ANNUAL REPORT 2015 CORPORATE DIRECTORY Australian Business Number Share Registry Link Market Services Level 4, 152 St Georges Terrace, Perth WA 6000 Telephone: 1300 554 474 Fax: (02) 9287 0303 Email: registrars@linkmarketservices.com.au Website: www.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 CONTENTS CHAIRMAN’S LETTER REVIEW OF OPERATIONS ANNUAL FINANCIAL REPORT DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION 2 3 6 7 11 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 12 STATEMENT OF FINANCIAL POSITION 13 STATEMENT OF CHANGES IN EQUITY 14 STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDIT REPORT 15 16 42 43 CHAIRMAN’S LETTER Dear Shareholders, Jupiter Mines has seen sound progress over the financial year ending 28 February 2015. The Company’s major project, the Tshipi Borwa mine, more than doubled its production and export volumes to over two million tonnes of manganese ore, making it one of the world’s largest manganese mines. Tshipi also reported profits despite current weak manganese prices. In the Central Yilgarn, work to optimise costs on the Mount Mason DSO Hematite Project continued. Cost savings were achieved across most operating and capital items. However due to the delay in the Esperance Port expansion, and the sharp decrease in the iron ore price, the Board thought it prudent to place this project into care and maintenance. The Mount Ida Magnetite Project also remains in care and maintenance until the conditions improve. In line with this, the Board commissioned a valuation of its iron ore projects to ensure they are recognised accurately in the financial statements. Based on this valuation, a decision was taken to write down Jupiter’s iron ore assets to the fair value of $13.6 million. The coming year will be challenging in the current weak commodity markets. However with our strong operations and management teams, we are well positioned to continue building value for Jupiter Mines shareholders. Yours Faithfully, Jupiter Mines Limited Brian Gilbertson Chairman “ Jupiter Mines has seen great progress over the financial year” 2 JUPITER MINES LIMITED ANNUAL REPORT 2015 REVIEW OF OPERATIONS Jupiter Mines Limited (“Jupiter” or the “Company”) continued to see significant progress during the year at the Company’s the Tshipi Kalahari major project at Manganese Mine in South Africa. In Australia, at the Central Yilgarn Iron Project (“CYIP”), depressed iron ore prices and lack of port access has led to both the Mount Ida Magnetite Project and Mount Mason Hematite Project being placed in Care and Maintenance. 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. 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. As such, once the operation stabilises, the Tshipi Borwa Mine is expected to produce a comparable product that has been tried and tested in the global manganese markets. 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 and exports more than double this year to over two million tonnes of manganese ore, making Tshipi Borwa one of the world’s largest manganese mines. It is an outstanding accomplishment given that Tshipi Borwa only commenced production two years ago. Turnover and net profit before tax were just under budget, as a result of a weaker than budgeted manganese price over the year. For the coming 2016 financial year, Tshipi is once again targeting exports of just over two million tonnes. Figure 1. Tshipi Kalahari Manganese Project Location Map Figure 2 & 3 – Operations continue at Tshipi Borwa Construction activities on the capital project at Tshipi began drawing to a close in March 2015 also. 3 Figure 4 & 5 – Stockpiling and loading of manganese ore at Tshipi Borwa OM Tshipi (S) Pte Ltd (“OMT”), the Singaporean marketing company, continued with the sale and export of Tshipi’s manganese ore, and also recognised a profit for this financial year. 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. 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. With the sharp decline in the iron ore price, and the delayed Esperance Port expansion (discussed below), Jupiter commissioned an independent valuation of its iron ore assets in line with accounting standards in order to ensure the current carrying value is presented fairly. The Company took a decision to write down its Mount Ida Magnetite Project to $13.4 million, and the Mount Mason DSO Hematite Project to $200,000. An additional $1,000,000 was written down against the Camp Cassini exploration camp. A total impairment of $49.2 million has been recognised in the enclosed financial statements for the year ended 28 February 2015. The abovementioned impairment is a non-cash item with no adverse impact on cashflow. The Jupiter Board remains committed to these projects should economic conditions improve and will reassess values on a regular basis. 4 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 suspended work on the Feasibility Study in November 2012, and the project remains in care and maintenance. No work has been completed on this project in this financial year. Minimum expenditure has been met on all tenements. MOUNT MASON DSO HEMATITE PROJECT Jupiter started the year focusing on the optimisation of the Mount Mason Feasibility Study. Many opportunities existed 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 are now completed and all the Project Approvals for Mount Mason and the Yunndaga rail siding were received from the Department of Mines and Petroleum in July 2014. The Esperance Ports Sea and Land (“EPSL”) remain in contract negotiations with the YES Consortium (led by Asciano Limited) to develop the Multi-User Iron Ore Facility at Esperance Port. The delay on the port expansion, together with the depressed iron ore price, led the Board to place the Mount Mason project into care and maintenance at the end of 2014. With the present iron ore price levels, Jupiter does not expect the Esperance Port expansion to take place as previously stated. It is also prudent to wait for the opportunity on rail and port infrastructure capacities, which may become available to other miners in the region, as well as Jupiter. NON-CORE PROJECTS The Oakover Manganese project was divested in June 2014. The Klondyke Gold project remains held for sale, and a transaction is currently being finalised. REVIEW OF OPERATIONSJUPITER MINES LIMITED ANNUAL REPORT 2015 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 18/01/2016 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%) E29/560 Mt Ida Granted 17/03/2004 8/09/2006 7/09/2015 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 $40,500.00 $4,997.70 Jupiter Mines Ltd (100%) Granted 1/11/2010 18/08/2011 17/08/2016 2 Blocks $20,000.00 $370.20 Jupiter Mines Ltd (100%) 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 Granted 1/09/2009 24/06/2010 23/06/2031 6,341.00 Ha Granted 12/01/2010 24/08/2010 23/08/2031 