IRONRIDGE RESOURCES LIMITED
AND CONTROLLED ENTITIES
ACN: 121 572 192
ANNUAL REPORT 2014
CONTENTS
DIRECTORS’ REPORT ...............................................................................................................3
AUDITORS INDEPENDENCE DECLARATION..........................................................................18
INTEREST IN TENEMENTS......................................................................................................19
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME.............................................20
CONSOLIDATED STATEMENT OF FINANCIAL POSITION.....................................................21
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .....................................................22
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................................23
NOTES TO THE FINANCIAL STATEMENTS............................................................................24
DIRECTORS’ DECLARATION ..................................................................................................46
INDEPENDENT AUDITORS’ REPORT .....................................................................................47
DIRECTORS’ REPORT
Your directors submit their report for the year ended 30 June 2014.
Directors
The names and details of the Company’s directors in office during the financial year and until the date of this
report are as follows. Directors were in office for this entire period unless otherwise stated.
Nicholas Mather
Vincent Mascolo
Geoffrey (Stuart) Crow
Nicholas Mather –Non Executive Chairman
BSc (Hons,Geol), MAusIMM
Nick Mather’s special area of experience and expertise is the generation of and entry into undervalued or
unrecognised resource exploration opportunities. He has been involved in the junior resource sector at all
levels for more than 25 years. In that time he has been instrumental in the delivery of major resource projects
that have delivered significant gains to shareholders. As an investor, securing projects and financiers, leading
exploration campaigns and managing emerging resource companies Mr Mather brings a wealth of valuable
experience.
During the past three years Mr Mather has also served as a director of the following listed companies:
DGR Global Limited
Orbis Gold Limited
Aus Tin Mining Limited
Navaho Gold Limited
Bow Energy Limited (resigned 11 January 2012)
Armour Energy Limited
Lakes Oil NL (appointed 7 February 2012)
SolGold plc, which is listed on the London Stock Exchange (AIM)
Vincent Mascolo –Executive Director
BEng Mining, MAusIMM, MEI Aust
Mr Mascolo is a qualified mining engineer with extensive experience in a variety of fields including, gold and
coal mining, quarrying, civil-works, bridge-works, water and sewage treatment and estimating.
Mr Mascolo has completed his assignment in the Civil and Construction Industry, including construction and
project management, engineering, quality control and environment and safety management. He is also a
member of both the Australian Institute of Mining and Metallurgy and the Institute of Engineers of Australia.
During the past three years Mr Mascolo has also served as a director of the following listed companies:
DGR Global Limited
Stuart Crow –Non Executive Director
Mr Crow has more than 27 years’ experience in all aspects of corporate finance and investor relations in
Australia and international markets, and has owned and operated his own businesses in these areas for the
last nineteen years. He brings extensive working knowledge of global capital markets and investor relations to
the Board.
Throughout his career, Stuart has served on a number of boards of public and unlisted companies and has
assisted in raising funds for companies of varying size in Australia and International capital markets whilst
working for his own firm and before that some of the world’s largest broking firms.
During the past three years Mr Crow has also served as a director of the following listed companies:
TNG Limited
IronRidge Resources Limited financial report for the year ended 30 June 2014
3
Directors’ Report (continued)
As at the date of this report, the interest of the directors in the shares and options of IronRidge Resources
Limited were:
Nicholas Mather
Vince Mascolo
Stuart Crow
Company secretary
Number of ordinary shares
1,303,703
8,310,291
1,000,000
Number of options over ordinary
shares
1,500,000
3,000,000
1,500,000
Karl Schlobohm – Company Secretary
B.Comm, B.Econ, M.Tax, CA, AICD
Karl Schlobohm is a Chartered Accountant with over 20 years’ experience across a wide range of industries and
businesses. He has extensive experience with financial accounting, corporate governance, company
secretarial duties and board reporting. Over the past 5 years, Mr Schlobohm has contracted into roles as CFO
and/or Company Secretary for a number of ASX-listed resource companies including Linc Energy, Discovery
Metals and Meridian Minerals.
He currently acts as the Company Secretary for ASX-listed DGR Global Limited, Navaho Gold Limited (also acts
as non-executive director), Aus Tin Mining Limited, Armour Energy Limited and LSE(AIM)-listed SolGold Plc.
Corporate structure
IronRidge Resources Limited is a company limited by shares that is incorporated and domiciled in Australia. It
was converted to a public company on 22 August 2011.
Principal activities
IronRidge was originally established to explore for uranium in southern Queensland and over a number of years
the Company accumulated a sizeable package of Exploration Permits for Minerals (EPM) and an Exploration
Permit for Coal (EPC), focussed mainly in the Surat Basin, in Queensland, Australia.
In late 2011 the Company sought to expand its strategy of “Early Mover Advantage” into regions of Africa
prospective for iron ore and an experienced team of ex-Rio Tinto geologists engaged to identify and secure a
portfolio of assets with the potential to be world class. There was no significant change in the nature of the
activities of the Group during the financial year.
Dividends
No dividends were declared or paid during the financial year.
IronRidge Resources Limited financial report for the year ended 30 June 2014
4
Directors’ Report (continued)
Review of Operations and Future Developments
IronRidge is focused on exploration for and development of large scale bulk commodities. The company is
assembling a suite of assets in prospective, under-developed regions –
Gabon (Three granted Permis de Recherche for Iron ore)
Exploration has commenced and initial sample assay results very encouraging
An additional 1400km2 of tenure at Tchibanga was granted.
Falcon Data interpretation identifies some 100km of strike zones and multiple drill targets at
Tchibanga
Proposed drilling program to confirm extent of mineralization.
Exploration target of 1.2 Bt, with initial DSO option already indicated
SRK estimates upto 500mt of DSO at Mont Pele alone on 2km of strike
DRC (Exploitation Permit prospective for iron ore)
MoU for 63.5% farm-in for Kasumbalesa Project
Exploration target 65 – 260 Mt, with DSO potential
Australia (Granted EPMs prospective for Ni/Co and TiO
/Fe/Al
O
)
Extensive auger drilling program undertaken on titanium area in late 2012
Significant exploration upside remains
₂
₃
₂
IronRidge Resources Limited financial report for the year ended 30 June 2014
5
Directors’ Report (continued)
Review of Operations and Future Developments (continued)
The IronRidge projects in Gabon, West Africa, are shown in the following Figure 1. Gabon is one of the richest
nations in Africa, with an economy largely based on oil. It is however a recognised region for hosting iron ore,
and the stable Gabonese Government is promoting mining investment. The country already has substantial rail
and port infrastructure in place.
Figure 1: IronRidge Resources Gabon Tenement Locations
The Belinga Sud Permis de Recherche (see Figure 2) covers 1,976 km² and hosts hematite in conventional
Banded Iron Formations (BIF). It is directly south of the Belinga Iron Ore Deposit (860 Mt @ 63% Fe), and 150
km from the Trans-Gabonese rail line. The tenement contains several exploration targets evident from
magnetic anomalies and preliminary exploration, and the potential for an initial direct shipping (DSO) project.
IronRidge Resources Limited financial report for the year ended 30 June 2014
6
Directors’ Report (continued)
Review of Operations and Future Developments (continued)
Figure 2: Belinga Sud Project, Gabon, West Africa
The two Tchibanga Permis de Recherche (see Figure 3) covers 3,377km² and is along strike from known iron
occurrences. The area has not been subject to any “modern era” exploration. The tenement is proximate to
the port of Mayumba.
Figure 3: Tchibanga Project, Gabon, West Africa
IronRidge Resources Limited financial report for the year ended 30 June 2014
7
Directors’ Report (continued)
Review of Operations and Future Developments (continued)
IronRidge recently acquired Falcon Gravity Data in the Tchibanga area. Sampling and mapping has confirmed a
correlation of the characteristic signatures provided by magnetics, gravity and topography data, including the
ability to differentiate between hematite and magnetite resources. Based on the Falcon data IronRidge lodged
and was granted an additional 1,400 km2 of tenure giving 100% tenure over the gravity data area (see Figure
4). Noting a strong magnetic and gravity response similar to the known Milingui Iron Ore deposit to the north
west of the Tchibanga Permit, IronRidge has completed an initial field exploration program in the Mont Pele
area in the south eastern sector of the Tchibanga Permit. This has confirmed the presence of hematite grading
up to 62% in banded iron formations (BIF) over a conservative strike length of 10km.
Figure 4: Tchibanga – New Exploration Permit and Falcon Gravity Data Coverage Identifying Multiple
Drill Targets
IronRidge Resources Ltd exploration tenements in Australia are shown in Figure 5. They are clustered in two
groups in the area west of Mundubbera in Queensland.
The southern group centered on and around Monogorilby which is prospective for TiO2, with accompanying Fe
and Al2O3. A drilling program undertaken in late 2011 at Monogorilby revealed that the top 11 metres of the
deposit is extensive and homogeneous, averaging >4.5% TiO
(max value 13.8%). X-Ray Diffraction (XRD)
analysis indicates the mineralogy of the titanium to be rutile and titanium associated with goethite, and
preliminary metallurgical test results produced an intermediate product that may be suitable for
hydrometallurgical processing.
₂
In late 2012 an extensive auger drilling program confirmed a much larger and thicker quantity of titanium rich
tuff underlay the harder laterite material tested in the 2011 drilling program. A resource estimate “in house”
indicates over 1.1 Bt assaying +3.2% TiO2. A program to test metallurgical recovery of the titanium is now
being commenced.
