(ACN 100 714 181)
Annual Report
For the year ended 30 June 2014
Contents
Corporate Directory
Operations Report
Directors’ Report
Corporate Governance Statement
Auditor’s Independence Report
Directors Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Consolidated Financial Statements
Independent Audit Report
ASX Additional Information
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53
Corporate Directory
ACN: 100 714 181
ASX Code: KRC
King River Copper shares are listed on the Australian Stock Exchange (ASX)
DIRECTORS
Anthony Barton
(Chairman)
Leonid Charuckyj
(Director)
Greg MacMillan
(Director)
Derek Carew-Hopkins
(Resigned 2nd July 14)
COMPANY SECRETARY
Greg MacMillan
REGISTERED OFFICE
254 Adelaide Tce
Perth WA 6000
Tel:
Fax:
Email: info@kingrivercopper.com.au
(08) 9221 8055
(08) 9325 8088
SOLICITORS
Fairweather Corporate Lawyers
595 Stirling Highway
Cottesloe WA 6011
BANKERS
ANZ Banking Corporation
8 St Georges Tce
Perth WA 6000
SHARE REGISTER
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross WA 6153
AUDITORS
Ernst and Young
11 Mounts Bay Road
Perth WA 6000
INTERNET ADDRESS
www.kingrivercopper.com.au
Page 3
Operations Report
BACKGROUND OF KING RIVER COPPER LTD
King River Copper Limited has established a portfolio of 100% owned tenements covering approximately 715 square kilometres
in the East Kimberley region of Western Australia (“Tenements”).
In August 2012, The Company changed focus following a technical review of all previous exploration databases. This review
highlighted genuine potential for extensive Copper/Gold mineralization within the Speewah Dome.
COPPER / GOLD
The Company has now built a very comprehensive dataset comprising airborne magnetics, ground based gravity, SAM and IP
surveys, surface sampling (soils and rock chips), and limited drilling. Reprocessing of the geophysical datasets and its
integration with our geochemical and geological data has also been completed. Almost without exception, the highest grade
copper and gold mineralisation found to date is in quartz-sulphide and quartz-hematite veins, or breccia, at the contact of the
shale and felsic granophyre rock units along north-south trending shear zones. These higher grade surface samples generally
host a variety of interesting mineral elements including Copper, Gold, Silver, Arsenic, Antimony, Bismuth, Scandium, Mercury
and Tin.
The first phase of our 2014 exploration effort concentrated on drilling particularly high grade copper surface samples identified
at Chapman in 2013. At the time of this Report, Chapman results are still being interpreted and assays are pending for
interesting holes drilled along the Todhunter line and at Calamonah.
In some locations at surface we may only find eroded evidence of past mineralisation, particularly at locations where there is
clear evidence the overlying shale sediment has been totally eroded away.
Our geologists priority going forward is now to model and identify the best target locations, along strike but below the surface,
where our that higher grade target horizon will have be preserved (and not have been eroded by past exposure at surface).
Such locations have already been identified by the Company and will be followed up by further drilling at the earliest
opportunity.
Page 4
Directors Report
The directors submit their report for King River Copper Limited (“King River” or “the Company”) and its controlled entities for
the year ended 30 June 2014.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this report are as
follows. The directors were in office for the entire period unless otherwise stated. No director has served as a director of any
other ASX Listed Companies in the past 3 years unless mentioned below.
Anthony Barton
Chairman
Appointed 21st May 2007
Mr Barton has been involved in founding and growing a number of successful listed public companies. He has extensive
experience in capital markets, corporate finance, funds management and venture capital and has had advisory roles in the
incorporation and listing of many Australian based resource companies.
Mr Barton is the founding Executive Chairman of the boutique investment bank Australian Heritage Group. He is a graduate of
the Royal Melbourne Institute of Technology with a Bachelor of Business (Accountancy) degree and has 34 years of commercial
experience having also acted in senior executive and director capacities for two leading Australian stockbroking firms.
Mr Barton is also a non-executive Chairman of Spectrum Resources Limited.
Leonid Charuckyj
Director
Appointed 13th December 2011
Mr. Charuckyj (B.E. and M.Eng-Sc. Melbourne University) has had extensive experience over a broad range of technical,
engineering, management and corporate roles including senior positions in government, public and private industry both in
Australia and overseas. Focus has been on the environmental, pollution control and waste management industries and on the
energy and mining industries amongst others.
This has included such diverse roles as representing Australia as an expert engineering advisor in the Middle East, developing
and commercialising new technologies (both in the public company arena and for major international groups), and managing
all aspects of an industrial minerals development from mine and processing to product development and marketing. Mr
Charuckyj is also a non-executive director of Spectrum Resources Limited.
Gregory MacMillan
Director - Appointed 2nd July 2014
Company Secretary - Appointed 9th August 2012
Greg MacMillan has wide ranging corporate, financial, capital markets and commercial experience over the last 30 years. Greg
has held the positions of director, company secretary, chief financial officer, and corporate finance executive in numerous
companies across the finance, mining and commercial sectors. Greg holds a Bachelor of Business degree, is a Certified Practicing
Accountant and a Chartered Company Secretary.
Derek Carew-Hopkins
Director
Resigned 2nd July 2014
Mr Carew-Hopkins has extensive experience in engineering and is a specialist in water and environmental issues. As the
Director General of the Department of Environment, Mr Carew-Hopkins had responsibility for a diverse range of
environmental and water related regulation, assessment and investigation including a significant agenda of new initiatives
across the environment portfolio. He left Government in 2006 and now runs a consultancy specialising in guiding development
projects through the approval processes.
Mr Carew-Hopkins has a Bachelor of Civil Engineering from the University of Central Queensland and is an accredited
Mediator in dispute resolution. He spent the early part of his career in mining and construction project management and many
years in water supply development. He is well known for his expertise in groundwater investigations, well field development
and dispute resolution.
Page 5
Directors Report
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
As at the date of this report, the interests of the directors in the shares of the Company were
Ordinary Shares
Options Over Ordinary Shares
Anthony Barton
Chairman
Leonid Charuckyj
Director
Derek Carew-Hopkins Director (Resigned 2/07/14)
Greg MacMillan
Director
Total
14,879,7681
1,456,0622
1,000,000
7,976,5162
25,312,346
8,001,9101
1,632,4252
1,330,000
4,840,6102
15,804,945
¹ 6,500,000 of the Shares and 2,200,001 Options are held by Mr AP Barton and Mrs CH Barton as trustee for the Barton Family
Superannuation Fund of which Mr Barton is a director and a beneficiary. 7,060,000 of the Shares and 3,424,001 of the Options
are held by Australian Heritage Group Pty Ltd as trustee for the Australian Heritage Trust of which Mr Barton is a director and
a beneficiary. 919,768 of the Shares and 367,908 Options are held by Inglewood Lodge Pty Ltd of which Mr Barton is a director
and a beneficiary. 400,000 of the Shares and 160,000 Options are held by Barton & Barton Pty Ltd of which Mr Barton is a
director.
2 959,550 of the Shares and 383,820 options are held by Mr L Charuckyj & Mrs CM Charuckyj as trustee for the ZETA Super
Fund of which Mr Charuckyj is a trustee and beneficiary. 440,000 of the Shares and 176,000 options are held by Temtor Pty Ltd
of which Mr Charuckyj is a director and beneficiary.
3 916,516 of the Shares and 366,609 of the Options are held by GDM Services Pty Ltd as trustee for the GDM Services Trust of
which Mr MacMillan is a director and beneficiary. 7,060,000 of the Shares and 3,424,001 of the Options are held by Australian
Heritage Group Pty Ltd as trustee for the Australian Heritage Trust of which Mr MacMillan is a director and beneficiary.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
King River has established a portfolio of 100% owned tenements covering approximately 715 square kilometres in the East
Kimberley region in Western Australia (“Tenements”). The principal activities of the entities within the Group during the year
were focusing on exploration and development of the Tenements in the East Kimberley region of Western Australia.
CORPORATE STRUCTURE
King River is a company limited by shares that is incorporated and domiciled in Australia. King River has a fully owned
subsidiary Speewah Mining Pty Ltd. The Group has prepared a consolidated financial report incorporating the entity that it
controlled during the financial year, Speewah Mining Pty Ltd a 100% owned subsidiary.
OPERATING REVIEW
The consolidated entity’s operations are discussed in the Operations Report.
REVIEW OF CONSOLIDATED FINANCIAL CONDITION
The consolidated entity recorded an operating loss after income tax of $719,675 (2013: $17,465,012 loss). There was no dividend
declared or paid during the year.
CAPITAL STRUCTURE
As at the date of this report the Company had 155,648,179 fully paid ordinary shares. There were also 62,689,460 listed options
over ordinary shares on issue and 10,750,000 unlisted options over ordinary shares on issue. Details of the terms of the options
are outlined in Note 18 of the consolidated financial statements.
CASH FROM OPERATIONS
The net cash outflow from operations of $531,303 is significantly less than the cash inflow in the previous year of $768,317. The
cash balance at year end was $1,235,928.
Page 6
Directors Report
LOSS PER SHARE
Basic and diluted loss per share (cents)
Share price (cents)
2014
(0.40)
0.12
2013
(12.16)
0.060
2012
(0.49)
0.110
2011
(0.28)
0.230
2010
(1.70)
0.195
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the financial year the following significant changes were made to the Company’s equity:
On the 23rd July 2013, the Company received shareholder approval at their General Meeting to extend the on market Share
Buy Back to include up to 13,865,717 shares. 9,000 shares were bought back on the 9th September 2013;
On the 17th April 2014, the Company issued 12,000,003 ordinary shares at 6.3 cents;
On the 7th May 2014, the Company issued 1,350,000 options at an exercise price of 20 cents. These options expire 30th June
2019;
On the 20th June 2014, the Company issued 4,600,000 ordinary shares at 12 cents and 1,840,000 options with an exercise
price of 20 cents. These options expire 30th June 2015;
On the 25th June 2014, the Company issued 1,200,000 options to Directors pursuant to shareholder approval obtained at
the Company’s General Meeting held the same day. These options have an exercise price of 20 cents and expire 30th June
2019
On the 30th June 2014, 1,000,000 options expired with an exercise price of 37 cents.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On the 2nd July 2014, the Company issued a further 400,005 ordinary shares at 12 cents and 160,002 options with an exercise
price of 20 cents. These options expire 30th June 2015. Also on the 2nd July 2014, Derek Carew-Hopkins resigned as a Director of
the Company. Greg MacMillan was appointed as a Director the same day.
On the 16th September 2014, the Company announced that it was completing a capital raising of $900,000 at 4.5 cents per share
for the issue of 20,000,000 shares from sophisticated and professional investors. Other than this were no significant events
following the balance date that effected the company’s equity or state of affairs.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The consolidated entity’s current focus is on exploration of its Copper / Gold prospects referred to in the Operations Report.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The consolidated entity’s environmental obligations are regulated under both State and Federal law. All environmental
performance obligations are monitored by the Board and subjected from time to time to Government agency audits and site
inspections. The consolidated entity has a policy of at least complying with, but in most cases exceeding, it’s statutory
environmental performance obligations. No environmental breaches have occurred or have been notified by any Government
agencies during the year ended 30 June 2014.
SHARES UNDER OPTION
As at the date of this report, there were 73,439,460 unissued ordinary shares under granted options.
Date Options Granted
Expiry Date
Issue Price of Shares
Number Under Option
5-Feb -2010
15-Nov-2011
6-Dec-2012
6-March-2013
30-Apr-2013
7-May-2014
20-June-2014
25-June-2014
2-July-2014
Page 7
31-Dec-2014
31-Dec-2014
30-Nov-2017
30-June-2015
30-June-2015
30-June-2019
30-June-2015
30-June-2019
30-June-2015
$0.55
$0.24
$0.10
$0.20
$0.10
$0.20
$0.20
$0.20
$0.20
1,950,000
750,000
1,250,000
60,689,458
4,250,000
1,350,000
1,840,000
1,200,000
160,002
73,439,460
Directors Report
SHARES ISSUED ON EXERCISE OF OPTIONS
During or since the end of the financial year, there were no options exercised. Refer to Note 18 of the consolidated financial
statements for further details of the options outstanding. Option holders do not have any right, by virtue of the option, to
participate in any issue of the Company or any related body corporate.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has entered into Director and Officer Protection Deeds (“D&O Deed”) with each Director and the Company
Secretary (“Officers”). Under the D&O Deed, the Company indemnifies the Officers to the maximum extent permitted by law
and the Constitution against legal proceedings, damage, loss, liability, cost, charge, expense, outgoing or payment (including
legal expenses on a solicitor/client basis) suffered, paid or incurred by the officers in connection with the Officers being an
officer of the Company, the employment of the officer with the Company or a breach by the Company of its obligations under
the D&O Deed.
Also pursuant to the D&O Deed, the Company must insure the Officers against liability and provide access to all board papers
relevant to defending any claim brought against the Officers in their capacity as officers of the Company. The Company has
paid insurance premiums of $8,156 (2013: $8,156) in respect of liability for any current and future directors, company secretary,
executives and employees of the Company. This amount is payable in total and no specific amount is included in the directors’
remuneration.
ROUNDING
The amounts contained in this report and in the financial report have been rounded to the nearest dollar.
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each director of King River Copper Limited, and for the
executives in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this
report, key management personnel (KMP) of the company and the group are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the company and the group, directly or indirectly,
including any director (whether executive or otherwise) of the company, and includes three executives in the group.
For the purposes of this report, the term “executive” encompasses the chief executive, senior executives and the company
secretary of the company.
Details of key management personnel
(i) Directors
A Barton
Chairman
D Carew Hopkins
Director (Resigned 2nd July 14)
L Charuckyj
Director
(ii) Executives
K Rogers
A Chapman
G MacMillan
Chief Geologist
Project Geologist
Company Secretary
On the 2nd July 2014, Derek Carew-Hopkins resigned as a Director of the Company. Greg MacMillan was appointed as a
Director the same day.
Other than as detailed above there are no other Executives of the Company.
1. Remuneration Committee
The Remuneration Committee of the Board of Directors of King River is responsible for determining and reviewing
compensation arrangements for the directors and executives. The Remuneration Committee assesses the appropriateness of
the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market
conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and
executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash
and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will
be optimal for the recipient without creating undue cost for the Company.