6,886.00 Ha Granted 13/05/2010 12/09/2011 11/09/2032 26,020.34 Ha Granted 12/11/2010 24/02/2012 23/02/2033 64,550.49 Ha Granted 5/09/2012 17/06/2013 16/06/2034 19,703.86 Ha Granted 20/10/2012 1/08/2013 31/07/2034 29,849.54 Ha Granted 20/10/2012 1/08/2013 31/07/2034 17,632.43 Ha Granted 20/10/2012 1/08/2013 31/07/2034 5,882.25 Ha Granted 3/05/2010 27/06/2011 26/06/2032 68,952.89 Ha Granted 5/09/2012 19/08/2013 18/08/2034 8,703.48 Ha 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%) E29/801 G29/22 Mt Ida Mt Ida L29/78 L29/79 L29/81 L29/99 L36/214 L36/215 L36/216 L36/217 L37/203 L57/45 L29/122 M29/414 L57/46 Mt Ida Mt Ida Mt Ida Mt Ida Mt Ida Mt Ida Mt Ida Mt Ida Mt Ida Mt Ida Mt Ida Mt Ida 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%) Granted 05/09/2012 05/12/2014 04/12/2035 31,741.86 Ha - - Jupiter Mines Ltd (100%) 5 REVIEW OF OPERATIONS ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 28 FEBRUARY 2015 ABN 51 105 991 740 CONSOLIDATED ENTITY 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 year ended 28 February 2015 and the Independent Auditor’s Report thereon. DIRECTORS The Directors of Jupiter at any time during or since the end of the financial year 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), 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 Limited 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 Limited 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. 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. 7 DIRECTORS’ REPORT 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. 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 Jupiter has chosen to place its Mount Mason DSO Hematite Project into Care and Maintenance with the Mount Ida Magnetite Project, due to the current economic conditions and access to port facilities. Principal Activities The principal activities of Jupiter during the year have been the development and operation of its Tshipi manganese mine, as well as progressing its Mount Mason and Mount Ida exploration assets. Review of Results and Operations The consolidated results of Jupiter for the year ended 28 February 2015 was a loss of $32,008,050 after a $138,475 tax expense (8 month period ended 28 February 2014 resulted in a loss of $5,532,772 after a nil income tax expense). 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 year ended 28 February 2015 is set out below: Date Announcement and Activities 25 March 2014 The Company released “Interim Financial Report – Half Year Ended 31 December 2013”. 3 June 2014 5 June 2014 The Company released “Annual Report 2014”. The Company announced the “Sale of Oakover Manganese Project”. 20 June 2014 The Company released the “Tshipi Article in Mining Yearbook 2014”. 24 July 2014 The Company released “Notice of 2014 Annual General Meeting and Proxy”. 27 August 2014 The Company announced “Results of 2014 Annual General Meeting” and “2014 Annual General Meeting Presentation”. 18 November 2014 The Company released the “Interim Financial Report – Half Year Ended 31 August 2014”. 8 DIRECTORS’ REPORT JUPITER MINES LIMITED ANNUAL REPORT 2015 Dividends No dividends were paid or declared during the year by Jupiter. Financial Position At 28 February 2015, Jupiter held $38,773,153 in cash and cash equivalents compared with $41,124,477 at 28 February 2014 and had carried forward exploration expenditure of $13,600,000 compared with $59,614,781 at 28 February 2014. Significant Events After Reporting Date On 6th March 2015, Jupiter Kalahari (Mauritius) Limited was removed from the company register of Mauritius, after it was successfully migrated to Luxembourg. These financial statements were authorised for issue on 26 June 2015 by Director Brian Gilbertson. Likely Developments The Directors still intend Jupiter to proceed with the development of Jupiter’s Mount Ida Magnetite and Mount Mason DSO Hematite projects 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 year. Options and Rights As at 28 February 2015, there were nil (28 February 2014: 1,200,000) 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 year. No options were exercised during the financial year. Since 28 February 2015 to the date of this Annual Report, nil options have been exercised and no options have been granted. 1,200,000 (28 February 2014: 2,000,000) options lapsed or were vested during the financial year. 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 year under review are: Director Brian Gilbertson Paul Murray Priyank Thapliyal Andrew Bell Soo-Cheol Shin COMMITTEE MEETINGS Number of meetings held during tenure of the Director 4 4 4 4 4 Number of meetings attended 4 4 4 4 3 The number of committee meetings and the number of meetings attended by each of the Directors of Jupiter during the financial year under review are: Director Audit Committee meetings attended Paul Murray Priyank Thapliyal Andrew Bell 2 2 2 Audit Committee meetings held during tenure 2 Remuneration Committee meetings attended 1 Remuneration Committee meetings held during tenure 1 2 2 1 1 1 1 9 DIRECTORS’ REPORT 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 - 1,260,000 24,858,963 - - Options over Ordinary Shares - - - - - 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 in the Company. 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 in the Company. 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 in the Company. 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 and POSA GP is the registered owner of 323,461,584 shares in the Company. 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 year as a result of exercise During or since the end of the financial year, 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 year ending 28 February 2015 or to the date of this Report. Non-Audit Services The Board of Directors is satisfied that the provision of non-audit services during the financial year 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 total amount paid or payable to Grant Thornton Australia Limited for services provided during the year ended 28 February 2015 as disclosed in Note 6: Taxation and other services $14,850 Auditor’s Independence Declaration The lead auditor’s independence declaration for the year ended 28 February 2015 has been received and can be found on the following page. 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 year. The Consolidated Entity was not a party to any such proceedings during the reporting year. Brian Gilbertson Perth 26 June 2015 10 DIRECTORS’ REPORT JUPITER MINES LIMITED ANNUAL REPORT 2015 AUDITOR’S INDEPENDENCE DECLARATION Auditor’s Independence Declaration To the Directors of Jupiter Mines Limited Level 1 10 Kings Park Road West Perth WA 6005 Correspondence to: PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au 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 year ended 28 February 2015, I declare that, to the best of my knowledge and belief, there have been: a b no contraventions of the auditor independence requirements of the Corporations Act 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 C A Becker Partner - Audit & Assurance Perth, 26 June 2015 Grant Thornton Audit Pty Ltd ABN 94 269 609 023 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 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 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. 