Annual
Report
2024
Lion Selection Group Limited
ABN 26 077 729 572
Level 2, 175 Flinders Lane
Melbourne Vic 3000
Tel: +61 3 9614 8008
www.lionselection.com.au
Lion is a company that provides access to the high growth
sector for generalist investors and is intended to be a
‘set-and-forget’ exposure, where the stock selection and
investing timing are managed by a specialist team.
Contents
02
Chairman’s Letter to Shareholders
03
Net Tangible Asset Backing as at 30 September 2024
04
Chief Executive Officer’s Report
08
Mining Market Review
12
Portfolio Development
16
Lion Board and Management
18
Principal Risks and Uncertainties
19
Corporate Governance Statement
29
Directors’ Report
37
Auditor’s Independence Declaration
38
Lion Selection Group Limited Directors’ Declaration
39
Statement of Profit or Loss and
Other Comprehensive Income for the Year ended 31 July 2024
40
Statement of Financial Position as at 31 July 2024
41
Statement of Cash Flows for the Year ended 31 July 2024
42
Statement of Changes in Equity for the Year ended 31 July 2024
43
Notes to the Financial Statements for the Year ended 31 July 2024
64
Consolidated Entity Disclosure Statement
65
Independent Auditor’s Report
70
Shareholder Information
72
Lion Selection Group Limited Registry
73
Corporate Directory
Lion Selection Group Limited 2024 Annual Report
1
Lion Directors are pleased to present the
Lion Selection Group Annual Report for
the year ended 31 July 2024.
Chairman’s Letter to Shareholders
As incoming Chairman I believe that
the past two years have been a period
of positive change which have set the
foundations for future growth.
The decision to sell Indonesian gold assets in 2022, at
the peak of the mining cycle (as measured by the Lion
Clock) has been rewarded by the expected slump in
micro cap miners and the ability to buy at a discount.
This also exchanged Indonesian risk and allowed a new
business focussed solely on Australia, with what should be
Australian stability. Very significantly this reset Lion to the
Lion clock, selling at the peak and then able to invest into a
falling market, something that had not been possible while
operating African and Asian Lion fixed life funds.
Lion has ample cash for new business for the first time
since 2008 and we are seeing good deal flow to deploy
these funds.
The key to successful project development and investment
is having good people. We knew this in 1997 at Lion’s
formation but we didn’t have 27 years experience with
many different groups. We do now, and subtle changes
have been made.
Another change to people has been the replacement by a
conventional management structure of the fee for service
external Lion Manager in July 2024. A very happy change
for all concerned, also reducing costs.
Looking to the future, two major trends are underway
which will impact mining; a global energy transition from
fossil fuels, and the replacement of global free trade by
the competing political blocks of USA and Europe versus
China, Russia and Iran.
The first is a big positive for junior Australian miners with
the metals required for the energy transition appearing to
be abundant in Australia. Compared to the massive iron
ore, coal, oil and gas markets, the energy transition metals
are tiny ‘Cottage Industries’ and not yet the focus of
major miners.
The second however is more challenging for junior miners.
These minor metal markets have limited transparency,
volatile prices and are largely controlled by China.
Opportunities are available in minor metals and will be
taken by Lion through these changing times. Gold and
base metals usually have less risk and are easier to
analyse, hence will form the bulk of the portfolio. A big
opportunity is available to Australia in uranium if the
political blockages are removed.
Lion is well placed in these exciting times!
Robin Widdup
Chairman
Lion’s view is that micro-capitalisation
resources equities are at or close to
their cyclical low, and accordingly
we are aiming to invest through the
weakest part of the market.
2
Lion Selection Group Limited 2024 Annual Report
Net Tangible Asset Backing
as at 30 September 2024
Notes to the NTA
The after-tax number relates to the provision for deferred tax on the unrealised gains in the Company’s investment
portfolio. The Company is a long-term investor and does not intend disposing of its total long term investment portfolio.
Under current Accounting Standards, the Company is required to provide for tax on any gains that may arise on such a
theoretical disposal, after the utilisation of brought forward losses.
The NTA laid out above excludes $1.2M in contingent liabilities relating to Lion’s acquisition of investments from African
Lion 3. The contingent liabilities reduce over time and will become zero by 3 March 2026 if not crystallised by the sale of
PhosCo or Atlantic Tin prior.
The NTA contains the value of the component parts of Lion’s assets as at the NTA date, which is a snapshot in time.
The majority of this includes the value of cash at bank, and value of investments at their closing price on NTA date.
The NTA is not an expression of the ultimate, realisable value of the investments, which in many cases may far exceed
the value contained in the NTA.
As at 30 September 2024 Lion held $50.2M of equity investments and
$50.8M of net cash and other assets, with a combined aggregate value
of $99.3M (after tax), against a market capitalisation of $72.0M
Lion advises that the unaudited net tangible asset backing of Lion as 30 September 2024 is
71.6 cents per share (before tax) and 70.4 cents per share (after tax).
Unaudited NTA
A$M
Net Cash and other assets
50.8
Portfolio – New Investments (Australia)
37.9
Portfolio – Legacy Investments
12.3
Less Tax
(1.7)
Net Tangible Assets – Post-tax
$99.3M
NTA per share – Post-tax
70.4cps
Lion Selection Group Limited 2024 Annual Report
3
Chief Executive Officer’s Report
Lion is making strategic investments in selected micro-capitalisation
resources companies with strong growth outlook, getting set to capture
the benefits of project de-risking, a cyclical recovery and return of
investor risk appetite to the sector. These are the most downtrodden
group of companies in the market at present, but in boom times stocks
in this space are capable of high multiple returns.
Portfolio establishment well underway
Lion has invested $18.0M in 2024, with a further $4.4M
invested shortly after the end of the financial year, taking
the total invested in the new investment portfolio to
$24.9M. These investments are across nine companies
of a targeted 10-20 company portfolio.
Strongly gold exposed
Gold companies have offered the best risk assessed
value to Lion over the last 12 months, and so a significant
proportion of the investments Lion has made are
companies with gold or gold dominated projects. These
companies are strongly positioned against the backdrop of
record gold prices.
Well-funded
Lion’s cash balance at year end was $57.0M
(including term deposits and accrued interest).
Business simplified
Lion management have been employed directly, terminating
the long association with Lion Manager. There is no longer
an external manager, all costs are contained within Lion and
no longer linked to the size of funds under management.
2024 Year
in Summary
2024 has been Lion’s busiest year
of assessment work, due diligence
and investment for many years.
4
Lion Selection Group Limited 2024 Annual Report
Investment Focus and Process
Lion Selection Group was founded in 1997 as a mining
investment company that could combine specialist mining
expertise with pooled, long-term capital and take a portfolio
approach to investing in the very high growth micro-
capitalisation resources sector.