Page 8
Directors Report
2. Remuneration Policy
The Company's remuneration policies are reflected in the Charter of the Remuneration Committee. It is the Company’s
objective to provide maximum stakeholder benefit from the retention of high quality Board and executive team by
remunerating directors and key executives fairly and appropriately with reference to relevant employment market conditions.
The Company’s remuneration policy is to establish competitive remuneration (including performance incentives) consistent
with long term development and success, to ensure remuneration is fair and reasonable (taking into account all relevant factors,
and within appropriate controls or limits) that performance and remuneration are appropriately linked, that all remuneration
packages are reviewed annually or on an ongoing basis in accordance with management's remuneration packages, and that
retirement benefits or termination payments (other than notice periods) will not be provided or agreed other than in exceptional
circumstances.
It is the Company’s objective that the remuneration policy aligns with achievement of strategic objectives and creation of long
term value for shareholders. The Company does not use specific performance hurdles or conditions in determining
remuneration or short term rewards. The Company assesses each employee annually based upon the individual performance
in carrying out the agreed responsibilities of the employee which have been developed in consideration of the Company’s long
term goals. The performance incentive component is reflected as part of the increase in salary and the issue of equity based
compensation for each employee on an annual basis.
The Company does not have a formal policy to prohibit executives from entering into arrangements to protect the value of
unvested long term incentive awards.
3. Non Executive Director Remuneration
3.1 Fixed Remuneration
The aggregate remuneration to non executive directors will not exceed the maximum approved amount of $150,000. The board
seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain directors of the
highest calibre, whilst incurring a cost which is acceptable by shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst directors is reviewed annually. The board considers fees paid to non executive directors of comparable companies
when undertaking the annual review as well as additional time commitment of directors who serve on one or more sub
committees and assistance to the Company with new investment opportunities. Each of the non executive directors during the
financial year received a salary of $40,000 per annum plus superannuation. Non executive directors are encouraged to hold
shares in the Company; these are to be purchased by the director on market. It is considered good corporate governance for
directors to have a stake in the company on whose board he or she sits.
Remuneration of non executive directors for the year ended 30 June 2014 is disclosed in Table 1 under the remuneration section
of this report.
3.2 Variable Remuneration – Short Term Incentives
Non executive directors do not receive performance based bonuses or additional remuneration for their membership of
subsidiary boards or committees.
3.3 Variable Remuneration – Long Term Incentives
During the financial year, the Company had no contractual obligations to provide long term incentives to non executive
directors.
4. Executive Director Remuneration
The company aims to reward executives with a level and mix of remuneration commensurate with their position and
reward executives for company and individual performance;
align the interests of executives with those of shareholders;
responsibilities within the company so as to:
ensure total remuneration is competitive by market standards.
link reward with the strategic goals and performance of the company; and
Executive remuneration comprises of:
base pay and benefits; and
long term incentives through equity based compensation.
Page 9
Directors Report
4.1 Fixed Remuneration
Base pay and benefits
Base pay is structured as a total employment cost package that may be delivered as combination of cash and salary sacrifice
superannuation at the executive’s discretion.
Executives are offered a competitive base pay. Reference is made to industry benchmarks to ensure that the base pay is set to
reflect the market for a comparable role. Base pay is reviewed annually, or upon promotion, to ensure the executive’s pay is
competitive with comparable positions of responsibility. There is no guaranteed base pay increases for any executive contract.
4.2 Variable Remuneration – Long Term Incentives
During the financial year the Company had no contractual obligations to provide long term incentives to the executive director.
4.3 Employment Contracts – Executives - Ken Rogers (Chief Geologist), Andrew Chapman (Project Geologist)
The Company had entered into employment agreements with Messer’s Rogers and Chapman for the provision of technical
geological services based on daily rates for the provision of services. Their services could be terminated by giving a 2 week
notice by either party.
5. Remuneration of Key Management Personnel and Executives of the Company
Details of the remuneration of each director of King River, each of the executives of the Company and the consolidated entity
for the year ended 30 June 2014 are set out in the following tables.
Table 1: Remuneration for the year ended 30 June 2014
30 June 2014
Directors
A Barton
D Carew-Hopkins (Resigned 2/07/14)
L Charuckyj
Sub Total1
Executives
K Rogers
A Chapman
G MacMillan
Sub Total
Total
Short
Term
Post
Employment
Salary &
Superannuation
Share Based
Options
as % of
Fees
$
43,600
43,600
43,600
130,800
60,000
174,215
36,000
270,215
401,015
Payments
Total
Total
Options
Shares
$
57,000
28,500
28,500
114,000
17,700
35,400
17,700
70,800
184,800
$
-
-
-
-
-
-
-
-
-
$
100,600
72,100
72,100
244,800
83,200
209,615
56,940
349,755
594,555
%
56
40
40
-
21
17
31
-
-
$
-
-
-
-
5,500
-
3,240
8,740
8,740
1. Premium for Director’s liability insurance is not included in remuneration table.
Other than disclosed in the table above no director or executive received any compensation in the financial year ended 30 June
2014. None of the remuneration for directors or executives was performance related.
Page 10
Directors Report
Table 2: Remuneration for the year ended 30 June 2013
30 June 2013
Salary & Fees
Superannuation
Payments
Total
Total
Options
Shares
Short Term
Employment
Share Based
Post
Options
as % of
Directors
A Barton
D Carew-Hopkins
L Charuckyj
R Wolanski (Resigned 9/08/12)
Sub Total1
Executives
K Rogers
A Eves
A Chapman
G MacMillan
Sub Total
Total
$
$
$
40,000
40,000
40,000
63,033
183,033
48,876
16,435
63,640
33,000
161,951
344,984
3,600
3,600
3,600
5,850
16,650
5,400
-
-
2,970
8,370
25,020
13,410
8,046
8,046
-
29,502
15,334
-
29,151
8,046
52,531
82,033
$
-
-
-
-
-
-
-
-
-
-
-
$
57,010
51,646
51,646
68,883
229,185
69,610
16,435
92,791
44,016
222,852
452,037
%
23
15
15
22
-
31
18
-
-
1.
Premium for Director’s liability insurance is not included in remuneration table.
5.1 Equity Based Compensation – Options 2014
During the year unlisted options exercisable at $0.20 on or before 30 June 2019 were issued to directors of the Company, which
were approved at the Company’s General Meeting held on the 25th June 2014. 600,000 options were issued to Anthony Barton,
300,000 options were issued to Derek Carew-Hopkins and 300,000 were issued to Leonid Charuckyj.
The options were issued as an alternate remuneration to cash, to provide industry competitive remuneration rates and to
encourage long term relationships with the Company. These options vest evenly over a 3 year period.
Table 1: Compensation Options Granted during the year ended 30 June 2014
Fair
Value
Granted
Grant
Grant
Exercise
Expiry
No.
Date
Date ($)
Price ($)
Date
First
Last
Exercise
Exercise
Date
Date
30 June 2014
Directors
A Barton
D Carew-
Hopkins
(Resigned
2/07/14)
Leonid
Charuckyj
Executives
K Rogers
A Chapman
G MacMillan
600,000
300,000
300,000
300,000
600,000
300,000
25-June-
14
25-June-
14
25-June-
14
7-May-
14
7-May-
14
7-May-
14
Vested
Vested
No.
%
33
$0.095
$0.20
30-June-19 25-June-14 30-June-19
200,000
$0.095
$0.20
30-June-19 25-June-14 30-June-19
100,000
33
$0.095
$0.20
30-June-19 25-June-14 30-June-19
100,000
33
$0.059
$0.20
30-June-19 7-May-14
30-June-19
100,000
$0.059
$0.20
30-June-19 7-May-14
30-June-19
200,000
$0.059
$0.20
30-June-19 7-May-14
30-June-19
100,000
33
33
33
Total
2,400,000
800,000
There were no alterations to options terms since grant date and no options were forfeited. Further details of the options are
contained in Note 18.
Page 11
Directors Report
30 June 2014
Directors
A Barton
D Carew-Hopkins
Leonid Charuckyj
Executives
K Rogers
A Chapman
G MacMillan
Total
Value of Options
Value of Options
Value of Options
Granted ($)
Exercised ($)
Cancelled / Lapsed ($)
57,000
28,500
28,500
17,700
35,400
17,700
184,800
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other than as detailed above, no Directors or executives were issued options or had options outstanding in the financial year
ended 30 June 2014. During the year, 1,000,000 options exercisable at $0.37 on or before 30th June 2014 lapsed, these options were
out of the money hence they had nil value.
Table 2: Options Holdings of Key Management Personnel during the year ended 30 June 2014
30 June 2014
Balance at
Granted as
Net
Balance at
Beginning
Remuner-
Options
Change
of Period
ation
Exercised
Other
1 July
2013
Directors
A Barton
D Carew-Hopkins
1,250,000
750,000
600,000
300,000
(Resigned
2/07/14)
L Charuckyj
Executives
K Rogers
A Chapman
G MacMillan
Total
750,000
300,000
1,000,000
1,000,000
750,000
300,000
600,000
300,000
5,500,000
2,400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
End of
Period
30 June
Vested at 30 June 2014
Not
2014
Total
Exercisable Exercisable
1,850,000
1,050,000
1,850,000
1,050,000
400,000
200,000
1,450,000
850,000
1,050,000
1,050,000
200,000
850,000
1,300,000
1,600,000
1,300,000
1,600,000
1,050,000
1,050,000
200,000
400,000
200,000
1,100,000
1,200,000
850,000
7,900,000
7,900,000
1,600,000
6,300,000
5.2 Equity Based Compensation – Options 2013
During the year unlisted options exercisable at $0.10 on or before 30 June 2015 were issued to directors of the Company, which
were approved at the Company’s General Meeting held on the 30th April 2013. 750,000 options were issued to Derek Carew-
Hopkins, 750,000 options were issued to Leonid Charuckyj, and 1,250,000 options were issued to Anthony Barton.
The options were issued as an alternate remuneration to cash, to provide industry competitive remuneration rates and to
encourage long term relationships with the Company. The options are not performance related and vested immediately on
issue.
Page 12
Directors Report
Table 1: Compensation Options Granted during the year ended 30 June 2013
Fair
Value
Granted
Grant
Grant
Exercise
Expiry
No.
Date
Date ($)
Price ($)
Date
First
Last
Exercise
Exercise
Date
Date
Vested
Vested
No.
%
1,250,000
750,000
750,000
250,000
750,000
1,000,000
750,000
30-Apr-
13
30-Apr-
13
30-Apr-
13
6-Dec-
12
30-Apr-
13
6-Dec-
12
30-Apr-
13
$0.035
$0.10
30-June-15 30-Apr-13
30-June-15 1,250,000
100
$0.035
$0.10
30-June-15 30-Apr-13
30-June-15
750,000
$0.035
$0.10
30-June-15 30-Apr-13
30-June-15
750,000
$0.045
$0.10
30-Nov-17 6-Dec-12
30-Nov-17
250,000
$0.035
$0.10
30-June-15 30-April-13 30-June-15
750,000
$0.045
$0.10
30-Nov-17 6-Dec-13
30-Nov-17
-
100
100
100
100
-
$0.035
$0.10
30-June-15 30-April-13 30-June-15
750,000
100
30 June 2013
Directors
A Barton
D Carew-
Hopkins
Leonid
Charuckyj
Executives
K Rogers
K Rogers
A Chapman
G MacMillan
Total
5,500,000
4,500,000
There were no alterations to options terms since grant date and no options were forfeited. Further details of the options are
contained in Note 18.
30 June 2013
Directors
A Barton
D Carew-Hopkins
Leonid Charuckyj
Executives
K Rogers
A Chapman
A Eves
G MacMillan
Total
Value of Options
Value of Options
Value of Options
Granted ($)
Exercised ($)
Cancelled / Lapsed ($)
13,410
8,046
8,046
15,334
29,151
-
8,046
82,033
-
-
-
-
-
-
-
-
351,955
160,237
-
201,250
-
12,850
-
726,292
Other than as detailed above, no Directors or executives were issued options or had options outstanding in the financial year
ended 30 June 2013. During the year a total of 200,000 options exercisable at $0.45 on or before 31 March 2013 lapsed. During the
year 1,550,000 options exercisable at $0.55 on or before 31 December 2014, 1,250,000 options exercisable at $0.24 on or before 30
June 2014, and 250,000 options exercisable at $0.37 on or before 30 June 2014 were cancelled.
Page 13
Directors Report
Table 2: Options Holdings of Key Management Personnel during the year ended 30 June 2013
30 June 2013
Balance at
Granted as
Net
Balance at
Beginning
Remuner-
Options
Change
of Period
ation
Exercised
Other
1 July
2012
Directors
A Barton
1,500,000
1,250,000
D Carew-Hopkins
800,000
750,000
R Wolanski
L Charuckyj
Executives
K Rogers
R Ramsay
A Eves
B Andrew
A Chapman
G MacMillan
Total
1,500,000
-
-
750,000
750,000
900,000
750,000
250,000
1,000,000
-
-
-
-
-
1,000,000
750,000
6,450,000
5,500,000
-
-
-
-
-
-
-
-
-
-
-
End of
Period
30 June
Vested at 30 June 2013
Not
2013
Total
Exercisable Exercisable
(1,500,000)
1,250,000
1,250,000
(800,000)
750,000
750,000
1,500,000
1,500,000
750,000
750,000
(750,000)
1,000,000
1,000,000
900,000
550,000
250,000
900,000
550,000
250,000
-
(200,000)
-
-
-
-
-
-
-
-
-
-
-
1,250,000
750,000
1,500,000
750,000
1,000,000
900,000
550,000
250,000
1,000,000
1,000,000
1,000,000
-
750,000
750,000
(3,250,000)
8,700,000
8,700,000
-
-
750,000
7,700,000
5.3. Equity Based Compensation – Shares 2014
Table 1: Shareholdings of Key Management Personnel during the year ended 30 June 2014
30 June 2014
Directors
A Barton 1
D Carew-Hopkins
L Charuckyj 2
Executives
K Rogers
A Chapman
G MacMillan 3
Total
Balance
Granted as
On Exercise
Net Change
Balance
1 July 2013
Remuneration
of Options
Ord
Ord
Ord
Other
Ord 4
30 June 2014
Ord
14,879,768
1,000,000
1,456,062
409,768
-
7,976,511
25,722,117
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,879,768
1,000,000
1,456,062
(180,000)
229,768
-
5
(179,995)
-
7,976,516
25,542,114
¹ 6,500,000 of the Shares are held by Mr AP Barton and Mrs CH Barton as trustee for the Barton Family Superannuation
Fund of which Mr Barton is a director and a beneficiary. 7,060,000 of the Shares are held by Australian Heritage Group
Pty Ltd as trustee for the Australian Heritage Trust of which Mr Barton is a director and a beneficiary. 919,768 of the
Shares are held by Inglewood Lodge Pty Ltd of which Mr Barton is a director and a beneficiary. 400,000 of the Shares are
held by Barton & Barton Pty Ltd of which Mr Barton is a director.