11 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS Other income Depreciation and amortisation expense Finance costs Director and secretarial costs Impairment of exploration and evaluation assets Impairment of property, plant and equipment 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 Realised foreign exchange gain/(loss) Other expenses Share of profit from joint venture entities using the equity method Loss before income tax Income tax expense Net loss attributable to members of parent entity Other comprehensive income/(loss) Net fair value (loss)/gain on revaluation of financial assets Other comprehensive (loss)/gain for the period, net of tax Total comprehensive loss for the period Overall Operations Basic loss per share (cents per share) Diluted loss per share (cents per share) Consolidated Group Note February 2015 $ February 2014 (8 month period) $ 2 3 3 17 14 12 3 18 4 12 8 8 2,211,640 1,772,840 (149,617) (19,981) (382,459) (48,226,334) (1,000,000) (115,514) (14,738) (206,005) (24,571) - (350,357) (264,272) - (5,344,879) (102,919) (262,127) (60,958) (925,614) (408,597) (98,362) (476,858) - 3,351 (26,909) 18,406,525 (31,869,576) (138,475) (32,008,050) (70,980) (327,518) (33,073) (681,809) (302,965) (65,708) (660,796) (26,338) (7,883,791) (93,596) 8,810,941 (5,532,772) - (5,532,772) (713,975) (713,975) 92,937 92,937 (32,722,026) (5,439,835) (0.0140) (0.0140) (0.0024) (0.0024) The Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 12 FOR THE YEAR ENDED 28 FEBRUARY 2015STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEJUPITER MINES LIMITED ANNUAL REPORT 2015 STATEMENT OF FINANCIAL POSITION ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Assets held for sale Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Available for sale financial 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 TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY Consolidated Group Note February 2015 $ February 2014 $ 9 10 11 16 12 14 15 18 16 17 19 20 21 22 38,773,153 41,124,477 223,244 390,000 1,074,416 207,789 587,083 1,363,961 40,460,813 43,283,310 958,205 1,103,504 12,356 339,761,230 51,923,640 13,600,000 2,018,385 2,561,953 80,752 321,183,933 51,545,089 59,614,781 407,358,935 437,004,893 447,819,748 480,288,203 243,831 35,594 279,425 279,425 255,875 35,647 291,522 291,522 447,540,323 479,996,681 526,639,293 526,639,293 - 979,639 (79,098,969) (47,622,251) 447,540,323 479,996,681 The above Statement of Financial Position should be read in conjunction with the accompanying notes. 13 AS AT 28 FEBRUARY 2015STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Note Ordinary Issued Capital $ Options Reserve $ 526,639,293 - 410,307 - Balance at 1 July 2013 Profit/(loss) attributable to members of parent entity Total other comprehensive income for the year Total comprehensive loss for the year Options vested during the period Lapse of options 22(a) Sub-total Dividends paid or provided for Balance as at 28 February 2014 Loss attributable to members of parent entity Total other comprehensive loss for the year Total comprehensive loss for the year Options lapsed during the period 22(a) Sub-total Dividends paid or provided for - - - - - - 526,639,293 - - - - - - Financial Assets Reserve $ 621,038 - Accumulated Losses $ Total $ (42,260,458) (5,532,772) 485,410,180 (5,532,772) 92,937 - 92,937 92,937 (5,532,772) (5,439,835) - - - - - 170,979 170,979 - 26,338 - 26,338 - 713,975 - (47,622,251) 479,996,683 (32,008,050) (32,008,050) (713,975) - (713,975) - - 26,338 (170,979) (144,641) - 265,666 - - (713,975) (32,008,050) (32,722,023) (265,666) (265,666) - - - - - - 265,666 265,666 - - - - (79,098,970) (447,540,323) Balance as at 28 February 2015 526,639,293 The Statement of Changes in Equity should be read in conjunction with the accompanying notes. 14 FOR THE YEAR ENDED 28 FEBRUARY 2015STATEMENT OF CHANGES IN EQUITYJUPITER MINES LIMITED ANNUAL REPORT 2015 CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received Other income Consolidated Group Note February 2015 $ February 2014 $ (8 months) (2,325,819) (3,223,598) 1,347,168 259,458 1,694,553 361,264 Net cash provided used in operating activities 26(a) (719,170) (1,167,781) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of intangible assets Payments for exploration and evaluation of mining reserves Sale of held for sale assets Net cash provided used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Purchase of shares Proceeds from/(contribution to) borrowings Net cash provided used in financing activities Net 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 15 11 (11,413) (1,816,591) 200,000 (22,673) (1,569,885) - (1,628,004) (1,592,558) (4,150) - - (11,912,147) (4,150) (11,912,147) (2,351,324) 41,124,477 (14,672,486) 55,762,763 - 34,200 38,773,153 41,124,477 The Statement of Cash Flows should be read in conjunction with the accompanying notes. 15 FOR THE YEAR ENDED 28 FEBRUARY 2015STATEMENT OF CASH FLOWS 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 26 June 2015. 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 year. 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 The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values. Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of: (a) fair value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquire, and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately. (b) Interests in Joint Ventures and Associates 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 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. 16 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The carrying amount of the investment in 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 year 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 year 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 year 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 years in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. (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 year 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% 17 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 year when the new information becomes available. (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 year. 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 years 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. 