ANNUAL REPORT 2014 CORPORATE DIRECTORY Australian Business Number Share Registry Link Market Services Level 2, 178 St Georges Terrace Telephone: 1300 554 474 Facsimile: Email: Website: www.linkmarketservices.com.au (02) 9287 0303 registrars@linkmarketservices.com.au Auditors Grant Thornton Audit Pty Ltd Level 1, 10 Kings Park Road West Perth WA 6005 Telephone: (08) 9480 2000 Facsimile: (08) 9322 7787 Email: info.wa@au.gt.com Website: www.grantthornton.com.au 51 105 991 740 Directors Brian Gilbertson (Non-executive Chairman) Paul Murray (Non-executive Director) Priyank Thapliyal (Executive Director) Mr Soo-Cheol Shin (Non-executive Director) Andrew Bell (Non-executive Director) Executives Priyank Thapliyal Chief Executive Officer Melissa North Company Secretary and Chief Financial Officer Principal Office Level 42, 108 St Georges Terrace Perth WA 6000 Telephone: (08) 9346 5500 Facsimile: (08) 9481 5933 Email: info@jupitermines.com JUPITER MINES LIMITED ANNUAL REPORT 2014 CONTENTS Chairman’s Letter Review of Operations Annual Financial Report Directors’ Report Auditor’s Independence Declaration Statement of Profit or Loss and Other Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Independent Audit Report 1 2 8 9 15 16 17 18 19 20 58 59 JUPITER MINES LIMITED ANNUAL REPORT 2014 CHAIRMAN’S LETTER Dear Shareholders, The financial period ending 28 February 2014 has seen significant progress on Jupiter’s key projects. The Tshipi Borwa mine is well on its way to becoming one of the world’s important suppliers of manganese ore. One million tonnes was produced and sold in its first full financial year, generating profits even at the depressed manganese ore prices ruling. The production ramp up to 2.4 million tonnes per annum is set to continue in the current financial year, in line with the anticipated increase in logistics capacity. In the Central Yilgarn, work has continued to optimise the Mount Mason DSO Hematite Project. There has also been important progress in the plans to expand the capacity of the port of Esperance, with the preferred proponent announced. This increases the likelihood of Mount Mason being developed, and with it the potential to generate profits in the foreseeable future. The de-listing of Jupiter in January 2014 was completed smoothly and the majority of shareholders remain committed to Jupiter and its Strategy. I hope to see these realise significant value in the future. Yours Faithfully, Jupiter Mines Limited Brian Gilbertson Chairman 1 JUPITER MINES LIMITED ANNUAL REPORT 2014 REVIEW OF OPERATIONS Jupiter Mines Limited (“Jupiter” or the “Company”) continued to focus on the development of its iron ore and manganese projects in pursuit of its long term Steel Feed Corporation (“SFC”) strategy. Significant progress was achieved during the year at the Company’s major project in South Africa the Tshipi Kalahari Manganese Project. In Australia, at the Central Yilgarn Iron Project (“CYIP”), work continued on the optimisation of the Mount Mason Feasibility Study and progression of the project approvals documentation. Work on the Mount Ida Feasibility Study remained on hold. TSHIPI KALAHARI MANGANESE PROJECT Jupiter has a 49.9% interest in Tshipi é Ntle Manganese Mining (Tshipi). Tshipi owns two manganese projects in the Kalahari Manganese fields, namely Tshipi Borwa and Tshipi Bokone, adjacent to the operating Mamatwan and Wessels mines respectively. Tshipi’s flagship project, Tshipi Borwa, continued and fortified its production during the year. It is located in the Southern portion of the Kalahari Manganese Field, the largest manganese bearing geological formation in the world. Figure 1. Tshipi Kalahari Manganese Project Location Map Tshipi Borwa is mining the ore body that is contiguous to, and a direct extension of, the Mamatwan ore body which has been mined for over 46 years. Tshipi Bokone is an exploration property located in the northern portion of the Kalahari Manganese Field. TSHIPI BORWA The ramp up at Tshipi Borwa saw production of over one million tonnes, of which 734,000 tonnes of lump and 202,000 of fines manganese were exported in its financial year to 28 February 2014. Tshipi has recorded a profit in the same year, which is a significant achievement in its first full year of operations. Transnet rail has committed to make available two trains per week while one additional train per week is at Transnet’s discretion. Alternative road and rail solutions have been implemented to increase the logistics capacity available to Tshipi including the use of sea containers and open topped containers (Skiptainers). These alternatives rely dominantly on rail transportation, while road transportation alternatives are also being pursued and adopted. JUPITER MINES LIMITED ANNUAL REPORT 2014 2 REVIEW OF OPERATIONS (continued) Figure 2 and 3. Loading and railing of manganese ore at Tshipi Borwa Completion of the construction of the mine and plant infrastructure, giving full operating performance, is expected during the current financial year. Despite the challenges of building a new project, Tshipi is achieving mine production to satisfy the Transnet rail and port allocation. During the coming financial year, Tshipi expects to produce and ship approximately 1.7 million tonnes. In September 2013, Tshipi entered a Joint Venture Agreement (“JVA”) with a new entity, Singapore-based OM Tshipi (S) Pte Ltd (“OMT”). The JVA provides for the marketing of the manganese ore produced by Tshipi, and is jointly owned by Jupiter Kalahari (Mauritius) Ltd, Ntsimbintle Mining Pty Ltd and OM Materials Trades (S) Pte Ltd. In conjunction with the execution of the JVA, Tshipi entered into a Take-or-Pay Offtake Contract with OMT for all of its available production for the next two years, extendable at the option of the parties. Figure 4 and 5. Production continues at Tshipi Borwa In December 2013, the Company announced that a ZAR 400 million working capital facility had been secured to support the production and sales targets set by management. In February 2014, Brendan Robinson was appointed as CEO of Tshipi. Mr Robinson has been closely associated with the project for many years and has acted as Tshipi’s CFO since November 2011. TSHIPI BOKONE Exploration activities at Tshipi Bokone have temporarily been put on hold as Tshipi management focus their attention at bringing Tshipi Borwa to optimum production. 3 JUPITER MINES LIMITED ANNUAL REPORT 2014 REVIEW OF OPERATIONS (continued) CENTRAL YILGARN IRON PROJECTS The Central Yilgarn Iron Project (“CYIP”) area is located 130km by road northwest of the town of Menzies. The CYIP consists of the smaller DSO project – (Mount Mason) and the flagship long-life magnetite Project – (Mount Ida). Both projects are planned around existing infrastructure in the region, including the Leonora to Esperance railway line, and the Port of Esperance. Figure 6. CYIP Project Location Map MOUNT IDA MAGNETITE PROJECT The flagship Mount Ida Magnetite Project has the reserves to be a tier one long-life magnetite mine, further establishing Jupiter’s presence in the Central Yilgarn region. Jupiter decided to suspend the Feasibility Study in the last financial year, and the project remains on hold. No work has been completed on this project in this financial period. MOUNT MASON DSO HEMATITE PROJECT The focus of the year has remained the optimisation of the Feasibility Study. Many opportunities exist to reduce capital and operating costs, especially with regards to the construction of common infrastructure to be utilised by the various other potential producers in the Yilgarn. All baseline environmental surveys and studies have been completed and all the Project Approvals for Mount Mason and the Yunndaga rail siding are expected by July 2014. Indicative prices were received on ore haulage from the mine site to the Yunndaga rail siding near Menzies using different truck configurations. Operating cost reductions can be achieved using bigger payload options. Preliminary discussions with the Menzies Shire on upgrading the Menzies Sandstone road for the different transport options have commenced. JUPITER MINES LIMITED ANNUAL REPORT 2014 4 REVIEW OF OPERATIONS (continued) Figure 7. Mount Mason Infrastructure Layout Following to the end of the financial period, the Esperance Ports Sea and Land (“EPSL”) announced that the group known as the YES Consortium (“YES”, led by Asciano Limited) had been named as the preferred proponent to develop the Multi- User Iron Ore Facility at Esperance Port. Yes and EPSL are currently finalising contractual terms, after which the Consortium will be commencing discussions with potential users of the port. Jupiter intends to fully participate in such discussions. Figure 8. Esperance Port NON-CORE PROJECTS Minimal activity was undertaken on the Company’s non-core assets during the period. The Oakover Manganese and Klondyke Gold projects remain held for sale. After financial and geological evaluation, it was decided that the Mount Alfred project tenements were no longer of value to the Company and were relinquished shortly after the end of the financial period. 5 JUPITER MINES LIMITED ANNUAL REPORT 2014 REVIEW OF OPERATIONS (continued) SCHEDULE OF MINERAL TENEMENTS LEASE NAME STATUS APPLIED DATE GRANT DATE EXPIRY DATE CURRENT AREA CURRENT COMMITMENT CURRENT RENT HOLDERS G37/36 General Purpose – Graten Well Granted 3/04/2009 17/01/2011 16/01/2032 358.62 Ha G29/21 Mt Mason Granted 22/05/2009 23/03/2010 22/03/2031 95.00 Ha G29/23 Mt Mason Granted 5/05/2012 7/02/2013 6/02/2034 1,256.73 Ha L29/116 Mt Mason Granted 7/06/2012 3/01/2013 2/01/2034 25.48 Ha L29/117 Mt Mason Granted 7/06/2012 7/12/2012 6/12/2033 90.14 Ha L29/118 Mt Mason Granted 7/06/2012 9/11/2012 8/11/2033 11.67 Ha L29/119 Mt Mason Granted 28/08/2012 30/07/2013 29/07/2034 52.76 Ha L29/121 Mt Mason Granted 30/09/2012 30/07/2013 29/07/2034 64.31 Ha L29/123 Mt Mason Granted 25/11/2012 26/03/2013 25/03/2034 23.13 Ha L29/120 Mt Mason Granted 30/09/2012 7/02/2013 6/02/2034 1,720.05 Ha - - - - - - - - - - $4,990.10 Jupiter Mines Ltd (100%) $1,320.50 Jupiter Mines Ltd (100%) $17,458.40 Jupiter Mines Ltd (100%) $361.40 Jupiter Mines Ltd (100%) $1,264.90 Jupiter Mines Ltd (100%) $166.80 Jupiter Mines Ltd (100%) $736.70 Jupiter Mines Ltd (100%) $903.50 Jupiter Mines Ltd (100%) $333.60 Jupiter Mines Ltd (100%) $10,860.50 Jupiter Mines Ltd (100%) M29/408 Mt Mason Granted 6/02/2006 28/11/2007 27/11/2028 300.00 Ha $30,100.00 $4,725.70 Jupiter Mines Ltd (100%) M45/552 Klondyke Granted 13/10/1992 19/01/1993 18/01/2014 9.71 Ha $10,000.00 $157.00 Jupiter Mines Ltd (75%) M45/668 Klondyke Granted 12/06/1995 29/12/1995 28/12/2016 240.00 Ha $24,000.00 $3,768.00 Jupiter Mines Ltd (75%) M45/669 Klondyke Granted 12/06/1995 29/12/1995 28/12/2016 120.00 Ha $12,000.00 $1,884.00 Jupiter Mines Ltd (75%) M45/670 Klondyke Granted 12/06/1995 29/12/1995 28/12/2016 120.00 Ha $12,000.00 $1,884.00 Jupiter Mines Ltd (75%) E45/2638 Oakover Granted 21/04/2004 12/11/2008 11/11/2015 35 Blocks $70,000.00 $8,788.50 Jupiter Mines Ltd (100%) E45/2639 Oakover Granted 21/04/2004 10/06/2009 9/06/2014 28 Blocks $42,000.00 $7,030.80 Jupiter Mines Ltd (100%) E45/2640 Oakover Granted 21/04/2004 10/06/2009 9/06/2014 49 Blocks $73,500.00 $12,303.90 Jupiter Mines Ltd (100%) E45/2641 Oakover Granted 21/04/2004 10/06/2009 9/06/2014 70 Blocks $105,000.00 $17,577.00 Jupiter Mines Ltd (100%) E45/3547 Oakover Granted 28/10/2009 9/07/2010 8/07/2015 61 Blocks $91,500.00 $11,291.10 Jupiter Mines Ltd (100%) E29/560 Mt Ida Granted 17/03/2004 8/09/2006 7/09/2014 35 Blocks $105,000.00 $16,642.50 Jupiter Mines Ltd (100%) E29/777 Mt Ida Granted 4/06/2010 15/02/2011 14/02/2016 27 Blocks $27,000.00 $4,997.70 Jupiter Mines Ltd (100%) E29/801 Mt Ida Granted 1/11/2010 18/08/2011 17/08/2016 2 Blocks $15,000.00 $370.20 Jupiter Mines Ltd (100%) G29/22 Mt Ida Granted 11/01/2011 6/09/2012 5/09/2033 9,634.00 Ha L29/100 Mt Ida Granted 11/01/2011 11/11/2011 10/11/2032 775.00 Ha L29/106 Mt Ida Granted 18/03/2011 20/06/2012 19/06/2033 119.44 Ha L29/78 Mt Ida Granted 1/09/2009 24/06/2010 23/06/2031 6,341.00 Ha L29/79 Mt Ida Granted 12/01/2010 24/08/2010 23/08/2031 6,886.00 Ha L29/81 Mt Ida Granted 13/05/2010 12/09/2011 11/09/2032 26,020.34 Ha L29/99 Mt Ida Granted 12/11/2010 24/02/2012 23/02/2033 64,550.49 Ha L36/214 Mt Ida Granted 5/09/2012 17/06/2013 16/06/2034 19,703.86 Ha L36/215 Mt Ida Granted 20/10/2012 1/08/2013 31/07/2034 29,849.54 Ha L36/216 Mt Ida Granted 20/10/2012 1/08/2013 31/07/2034 17,632.43 Ha L36/217 Mt Ida Granted 20/10/2012 1/08/2013 31/07/2034 5,882.25 Ha L37/203 Mt Ida Granted 3/05/2010 27/06/2011 26/06/2032 68,952.89 Ha L57/45 Mt Ida Granted 5/09/2012 19/08/2013 18/08/2034 8,703.48 Ha L29/122 Mt Ida Granted 30/09/2012 03/04/2014 2/04/2035 6,590.72 Ha - - - - - - - - - - - - - - $133,870.90 Jupiter Mines Ltd (100%) $10,772.50 Jupiter Mines Ltd (100%) $1,668.00 Jupiter Mines Ltd (100%) $3,170.50 Jupiter Mines Ltd (100%) $3,443.00 Jupiter Mines Ltd (100%) $13,010.50 Jupiter Mines Ltd (100%) $32,275.50 Jupiter Mines Ltd (100%) $9,852.00 Jupiter Mines Ltd (100%) $14,925.00 Jupiter Mines Ltd (100%) $8,816.50 Jupiter Mines Ltd (100%) $2,941.50 Jupiter Mines Ltd (100%) $34,476.50 Jupiter Mines Ltd (100%) $4,352.00 Jupiter Mines Ltd (100%) $3,295.50 Jupiter Mines Ltd (100%) M29/414 Mt Ida Granted 11/01/2011 25/11/2011 24/11/2032 6,461.00 Ha $646,000.00 $101,422.00 Jupiter Mines Ltd (100%) L57/46 Miscellaneous Licence Application 05/09/2012 - - 31,741.86 Ha - - Jupiter Mines Ltd (100%) JUPITER MINES LIMITED ANNUAL REPORT 2014 6 7 JUPITER MINES LIMITED ANNUAL REPORT 2014 ANNUAL FINANCIAL REPORT FOR THE 8 MONTH PERIOD ENDED 28 FEBRUARY 2014 ABN 51 105 991 740 CONSOLIDATED ENTITY DIRECTORS’ REPORT In accordance with a resolution of Directors, the Directors present their Report together with the Financial Report of Jupiter Mines Limited (Jupiter) and its wholly owned subsidiaries (together referred to as the Consolidated Entity) for the financial period ended 28 February 2014 and the Independent Audit Report thereon. Directors The Directors of Jupiter at any time during or since the end of the financial period are as follows: Non-Executive − Brian Patrick Gilbertson − Paul Raymond Murray − Andrew Bell − Soo-Cheol Shin Executive − Priyank Thapliyal Additional information is provided below regarding the current Directors. Brian Patrick Gilbertson BSc (Maths and Physics), BSc (Hons) (Physics), MSc (Physics), MBL, PMD45 (Chairman: Non-Executive