IronRidge Resources Limited financial report for the year ended 30 June 2014
8
Directors’ Report (continued)
Review of Operations and Future Developments (continued)
A review of earlier work on the Quaggy Prospect during the past year has led to a change in exploration focus
and the application for two additional exploration tenements further north at Glencoe. Quaggy presents a
strong magnetic feature that can be traced under the overlying laterite and alluvial cover. Soil cover (derived
from the underlying gabbro) to the east is strongly anomalous in copper, nickel, cobalt and associated
platinum group metals. As shown in Figure 6, these sit over SAM conductors which are stronger to the west at
the limit of the survey. The combination of geology, soil geochemistry and underlying conductors demonstrates
a potential for a new nickel district similar to that recently discovered by Sirius Resources NL (Nova Prospect)
in Western Australia. The Glencoe prospect (under application) to the north of Quaggy presents an even
stronger magnetic layered gabbro feature with known Cu, Ni and PGMs than at Quaggy.
Figure 5: IronRidge Resources EPMs and Projects in Queensland
Figure 6: Peak SAM conductors and soil geochemistry at Quaggy (shown over magnetic image)
The loss after income tax for the Group for the year ended 30 June 2014 was $2,425,279.
IronRidge Resources Limited financial report for the year ended 30 June 2014
9
Directors’ Report (continued)
Significant changes in the state of affairs
During the financial year ended 30 June 2014, issued capital increased to $6,661,258 from $4,391,686 as a
result of seed capital raisings totaling $1,334,423, net of share issue costs of $41,015, the issue of shares to
DGR Global Limited as a result of a partial debt conversion of $100,000, the issue of bonus shares to executives
of $617,950 and the issue of shares as a result of other debt conversions totaling $217,200.
In the opinion of the Directors, there were no other significant changes in the state of affairs of the Group that
occurred during the financial year under review not otherwise disclosed in this report or the financial
statements of the Group for the financial year.
Environmental regulations and performance
The Directors have put in place strategies and procedures to ensure that the Group manages its compliance
with environmental regulations. The Directors are not aware of any breaches of any applicable environmental
regulations.
Proceedings on behalf of company
No person has applied to the Court under section 237 of Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose
of taking responsibility on behalf of the Company for all or any part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
Remuneration report (audited)
This remuneration report for the year ended 30 June 2014 outlines the remuneration arrangements of the
Company and the Group in accordance with the requirements of the Corporations Act 2001 (the “Act”) and its
regulations. This information has been audited as required by section 308(3C) of the Act.
The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who
are defined as those persons having authority and responsibility for planning, directing and controlling the
activities of the Company and the Group, directly or indirectly, including any director (whether executive or
otherwise) of the Company, and includes the executive team.
Individual key management personnel disclosures
The remuneration report is presented under the following sections:
1.
2. Remuneration policy
3. Non-executive director remuneration arrangements
4.
5. Company performance and the link to remuneration
6.
7.
1. Individual key management personnel disclosures
Executive contractual arrangements
Equity instruments disclosures
Executive remuneration arrangements
Key management personnel
(i) Directors
Nicholas Mather
Vince Mascolo
Stuart Crow
(ii) Executives
Karl Schlobohm*
Priy Jayasuriya*
Barry Stoffell
Amanda Geard
Executive Chairman
Executive Director
Non-executive Director
Company Secretary
Chief Financial Officer
Chief Geologist, New Opportunities Group
Business Generation, New Opportunities Group
* Karl Schlobohm, Priy Jayasuriya, Barry Stoffell and Amanda Geard are currently remunerated by DGR Global
Limited.
There were no changes to KMP after reporting date and before the date the financial report was authorized for
issue.
IronRidge Resources Limited financial report for the year ended 30 June 2014
10
Directors’ Report (continued)
Remuneration report (continued)
2. Remuneration policy
IronRidge Resources Limited’s remuneration strategy is designed to attract, motivate and retain employees
and NEDs by identifying and rewarding high performers and recognising the contribution of each employee to
the continued growth and success of the Group.
The Board of Directors is responsible for determining and reviewing compensation arrangements for the
Directors and the Executive team. The Board assesses the appropriateness of the nature and amount of
remuneration of such officers on a periodic basis by reference to relevant employment market conditions with
the overall objective of ensuring maximum shareholder benefit from the retention of a high quality Board and
Executive team. Such officers are given the opportunity to receive their base remuneration in a variety of
forms including cash and fringe benefits. It is intended that the manner of payments chosen will be optimal
for the recipient without creating undue cost for the Company. Further details on the remuneration of
Directors and Executives are set out in this Remuneration Report.
The Company aims to reward the Executives with a level and mix of remuneration commensurate with their
position and responsibilities within the Company. The Board’s policy is to align Executive objectives with
shareholder and business objective by providing a fixed remuneration component and offering long-term
incentives.
In accordance with best practice corporate governance, the structure of NED and executive remuneration is
separate and distinct.
3. Non-executive director remuneration arrangements
The board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract
and retain directors of the highest caliber, whilst incurring a cost that is acceptable to shareholders. The
Company’s specific policy for determining the nature and amount of remuneration of Board members of the
Company is as follows:
The Constitution of the Company provides that the NEDs are entitled to remuneration as determined by the
Company in a general meeting to be apportioned among them in such manner as the Directors agree, and, in
default of agreement, equally. The aggregate remuneration per annum will be determined at the next annual
general meeting. Additionally, NEDs are entitled to be reimbursed for properly incurred expenses.
If a NED performs extra services, which in the opinion of the Directors are outside the scope of the ordinary
duties of the Director, the Company may remunerate that Director by payment of a fixed sum determined by
the Directors in addition to or instead of the remuneration referred to above. However, no payment can be
made if the effect would be to exceed the maximum aggregate amount payable to NEDs. A NED is entitled to
be paid travelling and other expenses properly incurred by them in attending Director’s or general meetings of
the Company or otherwise in connection with the business of the Company.
All Directors have the opportunity to qualify for participation in the Company’s Employee Share Option Plan
(“ESOP”), subject to the approval of shareholders.
The remuneration of NEDs for the year ended 30 June 2014 is detailed in this Remuneration Report.
4. Executive remuneration arrangements
The Company aims to reward the Executives with a level and mix of remuneration commensurate with their
position and responsibilities within the Company and so as to:
align the interests of the Executives with those of shareholders;
link reward with the strategic goals and performance of the Company; and
ensure total remuneration is competitive by market standards.
The remuneration of Executives may from time to time be fixed by the Board. The remuneration will comprise
a fixed remuneration component and also may include offering specific short and long-term incentives, in the
form of:
performance based salary increases and/or bonuses; and/or
the issue of options.
The remuneration of the Executives employed on a full-time basis by the Company for the year ending 30 June
2014 is detailed in this Remuneration Report.
IronRidge Resources Limited financial report for the year ended 30 June 2014
11
Directors’ Report (continued)
Remuneration report (continued)
5. Company performance and the link to remuneration
During the financial year, the Company has generated losses as its principal activity was mineral exploration.
During the year ended 30 June 2014 the Company’s ordinary shares were not traded on any exchange and
there were no dividends paid during the year.
As the Company is still in the exploration and development stage, the link between remuneration, Company
performance and shareholder wealth is tenuous. Share prices are subject to the influence of metals prices and
market sentiment toward the sector, and as such increases or decreases may occur quite independent of
Executive performance or remuneration.
6. Executive contractual arrangements
It is the Board’s policy that employment agreements are entered into with all Executives.
The current service agreement with the Executive Director has a notice period of three (3) months. All other
employment agreements have one month (or less) notice periods. Executives are entitled to their statutory
entitlements of accrued annual leave and long service leave together with any superannuation on termination.
No other termination payments are payable.
The terms of appointment for NEDs are set out in the letters of appointment.
Executive Director
The Company has a three (3) year Executive Service Agreement with Alberona Pty Ltd an entity associated
with Mr Vincent Mascolo, which took effect on 9 January 2012 for the provision of certain consultancy services.
Alberona Pty Ltd will provide Mr Vincent Mascolo as Executive Director of IronRidge Resources Limited. Under
the terms of the agreement:
Alberona Pty Ltd is entitled to a base fee for the services of Mr Mascolo of $180,000 per annum,
increasing to $250,000 per annum on the date the Company’s shares are admitted to quotation on the
ASX and increasing to $350,000 from the day the company has a market capitalisation of equal to or
greater than $100 million.
Both the Company and Alberona Pty Ltd are entitled to terminate the contract upon giving three (3)
months written notice;
The Company is entitled to terminate the agreement immediately upon the happening of certain
events in respect of Alberona Pty Ltd’s solvency or certain acts of misconduct;
Mr Mascolo is entitled to a short-term incentive equal to 100% of the base fee over the lifetime of the
Executive Service Agreement with Alberona Pty Ltd on meeting the following key performance
indicators
a) 10% - Compliance with statutory requirements and board reporting;
b) 25% - Share price re-rating;
c) 25% - Project advancement and or value adding acquisition;
d) 30% - Promotional achievement, capital management & successful cash raisings; and
e) 10% - No lost time injury and adherence to OHES policies.
Mr Mascolo is entitled to a long-term Incentive equal to a maximum of 4% interest in the share capital
of the company upon meeting certain key performance indicators as set by the board.