18 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 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. (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 goodwill and 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. 19 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (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). (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 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. 20 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. 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 profit or loss and other comprehensive income. An impairment has been recognised in respect of exploration expenditure at reporting date of $48,226,334 in relation to the Mount Ida and Mount Mason projects. The Board has based this judgement on an external valuation. Refer to Note 17 for more details. KEY JUDGEMENTS - ASSETS HELD FOR SALE As disclosed in Note 11 to the financials, the Klondyke area of interest was re-classified to “Assets Held for Sale” for the reporting year ended 28 February 2014. The Directors have assessed and then impaired the value of this area of interest to its estimated fair value for the year ended 28 February 2015. It is expected that this asset will be sold in the next 12 months. Investments classified as other financial assets at fair value through profit and loss consists of listed securities. The fair value through profit and loss consists of the change in valuation of listed securities. The fair value of listed securities has been determined by reference to published price quotations in an active market. (s) Share based payments Under AASB 2 share based payments, the Company is required to determine the fair value of options issued to employees as remuneration and recognise as an expense in the statement of comprehensive income. This standard is not limited to options and also extends to other forms of equity-based remuneration. (t) Foreign Currency Translation (i) Functional and presentation currency The functional and presentation currency of Jupiter and its subsidiaries is Australian dollars ($). The 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 joint ventures 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. 21 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS 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. NEW AND REVISED STANDARDS THAT ARE EFFECTIVE FOR THESE FINANCIAL STATEMENTS A number of new and revised standards became mandatory and are effective for annual periods beginning on or after 1 January 2014. Information on these new standards which could impact on the Group are presented below: AASB 2012-3 AMENDMENTS TO AUSTRALIAN ACCOUNTING STANDARDS – OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES AASB 2012-3 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 2012-3 is applicable to annual reporting periods beginning on or after 1 January 2014. The adoption of these amendments has not had a material impact on the Group as the amendments merely clarify the existing requirements in AASB 132. AASB 2013-3 AMENDMENTS TO AASB 136 – RECOVERABLE AMOUNT DISCLOSURES FOR NON-FINANCIAL ASSETS These narrow-scope amendments address disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. When developing IFRS 13 Fair Value Measurement, the IASB decided to amend IAS 36 Impairment of Assets to require disclosures about the recoverable amount of impaired assets. The IASB noticed however that some of the amendments made in introducing those requirements resulted in the requirement being more broadly applicable than the IASB had intended. These amendments to IAS 36 therefore clarifies the IASB’s original intention that the scope of those disclosures is limited to the recoverable amount of impaired assets that is based on fair value less costs of disposal. AASB 2013-3 makes the equivalent amendments to AASB 136 Impairment of Assets and is applicable to annual reporting periods beginning on or after 1 January 2014. The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of existing requirements. AASB 2014-1 AMENDMENTS TO AUSTRALIAN ACCOUNTING STANDARDS (PART A: ANNUAL IMPROVEMENTS 2010– 2012 AND 2011–2013 CYCLES) Part A of AASB 2014-1 makes amendments to various Australian Accounting Standards arising from the issuance by the IASB of International Financial Reporting Standards Annual Improvements to IFRSs 2010-2012 Cycle and Annual Improvements to IFRSs 2011-2013 Cycle. Among other improvements, the amendments arising from Annual Improvements to IFRSs 2010-2012 Cycle: • clarify that the definition of a ‘related party’ includes a management entity that provides key management personnel services to the reporting entity (either directly or through a group entity); and • amend AASB 8 Operating Segments to explicitly require the disclosure of judgements made by management in applying the aggregation criteria. Among other improvements, the amendments arising from Annual Improvements to IFRSs 2011-2013 Cycle clarify that an entity should assess whether an acquired property is an investment property under AASB 140 Investment Property and perform a separate assessment under AASB 3 Business Combinations to determine whether the acquisition of the investment property constitutes a business combination. Part A of AASB 2014-1 is applicable to annual reporting periods beginning on or after 1 July 2014. The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of existing requirements. (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 2015 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. 22 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (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 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 2014-3 AMENDMENTS TO AUSTRALIAN ACCOUNTING STANDARDS – ACCOUNTING FOR ACQUISITIONS OF INTERESTS IN JOINT OPERATIONS This amendments impacts on the use of AASB 11 when acquiring an interest in a joint operation. The effective date is annual reporting periods beginning on or after 1 January 2016. When these amendments are first adopted for the year ending 31 December 2016, there will be no material impact on the transactions and balances recognised in the financial statements. AASB 2014-10 AMENDMENTS TO AUSTRALIAN ACCOUNTING STANDARDS – SALE OR CONTRIBUTION OF ASSETS BETWEEN AN INVESTOR AND ITS ASSOCIATE OR JOINT VENTURE The amendments address a current inconsistency between AASB 10 Consolidated Financial Statements and AASB 128 Investments in Associates and Joint Ventures (2011). The amendments clarify that, on a sale or contribution of assets to a joint venture or associate or on a loss of control when joint control or significant influence is retained in a transaction involving an associate or a joint venture, any gain or loss recognised will depend on whether the assets or subsidiary constitute a business, as defined in AASB 3 Business Combinations. Full gain or loss is recognised when the assets or subsidiary constitute a business, whereas gain or loss attributable to other investors’ interests is recognised when the assets or subsidiary do not constitute a business. The effective date is for annual reporting periods beginning on or after 1 January 2016. When these amendments are first adopted for the year ending 31 December 2016, there will be no material impact on the financial statements. 