2 959,550 of the Shares are held by Zeta Mr L Charuckyj & Mrs CM Charuckyj as trustee for the ZETA Super Fund of
which Mr Charuckyj is a trustee and beneficiary. 440,000 of the Shares are held by Temtor Pty Ltd of which Mr
Charuckyj is a director and beneficiary.
3 916,516 of the Shares are held by GDM Services Pty Ltd as trustee for the GDM Services Trust of which Mr MacMillan is
a director and beneficiary. 7,060,000 of the Shares are held by Australian Heritage Group Pty Ltd as trustee for the
Australian Heritage Trust of which Mr MacMillan is a director and beneficiary.
4 These were transacted on market.
Page 14
Directors Report
Table 2: Shareholdings of Key Management Personnel during the year ended 30 June 2013
30 June 2013
Directors
A Barton 1
D Carew-Hopkins
R Wolanski (Resigned 9th Aug 12)
L Charuckyj 2
Executives
K Rogers
A Chapman
G MacMillan 3
Total
Balance
Granted as
On Exercise
Net Change
Balance
1 July 2012
Remuneration
of Options
Ord
Ord
Ord
Other
Ord 4
30 June 2013
Ord
13,129,768
450,000
644,768
1,206,062
169,768
-
7,976,511
23,576,877
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,750,000
550,000
(644,760)
250,000
14,879,768
1,000,000
8
1,456,062
240,000
409,768
-
-
2,145,240
-
7,976,511
25,722,117
¹ 6,500,000 of the Shares are held by Mr AP Barton and Mrs CH Barton as trustee for the Barton Family Superannuation Fund
of which Mr Barton is a director and a beneficiary. 7,060,000 of the Shares are held by Australian Heritage Group Pty Ltd as
trustee for the Australian Heritage Trust of which Mr Barton is a director and a beneficiary. 919,768 of the Shares are held by
Inglewood Lodge Pty Ltd of which Mr Barton is a director and a beneficiary. 400,000 of the Shares are held by Barton &
Barton Pty Ltd of which Mr Barton is a director.
2 959,550 of the Shares are held by Zeta Mr L Charuckyj & Mrs CM Charuckyj as trustee for the ZETA Super Fund of which
Mr Charuckyj is a trustee and beneficiary. 440,000 of the Shares are held by Temtor Pty Ltd of which Mr Charuckyj is a
director and beneficiary.
3 346,743 of the Shares are held by GDM Services Pty Ltd as trustee for the GDM Services Account of which Mr MacMillan is a
director and beneficiary. 569,768 of the Shares are held by GDM Services Pty Ltd as trustee for the GDM Services Super
Account of which Mr MacMillan is a director and beneficiary. 7,060,000 of the Shares are held by Australian Heritage Group
Pty Ltd as trustee for the Australian Heritage Trust of which Mr MacMillan is a director and beneficiary.
4 These were transacted on market.
5.4 Related Party Transactions
All equity transactions with key management personnel have been entered into at arm’s length.
Australian Heritage Group Pty Ltd (“AHG”), a company of which Mr Anthony Barton, a Director and Mr Greg MacMillan, a
Director and the Company Secretary, have entered into an occupancy and administration agreement with King River copper in
respect of providing occupancy, administration and bookkeeping services commencing March 2009. The total value of the
occupancy and administration services provided by AHG during the year was $82,200 (2013: $97,407). As at 30th June 2014, there
was an amount of $13,700 outstanding to pay AHG for services incurred in the month of June. This amount is included in Note
15. All services provided by companies associated with directors were provided on commercial terms.
End of Remuneration Report
Page 15
Directors Report
DIRECTORS’ MEETINGS
The number of meetings of directors (including meetings of committees of directors) held during the year and the number of
meetings attended by each director was as follows:
Number of Meetings Held
Number of Meetings Attended
Anthony Barton
Leonid Charuckyj
Derek Carew-Hopkins
(Resigned)
Greg MacMillan
Directors
Meetings
2
Audit1
Committee Meeting
2
Nomination1
Committee Meeting
-
Remuneration1
Committee Meeting
-
2
2
2
2
2
-
-
2
-
-
-
-
-
-
-
-
1. Committee is made up of the full Board. Reference to meeting refers to meeting conducted specifically to deal with the
particular business of that Committee.
COMMITTEE MEMBERSHIP
The role of the Audit, Remuneration and Nomination Committees is carried out by the full Board in accordance with the
appropriate charters. The Board considers that no efficiencies or benefits would be gained by establishing separate committees.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the directors of King River support
and have adhered to the principles of corporate governance. The Company’s corporate governance statement is contained in
the following section of this annual report.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law and professional regulations, the Company has agreed to indemnify its auditors, Ernst & Young,
as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
AUDITOR INDEPENDENCE
Section 370C of the Corporation Act 2001 requires our auditors, Ernst & Young, to provide the directors of the Company with
an Independence Declaration in relation to the audit of the consolidated financial report. This Independence Declaration is
disclosed on page 24 of this report and forms part of this directors’ report for the year ended 30 June 2014.
NON AUDIT SERVICES
The Company’s auditors, Ernst & Young, provided no non audit services during the year ended 30 June 2014.
TAX CONSOLIDATION
The Company and its subsidiary form a tax consolidated group.
Signed in accordance with a resolution of the directors.
Mr Greg MacMillan
Director
26th September 14
Page 16
Corporate Governance
1
INTRODUCTION
1.1. Corporate Governance
The Australian Stock Exchange ("ASX") Listing Rules ("Listing Rules") require a listed entity to include in its annual report a
statement on corporate governance practices disclosing the extent to which it has followed the "best practice" corporate
governance recommendations set by the ASX Corporate Governance Council. If the entity has not followed any of the
recommendations, it must identify them and give reasons why. It must state the period during which the recommendations
were followed. For this purpose, Listing Rules Guidance Note 9 sets out the 8 essential corporate governance principles and
the applicable "best practice recommendations".
1.2. Compliance with ASX Listing Rule 4.10.3
Listing Rule 4.10.3 and Guidance Note 9 reflect ASX policy that it is "appropriate to focus on disclosure of corporate governance
practices rather than prescribe adoption of a particular practice". Therefore, an entity's obligation is to highlight areas of
departure from the recommendations: the "if not, why not?" approach.
1.3. The Company's Approach
The Board and senior management of King River Copper ("the Company") are committed to acting responsibly, ethically
and with high standards of integrity as the Company works to create shareholder value. To achieve this goal, the Board has
developed and adopted corporate governance practices and policies that have been implemented throughout management
and governance. This Corporate Governance Statement summarises these practices as they have been adopted by the
Company.
1.4. Adoption by the Board
The Board of the Company has reviewed and considered this Corporate Governance Statement and has adopted it. A
Board resolution to this effect has been passed.
1.5. Summary of Compliance
The Company has complied with 24 of the 26 "best practice recommendations". Non-compliance with Recommendations 2.2
and 4.2 relates to the Board considering it appropriate to not separately constitute an Audit Committee and there not being
an independent Chairman on the Board. The full Board deals with matters that would be dealt with by Audit,
Remuneration and Nomination Committees and it considers the make up of the Board and its Committees are appropriate
given the Company's size and operations and the current directors’ skills and experience.
2 ESSENTIAL PRINCIPLES OF GOOD CORPORATE GOVERNANCE
2.1. Principle 1: Lay Solid Foundations for Management and Oversight
"Recognise and publish the respective roles and responsibilities of the board and management."
Recommendation 1.1: Formalise and disclose the functions reserved to the Board and those delegated to senior executives.
The Directors monitor the business affairs of the Company on behalf of Shareholders and have formally adopted a Board
Charter which is designed to encourage Directors to focus their attention on accountability, risk management and ethical
conduct.
The Board's primary role is the optimisation of Company performance and protection and enhancement of shareholder
value. They develop strategies for the Company, reviews strategic objectives and monitors performance against these
objectives. Its functions and responsibilities include the following;
setting strategic and policy direction
monitoring performance against strategy
identifying principal risks and opportunities and ensuring risk management systems are established and reviewed
approving and monitoring financial reports
capital management
significant business transactions and investments
appointing senior management and monitoring performance
remuneration
development and succession
continuous disclosure compliance
ensuring effective shareholder communication
overseeing the Company's commitment to sustainable development and the environment
ensuring the Board remains appropriately skilled
reviewing and approving corporate governance systems
Page 17
Corporate Governance
enhancing and protecting the Company's reputation.
establishing and maintaining appropriate ethical standards
The Board is also governed by the Company's Constitution, and on appointment each director is provided with a Director's
Information Kit, which forms part of the terms of their appointment and contains guides to directors’ duties and
responsibilities, the role of the Board and committees, the Constitution and the Company's policies.
The Company has in place formal letters of engagement for its senior management, setting out the responsibilities
specifically delegated to them.
Recommendation 1.2: Disclose the process for evaluating the performance of senior executives.
During each Financial Year an assessment of the performance of each senior executive is undertaken by the Remuneration
Committee and the Board. Individual executives are evaluated against the terms and conditions of their employment and
set policies for senior executive remuneration. Remuneration packages consist of base salary, fringe benefits, incentive
schemes (including performance related bonuses), superannuation and entitlements upon retirement or termination.
Senior executives are evaluated and rewarded for both financial and non-financial performance across a range of indicators
that apply to delivering results across the Company and linked to creating value for shareholders. Annual salary increases
are determined by the following three factors: (a) movement in job salary rates as determined by the Minerals and Energy
Human Resources Conference (“MEHRC”) national survey on like positions and job size; (b) movement in individual
competency values; and (c) movement in individual performance values.
2.2. Principle 2: Structure the Board to Add Value
"Have a board of an effective composition size and commitment to adequately discharge its responsibilities and duties."
Recommendation 2.1: A majority of the board should be independent directors.
The board comprises of Mr Anthony Barton, Mr Leonid Charuckyj and Mr Greg MacMillan as directors. Mr Derek Carew-
Hopkins was also a director during the year, however resigned on the 2nd July 2014. Mr MacMillan was appointed as a
Director the same day. Details of the directors are set out in the Company's annual report. At present, Mr MacMillan and
Mr Leonid Charuckyj are considered to be independent directors in terms of the ASX Corporate Governance Council's
definition of independence. Mr Barton is not considered to be independent as he is a substantial shareholder of the
Company. The board is made up of a majority of independent director, however the company has also adopted certain
procedures intended to ensure independent decision making occurs, including the requirement for directors to absent
themselves from discussions in which they have a conflict of interest and the functioning of the Remuneration and Audit
Committees.
Recommendation 2.2: The chairperson should be an independent director.
The chairperson, Mr Barton, is not independent, as outlined above.
Recommendation 2.3: The roles of the chairperson and Chief Executive Officer should not be exercised by the same individual.
The role of chairperson is filled by Mr Anthony Barton and currently the position of Chief Executive Officer is vacant.
Recommendation 2.4: The board should establish a Nomination Committee.
The Board has established a nomination committee comprising of all three Directors. The Board considers that given its size
and that all members of the Board hold non-executive positions in the Company, no efficiencies or other benefits would be
gained by establishing a separate nomination committee. The Board assesses the experience, knowledge and expertise of
potential directors before any appointment is made. The nomination committee deals with matters relating to the renewal of
Board Members and Board Performance. The company has also adopted a Nomination and Remuneration Committee
Charter.
Recommendation 2.5: Companies should disclose the process for evaluating the performance of the board, its committees and individual
directors.
The Remuneration Committee has developed a formal process for performance evaluation of the Board. The Remuneration
Committee reviews the remuneration policies applicable to all Directors and Executive Officers once a year making
recommendations on remuneration packages and terms of employment to the Board.
The company secretary is appointed and removed by the Board. The company secretary works with the Chairman, the
Board and the Board Committees on all governance issues. All Directors have access to the company secretary for the
purpose of obtaining information or advice.
2.3. Principle 3 : Promote ethical and responsible decision-making
Companies should actively promote ethical and responsible decision-making.
Recommendation 3.1: Companies should establish a code of conduct and disclose the code or a summary of the code as to:
The practices necessary to maintain confidence in the company’s integrity.
Page 18
Corporate Governance
The practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders.
The responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
The Company has adopted a Code of Conduct setting the standards expected of officers, employees and contractors. This
demonstrates the Company's commitment to conducting business in an ethical and accountable manner. In essence, officers,
employees and contractors are expected to:
act in good faith with the utmost honesty, integrity, objectivity and fairness
not to act improperly, misleadingly or deceptively
not to engage in illegal activity
understand and comply with applicable laws and Company policies
avoid conflicts of interest
be professional, responsible and accountable
respect an individual's rights
deal responsibly with the community.
The Board monitors implementation of the Code. Breaches are reported by employees or contractors to a supervisor and by
management or directors to the Board or the chairperson. In addition, the Director's Information Kit provided to each
director contains a guide to the duties and responsibilities of directors and it is expected that Directors will be familiarised
with these or any other documents prepared by the Company to meet corporate governance requirements.
Recommendation 3.2: Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The
policy should include requirements for the board to establish measureable objectives for achieving gender diversity for the board to assess
annually both the objectives and the progress in achieving them.
The Company has not yet established a formal diversity policy. The Board has and will where appropriate conduct all
Board appointments in a manner that promotes gender diversity including establishing a structured approach for
identifying a pool of candidates, using external experts where necessary.
Due to the small scale of the Company’s operations and the limited number of employees, the Company has not yet set a
formal policy for achieving gender diversity. The Company will monitor its position and consider establishing a formal
policy as and when the Company develops over time.
