAD ANNUAL REPORT 2017 MANAGING DIRECTOR'S REPORT
HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2017
Iron Ore Marketing
While the previous strong growth in
Chinese steel production is levelling
out, demand for imported iron ore into
this key target market for CEIP product
remains very strong which, in part, is
being driven by the progressive decline
in domestic Chinese iron ore production.
Restructuring of the Chinese steel
industry, together with continued active
enforcement of stricter environmental
regulations, is contributing to the ongoing
removal of less efficient and more
polluting steel production capacity. This
has resulted in an increased reliance
on higher quality iron ore feedstocks
together with a widening in the pricing
premium for these.
Corporate
Ongoing discussion with major Chinese
steel mills, including those who
previously entered into Memoranda
of Understanding (MoUs) with Iron
Road, has reinforced the view that high
quality CEIP product would prove a very
desirable addition to feedstock blends
and result in significant reductions in mill
pollution and operating costs.
Average spot benchmark iron ore prices
during FY17 (62% Fe Fines, CFR China,
in AUD terms) exceeded the CEIP’s
modelled long-term (2021-2035) real
benchmark price assumptions.
During September 2016 the CEIP
infrastructure (rail and port) was declared
a Priority Project by Infrastructure Australia
(IA), a statutory authority of the Australian
Government. The CEIP is one of only ten
Projects on the national Infrastructure
Priority List and the only ‘Opportunity
for Growth Project’ nationwide. The
categorisation of CEIP as a Project rather
than an Initiative reflects that the full
business case completed by Iron Road
has been positively assessed by the IA
Board.Initiatives are potential infrastructure
solutions for which a business case has
not yet been completed.
In October 2016 His Excellency Mr
Cheng Jingye, Chinese Ambassador to
Australia, visited the joint Iron Road-CREC
development team at Iron Road House
in Adelaide. The Ambassador’s visit
coincided with the arrival of two teams
of specialist CREC engineers from Kuala
Lumpur and Beijing, accompanied by
senior CREC executives. Over 50 CREC
staff worked with Iron Road as part of the
Project Commercialisation Programme
for the CEIP.
On 10 November 2016, the Hon Darren
Chester, Federal Minister for Infrastructure
and Transport, renewed the Company’s
Major Project Facilitation service in
respect of the CEIP. The renewal
recognises, on a national level, the
strategic significance of the CEIP to the
State’s economic growth, employment
and infrastructure development.
In early December 2016 an open invitation
was made by Regional Development
Australia Whyalla and Eyre Peninsula
(RDAWEP) to third parties, interested
in utilising Iron Road’s proposed Cape
Hardy port facilities, to submit a non-
binding Registration of Preliminary
Interest. Individuals and businesses that
may wish to use the port facilities for
the import or export of commodities,
goods and services, or service providers’
essential for general port operations,
were encouraged to contact RDAWEP
for further information. The process was
extended from the initial closing date of
31 March 2017 to August 2017 due to
the high level of interest shown by
several parties.
Press conference, May 2017 with Premier,
the Hon Jay Weatherill MP, the Minister
for Mineral Resources and Energy, the
Hon Tom Koutstantonis and Iron Road
Managing Director, Andrew Stocks
MINING LEASE &
DEVELOPMENT
APPROVAL
RECEIVED
Iron Road’s Mining Lease and
Development applications were
approved by the SA Government
with a formal announcement being
made by the Premier, the Hon Jay
Weatherill MP and the Minister for
Mineral Resources and Energy,
the Hon Tom Koutstantonis MP on
Wednesday, 3 May 2017.
Receiving the two key South
Australian Government approvals
for the CEIP Mine and associated
Infrastructure is a significant
milestone for the Company and
adds to the momentum being
generated in the areas of finance
and construction, particularly in light
of Iron Road’s strategic partnerships
with China Railway Group Limited
(CREC) and Emerald Grain.
The next stages of Iron Road’s
development journey will
include further engagement with
landowners and stakeholders,
preparing secondary approval
applications, reaching a Final
Investment Decision with CREC and
ultimately achieving financial close.
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MANAGING DIRECTOR'S REPORT
HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2017
Gawler Iron Project (GIP, IRD 81-90% of the iron rights)
The Gawler Iron Project (GIP) is located approximately 25km north of the standard gauge Trans-Australian Railway that connects to
the Central Australia Railway at Tarcoola.
The GIP hosts mineralisation anticipated to support a small to medium scale magnetite iron ore mining operation with the potential
to produce a quality iron concentrate using a simple beneficiation process. The Company has focused all effort on the CEIP and
therefore minimal evaluation activity has been conducted on the GIP and no expenditure is forecast in the next period..
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IRON ROAD ANNUAL REPORT 2017 MANAGING DIRECTOR'S REPORT
HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2017
Global Mineral Resource and Ore Reserve Statement
The Global Mineral Resource and Ore Reserve Statement remains
unchanged from that published in the 2016 Iron Road Annual
Report. The Statement is reviewed annually and compared with
the Statement form the previous year. Governance and internal
controls measures ensure that the Statement is valid in its current
context and that depletion through mining (if any) and material
changes to other factors are taken into account.
CEIP Ore Reserve Summary
Resource Classification
Dry Tonnes
(Mt)
Fe
(%)
SiO2
(%)
Al2O3
(%)
Proved
Probable
Total
2,131
15.55
53.78
12.85
1,550
14.40
53.58
12.64
3,681
15.07
53.70
12.76
The Ore Reserves estimated for CEIP involving mine planning is based on and fairly represents information and supporting
documentation compiled by Mr Bob McCarthy, a Member of the Association of Professional Engineers and Geoscientists of British
Columbia (Canada) and a full time employee of SRK Consulting (North America). Mr McCarthy has sufficient experience relevant to
the style of mineralisation and the type of deposits under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves”. Mr McCarthy consents to the inclusion in the report of the matters based on his information in the form and context in
which it appears. The Ore Reserves estimated for the CEIP involving aspects other than mine planning is based on and fairly represents
information and supporting documentation compiled by Mr Larry Ingle, a Member of the Australian Institute of Mining and Metallurgy
and a full time employee of Iron Road Limited. Mr Ingle has sufficient experience relevant to the style of mineralisation and the type of
deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition
of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Ingle consents to the inclusion
in the report of the matters based on his information in the form and context in which it appears. This report includes results that have
previously been released under JORC 2012 by the Company on 2 May 2016. The Company is not aware of any new information or data
that materially affects the information included in this announcement and all material assumptions and technical parameters underpinning
the Ore Reserve continue to apply and have not materially changed.
CEIP Global Mineral Resource
Location
Classification
Murphy South/Rob Roy
Boo-Loo/Dolphin
Total
Measured
Indicated
Inferred
Indicated
Inferred
Tonnes
(Mt)
Fe
(%)
2,222
15.69
474
15.6
667
16
796
16.0
351
17
4,510
16
SiO2
(%)
53.70
53.7
53
53.3
53
53
Al2O3
(%)
12.84
12.8
12
12.2
12
13
P
(%)
0.08
0.08
0.08
0.07
0.09
0.08
LOI
(%)
4.5
4.5
4.3
0.6
0.7
3.5
The Murphy South/Rob Roy Mineral Resource estimate was carried out following the guidelines of the JORC Code (2004) by Iron
Road Limited and peer reviewed by Xstract Mining Consultants. The Murphy South - Boo-Loo/Dolphin oxide and transition Resource
estimate was carried out following the guidelines of the JORC Code (2004) by Coffey Mining Limited. The Boo-Loo/Dolphin fresh Mineral
Resource estimate was carried out following the guidelines of the JORC Code (2012) by Iron Road Limited and peer reviewed by AMC
Consultants. This report includes results that have previously been released under JORC 2004 and JORC 2012 by the Company on 30
June 2010, 28 May 2013 and 27 February 2015. The Company is not aware of any new information or data that materially affects the
information included in this announcement and all material assumptions and technical parameters underpinning the Mineral Resource
continue to apply and have not materially changed.
CEIP Indicative Concentrate Specification – 100 micron (p80)*
Iron (Fe)
66.7%
Silica (SiO2)
3.36%
Alumina (Al2O3)
1.90%
Phosphorous (P)
0.009%
* The concentrate specifications given here are based on current data from metallurgical test work, bulk samples and simulation modelling designed
specifically to emulate the proposed beneficiation plant.
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
DIRECTORS'
REPORT
His Excellency Mr Cheng Jingye,
Ambassador of China to Australia,
at Iron Road House, Adelaide,
October 2016
Your directors present
their report on the
consolidated entity
consisting of Iron Road
Limited and the entities
it controlled at the end
of or during the year
ended 30 June 2017.
Throughout this report, the consolidated
entity is referred to as the Group.
Directors and Company
Secretary
The following persons were directors of
Iron Road Limited during the whole of
the financial year and up to the date of
this report:
Peter Cassidy
Andrew Stocks
Jerry Ellis AO
Leigh Hall AM
Julian Gosse
Ian Hume
Jaroslaw Kopias – appointed as
Company Secretary (22 December 2016)
Leonard Math – resigned as
Company Secretary (22 December 2016)
12
IRON ROAD ANNUAL REPORT 2017 Dividends
No dividends were paid, declared or
recommended during the year ended 30
June 2017.
Corporate governance
statement
Iron Road Limited and the Board
are committed to achieving and
demonstrating high standards of
corporate governance. Iron Road’s
corporate governance statement was
approved by the Board on 15 September
2017 and can be viewed at www.
ironroadlimited.com.au/about-us/
corporate-governance.
Review of operations
Information on the operations and
financial position of the Group and its
business strategies and prospects is
set out in the review of operations and
activities on page 25 of this report.
Significant changes
in the state of affairs
There were no significant changes in the
state of affairs of the Group during the
financial year.
Events since the end
of the financial year
No matters of circumstances have arisen
since 30 June 2017 that have significantly
affected the Group’s operations, results or
state of affairs.
Likely developments and
expectedresults of operations
Likely developments in the operations
of the Group and expected results of
these operations in future financial years
have been included in the Operating and
Financial Review.