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. 23 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS NOTE 2: OTHER INCOME 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 Consolidated Group Note February 2015 $ February 2014 $ (8 months) 1,776,639 435,001 2,211,640 1,412,434 360,406 1,772,840 19,981 14,738 925,614 681,809 22,124 19,159 28,525 79,809 149,617 37,776 (9,080) 33,203 43,572 47,819 115,514 45,516 48,226,334 1,000,000 350,357 49,576,691 24,571 - 5,609,151 5,633,722 24 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 NOTE 4: INCOME TAX EXPENSE (a) The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax expense as follows: Prima facie tax expense on ordinary activities before income tax at 30% (28 February 2014: 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 Income tax expense (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 Deferred income tax benefits will only be realised if the conditions for deductibility set out in Note 1 occur. (c) Deferred income tax liability which has been reduced to nil by the benefits attributable to tax losses not brought to account Consolidated Group Note February 2015 $ (9,560,872) February 2014 $ (8 months) (1,659,831) (335,227) (164,749) - 7,901 (1,112,069) 2,230,689 (11,008,169) 414,012 14,291,441 (3,421,747) (138,475) 1,029,907 (1,473,918) - 5,909,520 2,631,843 82,083 87,010 (4,473,287) 18,741,540 25 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS 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 year ended 28 February 2015. (a) Names and positions held of economic and parent entity key management personnel in office at any time during the financial year are: Key Management Person Position Mr B P Gilbertson Chairman – non-executive Mr A Bell Mr P R Murray Mr P Thapliyal Mr S C Shin Ms M North Director – non-executive Director – non-executive Director – executive Director – non-executive CFO & Company Secretary (b) The totals of remuneration paid to KMP of the Company and the Group during the year are as follows: Short-term employee benefits Post-employment benefits (c) Options and Rights Holdings Consolidated Group February 2015 $ 381,521 February 2014 $ (8 months) 457,521 37,776 419,297 31,911 489,432 There were no options held by Key Management Personnel for the year ended 28 February 2015. Balance 1 July 2013 Granted as Compensation Exercised Other Changes* Mr G Durack 1,500,000 - - (1,500,000) Balance 28 February 2014 - Vested Unvested Not Exercisable - - - * 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 March Mr P R Murray Mr P Thapliyal1 Total 2014 1,260,000 24,858,963 26,118,963 Received as Remuneration - - - Options Exercised Net Change Other - - - - - - Balance 28 February 2015 1,260,000 24,858,963 26,118,963 1 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 2013 1,260,000 Received as Remuneration - 14,813,155 16,073,155 - - 1 Net change other refers to shares purchased or sold during the financial year. Options Exercised Net Change Other1 Balance 28 February 2014 1,260,000 - - - - 10,045,808 24,858,963 10,045,808 26,118,963 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 26 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 NOTE 6: AUDITORS’ REMUNERATION Amounts paid or payable to the Auditors of the Company and charged as an expense were: Audit and review of the financial statements - Auditors of Jupiter Mines Limited - Auditors of subsidiary or related entities Remuneration for audit and review of financial statements Other Non-Audit Services - Taxation and other services Total other service remuneration Total Auditors’ Remuneration NOTE 7: DIVIDENDS No dividends were declared or paid in the year. NOTE 8: EARNINGS PER SHARE Reconciliation of earnings to net loss for the year Net loss Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS and dilutive EPS Loss per share Consolidated Group February 2015 $ February 2014 $ (8 months) 85,956 58,553 144,509 14,850 14,850 159,359 112,438 839 113,277 17,095 17,095 130,372 - - (32,008,050) (5,532,772) No. 2,272,600,860 No. 2,272,483,599 (0.0140) (0.0024) 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 by ordinary shareholders would have the effect of decreasing the loss per ordinary share and would therefore be non-dilutive. 27 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS NOTE 9: CURRENT ASSETS – CASH Cash at bank and in hand Short-term bank deposits Consolidated Group February 2015 $ February 2014 $ 757,947 38,015,206 38,773,153 228,886 40,895,591 41,124,477 The effective interest rate on short-term bank deposits was 3.45%; (February 2014: 3.65%) the term deposits range between 30 and 90 days. NOTE 10: CURRENT ASSETS – TRADE AND OTHER RECEIVABLES CURRENT GST Receivables Trade Debtors Sundry Debtors 54,040 22,898 146,306 223,244 33,405 77,132 97,252 207,789 - 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 29. 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 390,000 - 390,000 393,952 193,131 587,083 The Board have treated the above areas of interest as held for sale. Mineral interests held for sale are carried at their fair value less estimated costs to sell. During the period, the Oakover Manganese Project was disposed for $200,000. NOTE 12: CURRENT ASSETS – FINANCIAL ASSETS Available for sale financial assets comprise : Listed investments, at fair value - Shares and options in listed corporations 958,205 2,018,385 Available-for-sale financial assets consist of investments in ASX listed companies ordinary shares, and therefore they have no fixed maturity date or coupon rate. The fair value of listed available-for-sale financial assets has been determined directly by reference to published price quotations in an active market. This resulted in a net loss on revaluation of $1,064,330 for the 2015 financial year, being $350,357 that was recognised in the profit or loss, and a $713,975 loss taken through the Financial Asset Reserve. In the comparative 2014 financial period there was a net loss of $171,335, being a $264,272 loss that was expensed, and a $92,937 gain that was taken to the Financial Assets Reserve. 