Other Executives
Employment contracts entered into with Executives contain the following key terms:
Event
Performance based salary increases and/or bonuses
Short and long-term incentives, such as options
Resignation/ notice period
Serious misconduct
Company Policy
Board discretion
Board discretion
1 month
Company may terminate at any time
Payouts upon resignation or termination, outside industrial regulations
(i.e. ‘golden handshakes’)
None
IronRidge Resources Limited financial report for the year ended 30 June 2014
12
Directors’ Report (continued)
Remuneration report (continued)
Remuneration of Directors and Other Key Management Personnel
Directors
Stephen Everett1
-
-
2014
2013
Nicholas Mather
-
-
-
-
2014
2013
Vince Mascolo
2014
2013
Stuart Crow2
2014
2013
Total remuneration
-
-
-
-
2014
2013
Short term
benefits
Salary & fees
$
Post-
employment
Superannuation
$
Share based payments
Equity settled
Options
$
Shares
$
Total
$
% Consisting
of options
-
11,667
50,000
79,167
180,000
179,275
52,500
20,833
282,500
290,942
-
-
-
-
-
-
-
-
-
-
-
-
19,409
-
38,820
-
19,409
-
-
-
-
-
215,200
-
-
-
-
11,667
69,409
79,167
434,020
179,275
71,909
20,833
77,638
-
215,200
-
575,338
290,942
-
-
28%
-
9%
-
27%
-
1 Stephen Everett resigned 21 November 2012
2 Stuart Crow was appointed 1 February 2013
Other Key
Management
Personnel
Peter Williams1
-
-
2014
2013
Karl Schlobohm2
-
-
2014
2013
Priy Jayasuriya2
-
-
2014
2013
Barry Stoffell2
2014
2013
-
-
Amanda Geard2
-
-
2014
2013
Total remuneration
-
-
2014
2013
Short term
benefits
Post-
employment
Share based payments
Equity settled
Total
% Consisting
of options
Salary & fees
$
Superannuation
$
Options
$
Shares
$
-
58,498
-
-
-
-
-
-
-
-
-
58,498
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,470
-
6,470
-
34,744
-
34,744
-
82,428
-
-
-
-
-
-
-
201,375
-
201,375
-
$
-
58,498
6,470
-
6,470
-
236,119
-
236,119
-
-
-
100%
-
100%
-
15%
-
15%
-
402,750
-
485,178
58,498
1 Peter Williams resigned 21 November 2012.
2 Karl Schlobohm, Priy Jayasuriya, Barry Stoffell and Amanda Geard are remunerated by DGR Global Ltd.
There were no other executives employed or remunerated by the Company or the Group during the years
ended 30 June 2014 and 2013.
Performance income as a proportion of total remuneration
There was no performance based remuneration during the year.
IronRidge Resources Limited financial report for the year ended 30 June 2014
13
Directors’ Report (continued)
Remuneration report (continued)
7. Equity instruments disclosures
Shares and Options issued as part of remuneration for the year ended 30 June 2014
Shares and options may be issued to Directors and Executives as part of their remuneration. The shares and
options are not issued based on performance criteria, but are issued to the majority of Directors and
Executives of the Company to align comparative shareholder return and reward for Directors and Executives.
Shares and Options granted as remuneration
Details of shares issued as part of remuneration of directors and other key management personnel in this
financial year are as follows:
Director shares
Key Management
Personnel shares
Grant date
31/01/2014
Issue price
$0.08
20/12/2013
$0.075
The number of ordinary shares granted to directors and other key management personnel as part of
compensation during the year ended 30 June 2014 are set out below:
Number of shares
granted during the
year 2014
-
2,690,000
-
-
-
2,685,000
2,685,000
8,060,000
Directors
Nicholas Mather
Vince Mascolo
Stuart Crow
Other Key
Management
Personnel
Karl Schlobohm
Priy Jayasuriya
Amanda Geard
Barry Stoffell
Total
The terms and conditions of the grant of options over ordinary shares affecting remuneration of directors and
other key management personnel in this financial year or future reporting years are as follow:
Grant date
Vesting date and
exercisable date
Expiry date
Exercise price
Director Options
31/01/2014
31/01/2014
31/12/2017
£0.25
Fair value per
option at grant
date
£0.007
Key Management
Personnel
Options
31/01/2014
31/01/2014
31/12/2017
£0.25
£0.007
Options granted carry no dividend or voting rights. There was no amount paid or payable by the recipients
IronRidge Resources Limited financial report for the year ended 30 June 2014
14
Directors’ Report (continued)
Remuneration report (continued)
7. Equity instruments disclosures (continued)
The number of options over ordinary shares granted to and vested by directors and other key management
personnel by as part of compensation during the year ended 30 June 2014 are set out below:
Number of options
granted during the
year 2014
Number of options
vested during the
year 2014
1,500,000
3,000,000
1,500,000
1,500,000
3,000,000
1,500,000
500,000
500,000
2,685,000
2,685,000
12,370,000
500,000
500,000
2,685,000
2,685,000
12,370,000
Directors
Nicholas Mather
Vince Mascolo
Stuart Crow
Other Key
Management
Personnel
Karl Schlobohm
Priy Jayasuriya
Amanda Geard
Barry Stoffell
Total
Shares issued on exercise of remuneration options
There were no options exercised during the year that were previously granted as remuneration (2013: nil).
Additional disclosures relating to key management personnel
Shareholdings
Directors
Nicholas Mather
Vincent Mascolo
Stuart Crow
Other Key Management
Personnel
Karl Schlobohm
Priy Jayasuriya
Barry Stoffell
Amanda Geard
Total
Balance
1 July 2013
Granted as
Compensation
Options
Exercised
Net Change
Other
Balance
30 June 2014
-
3,317,000
400,000
-
2,690,000
-
200,000
-
-
-
3,917,000
-
-
2,685,000
2,685,000
8,060,000
-
-
-
-
-
-
-
-
1,303,703
2,303,291
600,000
1,303,703
8,310,291
1,000,000
92,500
-
-
-
4,299,494
292,500
-
2,685,000
2,685,000
16,276,494
“Net Change Other” above includes the balance of shares held on appointment / resignation, and shares
acquired for cash.
There were no shares held nominally at 30 June 2014 (2013: nil).
IronRidge Resources Limited financial report for the year ended 30 June 2014
15
Directors’ Report (continued)
Remuneration report (continued)
Option holdings
Current Year
Directors
Nicholas Mather
Vincent Mascolo
Stuart Crow
Other Key Management
Personnel
Karl Schlobohm
Priy Jayasuriya
Barry Stoffell
Amanda Geard
Total
Balance
1 July 2013
Granted
Exercised
Other
Balance
30 June 2014
Vested at the
end of the
year
Vested and
exercisable at
the end of the
year
Vested and
unexercisable
at the end of
the year
-
-
-
-
-
-
-
-
1,500,000
3,000,000
1,500,000
500,000
500,000
2,685,000
2,685,000
12,370,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
3,000,000
1,500,000
1,500,000
3,000,000
1,500,000
1,500,000
3,000,000
1,500,000
500,000
500,000
2,685,000
2,685,000
12,370,000
500,000
500,000
2,685,000
2,685,000
12,370,000
500,000
500,000
2,685,000
2,685,000
12,370,000
-
-
-
-
-
-
-
There were no options held nominally at 30 June 2014 (2013: nil).
Loans to Key Management Personnel
There were no loans to Directors or other key management personnel during the year.
Other Transactions with Key Management Personnel
There were no other transactions or balances with key management personnel during the period.
(End of Remuneration Report)
IronRidge Resources Limited financial report for the year ended 30 June 2014
16
Directors’ Report (continued)
Directors’ Meetings
The number of meetings of Directors held during the year and the number of meetings attended by each
Director was as follows:
Nicholas Mather
Vince Mascolo
Stuart Crow1
Number of
meetings held
while in office
6
6
6
Meetings attended
6
6
6
Significant Events after the Balance Date
The Directors are not aware of any significant changes in the state of affairs of the Company after the balance
date that is not covered in this report.
Indemnification and insurance of Directors, Officers and Auditor
Each of the Directors and Secretary of the Company has entered into a Deed with the Company whereby the
Company has provided certain contractual rights of access to books and records of the Company to those
Directors. The Company has insured all of the Directors. The contract of insurance prohibits the disclosure of
the nature of the liabilities covered and amount of the premium paid. The Corporations Act does not require
disclosure of the information in these circumstances.
The Company has not indemnified or insured its auditor.
Non-audit Services
BDO Audit Pty Ltd did not provide any non-audit services during the year.
Auditor’s Independence Declaration
The Auditor’s Independence Declaration forms part of the Directors’ Report and can be found on page 18.
Signed in accordance with a resolution of Directors:
Vincent Mascolo
Director
Brisbane
Date: 31 October 2014
IronRidge Resources Limited financial report for the year ended 30 June 2014
17
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY DAMIAN WRIGHT TO THE DIRECTORS OF IRONRIDGE
RESOURCES LIMITED
As lead auditor of IronRidge Resources Limited for the year ended 30 June 2014, I declare that, to
the best of my knowledge and belief, there have been no contraventions of:
•
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
any applicable code of professional conduct in relation to the audit.
This declaration is in respect IronRidge Resources Limited and the entities it controlled during the
period.
D P Wright
Director
BDO Audit Pty Ltd
Brisbane, 31 October 2014
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation, other than for the acts or omissions of financial services licensees.
18
INTEREST IN TENEMENTS
As at the date of this report, the Group has an interest in the following tenements.
Tenement
%
Interest
Grant Date
Application Date
Expiry Date
Term
EPM 16260
EPM 16261*
EPM 18534
EPMA 19164
EPMA 19419
EPMA 25115
Authorisation de
prospection
G6-525
Authorisation de
prospection
G6-526
Authorisation de
prospection
G5-533
100%
100%
100%
100%
100%
100%
12.06.08
28.05.08
12.10.10
30.09.13
26.08.14
08.04.14
11.06.15
7 years
27.05.15*
5 years
11.10.14*
4 years
29.09.15
2 years
25.08.17
3 years
07.04.17
3 years
100%
07.06.12
27.06.16
4 years
100%
07.06.12
27.06.16
4 years
100%
05.12.13
04.12.16
3 years
*A renewal application has been lodged in respect of this Exploration Permit.