Environmental regulation
The Group’s operations are subject to
environmental regulation in respect to
mineral tenements relating to exploration
activities on those tenements. No on-
ground exploration or other work was
undertaken during the financial year and
there were subsequently no breaches
of any environmental requirements. The
Group’s proposed CEIP Infrastructure
is subject to the Environment Protection
and Biodiversity Conservation Act 1999
(Cth) as this element of the Project was
declared a ‘Controlled Action’ on the 26
August 2014. The Group has reviewed
its energy consumption and greenhouse
gas emissions for the reporting year, with
both found to be below the reporting
threshold as specified within the National
Greenhouse and Energy Reporting Act
2007 (Cth) (NGER).
Principal activities
The principal activity of the Group during
the year was the exploration
and evaluation of the Groups iron
ore interests at its flagship project,
the Central Eyre Iron Project (CEIP)
in South Australia.
The following milestones occurred
during the year:
» Mining Lease and Development
Approval for the CEIP granted
by the South Australian
Government on 3 May 2017
» Iron Road’s Central Eyre Iron Project
(CEIP) partner, China Railway
Group Limited (CREC), delivers an
estimated US$295 million of capital
savings as part of the Joint Project
Commercialisation Programme.
» The drafting of two secondary
approvals for the CEIP – a
Programme for Environment
Protection and Rehabilitation
(PEPR) for the mine and a
Construction Environmental
Management Plan (CEMP) for the
infrastructure is well underway.
» Formal Expression of Interest
(EOI) letters received from
three major banks indicating
strong lending appetite for CEIP
US$3 billion debt financing:
Industrial and Commercial
Bank of China Ltd and China
Construction Bank are ranked
No. 1 and No. 2 globally and the
policy bank, China Development
Bank is ranked No. 6.
» Regional Development Australia
Whyalla and Eyre Peninsula
(RDAWEP), on behalf of Iron
Road, concluded a successful
Registration of Preliminary Interest
process in relation to the Cape
Hardy port development.
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
DIRECTORS' REPORT
Peter Cassidy
Chairman
Andrew Stocks
Managing Director
Jerry Ellis AO
Non-executive director
Dr Cassidy is co-founder and Chairman of
The Sentient Group (Sentient), Chairman
of Enirgi Group Corporation and a Director
of Xinli Titanium. Prior to co-founding
Sentient in 2000, Dr Cassidy established
AMP Life’s private equity division,
worked with Ford Motor Company and
was involved with industry development
on behalf of Australian State and
Commonwealth Governments.
Dr Cassidy holds a degree in geology and
a first class honours degree in chemistry
from the University of Tasmania and a PhD
in coal science from Monash University.
No other directorships of listed companies
have been held in the last three years.
Mr Stocks is a Mining Engineer with
approximately thirty years’ experience
in the resources sector, primarily in
mining operations and corporate roles.
He has been particularly active in the
areas of business optimisation, cost and
production efficiency improvements,
project evaluation and development of
mining projects in Australia and overseas.
Mr Stocks has led Iron Road as
Managing Director from its inception
and is an elected councillor on the
South Australian Chamber of Mines
and Energy (SACOME) Council.
No other directorships of listed
companies have been held
in the last three years.
Mr Ellis has had a long and distinguished
career in business, particularly in the
resources sector. Mr Ellis’ career included
three decades at BHP Ltd, Chairing the
company from 1997 to 1999. He also
served on the boards of a number of
listed companies and governing bodies
including Newcrest Mining, Aurora Gold,
the International Copper Association,
Australia and New Zealand Banking
Group, the International Council on Metals
and the Environment and the American
Mining Congress.
Mr Ellis is the former Chairman of
Alzheimers Australia (NSW), former
Chancellor of Monash University, former
President of the Minerals Council of
Australia and former Chairman of the
Australia-Japan Foundation and the
Australian National Occupational Health
and Safety Commission.
In the three years immediately prior to the
end of the financial year, Mr Ellis served as
a director of the following companies:
» MBD Energy Limited
14
IRON ROAD ANNUAL REPORT 2017 DIRECTORS' REPORT
Leigh Hall AM
Non-executive director
Julian Gosse
Non-executive director
Ian Hume
Non-executive director
Mr Gosse has served as a professional
director for the last 20 years on
various listed company Boards.
Prior to this he was involved in the
stockbroking, merchant banking
and venture capital industries.
In the three years immediately prior to the
end of the financial year, Mr Gosse served
as a director of the following companies:
Mr Ian Hume's career in the resources
industry stretches back several decades,
primarily in the fields of managed
fund investments, capital raising and
project development. Mr Hume was a
Founding Partner of The Sentient Group,
a manager of closed end private equity
funds specialising in global investments
in the natural resource industries.
» WAM Research Limited*
» Clime Capital Limited*
» Australian Leaders Fund*
* denotes current directorships
He remains an independent advisor
to The Sentient Group, following his
retirement from the fund in 2009.
Prior to the founding of The Sentient
Group, Mr Hume was a consultant
to AMP’s Private Capital Division.
In the three years immediately prior to the
end of the financial year, Mr Hume served
as a director of the following companies:
» Golden Minerals Company*
» Silver City Minerals Limited
» Marengo Mining Limited
» African Energy Resources Limited*
* denotes current directorships
Mr Hall is a highly experienced company
director, with a strong background
in finance and investment from a
career spanning senior executive
positions at AMP, membership of a
range of investment oversight boards,
board positions at securities industry
organisations, and significant participation
in government advisory boards related to
the securities, corporate law, managed
funds and superannuation sectors.
Mr Hall is a Member of the Order of
Australia, with a citation for service to
business and commerce, in particular
to the improvement of ethical and
professional standards and the
efficiency of the Australian securities
markets. Mr Hall is also a Fellow of the
Institute of Chartered Accountants in
Australia and a Fellow of the Australian
Institute of Company Directors.
In the three years immediately prior to the
end of the financial year, Mr Hall served
as a director of the following companies:
» Funds SA
» Enirgi Group Corporation
» Compliance Committee, Lazard Asset
Management Pacific* (Chairman)
* denotes current directorships
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
DIRECTORS' REPORT
REMUNERATION REPORT
Meetings of directors
There were two formal board meetings
held during the year ended 30 June 2017
with attendance as follows:
Ian Hume
Julian Gosse
Leigh Hall AM
Jerry Ellis AO
Andrew Stocks
Peter Cassidy
0
1
2
Board meeting attendance
16
Remuneration report
The directors present the Iron Road
Limited 2017 remuneration report,
outlining key aspects of the remuneration
policy and framework and the
remuneration awarded during the year.
The report is structured as follows:
a) Key management personnel (KMP)
covered in this report
b) Remuneration policy and link to
performance
c) Elements of remuneration
d) Remuneration expenses for
executive KMP's
e)
Contractual arrangements for
executive KMP's
f) Non-executive director
arrangements
g) Additional statutory information
a) Key management personnel
covered in this report
Executive and Non-executive
directors:
Peter Cassidy – Chairman
Andrew Stocks – Managing director
Jerry Ellis AO – Non-executive director
Leigh Hall AM – Non-executive director
Julian Gosse – Non-executive director
Ian Hume – Non-executive director
Other key management personnel:
Larry Ingle – General Manager
b) Remuneration policy
and link to performance
The remuneration policy of Iron Road
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. The Board of Iron
Road Limited believes the remuneration
policy is appropriate and effective in its
ability to attract and retain high calibre
executives and directors to manage
the Group.
The remuneration policy, detailing the
terms and conditions for the executive
director and other senior executives,
was developed by the Board. All
executives receive a base salary (which is
determined by factors such as skills and
relevant experience) and superannuation.
The Board reviews executive packages
annually by reference to the Group’s
results, executive performance and
relevant information on prevailing
remuneration practices across the
resources sector for comparable roles
within other listed organisations.
The Board sought shareholder approval
for an Equity Incentive Plan at the Annual
General Meeting on 28 November 2014.
This plan forms part of the Group’s
remuneration policy and provides the
Group with a mechanism for driving
long term performance for shareholders
and the retention of executives. The
Board has the discretion to issue shares
or rights to acquire shares and offers
may be subject to performance criteria
consistent with the Group’s key strategic
objectives. The plan is administered by
the Board which has the discretion to
determine which persons are eligible
to participate in the plan. Additional
information on the Equity Incentive Plan
is contained in section c).
IRON ROAD ANNUAL REPORT 2017 DIRECTORS' REPORT
REMUNERATION REPORT
In the event of serious misconduct or a
material a material misstatement in the
Group’s financial statements, the Board
can cancel or defer performance based
remuneration and may also claw back
performance based remuneration paid in
previous financial years.
Directors, executives and other
employees receive a superannuation
guarantee contribution required by the
government and do not receive any other
retirement benefits. Some individuals,
however, may choose to sacrifice part of
their salary towards superannuation.
Statutory performance indicators
The Board aims to align executive
remuneration to strategic and business
objectives. As required by the
Corporations Act 2001, the figures below
show the Group’s financial performance
over the last five years. However, these
are not necessarily consistent with
the measures used in determining the
variable amounts of remuneration to be
awarded to KMP. As a consequence,
there may not always be a direct
correlation between the statutory key
performance measures and the variable
remuneration awarded.
c) Elements of remuneration
Fixed annual remuneration
Executives receive their fixed
remuneration as cash and statutory
superannuation. Fixed remuneration
is reviewed annually by the Board
and benchmarked against market
data for comparable roles in listed
companies across the resources
sector. In the year ended 30 June
2017, fixed remuneration of executives
and KMP remained unchanged.
Long term incentives
The remuneration policy has been
designed to align the long term
objectives between the Group, its
directors and executives by encouraging
strong performance in the realisation
of the Group’s growth strategy and the
enhancement of shareholder value.
In prior years, this has been facilitated
through the Employee Share Option Plan
and the issue of share options which
were granted for no consideration, but
may contain performance related vesting
conditions (share price) or milestone
related vesting conditions which must
be satisfied within defined timeframes
in order for the options to be exercised.
Once vested, the options must be
exercised prior to their expiry date.
There are no participating rights or
entitlements inherent in the options.
To address future incentive
arrangements, the Board adopted the
Iron Road Equity Incentive Plan dated
8 October 2014, directed at attracting,
motivating and retaining persons with
the skills and experience to deliver
successful outcomes in pursuit of the
Group’s key strategic goals.