28 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 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 - Jupiter Kalahari S.A. *Percentage of voting power is in proportion to ownership Principal Activities: Country of Incorporation Percentage Owned (%)* 2015 2014 Notes Australia Australia Australia Australia Mauritius Luxembourg (a) (b) 100 100 100 100 100 100 100 100 100 - (a) During the period all Controlled Entities with the exception of Jupiter Kalahari (Mauritius) Limited (“JKML”) were dormant. JKML was migrated to Luxembourg on 28 February 2015. JKML was removed from the companies register of Mauritius on 6 March 2015. (b) As Jupiter Kalahari (Mauritius) Limited was migrated to Luxembourg at the end of the financial year, it was renamed Jupiter Kalahari S.A. This entity is 100% owned by the Company and continues to hold the 49.9% share in Tshipi é Ntle Manganese Mining (Proprietary) Limited. 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 - Impairment Furniture and fittings - At cost - Accumulated depreciation Net carrying value Consolidated Group February 2015 $ February 2014 $ 110,923 (102,275) 8,648 110,923 (80,151) 30,772 3,941,388 (1,847,311) (1,000,000) 3,941,388 (1,439,511) - 1,094,077 2,501,877 195,740 (194,961) 779 1,103,504 195,740 (166,436) 29,304 2,561,953 Movements in Carrying Amounts 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: Balance at 1 July 2013 Additions Disposals Impairment Depreciation expense Balance at 28 February 2014 Additions Disposals Impairment Depreciation expense Balance at 28 February 2015 Leasehold Improvements $ 21,695 Plant and Equipment $ 2,765,464 Furniture and Fittings $ Total $ 129,494 2,916,653 - - - 9,077 30,772 - - - (22,124) 8,648 - - - (285,390) 2,501,877 - - (1,000,000) (407,803) 1,094,077 - (1,614) - (98,576) 29,304 - - - (28,525) 779 - (1,614) - (353,085) 2,561,953 - - (1,000,000) (458,449) 1,103,504 29 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS NOTE 15: NON-CURRENT ASSETS – INTANGIBLE ASSETS Computer Software - At cost - Accumulated amortisation Net carrying value Movements in carrying amounts Balance at 1 July 2013 Additions Amortisation expense Balance at 28 February 2014 Additions Amortisation expense Balance at 28 February 2015 Consolidated Group February 2015 $ February 2014 $ 312,905 (300,550) 12,356 104,283 24,288 (47,819) 80,752 11,413 (79,809) 12,356 301,493 (220,741) 80,752 Total $ 104,283 24,288 (47,819) 80,752 11,413 (79,808) 12,356 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 NOTE: 1,074,416 1,363,961 51,923,640 51,545,098 Loan notes: 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 28. - Fair value: Details’ regarding fair value is disclosed in Note 29. - Foreign exchange and interest rate risk: Details’ regarding foreign exchange and interest rate risk exposure is disclosed in Note 29. - 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. Refer to Note 29. 30 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 NOTE 17: NON-CURRENT ASSETS – EXPLORATION AND EVALUATION ASSETS Opening Balance Provisions reversed Additions Impairment Closing Balance Costs carried forward in respect of the following areas of interest: - Mount Mason - Mount Ida and Mount Hope - Yunndaga Consolidated Group February 2015 $ 59,614,781 February 2014 $ 57,790,631 - 2,211,553 (48,226,334) - 1,848,721 (24,571) 13,600,000 59,614,781 200,000 13,400,000 - 13,600,000 10,755,645 48,819,136 40,000 59,614,781 At 28 February 2015, due to the downturn in the iron ore price, the future recoverability of capitalised exploration and evaluation expenditure was assessed and an impairment loss of $48,576,691 was recognised. The Board received an independent external valuation of the Mount Ida Magnetite and Mount Mason DSO Hematite projects which provided a value of $13,400,000 and $200,000 respectively. The external valuation was based on a market based assessment using a resource multiples analysis of comparable companies. The impairment loss was recognised in the Statement of Profit or Loss and Other Comprehensive Income to reduce the carrying amount of the exploration and evaluation assets to the independent valuation. Capitalised costs amounting to $1,816,591 (February 2014: $1,569,558) have been included in cash flows from investing activities in the statement of cash flows. FAIR VALUE OF EXPLORATION AND EVALUATION ASSETS Non-financial instruments measured at fair value in the statement of financial position are grouped into three (3) levels of a fair value hierarchy. The three (3) levels are defined based on the observability of significant inputs to the measurement, as follows: • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; or • Level 3: unobservable inputs for the asset or liability The following table shows the Levels within the hierarchy of non-financial assets measured at fair value on a recurring basis at 28 February 2015: 28 February 2015 Exploration and evaluation • Mt Mason • Mt Ida Level 1 $ Level 2 $ 200,000 13,400,000 13,600,000 Level 3 $ Total $ 200,000 13,400,000 13,600,000 The fair value of the Group’s exploration and evaluation assets above is estimated based on a market based assessment performed by an independent, professionally-qualified valuer. The significant inputs and assumptions are developed in close consultation with management. The valuation processes and fair value changes are reviewed by the Board of Directors and Audit Committee at each reporting date. The valuation was carried out using a market based assessment that incorporates a review of comparable iron ore companies and projects in Australia, which includes listed DSO and Magnetite projects. 31 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS NOTE 18: INVESTMENTS USING THE EQUITY METHOD Set out below are the Joint Ventures of the Group as at 28 February 2015, 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 Country of Incorporation Ownership interest held by the Group 2015 2014 Tshipi é Ntle Manganese Mining (Proprietary) Limited South Africa 49.9% 49.9% Nature of Relationship Joint Venture OM Tshipi (S) Pte Ltd Singapore 33.3% 33.3% Joint Venture Measurement Method Equity Accounting Equity Accounting Summarised Financial Information Tshipi é Ntle Manganese Mining (Proprietary) Limited Opening carrying value of joint venture Increase of shareholder loan Share of profit using the equity method OM Tshipi (S) Pte Ltd Opening carrying value of joint venture Initial acquisition Share of profit using the equity method February 2015 $ February 2014 $ 320,610,401 311,792,280 170,773 16,761,367 580,686 8,237,435 337,542,541 320,610,401 573,532 - 1,645,157 2,218,689 - 26 573,507 573,532 Total Investments using the equity method 339,761,230 321,183,933 32 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 NOTE 19: CURRENT LIABILITIES – TRADE AND OTHER PAYABLES CURRENT Unsecured liabilities Trade payables Sundry payables and accrued expenses 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 benefits NOTE 21: ISSUED CAPITAL Paid up capital: Consolidated Group February 2015 $ February 2014 $ 22,626 221,205 243,831 56,018 199,857 255,875 35,594 35,647 2,281,835,383 (February 2014: 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 At reporting date 526,639,293 526,639,293 526,639,293 526,639,293 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 (b) Capital Management Consolidated Group February 2015 Number of Shares 2,281,835,383 February 2014 Number of Shares 2,281,835,383 - - 2,281,835,383 2,281,835,383 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. 