Since 1997, Lion has been an early shareholder and
contributed to the success of a long list of successful
mining companies. These include East African Gold Mines
(The North Mara Mine which is now a substantial gold
producer for Barrick in Tanzania), Consolidated Minerals,
Independence Group (now known as IGO), Catalpa
Resources (now known as Evolution Mining), MPI Mines,
Redback Mining, Gallery Gold, EganStreet Resources,
Indophil Resources, Platmin, Nusantara and the Pani
Gold Project. Profitable exits have enabled Lion to make
distributions to shareholders exceeding 341cps1 which
have contributed to Total Shareholder Return since 1997
well exceeding the ASX Small Resources Index2.
Lion is a company that provides access to the high growth
sector for generalist investors and is intended to be a
‘set-and-forget’ exposure, where the stock selection and
investing timing are managed by a specialist team.
Well-funded
Having executed major asset sales in 2021 and 2022 close
to the top of the market which returned over $90M cash,
Lion’s asset backing became almost 90% net cash as the
market cycle turned over from boom to bust. This balance
sheet strength means Lion has been well funded for
opportunities arising in a weakening market.
The cyclical downturn in mining since 2022 has weakened
equity prices for miners, with the micro-capitalisation
companies that Lion targets affected the worst. Since April
2022, the median price of Lion’s target sector has declined
by 70%, effectively multiplying the purchasing power of
Lion’s cash by over three times. As the equity market has
weakened, Lion’s retained cash has also been available for
earning a strong rate of interest.
Investing aligned to the mining cycle
Lion closely monitors the mining cycle via the Lion Mining
Clock and takes a long-term view on the investments
that it makes. Generally, the best time to purchase high
percentage holdings in small companies is when entries
can be predominantly via share placements at discounted
prices, in a weak market.
Lion’s view is that micro-capitalisation resources equities
are at or close to their cyclical low, and accordingly we are
aiming to invest through the weakest part of the market.
1. Insert performance reference
2. State performance and include reference
Many generalist investors can see the
attraction of high returns that can be achieved
in this space but are often put off by three
key factors:
1. Jargon and lack of technical expertise
stands in the way of their investment
selection
2. Compounded by not knowing who to
trust in a sector where there is a high
concentration of versatile entrepreneurs
3.. And a wariness toward the boom-bust
nature of mining investment
Chief Executive Officer’s Report
Lion Selection Group Limited 2024 Annual Report
5
Broad access to opportunities and deal flow
There are thousands of listed companies active globally in
the micro-capitalisation resources sector, and a substantial
number that are unlisted. This universe is impenetrable
to many investors by its sheer size – how can an investor
feel they are investing in a quality opportunity when that
judgement requires measurement against such a large
number of others?
The bulk of capital raising requirements for the sector are
serviced by stockbrokers, and typically fund raising takes
place at a discount to prevailing trading prices. The micro-
capitalisation sector has a very high proportional ownership
by retail investors, yet these same investors have poor
access to the discounted pricing that fund raising takes
place at, especially where it is structured as a placement.
Retail investors have almost no access to unlisted
opportunities in the space, which are generally priced at an
attractive discount to their listed peers because of the lack
of liquidity. These companies generally depend on close
networks for their initial funding.
Lion has been an investor in the micro-capitalisation
resources space for 27 years and brings a very broad
industry knowledge. This delivers Lion one of its strongest
advantages, as an identified investor that is offered a high
volume of opportunity deal flow both directly by companies
and also through stockbrokers and with the experience
to draw on to judge those opportunities against the vast
universe of others.
In the lead up to making an investment, Lion has generally
done assessments over the weeks, months and in some
cases years that led up to the opportunity. This preparation
enables Lion to get to know projects and people well,
and can lead to a rapid turnaround when the opportunity
arrives. This also often allows for Lion to provide a lead
order providing a strong sense of confidence for the
companies to launch their raisings and enabling Lion to
obtain strong allocations as a cornerstone investor.
Lion experiences high deal flow in most markets, but this
has been especially high since 2022 as there have been
few other sources of investor capital in the market.
Research driven process
The investment team and board of Lion has a long
collective experience in mining and capital markets which
enables the full investment appraisal and due diligence
process to be performed in-house. We intend only to invest
in a very small proportion of the available opportunities and
target investment returns that are multiples on the amount
invested with a detailed understanding of risk.
Lion’s investment process consists of filtering
opportunities into a watchlist, then due diligence which
may lead to an investment being made.
Filtering criteria:
●Jurisdiction – Australia only.
●Commodity – precious metals, base metals and critical
materials. More specifically, Lion is interested in projects
with saleable products that don’t rely on substantial
(uncertain) new forms of demand.
●People with high capability and integrity, who are invested
with conviction in the company they are managing and
show willingness to work alongside Lion.
●Mineral projects with growth potential and likelihood of
being developed into a mine.
●Strategically located projects, which might eventually
present multiple pathways to development or exit.
Chief Executive Officer’s Report
6
Lion Selection Group Limited 2024 Annual Report
Valuation
Multiples on
price available
Risk
Avoid high probability,
terminal outcomes
People
Highly capable and
sincere
Three key criteria must present strong cases in order
for Lion to invest:
1. People are the crucial ingredient for generating
investor returns in any company. Irresponsible
management can destroy value in great assets,
and likewise a high capability management team
can extract returns from lesser quality assets. High
integrity is as important as capability, and whether
Lion’s investment results in close collaboration over
several years or is passive, all investments need to
satisfy the criteria that Lion would comfortably view
the team we are backing as part of our own.
2. Project value needs to be extremely compelling when
investing from an early stage. And yet, this is made
challenging by the lack of information to inform a
valuation because of the stage of the investments
Lion makes. A valuation must show fully diluted
returns in excess of 10x the investing price.
3. Risk covers a range of factors that are often played
down and likely overlooked by many investors.
Some risks are worth taking with an educated
view and others can be terminal. Lion seeks to
avoid terminal risks and establish a portfolio that
balances risk profile across it.
These qualities are frequently present individually but
seldom in combination.
With so many opportunities available and a weak
market, Lion can afford to be extremely selective where
metrics are not suitable to support investment. Over a
27-year history Lion are very well aware of the type of
people and assets that we have had most success with
in the past. It is better to wait for the right combination
rather than to swing at something that is unsuitable.
New investments – Australia Only
Historically Lion has invested in a broad range of
jurisdictions, mostly Australia, Africa and Asia. The reason
that a mining investor would venture overseas is typically
to seek ‘world class’ geology under the notion that the
best geology will underpin the best returns. It is true that
there are countries with very attractive geology that has
been only lightly explored, which presents some tantalising
potential discovery opportunities. The trade off is that
some of the world’s least explored geology is overlain by
some of the worst investing regimes and typically this only
becomes evident after money is invested, when something
goes wrong.
In Lion’s 27 years of global investing experience, several
factors have resulted in our Australian-only focus for new
investments:
●Excellent returns can be made on good (but not world
class) geology, or even mature projects, in jurisdictions
that investors flock to because there is a deeper pool of
investors willing to provide liquidity along the way.
●When a project is developed, that deep pool of liquidity
ensures that full value will be received on exit.
●Australian geology is world class. It has been well explored,
which is only to say some areas are mature, however there
are still new and exciting frontiers as well as shallowly
explored projects that present great opportunities.