Awards under the plan may be structured
as either shares or performance rights to
acquire shares and the Board may grant
such awards with specific performance
criteria that are to be satisfied within
defined time restrictions.
For details of individual interests in
options and performance rights at
year end, refer to section g).
Revenue
Loss before tax
Share price at 30 June
Basic loss per share (cents)
30 June 2017
$
30 June 2016
$
30 June 2015
$
30 June 2014
$
30 June 2013
$
4,407
5,481
321,831
1,232,188
794,279
( 3,926,284)
( 6,674,238)
( 4,910,678)
( 4,207,036)
( 5,469,066)
0.175
( 0.58)
0.110
( 1.16)
0.065
( 0.86)
0.300
( 0.83)
0.170
( 1.82)
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
DIRECTORS' REPORT
REMUNERATION REPORT
Iron Road's vision is
to become a trusted
and reliable supplier
of premium iron
concentrates to the
Asian marketplace.
Proposed port development site - Cape Hardy, South Australia
d) Remuneration expenses for
executive KMP
The following table shows details of the
remuneration expense recognised for the
Group’s executive KMP for the current
and previous financial year measured in
accordance with the requirements of the
accounting standards.
Fixed remuneration
No cash bonuses were paid to executive
KMP during the financial year.
Short term employee
benefits
Long term
benefits
Cash
salary
Year
$
Non-
monetary
benefits
$
Annual and
long service
leave
$
Post
employment
benefits
Superannuation
Variable
remuneration
Share based
payments
Performance
rights*
$
$
Total
$
Name
Managing Director
Andrew Stocks
Other key management personnel
General Manager
Larry Ingle
Chief Financial Officer
2017
2016
365,297
365,297
-
-
23,968
(8,278)
34,703
34,703
68,119
492,087
78,818
470,539
2017
2016
306,301
306,301
556
6,285
(35,070)
29,099
29,099
45,412
381,368
52,546
359,161
Howard Rae - resigned 13 October 2015
2016
163,791
Total Executive Director and KMP
2017
2016
671,598
835,389
-
-
6,285
(13,186)
24,524
(56,534)
5,851
225,000
381,456
63,802
69,653
113,531
356,364
873,455
1,211,156
* Performance rights under the executive LTI scheme are expensed over the vesting period. Refer to section g) for additional information.
18
IRON ROAD ANNUAL REPORT 2017
DIRECTORS' REPORT
REMUNERATION REPORT
Capsize (left) and
Handymax (far right)
vessels docked at
proposed port
for loading
Artist's rendering
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g) Additional statutory
information
Remuneration mix for financial year 2017
e) Contractual arrangements
for executive KMP
Andrew Stocks
Managing Director
Larry Ingle
General Manager
Fixed remuneration
$400,000 including statutory
superannuation
$335,400 including statutory
superannuation
Andrew Stocks
86%
14%
Contract duration
No fixed term arrangement
No fixed term arrangement
Notice by the individual/company
Three months
Three months
Termination of employment
If employment ceases due to genuine redundancy, resignation
under reasonable circumstances as determined by the Board,
death or invalidity, some or all of the unvested performance
rights will not lapse and may vest or the performance criteria
may be waived.
f) Non-executive director
arrangements
Non-executive directors receive a
board fee of $50,000 per annum and
do not receive performance based
remuneration, retirement allowances
or termination benefits. Fees are
reviewed annually by the Board
and have remained unchanged.
The maximum aggregate amount of
fees that can be paid to non executive
directors is currently $400,000 which
was approved by shareholders at the
2012 AGM on 23 November 2012.
Peter Cassidy
Jerry Ellis AO
Leigh Hall AM
Julian Gosse
Ian Hume
Larry Ingle
100%
100%
100%
100%
100%
88%
12%
75%
80%
85%
90%
95%
100%
Fixed
At Risk - LTI
Long term incentives are currently
provided exclusively by way of
performance rights and are calculated on
the value of the right expensed during the
year. There was no performance based
remuneration granted during the year.
19
IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
DIRECTORS' REPORT
REMUNERATION REPORT
Terms and conditions of share-based
payment arrangements
Performance rights
The Iron Road Equity Incentive Plan was
implemented in December 2014 as part
of the Group’s remuneration policy to
encourage long term performance and
the retention of executives. It is targeted
at Iron Road’s Managing Director and
KMP whose responsibilities provide them
with opportunity to significantly influence
long term shareholder value. The plan
is administered by the Board which
has discretion over persons eligible to
participate and the performance criteria
attached to performance rights.
Performance rights under the Equity
Incentive Plan expire five years from the
date of issue if the applicable vesting
conditions as set by the Board are not
met. Satisfaction of any vesting condition
will not automatically trigger the exercise
of the performance right. The fair value
of the rights is determined by the market
price of Iron Road Limited shares at the
grant date. Rights are granted under the
plan for nil consideration and carry no
dividend or voting rights. Once vested
and exercised, any share acquired by
participants will rank equally with all
existing shares of the same class.
Performance rights on issue
At the Board’s discretion, the Managing
Director and General Manager were
granted 5,000,000 performance rights at
a fair value of $0.16 for nil consideration,
with an exercise price of nil. All
performance rights granted have vesting
conditions in relation to securing funding
for the advancement of the CEIP and will
lapse if not exercised within five years
from grant date.
Should the participant’s employment
cease due to genuine redundancy,
resignation under reasonable
circumstances if so determined by the
Board, death or invalidity, the unvested
performance rights will not lapse and
may vest or the performance criteria may
be waived. This may constitute a benefit
for the purposes of Section 200B of the
Corporations Act 2001 resulting in the
Board seeking shareholder approval and
a 99.6% "Yes" vote at the Annual General
Meeting on 28 November 2014.
There were no performance rights
granted during the year ended
30 June 2017.
Options
The Employee Option Plan is designed to
provide long term incentives for directors
and KMP to deliver long term shareholder
returns. Participants are granted options,
some of which vest on issue and others
that vest if certain market and non-
market vesting conditions are met.
Options are granted under the plan for nil
consideration, carry no dividend or voting
rights and expire if not exercised within
five years from issue. When exercisable,
each option is convertible into one
ordinary share.
Participation in the plan is at the Board’s
discretion and no individual has a
contractual right to participate in the Plan
or to receive any guaranteed benefits.
There are no unissued ordinary shares
of Iron Road Limited under option for
directors and executives as at 30 June
2017, as all remaining options expired on
25 July 2016.
2017
KMP and Grant date
Balance at
the start
of the year
Balance at the end of the year
Vested and
exercisable
Unvested
Maximum
value yet
to vest*
Andrew Stocks
23 December 2014
3,000,000
Larry Ingle
23 December 2014
2,000,000
Total
5,000,000
-
-
-
3,000,000
$68,118
2,000,000
$45,412
5,000,000
$113,530
* The maximum value of performance rights yet to vest has been determined as the amount of the grant
date fair value that is yet to be expensed. The minimum value of performance rights yet to vest is nil, as
the rights will be forfeited if the vesting conditions are not met.
20
IRON ROAD ANNUAL REPORT 2017 DIRECTORS' REPORT
REMUNERATION REPORT
Shareholdings
Several Directors chose to exercise
their entitlement as part of a rights issue
launched in June 2016. Changes to
Directors holdings are shown below:
Ordinary Shares
held by:
30 June 2017
Acquired through
Rights issue
30 June 2016
Peter Cassidy
Andrew Stocks
Jerry Ellis AO
Leigh Hall AM
Julian Gosse
Ian Hume
Larry Ingle
Total
8,409,652
2,915,938
315,556
444,444
656,667
5,723,559
-
840,966
-
31,556
44,444
65,667
7,568,686
2,915,938
284,000
400,000
591,000
572,356
5,151,203
-
-
18,465,816
1,554,989
16,910,827
None of the shares above are held nominally by the directors or KMP.
Voting of shareholders Annual General
Meeting held on 18 November 2016
Iron Road Limited received more than
99% of “yes” votes on its remuneration
report for the 2016 financial year. The
company did not receive any specific
feedback at the Annual General
Meeting or throughout the year on its
remuneration practices.
This is the end of the audited
remuneration report.
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
DIRECTORS' REPORT
Insurance of directors and officers
Non-audit services
During the financial year, Iron Road
Limited paid an insurance premium to
insure the directors and officers of the
Group and its controlled entities.
No details of the nature of the liabilities
covered and the amount of premium paid
in respect of the directors and officers
liability insurance policy have been
disclosed as such disclosure is prohibited
under the terms of the policy.
The Group has also entered into a Deed
of Indemnity, Insurance and Access with
each director. In summary, the Deed
provides for:
» access to corporate records for each
director for a period after ceasing
to hold office in the company;
» the provision of directors and
officers liability insurance; and
» indemnity for legal costs incurred
by directors in carrying out the
business affairs of the company.
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 Group, or to intervene
in any proceedings to which the Group
is a party, for the purpose of taking
responsibility on behalf of the Group for
all or part of those proceedings.
The Group may decide to engage the
auditor on assignments additional to
their statutory audit duties where the
auditors expertise and experience with
the Group are important. The Board is
satisfied that the provision of non-audit
services is compatible with the general
standard of independence for auditors
imposed by the Corporations Act 2001
and none of the services undermine
the general principles relating to auditor
independence as set out in APES
110 Code of Ethics for Professional
Accountants.
Details of the amounts paid or payable
to the auditor (PricewaterhouseCoopers,
Australia) for audit and non-audit services
provided during the year are set out in
Note 16.
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 23.