IronRidge Resources Limited financial report for the year ended 30 June 2014
19
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2014
Revenue
Administration and consulting expenses
Depreciation
Employee benefits expenses
Exploration costs written-off
Legal expenses
Interest expense
Listing costs expensed
Share based payments
(Loss) before income tax
Income tax expense
(Loss) for the year
Other comprehensive income
Total comprehensive income for the year
attributable to the owners of IronRidge
Resources Limited
Earnings per share
Basic earnings per share
Diluted earnings per share
Notes
2
2014
$
2013
$
2,221
1,811
(1,079,918)
(4,384)
-
(10,073)
(25,000)
(11)
(518,453)
(789,661)
(2,425,279)
-
(2,425,279)
(731,752)
(4,377)
(52,524)
(331,058)
(17,445)
(1,018)
-
-
(1,136,363)
-
(1,136,363)
-
-
(2,425,279)
(1,136,363)
Cents / share
Cents / share
(2.0)
(2.0)
(1.2)
(1.2)
16
3
4
8
8
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
IronRidge Resources Limited financial report for the year ended 30 June 2014
20
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2014
Current assets
Cash and cash equivalents
Trade and other receivables
Prepaid IPO costs
Total current assets
Non-current assets
Other financial assets
Property, plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Non-Interest-bearing loans
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity attributable to owners of
IronRidge Resources Limited
Notes
2014
$
2013
$
9
10
11
12
13
14
19(e)
27,600
29,424
386,476
443,500
63,103
11,010
1,590,815
1,664,928
2,108,428
1,293,831
9,205
1,303,036
1,303,036
805,392
15
16
6,661,258
171,711
(6,027,577)
29,661
24,525
-
54,186
68,103
15,394
1,021,370
1,104,867
1,159,053
349,529
20,136
369,665
369,665
789,388
4,391,686
-
(3,602,298)
805,392
789,388
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
IronRidge Resources Limited financial report for the year ended 30 June 2014
21
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2014
Issued
Capital
Accumulated
Losses
$
$
Share
based
payments
reserve
$
Balance at 30 June 2012
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Shares issued during the year
Share issue costs, net of tax
Balance at 30 June 2013
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Shares issued during the year
Share issue costs, net of tax
Share based payments
Balance at 30 June 2014
3,131,190
-
-
-
1,275,769
(15,273)
4,391,686
-
-
-
2,310,586
(41,014)
-
6,661,258
(2,465,935)
(1,136,363)
-
(1,136,363)
-
-
(3,602,298)
(2,425,279)
-
(2,425,279)
-
-
-
(6,027,577)
-
-
-
-
-
-
-
-
-
-
-
-
171,711
171,711
Total
Equity
$
665,255
(1,136,363)
-
(1,136,363)
1,275,769
(15,273)
789,388
(2,425,279)
-
(2,425,279)
2,310,586
(41,014)
171,711
805,392
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
IronRidge Resources Limited financial report for the year ended 30 June 2014
22
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2014
Notes
2014
$
2013
$
Cash flows from operating activities
Receipts from customers (including GST)
Payments to suppliers and employees (including GST)
Interest received
Interest paid
Net cash flows from operating activities
Cash flows from investing activities
Payments for security deposits
Refund of security deposits
Payments for investments in available for sale securities
Purchase of property, plant and equipment
Payments for exploration and evaluation assets
Net cash flows from investing activities
Cash flows from financing activities
Proceeds from the issue of shares
Transactions costs on the issue of shares
Prepayment of IPO costs
Proceeds from borrowings
Repayment of borrowings
Net cash flows from financing activities
18
11
11
12
15
19(e)
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
9
114,810
(798,468)
2,221
(11)
(681,448)
(5,000)
10,000
-
-
(477,461)
(472,461)
1,375,438
(25,313)
(203,846)
14,115
(8,546)
1,151,848
(2,061)
29,661
27,600
69,435
(314,669)
1,811
(1,018)
(244,441)
(27,166)
-
-
(449,116)
(476,282)
622,750
(10,275)
106,379
(182,600)
536,254
(184,469)
214,130
29,661
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
IronRidge Resources Limited financial report for the year ended 30 June 2014
23
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies
Corporate Information
The consolidated financial report of IronRidge Resources Limited for the year ended 30 June 2014 was
authorised for issue in accordance with a resolution of the directors on 31 October 2014.
IronRidge Resources Limited (the Parent) is a public company limited by shares incorporated and domiciled in
Australia. The ultimate parent of IronRidge Resources Limited is DGR Global Limited which owns 46% of the
ordinary shares. The Group’s registered office is located at Level 27 One One One, 111 Eagle Street, Brisbane,
QLD 4000.
The nature of the operations and principal activities of the Group are described in the director’s report.
Basis of Preparation
This financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of
the Australian Accounting Standards Board and the Corporations Act 2001. The Group is considered a for-profit
entity for the purpose of Australian Accounting Standards.
The financial report covers the Group comprising of IronRidge Resources Limited and its subsidiaries and is
presented in Australian dollars.
Compliance with IFRS
Australian Accounting Standards include Australian Equivalents to International Financial Reporting Standards
(AIFRS). Compliance with AIFRS ensures that the financial statements and notes of IronRidge Resources Limited
comply with International Financial Reporting Standards (IFRS).
Going concern
The financial statements have been prepared on a going concern basis which contemplates the continuity of
normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of
business. The Group has not generated revenues from operations. As such, the Group’s ability to continue to
adopt the going concern assumption will depend upon a number of matters including successful closure of its
initial public offering, its subsequent successful raisings in the future of necessary funding and the successful
exploration and subsequent exploitation of the Group’s tenements. In addition it is dependent upon the
majority of the trade creditors agreeing to deferred payment terms. The Directors have an expectation that
the closure of its initial public offering will be successful. If market conditions do not lend itself to the
completion of an initial public offering, the Directors will have several other strategic and funding
opportunities that they will review.
In the absence of these matters being successful, there exists a material uncertainty that may cast significant
doubt on the Group’s ability to continue as a going concern with the result that the Group may have to realise
its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts different
from those stated in the financial statements. No adjustments for such circumstances have been made in the
financial statements.
Reporting basis and conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified by the
revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value
basis of accounting has been applied.
The following is a summary of the material accounting policies adopted by the Group in the preparation of the
financial report.
IronRidge Resources Limited financial report for the year ended 30 June 2014
24
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies (continued)
Accounting Policies
(a)
New Accounting Standards and Interpretations
The accounting policies adopted are consistent with those of the previous financial year except as follows:
The Company has adopted the following new and amended Australian Accounting Standards and AASB
Interpretations as of 1 July 2013:
Reference
AASB 10
AASB 11
AASB 12
AASB 13
AASB 2011-8
AASB 119
AASB 2011-10
AASB 127
AASB 128
AASB 2011-7
AASB 2012-2
AASB 2012-5
AASB 2012-10
AASB 2011-4
Title
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Value Measurements
Amendments to Australian Accounting Standards arising from
AASB 13
Employee Benefits (September 2011)
Amendments to Australian Accounting Standards arising from
AASB 119 (September 2011)
Separate Financial Statements (Revised)
Investments in Associates and Joint Ventures (Reissued)
Amendments to Australian Accounting Standards arising from
the Consolidation and Joint Arrangements Standards
Amendments to Australian Accounting Standards – Disclosures –
Offsetting Financial Assets and Financial Liabilities
Amendments to Australian Accounting Standards arising from
Annual Improvements 2009-2011 Cycle
Amendments to Australian Accounting Standards – Transition
Guidance and Other Amendments
Amendments to Australian Accounting Standards to Remove
Individual Key Management Personnel Disclosure Requirement
Application date
of standard
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
Application date
for the Company
1 July 2013
1 July 2013
1 July 2013
1 July 2013
1 July 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 July 2013
1 July 2013
1 July 2013
1 July 2013
1 July 2013
1 January 2013
1 July 2013
1 January 2013
1 July 2013
1 January 2013
1 July 2013
1 January 2013
1 July 2013
The adoption of the above standards and interpretations did not have any material impact on the current or
any prior period and is not likely to materially affect future periods.
Australian Accounting Standards and Interpretations that have been recently issued or amended but are not
yet effective have not been adopted by the Company for the annual reporting period ending 30 June 2014.
None of these is expected to have a significant effect on the financial statements.
The Company anticipates that all of the relevant pronouncements will be adopted in the Company’s
accounting policies for the first period beginning after the effective date of the pronouncement. Information
of new standards, amendments and interpretations that are expected to be relevant to the Company’s
financial statements is provided below.
Reference
AASB 9
AASB 2012-3
AASB 2013-3
AASB 2013-4
AASB 2013-5
Title
Financial Instruments
Amendments to Australian Accounting Standards – Offsetting
Financial Assets and Financial Liabilities
Amendments to AASB 136 – Recoverable Amount Disclosures for
Non-Financial Assets
Amendments to Australian Accounting Standards – Novation of
Derivatives and Continuation of Hedge Accounting
Amendments to Australian Accounting Standards – Investment
Entities
Application date
of standard
1 January 2017
1 January 2014
Application date
for the Company
1 July 2017
1 July 2014
1 January 2014
1 July 2014
1 January 2014
1 July 2014
1 January 2014
1 July 2014
IronRidge Resources Limited financial report for the year ended 30 June 2014
25
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(b)
Basis of Consolidation
The consolidated financial statements comprise the financial statements of IronRidge Resources Limited and
its subsidiaries as at and for the period ended 30 June each year (the “Group”).