Recommendation 3.3: Companies should disclose in each annual report the measureable objectives for achieving gender diversity set by
the board in accordance with the diversity policy and progress towards achieving them.
The Company has not established measurable guidelines in relation to diversity. Due to the small scale of the Company’s
operations and the limited number of employees, the Company has not yet set a formal policy for achieving gender
diversity. The Company will monitor its position and consider establishing a formal policy as and when the Company
develops over time to address equal opportunities in the hiring, training and career advancement of directors, officers and
employees.
Recommendation 3.4: Companies should disclose in each annual report the proportion of women employees in the whole organisation,
women in senior executive position and women on the board.
The gender balance throughout the organisation at 30 June was as follows:
2014
2013
Board
Other Key Management Personnel
All appointments have previously and will continue to be conducted in a manner that promotes gender diversity, including
Female
-
1
Total
4
3
Female
-
1
Total
4
3
establishing a structured approach for identifying a pool of candidates, using external experts where necessary.
2.4. Principle 4: Safeguard Integrity in Financial Reporting
"Have a structure to independently verify and safeguard the integrity of the company's financial reporting."
Recommendation 4.1: The board should establish an audit committee.
The Board has established an Audit Committee consisting of the full board. The Board considers that given its size and that
all members of the Board hold non-executive positions in the Company, no efficiencies or other benefits would be gained by
establishing a separate audit committee.
Recommendation 4.2: Structure the audit committee so that it consists of: only non executive directors; a majority of independent
directors; an independent chairperson, who is not chairperson of the board; and at least three members.
The audit committee is made up of the full board being three non – executive directors. The chairman of the Audit
Committee, Mr MacMillan is not the Chairman of the Board and is a Non-Executive director of the company. Before Mr
MacMillan’s appointment on the 2nd July 2014, Mr Carew-Hopkins was the Chairman for the Audit Committee. He was also
Page 19
Corporate Governance
not the Chairman of the Board during this time. Both are considered to be independent directors pursuant to the ASX
Corporate Governance Principles.
The Board considers that given its size and that all members of the Board hold non-executive positions in the Company, no
efficiencies or other benefits would be gained by establishing a separate audit committee or appointing another non-
executive, independent director to the Board.
Recommendation 4.3: The audit committee should have a formal charter.
The Board has adopted an Audit Committee Charter which sets out the duties of the Committee. These include the
following;
to be the focal point of the communication between the Board, management and the external auditor
recommend engagement and monitor performance of the external auditor
review external audit reports and ensure prompt remedial action
review the effectiveness of management information and internal control, all areas of significant financial risk and risk
management, significant transactions not a normal part of the Company’s business, financial information and ASX
reporting statements
monitor internal controls and compliance and review the disclosure policy annually.
The audit committee aims to meet at least once every quarter, with further meetings on an as required basis. The charter is
included on the Company’s website which also includes any information on procedures for the selection and appointment
of the external auditor, or rotation of external engagement partners.
2.5. Principle 5: Make Timely and Balanced Disclosure
"Promote timely and balanced disclosure of all material matters concerning the Company."
Recommendation 5.1: Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at a senior executive level for that compliance.
The Company has in place a continuous disclosure policy, "A Guide to Disclosure" which is reviewed at least annually, a
copy of which is included in the Director's Information Kit provided to each director upon appointment, and which forms
part of the terms of their appointment. A copy of the policy is also provided to all Company officers, employees and agents.
The Company has obligations under the Corporations Act and ASX Listing Rules to keep the market fully informed of
information which may have a material effect on the price or value of its securities. The Company discharges these
obligations by releasing information to ASX in the form of an ASX release or disclosure in other relevant documents (e.g. the
Annual Report). In addition, a list of recent announcements is presented in each Board meeting for discussion, minuting and
action if required.
2.6. Principle 6: Respect the Rights of Shareholders
"Respect the rights of shareholders and facilitate the effective exercise of those rights."
Recommendation 6.1: Design and disclose a communications strategy to promote effective communication with shareholders and
encourage effective participation at general meetings.
The Company has in place a communications policy, a copy of which is included in the Director's Information Kit provided
to each director upon appointment. The company is committed to ensuring that trade in securities takes place in an efficient,
competitive and informed market. The communications policy recognises the importance of forthright communication as a
key plank in building shareholder value and that to prosper and achieve the growth the company must (among other
things) earn the trust of employees, customers, suppliers, communities and security holder by being forthright in its
communications and consistent in its fulfilment of obligations.
The key aspects of the policy are:
diligent compliance with the Company's disclosure and trading policies;
prompt, transparent compliance with statutory reporting and meeting obligations, including detailed and full
disclosure in relation thereto; and
effective use of the Company's website, electronic communication and its share registry to keep shareholders up to date
and to deal with enquiries.
The communications policy was adopted in May 2007 and is reviewed annually.
The Company employs a wide range of communication approaches to its members and the broader investment community.
In addition to direct communication with its members, a section of the Company’s website it is dedicated to its investors.
Media releases, investor presentations and interim and full-financial reports are available for review on its website. These
announcements, presentations and reports are placed on the website immediately after they have been released to ASX.
Members with access to email can, through the Company’s website, elect to be placed on an email mailing list in order to be
Page 20
Corporate Governance
sent certain corporate information as it is released, including notices of annual general meetings and explanatory statements
and Annual reports. The Company regularly issues direct mail-outs to all shareholders advising of its email
communication facility to encourage shareholders to be placed on its email mailing list.
As the usage and acceptance of electronic communications in the community increases, the Company continues to
investigate the potential for increased use of electronic means of communicating with its investors and engaging their
involvement in the Company, including shareholder participation in its general meetings.
2.7. Principle 7: Recognise and Manage Risk
"Establish a sound system of risk oversight and management and internal control."
Recommendation 7.1: The board or appropriate committee should establish policies on risk oversight and management, and disclose a
summary of those policies.
The Company has in place a risk oversight and management policy, a copy of which is included in the Director's
Information Kit provided to directors upon appointment and which sets out systems for risk oversight, management and
internal control.
This risk management policy was adopted in May 2007. The key aspects of it are:
the Board oversees the establishment and implementation of risk management;
the Audit Committee is delegated the function and responsibility to establish, implement and maintain risk
management systems and frameworks; and
the Company's senior management are delegated the tasks of management of operational risk and the implementation
of risk management strategies.
The Board approves risk management systems and reviews them and their implementation annually. The Company's risk
profile, assessed and determined on the basis of the Company's businesses in mineral exploration, is reviewed annually.
The Board regularly considers risk management at its meetings.
The Company's risk management systems and control frameworks include the Board's ongoing monitoring of management
and operational performance, a comprehensive system of budgeting, forecasting and reporting to the Board, regular
presentations to the Board by management on the management of risk, approval procedures for significant capital
expenditure above threshold levels, the functioning of the Audit Committee, comprehensive written policies on specific
activities and corporate governance, regular communication between directors on compliance and risk and consultation and
review between the Board and external accountants.
Recommendation 7.2: The Board should require management to design and implement the risk management and internal control system
to manage the Company’s material business risks and report to it on whether those risks are being managed effectively the board should
disclose that management has reported to it as to the effectiveness of the Company’s management of its material business risks.
The Board has identified the specific and general risks that the Company is subject to and regularly assess and evaluation
the impact of these and other potential risks on the Company’s operation and business objectives. The risk profile of the
company contains both financial and non-financial factors including material risks arising from pricing, competitive
position, currency movements, operational efficiency, product quality and investments in new projects. Senior management
are responsible for the development of risk mitigation plans and the implementation of risk reduction strategies and each
week the senior management team meets to identify and discuss the types of business risks threatening the Company as a
whole or specific business activity within the Company.
To reduce these risks, the company has in place an experienced Board, regular Board meetings, financial annual audit and
half year review, rigorous appraisal of new investments, and advisers familiar with the company. The Board’s collective
experience will enable accurate identification of the principal risks that may affect the Company’s business. Key operational
risks and their management will be recurring items for deliberation at Board Meetings.
The Board is of the view that its risk management systems promote informed and measured decision making on risk issues
bases on a systematic approach to risk identification, assessment, control, review and reporting.
Recommendation 7.3: The Board should disclose whether it has received assurance from the chief executive officer (or equivalent) that the
declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and
internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.
The Company Secretary confirms in writing to the Board that the financial reports of the Company for the financial year:
present a true and fair view, in all material respects, of the company’s financial condition and operational results and are
in accordance with relevant accounting standards;
the statement given in paragraph (a) above is founded on a sound system of risk management and internal compliance
and control which implements the policies adopted by the Board; and
Page 21
Corporate Governance
the company’s risk management and internal compliance and control system is operating efficiently and effectively in all
material respects.
2.8. Principle 8: Remunerate Fairly and Responsibly
Recommendation 8.1: The board should establish a Remuneration Committee.
The Company aims to attract and retain high calibre directors and senior executives capable of meeting the leadership and
specific management needs of the Company. A Remuneration Committee was established by the Board in previous years to
focus on this Company objective. The role of the Remuneration Committee is carried out by the full Board.
The Committee's duties include supervising employment and human resources, recommending remuneration for executive
directors and senior employees and for non executive director remuneration within approved limits, assisting executive
directors develop remuneration arrangements and reviewing executive succession and development.
The Committee met once during the Financial Year.
Recommendation 8.2: Clearly distinguish the structure of non executive directors remuneration from that of senior directors and senior
executives.
Executive Directors remuneration packages may comprise of:
(a)
(b)
(c)
The aggregate remuneration to non executive directors will not exceed the maximum amount of $150,000 approved by the
salary and associated superannuation;
fixed directors fees; and
performance based bonuses.
Company’s shareholders. The Company has adopted a Nomination and Remuneration Committee Charter.
Full remuneration disclosure, including superannuation entitlements, and the number of meetings of the Remuneration
Committee is provided by the Company in this annual report. The Remuneration Committee ensures that all equity based
executive remuneration is made within the guidelines set by plans approved by Shareholders.
Departure from Best Practice Recommendations
From 1 July 2013 to 30 June 2014, the Company complied with each of the Eight Essential Corporate Governance Principles
and Best Practice Recommendations published by the ASX Corporate Governance Council, other than in relation to the table
below.
Recommendation
2.2
Notification of
Departure
The Chairman is not
independent
Not established a formal
diversity policy
The Company has not
established measurable
guidelines in relation to
diversity
Explanation from Departure
The existing structure is considered appropriate given the small scale
of the Company’s enterprise and the associated economic restrictions
this places on the Company. The existing structure is aimed at
maximising the financial position of the Company by keepings its
operating costs to a minimum.
Due to the small scale of the Company’s operations and the limited
number of employees, the Company has not yet set a formal policy
for achieving gender diversity. The Company will monitor its
position and consider establishing a formal policy as and when the
Company develops over time.
Due to the small scale of the Company’s operations and the limited
number of employees, the Company has not yet set a formal policy
for achieving gender diversity. The Company will monitor its
position and consider establishing a formal policy as and when the
Company develops over time to address equal opportunities in the
hiring, training and career advancement of directors, officers and
employees.
The Audit Committee;
- is not chaired by an
independent chair
The role of the Audit Committee is currently carried out by the full
Board, consisting of three non-independent directors and the
Company Secretary. The existing structure is considered appropriate
given the size and financial position of the company.
3.2
3.3
4.2
Page 22
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s Independence Declaration to the Directors of King River Copper
Limited
In relation to our audit of the financial report of King River Copper Limited for the financial year ended 30
June 2014, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
Ernst & Young
RJ Curtin
Partner
Perth
26 September 2014
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RC:KW:King River:028
Directors’ Declaration
In accordance with a resolution of the directors of King River Copper Limited, I state that:
In the opinion of the directors:
(a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30th June 2014 and of its performance
for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001;
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2(a);
and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
(d) 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 ending 30th June 2014.
On behalf of the Board
Mr Greg MacMillan
Director
26th September 14
Page 24
Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2014
Revenue
Other income
Directors’ and employee benefits expenses
Consultants expenses
Compliance costs
Depreciation expense
Insurance
Other administration expenses
Impairment of Capitalised Exploration Expenses
Loss before income tax expense
Income tax benefit
Net loss for the year after tax
Other Comprehensive Income
Total Comprehensive Loss for the Year
Total Comprehensive Loss for the Year is attributable to:
Owners of King River Copper Limited
Consolidated
Notes
2014
$
6(a)
6(b)
6(c)
6(c)
6(d)
7
15,540
83,046
(363,690)
-
(87,981)
-
(29,298)
(337,293)
-
(719,675)
-
2013
$
14,330
1,459,855
(319,653)
(37,220)
(117,136)
(3,646)
(12,440)
(337,950)
(18,449,286)
(17,803,146)
338,134
(719,675)
(17,465,012)
-
-
(719,675)
(17,465,012)
(719,675)
(719,675)
(17,465,012)
(17,465,012)
Loss per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
9
9
(0.48)
(0.48)
(12.16)
(12.16)
The accompanying notes form part of these consolidated financial statements.
Page 25
Statement of Financial Position
AS AT 30 JUNE 2014
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non Current Assets
Deferred exploration expenditure
Plant and Equipment
Other financial assets
Total Non Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Consolidated
Notes
2014
$
2013
$
10
11
14
13
12
15
1,235,928
80,262
1,316,190
1,762,612
34,216
1,796,828
5,267,933
3,701,745
8,009
45,241
5,321,183
6,637,373
8,009
44,221
3,753,975
5,550,803
533,217
533,217
150,802
150,802
533,217
150,802
6,104,156
5,400,001
16(a)
16(b)
24,960,903
1,510,429
23,730,725
1,316,779
(20,367,177)
(19,647,503)
6,104,156
5,400,001
The accompanying notes form part of these consolidated financial statements.
Page 26
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2014
Consolidated
Notes
2014
$
Cash Flows from Operating Activities
Interest received
Research & Development Tax Rebate
Payments to suppliers and employees
Net cash from / (used in) in operating activities
10
Cash Flows from Investing Activities
Payment for exploration and evaluation
Disposal of plant and equipment
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares
Payment of share issue costs
Payment for shares bought back
Net cash from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and Cash Equivalents at end of year
10
The accompanying notes form part of these consolidated financial statements.