Signed in accordance with a resolution
of the directors, for and on behalf of
the Board by:
Andrew Stocks
Managing Director
20 September 2017
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IRON ROAD ANNUAL REPORT 2017 DIRECTORS' REPORT
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
OPERATING AND FINANCIAL REVIEW
CORPORATE AND SOCIAL RESPONSIBILITY
C O RE VALUES
S AFETY
I M P R O V EMENT ETHOS
C R E A T ING VALUE
I N N O VATION AND
I O N AL EXCELLENCE
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OUR OBJECTIVE
To develop a world
class magnetite mine
and infrastructure in
South Australia
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COOPERATIVE REL A T I O N
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SOCIAL RESPO N S I B I
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A C C O UNTABILITY
RESPONSIBILIT Y
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24
IRON ROAD ANNUAL REPORT 2017
OPERATING AND FINANCIAL REVIEW
Company strategy and operating activities
During the year, Iron Road and China Railway Group Limited
(CREC) collaborated to review the capital component of the
CEIP. This included forensic evaluation of designs, engineering
and cost elements by CREC engineering specialists many
of whom temporarily relocated to Adelaide. With the ability
to leverage the procurement systems of one of the largest
construction companies in the world, CREC was able to deliver
a capital cost reduction of $USD295 million. The revised capital
estimate brings total start up capital down to US$3.7 billion.
During the first quarter of 2017, Iron Road obtained Expressions
of Interest from three global leaders in banking and finance.
The China Development Bank, Industrial and Commercial Bank
of China and China Construction Bank have expressed their
willingness to provide senior debt with long loan tenor, working
capital and financial instruments facilities.
Significant progress was made in the regulatory area, with
the approval of Iron Road’s Mining Lease and Development
Applications for the CEIP. The drafting of two secondary
approvals – the Program for Environment Protection and
Rehabilitation (PEPR) and the Construction and Environment
Management Plan (CEMP) are well underway with targeted
stakeholder engagement already commenced.
Operating results for the year
The principal activities of the Group during the year were
progressing with Government approvals and optimisation of
mining & process solutions, with an additional focus on the
efficient delivery of both port and rail infrastructure solutions.
These activities were initially financed through a short term debt
facility which was subsequently repaid through an entitlement
offer and institutional placements finalised in July 2016.
The Group incurred an operating loss after income tax for the
year ended 30 June 2017 of $3,926,284 (2016: $6,674,238).
With the Gawler Iron Project (GIP) fully impaired in 2016,
exploration impairment was significantly lower this year
(2017: 3,791 2016: 1,998,546)
Total exploration and evaluation expenditure was also lower
again this year $1,757,530 (2016: $2,544,319) as the Group’s
activities evolve and mature.
Changes in financial position
The Group’s net assets increased by 4% this year (2017:
$129,456,908 2016: $124,777,461) as finance raised through
institutional placements and an entitlement offer was used to
extinguish debt. Such capital increased equity by 5.6%, with an
additional 85,099,382 shares issued in July 2016.
Risk management
Operational, financial and regulatory risks are considered and
addressed by management, with specific areas of significant
risk referred by management to the Board. The Board
considers that at this stage of the Group’s project development
operations, it is important for all Board members to be a part
of this process and as such the Board has not established a
separate risk management committee.
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
Iron concentrate from the CEIP, South Australia
26
IRON ROAD ANNUAL REPORT 2017
IRON ROAD ANNUAL REPORT 2017 FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Contents
Financial
statements
Notes to the
Financial
statements
Consolidated Income Statement
Consolidated Statement of Financial Position
Consolidated Statement of Change in Equity
Consolidated Statement of Cash flows
Structure of Notes and materiality
Page 28
Page 29
Page 30
Page 31
Page 32
Note disclosures are split into five sections shown below to enable a better understanding
of how the Group performed.
Key numbers
Structures
Capital
Additional
Information
Unrecognised
Items
1. Cash
9. Controlled
entities
13. Equity and
reserves
16. Remuneration
of auditors
19. Commitments
2. Exploration
10. Segment
information
14. Share-based
payments
17. Accounting
policies
20. Contingencies
3. Property, plant
and equipment
11. Related
parties
15. Loss per share
18. Risk
management
21. Events after
reporting date
4.
Operating
activities
12. Parent entity
information
5. Provisions
6. Taxation
7.
Receivables and
prepayments
8. Trade payables
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Accounting policies and critical accounting judgements applied to the preparation of financial statements have
been moved to the relevant section.
Information is only being included in the Notes to the extent that is has been considered material and relevant to
the understanding of the financial statements.
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2017
Note
2017
$
2016
$
Revenue from continuing operations
Interest income
Expenses
Impairment of exploration expenses
Depreciation
Employee benefits expense
General expenses
Professional fees
Travel and accommodation
Marketing
Rent and administration
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
attributable to owners of Iron Road Limited
2
3
4
4
6
Loss per share for loss attributable to the ordinary equity holders of the company:
Basic and diluted loss per share (cents)
15
4,407
5,481
(3,791)
(1,998,546)
(183,408)
(1,611,003)
(248,047)
(858,578)
(298,300)
(168,867)
(558,697)
(243,276)
(2,149,955)
(315,772)
(947,804)
(249,146)
(158,759)
(616,461)
(3,926,284)
(6,674,238)
-
-
(3,926,284)
(6,674,238)
-
-
(3,926,284)
(6,674,238)
Cents
(0.58)
Cents
(1.16)
The above consolidated income statement should be read in conjunction with the notes to the consolidated financial statements.
28
IRON ROAD ANNUAL REPORT 2017 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2017
ASSETS
Current assets
Cash and cash equivalents
Bank Term deposits
Receivables and prepayments
Total current assets
Non-current assets
Exploration and evaluation expenditure
Property, plant and equipment
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
Note
2017
$
2016
$
1
1
7
2
3
8
5
5
13
13
13
1,262,109
90,000
120,287
1,472,396
120,397,386
9,968,272
130,365,658
131,838,054
1,884,400
456,361
2,340,761
40,385
40,385
2,381,146
129,456,908
160,916,191
5,053,229
(36,512,512)
129,456,908
858,413
90,000
128,518
1,076,931
118,643,647
10,149,731
128,793,378
129,870,309
4,519,448
467,563
4,987,011
105,837
105,837
5,092,848
124,777,461
152,423,991
4,939,698
(32,586,228)
124,777,461
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The above consolidated statement of financial position should be read in conjunction with the notes to the consolidated financial statements.
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Balance at 1 July 2015
Loss for the year
Transactions with owners in their capacity as owners:
Contributions to equity net of transaction costs
Share based payments
Balance at 30 June 2016
Attributable to owners of Iron Road Limited
Contributed
Equity
Accumulated
losses
Reserves
Total Equity
Note
$
$
$
$
151,676,845
(25,911,990)
4,814,136
130,578,991
-
(6,674,238)
-
(6,674,238)
747,146
14
-
-
-
-
747,146
125,562
125,562
152,423,991
(32,586,228)
4,939,698
124,777,461
Loss for the year
-
(3,926,284)
-
( 3,926,284)
Transactions with owners in their capacity as owners:
Contributions to equity net of transaction costs
Share based payments
Balance at 30 June 2017
13
14
8,492,200
-
-
-
-
8,492,200
113,531
113,531
160,916,191
( 36,512,512)
5,053,229
129,456,908
The above consolidated statement of changes in equity should be read in conjunction with the notes to the consolidated financial statements.
30
IRON ROAD ANNUAL REPORT 2017 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Cash flows from operating activities
Payments to suppliers and employees (inclusive of GST)
Interest received
Net cash outflow from operating activites
Cash flows from investing activities
Payments for term deposits
Receipts from term deposits
Payments for exploration and evaluation
Payments for property and equipment
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds of issue from shares
Share based payment purchase
Proceeds/ (repayment) of borrowings
Share issue transaction costs
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the half-year
Cash and cash equivalents at the end of the year
Note
4
13
13
1
2017
$
(3,624,797)
4,695
(3,620,102)
(90,000)
90,000
(1,231,198)
(1,949)
(1,233,147)
8,509,938
-
(3,000,000)
(252,993)
5,256,945
403,696
858,413
1,262,109
2016
$
(3,987,575)
8,162
(3,979,413)
(90,000)
272,408
(3,494,642)
(48,095)
(3,360,329)
1,051,800
(225,000)
4,000,000
(69,399)
4,757,401
(2,582,341)
3,440,754
858,413
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The above consolidated statement of cash flows should be read in conjunction with the notes to the consolidated financial statements.
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
NOTES TO THE FINANCIAL STATEMENTS: KEY NUMBERS
FOR THE YEAR ENDED 30 JUNE 2017
$160m
SPENT TO DATE
1. Cash
Where we spent money
Per the Consolidated Statement of Cash flows, total cash
expended during the year was significantly lower than prior
years as the Group’s consolidated its focus in the regulatory
and commercial arena.
$4,857,944
2017
Exploration and evaluation
Employee benefits expense
Professional fees
Rent and administration
Share issue transaction costs
Property, plant and equipment
Other
$1,231,198
$1,497,472
$847,927
$558,697
$252,993
$1,949
$467,708
$7,530,312
2016
Exploration and evaluation
Employee benefits expense
Professional fees
Rent and administration
Share issue transaction costs
Property, plant and equipment
Other
$3,494,642
$2,024,393
$847,872
$606,656
$69,399
$48,095
$439,095
Cash and cash equivalents at 30 June 2017 was $1,262,109
(2016: $858,413) and bank term deposits held were $90,000
(2016: $90,000). The bank term deposit of $90,000 is held as
security for the Group’s credit card facility.
Cash at bank earns a floating interest rate based on the at call
daily rate. Funds held in a term deposit facility for greater than
3 months have been reclassified to bank term deposits in the
consolidated statement of financial position per AASB 107.
32
2. Exploration
Exploration and evaluation expenditure fell by 30% in 2017 as
the Group concentrated on commercial decision making
120
110
100
90
million
2015
2016
2017
2015
Opening balance 1 July 2015
Additions during the period
Impairment of exploration expenses
2016
Closing balance 30 June 2016
Additions during the period
Impairment of exploration expenses
2017
Closing balance 30 June 2017
$118,097,874
$2,544,319
($1,998,546)
$118,643,647
$1,757,530
($3,791)
$120,397,386
Exploration and evaluation expenditure in relation to the CEIP’s
exploration licence 5932 for the year ended 30 June 2017
was $1,757,530 (2016: $2,544,319). The CEIP asset is tested
for impairment periodically or when events or circumstances
indicate the carrying value may not be recoverable. For the
year ended 30 June 2017, the directors deemed the current
capitalisation of development of the CEIP resource to be
appropriate, as the Group continues to refine mining and
processing methods and capital cost estimates.