There is no reason to need to look elsewhere, and Lion’s
investment in Plutonic is an ideal example of this.
●The Lion team’s relationships and networks are far better
in Australia than anywhere else in the world, and for that
reason can make far better judgements on people. This
is a strong ‘home ground advantage’ and we would prefer
to leverage.
●With a base in Melbourne, it is far cheaper for us to
investigate and manage investments in Australia than
anywhere else.
●The Australian commercial and legal system is transparent,
with the rule of law protecting project interests.
At present there is more than adequate deal flow from
within Australia which can be addressed with a small and
focussed team, so there is no need to consider broadening
this jurisdiction preference in the immediate future.
Chief Executive Officer’s Report
How can an investor feel they are investing
in a quality opportunity when that
judgment requires measurement against
such a large number of others? Lion is
offered a high volume of opportunity deal
flow both directly by companies and also
through stockbrokers.
Lion Selection Group Limited 2024 Annual Report
7
Opportunity: once-in-a-cycle discounts
The trend of share price performance for the micro-
capitalisation mineral resources sector isn’t measured by
indices, because there isn’t one. A median of share price
performance of this group shows a fall of 70% since early
2022. This price weakening is far more severe than that
experienced by larger capitalisation miners – this is typical
of a normal cyclical downturn in mining.
The current downturn has been driven by softening
commodity prices and a decline in liquidity, but the lack of
support for explorers and developers has been exacerbated
by a lack of risk appetite for micro-cap companies across
the market. This is linked to the imposition of rising interest
rates that became a factor in 2022 and presents a double
whammy to early-stage companies in the mining sector.
To Lion, this combination of circumstances has presented
an opportunity. Lion has been well funded following
large top of the market divestments. Gold explorers
and developers, which have been a focal point of Lion’s
investment to date, have been especially hard hit –
despite the record gold price environment. Prior to 2024,
sentiment toward gold was indifferent and gold explorers
were overlooked by investors with a strong preference
for critical materials explorers. Of the nine companies
Lion has invested in within its new investment portfolio,
only one has no gold exposure. Sentiment toward critical
materials has subdued significantly, with this space more
attractive for investment as equity prices have pulled back
and western government efforts to support the sector have
become more tangible.
One of the pillars underpinning the ASX 100 Resources for
the last 20 years is the export of iron ore. The iron ore price
has weakened in the last twelve months as the Chinese
property market and steelmaking industry declined, but
still remains well above historical levels and a cash cow
for the majors. Very recent Chinese stimulus has helped,
but this is unlikely to revive or even stabilise the sector
in the medium term and fundamentals remain weak.
This is exacerbated by emerging large-scale competition
from Guinea into an already saturated market. A major
correction of iron ore pricing remains a distinct possibility
that may delay a broader recovery of the junior space.
With so many opportunities available
and a weak market, Lion can afford to be
extremely selective where metrics are not
suitable to support investment.
Mining Market Review
8
Lion Selection Group Limited 2024 Annual Report
Mining Market Review
Mining equities have softened, but
the cyclical downturn is amplified for
smaller capitalisation stocks:
(since 19 April 2024 ‘market peak’)
l ASX100 Resources
-16%
l ASX Small Resources
-33%
l Micro-Cap Resources stocks* -70%
* The proxy for Micro-Capitalisation Resources
is a basket of 682 companies, classified as
‘Metals & Mining’, capitalised at less than
$250M market cap on 30 August 2024.
Interest rates, and the market’s
outlook for interest rates have been
the biggest influence on equity market
risk appetite: as interest rates rose and
the notion that inflation was sticky,
risk appetite and liquidity decreased.
Most mineral commodities have
weakened since their peaks in 2021
or 2022.
The examples shown here are all large
market commodities, and so have a
strong influence on the world’s major
miners equity prices.
Gold is the clear exception, which has
been an especially strong performer
in 2024.
1 Jan 2020
1 Jan 2021
1 Jan 2022
1 Jan 2023
1 Jan 2024
Mining Equities
rebased to 19 April 2022
Interest Rates
Commodities
ASX100 Resources
Gold
ASX Small Resources
Copper
Micro-Cap Resources*
Iron Ore
Jan 2021: peak median
price for basket of
micro-cap resources
companies (interest
rates start to move up)
Apr 2022: peak prices
for mining equity indices
which reacted to outlook for
interest rate increases
19 April 2022
14 March 2022:
US 10 year bond yields
break through 2%pa
Sentiment flips from “inflation
isn’t sticky” to “it is”…
US 10 Year Bonds %pa
1 Jan 2020
1 Jan 2021
1 Jan 2022
1 Jan 2023
1 Jan 2024
May 2021–Apr 2022:
peaks for most mineral
commodities (except gold)
Jan–Dec 2023:
Lithium price collapse
Sentiment toward critical
materials deteriorates
2024:
Gold appreciates
strongly
Lion Selection Group Limited 2024 Annual Report
9
Expectation: Strong medium to long term
sector outlook
Lion is positioning for a cyclical recovery and the next
mining boom.
All mining booms are similar in their cyclical nature but
can vary in magnitude and duration, and there are several
coinciding factors that provide a strong outlook for the
next boom:
●The mining industry is collectively extremely under-
invested in future supply, so the supply response to any
rejuvenation of demand is expected to be slow. This is
anticipated to be a positive factor for commodity prices.
New projects will be needed to catch up and rather than
investing to find or develop, major miners have been
mainly looking to buy into new projects. This doesn’t
create new supply, and this behaviour both reinforces the
expectation and does nothing to alleviate it.
●Identified sources of new supply are also likely to be slow
in delivery due to permitting pathways which are the
longest they have ever been. Any new discovery will take
a long time to commercialise.
●The global energy transition adds substantial new
demand for many commodities and governments in
many developed economies have begun providing
incentives to support the transition.
●Some of the best returns in global equities in the past
decade have been in the technology sector, which shares
a risk-reward profile with mining in the willingness
that investors have to taking on risks and expecting
commensurate returns. The capitalisation of the global
technology sector is several times larger than the global
mining industry, so even a small proportion of tech
capital rotating into a promising commodity sector could
make a material difference in the performance of mining
equities through the next boom.
The chart on page 11 shows the GSCI Index (a broad index
of commodity prices) divided by the S&P500 (prominent US
equity index) and is used as a comparison of the relative
valuation of equities and commodities. On this measure
equities are ‘overvalued’ in comparison with commodities,
and the current valuation difference is the largest it has
been since 1970 and has existed since 2016. This chart
supports the cases above, that as the next mining boom
unfolds there is a likelihood of investors preferentially re-
rating commodities and looks like a potent mixture to set
the scene for a bullish period for commodities to come –
the next mining boom.
The standout of calendar year 2024 so far has been gold,
which has outperformed many asset classes and counter
to most other mineral commodities. In the last two years
Chinese investors have replaced western ETFs as the
marginal buyer of gold: a new, large source of demand.
Global gold production has seen very little growth in the
last four to five years, so there is little supply response that
is available to meet new demand in the gold market. In the
first half of 2024 there had only been a muted response
of gold equities to gold price, and any investor interest
seemed to be limited to miners rather than explorers.