14,521
83,046
(628,870)
(531,303)
(1,225,560)
-
(1,225,560)
1,308,000
(77,244)
(578)
1,230,178
(526,685)
1,762,612
1,235,928
2013
$
11,982
1,459,855
(703,520)
768,317
(640,970)
494
(640,476)
1,052,750
(15,916)
(287,468)
749,366
877,207
885,405
1,762,612
Page 27
Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2014
Consolidated
$
$
$
Issued
Capital
Equity
Benefits
Reserve
Accumulated
Losses
Total
Equity
$
23,730,725
1,316,779
(19,647,503)
5,400,001
At 1 July 2013
Loss for the year
Total comprehensive income for the year
Transaction with owners in their capacity as
owners:
Share Buy Back
Issue of Share Capital – 17th April 14
Capital Raising Fees net of tax
-
-
(578)
756,000
(44,957)
-
-
-
-
-
Share Based Payments (options issued) – 7th May 14
-
79,650
Issue of Share Capital – 20th June 14
Capital Raising Fees net of tax
552,000
(32,287)
-
-
Share Based Payments (options issued) – 25th June 14
-
114,000
(719,675)
(719,675)
(719,675)
(719,675)
-
-
-
-
-
-
-
(578)
756,000
(44,957)
79,650
552,000
(32,287)
114,000
Balance at 30 June 2014
24,960,903
1,510,429
(20,367,177)
6,104,156
At 1 July 2012
Loss for the year
22,981,360
1,948,187
(2,895,932)
22,033,615
-
-
(17,465,012)
(17,465,012)
Total comprehensive income for the year
(17,465,012)
(17,465,012)
Transaction with owners in their capacity as
owners:
Issue of Share Capital – 15th November 2012
Capital raising fees net of tax
Share Buy Back
1,052,750
(15,916)
(287,468)
-
-
-
Share based payment (options issued)
-
82,034
-
-
-
-
Share based payment (options cancelled)
(713,441)
713,441
1,052,750
(15,916)
(287,468)
82,034
-
Balance at 30 June 2013
23,730,725
1,316,779
(19,647,503)
5,400,001
The accompanying notes form part of these consolidated financial statements.
Page 28
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1. CORPORATE INFORMATION
King River Copper (“King River” or “the Company”) is a company domiciled in Australia and publicly listed on the Australian
Stock Exchange (ASX). The Company was incorporated on 28 May 2002. The address of the Company’s registered office is 254
Adelaide Tce, Perth WA 6000. The consolidated financial statements of the Company as at and for the year ended 30 June 2014
comprise the Company and its subsidiary (the “Group”). The nature of the operations and principal activities of the Group are
described in the Directors’ Report.
The consolidated financial report was authorised for issue by the directors on the 26th September 2014 in accordance with a
resolution of the directors.
2. BASIS OF PREPARATION
(a) Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting
Standards (AASB’s) and the Corporations Act 2001. The consolidated financial report also complies with International Financial
Reporting Standards (IFRS’s) and interpretations adopted by the International Accounting Standards Board (IASB).
(b) Basis of measurement
Unless stated otherwise, the consolidated financial statements have been prepared on the historical cost basis.
(c) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency.
(d) Use of estimates and judgements
The preparation of financial statements in conformity with AASBs requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised and in any future periods affected.
(e) Changes in accounting policies
From 1 July 2013 the Group has adopted the following Standards and Interpretations, mandatory for annual periods beginning
on or after 1 July 2013 applicable to the group. The application of these Standards and Interpretations’ does not have any
material impact on the financial position or performance of the Group.
Reference
Summary
AASB 10
Consolidated Financial Statements
AASB 10 establishes a new control model that applies to all entities. It replaces parts of AASB
127 Consolidated and Separate Financial Statements dealing with the accounting for consolidated
financial statements and UIG-112 Consolidation - Special Purpose Entities.
The new control model broadens the situations when an entity is considered to be controlled
by another entity and includes new guidance for applying the model to specific situations,
including when acting as a manager may give control, the impact of potential voting rights
and when holding less than a majority voting rights may give control.
Consequential amendments were also made to this and other standards via AASB 2011-7 and
AASB 2012-10.
Application
Date for
Group
1 July 2013
AASB 12
Disclosure of Interests in Other Entities
1 July 2013
AASB 12 includes all disclosures relating to an entity's interests in subsidiaries, joint
arrangements, associates and structured entities. New disclosures have been introduced about
the judgments made by management to determine whether control exists, and to require
summarised information about joint arrangements, associates, structured entities and
subsidiaries with non-controlling interests.
AASB 13
Fair Value Measurement
1 July 2013
AASB 13 establishes a single source of guidance for determining the fair value of assets and
liabilities. AASB 13 does not change when an entity is required to use fair value, but rather,
provides guidance on how to determine fair value when fair value is required or permitted.
Application of this definition may result in different fair values being determined for the
relevant assets.
Page 29
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair
value. This includes information about the assumptions made and the qualitative impact of
those assumptions on the fair value determined.
Consequential amendments were also made to other standards via AASB 2011-8.
AASB 119
Employee Benefits
1 July 2013
The main change introduced by this standard is to revise the accounting for defined benefit
plans. The amendment removes the options for accounting for the liability, and requires that
the liabilities arising from such plans is recognised in full with actuarial gains and losses being
recognised in other comprehensive income. It also revised the method of calculating the return
on plan assets.
The revised standard changes the definition of short-term employee benefits. The distinction
between short-term and other long-term employee benefits is now based on whether the
benefits are expected to be settled wholly within 12 months after the reporting date.
Consequential amendments were also made to other standards via AASB 2011-10.
AASB 2012-
5
Amendments to Australian Accounting Standards arising from Annual Improvements 2009-
2011 Cycle
1 July 2013
AASB 2012-5 makes amendments resulting from the 2009-2011 Annual Improvements Cycle.
The standard addresses a range of improvements, including the following:
► Repeat application of AASB 1 is permitted (AASB 1)
Clarification of the comparative information requirements when an entity provides a third
balance sheet (AASB 101 Presentation of Financial Statements)
AASB 1053
Application of Tiers of Australian Accounting Standards
1 July 2013
This standard establishes a differential financial reporting framework consisting of two tiers of
reporting requirements for preparing general purpose financial statements:
a. Tier 1: Australian Accounting Standards
b. Tier 2: Australian Accounting Standards - Reduced Disclosure Requirements
Tier 2 comprises the recognition, measurement and presentation requirements of Tier 1 and
substantially reduced disclosures corresponding to those requirements.
The following entities apply Tier 1 requirements in preparing general purpose financial
statements:
a.
For-profit entities in the private sector that have public accountability (as defined in this
standard)
b. The Australian Government and State, Territory and Local governments
The following entities apply either Tier 2 or Tier 1 requirements in preparing general purpose
financial statements:
For-profit private sector entities that do not have public accountability
a.
b. All not-for-profit private sector entities
c.
Public sector entities other than the Australian Government and State, Territory and Local
governments.
Consequential amendments to other standards to implement the regime were introduced by
AASB 2010-2, 2011-2, 2011-6, 2011-11, 2012-1, 2012-7 and 2012-11.
AASB 2011-
4
Amendments to Australian Accounting Standards to Remove Individual Key Management
Personnel Disclosure Requirements [AASB 124]
1 July 2013
This amendment deletes from AASB 124 individual key management personnel disclosure
requirements for disclosing entities that are not companies. It also removes the individual
KMP disclosure requirements for all disclosing entities in relation to equity holdings, loans
and other related party transactions.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective, have
not been adopted by the Group for the annual reporting period ending 30 June 2014.
The group has reviewed these standards and interpretations, the potential effect of these standards and interpretations is yet
to be fully determined. These are outlined in the table on the next page;
Page 30
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
AASB 2012-
3
AASB 2014-
1
Part A -
Annual
Improveme
nts
2010–2012
Cycle
AASB 2012-3 adds application guidance to AASB 132 Financial Instruments: Presentation 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.
1 July 2014
AASB 2014-1 Part A: This standard sets out amendments to Australian Accounting Standards
arising from the issuance by the International Accounting Standards Board (IASB) of
International Financial Reporting Standards (IFRSs) Annual Improvements to IFRSs 2010–2012
Cycle and Annual Improvements to IFRSs 2011–2013 Cycle.
1 July 2014
Annual Improvements to IFRSs 2010–2012 Cycle addresses the following items:
► AASB 2 - Clarifies the definition of 'vesting conditions' and 'market condition' and
introduces the definition of 'performance condition' and 'service condition'.
► AASB 3 - Clarifies the classification requirements for contingent consideration in a
business combination by removing all references to AASB 137.
► AASB 8 - Requires entities to disclose factors used to identify the entity's reportable
segments when operating segments have been aggregated. An entity is also required to
provide a reconciliation of total reportable segments' asset to the entity's total assets.
► AASB 116 & AASB 138 - Clarifies that the determination of accumulated depreciation does
not depend on the selection of the valuation technique and that it is calculated as the
difference between the gross and net carrying amounts.
AASB 124 - Defines a management entity providing KMP services as a related party of the
reporting entity. The amendments added an exemption from the detailed disclosure
requirements in paragraph 17 of AASB 124 for KMP services provided by a management
entity. Payments made to a management entity in respect of KMP services should be
separately disclosed.
Amendment
s to
IAS 16 and IAS 38 both establish the principle for the basis of depreciation and amortisation as
being the expected pattern of consumption of the future economic benefits of an asset.
1 July 2016
IAS 16 and
IAS 38
The IASB has clarified that the use of revenue-based methods to calculate the depreciation of
an asset is not appropriate because revenue generated by an activity that includes the use of an
asset generally reflects factors other than the consumption of the economic benefits embodied
in the asset.
IFRS 15
The IASB also clarified that revenue is generally presumed to be an inappropriate basis for
measuring the consumption of the economic benefits embodied in an intangible asset. This
presumption, however, can be rebutted in certain limited circumstances.
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers, which replaces
IAS 11 Construction Contracts, IAS 18 Revenue and related Interpretations (IFRIC 13 Customer
Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of
Assets from Customers and SIC-31 Revenue—Barter Transactions Involving Advertising Services)
The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. An entity recognises
revenue in accordance with that core principle by applying the following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance obligations in the contract
(e) Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Early application of this standard is permitted.
1 July 2017
AASB 9/
IFRS 9
On 24 July 2014 The IASB issued the final version of IFRS 9 which replaces IAS 39 and includes
a logical model for classification and measurement, a single, forward-looking ‘expected loss’
impairment model and a substantially-reformed approach to hedge accounting.
1 January
2018
Page 31
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
3. SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of Consolidation
The consolidated financial report comprises the financial statements of King River Copper Limited and its controlled entity (the
“Group” or “consolidated entity”). King River Copper Limited’s controlled entity is the wholly owned company Speewah
Mining Pty Ltd. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with its
investee and has ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if
and only if the Group has;
- Power over the investee (eg, existing rights that give it the current ability to direct the relevant activities of the investee)
- Exposure, or rights, to variable returns from its involvement with the investee, and
- The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including;
- The contractual arrangement with the other vote holders of the investee
- Rights arising from other contractual arrangements
- The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary
and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or
disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until
the date the Group ceases to control the subsidiary. Profit or loss and each component of other comprehensive income (OCI) are
attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-
controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries
to bring their accounting policies into line with the Group’s accounting policies.
All inter-company balances and transactions between entities in the consolidated entity, including any unrealised profits or
losses, have been eliminated on consolidation.
Where controlled entities have entered or left the consolidated entity during the year, their operating results have been
included/excluded from the date control was obtained, or until the date control ceased. There are no minority interests in the
equity of the controlled entity.
(b) Income Tax and Other Taxes
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or
paid to the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided for on all temporary differences at balance date between the tax base of assets and liabilities
and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit
nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference
Page 32
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
3. SIGNIFICANT ACCOUNTING POLICIES continued
will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be
utilised.
The carrying amount of deferred income tax assets is reviewed at each balance and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the balance date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
Tax consolidation legislation
The Company and its’ subsidiary have formed a tax consolidated group. The consolidated financial statements have been
prepared on this basis of the formation of a consolidated group.
The Company and its’ subsidiary have implemented the tax consolidation legislation as of 1 July 2004.
The head entity, King River and the subsidiary in the tax consolidated group continue to account for their own current and
deferred tax amounts. The group has applied the group allocation approach in determining the appropriate amount of current
taxes and deferred taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, King River also recognises the current tax liabilities (or assets) and the
deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax
consolidated group.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
(c) Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less an allowance for any uncollectible amounts.
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off
when identified. An allowance for doubtful debts is raised when there is objective evidence that the Group will not be able to
collect the debt. Financial difficulties of the debtor, default payments or debts more than 60 days overdue are considered
objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the
present value of estimated future cash flows, discounted at the original effective interest rate.
(d) Plant and Equipment
Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment
losses.
Plant and Equipment
Plant and equipment are measured on the cost basis less accumulated depreciation and impairment losses.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are
incurred.
Impairment
Carrying values of assets are reviewed at each balance date to determine whether there are any objective indicators of
impairment that may indicate the carrying values may not be recoverable in whole or in part.
Where an asset does not generate cash flows that are largely independent it is assigned to cash generating unit and the
recoverable amount test applied to the cash generating unit as a whole.
Recoverable amount is determined as the greater of fair value less costs to sell and value in use. The assessment of value in use
considers the present value of future cash flows discounted using an appropriate pre tax discount rate reflecting the current
market assessments of the time value of money and risks specific to the asset.
Page 33
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
3. SIGNIFICANT ACCOUNTING POLICIES continued
An impairment exists if the carrying value of the asset is determined to be in excess of its recoverable amount, in which case the
asset or cash generating unit is written down to its recoverable amount.
Depreciation
The depreciable amount of plant and equipment is depreciated on a straight line basis over their useful lives to the Company
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
Plant and equipment
Depreciation Rate
10-50%
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
included in the income statement.
(e) Financial Assets
Other financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are categorised as either
financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available for sale
financial assets. The classification depends on the purpose for which the investments were acquired. Designation is re-
evaluated at each financial year end, but there are restrictions on reclassifying to other categories.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of assets not at fair value through
profit or loss, directly attributable transaction costs.
Recognition and Derecognition
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the consolidated entity
commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts
that
require delivery of the assets within the period established generally by regulation or convention in the market place. Financial
assets are derecognised when the right to receive cash flows from the financial assets have expired or been transferred.