Director) Mr Gilbertson was appointed a Director on 22 June 2010. Mr Gilbertson has extensive experience in the global natural resources industry. He was Managing Director of Rustenburg Platinum Mines Limited in the 1980’s, a period during which the company gained recognition as the world’s foremost producer of platinum. In the 1990’s, as Executive Chairman of Gencor Limited, he led the restructuring of the South African mining industry into the post-Apartheid era, transforming Gencor into a focused mineral and mining group. During this period he held ultimate responsibility for Impala Platinum Holdings, for Samancor Limited (the world’s largest producer of manganese and chrome ore and alloys) and for Trans-Natal Coal Corporation (a major coal producer and exporter). Important new initiatives included the Hillside and Mozal aluminium smelters, the Columbus stainless steel plant, and the purchase of the international mining assets (Billiton plc) of the Royal Dutch Shell Group. In 1997, Gencor restructured its non-precious metals interests as Billiton plc. With Mr Gilbertson as Executive Chairman, Billiton plc raised US$1.5 billion in an initial public offering on the LSE, taking the company into the FTSE 100. Separately, Mr Gilbertson worked to merge the gold operations of Gencor and Gold Fields of South Africa, creating Gold Fields Limited, a leader in the world gold mining industry. He served as its first Chairman until October 1998. In 2001, Billiton plc merged with BHP Limited to create what is widely regarded as the world’s premier resources company, BHP Billiton plc. Mr Gilbertson was appointed its second Chief Executive on 1 July 2002. In late 2003, Mr Gilbertson led mining group Vedanta Resources plc (Vedanta) to the first primary listing of an Indian company on the London Stock Exchange in the second largest IPO of the year (US$876 million). He served as Chairman of Vedanta until July 2004. He was appointed President of Sibirsko-Uralskaya Aluminium Company (SUAL), the smaller aluminium producer in Russia and led that company into the US$30 billion merger with RUSAL and the alumina assets of Glencore International A.G., creating the largest aluminium company in the world. Mr Gilbertson established Pallinghurst Advisors LLP and Pallinghurst (Cayman) GP L.P. during 2006 and 2007 respectively, to develop opportunities on behalf of a group of natural resource investors, which currently own 86% of Jupiter. Mr Gilbertson is a British and South African citizen. He has not been a Director of any other ASX listed company in the past three years. JUPITER MINES LIMITED ANNUAL REPORT 2014 9 DIRECTORS’ REPORT (continued) Paul Raymond Murray FFin, CPA (Independent Non-Executive Director, Remuneration Committee Chairman, Audit Committee Chairman) Mr Murray was appointed as a Director on 20 August 2003. Mr Murray has served on the Board and consulted to a number of ASX listed resource exploration companies. With a business career spanning 50 years, he has also been responsible for the successful listing on the ASX of a number of public companies. Mr Murray has been a Director of Great Western Minerals Limited, Consolidated Western Areas Limited and Global Mineral Resources Limited. Andrew Bell B.A. (Hons), M.A., LLB (Hons), FGS (Independent Non-Executive Director, Audit Committee Member, Remuneration Committee Member) Mr Bell was appointed as a Director of Jupiter on 19 May 2008. Mr Bell is Chairman of Red Rock Resources plc, a company listed on the AIM market of the London Stock Exchange Ltd. He was a natural resources analyst in London in the 1970s, then specialised in investment and investment banking covering the Asian region. He has been involved in the resource and mining sectors in Asia since the 1990s, and has served on the Boards of a number of listed resource companies. He is a Fellow of the Geological Society. Mr Bell is presently on the following Boards: • Chairman and Non-Executive Director of Resource Star Limited (ASX: RSL) since 2007 • Red Rock Resources plc, (AIM: RRR) since 2005 • Chairman of Regency Mines plc (AIM: RGM) since 2004 • Greatland Gold plc (AIM: GGP) since 2005 Priyank Thapliyal Metallurgical Engineer, B Tech, M Eng, MBA (Western Ontario, Canada) (Executive Director, Audit Committee Member, Remuneration Committee Member) Mr Thapliyal was appointed as a Non-Executive Director of Jupiter on 4 June 2008. Mr Thapliyal has been charged with implementing the Pallinghurst Resources Steel Making Materials strategy through Jupiter. Mr Thapliyal a founding partner of Pallinghurst Advisors LLP, joined Sterlite Industries in 2000 as a US$100 million firm, serving as deputy to the owner Mr. Anil Agarwal. He implemented the strategies that led to Sterlite becoming Vedanta Resources plc (including its US$870 million London IPO), a FTSE 100 company which was valued at US$7.5 billion at the time of his departure in October 2005. Mr Thapliyal led Vedanta’s US$50 million investment in Konkola Copper Mines, Zambia, in 2004, a stake currently valued at more than US$1 billion. Priyank was a former mining and metals investment banker with CIBCWM, Toronto Canada and is a qualified Metallurgical Engineer, MBA (Western Ontario, Canada) and former Falconbridge employee. Mr Thapliyal has not been a Director of any other ASX listed companies in the past three years. Soo-Cheol Shin (Non-Executive Director) Mr Shin was appointed as a Director of Jupiter on 19 March 2012. Mr Shin holds a Bachelor of Arts in Public Administration and joined POSCO in 1989. Mr Shin has held a variety of positions throughout his career including Project Manager, POSCO Australia Pty Ltd; Team Leader, Coal Procurement Group; Team Leader, Steel Making Raw Materials Procurement Group and Group Leader, Raw Materials Transportation Group. He was appointed Managing Director of POSCO Australia in February 2012. Mr Shin has extensive experience in the management of natural resource projects both international and within Australia. Mr Shin has been a Non-Executive Director of Sandfire Resources NL (SFR) since 2012. JUPITER MINES LIMITED ANNUAL REPORT 2014 10 DIRECTORS’ REPORT (continued) Company Secretary Ms Melissa North BCom, CA has been the Company Secretary since November 2012. Ms North is also the Chief Financial Officer of Jupiter. Ms North has an extensive background in finance management and business advisory with groups such as Grant Thornton and Chime Communications (London). Significant Changes in the State of Affairs In October 2013, Jupiter Mines Limited applied to the Australian Securities Exchange (ASX) for the removal of the Company from the official list. The Company was de-listed from the Australian Securities Exchange on 10 January 2014, after approval was given by shareholders at the Company’s AGM in November 2013. The Company also applied to the Australian Securities and Investments Commission (“ASIC”) to change its financial year end from 30 June to 28 February. The change will allow the Company to align with the year end of the Tshipi Joint Venture, Jupiter’s primary project. The Tshipi Joint Venture accounts for a significant portion of the Group’s financial results and operations. The request for change of year end has been approved by ASIC subsequent to the year end. Principal Activities The principal activities of Jupiter during the period have been the development and operation of its Tshipi manganese mine, as well as further optimisation work of its Mount Mason DSO hematite project. Review of Results and Operations The consolidated results of Jupiter for the 8 month period were a loss of $5,532,772 after nil income tax benefit (Year ended 30 June 2013: loss of $4,818,792 after an income tax benefit of $117,540). Further details of the results of the Consolidated Entity are set out in the accompanying financial statements in this Annual Report. A summary of announcements made by Jupiter during the period ended 28 February 2014 is set out below: Date Announcement and Activities 2 July 2013 Pallinghurst Consortium acquires further shares in Jupiter. 16 July 2013 Resignation of Greg Durack as CEO and appointment of Priyank Thapliyal as Acting CEO. 31 July 2013 The Company released the June 2013 Quarterly Activities Report and Cash flow Report “Appendix 5B”. 5 September 2013 The Company announced the creation of OM Tshipi (S) Pte Ltd 6 September 2013 The Company announced “Tshipi Borwa Project Update”. 3 October 2013 The Company announced its “Application to De-List from ASX”. 16 October 2013 The Company announced that the “ASX approves Jupiter application to de-list”. 31 October 2013 The Company released the September 2013 Quarterly Activities Report and Cash flow Report “Appendix 5B”. 28 November 2013 The Company announced “Results of 2013 Annual General Meeting.” 13 December 2013 The Company announced “Tshipi Borwa Project Update”. 8 January 2014 The Company announced “Removal of the Company from the ASX Official List”. 15 January 2014 The Company released “Shareholder Update re De-listing”. 17 February 2014 The Company released the “December 2013 Quarterly Report”. JUPITER MINES LIMITED ANNUAL REPORT 2014 11 DIRECTORS’ REPORT (continued) Dividends No dividends were paid or declared during the period by Jupiter. Financial Position At 28 February 2014, Jupiter held $41,124,477 in cash and cash equivalents compared with $63,478,108 at 30 June 2013 (restated) and had carried forward exploration expenditure of $59,614,781 compared with $57,790,631 at 30 June 2013 (restated). Significant Events After Reporting Date These financial statements were authorised for issue on 30 May 2014 by Director Brian Gilbertson. Likely Developments The Directors still intend Jupiter to proceed with the development of Jupiter’s Mount Mason DSO Hematite project should this be economically viable. Further information about likely developments and expected results of operations in future financial years has been omitted from this Report because disclosure would be likely to result in unreasonable prejudice to Jupiter. Further information about Jupiter’s business strategies and its prospects for future financial years has been omitted from this Report because disclosure of the information is likely to result in unreasonable prejudice to Jupiter. Environmental Regulations and Performance Jupiter’s operations are subject to general environmental regulation under the laws of the States and Territories of Australia and South Africa. The various exploration interests held by Jupiter impose future environmental obligations for site remediation following sampling and drilling programs. The Board is aware of these requirements and management is charged with ensuring compliance. The Directors are not aware of any breaches of these environmental regulations and licence obligations during the period. Options and Rights As at 28 February 2014, there were 1,200,000 (30 June 2013: 3,200,000) options over unissued shares in the capital of Jupiter, details of which are set out in Note 22 of the attached Financial Statements. No options were granted during the financial period. No options were granted during the financial period. No options were exercised during the financial period. Since 28 February 2014 to the date of this Annual Report, nil options have been exercised, no options have been granted. 2,000,000 (30 June 2013: 3,500,000) options lapsed or were cancelled during the financial period. Meetings – Attendance by Directors Board Meetings The number of Directors’ meetings and the number of meetings attended by each of the Directors of Jupiter during the financial period under review are: Director Number of meetings held during tenure of the Director Number of meetings attended Brian Gilbertson Paul Murray Priyank Thapliyal Andrew Bell Soo-Cheol Shin JUPITER MINES LIMITED ANNUAL REPORT 2014 3 3 3 3 3 3 3 3 3 3 12 DIRECTORS’ REPORT (continued) Committee Meetings The number of committee meetings and the number of meetings attended by each of the Directors of Jupiter during the financial period under review are: Audit Committee meetings attended Audit Committee meetings held during tenure Remuneration Committee meetings attended 2 2 2 2 2 2 - - - Remuneration Committee meetings held during tenure - - - Director Paul Murray Priyank Thapliyal Andrew Bell Directors’ Interests Particulars of Directors’ interests in securities as at the date of this report are as follows: Director Brian Gilbertson 1 Paul Murray Priyank Thapliyal 2 Andrew Bell 3 Soo-Cheol Shin 4 Ordinary Shares Options over Ordinary Shares - 1,260,000 24,858,963 - - - - - - - 1 Brian Gilbertson as the Chairman of Pallinghurst Resources Limited (listed on the JSE and BSX) has a relevant interest in Pallinghurst Steel Feed Dutch (B.V.) (PSF). PSF is the registered owner of 421,042,093 Ordinary Shares. 2 Priyank Thapliyal is a Director of PSF and therefore has a relevant interest in PSF. PSF is the registered owner of 421,042,093 Ordinary Shares. 3 Andrew Bell as the Chairman and Director of Red Rock Resources plc has a relevant interest in Red Rock Resources plc (RRR). RRR is the registered owner of 19,674,375 Ordinary Shares. 