Gold prices making new record highs is a strong driver of
investor interest, and a good candidate for the trigger to
draw investor liquidity back to the mining space. Gold ETF’s
have reversed their outflows, with May, June and July 2024
having net inflows adding to the buying pressure for gold.
The main unknown about a normal cyclical recovery is
when. A recovery of market interest in micro- and small
caps is broadly expected as risk-taking investment appetite
returns. The market for micro-capitalisation companies
tends to feature a high proportion of retail investors, who’s
willingness and ability to invest is linked to cost of living
and interest rates.
Lion is positioning for a cyclical recovery
and he next mining boom. The global
energy transition adds substantial new
demand for many commodities.
The mining industry is collectively
extremely under-invested in future supply.
Mining Market Review
10 Lion Selection Group Limited 2024 Annual Report
GSCI index divided by the S&P500 index, 1970-present (monthly imprints)
Source: Investing.com, IRESS, Lion
Jan 70
Jan 80
Jan 90
Jan 00
Jan 10
Jan 20
1972 Nifty Fifty
Oil embargo
Gulf war
1987
Dot Com
2008 Chinese induced
Commodity peaks
?
Commodities expensive
Equities expensive
GSCI / S&P500
The capitalisation of the global
technology sector is several times larger
than the global mining industry, so
even a small proportion of tech capital
rotating into a promising commodity
sector could make a material difference
in the performance of mining equities
through the next boom.
Mining Market Review
Lion Selection Group Limited 2024 Annual Report 11
Since executing asset sales in 2021 and
2022 that took Lion to a largely cash
asset backing, Lion has assessed well
over 1,000 new investment opportunities.
Portfolio Development
Lion intends to establish a portfolio of between 10 and
20 investments that provides an attractive balance of
risk and high likelihood of returns and that is leveraged
to the most attractive commodities. From this deal flow,
Lion has selected nine Australian focussed companies
and deployed $24.9M (including commitments and
investments as at 31 July 2024).
Most of that investment has been made in the 2024
financial year ($18.0M), which corresponds with Lion’s
view that the prices of opportunity companies we have
been assessing had levelled out or were unlikely to
become materially lower.
Great
Boulder
Antipa
Plutonic
Koonenberry
Sunshine
Brightstar
Saturn
Critica
Alto
Brightstar Resources
[ASX:BTR]
Low capex, cash flow funds growth, strategically sized gold inventory
Saturn Metals
[ASX:STN]
Low-cost heap leach economics x large gold inventory
Antipa Minerals
[ASX:AZY]
Telfer region strategic resource
Sunshine Metals
[ASX:SHN]
High grade Gold / Copper / Zinc VMS
Alto Metals
[ASX:AME]
Strategic ground package, 0.8Moz in shallow drilling
Great Boulder
[ASX:GBR]
Defining the Eastern limb of the Meekatharra Gold Field
Critica Minerals
[ASX:CRI]
Large, shallow, high grade REE discovery close to proposed upgrade facilities
Koonenberry Gold
[ASX:KNB]
Koonenberry field – nugget patches and untested targets
Plutonic Limited
[unlisted]
Large, undrilled hydrothermal system with gold / copper pregnancy
Pre-discovery
Definition
Assessment
Development
Production
Commodity legend:
Precious metals
Base metals
Strategic materials
Stage and location of Lion’s Australian investment portfolio
Note that legacy investments in Erdene, Atlantic Tin, Kin Gin and PhosCo are not shown
Underpins greatest value
growth potential
l Australia focus
l Precious, base and strategic
materials
l Pre-development stage
12 Lion Selection Group Limited 2024 Annual Report
Company
Outlook
Invested
$M
Value
$M
Value
$M
AUSTRALIA
31/07/24 31/07/24 30/09/24
Brightstar
Resources
[ASX:BTR]
Gold in WA. Brightstar has a short, low-cost pathway to production and a
strategy to apply cash flow to funding growth. Brightstar are currently completing
the acquisition of a major growth project by consolidating the Sandstone/
Gidgee region of WA, which will position them with a long-term growth pipeline.
The combination of this strategy and newly consolidated large mineral resource
inventory presents the potential to go on to become a large gold producer.
2.0
2.1
9.0
Saturn Metals
[ASX:STN]
Gold in WA. Saturn’s Apollo Hill project is a large, high-density accumulation of
gold that is amenable to very low unit costs which presents strong economics.
Development of Apollo Hill is expected to unlock a strategically sized gold project
8.0
10.1
15.2
Antipa Minerals
[ASX:AZY]
Gold in WA. Established strategic gold resources at Minyari in the Paterson
province which neighbours Telfer, Winu and Havieron. Corporate activity has
begun to stir, and Antipa is well positioned to consider several potential pathways
to commercialisation
2.0
2.2
5.2
Sunshine
Metals
[ASX:SHN]
Base metals and gold in Qld. Sunshine acquired Liontown near Charters
Towers as a drilled resource and has had early success adding high grade gold
mineralisation that had previously been unrecognised. Strong pipeline of near-
resource targets for extension to test.
0.8
1.0
0.9
Alto Metals
[ASX:AME]
Gold in WA. Progressing toward a combination via a scheme of arrangement
with Brightstar Resources
1.0
0.6
1.2
Great Boulder
Resources
[ASX:GBR]
Gold in WA. Main focus is exploring the eastern limb of a regional scale fold,
which contains the Meekatharra gold field on the western limb. In 2023 and 2024
permitting and ground acquisition has provided access to areas that have never
been tested and Great Boulder work has defined a range of new targets. These
are expected to lead to growth of gold Resources, in proximity to established
gold process facilities.
0.8
0.5
0.6
Critica Minerals
[ASX:CRI]
REE’s in WA. Large, shallow, high grade REE discovery close to new upgrade
facilities
0.8
0.8
0.8
Koonenberry
Gold
[ASX:KNB]
Gold (+/- copper) in NSW. 100% holder of large ground position in NW NSW, which
contains substantial surface gold (nugget patches) but has only even been lightly
explored. Appears to be a continuation of Stawell gold zone geology (well known in
Western Victoria) sequestered in NSW, with a large inventory of targets to pursue
0.2
0.3
0.2
Plutonic Limited
[unlisted]
Exploring for gold and copper in NT. Never-before considered mineral systems
over a large area: district scale discovery potential. The Champion project
contains very large targets with alteration expressions that outline large
hydrothermal systems which contain low-level surface anomalism for gold (up
to 1.3g/t) and copper (up to 0.31%) in rock chips
4.8
4.8
4.8
Portfolio Development
The best opportunities that Lion saw, especially from
assessments done in 2022 and 2023, were companies
with gold projects which offered the best risk assessed
value propositions to Lion. Lion’s largest investments are
in companies that each have large established gold
resource positions and are strongly leveraged to the
gold price and the potential for an uplifted valuation on
becoming gold producers.
Lion expects to remain very active deploying investment
through calendar year 2025 with a strong pipeline of
companies on the watch list and in advanced stages of
assessment across a range of commodities.