The Group’s exploration and evaluation policy is to capitalise
and carry forward exploration and evaluation expenditure
where a JORC compliant resource has been identified.
This appropriately recognises that these projects are in
the advanced exploration, evaluation or feasibility phase.
Expenditure incurred in the acquisition of rights to explore is
capitalised, classified as tangible or intangible and recognised
as an exploration and evaluation asset. Exploration and
evaluation assets are measured at cost at recognition.
IRON ROAD ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS: KEY NUMBERS
FOR THE YEAR ENDED 30 JUNE 2017
$1,757,530
EXPLORATION AND EVALUATION
EXPENDITURE FOR THE YEAR 2017
Recoverability of the carrying amount of the exploration and
evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale of the respective
areas of interest. The Group fully impaired iron ore rights of
$1,961,018 in the Gawler Iron Project (GIP) in the year ended
30 June 2016 in order to completely focus on the CEIP. The
impairment for the year ended 30 June 2017 in relation to the
GIP was $3,791.
For areas of interest where a JORC Mineral Resource is yet to
be identified or where exploration rights are no longer current,
the capitalised values are subsequently impaired and charged
to the profit and loss. There was no expenditure or impairment
on exploration license 5496 in the year (2016: $37,528).
Recoverability of exploration and evaluation assets
The Group’s accounting policy requires management make
certain assumptions as to future events and circumstances.
Exploration and evaluation costs are carried forward based
on the accounting policy set out above. Should development
not be possible, or the existence of reserves does not allow
for economic development, amounts recorded may require
impairment in future periods. Iron Road periodically evaluates
the economic potential of the CEIP using discounted cashflow
modelling techniques. The model includes assumptions for
production volumes, forecast iron ore pricing, foreign
exchange rates and project costs, which are updated
for the latest available data.
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Iron concentrate from the CEIP, South Australia
IRON ROAD ANNUAL REPORT 2017
33
IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
NOTES TO THE FINANCIAL STATEMENTS: KEY NUMBERS
FOR THE YEAR ENDED 30 JUNE 2017
CEIP $9,025,418
LAND PURCHASED
3. Property, plant and equipment
LAND AND BUILDINGS
PLANT AND EQUIPMENT
Year ended 30 June 2016
Opening net book value
Additions
Depreciation charge
Land
$
8,978,418
47,000
-
Buildings &
Improvements
$
869,526
-
(78,479)
Equipment
$
482,492
1,095
(159,421)
Closing net book amount
9,025,418
791,047
324,166
At 30 June 2016
Cost or fair value
9,025,418
1,040,190
Accumulated depreciation
-
(249,143)
Net book amount
9,025,418
791,047
Year ended 30 June 2017
Opening net book value
Additions
Depreciation charge
9,025,418
791,047
-
(54,045)
(123,038)
Closing net book amount
9,025,418
737,002
203,077
1,079,460
(755,294)
324,166
324,166
1,949
Motor
Vehicles
$
14,476
-
(5,376)
9,100
Total
$
10,344,912
48,095
(243,276)
10,149,731
64,839
(55,739)
11,209,907
(1,060,176)
9,100
10,149,731
9,100
-
(6,325)
2,775
10,149,731
1,949
(183,408)
9,968,272
At 30 June 2017
Cost or fair value
9,025,418
1,040,190
Accumulated depreciation
-
(303,188)
1,081,409
(878,332)
64,839
(62,064)
11,211,856
(1,243,584)
Net book amount
9,025,418
737,002
203,077
2,775
9,968,272
During the year ended 30 June 2017, the Group invested
$1,949 in property, plant and equipment (2016: $48,095).
All property, plant and equipment are stated at historical
cost less accumulated depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of
the items.
Depreciation methods and useful lives
Subsequent costs are included in the assets carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when
replaced. All repairs and maintenance are charged to profit and
loss during the reporting period in which they are incurred.
Land is not depreciated and on other assets is calculated
using the straight line method to allocate their cost or revalued
amounts, net of their residual values, over their estimated useful
lives as follows:
» Computer equipment 3 - 4 years
» Office equipment 3 - 20 years
» Plant and equipment 3 - 20 years
» Buildings & improvements 4 - 40 years
» Motor vehicles 5 - 10 years
In the case of leasehold improvements, the allocation of cost is
over the term of the lease. The assets’ residual values and useful
lives are reviewed and adjusted if appropriate at the end of each
reporting period. An asset’s carrying amount is written down
immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount. Gains
and losses on disposals are determined by comparing proceeds
with the carrying amount and included in profit or loss.
34
IRON ROAD ANNUAL REPORT 2017
NOTES TO THE FINANCIAL STATEMENTS: KEY NUMBERS
FOR THE YEAR ENDED 30 JUNE 2017
Reconciliation of profit after income tax to net cash outflow
from operating activities is as follows:
2017
$
2016
$
Net loss for the period
(3,926,284)
(6,674,238)
Depreciation
183,408
243,276
Share based payments
113,531
350,562
Non cash - rent incentive
(29,167)
(50,000)
Formation
993
497
Impairment of exploration
expenses
Change in operating
assets and liabilities
Decrease in trade and
other receivables
Increase/(Decrease)
in trade payables
3,791
1,998,546
8,231
264,731
72,881
(150,395)
Increase in other provisions
(47,487)
37,608
Net cash outflow from
operating activities
(3,620,102)
(3,979,413)
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4. Operating activities
Operating expenses were $3,930,691 for the year ended
30 June 2017 (2016: $6,679,719) and include the following:
Employee benefits expense
1,500,000
1,200,000
900,000
600,000
300,000
0
-300,000
Salaries
and wages
Superannuation
Directors’ fees
Share based
payments
Other employee
benefits
Total
Salaries and wages
Superannuation
Directors’ fees
Share based payments
Other employee benefits
Professional fees
2017
2016
$1,611,003
$2,149,955
$1,167,752
$1,392,979
$118,347
$139,161
$245,834
$241,905
$113,531
$350,562
($34,461)
$25,348
$858,578
2017
$947,804
2016
Consulting
Legal
Accounting and audit
ASX & ASIC
Other professional fees
2017
2016
$647,054
$539,652
$48,377
$204,645
$113,644
$47,628
$1,875
$98,593
$41,540
$63,374
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
NOTES TO THE FINANCIAL STATEMENTS: KEY NUMBERS
FOR THE YEAR ENDED 30 JUNE 2017
$496,746
TOTAL CARRYING AMOUNT
AS AT 30 JUNE 2017
5. Provisions
Provisions
CURRENT PROVISIONS
NON CURRENT PROVISIONS
Annual
leave
$
Long service
leave
$
Long service
leave
$
Other
provisions
$
Total
$
Carrying amount as at 1 July 2016
257,933
209,630
76,671
29,166
573,400
Additional provision recognised during the year
119,989
(27,774)
(36,286)
-
55,929
Amounts used during the year
(103,417)
-
-
(29,166)
(132,583)
Carrying amount as at 30 June 2017
274,505
181,856
40,385
-
496,746
The employee benefits provision covers the Group’s liability for
long service leave and annual leave. This provision represents
a present obligation as a result of past events, where it is
probable that an outflow of resources will be required to settle
the obligation. The current portion of this liability includes all of
the accrued annual leave and the unconditional entitlements
to long service leave where employees have completed the
required period of service. However, based on past experience,
the Group does not expect all employees to take the full amount
of accrued leave or require payment within twelve months.
Short term employee benefit obligations
Liabilities for wages and salaries, including non-monetary
benefits and accumulating sick leave that are expected to be
settled wholly within twelve months after the end of the period in
which the employees render the related service are recognised
in respect of employees’ services up to the end of the
reporting period and are measured at the amounts expected
to be paid when the liabilities are settled. All other short-term
employee benefit obligations are presented as payables.
Other long term employee benefit obligations
The liabilities for long service leave and annual leave are not
expected to be settled wholly within twelve months after the
end of the period in which the employees render the related
service. They are therefore recognised in the provision for
employee benefits and measured as the present value of
expected future payments to be made in respect of services
provided by employees up to the end of the reporting period
using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee
departures and periods of service.
Notwithstanding the classification of annual leave as a long
term employee benefit, the related obligations are presented as
current liabilities in the balance sheet if the Group does not have
an unconditional right to defer settlement for at least twelve
months after the reporting date, regardless of when actual
settlement is expected to occur.
The following amounts reflect leave that is not expected to be
taken or paid within twelve months:
Annual leave obligations expected
to be settled after twelve months
2017
$
2016
$
164,703
156,958
Current long service leave obligations
to be settled after twelve months
181,856
194,887
Total current leave obligations
expected to be settled after
twelve months
346,559
351,845
36
IRON ROAD ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS: KEY NUMBERS
FOR THE YEAR ENDED 30 JUNE 2017
$42,344,723
TAX LOSSES
6. Taxation
Iron Road Limited and its wholly-owned Australian controlled
entities have implemented the tax consolidation legislation. As a
consequence, these entities are taxed as a single entity and the
deferred tax assets and liabilities of these entities are set off in
the consolidated financial statements.
This note provides an analysis of the Group’s income tax
expense, amounts recognised and deferred tax assets and
liabilities. The income tax expense of nil for the year ended
30 June 2017 (2016: nil) represents the tax payable on the
current period’s taxable loss adjusted by changes in deferred
tax assets and liabilities attributable to temporary differences
and to unused tax losses.
Deferred income tax is determined using a tax rate applicable
at the end of the reporting period and expected to apply when
the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Reconciliation of income tax
benefit to prima facie tax
Loss from continuing operations before
income tax benefit
2017
$
2016
$
(3,926,284)
(6,674,238)
Tax at the Australian tax rate of 30%
(2016: 30%)
(1,177,885)
(2,002,271)
Tax effect of amounts which are not
deductible in calculating taxable income
34,624
105,477
Current year tax losses not recognised
1,143,261
1,896,794
Income tax expense
-
-
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those
temporary differences and losses. Deferred tax assets and
liabilities are offset when there is a legally enforceable right to
offset current tax assets and liabilities and when the deferred
tax balances relate to the same taxation authority. Current
tax assets and tax liabilities are offset where the entity has a
legally enforceable right to offset and intends either to settle
on a net basis, or to realise the asset and settle the liability
simultaneously. Current and deferred tax is recognised in profit
or loss, except to the extent that it relates to items recognised
in other comprehensive income or directly in equity. In this case,
tax is also recognised in other comprehensive income
or directly in equity.