4 Soo-Cheol Shin is the Managing Director of POSCO Australia Pty Ltd, has a relevant interest in POSCO Australia Pty Ltd (POSCO) and POSCO Australia GP PTY LTD (POSA GP). POSCO is the registered owner of 66,249,191 Ordinary Shares; POSA GP is the registered owner of 323,461,584 shares. Unissued shares under option Up until the date of this report, there are no further unissued shares under option. Shares issued during or since the end of the period as a result of exercise During or since the end of the financial period, the Company did not issue any ordinary shares as a result of the exercise of options. Contracts with Directors There are no agreements with any of the Directors. Indemnification and Insurance of Officers and Auditors Since the end of the previous financial year, Jupiter has paid premiums to insure the Directors and Officers of the Consolidated Entity. Details of the nature of the liabilities covered and the amount of premium paid in respect of Directors’ and Officers’ insurance policies preclude disclosure to third parties. Jupiter has not paid any premiums in respect of any contract insuring its auditor against a liability incurred in that role as an auditor of Jupiter. In respect of non-audit services, Grant Thornton Audit Pty Ltd, Jupiter’s auditor has the benefit of an indemnity to the extent Grant Thornton Audit Pty Ltd reasonably relies on information provided by Jupiter which is false, misleading or incomplete. No amount has been paid under this indemnity during the financial period ending 28 February 2014 or to the date of this Report. JUPITER MINES LIMITED ANNUAL REPORT 2014 13 DIRECTORS’ REPORT (continued) Non-Audit Services The Board of Directors is satisfied that the provision of non-audit services during the financial period is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons: • all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and • the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. The following fees were paid or payable to Grant Thornton Australia Limited for non-audit services provided during the period ended 28 February 2014: Taxation and other services $17,095 Auditor’s Independence Declaration The lead auditor’s independence declaration for the period ended 28 February 2014 has been received and can be found on page 15 of the Annual Report. Proceedings on behalf of Jupiter No person has applied for leave of Court to bring proceedings on behalf of Jupiter or intervene in any proceedings to which Jupiter is a party for the purpose of taking responsibility on behalf of Jupiter for all or any part of those proceedings. Jupiter was not a party to any such proceedings during the period. The Consolidated Entity was not a party to any such proceedings during the reporting period. Brian Gilbertson Perth 30 May 2014 JUPITER MINES LIMITED ANNUAL REPORT 2014 14 AUDITOR’S INDEPENDENCE DECLARATION Level 1 10 Kings Park Road West Perth WA 6005 Auditor’s Independence Declaration To the Directors of Jupiter Mines Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Jupiter Mines Limited for the period ended 28 February 2014, I Auditor’s Independence Declaration declare that, to the best of my knowledge and belief, there have been: To the Directors of Jupiter Mines Limited T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au Correspondence to: PO Box 570 West Perth WA 6872 Level 1 10 Kings Park Road West Perth WA 6005 T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au Correspondence to: PO Box 570 West Perth WA 6872 In accordance with the requirements of section 307C of the Corporations Act 2001, as lead a auditor for the audit of Jupiter Mines Limited for the period ended 28 February 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 b a b no contraventions of any applicable code of professional conduct in relation to the no contraventions of the auditor independence requirements of the Corporations Act audit. 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON AUDIT PTY LTD Chartered Accountants GRANT THORNTON AUDIT PTY LTD Chartered Accountants C A Becker Partner - Audit & Assurance Perth, 30 May 2014 C A Becker Partner - Audit & Assurance Perth, 30 May 2014 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm Grant Thornton Audit Pty Ltd ACN 130 913 594 is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and scheme applies. are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. JUPITER MINES LIMITED ANNUAL REPORT 2014 15 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE 8 MONTH PERIOD ENDED 28 FEBRUARY 2014 Other Income Depreciation and amortisation expense Finance costs Director and secretarial costs Impairment of exploration expenses Impairment of available-for-sale financial assets Impairment of assets held for sale - mineral assets Insurance costs Legal and professional costs Travel and entertaining costs Occupancy costs Consultancy fees Administration expenses Employee benefits expense Directors’, employees & consultant option expenses Foreign exchange gain/ (loss) Other expenses Share of profit from joint venture entities using the equity method Loss before income tax Income tax (expense)/benefit Net loss attributable to members of parent entity Other comprehensive income/(loss) Net fair value gain/(loss) on revaluation of financial assets Other comprehensive gain/(loss) for the period, net of tax Total comprehensive gain/(loss) for the period Overall Operations Basic loss per share (cents per share) Diluted loss per share (cents per share) Consolidated Group Note February 2014 $ June 2013 $ (Restated) 2 3 3 17 12 11 18 4 22 8 8 1,772,840 (115,514) (14,738) (206,005) (24,571) (264.272) (5,344,879) (70,980) (327,518) (33,073) (681,809) (302,965) (65,708) 4,150,164 (244,839) (32,923) (326,578) (1,557,233) (882,901) - (119,880) (271,124) (127,223) (890,828) (47,842) (328,050) (660,796) (1,462,261) (26,338) (189,344) (7,883,791) (4,422,686) (93,596) (102,876) 8,810,941 1,928,906 (5,532,772) (4,936,332) - 117,540 (5,532,772) (4,818,792) 92,937 92,937 621,038 621,038 (5,439,835) (4,197,754) (0.0024) (0.0024) (0.0022) (0.0022) The Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. JUPITER MINES LIMITED ANNUAL REPORT 2014 16 STATEMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY 2014 ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Assets held for sale Financial assets Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Intangible assets Investments using the equity method Other non-current assets Exploration and evaluation assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY Consolidated Group Note February 2014 $ June 2013 $ (Restated) 1 July 2012 $ (Restated) 9 10 11 12 16 14 15 18 16 17 41,124,477 55,762,763 49,442,468 207,789 587,083 2,018,385 1,363,961 396,185 5,830,826 2,189,721 1,458,542 983,774 - 2,451,585 1,417,131 45,301,695 65,638,036 54,294,958 2,561,953 2,916,653 3,422,245 80,752 104,283 165,057 321,183,933 311,792,280 283,137,650 51,545,089 48,131,647 49,452,545 59,614,781 57,790,631 24,968,495 434,986,508 420,735,494 361,145,992 480,288,203 486,373,531 415,440,950 19 20 255,875 35,647 291,522 824,179 139,172 963,351 1,618,115 93,967 1,712,082 - - - - 157,000 157,000 291,522 963,351 1,869,082 479,996,681 485,410,180 413,571,868 21 22 526,639,293 526,639,293 450,792,571 979,639 1,031,345 680,516 (47,622,251) (42,260,458) (37,901,219) 479,996,681 485,410,180 413,571,868 The above Statement of Financial Position should be read in conjunction with the accompanying notes. 17 JUPITER MINES LIMITED ANNUAL REPORT 2014 STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 28 FEBRUARY 2014 Ordinary Issued Capital $ Note Options Reserve $ Financial Assets Reserve $ Accumulated Losses $ Total $ 450,792,571 680,516 - - - - - - - - (37,901,219) 413,571,868 (4,818,792) (4,818,792) 621,038 - 621,038 621,038 (4,818,792) (4,197,754) 21(a) 75,846,722 189,344 22(a) - (459,553) 75,846,722 (270,909) - - - - - - - 76,036,066 459,553 - (4,359,239) 71,838,312 - - 526,639,293 410,307 621,038 (42,260,458) 485,410,180 - - - - - - - - - - - - 26,338 (170,979) (144,641) - - (5,532,772) (5,532,772) 92,937 - 92,937 92,937 (5,532,772) (5,439,835) - - - - - - - 170,979 170,979 - - 26,338 - 26,338 - 22(a) Balance at 1 July 2012 (Restated) Loss attributable to members of parent entity Total other comprehensive profit/(loss) for the year Total comprehensive loss for the year Shares issued during the year, net of transaction costs Lapse of options Sub-total Dividends paid or provided for Balance as at 30 June 2013 (Restated) Loss attributable to members of parent entity Total other comprehensive profit/ (loss) for the year Total comprehensive loss for the year Shares issued during the year, net of transaction costs Options vested during the period Lapse of options Sub-total Dividends paid or provided for Balance as at 28 February 2014 526,639,293 265,666 713,975 (47,622,251) 479,996,683 The Statement of Changes in Equity should be read in conjunction with the accompanying notes. JUPITER MINES LIMITED ANNUAL REPORT 2014 18 STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 28 FEBRUARY 2014 Consolidated Group Note February 2014 $ June 2013 $ (Restated) CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received Other income Net cash used in operating activities 26(a) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Payments for exploration and evaluation of mining reserves Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the issue of shares, net of transaction costs and conversion of options to shares Proceeds from/(contribution to) borrowings Net cash provided by/(used in) financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of financial period Effect of exchange rates on cash holdings in foreign currencies Cash and cash equivalents at the end of the financial period (3,223,598) 1,694,553 361,264 (1,167,781) (3,631,980) 3,152,327 247,630 (232,023) (22,673) (1,569,885) (1,592,558) (109,200) (15,607,532) (15,716,732) - 75,846,722 (11,912,147) (11,912,147) (14,672,486) (51,876,977) 23,969,745 8,020,991 55,762,763 49,442,468 34,200 41,124,477 (1,700,696) 55,762,763 The Statement of Cash Flows should be read in conjunction with the accompanying notes. 19 JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies These consolidated financial statements and notes represent those of Jupiter Mines Limited (“Jupiter”) and it’s Controlled Entities (the “Consolidated Group” or “Group”). The separate financial statements of the parent entity, Jupiter Mines Limited, have not been presented within this financial report as permitted by the Corporations Act 2001. The financial statements were authorised and issued by the board of directors on 30 May 2014. Basis of Preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated. The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. Jupiter Mines Limited is a for-profit entity for the purpose of preparing the financial statements. (a) Principles of Consolidation The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Jupiter Mines Limited at the end of the reporting period. A controlled entity is any entity over which Jupiter Mines Limited has the power to govern the financial and operating policies so as to obtain benefits from its activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered. A list of controlled entities is contained in Note 13 to the financial statements. In preparing the consolidated financial statements, all inter-Group balances and transactions between entities in the Consolidated Group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity. Business Combinations Business combinations occur where an acquirer obtains control over one or more businesses. A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions). When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date. All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase. JUPITER MINES LIMITED ANNUAL REPORT 2014 20 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) (b) Interests in Joint Ventures The Group acquired an interest in Tshipi é Ntle Manganese Mining (Proprietary) Limited (“Tshipi”), a joint venture entity, in October 2010. The Group’s accounting policy for joint ventures was considered by the Directors as part of the deliberation on the Tshipi acquisition, and had not been formally considered or articulated previously. The Group also under took an interest in OM Tshipi (S) Pte Ltd (“OMT”), a joint venture entity, in November 2013. Associates are those entities over which the Group is able to exert significant influence but which are not subsidiaries. A joint venture is an arrangement that the Group controls jointly with one or more other investors, and over which the Group has rights to a share of the arrangement’s net assets rather than direct rights to underlying assets and obligations for underlying liabilities. Investments in associates and joint ventures are accounted for using the equity method. Any goodwill or fair value adjustment attributable to the Group’s share in the associate or joint venture is not recognised separately and is included in the amount recognised as investment. The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture, adjusted where necessary to ensure consistency with the accounting policies of the Group. Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested for impairment. (c) Income Tax The income tax expense (revenue) for the period comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the period as well unused tax losses. Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss. Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. 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) a legally enforceable right of set-off exists; and (b) 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. JUPITER MINES LIMITED ANNUAL REPORT 2014 21 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) d) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. The cost of fixed assets constructed within the Consolidated Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. 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 statement of comprehensive income during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the Consolidated Group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Office equipment Furniture & fittings Motor vehicles Leasehold improvements Buildings Depreciation Rate 33.33% 33.33% 12.50% 20.00% 10.00% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. (e) Exploration and Evaluation Expenditure The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits are likely either from future exploitation or sale or where activities have not reached a stage which permits a reasonable assessment of the existence of reserves. The determination of a Joint Ore Reserves Committee (JORC) resource is itself an estimation process that requires varying degrees of uncertainty depending on sub-classification and these estimates directly impact the point of deferral of exploration and evaluation expenditure. The deferral policy requires management to make certain estimates and assumptions about future events or circumstances, in particular whether an economically viable extraction operation can be established. Estimates and assumptions made may change if new information becomes available. If, after expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalised is written off in the Statement of Profit or Loss and Other Comprehensive Income in the period when the new information becomes available. JUPITER MINES LIMITED ANNUAL REPORT 2014 22 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) (f) Leases Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the Consolidated Group, are classified as finance leases. Finance leases are capitalised by recognising 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 period. Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses in the periods in which they are incurred. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the lease term. (g) Financial Assets Recognition and initial measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement Finance instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost. Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method. Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit or loss. The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of Accounting Standards specifically applicable to financial instruments. (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. Loans and receivables are included in current assets, where they are expected to mature within 12 months after the end of the reporting period. JUPITER MINES LIMITED ANNUAL REPORT 2014 23 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost. Held-to-maturity investments are included in non-current assets where they are expected to mature within 12 months after the end of the reporting period. All other investments are classified as current assets. (ii) Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. They are subsequently measured at fair value with changes in such fair value (i.e. gains or losses) recognised in other comprehensive income (except for impairment losses and foreign exchange gains and losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss. Available-for-sale financial assets are included in current assets where they are expected to be sold within 12 months after the end of the reporting period. All other financial assets are classified as non- current assets. (iii) Financial liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Impairment of Financial Assets At the end of each reporting period, the Group assess whether there is objective evidence that a financial asset has been impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events (a “loss event”) having occurred, which has an impact on the estimated future cash flows of the financial asset(s). In the case of available-for-sale financial assets, a significant or prolonged decline in the market value of the instrument is considered to constitute a loss event. Impairment losses are recognised in profit or loss immediately. Also, any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit or loss at this point. In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments; indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or economic conditions that correlate with defaults. For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures of recovery, if management establishes that the carrying amount cannot be recovered by any means, at that point the written-off amounts are charged to the allowance account or the carrying amount of impaired financial assets is reduced directly if no impairment amount was previously recognised in the allowance account. When the terms of the financial assets that would otherwise have been past due or impaired have been renegotiated, the group recognises the impairment for such financial assets by taking into account the original terms as if the terms have not been renegotiated so that the loss events have occurred are duly considered. JUPITER MINES LIMITED ANNUAL REPORT 2014 24 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) (h) Impairment of Non-Financial Assets At each reporting date, the Group reviews the carrying values of its tangible and intangible 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 its recoverable amount is expensed to the statement of comprehensive income. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Impairment testing is performed annually for intangible assets with indefinite lives. (i) Employee Benefits Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to reporting date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows. (j) Provisions Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. (k) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, less credit card facilities used. Bank overdrafts are shown as short-term borrowings in liabilities. (l) Trade and Other Receivables Trade receivables, which generally have 30 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 trade receivables is reviewed on an ongoing basis at an operating unit level. 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. (m) Revenue and Other Income Revenue from the sale of goods is recognised when significant risks and rewards of the saleable product have transferred to the customer. Risks and rewards are considered passed to the customer upon delivery to the customer’s control. This generally occurs when the product is physically transferred onto a vessel. Revenue from inventory sales is measured at fair value of consideration received/receivable. Revenue is stated after deducting sales taxes, duties and levies. The price is determined on a provisional bases at the date of sale (cost insurance and freight). Adjustments to the sale price may occur based on variances in the metal or moisture content of the ore up to the date of final pricing. The period between provisional invoicing and final pricing is typically between 2 and 3 months. Accordingly, the fair value of the original revenue and associated receivable is adjusted each reporting period by reference to the best estimate of the actual metal and moisture content. The changes in fair value are recorded as an adjustment to revenue. Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument. All revenue is stated net of the amount of goods and services tax (GST). JUPITER MINES LIMITED ANNUAL REPORT 2014 25 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) (n) Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in the statement of profit or loss and comprehensive income in the period in which they are incurred. (o) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. (p) Trade and Other Payables Trade and other payables are carried at cost and due to their short time nature they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial period that are unpaid and arise when Jupiter 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 days of recognition. (q) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial period. (r) 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 of non-financial assets 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. Key estimates – Options The fair value of services received in return for options granted are measured by reference to the fair value of options granted. The estimate of the fair value of the services received is measured based on the Black Scholes option-pricing model. The contractual life of the options is used as an input into the model. Expectations of early exercise are incorporated into the model as well. Refer to Note 27 for more details. The expected volatility is based on the historic volatility of peer Group entities (calculated on the weighted average remaining life of the share options), adjusted for any expected changes to volatility due to publicly available information. Further information regarding assumptions is included in Note 27. JUPITER MINES LIMITED ANNUAL REPORT 2014 26 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) Key judgements – Exploration and evaluation expenditure The Group’s accounting policy for exploration and evaluation expenditure results in certain items of expenditure being capitalised for an area of interest where it is considered likely to be recoverable by future exploitation or sale or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the expenditure under the policy, a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be written off to the statement of comprehensive income. An impairment has been recognised in respect of exploration expenditure at reporting date of $5,344,880. Refer to Note 11 for more details. Mineral Reserves and Resource Estimates Ore reserves are estimates of the amount of ore that can be economically and legally extracted from the Group’s mining properties. The Group estimates its ore reserves and mineral resources based on information compiled by appropriately qualified persons relating to the geological data on the size, depth and shape of the ore body, and requires complex geological judgments to interpret the data. The estimation of recoverable reserves is based upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements, and production costs along with geological assumptions and judgments made in estimating the size and grade of the ore body. Changes in the reserve or resource estimates may impact upon the carrying value of exploration and evaluation assets, mine properties, property, plant and equipment, goodwill, provision for rehabilitation, recognition of deferred tax assets, and depreciation and amortisation charges. Assets Held for Sale As disclosed in Note 11 to the financials, the Klondyke and Oakover areas of interest were re-classified to “Assets Held for Sale” for the reporting period ended 30 June 2013. The Directors have assessed and then impaired the value of these two areas of interest to their estimated fair value for the period ended 28 February 2014. It is expected that these assets will be sold in the next 12 months. (s) Share based payments Under AASB 2 share based payments, the Company is required to determine the fair value of options issued to employees as remuneration and recognise as an expense in the statement of comprehensive income. This standard is not limited to options and also extends to other forms of equity-based remuneration. (t) Foreign Currency Translation (i) Functional and presentation currency The functional and presentation currency of Jupiter and its subsidiaries is Australian dollars ($). The presentation and functional currency for the interest in Tshipi is the South African Rand. The results are translated into Australian dollars for disclosure in Jupiter’s consolidated accounts. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. (ii) Translation of interest in Joint Venture functional currency to presentation currency The results of the South African Joint Venture interest are translated into Australian dollars using an average rate over the period of the transactions. Assets and liabilities are translated at exchange rates prevailing at reporting dates. 27 JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) (u) Adoption of New and Revised accounting standards and interpretations During the current period, Jupiter adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory. The adoption of these standards has impacted the recognition, measurement and disclosure of certain transactions. The adoption of these standards was applied for the entire reporting period unless otherwise stated. These new pronouncements have had no significant impact on the group for this reporting period. Adoption of AASBs and improvements to AASBs 2011 – AASB 1054 and AASB 2011-1 The AASB has issued AASB 1054 Australian Additional Disclosures and 2011-1 Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project, and made several minor amendments to a number of AASBs. These standards eliminate a large portion of the differences between the Australian and New Zealand accounting standards and IFRS and retain only additional disclosures considered necessary. These changes also simplify some current disclosures for Australian entities and remove others. AASB Interpretation 20 Stripping Costs in the Production Phase of Surface Mining (applicable for annual reporting periods beginning on or after 1 January 2013). This standard has been chosen for early adoption by the Group. The Group has recognised a deferred stripping asset in accordance with the requirements of this Interpretation. The deferred stripping asset has been capitalised as part of inventory, as a current asset. The Board believes that benefit will realised in the next 12 months. This interpretation clarifies that costs of removing mine waste materials (overburden) to gain access to mineral ore deposits during the production stage of a mine must be capitalised as inventories under AASB 102: Inventories if the benefits from stripping activity is realised in the form of inventory produced. AASB 11 Joint Arrangements – effective for annual reporting period beginning on or after 1 January 2013 Nature of change: AASB 11 replaces AASB 131 Interest in Joint Ventures and AASB Interpretation 113 Jointly-controlled entities- Non-Monetary Contributions by Ventures. AASB 111 uses the principle of control in AASB 10 to define joint control, and therefore the determination of whether control exists may change. In addition, AASB 11 removes the option to account for jointly-controlled entities (JCEs) using proportionate consolidation, whereby the Group combined its share of the JCEs individual income and expenses, assets and liabilities and cash flows on a line-by-line basis with similar items in the Group’s financial statements. The Group has now adopted AASB 11 Joint Arrangements in its 28 February 2014 annual financial report. Under AASB 11, investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. Tshipi é Ntle Manganese Mining (Proprietary) Limited was previously accounted for using proportionate consolidation and has been assessed to meet the classification criteria of a joint venture under AASB 11. As a result, it has been accounted for using the equity method. As required under AASB 11, the change in accounting policy has been applied retrospectively and as a consequence, adjustments were recognised in the statement of financial position as at 30 June 2012 and 30 June 2013 and in the income statement for the period ended 30 June 2013. The tables below show the effect of the change in accounting policy on individual line items in each of the financial statements. Line items not affected by the change have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided. The impact of this change in the entity’s accounting policy on individual line items in the financial statements can be summarised on the following page: JUPITER MINES LIMITED ANNUAL REPORT 2014 28 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) Statement of Financial Position 30-JUN-13 (previously stated) Increase/ (decrease) 30-JUN-13 (Restated) 30-JUN-12 (previously stated) Increase/ (decrease) 30-JUN-12 (Restated) Current assets Cash and cash equivalents 63,478,108 (7,715,345) 55,762,763 