If these investments progress as planned, Lion expects
to follow its money in many investees. In all cases
investments have been sized according to the stage of the
investment, the kind of de-risking that is expected prior to
the next capital raising, and the balance of risks and value
assessed via our due diligence. From experience we expect
that future investment will be skewed toward opportunities
that reveal the best value and performance over time.
Lion Selection Group Limited 2024 Annual Report 13
Company
Outlook
Invested
$M
Value
$M
Value
$M
LEGACY
31/07/24 31/07/24 30/09/24
Erdene Resource
Devt Corp
[TSX:ERD]
Gold open pit project development underway in Mongolia: first gold expected
2025. Erdene is approaching maturity within Lion’s portfolio and is expected to
improve trading liquidity as it moves towards gold production in early 2025.
2.8
5.9
8.3
PhosCo Limited
[ASX:PHO]
Rock phosphate in Tunisia. Awaiting licence restitution and new licence
granting.
3.2
1.1
1.6
Atlantic Tin
[unlisted]
Tin in Morocco. The Achmmach project is well understood and has a clear
pathway to development, in a robust tin market. Awaiting commercial pathway
to liquidity.
0.7
2.0
2.0
Kin Gin
[unlisted]
Gold in Japan. A licence portfolio containing defined epithermal gold deposits
and historic mines has been assembled for very low cost. First project
approvals now granted, systematic on-ground work is anticipated to follow.
0.2
0.4
0.4
Portfolio Development
Merdeka Copper and Gold
2016 to present
IDR per share
Jan 16
Jan 17
Jan 18
Jan 19
Jan 20
Jan 21
Jan 22
Jan 23
Jan 24
31 January 2022
Lion agrees sale of Pani JV
interest for $74M, inc US$20M
of Merdeka shares
20 February 2023
Lion completes exit of
Pani, selling Merdeka
share interest
14 Lion Selection Group Limited 2024 Annual Report
Lion Selection Group Limited 2024 Annual Report 15
Lion Management Arrangements
On 1 July 2024 Lion completed the internalisation of its
management, shifting from investment management
services being provided by an external manager (Lion
Manager) to direct employment of all staff. This simplifies
Lion’s structure and creates alignment between each of the
key individuals and Lion. Lion will also have better control
of costs as the Company seeks to grow, as under the
previous investment management contract fees
would increase proportionately with invested capital
under management.
Lion shareholders provided approval for an Employee
Incentive Plan and New Long Term Incentive arrangements
for Hedley Widdup (related party) at a General Meeting
of shareholders on 26 June 2024, and the arrangements
became effective on 1 July 2024. From this date,
investment management fees will no longer be paid, and
there will be no ongoing commercial relationship with
Lion Manager.
Under this new arrangement Hedley Widdup has taken up
the position of Chief Executive Officer and Craig Smyth
retained the position of Chief Financial Officer.
Lion’s investment process and team has not changed –
only the job titles of Hedley and Craig. Modest cost savings
are expected to be derived as a result of the removal of
investment management fees.
Vale Barry Sullivan
It is with deep sadness and sincere condolences
that Lion has advised the passing of Barry Sullivan,
former Lion chairman and non-executive director, who
passed away in June, suddenly and unexpectedly of
natural causes.
Barry was a mining engineer, qualified at the Royal School
of Mines before commencing his career in South Africa.
He later moved to Mt Isa, where in a tenure of more than
20 years he rose to the level of Executive General Manager
responsible for the extensive Mount Isa and Hilton
operations. In the era of Barry’s tenure in Mt Isa, the mine
was an inseparable part of the social fabric the town. Barry
carried forward a strong sense of how a company of any
size would work within its host community.
Barry was a thoroughly decent man, with a keen interest
in people and provider of unwavering and unflappable
guidance endeared him to other board members. He
became a friend and mentor to many who’s career
pathways he crossed, he will be fondly remembered
and missed.
It was a very long friendship with Barry for the Lion
team, several of whom had technical careers in Mt Isa
prior to finance. After his retirement from MIM he had
involvements with several Lion investments as a non-
executive director or chairman of Exco Resources,
Allegiance Mining, Sedimentary Holdings, Catalpa
Resources and EganStreet Resources. Barry joined the
Lion board in 2011, he was the chairman from February
2016 to January 2024.
Robin Widdup Executive Chairman
Robin Widdup was appointed Executive Chairman of Lion on
1 February 2024. Barry Sullivan stepped down as Chairman
of the Company and took up a position as Non-Executive
Director. Chris Melloy and Peter Maloney continue as
Non-Executive Directors of Lion.
Lion Board and Management
16 Lion Selection Group Limited 2024 Annual Report
Robin Widdup
Executive Chairman
Robin has almost 50 years industry experience spanning
work in large mines in Africa, UK and Australia, mining
analysis for stockbroker JBWere & Son and then mining
investment at Lion Selection Group.
He was the founder of Lion in 1997, raising $100M to list
Lion on ASX. He has been a director and owner of Lion
Manager, the purpose formed company that provided
investment management services to Lion, and a director of
Lion since formation.
Over the 27 year history of Lion Robin has held a number
of directorships of listed and unlisted mining companies,
covering a variety of commodities, where Lion has been a
shareholder. Robin is currently Chairman of PhosCo Ltd.
Robin was appointed Executive Chairman of Lion on
1 February 2024 having previously been a non-executive
director.
Chris Melloy
Non-Executive Director
Chris is mining engineer with almost 50 years experience
in the mining industry in operations, securities analysis
and investment. He held senior positions in MIM and
JBWere & Son prior to joining Lion.
Chris was an Executive Director of Lion Manager from
its inception in 1997 through to 2011, becoming a non-
executive director of Lion on 1 November 2012.
He has held a number of directorships of listed and
unlisted companies where Lion has been a shareholder.
Chris is also Chairman of the Lion Remuneration Committee.
Peter Maloney
Non-Executive Director
Peter Maloney has broad commercial, financial and
management expertise and experience. He was Chief
Financial Officer of Lion and an executive director of Lion
Manager until April 2010.
Peter holds a Bachelor of Commerce from the University of
Melbourne and an MBA from University of Rochester. He
has also completed the Advanced Management Program
at Harvard Business School. Prior to joining Lion, Peter
held senior executive positions with WMC Resources and a
number of other companies.
Peter has been a non-executive director of Lion since
December 2010, including serving as Chairman between
1 January 2012 and 24 February 2016, and is Chairman of
the Lion Audit Committee.
Hedley Widdup
Chief Executive Officer
Hedley is a geologist with extensive experience across
base and precious metals mines in Australia. He joined the
Lion Manager team in July 2007 as an analyst, and was
appointed the Chief Executive Officer of Lion in July 2024.
He is a non-executive director of Erdene Resources
Development Corporation (TSX.ERD), non-executive
Chairman of Plutonic Limited (Unlisted), and a member of
the Melbourne Mining Club volunteer Steering Committee.