Deferred tax assets and liabilities
2017
$
2016
$
The balance of deferred tax assets comprises
temporary differences attributable to:
Tax losses
42,344,723
40,810,711
Business related costs
111,414
316,669
Accrued expenses
189,574
207,400
Total recognised and unrecognised
deferred tax assets
42,645,711
41,334,780
The balance of deferred tax liabilities comprises
temporary differences attributable to:
Accrued income
371
371
Exploration expenditure
34,171,778
34,496,270
Total deferred tax liabilities
34,172,149
34,496,641
Net deferred tax assets
8,473,562
6,838,139
Deferred tax assets not recognised
(8,473,562)
(6,838,139)
Net deferred tax assets
-
-
A net deferred tax asset of $8,473,562 (2016: $6,838,138) has
not been recognised as it is not probable within the immediate
future that taxable profits will be available against which
temporary differences and tax losses can be utilised.
The Group is subject to income taxes in Australia. Significant
judgement is required in determining the provision of income
taxes. There are many transactions and calculations undertaken
during the ordinary course of business for which the ultimate tax
determination is uncertain. The Group estimates its tax liabilities
based on the Group’s understanding of the tax law. Where the
final tax outcome of these matters is different from the amounts
that were initially recorded, such differences will impact the
current and deferred income tax assets and liabilities in the
period in which such determination is made.
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37
IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
NOTES TO THE FINANCIAL STATEMENTS: KEY NUMBERS
FOR THE YEAR ENDED 30 JUNE 2017
8. Trade payables
Trade payables
Accruals
2017
$
770,906
2016
$
90,291
112,122
428,015
Short term loan facility
1,000,000
4,000,000
Other payables
1,372
1,142
Total trade and other payables
1,884,400
4,519,448
Trade and other payables for the year ended 30 June 2017 were
$1,884,400 (2016: $4,519,448). The Group received $1,000,000
in short term debt finance from its major shareholder, The
Sentient Group, which is reflected in other payables. The loan
attracts nil interest and is repayable in June 2018.
All amounts are unsecured and are presented as current
liabilities unless payment is not due within 12 months from the
reporting date. The carrying amount of trade and other payables
are assumed to approximate their fair values, due to their short
term nature.
DEBT
REDUCTION
7. Receivables and prepayments
Receivables and prepayments for the year ended 30 June
2017 were $120,287 (2016: $128,518) which is largely due
to a reduction in prepayments and GST receivable.
$120,287
2017
GST receivable
Interest receivable
Prepayments
Other receivables
$48,285
$949
$70,571
$482
$128,518
2016
GST receivable
Interest receivable
Prepayments
Other receivables
$61,373
$1,237
$65,426
$482
As at 30 June 2017, other receivables that were past due or
impaired were nil (2016: nil). At initial recognition, the Group
measures a financial asset at its fair value plus transaction costs
that are directly attributable to the acquisition of the financial
asset. Loans and receivables are subsequently carried at
amortised cost using the effective interest method. Exposure to
risk is considered in Note 18(a).
Due to the short term nature of current receivables, their
carrying amount is assumed to approximate fair value.
38
IRON ROAD ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS: STRUCTURES
FOR THE YEAR ENDED 30 JUNE 2017
10. Segment information
Operating segments are reported in a manner consistent
with the internal reporting provided to the Board of Directors
and management of the Group. These internal management
reports are reviewed on a monthly basis and are aligned with
the information provided in the statement of comprehensive
income, statement of financial position and statement of cash
flows. The Group does not have any customers or operating
segments with discrete financial information and all of the
Group’s assets and liabilities are located within Australia,
as a result no reconciliation is required.
9. Controlled entities
Iron Road Limited has the following subsidiaries, all of which are
100% owned (2016: 100%) and located and incorporated
in Australia.
The following are subsidiaries of Iron Road Limited:
IRD Corporate Services Pty Ltd
IRD Group Finance Pty Ltd
IRD Port Assets Midco Pty Ltd
IRD Port Assets Holdings Pty Ltd
IRD Rail Assets Holdings Pty Ltd
IRD Port Assets Pty Ltd
IRD (Central Eyre) Pty Ltd
IRD (Gawler) Pty Ltd
IRD Train Operations Pty Ltd
IRD Track Services Pty Ltd
IRD Marine Operations Pty Ltd
IRD Cargo Services Pty Ltd
IRD Mining Operations Pty Ltd
Eyre Exploration Pty Ltd
IRD Rail Assets Midco Pty Ltd
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Iron concentrate from the CEIP, South Australia
IRON ROAD ANNUAL REPORT 2017
39
IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
NOTES TO THE FINANCIAL STATEMENTS: STRUCTURES
FOR THE YEAR ENDED 30 JUNE 2017
$1,135,689
TOTAL 2017
TRANSACTIONS
WITH KEY MANAGEMENT PERSONNEL HAVING AUTHORITY AND
RESPONSIBILITY OVER THE SENTIENT GROUP’S ACTIVITIES
11. Related parties
The parent entity of the Group and the ultimate parent entity
and controlling party is The Sentient Group (incorporated in the
Cayman Islands) which at 30 June 2017 owned 73.73% (2016:
71.56%) of the issued ordinary shares of Iron Road Limited.
Transactions with Key Management Personnel having authority
and responsibility over the Groups activities are as follows:
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
-200,000
Short term
employee
benefits
Long term
employee
benefits
Post
employment
benefits
Performance
rights expenses
Performance
rights
repurchased
2017
2016
12. Parent entity information
The individual financial statements for the parent entity show the
following amounts:
ASSETS
Total current assets
Total non-current assets
Total assets
LIABILITIES
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Reserves
Accumulated losses
Total equity
2017
$
2016
$
12,409,810
119,697,619
132,107,429
12,009,931
118,084,012
130,093,943
2,340,761
40,385
2,381,146
4,987,010
105,838
5,092,847
129,726,284
125,001,096
160,916,191
152,423,991
5,053,229
(36,243,137)
129,726,284
4,939,698
(32,362,594)
125,001,096
$1,135,689
$1,682,345
Loss for the year
(3,880,543)
(6,613,630)
$921,598
$1,079,413
Total comprehensive loss for the year
(3,880,543)
(6,613,630)
Total
Short term employee benefits
Long term employee benefits
Post employment benefits
$22,508
$78,052
($56,534)
$83,903
Performance rights expenses
$113,531
$350,562
Performance rights repurchased
$0
$225,000
Detailed remuneration disclosures are provided in the
Remuneration Report on page 14.
The following additional transactions occurred with
The Sentient Group:
Reimbursement of travel
related expenditure
2017
$
2016
$
18,255
42,902
Directors fees
50,000
37,739
Capital raising costs
302
64,185
Consulting fees
201,879
151,443
Total
270,436
296,269
Of the above, $17,000 (2016: $37,686) remained outstanding as
at 30 June 2017 and has been disclosed within trade payables.
All transactions were made on standard commercial terms and
conditions and at market rates.
40
The financial information for the parent entity, Iron Road Limited,
has been prepared on the same basis as the consolidated
financial statements, except as set out below.
(i) Investments in subsidiaries, associates and joint ventures.
Investments in subsidiaries are accounted for at cost in the
financial statements of Iron Road Limited.
(ii) Tax consolidation
Iron Road Limited and its wholly-owned Australian controlled
entities have implemented the tax consolidation legislation.
The head entity, Iron Road Limited, and the controlled entities
in the tax consolidated group account for their own current
and deferred tax amounts. These tax amounts are measured
as if each entity in the tax consolidated group continues to be
a stand-alone taxpayer in its own right. In addition to its own
current and deferred tax amounts, Iron Road Limited also
recognises the current tax liabilities (or assets) and the
deferred tax assets arising from unused tax losses and unused
tax credits assumed from controlled entities in the
tax consolidated group.
The company has not provided any financial guarantees as at
30 June 2017 and has no contingent liabilities as at 30 June 2017.
IRON ROAD ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS: CAPITAL
FOR THE YEAR ENDED 30 JUNE 2017
85 MILLION
SHARES ISSUED IN
THE YEAR ENDED JUNE 2017
13. Equity and reserves
Reserves
Share capital
Opening balance 1 July 2016 -
Ordinary shares fully paid
2017
$
2017
Shares
152,423,991
592,454,904
Shares issued as part of institutional
8,509,938
85,099,382
placement
Cost of capital raising
(17,738)
-
Balance 30 June 2017
160,916,191
677,554,286
During the year, 85,099,382 shares were issued under a capital
raising programme.
Ordinary shares entitle the holder to participate in dividends
and to share in the proceeds of winding up of the Group in
proportion to the number of and amounts paid on the shares
held. Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
Ordinary shares have no par value and the company does not
have a limited amount of authorised capital.
Performance rights
Information relating to the IRD Employee Option Plan and Equity
Incentive Plan including details of options issued, exercised and
lapsed during the financial year and outstanding at the end of
the reporting period are set out in Note 14.
The share based payment reserve is used to recognise the
value of options and performance rights issued. Options are
vested on issue and are fully expensed whereas performance
rights have vesting conditions that are yet to be satisfied.
Performance rights are expensed throughout the vesting period
and should they fail to vest before the expiry date, no amount is
recognised per AASB 2.
During the year, $113,531 of performance rights were expensed
in the profit and loss (2016: $350,562)
$5,100,000
$5,100,000
$5,000,000
$4,900,000
$4,800,000
$4,700,000
$4,600,000
$4,500,000
2015
2016
2017
2015
Opening balance 1 July 2015
Performance rights expenses
Repurchase of instrument
2016
Closing balance 30 June 2016
Performance rights expenses
2017
Closing balance 30 June 2017
Accumulated losses
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$4,814,136
$350,562
($225,000)
$4,939,698
$113,531
$5,053,229
($16,320,949)
($21,001,312)
($25,911,990)
($32,586,228)
($36,512,512)
2013
2014
2015
2016
2017
0 mil
-5
-10
-15
-20
-25
-30
-35
-40
There have been no dividends paid during the current or prior
financial years (2016: nil).