65,004,419 (15,561,951) 49,442,468 Trade and other receivables 8,160,186 (7,764,001) 396,185 2,354,420 (1,370,646) 983,774 Inventories Assets held for sale Financial assets Other current assets Non-current assets Property, plant and equipment Intangible assets Mining reserve Investments using equity method Exploration and evaluation assets 10,312,261 (10,312,261) - 5,830,826 2,189,721 - - 5,830,826 2,189,721 2,451,585 - - - - - - - 2,451,585 3,188,927 (1,730,385) 1,458,542 2,360,261 (943,130) 1,417,131 13,204,347 (10,287,694) 2,916,653 6,441,487 (3,019,242) 3,422,245 868,881 (764,598) 104,283 221,690 (56,633) 165,057 403,723,031 (403,723,031) - 374,633,122 (374,633,122) - - 311,792,280 311,792,280 - 283,137,650 283,137,650 57,790,631 - 57,790,631 50,326,038 (873,493) 49,452,545 Other non-current assets 52,189,308 (4,057,661) 48,131,647 24,968,495 - 24,968,495 Total Assets 620,936,227 (134,562,696) 486,373,531 528,761,517 (113,320,567) 415,440,950 Current liabilities Trade and other payables 7,443,479 (6,619,300) Short-term provisions Non-current liabilities 255,680 (116,508) 824,179 139,172 5,009,091 (3,390,976) 1,618,115 153,508 (59,541) 93,967 Provisions 1,259,261 (1,259,261) Deferred tax liability 90,057,793 (90,057,793) Long-term borrowings 42,508,141 (42,508,141) - - - 4,244,290 (4,087,290) 157,000 90,092,871 (90,092,871) 19,259,312 (19,259,312) - - Total Liabilities NET ASSETS Equity Issued Capital Reserves 141,524,354 (140,561,003) 963,351 118,759,072 (116,889,990) 1,869,082 479,411,873 5,998,307 485,410,180 410,002,445 3,569,423 413,571,868 526,639,293 - 526,639,293 450,792,571 - 450,792,571 (2,113,001) 3,144,347 1,031,346 (2,279,693) 2,960,209 680,516 Accumulated Losses (45,114,419) 2,853,961 (42,260,458) (38,510,433) 609,214 (37,901,219) TOTAL EQUITY 479,411,873 5,998,307 485,410,180 410,002,445 3,569,423 413,571,868 29 JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) Statement of Profit or Loss and Other Comprehensive Income (Restated) Revenue Other income Depreciation and amortisation costs Finance costs Director and secretarial costs Impairment of exploration interests Impairment of property, plant and equipment Impairment of available-for-sale financial assets Insurance costs Legal and professional costs Travel and entertaining costs Occupancy costs Consultancy fees Administration costs Employee benefits expense Directors’, employees & consultant option expenses Realised foreign exchange gain / (loss) Other expenses 30-JUN-13 (previously stated) $ Increase/ (decrease) $ 30-JUN-13 (Restated) $ 2,15t6,900 1,933,264 4,150,164 4,683,568 (4,683,568) - (244,839) (303,702) (326,578) - (244,839) (270,779) (32,923) - (326,578) (1,573,618) (16,385) (1,557,233) (8,814) (882,901) (119,880) (674,867) (218,331) (890,828) (47,842) (328,050) - - - (403,743) (91,108) - - - (8,814) (882,901) (119,880) (271,124) (127,223) (890,828) (47,842) (328,050) (1,557,547) (95,586) (1,462,261) (189,344) - (189,344) (6,551,529) (2,128,842) (4,422,686) (102,876) - (102,876) Share of profit from joint venture entities using the equity method - 1,928,906 1,928,906 Profit / (Loss) before income tax (7,181,078) (2,244,746) (4,936,332) Statement of Cash Flows (Extract) Cash Flows from Operating Activities Payments to suppliers and employees (4,842,261) 3,483,021 (1,359,240) Net cash inflows/(outflows) from operating activities (1,617,125) 3,139,239 1,522,114 Cash Flows from Investing Activities Purchase of plant and equipment Payments for exploration and evaluation Net cash outflows from investing activities (2,793,112) 2,750,659 (42,453) (47,675,627) 34,505,333 (13,170,294) (50,468,739) 37,255,992 (13,212,747) Net cash inflows from financing activities 72,019,967 (35,411,070) 36,608,897 Net movements in cash flows 19,934,103 4,984,161 24,918,264 JUPITER MINES LIMITED ANNUAL REPORT 2014 30 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) (v) New accounting standards for Application in Future Periods Certain new accounting standards and interpretations have been published that are not mandatory for 28 February 2014 reporting periods and have not yet been applied in the financial report. Jupiter’s assessment of the impact of these new standards and interpretations is set out below. AASB 9 Financial Instruments AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. The main changes are: (a) Financial assets that are debt instruments will be classified based on (1) the objective of the entity’s business model for managing the financial assets; and (2) the characteristics of the contractual cash flows. (b) Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income (instead of in profit or loss). Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument. (c) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases. (d) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows: • The change attributable to changes in credit risk are presented in other comprehensive income (OCI); and • The remaining change is presented in profit or loss. If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss. Otherwise, the following requirements have generally been carried forward unchanged from AASB 139 into AASB 9: • Classification and measurement of financial liabilities; and • Derecognition requirements for financial assets and liabilities. Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11 and superseded by AASB 2010-7 and AASB 2010-10. AASB 10 Consolidated Financial Statements AASB 10 establishes a revised control model that applies to all entities. It replaces the consolidation requirements in AASB 127 Consolidated and Separate Financial Statements and AASB Interpretation 112 Consolidation – Special Purpose Entities. The revised control model broadens the situations when an entity is considered to be controlled by another entity and includes additional guidance for applying the model to specific situations, including when acting as an agent may give control, the impact of potential voting rights and when holding less than a majority voting rights may give ‘de facto’ control. This will have an impact on Jupiter as a consolidated entity. JUPITER MINES LIMITED ANNUAL REPORT 2014 31 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) AASB 12 Disclosure of Interests in Other Entities AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structures entities. New disclosures introduced by AASB 12 include disclosures about the judgements made by management to determine whether control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries with non-controlling interests. This will result in further disclosures being made by the group. AASB 13 Fair Value Measurement AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted by other Standards. Application of this definition may result in different fair values being determined for the relevant assets. AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the assumptions made and the qualitative impact of those assumptions on the fair value determined. AASB 127 Separate Financial Statements As a result of the issuance of AASB 10, AASB 127 has been restructured and reissued to only deal with separate financial statements. This may not have an impact on the group. AASB 128 Investment in Associates and Joint Ventures Once an entity (using AASB 11) has determined that it has an interest in a joint venture, it accounts for it using the equity method in accordance with AASB 128 (Revised). The mechanics of equity accounting set out in the revised version of AASB 128 remain the same as in the previous version. AASB 2010-8 Amendments to Australian Accounting Standards –Deferred Tax: Recovery of Underlying Assets These amendments address the determination of deferred tax on investment property measured at fair value and introduce a rebuttable presumption that deferred tax on investment property measured at fair value should be determined on the basis that the carrying amount will be recoverable through sale. The amendments also incorporate AASB Interpretation 121 Income Taxes – Recovery of Revalued Non-Depreciable Assets into AASB 112. This may not have an impact on the group, dependent upon any possible property transactions undertaken. AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards This Standard makes consequential amendments to various Australian Accounting Standards arising from the issuance of AASB 10, AASB 11, AASB 12, AASB 127 (August 2011) and AASB 128 (August 2011). AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Other Comprehensive Income Amendments to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss in subsequent periods (reclassification adjustments, e.g. foreign currency translation reserves) and those that cannot subsequently be reclassified (e.g. fixed asset revaluation surpluses). Name changes of statements in AASB 101 as follows: • One statement of comprehensive income – to be referred to as ‘statement of profit or loss and other comprehensive income’ • Two statements – to be referred to as ‘statement of profit or loss’ and ‘statement of comprehensive income’. The group will rename the financial statements as required. JUPITER MINES LIMITED ANNUAL REPORT 2014 32 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 1: Summary of Significant Accounting Policies (continued) AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities This Standard amends the required disclosures in AASB 7 to include information that will enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial assets and recognised financial liabilities, on the entity’s financial position. This Standard also amends AASB 132 to refer to the additional disclosures added to AASB 7 by this Standard. The group will be able to adopt this amendment to offset their financial assets and liabilities. AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities This Standard adds application guidance to AASB 132 to address inconsistencies identified in applying some of the offsetting criteria of AASB 132, including clarifying the meaning of “currently has a legally enforceable right of set-off” and that some gross settlement systems may be considered equivalent to net settlement. AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle These amendments are a consequence of the annual improvements process, which provides a vehicle for making non-urgent but necessary amendments to Standards. These amendments follow the issuance of Annual Improvements to IFRSs 2009–2011 Cycle issued by the International Accounting Standards Board in May 2012. Mandatory Effective Date of IFRS 9 and Transition Disclosures This Standard amends IFRS 9 to require application for annual periods beginning on or after 1 January 2015, rather than 1 January 2013. Early application of IFRS 9 is still permitted. IFRS 9 is also amended so that it does not require the restatement of comparative-period financial statements for the initial application of the classification and measurement requirements of IFRS 9, but instead requires modified disclosures on transition to IFRS 9. 33 JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 2: Revenue Interest received Other revenue Note 3: Loss from Ordinary Activities Expenses Finance costs Rental expense on operating leases Operating lease rental - Depreciation of non-current assets: - - - Leasehold improvements Plant and equipment Furniture and fittings Amortisation of non-current assets: Intangibles - Total depreciation and amortisation expense Superannuation expense Impairment Exploration interests - Property, plant and equipment - - Financial assets Total Impairment Expense Note 4: Income Tax Expense Consolidated Group February 2014 $ 1,412,434 360,406 1,772,840 14,738 681,809 (9,080) 33,203 43,572 47,819 115,514 45,516 24,571 - 5,609,151 5,633,722 June 2013 $ (Restated) 4,016,138 134,026 4,150,164 32,923 890,828 57,517 53,745 65,753 67,824 244,839 89,115 1,557,233 - 890,828 2,448,061 (a) The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax expense as follows: Prima facie tax expense/(benefit) on ordinary activities before income tax at 30% (2013: 30%): Consolidated entity Add: Tax effect of: - - - Tax rate differential Share options expensed Other non-deductible expenses Less: - Deferred Tax Not Recognised - Recoupment of prior-year tax losses not previously brought to account - Research & Development offset Income tax benefit Income tax benefit not brought to account Income tax benefit (1,659,831) (1,480,900) (164,749) 7,901 2,230,689 414,012 1,029,907 (1,473,918) - - - - (38,578) 56,803 3,817,199 2,354,524 (1,825,152) (646,912) (1,259,101) (1,376,641) (117,540) (b) Deferred income tax benefit (net of deferred tax liability reduced – Note C) in respect of tax losses not brought to account Deferred income tax benefit attributable to timing differences not brought to account included above (c) Deferred income tax liability which has been reduced to nil by the benefits attributable to tax losses not brought to account 2,631,843 3,023,595 87,010 183,574 18,741,540 19,883,055 JUPITER MINES LIMITED ANNUAL REPORT 2014 34 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 5: Interests of Key Management Personnel Refer to the Remuneration Report contained in the Report of the Directors for details of the remuneration paid or payable to each member of the Group’s key management personnel for the period ended 28 February 2014. (a) Names and positions held of economic and parent entity key management personnel in office at any time during the financial period are: Key Management Personnel Position Mr B P Gilbertson Chairman – non-executive Mr A Bell Director – non-executive Mr P R Murray Director – non-executive Mr P Thapliyal Director – executive Mr S C Shin Mr G Durack Ms M North Director – non-executive CEO Resigned 16 July 2013 CFO & Company Secretary (b) The totals of remuneration paid to KMP of the Company and the Group during the period are as follows: Short-term employee benefits Post-employment benefits Share-based payments (c) Options and Rights Holdings Number of Options Held By Key Management Personnel Consolidated Group February 2014 $ 457,521 31,911 - 489,432 June 2013 $ (Restated) 713,876 56,130 - 770,006 Balance 1 July 2013 Granted as Compensation Exercised Other Changes* Balance 28 February 2014 Vested Unvested Not Exercisable Mr G Durack 1,500,000 - - (1,500,000) - - - - *Other changes refer to options purchased, lapsed, cancelled or sold during the financial year. Options provided as compensation: Fair Value at Grant Date $ Exercise Price $ Amount Paid $ Expiry Date Exercise Date Mr G Durack Mr G Durack Mr G Durack 0.162 0.156 0.152 0.70 0.80 0.90 - - - 11 Apr 2016 11 Apr 2013 11 Apr 2016 11 Apr 2014 11 Apr 2016 11 Apr 2015 The service conditions pertaining to these options involve the Key Management Personnel remaining employed by the Group. JUPITER MINES LIMITED ANNUAL REPORT 2014 35 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 5: Interests of Key Management Personnel (continued) (c) Options and Rights Holdings Number of Options Held By Key Management Personnel Balance 1 July 2012 Granted as Compensation Exercised Other Changes* Balance 30 June 2013 Vested Unvested Not Exercisable Mr G Durack 1,500,000 Mr Finkelstein 1,000,000 Total 2,500,000 - - - - - - - 1,500,000 - 1,500,000 1,500,000 (1,000,000) - - - - (1,000,000) 1,500,000 - 1,500,000 1,500,000 *Other changes refer to options purchased, lapsed, cancelled or sold during the financial year. (d) Shareholdings Number of Shares held by Key Management Personnel Key Management Personnel Balance 1 July 2013 Received as Remuneration Options Exercised Net Change Other 1 Balance 28 February 2014 Mr P R Murray Mr P Thapliyal2 Total 1,260,000 14,813,155 16,073,155 - - - - - - - 10,045,808 10,045,808 1,260,000 24,858,963 26,118,963 1 Net change other refers to shares purchased or sold during the financial year. 2 Priyank Thapliyal is a Director of PSF and therefore has a relevant interest in PSF. PSF is the registered owner of 421,042,093 Ordinary Shares. Number of Shares held by Key Management Personnel Key Management Personnel Mr P R Murray Mr P Thapliyal2 Total Balance 1 July 2012 1,260,000 11,727,080 12,987,080 Received as Remuneration - - - Options Exercised - - - Net Change Other 1 - 3,086,075 3,086,075 Balance 30 June 2013 1,260,000 14,813,155 16,073,155 1 Net change other refers to shares purchased or sold during the financial year. Amount paid per share $0.16. 