Craig Smyth
Chief Financial Officer
Craig graduated from the Victoria University of Wellington
with a Bachelor of Commerce and Administration, and has
completed his Master of Applied Finance at the University
of Melbourne. He is a member of the Institute of Chartered
Accountants of Australia and New Zealand.
Prior to Lion, Craig’s financial background includes Coopers
& Lybrand, Credit Suisse First Boston (London) and ANZ
Investment Bank.
Craig has 19 years resources experience, joining Lion
in 2005 as Financial Controller, before becoming Chief
Financial Officer in 2010.
Craig is the interim Chief Financial Officer of Lion investee
PhosCo Ltd.
Lion Board and Management
Following the changes to the Lion board during the year, the directors and key office holders
of Lion Selection Group are as set out below.
Lion Selection Group Limited 2024 Annual Report 17
Principal Risks and Uncertainties
The activities of Lion are subject to risks that can adversely impact its business and financial condition. The risks and
uncertainties described below are not the only ones that Lion may face. There may be additional risks unknown to Lion and
other risks, currently believed to be immaterial, which could turn out to become material.
Risk Factor
Nature
Investment
in resource
companies
Lion has investments in a range of resource companies whose exploration, development and mining
activities are at varying stages. Lion’s investees are subject to operating risks that are inherent to mining
and exploration activities, and may influence the financial performance and share price of the investees.
The value of Lion’s investments in these companies, and in turn the financial performance of Lion itself, will
continue to be influenced by a variety of factors including:
• general investment, economic and market conditions as outlined above, which can affect the investee’s
performance and share price;
• exploration is a speculative endeavour which may not result in investees finding economic deposits
capable of being successfully exploited;
• mining operations may be affected by a variety of factors which may or may not be within the control of
the investee. Whether or not income will result from exploration and development programs depends on the
successful establishment of mining operations. Factors including costs, integrity of mineralisation, consistency
and reliability of ore grades, metallurgical recoveries, and commodity prices affect successful project
development and mining operations;
• depending on the location of its exploration and/or mining activities, an investee may be subject to
political and other uncertainties, including risk of civil rebellion, expropriation, nationalisation, regulatory
changes (including environmental, social, taxation and royalties) and renegotiation or nullification of
existing contracts, mining licences and permits or other agreements;
• reliance on the performance of key management of Lion and investees;
• investees may enter into hedging transactions to fix the commodity price for a portion of production
and there is a risk that the investee may not be able to deliver into these hedges if, for example, there is
a production shortage at their mining operations, which could adversely affect the investee’s operating
performance if the commodity price moves unfavourably;
• investees that borrow money are potentially exposed to adverse interest rate movements that may
affect their cost of borrowing, which in turn would impact on their earnings and increase the financial risk
inherent in their businesses. In this situation there is also risk that an investee may not be able to repay its
debts and may be at risk of bankruptcy;
• resource nationalisation, politicial unrest, war or terrorist attacks anywhere in the world could result in a
decline in economic conditions worldwide or in a particular region, which could impact adversely on the
business, financial condition and financial performance of the investee;
• there is a risk that investees may lose title to mining tenements if conditions attached to licences are
changed or not complied with. Further, it is possible that tenements in which Lion’s investees have an interest
may be subject to misappropriation or legal challenge in jurisdictions without well-established legal systems.
• a form of native title reflecting the rights and entitlements of indigenous inhabitants to traditional lands
may exist on investee’s tenements, such that exploration and/or mining restrictions may be imposed or
claims for compensation forthcoming; and
• the high initial funding requirements of emerging exploration and mining companies can result in delays
in developing projects and a lack of liquidity, which may affect Lion’s ability to invest or divest.
Market
Movements
The performance of Lion and the prices at which its shares may trade on ASX can be expected to fluctuate
depending on a range of factors including movements in inflation, interest rates, exchange rates, general
economic conditions and outlooks, changes in government, fiscal, monetary and regulatory policies, prices
of commodities, global geo-political events and hostilities and acts of terrorism. Certain of these factors
could affect the trading price of Lion’s shares, regardless of operating performance. Lion attempts to
mitigate these factors by implementing appropriate safeguards and commercial actions but these factors
are largely beyond Lion’s control. The underlying value of Lion’s investments in its investees also may not be
fully reflected in Lion’s share price.
Reliance
on key
personnel
A number of key management and personnel is important to attaining the respective business goals of
Lion. One or more of Lion’s key employees could leave their employment, and this may adversely affect the
ability of Lion to conduct its business and, accordingly, affect the financial performance and share price of
Lion. Further, the success of Lion in part depends on the ability of Lion to attract and retain additional highly
qualified management and personnel.
18 Lion Selection Group Limited 2024 Annual Report
Corporate Governance Statement
Because the mineral resource/ore
reserve usually has both greater value
and risk than purely financial assets,
a company’s internal controls and
processes surrounding establishing
and announcing these are one of
the most material aspects for pre-
production mining companies.
This extends to studies that seek
to establish parameters around
how a mining operation might
operate. This area continues to be
overlooked in the ASX guidelines
and consideration should be given
for how mining companies approve
such releases, and having geological
and mining expertise at board level
to understand the issues and provide
formal approval. Regulatory debate
in 2016 focussed on scoping study
disclosure and restricting release
of this information which is vital to
investor comprehension and proper
functioning of the ASX as a funding
mechanism. Lion continues to oppose
any restriction on disclosure of
feasibility work.
The ASX Corporate Governance
Council requires listed firms to
adopt a majority of ‘independent’
board members without links
to management or substantial
shareholders (ie 5% or greater
shareholding), or explain ‘if not, why
not’. The concept is that such directors
should be more dispassionate
and less biased in favour of
either management or significant
shareholders. We note that there is
limited empirical research supporting
that such boards add value to a
company, and in Lion’s experience this
structure can be detrimental for junior
mining companies. Lion concurs that
it is essential that a board operates as
an effective check on management,
however a non-executive director with
a significant shareholding is often
better placed to fulfil this role, and
has interests closely aligned with the
general shareholder register.
Junior mining companies often have
many challenges to be overcome to
develop their projects, and need the
necessary entrepreneurial drive to
achieve this. In a crisis, an ASX-defined
independent director risks being
disinterested, overly conservative, or
may lack the fortitude to see the task
through when their personal incentives
are limited to on-going director’s fees.
The ASX guidelines provide that
non-executive directors should not
receive options with performance
hurdles or performance rights as part
of their remuneration which may lead
to bias in their decision making and
compromise their objectivity. Lion
notes that pre-production mining
companies almost all have limited
cash, and issuing appropriately
structured options both reduces the
cash burden on the company and
provides greater alignment with the
interests of shareholders.
As a professional investor in junior miners, Lion is particularly focussed
on the corporate governance of its investee companies. Lion’s approach
is based on experience through multiple resource cycles and reflects its
view that in corporate governance one size does not fit all and careful
consideration must be given for smaller mining companies, notably a
material sub-set of ASX listed companies. Three key departures are
relevant, in particular for pre-production mining companies:
(1)
(2)
(3)
Lion Selection Group Limited 2024 Annual Report 19
Introduction
The Board of Directors of Lion Selection Group Limited
(Lion or the Company) is committed to high standards of
corporate governance. The Company recognises that it has
responsibilities to its shareholders and personnel, as well
as to the communities in which it invests.