Subsidiaries
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity 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. Subsidiaries are fully consolidated from the date on which control is transferred to the
consolidated entity. They are de-consolidated from the date that control ceases.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent
company, using consistent accounting policies. In preparing the consolidated financial statements, all
intercompany balances, transactions, unrealized gains and losses resulting from intra-group transactions and
dividends have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be
consolidated from the date on which control is transferred out of the Group.
Investments in subsidiaries held by IronRidge Resources Limited are accounted for at cost in the separate
financial statements of the parent entity less any impairment charges. Dividends received from subsidiaries
are recorded as a component of other revenues by the parent entity, and do not impact the recorded cost of
the investment. Upon receipt of dividend payments from subsidiaries, the parent will assess whether any
indicators of impairment of the carrying value of the investment in the subsidiary exist. Where such indicators
exist, to the extent that the carrying value of the investment exceeds its recoverable amount, an impairment
loss is recognised.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition
method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable
assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The identifiable
assets acquired and the liabilities assumed are measured at their acquisition date fair values.
The difference between the above items and the fair value of consideration (including the fair value of any
pre-existing investment in the acquiree) is goodwill or discount on acquisition.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to each of the Group’s cash generating units that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill forms part of a cash generating unit and part of the operation within that unit is disposed of,
the goodwill associated with the operation disposed of is included in the carrying amount of the operation
when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is
measured based on the relative values of the operation disposed of and the portion of the cash generating unit
retained.
Non-controlling interests are allocated their share of net profit after tax in the statement of comprehensive
income and presented within equity in the consolidated statement of financial position, separately from the
equity of the owners of the parent.
Losses are attributed to the non-controlling interest even if that results in a deficit balance.
A change in ownership interest of a subsidiary that does not result in a loss of control, is accounted for as an
equity transaction.
IronRidge Resources Limited financial report for the year ended 30 June 2014
26
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(b)
Basis of Consolidation (continued)
Joint Arrangements
Joint Operations
The proportionate interests in the assets, liabilities and expenses of a joint operation activity have been
incorporated in the financial statements under the appropriate headings.
Joint Ventures
Investments in joint ventures are accounted for using the equity method. Under the equity method, the share
of the profits or losses of the joint venture is recognised in profit or loss and the share of the movements in
equity is recognised in other comprehensive income. Investments in joint ventures are carried in the
statement of financial position at cost plus post-acquisition changes in the consolidated entity’s share of net
assets of the joint venture. Goodwill relating to the joint venture is included in the carrying amount of the
investment and is neither amortised nor individually tested for impairment. Dividends receivable from joint
venture entities reduces the carrying amount of the investment.
Changes in Ownership Interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as
transactions with equity owners of the Group. A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests
in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any
consideration paid or received is recognised in a separate reserve within equity attributable to owners of
IronRidge Resources Ltd.
When the Group ceases to have control, or significant influence, any retained interest in the entity is
remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is
the initial carrying amount for the purposes of subsequently accounting for the retained interest as an
associate or financial asset. In addition, any amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had directly disposed of the related assets or
liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified
to profit or loss.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss
where appropriate.
(c) Business Combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a
business combination is measured at fair value, which is calculated as the sum of the acquisition date fair
values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of
the acquiree and the equity issued by the acquirer, and the amount of any non-controlling interest in the
acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree
either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related
costs are expensed as incurred, and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with contractual terms, economic conditions, the Group’s
operating or accounting policies and other pertinent conditions as at the acquisition date.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair value through profit and loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be
an asset or liability will be recognised in accordance with AASB 139 either in profit or loss or as a change to
other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured.
IronRidge Resources Limited financial report for the year ended 30 June 2014
27
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(d)
Operating Segments
An operating segment is a component of an entity that engages in business activities from which it may earn
revenues and incur expenses, whose operating results are regularly reviewed by the entity’s chief operating
decision maker to make decisions about resources to be allocated to the segment and assess its performance
and for which discrete financial information is available. This may include start-up operations which are yet
to earn revenues.
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately.
However, an operating segment that does not meet the quantitative criteria is still reported separately where
information about the segment would be useful to users of the financial statements.
Information about other operating segments that are below the quantitative criteria are combined and
disclosed in a separate category for “all other segments”.
(e)
Cash and Cash Equivalents
For the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with
banks, other short term highly liquid investments with original maturities of three months or less, and bank
overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of
financial position.
(f)
Trade and other receivables
Receivables generally have 30-60 day terms, are recognised initially at fair value and subsequently measured
at amortised cost using the effective interest method, less an allowance for impairment.
Collectability of receivables is reviewed on an ongoing basis. Individual debts that are known to be
uncollectible are written off when identified. An impairment provision is recognised when there is objective
evidence that the Group will not be able to collect the receivable. Financial difficulties of the debtor or debts
more than 90 days overdue are considered objective evidence of impairment. The amount of the impairment
loss is the receivable carrying amount compared to the present value of estimated future cash flows,
discounted at the original effective interest rate.
(g)
Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity
becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for
financial assets that are delivered within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not
classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair
value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and
measured as set out below.
Classification and Subsequent Measurement
(i)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and are subsequently measured at amortised cost using the
effective interest rate method.
(ii)
(iii)
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost using the effective interest rate method.
Available-for-sale financial assets
Available for sale financial assets comprise investments in listed entities. These investments are
recorded at cost.
IronRidge Resources Limited financial report for the year ended 30 June 2014
28
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(g)
Financial Instruments (continued)
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the
risks and benefits associated with the asset.
Financial liabilities are derecognized where the related
obligations are either discharged, cancelled or expire. The difference between the carrying value of the
financial liability extinguished or transferred to another party and the fair value of consideration paid,
including the transfer of non-cash assets or liabilities assumed is recognised in profit of loss.
(h)
Property, Plant & Equipment
Property, plant & equipment are stated at historical cost less accumulated depreciation and any accumulated
impairment losses.
The cost of property, plant & equipment constructed within the Group includes the cost of materials, direct
labour, borrowing costs and an appropriate portion of fixed and variable costs. Subsequent costs are included
in the asset’s 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. All other repairs and maintenance are charged to the profit or loss during the financial
year in which they are incurred.
Depreciation
The depreciable amount of all property, plant & equipment is depreciated over their useful life to the Group
commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the
shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of assets are:
Class of Property, plant & equipment
Plant & Equipment
Office Equipment
Depreciation
10% - 15% Straight line
33.3% Straight line
(h)
Property, Plant & Equipment (continued)
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are
included in the statement of comprehensive income.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use or disposal.
(i)
Exploration and Evaluation Assets
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of
interest. Such expenditures comprise net direct costs and an appropriate portion of related overhead
expenditure but do not include overheads or administration expenditure not having a specific nexus with a
particular area of interest. These costs are only carried forward to the extent that they are expected to be
recouped through the successful development of the area or where activities in the area have not yet reached
a stage which permits reasonable assessment of the existence of economically recoverable reserves and active
or significant operations in relation to the area are continuing.
A regular review has been undertaken on each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest.
IronRidge Resources Limited financial report for the year ended 30 June 2014
29
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(i)
Exploration and Evaluation Assets (continued)
A provision is raised against exploration and evaluation expenditure where the Directors are of the opinion
that the carried forward net cost may not be recoverable or the right of tenure in the area lapses. The
increase in the provision is charged against the results for the year. Accumulated costs in relation to an
abandoned area are written off in full against profit in the year in which the decision to abandon the area is
made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the
life of the area according to the rate of depletion of the economically recoverable reserves.
Costs of site restoration are provided over the life of the area from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structure, waste removal, and rehabilitation of the site in accordance with clauses of
mining permits. Such costs have been determined using estimates of future costs, current legal requirements
and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of
site restoration, there is uncertainty regarding the nature and extent of the restoration due to community
expectations and future legislation. Accordingly the costs have been determined on the basis that restoration
will be completed within one year of abandoning the site.
(j)
Impairment of Assets
At each reporting date, the Group reviews the carrying values of its tangible assets to determine whether
there is any indication that those assets have been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared
to the asset’s carrying value. Any excess of the asset’s carrying value over it recoverable amount is expensed
to the profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
(k)
Trade and Other Payables
Trade and other payables are carried at amortised cost and due to their short term nature they are not
discounted. They represent liabilities for goods and services provided to the Group prior to the end of the
financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect
of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30-60
days of recognition.
(l)
Provisions and Employee Benefits
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is possible that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a
separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is
presented in the statement of comprehensive income net of any reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure required to
settle the present obligation at the reporting date. The discount rate used to determine the present value
reflects current market assessments of the time value of money and the risks specific to the liability. The
increase in the provision resulting from the passage of time is recognised in finance costs.
IronRidge Resources Limited financial report for the year ended 30 June 2014
30
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(l)
Provisions and Employee Benefits (continued)
Employee benefits
(i) Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled
within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting
date. They are measured at the amounts expected to be paid when the liabilities are settled. Expenses for
non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or
payable.
(ii) Long service leave
The liability for long service leave is recognised and measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date. Consideration is
given to expected future wages and salary levels, experience of employee departures, and periods of service.
Expected future payments are discounted using market yields at the reporting date on national government
bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash
outflows.
(m)
Leases
Leases of property, plant & equipment where substantially all the risks and benefits incidental to the
ownership of the asset, but not the legal ownership, are transferred to the Group are classified as finance
leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the
fair value of the leased property or the present value of the minimum lease payments, including any
guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the
lease interest expense for the year.
Leased assets are depreciated on a straight line basis over their estimated useful lives where it is likely that
the Group will obtain ownership of the asset or over the term of the lease.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses on a straight line basis.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over
the life of the lease term.