2 Priyank Thapliyal is a Director of PSF and therefore has a relevant interest in PSF. PSF is the registered owner of 421,042,093 Ordinary Shares. Note 6: Auditors’ Remuneration Audit and review of the financial statements - - Auditors of Jupiter Mines Limited Auditors of subsidiary entities Remuneration for audit and review of financial statements Other Services - Taxation and other services Total other service remuneration Total Auditors’ Remuneration JUPITER MINES LIMITED ANNUAL REPORT 2014 Consolidated Group February 2014 $ June 2013 $ (Restated) 112,438 839 113,277 17,095 17,095 130,372 66,000 8,428 74,428 21,520 21,520 95,948 36 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 7: Dividends No dividends were declared or paid in the period. Note 8: Earnings per Share (a) Reconciliation of earnings to net loss for the period Net loss Losses used to calculate basic EPC and dilutive EPS Consolidated Group February 2014 $ (5,532,772) (5,532,772) June 2013 $ (Restated) (4,936,332) (4,936,332) (b) Weighted average number of ordinary shares outstanding during the 2,272,483,599 2,218,323,270 period used in calculating basic EPS and dilutive EPS Options are not included in the calculation, and could potentially dilute basic earnings per share in the future should they be exercised. There is no dilutive potential for ordinary shares as the exercise of options to ordinary shares would have the effect of decreasing the loss per ordinary share and would therefore be non-dilutive. Note 9: Current Assets – Cash Cash at band and in hand Short-term bank deposits The effective interest rate on short-term bank deposits was 3.65%; (2013: 5.38%) the term deposits range between 30 and 90 days. Reconciliation to the statement of Cashflows Cash at the end of the financial period as shown in the statement of Cashflows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents Note 10: Current Assets – Trade and other receivables CURRENT GST Receivables Trade Debtors Sundry Debtors 228,886 40,895,591 41,124,477 2,397,311 53,365,452 55,762,763 41,124,477 55,762,763 33,405 77,132 97,252 207,789 174,105 5,270 216,810 396,185 - Allowance for impairment loss: The Group’s exposure to bad debts is not significant. - Fair value and credit risk: Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value. Foreign exchange risk: Details regarding the foreign exchange and interest rate risk exposure are disclosed in Note 30. JUPITER MINES LIMITED ANNUAL REPORT 2014 - 37 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 11: Current Assets – Assets Held for Sale Assets held for sale comprise: Mineral interests, at fair value: - - Klondyke Oakover Total Assets Held for Sale Consolidated Group February 2014 $ June 2013 $ (Restated) 393,952 193,131 587,083 651,025 5,179,801 5,830,826 The Board have treated the above areas of interest as held for sale. An impairment was recognised at period end of which $5,344,880 was expensed. Note 12: Current Assets – Financial Assets Available for sale financial assets comprise : Listed investments, at fair value - Shares and options in listed corporations 2,018,385 2,189,721 Available-for-sale financial assets consist of investments in ASX listed companies’ ordinary shares, and therefore have no fixed maturity date or coupon rate. The fair value of listed available-for-sale investments has been determined directly by reference to published price quotations in an active market. This resulted in a net loss on revaluation of $171,335 for the 2014 financial period. This loss is made up of $264,272 that has been expensed and a $92,937 gain that has been taken to the Financial Assets Reserve. For the 2013 financial year there was a net loss of $261,863, being $882,901 that was expensed, and a $621,038 gain that was taken to the Financial Assets Reserve. Note 13: Controlled Entities Controlled entities consolidated Parent Entity: - Jupiter Mines Limited Subsidiaries of Jupiter Mines Limited: - - - - Future Resources Australia Limited Central Yilgarn Pty Limited Broadgold Pty Limited Jupiter Kalahari (Mauritius) Limited Notes Country of Incorporation Percentage Owned (%)* 2014 2013 Australia Australia Australia Australia Mauritius (a) 100 100 100 100 100 100 100 100 *Percentage of voting power is in proportion to ownership Principal Activities: (a) During the period all Controlled Entities with the exception of Jupiter Kalahari (Mauritius) Limited were dormant. JUPITER MINES LIMITED ANNUAL REPORT 2014 38 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 14: Non-Current Assets – Property, plant and equipment PLANT AND EQUIPMENT Leasehold Improvements - - At cost Accumulated depreciation Plant and equipment - - At cost Accumulated depreciation Furniture and fittings At cost Accumulated depreciation - - - Net carrying value Movements in Carrying Amounts Consolidated Group February 2014 $ June 2013 $ (Restated) 110,923 (80,151) 30,772 3,941,388 (1,439,511) 2,501,877 195,740 (166,436) 29,304 2,561,953 110,923 (89,231) 21,695 3,941,386 (1,120,918) 2,820,468 198,455 (123,965) 74,490 2,916,653 Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of the current financial period: Consolidated Group: Leasehold Improvements $ Plant and Equipment $ Furniture and Fittings $ Balance at 1 July 2012 (Restated) 79,212 3,099,755 Additions Disposals Impairment - - - 94,309 - - Depreciation expense Balance at 30 June 2013 (Restated) (57,517) 21,695 (426,000) 2,765,464 Additions Disposals Impairment - - - - - - Depreciation expense Balance at 28 February 2014 9,080 30,772 (285,390) 2,480,074 243,278 22,822 (14,986) - (121,622) 129,494 - (1,614) - (76,775) 51,105 Total $ 3,422,245 117,131 (14,986) - (607,739) 2,916,653 - (1,614) - (353,085) 2,561,953 39 JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 15: Non-Current Assets – Intangible Assets Computer Software - - At cost Accumulated amortisation Net carrying value Movements in carrying amounts Balance at 1 July 2012 (Restated) Additions Amortisation expense Balance at 30 June 2013 (Restated) Additions Amortisation expense Balance at 28 February 2014 Consolidated Group February 2014 $ June 2013 $ (Restated) 301,493 (220,741) 80,752 165,057 7,050 (67,824) 104,283 24,288 (47,819) 80,752 277,205 (172,922) 104,283 Total $ 165,057 7,050 (67,824) 104,283 24,288 (47,819) 80,752 Intangible assets have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and amortisation expense per the statement of profit or loss and other comprehensive income. All software is amortised over 3 years. Note 16: Other Assets CURRENT Deposits NON-CURRENT Loans (a) 1,363,961 1,458,542 51,545,089 48,131,647 (a) These loans have no fixed repayment date. $47,009,821 of loans are interest free, the remaining loans accrue interest at South African Prime rate. − Related party receivables: For terms and conditions of related party receivables refer to Note 29. − Fair value: Details’ regarding fair value is disclosed in Note 30. − Foreign exchange and interest rate risk: Details’ regarding foreign exchange and interest rate risk exposure is disclosed in Note 30. − Credit risk: The maximum exposure to credit risk at the reporting date is the higher of the carrying value of each class of receivable. No collateral is held as security. JUPITER MINES LIMITED ANNUAL REPORT 2014 40 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 17: Non-current assets – Exploration and evaluation assets Consolidated Group Opening Balance Provisions reversed Additions Impairment Reclassification of assets held for sale (refer Note 11) Closing Balance Costs carried forward in respect of the following areas of interest: - - - Mount Mason Mount Ida and Mount Hope Yunndaga February 2014 $ 57,790,631 - 1,848,721 (24,571) - 59,614,781 10,755,645 48,819,136 40,000 59,614,781 June 2013 $ (Restated) 50,326,038 (157,000) 15,009,652 (1,557,233) (5,830,826) 57,790,631 9,749,280 48,001,351 40,000 57,790,631 Capitalised costs amounting to $1,848,721 (2013 Restated: $15,009,652) have been included in cash flows from investing activities in the statement of cash flows. The Group has written-off exploration carrying costs of $24,571 as impaired assets during the period ended 28 February 2014 (2013 Restated: $1,557,233) and is separately presented in the Statement of Profit or Loss and Other Comprehensive Income as impairment of exploration interests. Note 18: Investments Using the Equity Method Set out below are the Joint Ventures of the Group as at 28 February 2014, in which in the opinion of the Directors, are material to the Group. The entities listed below have share capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation or registration is also their principal place of business, and the proportion of the Group’s ownership interest is the same as the proportion of voting rights held. These entities are held through a fully controlled entity, Jupiter Kalahari (Mauritius) Limited. Name of Entity Tshipi é Ntle Manganese Mining (Proprietary) Limited OM Tshipi (S) Pte Ltd Ownership interest held by the Group Country of Incorporation South Africa 2014 49.9% 2013 49.9% Nature of Relationship Joint Venture Measurement Method Joint Venture Singapore 33.3% 33.3% Joint Venture Joint Venture Summarised Financial Information Tshipi é Ntle Manganese Mining (Proprietary) Limited Opening carrying value of joint venture Increase of shareholder loan Share of profit/(loss) using the equity method OM Tshipi (S) Pte Ltd Opening carrying value of joint venture Initial acquisition Share of profit/(loss) using the equity method Total investments using the equity method 41 February 2014 $ June 2013 $ (Restated) 311,792,280 580,686 8,237,435 320,610,401 - 26 573,507 573,532 321,183,933 283,137,650 26,725,724 1,928,906 311,792,280 - - - - 311,792,280 JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 19: Current liabilities – Trade and other payables CURRENT Unsecured liabilities Trade payables Sundry payables and accrued expenses Consolidated Group February 2014 $ June 2013 $ (Restated) 56,018 199,857 255,875 376,143 448,036 824,179 Fair Value: Due to the short term nature of these payables, their carrying value is assumed to approximate to their fair value. Note 20: Current and non-current provisions SHORT-TERM PROVISIONS Short-term employee entitlements Note 21: Issued capital 35,647 139,172 Paid up capital: 2,281,835,383 (2013: 2,281,835,383) fully paid ordinary shares 21(a) 526,639, 293 526,639, 293 (a) Ordinary shares At the beginning of the reporting period Shares issued/bought back during previous period At reporting date 526,639,293 - 526,639,293 450,792,571 75,846,722 526,639,293 Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At the shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. The ordinary shares have no par value. At the beginning of the reporting period Shares issued/bought back during the previous period At reporting date Consolidated Group February 2014 Number of Shares 2,281,835,383 - 2,281,835,383 June 2013 Number of Shares 1,806,834,044 475,001,339 2,281,835,383 b) Capital Management Management controls the capital of the Group in order to maintain an appropriate debt to equity ratio, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. JUPITER MINES LIMITED ANNUAL REPORT 2014 42 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 22: Reserves Options reserve Financial assets reserve Consolidated Group Notes (a) (b) February 2014 $ 265,666 713,975 979,641 June 2013 $ (Restated) 410,307 621,038 1,031,345 The option reserve records items recognised as expenses on valuation of key management personnel share options. (a) Options At the beginning of the reporting period Options issued vesting during the period Options lapsed/cancelled during the period At reporting date At the beginning of the reporting period Number of options converted to ordinary shares during the period Number of options lapsed/cancelled during the period At reporting date 410,307 26,338 (170,979) 265,666 2014 Number 3,200,000 - (2,000,000) 1,200,000 680,516 189,344 (459,553) 410,307 2013 Number 6,700,000 - (3,500,000) 3,200,000 Directors, employees and consultant share option scheme expenses of $26,338 (June 2013: $189,344) represents the valuation of options granted. These were valued using the Black-Scholes pricing method. All option expense relates to option issued in prior periods. At 28 February 2014, there were 1,200,000 (June 2013: 3,200,000) unissued ordinary shares for which options were outstanding. These options will expire between 11 April 2014 and 