As required by the ASX Listing Rules, this statement
discloses the extent to which the Company follows the 4th
Edition of the ASX Corporate Governance Principles and
Recommendations released in February 2019 by the ASX
Corporate Governance Council (ASX Recommendations).
Except where otherwise explained, the Company follows
all of the ASX Recommendations.
This Corporate Governance Statement has been approved
by the Board of Directors of Lion Selection Group Limited.
PRINCIPLE 1: Lay solid foundations for
management and oversight
The Board
The Company has adopted a Board Charter that sets
out the role and functions of the Board, the Chair and
management and includes a description of those matters
expressly reserved to the Board and those delegated to
management. A copy of the Company’s Board Charter is
available on the Company’s website.
The Board of directors monitors the progress and
performance of Lion on behalf of its shareholders, by
whom it is elected and to whom it is accountable. The
Board Charter seeks to ensure that the Board discharges
its responsibilities in an effective and capable manner.
The Board’s primary responsibility is to satisfy the
expectations and be a custodian for the interests of its
shareholders. In addition, the Board seeks to fulfil its
broader ethical and statutory obligations, and ensure that
Lion operates in accordance with these standards. The
Board is also responsible for identifying areas of risk and
opportunity, and responding appropriately.
Responsibility for the administration and functioning of
Lion is delegated by the Board to the Chief Executive
Officer and the Chief Financial Officer (‘Executive
Management’). Through monitoring the performance of
the Executive Management at least annually by way of
performance evaluations, the Board ensures that Lion is
appropriately administered and managed. Lion’s Board
reviews the management’s performance internally through
reports, processes and presentations. The Board monitors
the management’s staffing and processes.
In addition, the Board guides strategic planning and
ensures it adheres to the interests and expectations of
Lion’s shareholders, manages risks and opportunities,
and monitors company progress, expenditure, significant
business investments and transactions, key performance
indicators and financial and other reporting.
Management
Executive Management implement the Company’s
investment strategy and manage its investments. This
includes all steps of the investment selection process and
the making of recommendations to the Board.
Executive Management are at liberty to engage specialists
and consultants as appropriate to assist in the investment
assessment process and provide a regular flow of
information to Lion’s directors. Lion’s Board retains the
power to make the final investment decision on the basis
of this information and advice. This retention of final
investment decision allows the Board to effectively review
the function and proficiency of the Executive Management
and of the investment selection processes.
Lion ensures that all candidates for directorship and senior
executives are well known to the company. In addition, all
appropriate checks and due diligence are undertaken by
the Lion Board prior to nominating a director for election or
appointment of a senior executive.
Information about candidates who are standing for
election or re-election as a director including biographical
details, qualifications, experience and other directorships
is provided to shareholders to enable them to make an
informed decision.
Recommendation 1.1
A listed entity should have and disclose a board
charter setting out:
(a) the respective roles and responsibilities of its
board and management; and
(b) those matters expressly reserved to the board and
those delegated to management.
Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks before appointing
a director or senior executive or putting someone
forward for election as a director; and
(b) provide security holders with all material
information in its possession relevant to a decision
on whether or not to elect or re-elect a director.
Corporate Governance Statement
20 Lion Selection Group Limited 2024 Annual Report
The terms on which the directors and senior executives
are appointed is set out in the written agreement between
the Company and the individual. This establishes the
roles and responsibilities of each person, their duties and
accountabilities.
The Company Secretary is responsible for co-ordination
of all Board business, including agendas, Board papers,
minutes, communication with regulatory bodies and ASX
and all statutory and other filings.
Through the Chairman, the Company Secretary is
accountable directly to the Board on all matters to do
with the proper functioning of the Board.
The Company has adopted a Diversity Policy which
provides a framework for the Company to establish and
achieve measurable diversity objectives.
In accordance with all matters set out in the Diversity
Policy, given the size of the Company, Lion has formed
the view that it would not, at this time, be appropriate or
practical to establish measurable objectives for achieving
gender diversity.
The Board did not set measurable gender diversity
objectives for the past financial year with respect to
recommendation 1.5(c). Lion does not at this time intend
to comply with this recommendation. However, this
position will be reviewed annually by the Board.
The small scale of the Board and the nature of the
Company’s activities make the formal establishment
of a performance evaluation strategy unnecessary.
Performance evaluation is managed by the Board.
The Board assesses performance of the Executive
Management on an annual basis. This process includes
one-on-one and collective meetings.
Senior executives are appointed by the Board and their
Key Performance Indicators (KPI’s) contain specific
financial and non-financial objectives. These KPI’s are
reviewed annually by the Board. The performance of each
senior executive against these objectives is evaluated
annually. A senior executive review was not undertaken
during the period to 31 July 2024 due to the recent
employment of Executive Management on 1 July 2024.
However, the company intends to conduct a senior
executive review in 2025.
Recommendation 1.3
A listed entity should have a written agreement with
each director and senior executive setting out the
terms of their appointment.
Recommendation 1.4
The company secretary of a listed entity should be
accountable directly to the board, through the chair, on all
matters to do with the proper functioning of the board.
Recommendation 1.6
A listed entity should:
(a) have and disclose a process for periodically
evaluating the performance of the board, its
committees and individual directors; and
(b) disclose for each reporting period whether a
performance evaluation has been undertaken in
accordance with that process during or in respect
of that reporting period.
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for evaluating the
performance of its senior executives at least once
every reporting period; and
(b) disclose for each reporting period whether a
performance evaluation has been undertaken in
accordance with that process during or in respect
of that period.
Recommendation 1.5
A listed entity should:
(a) have and disclose a diversity policy;
(b) through its board or a committee of the board
set measurable objectives for achieving gender
diversity in the composition of its board, senior
executives and workforce generally; and
(c) disclose in relation to each reporting period:
1. the measurable objectives set for that period to
achieve gender diversity;
2. the entity’s progress towards achieving those
objectives; and
3. either:
(A) the respective proportions of men and
women on the board, in senior executive
positions and across the whole organisation
(including how the entity has defined “senior
executive” for these purposes); or
(B) if the entity is a ‘relevant employer’ under
the Workplace Gender Equality Act, the
entity’s most recent ‘Gender Equality
Indicators’, as defined in and published
under that Act.16
If the entity was in the S&P/ASX 300 Index at
the commencement of the reporting period, the
measurable objective for achieving gender diversity
in the composition of its board should be to have not
less than 30% of its directors of each gender within a
specified period.
Corporate Governance Statement
Lion Selection Group Limited 2024 Annual Report 21
PRINCIPLE 2: Structure the board to
be effective and add value
Lion recognises that Recommendation 2.1 of the Principles
and Recommendations of the ASX Corporate Governance
Council suggests the establishment of a Nomination
Committee and associated Charter. However, in view of
the small size of Lion’s Board, the Board in its entirety, acts
effectively as Nomination Committee and there is no need
to further subdivide it. As such, a Nomination Committee is
an unnecessary measure for Lion.