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41
IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
NOTES TO THE FINANCIAL STATEMENTS: CAPITAL
FOR THE YEAR ENDED 30 JUNE 2017
14. Share-based payments
Share-based compensation benefits are provided to Directors and KMP through the Iron Road Limited Employee Option Plan and
the Iron Road Equity Incentive Plan.
Employee Option Plan
There were no options granted or exercised during the reporting period ended 30 June 2017, with all options expensed in prior
periods. There are no options on issue, as 500,000 options expired on 25 July 2016.
Grant date
Expiry date
Exercise price
Balance
at start
of period
Expired/
forfeited during
the year
Balance
at end
of period
Vested and
exercisable at
end of period
30 June 2017
Director options
25 July 2016
Total
Weighted average exercise price
30 June 2016
Director options
25 July 2016
Total
Weighted average exercise price
25 July 2016
$0.9926
500,000
(500,000)
500,000
$0.9926
-
-
-
-
-
-
-
-
25 July 2016
$0.9926
500,000
500,000
$0.9926
-
-
-
500,000
500,000
$0.9926
500,000
500,000
$0.9926
Equity Incentive Plan – Long term incentive
The Board adopted the Iron Road Equity Incentive Plan
issued on 8 October 2014, aimed at attracting, motivating
and retaining persons with the skills and experience to deliver
exceptional performance and outcomes in pursuit of the Groups
key strategic outcomes. The plan forms part of the Groups
remuneration policy and provides a mechanism for driving long
term performance and the retention of executives.
Under the plan, participants are granted performance rights,
all of which have performance related vesting conditions.
Performance rights are granted under the plan for no
consideration and carry no dividend or voting rights. When
exercisable, each right is convertible into one ordinary share with
an exercise price of nil. A participant in the plan is at the Boards
discretion and no individual has a contractual right to participate
in the plan or to receive any guaranteed benefits.
The fair value of the rights are determined by the market price
of Iron Road Limited shares at grant date and assuming no
dividend pay-out during the five year period. All performance
rights granted have vesting conditions in relation to securing
funding for the advancement of the CEIP and will lapse if not
exercised within five years.
Set out below is a summary of performance rights under the plan:
There were no rights granted or exercised during the reporting
period ended 30 June 2017 and the weighted average remaining
contractual life of all rights at this date is 2.51 years (2016: 3.51).
Total expenses arising from share-based payment transactions
recognised during the year is disclosed in Note 13 – Reserves.
Grant date
Expiry date
30 June 2017
23 December 2014
24 December 2019
23 December 2014
13 January 2020
Total
30 June 2016
23 December 2014
24 December 2019
23 December 2014
13 January 2020
23 December 2014
13 January 2020
Total
Fair value at
grant date
Balance
at start of
period
Granted
during the
year
Forfeited
during the
year
Balance
at end of
period
Vested and
exercisable at
end of period
$0.16
$0.16
3,000,000
2,000,000
$0.16
$0.16
$0.16
5,000,000
3,000,000
2,000,000
1,750,000
6,750,000
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
2,000,000
5,000,000
3,000,000
2,000,000
(1,750,000 )
-
(1,750,000)
5,000,000
-
-
-
-
-
-
-
42
IRON ROAD ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS: CAPITAL
FOR THE YEAR ENDED 30 JUNE 2017
15. Loss per share
Basic earnings per share is calculated by dividing:
i) the profit attributable to owners of the company,
excluding any costs of servicing equity other than
ordinary shares, and
ii) the weighted average number of ordinary shares
outstanding during the financial year.
Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take
into account:
i) the after income tax effect of interest and other
financing costs associated with dilutive potential
ordinary shares, and
ii) the weighted average number of additional ordinary
shares that would have been outstanding, assuming
the conversion of all dilutive potential ordinary shares.
Basic and diluted earnings per share
2017
cents
2016
cents
Total basic loss per share attributable to the
ordinary equity owners of the company
(0.58)
(1.16)
Total diluted loss per share attributable to
the ordinary equity owners of the company
(0.58)
(1.16)
Loss from continuing operations attributable
to the members of the group used in
calculating basic earnings per share:
(3,926,284) (6,674,238)
Weighted average number of shares used as the denominator
is 673,057,915 (2016: 572,272,972).
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Iron concentrate from the CEIP, South Australia
IRON ROAD ANNUAL REPORT 2017
43
IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
NOTES TO THE FINANCIAL STATEMENTS: ADDITIONAL INFORMATION
FOR THE YEAR ENDED 30 JUNE 2017
16. Remuneration of auditors
During the year ended 30 June 2017, total fees paid or payable
for services provided by PricewaterhouseCoopers and its
related practices were as follows:
PricewaterhouseCoopers
(Australia)
Total remuneration for audit and
other assurance services
2017
$
2016
$
59,786
53,420
(a) Basis of preparation of historical
financial information
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. Iron Road
Limited is a for-profit entity for the purpose of preparing the
financial statements. Iron Road Limited is a company limited by
shares, incorporated and domiciled in Australia. The financial
statements are presented in Australian Dollars.
Total remuneration for tax services
17,697
11,501
(i) Compliance with IFRS
Total remuneration of
PricewaterhouseCoopers
(Australia)
77,483
64,921
It is the Group’s policy to employ PricewaterhouseCoopers
on assignments additional to their statutory audit
duties where PricewaterhouseCoopers expertise and
experience is important. These assignments are principally
audit and assurance services and taxation advice.
PricewaterhouseCoopers is awarded assignments on
a competitive basis and it is the Group’s policy to seek
competitive tenders for all major projects
17. Accounting policies
Summary of significant accounting policies
The principal accounting policies adopted in the preparation
of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years
presented, unless otherwise stated. The financial statements
are for the consolidated entity consisting of Iron Road Limited
and its controlled entities. The financial statements were
authorised for issue by the directors on 20 September 2017.
The directors have the power to amend and reissue the
financial statements.
The consolidated financial statements of Iron Road Limited also
comply with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board
(IASB).
(ii) Historical cost convention
These financial statements have been prepared under
the historical cost convention.
(iii) Critical accounting estimates
The preparation of financial statements requires the use
of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of
applying the Group’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial
statement are disclosed in Note 17(g).
(iv) Going concern
The directors have prepared the financial statements on
a going concern basis which contemplates continuity of
normal business activities and the realisation of assets and
settlement of liabilities in the normal course of business.
The Group incurred a net loss of $3,926,284 for the year
(2016: $6,674,238). With cash reserves as at 30 June 2017 of
$1,262,109, Management are confident that these funds and
additional funding to be obtained through further progression of
the CEIP or from its major shareholder will be sufficient to allow
the Group to continue to meet it's obligations as and when they
fall due. Accordingly, the directors believe the going concern
assumption is appropriate.
(v) New standards and interpretations not yet adopted.
There are no standards that are not yet effective and that
are expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future
transactions.
44
IRON ROAD ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS: ADDITIONAL INFORMATION
FOR THE YEAR ENDED 30 JUNE 2017
(b) Principles of consolidation
d) Investment and other financial assets
The consolidated financial statements incorporate the assets
and liabilities of all controlled entities of Iron Road Limited as
at 30 June 2017 and the results of all controlled entities for the
year then ended. Iron Road Limited and its controlled entities
together are referred to in this financial report as the Group.
Controlled entities are all entities (including special purpose
entities) over which the Group has control. The Group controls
an entity when the Group is exposed to or has rights to variable
returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of
the entity.
Controlled entities are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated
from the date that control ceases.
The acquisition method of accounting is used to account
for business combinations by the Group. Intercompany
transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence
of the impairment of the asset transferred. Accounting policies
of controlled entities have been changed where necessary to
ensure consistency with the policies adopted by the Group.
c) Goods and service tax (GST)
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is
recognised as part of the cost of acquisition of the asset or
as part of the expense. Receivables and payables are stated
inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the taxation
authority is included with other receivables or payables in the
balance sheet. Cash flows are presented on a gross basis.
The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the
taxation authority, are presented as operating cash flows.
The Group classifies its financial assets as loans and
receivables. Management determines the classification of its
investments at initial recognition. Financial assets are initially
measured at fair value plus transaction costs that are directly
attributable to the acquisition of the financial asset. For loans
and receivables, the amount of the loss is measured as the
difference between the asset’s carrying amount and the
present value of estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the
financial asset’s original effective interest rate.
The Group assesses at the end of each reporting period
whether there is objective evidence that a financial asset or
group of financial assets is impaired. A financial asset or a
Group of financial assets is impaired and impairment losses
are incurred only if there is objective evidence of impairment
as a result of one or more events that occurred after the initial
recognition of the asset (a ‘loss event’) and that loss event
(or events) has an impact on the estimated future cash flows
of the financial asset or Group of financial assets that can be
reliably estimated.
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 Iron
Road Limited’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions are recognised in
profit or loss.
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
NOTES TO THE FINANCIAL STATEMENTS: ADDITIONAL INFORMATION
FOR THE YEAR ENDED 30 JUNE 2017
RISK
MANAGEMENT
f) Revenue recognition
a) Credit risk
Interest income on bank term deposits is calculated on the
term of the deposit and the bank interest rate at lodgement
date and accrued in revenue from continuing operations.
g) Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including
expectations of future events that may have a financial impact
on the entity and that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning
the future. The resulting accounting estimates will,
by definition, seldom equal the related actual results.
The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial
year are discussed in the respective notes:
(i) Exploration and evaluation assets (Note 2)
(ii) Taxation (Note 6)
18. Risk management
The Groups activities expose it to a variety of financial and
market risks (including interest rate risk and price risk), credit
risk and liquidity risk. The Groups overall risk management
program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial
performance of the Group.
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management
framework. Management monitors and manages the financial
risks relating to the operations of the Group through regular
reviews of the risks, to minimise potential adverse effects on the
financial performance and position of the Group.