(n)
Share Capital
Ordinary shares are classified as equity at the time that they are issued. Costs directly attributable to the
issue of new shares or options are shown as a deduction from the equity proceeds, net of any income tax
benefit.
(o)
Share-Based Payments
The Group may provide benefits to Directors, employees or consultants in the form of share-based payment
transactions, whereby services may be undertaken in exchange for shares or options over shares ("equity-
settled transactions").
The fair value of options granted to Directors, employees and consultants is recognised as an employee benefit
expense with a corresponding increase in equity (share option reserve). The fair value is measured at grant
date and recognised over the period during which the recipients become unconditionally entitled to the
options. Fair value is determined using a Black-Scholes option pricing model. An expense is still recognised
for options that do not ultimately vest because a market condition was not met.
IronRidge Resources Limited financial report for the year ended 30 June 2014
31
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(o)
Share-Based Payments (continued)
Where the terms of options are modified, the expense continues to be recognised from grant date to vesting
date as if the terms had never been changed. In addition, at the date of the modification, a further expense is
recognised for any increase in fair value of the transaction as a result of the change.
Where options are cancelled, they are treated as if vesting occurred on cancellation and any unrecognised
expenses are taken immediately to the profit or loss. If new options are substituted for the cancelled options
and designated as a replacement, the combined impact of the cancellation and replacement options are
treated as if they were a modification.
(p)
Revenue
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent
it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is recognised:
Interest
Interest revenue is recognized as interest accrues using the effective interest rate method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the net carrying amount of the financial asset.
All revenue is stated net of the amount of goods and services tax (GST).
(q)
Income Tax
The income tax expense for the period is the tax payable on the current period’s taxable income rate for each
jurisdiction adjusted by changes in deferred tax assets liabilities attributable to temporary differences
between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to
unused tax losses.
The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable
or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted
by the balance date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is recognised in the statement of comprehensive income except where it
relates to items that may be recognised directly in equity, in which case the deferred tax is adjusted directly
against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax
profits will be available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the group will derive
sufficient future assessable income to enable the benefit to be realised and comply with the conditions of
deductibility imposed by the law.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred
tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation
and settlement of the respective asset and liability will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
IronRidge Resources Limited financial report for the year ended 30 June 2014
32
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(r)
GST
Revenues, expenses and assets are recognised net of GST except where GST incurred on a purchase of goods
and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the
cost of acquisition of the asset or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable
from, or payable to, the taxation authority is included as part of receivables or payables in the statement of
financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation
authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(s)
Earnings per Share
Basic earnings per share is calculated as net profit (loss) attributable to members of the parent, adjusted to
exclude any costs of servicing equity other than ordinary shares, divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into
account:
The after tax effect of interest and other financing costs associated with dilutive potential ordinary
shares; and
The weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
(t)
Comparatives
When required by Australian Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
(u)
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date; and assumes that the
transaction will take place either: in the principle market; or in the absence of a principal market, in the most
advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming they act in their economic best interest. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the use
of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that
reflects the significance of the inputs used in making the measurements. Classifications are reviewed each
reporting date and transfers between levels are determined based on a reassessment of the lowest level input
that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers are
selected based on market knowledge and reputation. Where there is a significant change in fair value of an
asset or liability from one period to another, an analysis is undertaken, which includes a verification of the
major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.
IronRidge Resources Limited financial report for the year ended 30 June 2014
33
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 1: Summary of Significant Accounting Policies (continued)
Accounting Policies (continued)
(v)
Critical Accounting Estimates and Judgments
The Directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information.
Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the Group.
Key estimates – impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may
lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is
determined. Where applicable, value-in-use calculations performed in assessing recoverable amounts
incorporate a number of key estimates.
Key judgments – exploration & evaluation assets
The Group performs regular reviews on each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest. These reviews are based on detailed surveys and
analysis of drilling results performed to balance date.
The Directors have assessed that for the exploration and evaluation assets recognised at 30 June 2014, the
facts and circumstances do not suggest that the carrying amount of an asset may exceed its recoverable
amount. In considering this the Directors have had regard to the facts and circumstances that indicate a need
for an impairment as noted in Accounting Standard AASB 6 “Exploration for and Evaluation of Mineral
Resources”.
Exploration and evaluation assets at 30 June 2014 were $1,590,815 (2013: $1,021,370).
Note 2. Revenue
- Interest received
- Other revenue
Total Revenue
(a) Interest revenue from:
- At call deposits held with financial institutions
Total Interest Revenue
Note 3. Profit / (Loss)
Included in the profit / (loss) are the following specific
expenses:
Depreciation
- Office equipment
- Plant & equipment
2014
$
2013
$
2,221
-
2,221
2,221
2,221
1,811
-
1,811
1,811
1,811
800
3,584
799
3,578
IronRidge Resources Limited financial report for the year ended 30 June 2014
34
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 4. Income Tax
(a) Components of income tax expense (benefit)
Income tax expense (benefit) is made up of:
Current tax
Deferred tax
(b) The prima facie tax on profit / (loss) before income
tax is reconciled to the income tax expense as follows:
Prima facie tax on profit / (loss) before income tax at
30% (2013: 30%)
Add tax effect of:
Permanent differences
Current tax loss not recognised
Current year temporary difference not recognised
Deferred tax not recognised
Other items
Income tax expense
Deferred Tax Asset (at 30%)
Recognised temporary differences
Recognised Unused tax losses
Total deferred tax assets recognised
Deferred Tax Liability
Recognised timing differences
Net deferred tax recognised
Unrecognised deferred tax assets comprised of:
Deferred tax assets: Net unrecognised tax losses
Deferred tax assets: Gross unrecognised tax losses
2014
$
2013
$
-
-
-
-
-
-
(731,230)
(340,909)
237,032
494,198
-
-
-
-
21,870
185,958
207,828
(207,828)
-
1,704,630
5,682,100
-
237,769
-
-
103,140
-
8,320
365,095
373,415
(373,415)
-
965,545
3,218,482
In order to recoup carried forward losses in future periods, either the Continuity of Ownership Test (COT) or
Same Business Test must be passed. The majority of losses are carried forward at 30 June 2014 under COT.
Deferred tax assets which have not been recognised as an asset, will only be obtained if:
(i)
(ii)
(iii)
the Company derives future assessable income of a nature and of an amount sufficient to enable the
losses to be realised;
the Company continues to comply with the conditions for deductibility imposed by the law; and
no changes in tax legislation adversely affect the Company in realising the losses.
IronRidge Resources Limited financial report for the year ended 30 June 2014
35
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 5. Key Management Personnel
Key Management Personnel Compensation
The total remuneration of Key Management Personnel for the Group for the year was as follows:
Short term employee benefits
Post-employment benefits
Share based payments
Total
2014
$
282,500
-
778,016
1,060,516
2013
$
349,440
-
-
349,440
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid
or payable to each member of the Group’s Key Management Personnel.
Note 6. Dividends and Franking Credits
There were no dividends paid or recommended during the year or since the end of the year. There are no
franking credits available to shareholders of the Company.
Note 7. Auditors Remuneration
Audit and review of the financial reports of the Group
Taxation services
Note 8. Earnings per Share (EPS)
(a) Earnings
Earnings used to calculate basic and diluted EPS
(b) Weighted average number of shares and options
Weighted average number of ordinary shares outstanding
during the year, used in calculating basic earnings per
share
Weighted average number of dilutive options outstanding
during the year
Weighted average number of ordinary shares and
potential ordinary shares outstanding during the year,
used in calculating diluted earnings per share
Note 9. Cash and Cash Equivalents
Cash at bank
2014
$
2013
$
29,000
-
29,000
15,000
3,500
18,500
(2,425,279)
(1,136,363)
Number of Shares
Number of Shares
121,978,246
91,385,693
-
-
121,978,246
91,385,693
2014
$
2013
$
27,600
27,600
29,661
29,661
IronRidge Resources Limited financial report for the year ended 30 June 2014
36
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 10. Trade and Other Receivables
GST refundable
2014
$
2013
$
29,424
29,424
24,525
24,525
Receivables are non-interest bearing and are generally on 30-60 day terms. A provision for impairment loss
is recognised when there is objective evidence that an individual receivable is impaired. No impairment
loss has been recorded for the current and previous financial year.
Due to the short term nature of these receivables, their carrying value is assumed to approximate fair
value. The maximum exposure to credit risk is the carrying value of receivables. Collateral is not held as
security.
The receivables are not exposed to foreign exchange risk. No receivables were past due or impaired at 30
June 2014 (2013: nil).
2014
$
2013
$
Note 11. Other Financial Assets –Non-current
Security deposits
Investment in shares at cost
Note 12. Property, Plant and Equipment
Plant & Equipment – at cost
Accumulated depreciation
Written down value
Office equipment – at cost
Accumulated depreciation
Written down value
Total written down value
Reconciliation of carrying amounts at the beginning and of the year
Plant &
Equipment
Year ended 30 June 2014
At 1 July 2013 net of accumulated depreciation
Additions
Disposals
Depreciation charge for the year
At 30 June 2014 net of accumulated depreciation
Year ended 30 June 2013
At 1 July 2012 net of accumulated depreciation
Additions
Disposals
Depreciation charge for the year
At 30 June 2013 net of accumulated depreciation
$
13,878
-
-
(3,584)
10,294
17,456
-
-
(3,578)
13,878
59,103
4,000
63,103
32,815
(22,521)
10,294
2,401
(1,685)
716
11,010
64,103
4,000
68,103
32,815
(18,937)
13,878
2,401
(885)
1,516
15,394
Office
Equipment
$
Total
$
1,516
-
-
(800)
716
2,315
-
-
(799)
1,516
15,394
-
-
(4,384)
11,010
19,771
-
-
(4,377)
15,394
IronRidge Resources Limited financial report for the year ended 30 June 2014
37
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 13. Exploration and Evaluation Assets
Exploration and evaluation assets
Movements in carrying amounts
Balance at the beginning of the year
Additions
Written-off during the year
Balance at the end of the year
2014
$
2013
$
1,590,815
1,021,370
1,021,370
579,518
(10,073)
1,590,815
910,496
441,932
(331,058)
1,021,370
The recoverability of the carrying amount of exploration and evaluation assets is dependent on the
successful development and commercial exploitation or alternatively, sale of the respective areas of
interest.