11 April 2016 at exercise prices ranging from $0.70 to $0.90 per option. Refer to Note 27. (b) Financial Asset Reserve The financial assets reserve records amounts relating to the revaluation of available for sale financial assets. Note 23: Capital and Leasing Commitments Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable – minimum lease payments - - Not later than 12 months Between 12 months and 5 years Consolidated Group February 2014 $ June 2013 $ (Restated) 847,399 1,142,831 1,990,230 825,435 1,713,900 2,539,335 JUPITER MINES LIMITED ANNUAL REPORT 2014 43 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 23: Capital and Leasing Commitments (continued) NOTE: (a) This is made of up two leases: non-cancellable lease of 5 years however it can be subleased (with prior consent of Lessor). Amounts include rent, outgoings and parking with 4% annual rent review increase. It does not take into account reduced guarantees or returned deposits or incentives. Figures based on 12 Months (1-Mar-14 to 28-Feb-15) and between 12 months and 4 years (1-Mar-15 to 30-May-16 which is the end of the lease); non-cancellable lease of 4 years & 4 months. Amounts include rent and outgoings with 4% annual rent review increase. It does not take into account reduced guarantees or returned deposits or incentives. Figures based on 12 Months (1-Mar-13 to 28- Feb-15) and between 12 months and 4 years (1-Mar-15 to 30-May-16 which is the end of the lease). The expense recognised for the operating lease was $681,809 (June 2013: $865,721). (b) The property lease is non-cancellable for five-year, with rent payable monthly in advance. Exploration Expenditure Commitments In order to maintain current rights of tenure to exploration tenements, the Company and Group are required to perform minimum exploration work to meet the requirements specified by various State governments. These obligations can be reduced by selective relinquishment of exploration tenure or application for expenditure exemptions. Due to the nature of the Company and Group’s operations in exploring and evaluating areas of interest, it is very difficult to forecast the nature and amount of future expenditure. It is anticipated that expenditure commitments for the next twelve months will be tenement rentals of $508,109 (June 2013: $481,842) and exploration expenditure of $1,263,100 (June 2013: $1,299,684). Note 24: Contingent Liabilities Contingent Liabilities The parent entity has provided guarantees to third parties in relation to the performance and obligations of controlled entities in respect of banking facilities. At reporting date, the value of these guarantees and facilities are $1,280,000 (June 2013: $1,280,000). Total utilised at reporting date was $1,152,337 (June 2013: $1,152,337). Contingent Assets No contingent assets exist as 28 February 2014 or 30 June 2013. Note 25: Segment Reporting The Group operates in the mining industry within Australia and South Africa. The Group has identified its operating segments based on the internal reports that are reviewed and used by the chief operating decision makers (the Board of Directors and key management) in assessing performance and determining the allocation of resources. The Group segments are structured primarily on the basis of mineral as Central Yilgarn Iron Project (Iron Ore) located in Australia, Tshipi (Manganese) which is located in South Africa and Corporate/Unallocated. Expenses and assets are allocated to segments based on the tenement to which they directly relate. Information is not readily available for allocating the remaining items of revenue, expenses, assets and liabilities, or these items are not considered part of the core operations of any segment. Any transactions between reportable segments have been offset for these purposes. The newly formed joint venture OM Tshipi (S) Pte Ltd has been established to act as a marketing agent for the sale of output of the Tshipi Manganese. Therefore its performance has been included within the Tshipi Manganese (South Africa) segment. JUPITER MINES LIMITED ANNUAL REPORT 2014 44 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 25: Segment Reporting (continued) Segment Performance 28 February 2014 Revenue Depreciation and amortisation expense Finance costs Director and secretarial costs Impairment of exploration interests Impairment of financial assets Impairment of assets Insurance costs Legal and professional costs Travel and entertaining costs Occupancy costs Consultancy fees Administration expenses Employee benefits expense Foreign exchange loss Share option expense Other expenses Share of profit from joint venture entities using the equity method CYIP – Iron Ore (Australia) $ Tshipi – Manganese (South Africa) $ Corporate & Unallocated $ Total $ - - - - (24,571) - (5,344,879) - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,772,840 1,772,840 (115,514) (115,514) (14,738) (14,738) (206,005) (206,005) - - (24,571) - (264,272) (5,609,151) (70,980) (70,980) (327,518) (327,518) (33,073) (33,073) (681,809) (681,809) (302,965) (302,965) (65,708) (65,708) (660,796) (660,796) (7,883,791) (7,883,791) (26,338) (93,596) (26,338) (93,596) 8,810,941 - 8,810,941 Net loss before tax from continuing operations (5,369,450) 8,810,941 (8,974,263) (5,532,772) 30 June 2013 (Restated) Revenue Depreciation and amortisation expense Finance costs Director and secretarial costs Impairment of exploration interests Impairment of financial assets Impairment of assets Insurance costs Legal and professional costs Travel and entertaining costs 45 CYIP – Iron Ore (Australia) $ Tshipi – Manganese (South Africa) $ Corporate & Unallocated $ Total $ - - - - (1,557,233) - - - - - - - - - - - - - - - 4,150,164 4,150,164 (244,839) (244,839) (32,923) (32,923) (326,578) (326,578) - (1,557,233) (891,715) (891,715) - - (119,880) (119,880) (271,124) (271,124) (127,223) (127,223) JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 25: Segment Reporting (continued) Occupancy costs Consultancy fees Administration expenses Employee benefits expense Foreign exchange loss Share option expense Other expenses Share of profit from joint venture entities using the equity method Net loss before tax from continuing operations (ii) Segment assets and liabilities - - - - - - - - - - - - - - - 1,928,906 (890,828) (47,842) (328,050) (1,462,261) (4,422,686) (189,344) (102,876) - (890,828) (47,842) (328,050) (1,462,261) (4,422,686) (189,344) (102,876) 1,928,906 (1,557,233) 1,928,906 (5,308,005) (4,936,332) CYIP – Iron Ore (Australia) $ - - - - 2,300,798 - - - 59,614,781 62,502,662 - - - Tshipi – Manganese (South Africa) $ - - - - - - 51,545,089 321,183,933 - 372,729,022 - - - Corporate & Unallocated $ 207,789 1,363,961 2,018,385 261,155 80,752 Total $ 41,124,477 41,124,477 207,789 1,363,961 2,018,385 2,561,953 80,752 51,545,089 51,545,089 - 321,183,933 - 59,614,781 45,056,519 480,288,203 255,875 35,647 291,522 255,875 35,647 291,522 - - - - 2,518,876 - - - 57,790,631 66,140,333 - - - - - - - - 55,762,763 55,762,763 396,185 1,458,542 2,189,721 2,916,653 396,185 1,458,542 2,189,721 397,777 - 48,131,647 311,792,280 - 359,923,927 - - - 104,283 104,283 48,131,647 48,131,647 - 311,792,280 - 57,790,631 60,309,271 486,373,531 824,179 139,172 963,351 824,179 139,172 963,351 28 February 2014 Cash and cash equivalents Trade and other receivables Other current assets Financial assets Property, plant and equipment Intangible assets Other non-current assets Investments using the equity method Exploration and evaluation assets Total assets Trade and other payables Short term provisions Total liabilities 30 June 2013 (Restated) Cash and cash equivalents Trade and other receivables Other current assets Financial assets Property, plant and equipment Intangible assets Other non-current assets Investments using the equity method Exploration and evaluation assets Total assets Trade and other payables Short term provisions Total liabilities JUPITER MINES LIMITED ANNUAL REPORT 2014 46 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 25: Segment Reporting (continued) (iii) Segment Cashflows 28 February 2014 Net cash used in operating activities Net cash used in investing activities Net cash used in financing activities CYIP – Iron Ore (Australia) $ - (1,944,956) Tshipi – Manganese (South Africa) $ Corporate & Unallocated $ Total $ - - (1,000,297) (1,000,297) - - (1,944,956) (11,727,233) - (11,727,233) Net increase/(decrease) in cash held (1,944,956) (11,727,233) (1,000,297) (14,672,486) Cash and cash equivalents at beginning of financial period Effects of exchange rates on cash holdings in foreign currencies Cash and cash equivalents at end of financial period - - - 55,762,763 55,762,763 34,200 - 34,200 (1,944,956) (11,693,033) 54,762,466 41,124,477 30 June 2013 (Restated) Net cash used in operating activities - Net cash used in investing activities (15,668,852) - - 797,349 797,349 - (15,668,852) Net cash provided by/(used in) financing activities - (52,954,228) 75,846,722 22,892,484 Net increase/(decrease) in cash held (15,668,852) (52,954,228) 76,644,071 8,020,991 Cash and cash equivalents at beginning of financial period Effects of exchange rates on cash holdings in foreign currencies Cash and cash equivalents at end of financial period (50,222,607) - 99,665,075 49,442,468 - (1,700,696) - (1,700,696) (65,891,459) (54,654,924) 176,309,146 55,762,763 47 JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 26: Cash Flow Information (a) Reconciliation of Cash Flow from Operations to Loss after Income Tax Loss after income tax Non-cash flows included in loss after tax Depreciation and amortisation Share options recognised Impairment of exploration interests Impairment of available-for-sale financial assets Unrealised foreign exchange loss Share of profit from joint venture entities using equity method Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries (Increase)/decrease in other debtors Increase/(decrease) in trade payables and other creditors Increase/(decrease) in provisions Cash outflows from operations (b) Credit Standby Arrangements with Banks Credit facility Unused credit facility The major facilities are summarised as follows: Bank credit cards: Bank credit cards are arranged with Commonwealth Bank with the general terms and conditions being set and agreed to annually. Interest rates are variable and subject to adjustment. Consolidated Group February 2014 $ June 2013 $ (Restated) (5,532,772) (4,818,792) 115,514 26,338 24,571 5,609,151 7,883,791 (8,810,941) 188,396 (568,304) (103,525) (1,167,781) 244,839 189,344 1,557,233 891,715 4,422,686 (1,928,906) 41,411 (793,936) 45,205 (232,023) - - - - JUPITER MINES LIMITED ANNUAL REPORT 2014 48 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 27: Share-Based Payments Each option granted under the Jupiter Mines Limited Employee Option Plan entitles the employee to acquire one ordinary share of Jupiter Mines Limited (JMS). There are no voting or dividend rights attaching to the options until they are exercised by the employee, at which point ordinary shares which rank equally with all other JMS shares are issued. The options cannot be transferred. All options expire on the earlier of their expiry date or termination of the individual’s employment. Should the Vesting Conditions (described below) not be met, options will lapse. The terms and conditions of the grants on issue as at 28 February 2014 are as follows, whereby all options are settled by physical delivery of shares: Grant Date No. of Options Vesting Date Vesting Conditions Expiry Date Exercise Price 14 March 2012 14 March 2012 14 March 2012 Total 400,000 11 April 2013 Continuation of Service 11 April 2016 400,000 11 April 2014 Continuation of Service 11 April 2016 400,000 11 April 2015 Continuation of Service 11 April 2016 $0.70 $0.80 $0.90 1,200,000 Consolidated Group 2014 2013 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding at the beginning of the period 3,200,000 0.56 6,700,000 Granted Forfeited Cancelled Exercised Expired Outstanding at the end of the period Exercisable at the end of the period - - - - - - (1,500,000) 0.71 (1,000,000) - (500,000) 1,200,000 1,200,000 - 0.71 0.71 0.71 - (2,500,000) 3,200,000 3,200,000 0.56 - 0.25 - 0.25 0.56 0.56 The options outstanding at 28 February 2014 have an exercise price of $0.71 and a weighted average contractual life of 2.55 years. During the financial period, nil options were exercised (June 2013: 1,620,000). The fair value of services received in return for options granted is measured by reference to the fair value of options granted. The estimate of the fair value of the services received is measured based on the Black Scholes option-pricing model. The contractual life of the options is used as an input into the model. Expectations of early exercise are incorporated into the model as well. 49 JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 27: Share-Based Payments (continued) Tranche Expiry Date 1 2 3 11 April 2016 11 April 2016 11 April 2016 Fair Value per Option $ Exercise Price $ Price of Shares on Grant $ Estimated Volatility Risk Free Interest 0.162 0.70 0.26 106.69 6.3% 0.156 0.80 0.26 106.69 6.3% 0.152 0.90 0.26 106.69 6.3% Dividend Yield Grant Date Vesting Period - - - 21 December 2011 21 December 2011 21 December 2011 11 April 2013 11 April 2014 11 April 2015 In total, $26,338 (June 2013: $189,344) of employee remuneration expense (all of which related to equity-settled share- based payment transactions) has been included in the profit and loss for 2014 and credited to share option reserve. The expected volatility is based on the historic volatility of the Company (calculated on the weighted average remaining life of the share options), adjusted for any expected changes to volatility due to publicly available information. Risk-free interest rates are based on 5 year government bonds. Options will only convert to ordinary shares upon the achievement of a service condition. Note 28: Events After the Reporting Date In October 2013, the Jupiter Mines Limited applied to the Australian Securities Exchange (ASX) for the removal of the Company from the official list. The Company was de-listed from the Australian Securities Exchange on 10 January 2014, after approval was given by shareholders at the Company’s AGM in November 2013. The Company also applied to the Australian Securities and Investments Commission (“ASIC”) to change its financial year end from 30 June to 28 