(i) Financial assets carried at fair value
If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at
fair value because its fair value cannot be reliably measured, the amount of the loss is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for
a similar financial asset.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or
loss when the loans and receivables are derecognised or impaired. These are included in current assets, except for those with
maturities greater than 12 months after balance date, which are classified as non-current.
(f) Shares in controlled entities
Investments in controlled entities are measured at cost. The Group assesses whether it is necessary to recognise any impairment
loss in the investment in subsidiaries following any significant changes in the underlying assets or operations of the relevant
subsidiary.
(g) Exploration and Evaluation Expenditure
Expenditure on exploration and evaluation
is accounted for
in accordance with the
‘area of
interest' method.
Exploration and evaluation expenditure is capitalised provided the rights to tenure of the area of interest is current
and either:
•
the exploration and evaluation activities are expected to be recouped through successful development and
exploitation of the area of interest or, alternatively, by its sale; or
•
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage that
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in, or relating to, the area of interest are continuing.
When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated
then any capitalised exploration and evaluation expenditure is reclassified as capitalised mine development. Prior
to reclassification, capitalised exploration and evaluation expenditure is assessed for impairment.
Page 34
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
3. SIGNIFICANT ACCOUNTING POLICIES continued
Impairment
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the cash
generating unit level whenever facts and circumstances suggest that the carrying amount of the asset may exceed
its recoverable amount.
An
impairment exists when
the carrying amount of an asset or cash-generating unit exceeds
its estimated
recoverable amount. The asset or cash-generating unit
is then written down to
its recoverable amount. Any
impairment losses are recognised in the income statement.
(h) Provision for restoration, rehabilitation and environmental expenditures
The Group is required to decommission and rehabilitate mines and processing sites at the end of their producing
lives to a condition acceptable to the relevant authorities.
The expected cost of any approved decommissioning or rehabilitation program, discounted to
its net present
value, is provided when the related environmental disturbance occurs. The cost is capitalised when it gives rise to
future benefits, whether the rehabilitation activity is expected to occur over the life of the operation or at the time
of closure. The capitalised cost is amortised over the life of the operation and the increase in the net present value
of
the provision
for
the expected cost
is
included
in
financing expenses. Expected decommissioning and
rehabilitation costs are based on the discounted value of the estimated future cost of detailed plans prepared for
each site. Where there
is a change
in the expected decommissioning and restoration costs, the value of the
provision and any related asset are adjusted and the effect is recognised in profit or loss on a prospective basis
over the remaining life of the operation.
(i) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments.
Bank overdrafts are shown within short term borrowings in current liabilities on the balance sheet.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
(j) Trade and Other Payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the
Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future
payments in respect of the purchase of these goods and services.
(k) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to
any provision is presented in the income statement net of any reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the balance sheet date. If the effect of the time value of money is material, provisions are discounted using a pre-
tax rate that reflects the time value of money and the risks specific to the liability. The increase in the provision resulting from
the passage of time is recognised in finance costs.
(l) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue is
capable of being reliably measured. Interest revenue is recognised as interest accrues using the effective interest method.
(m) 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. In these circumstances the GST is recognised as part of the cost of acquisition
of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
Page 35
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
3. SIGNIFICANT ACCOUNTING POLICIES continued
(n) Share Based Payment Transactions
Equity settled transactions
The Group provides benefits to directors and employees (including senior executives) of the Group in the form of share based
payments, whereby employees render services in exchange for shares or rights over shares (equity settled transactions).
The cost of these equity settled transactions with employees is measured by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value of shares is determined by the price on grant date and of options using the
Black & Scholes model, further details of which are given in Note 18. In valuing equity settled transactions, no account is taken
of any performance conditions, other than conditions linked to the price of the shares of King River (market conditions) if
applicable.
The cost of equity settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent
to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will
ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date. The income statement charge or credit for a period
represents the movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a
market condition.
If the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a
modification of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is
reflected as additional share dilution in the computation of diluted earnings per share.
(o) Employee Benefits
Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of
the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are
measured at the amounts expected to be paid when the liabilities are settled.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date using the projected
unit credit method. Consideration is given to expected future wage and salary levels, experience of employee, departures, and
period of service. Expected future payments are discounted using market yields at the reporting date on national government
bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
(p) Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown
in equity as a deduction, net of tax, from the proceeds.
(q) Earnings Per Share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of
servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus
element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as
expenses; and
other non discretionary changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares;
Page 36
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
3. SIGNIFICANT ACCOUNTING POLICIES continued
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
(r)
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires
Leases
an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset.
(i) Group as a lessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are
capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease
payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in profit or loss.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no
reasonable certainty that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.
Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease payments
between rental expense and reduction of the liability.
4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(a) Significant accounting judgements
In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those
involving estimations, which have the most significant effect on the amounts recognised in the consolidated financial
statements:
(i) Determination of mineral resources and ore reserves
The Group’s policy for estimating its mineral resources and ore reserves requires that the Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves 2004 (the ‘JORC code’) be used as a minimum standard.
The information on mineral resources and ore reserves were prepared by or under the supervision of Competent Persons as
defined in the JORC code. The amounts presented are based on the mineral resources and ore reserves determined under the
JORC code. There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that
are valid at the time of estimation may change significantly when new information becomes available.
(ii) Capitalisation of exploration and evaluation expenditure
Under AASB 6 Exploration for and Evaluation of Mineral Resources, the Group has the option to either expense exploration and
evaluation expenditure as incurred, or to capitalise such expenditure (provided certain conditions are satisfied). The Group has
elected, when the conditions in AASB 6 are met, to capitalise these costs.
(b) Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events
and are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are
revised and in any future periods affected. The key estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of certain assets and liabilities with the next annual reporting period are:
(i) Share based payment transactions
The Group measures the cost of equity settled transactions with employees and suppliers by reference to the fair value of the
equity instrument at the date at which they are granted. The fair value is determined by using a Black and Scholes model, using
the assumptions detailed in Note 18.
The accounting estimates and assumptions relating to equity settled share based payments would have no impact on the
carrying amounts of the assets and liabilities within the next annual reporting period but may impact income and expenses.
(ii) Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including
whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale. To the extent that capitalised exploration and evaluation expenditure is determined not to be
recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage
that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is
Page 37
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS continued
determined in the future that this capitalised expenditure should be written off, profits and net assets will be reduced in the
period in which this determination is made.
(iii) Provision for decommissioning and restoration costs
Decommissioning and restoration costs are a normal consequence of mining, and the majority of this expenditure is incurred at
the end of a mine's life. In determining an appropriate level of provision consideration is given to the expected future costs to
be incurred, the timing of these expected future costs (largely dependent on the life of the mine), and the estimated future level
of inflation. The ultimate cost of decommissioning and restoration is uncertain and costs can vary in response to many factors
including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other mine
sites.
5. PARENT ENTITY INFORMATION
Parent
Current Assets
Non-current Assets
Total Assets
Current Liabilities
Non-current Liabilities
Total Liabilities
Contributed Equity
Accumulated Losses
Option Reserve
Total Equity
Profit / (Loss) for the year
Total Comprehensive loss for the year
6. REVENUES AND EXPENSES
(a) Revenue
Interest
(b) Other Income
Research & Development Tax Rebate
(c) Expenses
Depreciation – plant and equipment
Directors’ and employee benefits expenses:
- wages and fees
- superannuation contribution expense
- share based payments (options issued)
Page 38
2014
$
1,239,848
16,299,272
17,539,120
146,662
-
146,662
24,960,903
(9,078,874)
1,510,429
17,392,458
(717,647)
(717,647)
2013
$
1,777,502
15,038,843
16,816,345
130,068
-
130,068
23,730,725
(8,361,227)
1,316,779
16,686,277
1,362,769
1,362,769
Consolidated
2014
$
2013
$
15,540
14,330
83,046
83,046
1,459,855
1,459,855
-
(3,646)
(166,800)
(3,240)
(193,650)
(363,690)
(228,800)
(8,820)
(82,034)
(319,653)
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
6. REVENUES AND EXPENSES continued
(d) Other administration expenses
Administration and book keeping fees
Travel and accommodation
Advertising and promotion
Other expenses
7. INCOME TAX
The major components of the income tax are:
Statement of Comprehensive Income
Current income tax
Current tax attributable to prior years
Deferred income tax
Consolidated
2014
$
2013
$
(82,200)
(68,427)
(45,163)
(141,503)
(337,293)
(93,500)
(15,880)
(30,244)
(198,326)
(337,950)
-
-
Relating to origination and reversal of temporary differences
(143,556)
(4,781,053)
Deferred tax assets related to current year timing differences not
brought to account as realisation is not considered probable
Income tax benefit reported in the income statement
143,556
-
4,442,919
(338,134)
Reconciliation to Income Tax Expense on Accounting Loss
A reconciliation between tax expense and the product of accounting loss before
tax multiplied by the Company’s applicable income tax rate is as follows:
Accounting loss before income tax
(719,675)
(17,803,146)
Tax benefit at the statutory income tax rate 30%
(215,903)
(5,340,944)
Non Deductible Expenses
Employee share expenses
Prior year adjustments impacting timing differences not recognised
Deferred tax assets not brought to account as realisation is not considered
probable
Entertainment
Research and Development tax offset received
Research & Development adjustment
Other
Income Tax Benefit
58,095
-
24,610
973,237
181,412
4,442,919
679
-
-
-
(24,914)
(437,956)
630
-
-
(338,134)
Page 39
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
7. INCOME TAX continued
Consolidated
Deferred income tax
Deferred income tax at 30 June relates to the following:
Deferred tax liabilities
Exploration
Fixed Assets
Deferred tax assets
Capital raising costs
Prepayments
Tax losses
Provisions
Accrued Expenses
Statement of Financial Position
30 June 2014
30 June 2013
$
$
(1,580,380)
(1,110,524)
(487)
(2,403)
79,175
4,696
6,079,425
1,021
7,800
106,924
-
5,446,650
1,046
6,000
4,591,250
4,447,693
The Company and its subsidiary form a tax consolidated group. The consolidated financial statements have been prepared on
this basis of the formation of a consolidated group.
8. SEGMENT REPORTING
The Consolidated Entity operates in one geographical area being Australia and one industry, being exploration for the year to
30 June 2014. The Chief Operating Decision Makers are the Board of Directors and management of the Group. There is only one
operating segment identified being exploration activities in Australia based on internal reports reviewed by the Chief Operating
Decision Makers in assessing performance and allocation of resources.
The accounting policies applied for internal reporting purposes are consistent with those applied in the preparation of the
financial statements.
9.
LOSS PER SHARE
Consolidated
2014
$
2013
$
Loss used in calculation of basic and diluted earnings per share
(719,675)
(17,465,012)
Weighted average number of ordinary shares for the purposes of basic
earnings per share
Effect of dilution - share options
Weighted average number of ordinary shares adjusted for effect of dilution
Number
Number
150,858,064
-
150,858,064
143,574,868
-
143,574,868
As at 30 June 2014 the Company has 10,750,000 Directors’ and Employees Options (2013: 9,200,000) on issue. These options
are not considered to be dilutive as the conversion of the options to ordinary shares will decrease loss per share.
There have been no transactions involving ordinary shares or potential ordinary shares subsequent to the balance date that
would significantly change the number of ordinary shares or potential ordinary shares outstanding for the reporting period.
10. CASH AND CASH EQUIVALENTS
(i) Cash and cash equivalents balance
Cash at bank and on hand
Short term deposits
Page 40
1,235,928
-
1,235,928
1,740,847
21,765
1,762,612
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
10. CASH AND CASH EQUIVALENTS continued
Cash at bank earns interest at floating rates based on daily bank deposit rates.
(ii) Reconciliation of net loss after tax to net cash flows from operations
Profit/(Loss) for the year
Share-based payments
Depreciation
Impairment of Capitalised Exploration Expenses
(Increase)/decrease in assets:
current receivables
- Other financial assets
Increase/(decrease) in liabilities:
- provision
current payables
- deferred tax liabilities
Net Cash flow from / (used in) Operating Activities
11. TRADE AND OTHER RECEIVABLES
GST recoverable
Consolidated
2014
$
2013
$
(719,675)
193,650
-
-
(4,981)
(1,019)
722
-
-
(531,303)
(17,465,012
)
82,034
3,646
18,449,286
119
(2,348)
42,963
(4,236)
(338,134)
768,317
80,262
80,262
34,216
34,216
(a) Allowance for impairment loss
Trade and other receivables which are primarily from the ATO are non-interest bearing and are generally paid on 30 day
settlement terms. Trade and other receivables are neither past due nor impaired at 30 June 2014 and 30 June 2013.
(b) Fair value
Due to the short term nature of the other receivables, their carrying value is assumed to approximate their fair value
12. OTHER FINANCIAL ASSETS
Non-current - Term deposit for bank guarantee for rehabilitation bond
45,241
44,221
The non-current other financial asset term deposit is a security for bank guarantees provided by the Company to the State
Government to support Rehabilitation Bonds on exploration tenements. The funds attract interest at fixed rates in term deposits.
The Fair Value of Other Financial Assets is the Carrying Value. Management have deemed this to be a level 2 Financial Asset.
13.
PLANT AND EQUIPMENT
Cost
Accumulated depreciation
Net carrying amount
At beginning of year, net accumulated depreciation
Disposals
Depreciation charge for the year
At end of year, net accumulated depreciation
The useful life of the assets was estimated between 2 and 10 years for 2014.
31,301
(23,292)
8,009
8,009
-
-
8,009
31,301
(23,292)
8,009
12,148
(493)
(3,646)
8,009
Page 41
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
14. DEFERRED EXPLORATION EXPENDITURE
Costs carried forward in respect of:
Explorations and Evaluations Phase – At Cost
Balance at beginning of the year
Expenditure incurred
Impairment Loss
Total Exploration Expenditure
Consolidated
2014
$
2013
$
3,701,745
1,566,188
-
5,267,933
21,535,880
615,151
(18,449,286)
3,701,745
The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases are dependent
on the successful development and commercial exploitation or sale of the respective areas.
15. TRADE AND OTHER PAYABLES
Trade payables
533,217
150,802
Trade payables and other creditors are non interest bearing and are normally settled on 30 day terms. Due to the short term
nature of these payables, their carrying value is assumed to approximate their fair value.