Note 14. Trade and Other Payables
Trade creditors
Accrued expenses
2014
$
1,262,164
31,667
1,293,831
2013
$
172,029
177,500
349,529
Trade and other payables are non-interest bearing and are generally on 30-60 day terms.
Due to the short term nature of these payables, their carrying value is assumed to approximate fair value.
Note 15. Issued Capital
(a) Issued and paid up capital
135,907,155 (2013: 105,934,013) ordinary shares fully
paid
Share issue costs
2014
$
2013
$
6,732,547
(71,289)
6,661,258
4,421,961
(30,275)
4,391,686
Ordinary shares participate in dividends and the proceeds on winding up the Company in proportion to the
number of shares held. At shareholder meetings each ordinary share is entitled to one vote when a poll is
called, otherwise each shareholder has one vote on show of hands.
(b) Reconciliation of issued and paid-up capital
At 1 July 2012
Shares issued for cash ($0.075 per share – 01/05/13 net of issue costs)
Shares issued for debt conversion ($0.075 per share – 01/05/13)
Shares issued for cash ($0.075 per share – 30/06/13)
Share issued for debt conversion ($0.075 per share – 30/06/13)
At 30 June 2013
At 1 July 2013
Shares issued for cash ($0.075 per share – 01/07/13)
Shares issued for cash ($0.075 per share – 29/10/13)
Shares issued for debt conversion ($0.075 per share – 20/12/13)
Shares issued for services in lieu of cash ($0.075 per share – 20/12/13)
Shares issued for issue costs lieu of cash ($0.075 per share – 20/12/13)
Bonus shares issued ($0.075 per share – 20/12/13)
Shares issued for cash ($0.08 per share – 20/12/13 net of issue costs)
Bonus shares issued ($0.08 per share – 31/01/14)
Shares issued for cash ($0.08 per share – 31/01/14 net of issue costs)
Shares issued for cash ($0.08 per share – 04/03/14
At 30 June 2014
Number of
Shares
88,923,760
7,609,999
7,083,254
760,000
1,557,000
105,934,013
105,934,013
720,000
7,933,333
1,333,333
2,700,000
196,000
5,370,000
4,327,976
2,690,000
809,167
3,893,333
135,907,155
$
3,131,190
555,477
531,244
57,000
116,775
4,391,686
4,391,686
54,000
595,000
100,000
202,500
14,700
402,750
322,379
215,200
51,576
311,467
6,661,258
IronRidge Resources Limited financial report for the year ended 30 June 2014
38
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 15. Issued Capital (continued)
(c) Options
As at 30 June 2014, there were 13,270,000 unissued ordinary shares of IronRidge Resources Limited under
option held as follows:
13,270,000 unlisted options to take up one ordinary share in IronRidge Resources Ltd at an exercise
price of £0.25. The options vested immediately and expire 31 December 2017.
(d) Capital Risk Management
When managing capital, management’s objective is to ensure the entity continues as a going concern as well
as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to
maintain a capital structure to ensure the lowest costs of capital available to the Group.
The Group’s capital comprises equity as shown in the statement of financial position. The Group is not
exposed to externally imposed capital requirements.
Note 16 Share Based Payments
The expense recognised for share based payments received during the year is shown in the table below:
Expense arising from equity settled share-based payment
transactions
Bonus share issues
2014
$
789,661
2013
$
-
During the year ended 30 June 2014, IronRidge Resources, issued 8,060,000 shares to directors and key management
personnel totaling $617,950. No such share issues occurred during the year ended 30 June 2013.
Employee share option plan (ESOP)
Share options are granted to employees. The employee share option plan is designed to align participants’
interests with those of shareholders by increasing the value of the Company’s shares.
When a participant ceases employment after the vesting of their share options, the share options are forfeited
after 90 days unless cessation of employment is due to termination for cause, whereupon they are forfeited
immediately or death. The Company prohibits KMP from entering into arrangements to protect the value of
unvested ESOP awards.
Each option can be exercised from vesting date to expiry date for one share with the exercise price payable in
cash.
Options granted
On 31 January 2014, 13,270,000 IronRidge Resources Ltd share options were granted to Directors and employees
under the Employee Share Option Plan. The options are to take up one ordinary share in IronRidge Resources at a
price of 25 pence. The options vested immediately and are due to expire on 31 December 2017. The following table
illustrates the number (no.) and weighted average exercise prices (WAEP) of, and movements in, share based
payment share options granted during the year:
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
2014
No.
-
13,270,000
-
-
13,270,000
13,270,000
2014
WAEP
2013
No.
2013
WAEP
-
£0.25
-
-
£0.25
£0.25
-
-
-
-
-
-
-
-
-
-
-
-
-
-
IronRidge Resources Limited financial report for the year ended 30 June 2014
39
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 16 Share Based Payments (continued)
A value of $171,711 was calculated using the Black Scholes valuation methodology (refer below).
Weighted average exercise price
Weighted average life of the option
Underlying share price
Expected share price volatility
Risk free interest rate
Number of options issued
Fair value (black-scholes) per option
Total value of options issued
IronRidge Resources Ltd
ESOP
£0.25
3.92 years
£0.042
72.736%
1.78%
13,270,000
£0.007
$171,711
Note 17. Accumulated Losses
Accumulated losses at the beginning of the year
Losses after income tax expense
Accumulated losses attributable to members of IronRidge
Resources Limited at the end of the year
Note 18. Information relating to IronRidge Resources
Limited (“the parent entity”)
Current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Issued capital
Share based payment reserve
Accumulated losses
Loss of the parent entity
Total comprehensive loss of the parent entity
2014
$
2013
$
(3,602,298)
(2,425,279)
(2,465,935)
(1,136,363)
(6,027,577)
(3,602,298)
2014
$
2013
$
523,171
3,178,340
1,539,772
1,539,772
1,638,568
6,661,258
171,711
(5,194,401)
(2,417,487)
(2,417,487)
50,868
2,240,053
321,720
625,281
1,614,772
4,391,686
-
(2,776,914)
(1,129,849)
(1,129,849)
The parent does not have any guarantees in relation to the debts of its subsidiaries, contingent liabilities or
contractual obligations to purchase fixed assets at 30 June 2014 (2013: nil).
Note 19. Cash Flow Reconciliation
Loss after income tax
Non-cash operating items
- Write back of exploration expenditure
-
-
-
Depreciation
Share based payments
IPO costs expensed
Changes in operating assets and liabilities*
(Increase) decrease in trade and other receivables
(Increase) decrease in other current assets
Increase (decrease) in trade and other payables*
Net cash flows from operating activities
(2,425,279)
(1,136,363)
10,073
4,383
789,661
518,453
(4,899)
(386,476)
812,636
(681,448)
331,058
4,377
-
(24,525)
-
581,012
(244,441)
* Net of amounts relating to exploration and evaluation assets.
Non-cash investing and financing activities
During the year $100,000 (2013: $500,000) of the loan owing by IronRidge Resources Limited to parent entity
DGR Global Limited was converted to equity in IronRidge (refer note 15).
During the year a further $217,200 (2013: $148,019) of liabilities were settled by issue of equity (refer note
15).
IronRidge Resources Limited financial report for the year ended 30 June 2014
40
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 20. Related Party Disclosures
(a) Subsidiaries
The consolidated financial statements include the financial statements of IronRidge Resources Limited and the
subsidiaries listed in the following table:
Name
Eastern Exploration Pty Ltd
Quiver Coal Pty Ltd
IronRidge Botswana Pty Ltd
IronRidge Gabon SA
(b) Ultimate parent
Country of
incorporation
Equity interest (%)
Australia
Australia
Botswana
Gabon
2014
100
100
100
100
2013
100
100
100
100
DGR Global Limited is the ultimate parent, which is incorporated in Australia and owns 46% of IronRidge
Resources Limited.
(c) Key management personnel
Details relating to key management personnel, including remuneration paid, are included in the directors
report and note 5.
(d) Transactions with related parties
The following table provides the total amount of transactions that were entered into with related parties for
the relevant financial year:
Related party
DGR Global Limited (i)
Hopgood Ganim Lawyers (ii)
Sales to
related
parties
Purchases
from related
parties
Other
transactions
with related
parties
-
-
-
-
288,000
300,000
260,185
17,445
-
-
-
-
2014
2013
2014
2013
(i) The Company has a commercial arrangement with DGR Global Limited for the provision of various services,
whereby DGR Global Limited provides resources and services including the provision of its administration and
exploration staff, its premises (for the purposes of conducting the Company’s business operations), use of
existing office furniture, equipment and certain stationery, together with general telephone, reception and
other office facilities (‘‘Services’’). In consideration for the provision of the Services, the Group pays DGR
Global Limited a monthly management fee. For the year ended 30 June 2014 $288,000 was paid or payable to
DGR Global Limited (2013: $300,000) for the provision of the Services. The total amount outstanding at year
end was $72,000 (2013: $32,924).