33 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS NOTE 22: RESERVES Options reserve Financial assets reserve The option reserve records items recognised as expenses on valuation of key management personnel share options. (a) Options reserve At the beginning of the reporting period Options vesting during the period Options lapsed/cancelled during the period At reporting date At the beginning of the reporting period Number of options cancelled during the period At reporting date Consolidated Group Notes February 2015 (a) (b) $ - - February 2014 $ 265,666 713,975 265,666 (215,682) (49,984) - 410,307 26,338 (170,979) 265,666 2015 Number 1,200,000 2014 Number 3,200,000 (1,200,000) (2,000,000) - 1,200,000 At 28 February 2015, there were nil (February 2014: 1,200,000) unissued ordinary shares for which options were outstanding. (b) Financial Asset Reserve The financial assets reserve records amounts relating to the revaluation of available for sale financial assets. At the beginning of the reporting period Net fair value (loss)/gain on revaluation of financial assets 713,975 (713,975) - 621,038 92,937 713,975 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 NOTE: 881,295 261,537 847,399 1,142,831 1,142,832 1,990,230 (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-15 to 28-Feb-16) and between 12 months and 4 years (1-Mar-16 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-15 to 28-Feb-16) and between 12 months and 4 years (1-Mar-16 to 30-May-16 which is the end of the lease). The expense recognised for the operating lease was $717,895 (February 2014: $681,809). (b) The property lease is non-cancellable for five-years, 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 $486,213 (February 2014: $508,109) and exploration expenditure of $899,600 (February 2014: $1,263,100). 34 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 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 $787,689 (February 2014: $1,280,000). Total utilised at reporting date was $787,689 (February 2014: $1,152,337). Contingent Assets No contingent assets exist as 28 February 2015 or 28 February 2014. NOTE 25: SEGMENT REPORTING The Group operates in the mining industry. 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 its exploration and production interests. These are considered to be the Central Yilgarn Iron Exploration Project (Iron Ore), which is located in Australia and the producing Tshipi Project (Manganese) which is located in South Africa. 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 OM Tshipi (S) Pte Ltd Joint Venture was established to act as a marketing agent for the sale of the output of the producing Tshipi Project. Therefore its performance has been included within the Tshipi Manganese segment. (i) Segment Performance 28 February 2015 Impairment of exploration interests Impairment of property, plant and equipment CYIP - Iron Ore (Australia) Tshipi - Manganese (South Africa) Total (48,226,334) (1,000,000) - - (48,226,334) (1,000,000) Share of profit from joint venture entities using the equity method - 18,406,525 18,406,525 Total Corporate and Unallocated Net loss before tax from continuing operations (49,226,334) 18,406,525 (30,819,809) (1,049,767) (31,869,576) 28 February 2014 Impairment of exploration interests Impairment of assets Share of profit from joint venture entities using the equity method Total Corporate and Unallocated Net loss before tax from continuing operations (ii) Segment assets and liabilities 28 February 2015 Assets held for sale Property, plant and equipment Other non-current assets Investments using the equity method Exploration and evaluation assets Total Corporate and Unallocated Total assets Corporate and Unallocated Total liabilities (24,571) (5,344,879) - - (24,571) (5,344,879) - 8,810,941 8,810,941 (5,369,450) 8,810,941 3,441,491 (8,974,263) (5,532,772) 390,000 1,091,434 - - 390,000 1,091,434 - - 51,923,640 51,923,640 339,761,230 339,761,230 13,600,000 - 13,600,000 15,081,434 391,684,870 406,766,304 41,053,444 447,819,748 279,424 279,424 35 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS NOTE 25: SEGMENT REPORTING (CONTINUED) 28 February 2014 Assets held for sale Property, plant and equipment Other non-current assets Investments using the equity method Exploration and evaluation assets Total Corporate and Unallocated Total assets Corporate and Unallocated Total liabilities (iii) Segment Cashflows 28 February 2015 Net cash provided by/(used in) investing activities Total Corporate and Unallocated Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 28 February 2014 Net cash provided by/(used in) investing activities Net cash provided by/(used in) financing activities Total Corporate and Unallocated Effects of exchange rates on cash holdings in foreign currencies Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year NOTE 26: CASH FLOW INFORMATION 587,083 2,300,798 - - 587,083 2,300,798 - - 51,545,089 51,545,089 321,183,933 321,183,933 59,614,781 - 59,614,781 62,502,662 372,729,022 (1,628,004) (1,628,004) - - 435,231,684 45,056,519 480,288,203 291,522 291,522 (1,628,004) (1,628,004) (723,320) 41,124,477 38,773,153 (1,944,956) - (1,944,956) - (11,727,233) (11,727,233) (1,944,956) (11,727,233) (13,672,189) (1,000,297) 34,200 55,762,763 41,124,477 (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 property, plant and equipment Impairment of available-for-sale financial assets Realised foreign exchange (gain)/loss Consolidated Group February 2015 $ February 2014 $ (32,008,050) (5,532,772) 149,617 - 48,226,334 1,000,000 350,357 (3,351) 115,514 26,338 24,571 - 5,609,151 7,883,791 Share of profit from joint venture entities using equity method (18,406,525) (8,810,941) 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 (15,455) (12,044) (53) (719,171) 188,396 (568,304) (103,525) (1,167,781) - - - - NOTE 27: EVENTS AFTER THE REPORTING DATE On 6th March 2015, Jupiter Kalahari (Mauritius) Limited, was removed from the company register of Mauritius, after it was successfully migrated to Luxembourg. These financial statements were authorised for issue on 26 June 2015 by the Chairman Brian Gilbertson. 36 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 NOTE 28: 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 Mr P Thapliyal. Loans receivable from Tshipi and Ntle Manganese Mining These loans have No fixed repayment date. Consolidated Group February 2015 $ February 2014 $ 51,333 55,000 51,333 55,000 390,534 222,413 325,505 70,590 51,923,640 51,545,089 NOTE 29: FINANCIAL INSTRUMENTS 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 38,773,153 41,124,477 223,244 958,205 207,789 587,083 51,923,640 51,545,089 91,878,242 93,464,438 243,831 243,831 255,875 255,875 FINANCIAL RISK MANAGEMENT POLICIES 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. (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). 