16. CONTRIBUTED EQUITY AND RESERVES
(a) Contributed Equity
Consolidated
Issued capital at beginning of year as at 1 July 2012
Fully paid ordinary shares carry one vote per share and carry the right to
dividends
Movements in ordinary shares on issue
Issued 15th November 2012 for Cash in Share Purchase Plan
Transaction Costs on Share Issue net of tax
Share Buy Back 3rd May 2013
Issued capital at end of year as at 30 June 2013
2013
Number
130,668,170
$
22,981,360
21,055,000
-
(13,065,999)
138,657,171
1,052,750
(15,916)
(287,468)
23,730,725
Movement in options on issue
Number
Exercise Price
Listed Options on Issue as at 1 July 2012
Issue of Options – Loyalty Bonus Options Issue 6th March 2013
(Expire 30/06/15)
Listed Options on Issue as at 30 June 2013
Unlisted Options on Issue as at 1 July 2012
Issue of Options 6th December 2012
Expired 31st March 2013
Issue of Options 30th April 2013
Cancellation of Options 30th April 2013
Cancellation of Options 30th April 2013
Cancellation of Options 30th April 2013
Options on Issue as at 30 June 2013
-
60,689,458
60,689,458
20 cents
Number
Exercise Price
6,950,000
1,250,000
(200,000)
4,250,000
(1,550,000)
(250,000)
(1,250,000)
9,200,000
10 cents
45 cents
10 cents
55 cents
37 cents
24 cents
There were no significant movements in equity after the 2013 reporting period until the lodgement of this report.
Page 42
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
16. CONTRIBUTED EQUITY AND RESERVES continued
Issued capital at beginning of year as at 1 July 2013
Fully paid ordinary shares carry one vote per share and carry the right to
dividends
Movements in ordinary shares on issue
Share Buy Back 9th Sept 13
Issued 17th April 14 for Cash in Placement
Transaction Costs on Share Issue net of tax
Issued 20th June 14 for Cash in Placement
Transaction Costs on Share Issue net of tax
2014
Number
138,657,171
$
23,730,725
(9,000)
12,000,003
-
4,600,000
-
(578)
756,000
(44,957)
552,000
(32,288)
Issued capital at end of year as at 30 June 2014
155,248,174
24,960,903
Movement in options on issue
Number
Exercise Price
Listed Options on Issue as at 1 July 2013
Issue of Options – 20th June 14 (Expire 30/06/15)
Listed Options on Issue as at 30 June 2014
Unlisted Options on Issue as at 1 July 2013
Issue of Options – 7th May 14
Issue of Options – 25th June 14
Options Expired - 30th June 14
Options on Issue as at 30 June 2014
60,689,458
1,840,000
62,529,458
20 cents
Number
Exercise Price
9,200,000
1,350,000
1,200,000
(1,000,000)
10,750,000
20 cents
20 cents
37 cents
There were no significant movements in equity after the 2014 reporting period until the lodgement of this report.
Terms and conditions of contributed equity
Ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate
in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. On a
show of hands, every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a
poll each share is entitled to one vote.
As per the Corporations Act 2001 the Company does not have authorised capital and ordinary shares do not have a par
value.
b. Reserves
Reserves
At 30 June 2012
Share-based payments – employee benefits related to issue of options
Share-based payments – employee benefits related to cancellation of options
At 30 June 2013
Share-based payments – employee benefits related to issue of options
At 30 June 2014
Equity Benefits Reserve
$
1,948,187
82,034
(713,441)
1,316,779
193,650
1,510,429
Page 43
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
16. CONTRIBUTED EQUITY AND RESERVES continued
Nature and Purpose of Equity Benefits Reserve
This reserve is used to record the value of equity benefits provided to directors, employees and external service providers as
part of their fees and remuneration.
During the year, the following options were issued by the Company:
-
1,350,000 unlisted options exercisable at $0.20 on or before 30th June 2019 were issued to contractors and employees of the
Company. 450,000 vested immediately and 900,000 will vest evenly over a 3 year period;
-
1,200,000 unlisted options exercisable at $0.20 on or before 30th June 2019 were issued to Directors and Executives of the
Company. 400,000 vested immediately and 800,000 will vest evenly over a 3 year period.
During the year, the following options held by Directors and Executives expired;
- 1,000,000 unlisted options exercisable at $0.37 on or before 30th June 14.
Consolidated
2014
$
2013
$
17. COMMITMENTS
(a) Exploration Expenditure Commitment
In order to maintain the Company’s interest in mining tenements, the Company is committed to meet the minimum
expenditure conditions under which the tenements were granted.
Within 1 year
595,177
495,982
(b) Operating Lease Commitment
The Company entered an agreement for occupancy and warehouse storage facilities on a monthly basis, the commitments
under these agreements are:
within 1 year
1 - 3 years
Total lease payment during the year was $25,935 (2013: $47,370)
24,000
24,000
24,000
24,000
18. SHARE BASED PAYMENTS
(a) Recognised share-based payment expenses
The expense recognised in the Statement of Comprehensive Income in relation to share-based payments is disclosed in Note 6.
(b) General terms of share-based payment plans
There were 2 lots of options issued during the year ended 30 June 2014 which were issued to Director, Executives, contractors
and employees of the Company.
-
1,350,000 unlisted options exercisable at $0.20 on or before 30th June 2019 were issued to contractors and employees of the
Company. 450,000 vested immediately and 900,000 will vest evenly over a 3 year period;
-
1,200,000 unlisted options exercisable at $0.20 on or before 30th June 2019 were issued to Directors and Executives of the
Company. 400,000 vested immediately and 800,000 will vest evenly over a 3 year period.
(c) Summaries of options granted
The following table illustrates the number and weighted average exercise prices (WAEP) and movements in employee share
options issued during the year.
Options outstanding at the beginning of
the year
Granted during the year
Converted during the year
Expired during the year
Cancelled during the year
Outstanding at the end of the year
Exercisable at the end of the year
Page 44
2014
2013
Number
WAEP
Number
WAEP
9,200,000
2,550,000
-
(1,000,000)
-
10,750,000
9,050,000
0.24
0.20
-
0.37
-
0.22
0.22
6,950,000
5,500,000
-
(200,000)
(3,050,000)
9,200,000
8,200,000
0.43
0.10
-
-
0.41
0.24
0.24
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
18. SHARE BASED PAYMENTS continued
There were 10,750,000 options issued or exercisable as at 30 June 2014 (2013: 9,200,000).
On the 7th May 2014, the Company granted 1,350,000 options over ordinary shares to contractors and employees, with an
exercise price of $0.20, exercisable until 30th June 2019. 450,000 options vested immediately and 900,000 will vest evenly over a 3
year period.
On the 25th June 2014, the Company granted 1,200,000 options over ordinary shares to Directors and Executives, with an
exercise price of $0.20, exercisable until 30th June 2019. The Directors options were approved at the Company’s General Meeting
on the same date. 400,000 options vested immediately and 800,000 will vest evenly over a 3 year period.
On the 30th June 2014, 1,000,000 options granted to Executives and Directors of the Company expired.
(d) Weighted average remaining contractual life
The weighted average remaining contractual life for the options outstanding as at 30 June 2014 is 2.11 years (2013: 2.07 years).
(e) Range of exercise price and weighted average share price at the date of exercise
The exercise price for options outstanding at the end of the year was:
Options
Class F & G (1,950,000)
Class H (1,000,000)
Class I (750,000)
Class J & K (5,500,000)
Class L (2,550,000)
2014
0.55
-
-
0.10
0.20
2013
0.55
0.37
0.24
0.10
-
There were no options exercised during the 2014 financial year.
(f) Weighted average fair value
The weighted average fair value of options granted during the year ended 30 June 2014 was 7.6 cents (2013: 1.1 cents).
(g) Option pricing model
The fair value of the equity-settled share options granted under the option plan is estimated as at the date of grant using a
Black-Scholes model taking into account the terms and conditions upon which the options were granted.
The following table lists the inputs to the model used for the years ended 30 June 2014 and 30 June 2013:
Grant Date
Options Issued
Volatility (%)
Risk free interest rate (%)
Historic share price previous to grant date (cents)
Expected life of options (years)
Options exercise price (cents)
25 June 2014
1,200,000
7 May 2014
1,350,000
Total 2014
2,550,000
2013
5,500,000
113
3.04
13.5
5
20
111
3.29
9
5.2
20
-
-
-
-
-
-
-
-
-
-
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur.
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not
necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.
19. FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise of cash and short term deposits. The Group has various other financial
assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial
liability and equity instrument are disclosed in notes 10, 11, 12 and 15 to the consolidated financial statements.
The Group manages its exposure to a variety of financial risks: market risk (including commodity risk and interest rate risk),
credit risk, liquidity risk and cash flow interest rate risk in accordance with the approved Group policies.
Primary responsibility for the identification and control of financial risks rests with the Board. The Board reviews and agrees
policies for managing each of the risks identified.
Page 45
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
19. FINANCIAL RISK MANAGEMENT continued
The Group uses different methods to measure and manage different types of risks to which it is exposed. These include
monitoring levels of exposure to interest rate and foreign exchange risk and assessment of market forecast for interest rate and
foreign exchange. The Group manages credit risk by only dealing with recognised, creditworthy, third parties and liquidity risk
is monitored through the development of future rolling cash flow forecasts.
Commodity price risk
The Group’s policy is to sell its commodity products at current market prices. Once in production the Group expects to have an
exposure to commodity price risk associated with the production and sale of vanadium and fluorite. Presently the Group is not
exposed to commodity price risk.
Interest rate risk
The Group’s current exposure to the risk of changes in market interest rates relate primarily to cash assets rates and is managed
by the Board in accordance with the approved investment policy. This policy defines maximum exposures and credit ratings
limits.
The Group does not account for fixed rate financial assets and liabilities at fair value through profit or loss.
During the financial year the Group has managed its cash assets by entering into a fixed interest term deposits to maximise its
cash balance.
The following table summarises the impact of reasonably possible changes on interest rates for the Consolidated Group as at 30
June 2014. The sensitivity is based on the assumption that interest rate changes by 80 basis points with all other variables held
are constant. The 80 basis points sensitivity is based on reasonably possible changes over a financial year, using the observed
historical trend. The analysis is performed on the same basis for the comparative period.
The Group’s exposure to interest rate risk on post-tax loss arises from higher or lower interest income from cash and cash
equivalents. Please see Note 10 for information on cash balance held with variable and fixed interest rates.
Consolidated
Financial assets
Cash and cash equivalents
Other Financial Assets
Financial Liabilities
Impact on post tax profit and equity
Post-tax gain/(loss) and equity
80 bp increase
80 bp decrease
2014
$
1,235,928
45,241
-
1,281,169
10,284
(10,284)
2013
$
1,762,612
44,221
-
1,806,833
17,774
(17,774)
Foreign currency risk
The Group has no material transactional foreign currency exposure.
Credit risk
Credit risk arises in the event that counterparty will not meet its obligations under a financial instrument leading to financial
losses. The Group is exposed to credit risk from its operating activities, financing activities including deposits with banks and
receivables.
The credit risk control procedures adopted by the Group is to assess the credit quality of the institution with whom funds are
deposited or invested, taking into account its financial position and past experiences. Investment limits are set in accordance
with limits set by the Board based on the counterparty credit rating. The limits are assigned to minimise concentration of risks
and mitigate financial loss through potential counterparty failure. The compliance with credit limits is regularly monitored as
part of day-to-day operations. Any credit concerns are highlighted to senior management.
Page 46
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
19. FINANCIAL RISK MANAGEMENT continued
As the Group is yet to commence mining operations it has no significant exposure to customer credit risk. The maximum
exposure to credit risk at the reporting date is the carrying value of each class of financial assets in the Statement of Financial
Position.
Credit Quality of Financial Assets
Consolidated as at 30 June 2014
Cash and cash equivalents
Other Financial Assets
AAA
$
-
-
1,235,928
45,241
Trade and Other Receivables
80,262
-
Consolidated as at 30 June 2013
Cash and cash equivalents
Other Financial Assets
-
-
1,761,672
44,221
Trade and Other Receivables
32,216
-
S&P Credit rating
A1+
$
A1
$
A2
$
Unrated
$
940
-
-
940
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Liquidity risk
The responsibility for liquidity risk management rests with the Board of Directors.
The Group manages liquidity risk by maintaining sufficient cash to meet the operating requirements of the business and
investing excess funds in highly liquid short term investments. The Group’s liquidity needs can be met through a variety of
sources, including: cash generated from interest accrued on cash balances, short and long term borrowings and issue of equity
instruments.
Alternatives for sourcing our future capital needs include our current cash position, future operating cash flow, project debt
financings and equity raisings. These alternatives are evaluated to determine the optimal mix of capital resources for our capital
needs.
As at 30 June 2014 and 30 June 2013, the Group’s financial liabilities have contractual terms of less than 6 months.
Capital risk management
The Group’s capital comprises share capital, reserves less accumulated losses amounting to $6,104,156 at 30 June 2014 (2013:
$5,400,001). The Group’s capital management objectives are:
The Group may issue new shares or sell assets to reduce debts in order to maintain the optimal capital structure.
To safeguard the business as a going concern;
To maximise potential returns for shareholders through minimising dilution; and
To retain an optimal debt to equity balance in order to minimise the cost of capital.
20. RELATED PARTY DISCLOSURE
The consolidated financial statements include the financial statements of King River Copper Limited and its subsidiary:
Speewah Mining Pty Ltd
Country of
% Equity Interest
Incorporation
Australia
2014
100
2013
100
Details relating to key management personnel including remuneration are included in Note 23.
21. EVENTS AFTER THE BALANCE SHEET DATE
On the 2nd July 2014, the Company issued a further 400,005 ordinary shares at 12 cents and 160,002 options with an exercise
price of 20 cents. These options expire 30th June 2015.
On the 16th September 2014, the Company announced that it was completing a capital raising of $900,000 at 4.5 cents per share
for the issue of 20,000,000 shares from sophisticated and professional investors. Other than this were no significant events
following the balance date that effected the company’s equity or state of affairs.
Page 47
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
There were no other matters or circumstance that arose that has significantly affected, or may significantly affect, the operations
of King River, the results of those operations or the state of affairs of King River in subsequent years that is not otherwise
disclosed in the consolidated financial statements.