February. The change will allow alignment for the Company to align with the year end of the Tshipi Joint Venture, Jupiter’s primary project. The Tshipi Joint Venture accounts for a significant portion of the Group’s financial results and operations. The request of change of year end has been approved by ASIC subsequent to the year end. Accordingly, the first financial period is for the eight months to 28 February 2014, and subsequent period will end on 28 February each year. JUPITER MINES LIMITED ANNUAL REPORT 2014 50 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 29: Related Party Transactions Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Transactions with related parties: (a) Key Management Personnel Consulting fees paid to Andrew Bell Consultants, a company in which Mr A Bell has a beneficial interest. Consulting fees paid to Mr P Murray Expenses reimbursed to Pallinghurst Advisors LLP, a company in which Mr B Gilbertson and Mr P Thapliyal have a beneficial interest. Expenses reimbursed to Red Rock Resources Plc, a company in which Mr A Bell has a beneficial interest. Expenses reimbursed to Mr P Thapliyal. Loan from Tshipi Note 30: Financial Instruments Consolidated Group February 2014 $ June 2013 $ (Restated) 36,667 55,000 36,667 325,505 55,000 131,753 - 43,567 70,590 51,545,089 - 48,131,647 The Group’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payable. The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows: Financial Assets Cash and cash equivalents Trade and other receivables Available-for-sale financial assets Other non-current assets Financial Liabilities Trade and other payables Financial Risk Management Policies 41,124,477 207,789 587,083 51,545,089 93,464,438 55,762,763 396,185 5,830,826 48,131,647 110,121,421 255,875 824,179 The Directors monitor the Group’s financial risk management policies and exposures and approves financial transactions. The Directors’ overall risk management strategy seeks to assist the Group in meeting its financial targets, while minimising potential adverse effects on financial performance. Its functions include the review of credit risk policies and future cash flow requirements. Specific Financial Risk Exposures and Management The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk, liquidity risk and equity price risk. 51 JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 30: Financial Instruments (continued) (a) Credit Risk Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group. Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial stability of significant customers and counterparties), ensuring to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment. Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating, or in entities that the Directors have otherwise cleared as being financially sound. Credit Risk Exposures The maximum exposure to credit risk by class of recognised financial assets at reporting date, excluding the value of any collateral or other security held, is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented in the statement of financial position. Credit risk also arises through the provision of financial guarantees, as approved at Board level, given to parties securing the liabilities of certain subsidiaries (refer Note 24 for details). Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed in Note 10. There are no amounts of collateral held as security in respect of trade and other receivables. The Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Consolidated Group. Credit risk related to balances with banks and other financial institutions is managed by investing cash with major financial institutions in both cash on deposit and term deposit accounts. Interest rates on major deposits that are re-invested, are at a fixed rate on a monthly basis. (b) Liquidity risk Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms: − preparing forward looking cash flow analysis in relation to its operational, investing and financing activities; − monitoring undrawn credit facilities; − obtaining funding from a variety of sources; − maintaining a reputable credit profile; − managing credit risk related to financial assets; − only investing surplus cash with major financial institutions; and comparing the maturity profile of financial liabilities with the realisation profile of financial assets. The Group has no significant exposure to liquidity risk due to the level of cash and cash equivalents detailed at Note 9. The Group manages liquidity risk by monitoring immediate and forecast cash requirements and ensuring adequate cash reserves are maintained. JUPITER MINES LIMITED ANNUAL REPORT 2014 52 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 30: Financial Instruments (continued) The tables below reflect an undiscounted contractual maturity analysis for financial liabilities. Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates. Within 1 Year 1 to 5 Years Over 5 Years Total 2014 $ 2013 $ (Restated) 2014 $ 2013 $ (Restated) 2014 $ 2013 $ (Restated) 2014 $ 2013 $ (Restated) Consolidated Group Financial liabilities due for payment Trade and other payables 255,875 824,179 Total expected outflows 255,875 824,179 Financial assets – cash flows realisable Cash and cash equivalents Trade and other receivables Assets held or available for sale Other non-current assets Total anticipated inflows Net (outflow)/ inflow on financial instruments c) Market Risk - - - - - - - - - - - - - - - - - - 255,875 824,179 255,875 824,179 41,124,477 55,762,763 207,789 396,185 2,018,385 2,189,721 - 51,545,089 48,131,647 - 94,895,740 106,480,316 94,639,865 105,656,137 41,124,477 55,762,763 207,789 396,185 2,018,385 2,189,721 - - 51,545,089 48,131,647 43,521,987 58,348,669 51,545,089 48,131,647 43,266,112 57,524,490 51,545,089 48,131,647 Market risk arises from the Groups use of interest bearing and foreign currency financial instruments. It is the risk that the fair value of future cash flows of a of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), foreign exchange (currency risk) or other market factors (other price risk). (i) Interest rate risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The financial assets and financial liabilities with exposure to interest rate risk are detailed below: Financial Assets Cash and cash equivalents Other Non-Current Assets Financial Liabilities Short Term Borrowings Long Term Borrowings The Group is also exposed to earnings volatility on floating rate instruments Consolidated Group February 2014 $ 41,124,477 51,545,089 92,669,566 - - June 2013 $ (Restated) 55,762,763 48,131,647 103,894,410 - - JUPITER MINES LIMITED ANNUAL REPORT 2014 53 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 30: Financial Instruments (continued) (ii) Foreign exchange risk Jupiter operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Australian Dollar and South African Rand. Jupiter’s exposure to currency risk is on cash, trade receivables, and borrowings. Foreign currency risk is the risk of exposure to transactions that are denominated in a currency other than the Australian dollar. The carrying amounts of the Group’s financial assets and liabilities are denominated in two different currencies as set out below: Financial Assets (iii) Other Price Risk 28 February 2014 $ 40,856,192 ZAR 268,285 Total $ 41,124,477 Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices largely due to demand and supply factors for commodities. As the Group does not derive revenue from sale of products, the effect on profit and equity as a result of changes in the price risk is not considered material. The fair value of the mining projects will be impacted by commodity price changes (predominantly iron ore, nickel and uranium) and could impact future revenues once operational. However, management monitors current and projected commodity prices. (iv) Summarised sensitivity analysis The following table summarises the sensitivity of the Jupiter Group’s financial assets and financial liabilities to interest rate risk and foreign exchange risk. Management have reviewed interest rate and foreign exchange risk and determined the rates applied to be appropriate. Interest Rate Risk Foreign Exchange Risk Carrying Amount $ -50 bps Profit $ +50 bps Other Equity $ Profit $ Other Equity $ -10% Profit $ +10% Other Equity $ Profit $ Other Equity $ 41,124,477 (20,562) 207,789 2,018,385 - - 51,545,089 (26,156) 255,875 - - - - - - 20,562 - - 26,156 - - (46,718) - 46,718 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 28 February 2014 Financial Assets Cash and cash equivalents Receivables Available-for-sale financial assets Other Non- Current Assets Financial Liabilities Trade and other payables Total increase/ (decrease) JUPITER MINES LIMITED ANNUAL REPORT 2014 54 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 30: Financial Instruments (continued) (v) Fixed Interest Rate Maturing WAEIR Floating Interest Rate Within Year 1 to 5 Years Over 5 Years Non-Interest Bearing Total 2014 % 2013 % 2014 $ 2013 $ (Restated) 2014 $ 2013 $ (Restated) 2014 $ 2013 $ (Restated) 2014 $ 2013 $ (Restated) 2014 $ 2013 $ (Restated) 2014 $ Financial Assets: Cash and deposits Receivables Other Financial Assets 3.65 3.98 497,501 4,154,839 40,626,976 51,607,924 - - - - - - - - - - - - - - - - Other Non- Current Assets 9.3 9.3 Total Financial Assets Financial Liabilities: Trade and sundry payables Total Financial Liabilities - - 497,501 4,154,839 40,626,976 51,607,924 16 16 - - - - - - - - - - WAEIR = Weighted Average Effective Interest Rate (d) Net Fair Value - - - - - - - - - - - - - - - - - - - - - - - - - - 41,124,477 207,789 396,185 207,789 2,018,385 2,189,721 2,018,385 - 51,545,089 48,131,647 51,545,089 - 53,771,263 50,717,553 94,895,740 - - 255,875 824,179 255,875 255,875 824,179 255,875 The net fair values of cash and cash equivalents and non-interest bearing monetary financial assets and liabilities approximates their carrying value. The net fair value of financial assets and financial liabilities is based upon market prices where a market exists or by discounting the expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles. Listed equity investments have been valued by reference to market prices prevailing at reporting date. Financial Assets Cash at bank (i) Trade and other receivables (i) Assets available for sale (ii) Other Non-Current Assets Financial Liabilities Trade and other payables (i) February 2014 June 2013 (Restated) Carrying Amount $ Net Fair Value $ Carrying Amount $ Net Fair Value $ 41,124,477 207,789 2,018,385 51,545,089 94,895,740 41,124,477 207,789 2,018,385 51,545,089 94,895,740 55,762,763 396,185 2,189,721 48,131,647 106,480,316 55,762,763 396,185 2,189,721 48,131,647 106,480,316 255,875 255,875 824,179 824,179 55 JUPITER MINES LIMITED ANNUAL REPORT 2014 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 30: Financial Instruments (continued) The fair values in the above table have been determined based on the following methodology: (i) Cash and cash equivalents, trade and other receivables and trade and other payables are short-term investments in nature whose carrying value is equivalent to fair value. Trade and other payables exclude amounts provided for annual leave which is not considered a financial instrument. (ii) For listed available-for-sale financial assets, closing quoted bid prices at the end of the reporting period are used. Unlisted available-for-sale financial assets are recorded at cost. Financial Instruments Measured at Fair Value The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels: − quoted prices in active markets for identical assets or liabilities (Level 1); − inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and − inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). Group – as at 28 February 2014 Level 1 $ Level 2 $ Level 3 $ Total $ Financial Assets Assets available for sale 2,018,385 - - 2,018,385 Included in Level 1 of the hierarchy are listed investments. The fair values of these financial assets have been based on the closing quoted bid prices at reporting date, excluding transaction costs. JUPITER MINES LIMITED ANNUAL REPORT 2014 56 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE PERIOD ENDED 28 FEBRUARY 2014 Note 31: Parent Company Information ASSETS Current Assets Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed Equity Option Premium Reserve Financial Asset Reserve Accumulated Losses TOTAL EQUITY FINANCIAL PERFORMANCE Profit/(loss) for the period Other comprehensive income TOTAL COMPREHENSIVE PROFIT/LOSS Contractual Commitments Consolidated Group February 2014 $ June 2013 $ (Restated) 42,257,184 466,994,168 509,251,352 55,908,474 452,573,258 508,481,732 315,719 - 315,719 508,936,633 627,728 - 627,728 507,854,004 526,639,293 526,639,293 265,666 713,973 (18,683,298) 508,935,633 962,355 92,937 1,055,303 410,307 621,038 (19,816,634) 507,854,004 (7,911,501) 621,038 (7,290,463) As at 28 February 2014 the parent company had exploration contractual commitments of $1,263,100 refer to Note 23. Contingent Liability Refer to Note 24. Note 32: Company Details The registered office and principle place of business of Jupiter is: Jupiter Mines Limited Level 42 108 St Georges Terrace Perth WA 6000 57 JUPITER MINES LIMITED ANNUAL REPORT 2014 DIRECTORS’ DECLARATION The Directors of Jupiter Mines Limited declare that: 1. the financial statements, notes and the additional disclosures included in the Directors Report designated as audited, of the consolidated entity are in accordance with the Corporations Act 2001 including: (a) complying with Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and (b) give a true and fair view of the financial position as at 28 February 2014 and of the performance for the period ended on that date of the company and consolidated entity; The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1. There are reasonable grounds to believe that Jupiter Mines Limited will be able to pay its debts as and when they become due and payable. 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 period ended 28 February 2014. 2. 3. 4. Signed on behalf of the Board of Directors Brian Gilbertson Perth 30 May 2014 JUPITER MINES LIMITED ANNUAL REPORT 2014 58 INDEPENDENT AUDIT REPORT 59 JUPITER MINES LIMITED ANNUAL REPORT 2014 INDEPENDENT AUDIT REPORT (CONTINUED) JUPITER MINES LIMITED ANNUAL REPORT 2014 60 61 JUPITER MINES LIMITED ANNUAL REPORT 2014
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