Credit risk is the risk of financial loss to the Group if a customer
or counterparty to a financial asset fails to meet its contractual
obligations and arises principally from the Group’s receivables,
cash and cash equivalents and bank term deposits.
The maximum exposure to credit risk at the end of the
reporting period is the carrying amount of each class of cash
and cash equivalent and bank term deposit.
Exposure to credit risk
The carrying amount of the Groups financial assets represents
the maximum credit exposure. There are no significant
concentrations of credit risks, whether through exposure to
individual customers or specific industry sectors. The Group’s
maximum exposure to credit risk at the reporting date was
$1,472,396 (2016: $1,076,931).
The credit quality of financial assets that are neither past
due not impaired can be assessed by reference to external
credit ratings (if available) or to historical information about
counterparty default rates.
Financial assets that are neither past due nor impaired are
as follows:
2017
$
2016
$
Counterparties without
an external credit rating:
Financial assets with no default in the past
120,287
128,518
Cash at bank and fixed term
deposits with a credit rating:
AA-
A
Total
1,324,524
27,585
1,472,396
921,493
26,920
1,076,931
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IRON ROAD ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS: ADDITIONAL INFORMATION
FOR THE YEAR ENDED 30 JUNE 2017
b) Liquidity risk
c) Market risk
Liquidity risk is the risk that the Group will not be able
to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as
far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate
reserves and continuously monitoring forecast and actual
cash flows.
Typically the Group ensures that it has sufficient cash on
demand to meet expected operational expenses for a period
of 60 days, including the servicing of financial obligations. This
excludes the potential impact of extreme circumstances that
cannot reasonably be predicted, such as natural disasters.
The Group incurred short term debt to meet operational
expenses of $1,000,000 during the year ended 30 June 2017,
which has been disclosed in trade and other payables.
The following are the contractual maturities of undiscounted
financial liabilities, including estimated interest payments and
excluding the impact of netting agreements:
Contractual maturities
of financial liabilities
Less than
6 months
Total
contractual
cash flows
Carrying
amount
At 30 June 2017
Trade and other payables
1,884,400
1,884,400
1,884,400
Total non-derivatives
1,884,400
1,884,400
1,884,400
At 30 June 2016
Trade and other payables
4,519,448
4,519,448
4,519,448
Total non-derivatives
4,519,448
4,519,448
4,519,448
There are no derivative financial instruments.
Market risk is the risk that changes in market prices, such
as foreign exchange rates and interest rates which will affect
the Group’s income or the value of its holdings of financial
instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable
parameters, while optimising returns. The following market risk
exposures have been assessed:
(i) Currency risk
The Group operates in Australian dollars with infrequent and
low value transactions in other currencies. Such transactions
present immaterial currency risk.
(ii) Interest rate risk
Exposure arises from assets bearing variable interest rates.
With consideration of the cash balance at 30 June 2017 and
the Group’s intention to hold fixed rate assets to maturity, the
impact of interest rate risk is considered to be immaterial.
(iii) Price Risk
Changes in commodity prices may impact the Group's
projected cash flows in future years and may impact the
assessment of the carrying value of its assets. However, given
the company is not yet in production, changes in commodity
prices do not currently impact the Group's profit or loss or its
cash flows.
d) Capital risk management
The Group’s objectives when managing capital are to
safeguard their ability to continue as a going concern.
There were no changes to the Group’s approach to capital
management during the year. The Group is not subject to
externally imposed capital requirements.
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
NOTES TO THE FINANCIAL STATEMENTS: UNRECOGNISED ITEMS
FOR THE YEAR ENDED 30 JUNE 2017
LEASES
19. Commitments
Mining tenements
All of the Group tenements are situated in the South
Australia. In order to maintain an interest in the mining and
exploration tenements, the Group is committed to meet the
conditions under which the tenements were granted. The
timing and amount of exploration expenditure commitments
and obligations of the Group are subject to the minimum
expenditure commitments required as per the Mining Act 1971.
The following obligations are not provided for in the
financial report:
Exploration expenditure
commitments
2017
$
2016
$
Within one year
-
67,168
Lease commitments
The Group leases an office in Adelaide expired in 2017 and a
long term lease has not been entered in to. The Lessor has
agreed to a month by month tenancy for the foreseeable future.
Consequently, the total commitments for minimum payments
in relation to operating leases for the year ended 30 June 2017
were nil (2016: $265,923) and are categorised as follows:
Operating Lease commitments
Within one year
Later than one year
but no later than five years
Total lease commitments
2017
$
-
-
-
2016
$
265,923
-
265,923
Later than one year
but no later than five years
684,388
-
Capital commitments
There were no outstanding contractual commitments as at
30 June 2017.
20. Contingencies
There are no material contingent liabilities or contingent assets
of the Group at reporting date.
21. Events after reporting date
There an no events after reporting date.
Total exploration
expenditure commitments
684,388
67,168
The Groups interest in mining tenements is as follows:
South Australia
Warramboo
Lock
Mulgathing
Tenement
Reference
EL5934
ML6467
EL5496
EL5298
EL5298
EL5661
EL5720
EL5183
EL5732
EL5767
Interest
100%
100%
100%
90% Iron Ore rights
90% Iron Ore rights
90% Iron Ore rights
90% Iron Ore rights
81% Iron Ore rights
81% Iron Ore rights
81% Iron Ore rights
48
IRON ROAD ANNUAL REPORT 2017 DIRECTORS' DECLARATION
IRON ROAD LIMITED AND ITS CONTROLLED ENTITIES
The directors’ of the Group declare that:
1. The consolidated financial statements, comprising the consolidated statement of comprehensive income, consolidated
statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows and
accompanying notes are in accordance with the Corporations Act 2001 and:
a) comply with Accounting Standards, the Corporations Regulations 2001
and other mandatory professional reporting requirements; and
b) give a true and fair view of the Group’s financial position as at 30 June 2017
and of its performance for the financial year ended on that date.
2. In the directors’ opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they
become due and payable.
3. The remuneration disclosures included in the directors’ report (as part of audited Remuneration Report), for the year ended
30 June 2017, comply with section 300A of the Corporations Act 2001.
4. The directors’ have been given the declarations by the chief executive officer and finance manager required by section 295A
of the Corporations Act 2001.
5. The Group has included in the notes to the financial statements an explicit and unreserved statement of compliance with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
This declaration is made in accordance with a resolution of the Board of directors and is signed for and on behalf of the directors
by Andrew Stocks.
Andrew Stocks
Managing Director
20 September 2017
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
INDEPENDENT AUDITOR'S REPORT
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IRON ROAD ANNUAL REPORT 2017 INDEPENDENT AUDITOR'S REPORT
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
INDEPENDENT AUDITOR'S REPORT
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IRON ROAD ANNUAL REPORT 2017 INDEPENDENT AUDITOR'S REPORT
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IRON ROAD ANNUAL REPORT 2017OVERVIEWCHAIRMAN'S LETTERMANAGING DIRECTOR'S REPORTOPERATING AND FINANCIAL REVIEWFINANCIAL STATEMENTSDIRECTORS' REPORTSIGNED REPORTSASX INFORMATION
INDEPENDENT AUDITOR'S REPORT
54
IRON ROAD ANNUAL REPORT 2017 ASX ADDITIONAL INFORMATION
FOR THE YEAR ENDED 30 JUNE 2017
Additional information required by the Australian Securities Exchange Ltd and
not shown elsewhere in this report is shown below. All information is current as
at 15 September 2017.
Distribution of equity securities
Analysis of number of equity security holders by size of holding:
Spread of holding
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Number of
holders
185
479
290
626
142
Shares
held
86,333
1,435,420
2,345,762
20,718,679
Percentage of
ordinary fully
paid shares
0.01%
0.21%
0.35%
3.06%
652,968,092
96.37%
Substantial shareholder
These substantial shareholders have
notified the company in accordance with
section 671B of the Corporations Act 2001:
Shares
held
Sentient Executive GP II, Limited
29,131,005
Sentient Executive GP III, Limited
51,558,593
Sentient Executive GP IV, Limited
418,881,392
Total holding
499,570,990
Total holdings on register
1,722
677,554,286
100.00%
Voting rights
There were 355 holders of less than a marketable parcel of ordinary shares.
All ordinary shares are fully paid and
carry one vote per share without
restriction.
Twenty largest shareholders
The names of the twenty largest shareholders of quoted ordinary shares are:
Performance rights
Holder name
Shares
held
HSBC Custody Nominees Australia Limited
570,680,789
Percentage of
ordinary fully
paid shares
84.23%
Carry no dividend or voting rights.
On issue - 5,000,000
Number of holders - 2
1
2
3*
4*
5
6*
7
8
9
10
11
12
13
14
SANBA II Inv Company
DEVIPO Pty Ltd
Cedarose Pty Ltd
SEISUN Capital Pty Ltd
National Nominees Ltd
Paul, Geoffrey John
Anderson, CM & SM
BNP Paribas Nominees Pty Ltd
HSBC Custody Nominees Australia Ltd
Citicorp Nominees Pty Ltd
Stonecot Pty Ltd
JEM Investment Fund Holdings Pty Ltd
Leadville Investments Pty Ltd
15* Kiritsopoulos A and Ford J
16* Stocks, Claire Margaret
17* Stocks, Andrew James
18
19
20
Bond Street Custodians Ltd
Faltas Abraham
Rilat Lty Ltd
Total
* denotes merged holders
9,861,112
5,723,559
4,535,624
3,874,028
3,738,000
2,920,450
2,900,000
2,826,010
2,660,150
2,632,587
2,005,000
1,550,000
1,500,000
1,450,000
1,442,657
1,442,656
1,321,000
1,000,360
890,000
1.46%
0.84%
0.67%
0.57%
0.55%
0.43%
0.43%
0.42%
0.39%
0.39%
0.30%
0.23%
0.22%
0.21%
0.21%
0.21%
0.19%
0.15%
0.13%
624,953,982
92.24%
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IRON ROAD ANNUAL REPORT 2017 Stages of grinding media.
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7
IRON ROAD HOUSE
ABN 51 128 698 108
ASX Code IRD
Level 6, 30 Currie Street
Adelaide SA 5000
Telephone: +61 8 8214 4400
www.ironroadlimited.com.au