37 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS NOTE 29: FINANCIAL INSTRUMENTS (CONTINUED) 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. 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 2015 $ 2014 $ 2015 $ 2014 $ 2015 $ 2014 $ 2015 $ 2014 $ (243,831) (255,875) (243,831) (255,875) 38,773,153 41,124,477 223,244 207,789 - - - - - - - - - - - - 958,205 2,018,385 51,923,640 51,545,089 38,996,397 41,503,602 52,881,845 53,563,474 38,752,566 41,247,727 52,881,845 53,583,474 - - - - - - - - - - - - - - - - (243,831) (255,875) (243,831) (255,875) 38,773,153 41,124,477 223,244 207,789 958,205 2,018,385 51,923,640 51,545,089 91,878,242 94,895,740 91,634,411 94,639,865 Consolidated Group Financial liabilities due for payment Trade and other payables Total expected outflows 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 expected inflow on financial instruments 38 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 NOTE 29: FINANCIAL INSTRUMENTS (CONTINUED) (c) Market Risk 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 (ii) Foreign exchange risk Consolidated Group 2015 $ 2014 $ 38,773,153 51,923,640 41,124,477 51,545,089 90,696,793 92,669,566 - - - - 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 Other Non-Current Assets (iii) Other Price Risk 28 February 2015 $ 38,770,558 ZAR 2,595 - 51,923,640 Total $ 38,773,153 51,923,640 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. 28 February 2015 Carrying Amount $ Profit $ Other Equity $ Profit $ Other Equity $ Profit $ Other Equity $ Profit $ Other Equity $ Interest Rate Risk Foreign Exchange Risk -50 bps +50 bps -10% +10% 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) 38,773,153 (19,387) 223,244 958,205 - - 51,923,640 (25,962) 243,831 (45,349) - - - - - - 19,387 - - 25,962 45,349 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 39 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS NOTE 29: 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 2015 % 2014 % 2015 $ 2014 $ 2015 $ 2014 $ 2015 $ 2014 $ 2015 $ 2014 $ 2015 $ 2014 $ 2015 $ Financial Assets: Cash and deposits Receivables Other Financial Assets Other Non- Current Assets Total Financial Assets Financial Liabilities: Trade and sundry payables Total Financial Liabilities 3.45 3.65 758,066 497,501 38,015,087 40,626,976 - - - - - - - - - - - - - - - - 758,066 497,501 38,015,087 40,626,976 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 38,773,153 223,244 207,789 223,244 958,205 2,018,385 958,205 - 51,923,640 51,545,089 51,923,640 - 53,105,089 53,771,263 91,878,242 - - 243,831 255,875 243,831 243,831 255,875 243,831 WAEIR = Weighted Average Effective Interest Rate (d) Net Fair Value 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. February 2015 February 2014 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) Carrying Amount $ Net Fair Value $ 38,773,153 38,773,153 223,244 958,205 223,244 958,205 51,923,640 91,878,242 Carrying Amount $ 41,124,477 207,789 2,018,385 Net Fair Value $ 41,124,477 207,789 2,018,385 51,923,640 51,545,089 51,545,089 91,878,242 94,895,740 94,895,740 279,424 279,424 255,875 255,875 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. 40 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTSJUPITER MINES LIMITED ANNUAL REPORT 2015 NOTE 29: FINANCIAL INSTRUMENTS (CONTINUED) 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 2015 Financial Assets Assets available for sale Level 1 $ Level 2 $ Level 3 $ Total $ 958,205 - - 958,205 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. NOTE 30: 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 (Loss)/profit for the period Other comprehensive income/(loss) TOTAL COMPREHENSIVE (LOSS)/PROFIT Consolidated Group February 2015 $ February 2014 $ 40,903,603 42,257,184 430,932,704 466,994,168 471,836,307 509,251,352 275,775 - 275,775 315,719 - 315,719 471,560,532 508,936,633 526,639,293 526,639,293 - - 265,666 713,973 (55,078,759) (18,683,298) 471,560,532 508,935,633 (36,661,127) (713,975) 962,355 92,937 (37,375,102) 1,055,303 Contractual Commitments As at 28 February 2015 the parent company had exploration contractual commitments of $899,600. The Company also had operating lease commitments of $1,143,832. Refer to Note 23. Contingent Liability Refer to Note 24. NOTE 31: 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 41 FOR THE YEAR ENDED 28 FEBRUARY 2015NOTES TO THE FINANCIAL STATEMENTS 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 2015 and of the performance for the year ended on that date of the company and consolidated entity; 2. The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1. 3. 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. 4. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 28 February 2015. Signed on behalf of the Board of Directors Brian Gilbertson Perth 26 June 2015 42 DIRECTORS’ DECLARATIONJUPITER MINES LIMITED ANNUAL REPORT 2015 Independent Auditor’s Report To the Members of Jupiter Mines Limited Level 1 10 Kings Park Road West Perth WA 6005 Correspondence to: PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au We have audited the accompanying financial report of Jupiter Mines Limited (the “Company”), which comprises the consolidated statement of financial position as at 28 February 2015, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ responsibility for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors’ responsibility also includes such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. Grant Thornton Audit Pty Ltd ABN 94 269 609 023 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 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 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. 43 INDEPENDENT AUDITOR’S REPORT In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. Auditor’s opinion In our opinion: a the financial report of Jupiter Mines Limited is in accordance with the Corporations Act 2001, including: i ii giving a true and fair view of the consolidated entity’s financial position as at 28 February 2015 and of its performance for the year ended on that date; and complying with Australian Accounting Standards and the Corporations Regulations 2001. b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements. GRANT THORNTON AUDIT PTY LTD Chartered Accountants C A Becker Partner - Audit & Assurance Perth, 26 June 2015 44 INDEPENDENT AUDITOR’S REPORTJUPITER MINES LIMITED ANNUAL REPORT 2015 A Level 42, 108 St Georges Tce Perth WA 6000 T 08 9346 5500 F 08 9481 5933 E info@jupitermines.com www.jupitermines.com