22. AUDITORS’ REMUNERATION
The auditors of King River are Ernst & Young.
Amounts received or due and receivable by Ernst & Young for:
An audit or review of the financial report of the entity
Consolidated
2014
$
36,050
36,050
2013
$
35,000
35,000
23. DIRECTORS AND KEY MANAGEMENT PERSONNEL DISCLOSURES
On the 2nd July 2014, Derek Carew-Hopkins resigned as a Director of the Company. Greg MacMillan was appointed as a
Director the same day. Other than this, there were no other changes to key management personnel between the reporting date
and the date the financial report was authorised for issue.
(a) Compensation of Key Management Personnel
Key Management Personnel
Short-term
Post-employment superannuation
Value of Share based payments
389,891
8,740
80,155
478,786
344,984
25,020
82,033
452,037
(b) Option Holdings of Key Management Personnel
30 June 2014
Balance at
Granted as
Net
Balance at
Beginning
Remuner-
Options
Change
of Period
ation
Exercised
Other
1 July
2013
Directors
A Barton
D Carew-Hopkins
1,250,000
750,000
600,000
300,000
(Resigned
2/07/14)
L Charuckyj
Executives
K Rogers
A Chapman
G MacMillan
Total
750,000
300,000
1,000,000
1,000,000
750,000
300,000
600,000
300,000
5,500,000
2,400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
End of
Period
30 June
Vested at 30 June 2014
Not
2014
Total
Exercisable Exercisable
1,850,000
1,050,000
1,850,000
1,050,000
400,000
200,000
1,450,000
850,000
1,050,000
1,050,000
200,000
850,000
1,300,000
1,600,000
1,300,000
1,600,000
1,050,000
1,050,000
200,000
400,000
200,000
1,100,000
1,200,000
850,000
7,900,000
7,900,000
1,600,000
6,300,000
Page 48
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
23. DIRECTORS AND KEY MANAGEMENT PERSONNEL DISCLOSURES continued
30 June 2013
Balance at
Granted as
Net
Balance at
Beginning
Remuner-
Options
Change
of Period
ation
Exercised
Other
1 July
2012
Directors
A Barton
1,500,000
1,250,000
D Carew-Hopkins
800,000
750,000
R Wolanski
L Charuckyj
Executives
K Rogers
R Ramsay
A Eves
B Andrew
A Chapman
G MacMillan
Total
1,500,000
-
-
750,000
750,000
900,000
750,000
250,000
1,000,000
-
-
-
-
-
1,000,000
750,000
6,450,000
5,500,000
-
-
-
-
-
-
-
-
-
-
-
(c)
Shareholdings of Key Management Personnel
End of
Period
30 June
Vested at 30 June 2013
Not
2013
Total
Exercisable Exercisable
(1,500,000)
1,250,000
1,250,000
(800,000)
750,000
750,000
1,500,000
1,500,000
750,000
750,000
(750,000)
1,000,000
1,000,000
900,000
550,000
250,000
900,000
550,000
250,000
-
(200,000)
-
-
-
-
-
-
-
-
-
-
-
1,250,000
750,000
1,500,000
750,000
1,000,000
900,000
550,000
250,000
1,000,000
1,000,000
1,000,000
-
750,000
750,000
(3,250,000)
8,700,000
8,700,000
-
-
750,000
7,700,000
30 June 2014
Directors
A Barton 1
D Carew-Hopkins
L Charuckyj 2
Executives
K Rogers
A Chapman
G MacMillan 3
Total
Balance
Granted as
On Exercise
Net Change
Balance
1 July 2013
Remuneration
of Options
Ord
Ord
Ord
Other
Ord 4
30 June 2014
Ord
14,879,768
1,000,000
1,456,062
409,768
-
7,976,511
25,722,117
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,879,768
1,000,000
1,456,062
(180,000)
229,768
-
5
(179,995)
-
7,976,516
25,542,114
¹ 6,500,000 of the Shares are held by Mr AP Barton and Mrs CH Barton as trustee for the Barton Family Superannuation
Fund of which Mr Barton is a director and a beneficiary. 7,060,000 of the Shares are held by Australian Heritage Group
Pty Ltd as trustee for the Australian Heritage Trust of which Mr Barton is a director and a beneficiary. 919,768 of the
Shares are held by Inglewood Lodge Pty Ltd of which Mr Barton is a director and a beneficiary. 400,000 of the Shares are
held by Barton & Barton Pty Ltd of which Mr Barton is a director.
2 959,550 of the Shares are held by Zeta Mr L Charuckyj & Mrs CM Charuckyj as trustee for the ZETA Super Fund of
which Mr Charuckyj is a trustee and beneficiary. 440,000 of the Shares are held by Temtor Pty Ltd of which Mr
Charuckyj is a director and beneficiary.
3 916,516 of the Shares are held by GDM Services Pty Ltd as trustee for the GDM Services Trust of which Mr MacMillan is
a director and beneficiary. 7,060,000 of the Shares are held by Australian Heritage Group Pty Ltd as trustee for the
Australian Heritage Trust of which Mr MacMillan is a director and beneficiary.
4 These were transacted on market.
Page 49
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
23. DIRECTORS AND KEY MANAGEMENT PERSONNEL DISCLOSURES continued
30 June 2013
Directors
A Barton 1
D Carew-Hopkins
R Wolanski (Resigned 9th Aug 12)
L Charuckyj 2
Executives
K Rogers
A Chapman
G MacMillan 3
Total
Balance
Granted as
On Exercise
Net Change
Balance
1 July 2012
Remuneration
of Options
Ord
Ord
Ord
Other
Ord 4
30 June 2013
Ord
13,129,768
450,000
644,768
1,206,062
169,768
-
7,976,511
23,576,877
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,750,000
550,000
(644,760)
250,000
14,879,768
1,000,000
8
1,456,062
240,000
409,768
-
-
2,145,240
-
7,976,511
25,722,117
¹ 6,500,000 of the Shares are held by Mr AP Barton and Mrs CH Barton as trustee for the Barton Family Superannuation Fund
of which Mr Barton is a director and a beneficiary. 7,060,000 of the Shares are held by Australian Heritage Group Pty Ltd as
trustee for the Australian Heritage Trust of which Mr Barton is a director and a beneficiary. 919,768 of the Shares are held by
Inglewood Lodge Pty Ltd of which Mr Barton is a director and a beneficiary. 400,000 of the Shares are held by Barton &
Barton Pty Ltd of which Mr Barton is a director.
2 959,550 of the Shares are held by Zeta Mr L Charuckyj & Mrs CM Charuckyj as trustee for the ZETA Super Fund of which
Mr Charuckyj is a trustee and beneficiary. 440,000 of the Shares are held by Temtor Pty Ltd of which Mr Charuckyj is a
director and beneficiary.
3 346,743 of the Shares are held by GDM Services Pty Ltd as trustee for the GDM Services Account of which Mr MacMillan is a
director and beneficiary. 569,768 of the Shares are held by GDM Services Pty Ltd as trustee for the GDM Services Super
Account of which Mr MacMillan is a director and beneficiary. 7,060,000 of the Shares are held by Australian Heritage Group
Pty Ltd as trustee for the Australian Heritage Trust of which Mr MacMillan is a director and beneficiary.
4 These were transacted on market.
(d) Related Party Transactions
All equity transactions with key management personnel have been entered into at arm’s length.
Australian Heritage Group Pty Ltd (“AHG”), a company of which Mr Anthony Barton, a Director and Mr Greg MacMillan, a
Director and the Company Secretary, have entered into an occupancy and administration agreement with King River copper in
respect of providing occupancy, administration and bookkeeping services commencing March 2009. The total value of the
occupancy and administration services provided by AHG during the year was $82,200 (2013: $97,407). As at 30th June 2014, there
was an amount of $13,700 outstanding to pay AHG for services incurred in the month of June. This amount is included in Note
15.
All services provided by companies associated with directors were provided on commercial terms.
Page 50
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of King River Copper
Limited
Report on the financial report
We have audited the accompanying financial report of King River Copper Limited, which comprises the
consolidated statement of financial position as at 30 June 2014, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information, and the directors' declaration of the consolidated entity comprising the
company and the entities it controlled at the year's end or from time to time during the financial years.
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal controls as the directors determine are necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also
state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the
financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian and International Auditing Standards. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the audit
to obtain reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair
presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the directors’ report. We confirm that the Auditor’s Independence Declaration
would be in the same terms if given to the directors as at the time of this auditor’s report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RC:KW:King River:027
Opinion
In our opinion:
a.
the financial report of King River Copper Limited is in accordance with the Corporations Act 2001,
including:
i.
giving a true and fair view of the consolidated entity's financial position as at 30 June 2014 and
of its performance for the years ended on those dates; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Report on the remuneration report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
2014. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is
to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of King River Copper Limited for the year ended 30 June 2014,
complies with section 300A of the Corporations Act 2001.
Ernst & Young
RJ Curtin
Partner, Perth
26 September 2014
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RC:KW:King River:027
ASX Additional Information
Additional information required by the Australian Stock Exchange Limited and not shown elsewhere in this report is as
follows. The information is current as at 25th September 2014.
(a) Distribution of Equity Securities
The number of shareholders, by size of holding, in each class of share are:
1
1,001
5,001
10,001
100,001
1,000
5,000
10,000
100,000
and over
Listed Ordinary Shares
Listed Options
Number of
Holders
Number of
Shares
Number of
Holders
Number of
Shares
98
271
298
709
272
1,648
50,180
890,080
2,584,050
27,465,317
124,658,552
155,648,179
202
436
196
430
120
1,384
96,642
1,292,669
1,511,596
15,325,276
44,463,277
62,689,460
There are 449 shareholders holding less than a marketable parcel at a price of $0.064, totalling 1,438,743 shares.
There are 1,170 option holders holding less than a marketable parcel at a price of $0.001, totalling 10,993,964 options.
(b) Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are:
1 HSBC Custody Nominees Australia Ltd
2 Australian Heritage Group Pty Ltd
3
L & E Fisher Nominees Pty Ltd
4 Citicorp Nominees Pty Ltd
5 National Nominees Ltd
6 Mr Anthony P Barton & Mrs Corinne H Barton
7 Greatside Holdings Pty Ltd
8 Mr Anthony P Barton & Mrs Corinne H Barton
7 Occasio Holdings Pty Ltd
8
9
Jarden Custodians Ltd
Zero Nominees Pty Ltd
10 Australian Heritage Group Pty Ltd
11
Sesna Pty Ltd
12 Mr Christopher Albert Rose
13 Mr Allan P Taylor & Mr Rodney K Taylor
14 BNP Paribas Nominees Pty Ltd
15 The King’s Ransom (VIC) Pty Ltd
16 Miss Victoria Rose Barton
17 Mr Kenneth Jon Carter & Mrs Mandy Emma Carter
18 Mr William Percival Reynolds
19
Shayden Nominees Pty Ltd
20 Ms Susan Mary Gibson
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Listed Ordinary Shares
Number of
Shares
Percentage of
Shares %
7,000,000
4,856,250
4,496,087
4,192,024
3,567,944
3,500,000
3,485,000
3,000,000
2,705,000
2,124,129
1,807,044
1,806,357
1,300,000
1,300,000
1,262,000
1,203,221
1,164,655
1,100,000
1,058,537
1,000,000
1,000,000
1,000,000
4.50%
3.12%
2.89%
2.69%
2.29%
2.25%
2.24%
1.93%
1.74%
1.36%
1.16%
1.16%
0.84%
0.84%
0.81%
0.77%
0.75%
0.71%
0.68%
0.64%
0.64%
0.64%
ASX Additional Information
(c) Substantial Shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
Number of Shares
Percentage of
Ordinary Shares %
Mr Anthony Barton and Associates
14,879,768
9.56%
(d) Voting Rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(e) Twenty Largest Quoted Option Holders
These options all have an exercise price of 20 cents and expire on the 30th June 2015.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
L & E Fisher Nominees Pty Ltd
Citicorp Nominees Pty Ltd
Australian Heritage Group Pty Ltd
Sesna Pty Ltd
National Nominees Ltd
J P Morgan Nominees Australia Ltd
Mr Anthony P Barton & Mrs Corinne H Barton
Mr Anthony P Barton & Mrs Corinne H Barton
Mr Christopher Albert Rose
Greatside Holdings Pty Ltd
Zero Nominees Pty Ltd
Australian Heritage Group Pty Ltd
Ronald Zimet
Illington Pty Ltd
BNP Paribas Nominees Pty Ltd
HSBC Custody Nominees Australia Ltd
Stolow Pty Ltd
18. Mr Murray Mansfield & Mrs Helen Mansfield
19. Mr Bastiaan M Kap & Mrs Maryke C Kap
20.
VFT Investments Pty Ltd
Listed Options
Number
Options
of
Percentage
of Options %
5,732,000
3,286,383
2,542,501
1,500,000
1,357,298
1,222,091
1,200,001
1,000,000
1,000,000
840,000
722,818
722,543
712,000
701,002
629,105
616,692
600,000
558,157
530,000
490,002
9.14%
5.24%
4.06%
2.39%
2.17%
1.95%
1.91%
1.60%
1.60%
1.34%
1.15%
1.15%
1.14%
1.12%
1.00%
0.98%
0.96%
0.89%
0.85%
0.78%
Page 54
ASX Additional Information
(f) Distribution of unquoted option holder numbers
Category (Size of Holding)
No of Option Holders
No of Options
100,001 and over
11
11
10,750,000
10,750,000
(g) Holders of more than 20% of unquoted options
There are no holders, holding more than 20% of the unquoted options on issue.
(h) On-Market Buyback
There is no on-market buy-back scheme in operation for the company’s quoted shares or quoted options.
(i) Schedule of Mining Tenements
Area of Interest
Tenements
Comments
Australia – Western Australia
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
East Kimberley
M80/267
M80/268
M80/269
E80/2863
E80/3657
E80/4468
E80/4740
E80/4741
E80/4829
E80/4830
E80/4832
L80/43
L80/47
All of the Tenements are registered in the name of Speewah
Mining Pty Ltd, a wholly owned subsidiary of King River
Copper Limited.
Note:
M = Mining Lease
E = Exploration Licence
L = Miscellaneous Licence
Page 55