(ii) Mr Brian Moller (a Director of ultimate parent entity DGR Global Ltd), is a partner in the Australian firm
Hopgood Ganim lawyers. For the year ended 30 June 2014, Hopgood Ganim were paid $260,185 (2013:
$17,445) for the provision of legal services to the Group. The services were based on normal commercial
terms and conditions. The total amount outstanding at year end was $257,639 (2013: $40,000).
The outstanding balances at each relevant year end are unsecured, interest free and settlement occurs in
cash. All outstanding amounts payable comprise current liabilities.
IronRidge Resources Limited financial report for the year ended 30 June 2014
41
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 20. Related Party Disclosures (continued)
(e) Loans from related parties
During the year a loan of $97,615 (2013: $365,126) was advanced from DGR Global Limited to IronRidge
Resources Limited. During the year $8,546 was repaid in cash (2013: $182,600) and $100,000 was converted to
equity (2013: $500,000) resulting in a $9,205 balance owing at year end (2013: $20,136).
The loan is
unsecured and payable at call however DGR Global Limited have provided a letter of comfort to the Group
acknowledging that the loan will only be payable on the earlier of IronRidge Limited obtaining sufficient
working capital to warrant repayment, DGR Global Limited and IronRidge Resources Limited agreeing to
convert some or all of the loan to equity in the Group or the expiry of twelve months from the balance date.
Note 21. Capital Commitments
Future Exploration Commitments
The Group has certain obligations to expend minimum amounts on exploration in tenement areas. These
obligations may be varied from time to time and are expected to be fulfilled in the normal course of
operations of the Group. The commitments are as follows:
Less than 12 months
Between 12 months and 5 years
2014
$
7,696,990
9,876,000
17,572,990
2013
$
3,216,188
4,935,836
8,152,024
To keep tenements in good standing, work programs should meet certain minimum expenditure requirements.
If the minimum expenditure requirements are not met, the Group has the option to negotiate new terms or
relinquish the tenements. The Group also has the ability to meet expenditure requirements by joint venture or
farm-in agreements.
Note 22. Financial Risk Management
(a) General objectives, policies and processes
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group’s objectives, policies and processes for managing those risks and
the methods used to measure them. Further quantitative information in respect of these risks is presented
throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives,
policies and processes for managing those risks or the methods used to measure them from previous years
unless otherwise stated in this note.
The Group’s financial instruments consist mainly of deposits with banks, receivables and payables.
The Board has overall responsibility for the determination of the Group’s risk management objectives and
policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and
operating processes that ensure the effective implementation of the objectives and policies to the Group’s
finance function. The Group's risk management policies and objectives are therefore designed to minimise the
potential impacts of these risks on the results of the Group where such impacts may be material.
IronRidge Resources Limited financial report for the year ended 30 June 2014
42
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 22. Financial Risk Management (continued)
The overall objective of the Board is to set polices that seek to reduce risk as far as possible without unduly
affecting the Group’s competitiveness and flexibility. Further details regarding these policies are set out
below:
(b) Credit Risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation
resulting in the Group incurring a financial loss. This usually occurs when debtors fail to settle their obligations
owing to the Group. The Group’s objective is to minimise the risk of loss from credit risk exposure.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date
to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements.
Credit risk is reviewed regularly by the Board.
deposits with financial institutions and available-for-sale financial assets.
It arises from exposure to receivables as well as through
The Group does not have any material credit risk exposure to any single debtor or group of debtors under
financial instruments entered into by the Group and at balance date.
The Group’s cash at bank is wholly held with Macquarie Bank Limited.
(c) Liquidity Risk
Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet financial obligations as
they fall due. The objective of managing liquidity risk is to ensure, as far as possible, that the Group will
always have sufficient liquidity to meets its liabilities when they fall due, under both normal and stressed
conditions.
Liquidity risk is reviewed regularly by the Board.
The Group manages liquidity risk by monitoring forecast cash flows and liquidity ratios such as working capital.
The Group did not have any financing facilities available at balance date.
(d) Market Risk
Market risk arises from the use of interest bearing, tradable and foreign currency financial instruments. It is
the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
interest rates (interest rate risk), foreign exchange rates (currency risk) or other market factors (other price
risk). The Group does not have any material exposure to market risk other than interest rate risk.
Interest rate risk
Interest rate risk arises principally from cash and cash equivalents. The objective of interest rate risk
management is to manage and control interest rate risk exposures within acceptable parameters while
optimising the return.
IronRidge Resources Limited financial report for the year ended 30 June 2014
43
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 22. Financial Risk Management (continued)
Interest rate risk is managed with a mixture of fixed and floating rate debt. For further details on interest
rate risk refer to the tables below:
Floating
interest rate
Fixed
interest
rate
Non-
interest
bearing
2014
$
2014
$
2014
$
Total
carrying
amount as
per the
balance
sheet
2014
$
Weighted
average
effective
interest
rate
2014
%
27,600
-
-
27,600
-
-
Floating
interest rate
Fixed
interest
rate
2013
$
2013
$
29,661
-
-
29,661
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29,424
63,103
92,527
27,600
29,424
63,103
120,127
1,293,831
9,205
1,303,036
1,293,831
9,205
1,303,036
Non-
interest
bearing
2013
$
-
24,525
68,103
92,628
Total
carrying
amount as
per the
balance
sheet
2013
$
29,661
24,525
68,103
122,289
349,529
20,136
369,665
349,529
20,136
369,665
0.01%
-
-
-
-
Weighted
average
effective
interest
rate
2013
%
0.3%
-
-
-
-
(i) Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total financial assets
(ii) Financial liabilities
Trade and other payables
Non-interest-bearing loans
Total financial liabilities
(i) Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total financial assets
(ii) Financial liabilities
Trade and other payables
Non-interest-bearing loans
Total financial liabilities
Note 23. Operating Segments
The Group has identified its operating segment based on the internal reports that are reviewed and used by
the Board of Directors (chief operating decision makers) in assessing performance and determining the
allocation of resources. The Group is managed primarily on a geographic basis, that is, the location of the
respective areas of interest (tenements) in Queensland, and Gabon. Operating segments are determined on
the basis of financial information reported to the Board for the Group as a whole. The Group does not yet
have any products or services from which it derives an income.
Accordingly, management currently identifies the Group as having only one reportable segment, being
exploration for base and precious metals. The financial results from this segment are equivalent to the
financial statements of the Group. There have been no changes in the operating segments during the year.
IronRidge Resources Limited financial report for the year ended 30 June 2014
44
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 30 June 2014
Note 24. Asset Acquisition of Quiver Coal Pty Ltd
On 25 July 2012, IronRidge Resources Limited acquired 100% of the net assets of Quiver Coal Pty Ltd, from DGR
Global Limited for consideration of $2. The fair value of the net asset of Quiver Coal on acquisition was $2.
Note 25. Subsequent Events
The Directors are not aware of any significant changes in the state of affairs of the Group or events after the
balance date that would have a material impact on the consolidated financial statements.
Note 26. Contingent Assets and Liabilities
There are no contingent assets and liabilities at 30 June 2014 (2013: none).
IronRidge Resources Limited financial report for the year ended 30 June 2014
45
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of IronRidge Resources Limited, I state that:
1.
In the opinion of the Directors:
(a) The financial statements and notes of IronRidge Resources Limited for the financial year
ended 30 June 2014 are in accordance with the Corporations Act 2001, including:
(i)
(ii)
Giving a true and fair view of its financial position as at 30 June 2014 and
performance
Complying with the Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001
(b) The financial statements and notes also comply with International Financial Reporting
Standards as disclosed in Note 1
(c) There are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable
(d) The remuneration disclosures contained in the Remuneration Report comply with s300A of the
Corporations Act 2001.
2.
This declaration has been made after receiving the declarations required to be made to the Directors
in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June
2014.
On behalf of the board
Vincent Mascolo
Director
Brisbane
Date: 31 October 2014
IronRidge Resources Limited financial report for the year ended 30 June 2014
46
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITORS’ REPORT
To the members of IronRidge Resources Limited
Report on the Financial Report
We have audited the accompanying financial report of
IronRidge Resources Limited, which
comprises the consolidated statement of financial position as at 30 June 2014, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of
the consolidated entity comprising the company and the entities it controlled at the year’s end or
from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting
Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit
to obtain reasonable assurance about whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial report, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the company’s preparation of the financial report that gives a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the company’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of the
financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation, other than for the acts or omissions of financial services licensees.
47
which has been given to the directors of IronRidge Resources Limited, would be in the same terms
if given to the directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a)
the financial report of IronRidge Resources Limited is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June
2014 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b)
the financial report also complies with International Financial Reporting Standards as
disclosed in Note 1.
Emphasis of Matter
Without modifying our opinion, we draw attention to Note 1 in the financial report, which indicates
that the ability of the consolidated entity to continue as a going concern is dependent upon a
number of matters including successful closure of its initial public offering, its subsequent
successful raisings in the future of necessary funding and the successful exploration and subsequent
exploitation of the Group’s tenements. These conditions, along with other matters set out in Note
1, indicate the existence of a material uncertainty that may cast significant doubt on the
consolidated entity’s ability to continue as a going concern and, therefore, the consolidated entity
may be unable to realise its assets and discharge its liabilities in the normal course of business.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 10 to 16 of the directors’ report for
the year ended 30 June 2014. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of IronRidge Resources Limited for the year ended 30 June
2014 complies with section 300A of the Corporations Act 2001.
BDO Audit Pty Ltd
D P Wright
Director
Brisbane, 31 October 2014
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation, other than for the acts or omissions of financial services licensees.
48