The Lion Board as a whole reviews the size, structure and
composition of the Board including competencies and
diversity, in addition to reviewing Board succession plans
and continuing development.
It is a policy of Lion that the Board comprises individuals
with a range of knowledge, skills and experience which are
appropriate to its objectives.
A summary of the Lion directors’ skills and experience is
set out below:
Lion’s Constitution provides that the number of directors is
to be determined by the Board and shall not be less than
three. As a matter of policy, the Board is comprised of a
majority of independent non-executive directors. At present,
the Company has three directors – two independent
non-executive directors, being Chris Melloy and Peter
Maloney, and an executive director, Robin Widdup who was
appointed Executive Chairman on 1 February 2024. The
relevant skills, experience and expertise of each director
as well as the period of office held by each director are
described in the Company’s Annual Report.
Recommendation 2.1
The board of a listed entity should:
(a) have a nomination committee which:
1. has at least three members, a majority of
whom are independent directors; and
2. is chaired by an independent director,
and disclose:
3. the charter of the committee;
4. the members of the committee; and
5. as at the end of each reporting period,
the number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(b) if it does not have a nomination committee,
disclose that fact and the processes it employs to
address board succession issues and to ensure
that the board has the appropriate balance of
skills, knowledge, experience, independence and
diversity to enable it to discharge its duties and
responsibilities effectively.
Recommendation 2.3
A listed entity should disclose:
(a) the names of the directors considered by the
board to be independent directors;
(b) if a director has an interest, position, association
or relationship of the type described in Box 2.3
but the board is of the opinion that it does not
compromise the independence of the director,
the nature of the interest, position, association
or relationship in question and an explanation of
why the board is of that opinion; and
(c) the length of service of each director.
Recommendation 2.2
A listed entity should have and disclose a board skills
matrix setting out the mix of skills and diversity that
the board currently has or is looking to achieve in its
membership.
Skills and Experience
No. of Lion Directors
Leadership and Governance
Leadership
3
Corporate Governance
3
Strategy
3
Operations
Geology & Exploration
1
Infrastructure
2
Engineering
1
Project Delivery
3
Finance & Risk
Accounting
2
Finance
3
Acquisitions
3
Risk Management
3
Mining Investment
3
Recommendation 2.4
A majority of the board of a listed entity should be
independent directors.
Corporate Governance Statement
22 Lion Selection Group Limited 2024 Annual Report
The independent and objective judgment of Lion’s directors
is of paramount importance to the effective operation of
the Board. Independence is defined for the purposes of
the director as he/she being independent of any business
relations, whether managerial or otherwise, with Lion or
its actual or potential investments which might interfere
with their ability to make sound, unfettered, objective
judgments, and act in the best interest of Lion and its
shareholders.
The directors’ independence is regularly assessed by
the Board.
The majority of the Board of Lion are independent
non-executive directors.
To accord with good corporate governance practices
and in step with our objective of diversification of Board
representatives, the roles of Chairman and Chief Executive
Officer have been segregated.
Lion’s Executive Chair is Mr Robin Widdup who is not an
independent Director. The Board considers that Robin
Widdup best serves the office of Chair due to his extensive
industry experience.
The directors of the Board are specifically and individually
selected for their diverse skills and knowledge already
acquired through their education, professions, experience,
positions held and ongoing exposure to industry.
In accordance with the Company’s Board Charter:
●new Board appointees will undertake an induction
program to ensure effective and active participation at
the earliest opportunity;
●the Board is responsible for procuring appropriate
professional development opportunities for Directors to
develop and maintain the skills and knowledge needed to
effectively perform their role as Directors.
PRINCIPLE 3: Instil a culture of acting
lawfully, ethically and responsibly
The Company is committed to conducting all of its
business activities fairly, honestly, with the highest level
of integrity and professionalism and in compliance with
all applicable laws, rules and regulations. The Board is
dedicated to the highest ethical standards and recognises
and supports the Company’s commitment to compliance
with these standards.
A statement of the Company’s core values is available on
its website.
The Company’s Code of Conduct applies to the directors,
senior executives and employees of the Company.
The Company’s Code of Conduct is available on the
Company’s website. Any material breach of the Code of
Conduct is reported to the Board.
All directors and employees of the Company must preserve
the highest standards of integrity, accountability and
honesty in their dealings, operating in strict adherence
to statutory and ethical obligations. All such individuals
are to be mindful and respectful of relevant policies and
responsibilities, must avoid all conflicts of interest or,
where a conflict is able to be managed, must speak with
the Chairman about how the conflict should be managed
(who will consult with the board of directors if necessary).
Where there is uncertainty about whether a conflict exists,
all directors and employees are encouraged to discuss the
relevant circumstances with the Chairman. All concerns
about a breach of the Code of Conduct are to be reported
to the Chairman (who will in turn consult with the board).
The Company’s practices are to be stringently monitored
by the Board, while the Board itself must adhere to the
principles of its charter and uphold a high standard of
independence, objectivity and openness in its dealings and
relationship with shareholders and the management team.
In addition to its Code of Conduct, the Company’s
Shareholder Communications Policy, Securities Trading
Policy and Continuous Disclosure Policy, collectively form a
solid ethical foundation for company practices and must be
complied with at all times.
Recommendation 2.5
The chair of the board of a listed entity should be an
independent director and, in particular, should not be
the same person as the CEO of the entity.
Recommendation 3.2
A listed entity should:
(a) have and disclose a code of conduct for its
directors, senior executives and employees; and
(b) ensure that the board or a committee of the board
is informed of any material breaches of that code.
Recommendation 2.6
A listed entity should have a program for inducting new
directors and for periodically reviewing whether there is
a need for existing directors to undertake professional
development to maintain the skills and knowledge
needed to perform their role as directors effectively.
Recommendation 3.1
A listed entity should have and disclose its values.
Corporate Governance Statement
Lion Selection Group Limited 2024 Annual Report 23
Ethical Policies
Lion’s policies on indigenous communities, the
environment and social governance are as follows:
Local Indigenous Communities
Lion’s policy is that developments of investees are not
exploitative of local and indigenous communities and must
assist local communities such through symbiotic project
development. Investees are to have a focus on health,
education and employment of indigenous people near to
investee companies’ development projects.
Environment
Lion’s policy is that the environmental impact of
developments be in line with country/international
standards and not adversely impact local communities’
geology/economy.
Statement of Social Governance
It is the Company’s objective to achieve sustainable
economic and social benefits to the communities in which
mineral activity takes place by:
●recognising local realities and concerns;
●promoting dialogue and participation;
●building social and economic capital; and
●integrating activities locally and regionally.
To achieve its social governance objectives, the Company
considers the following areas of activity:
●Exploration/access to land and resources.
●Project development and governance of mining and
processing activity.
●Rent (royalty, tax etc) capture and distribution.
●Stewardship of water, biodiversity and energy use.
●Waste management.
●Social and environmental aspects of mine closure.
Subsequent stages of metals trade, smelting and refining
may often be beyond the influence of the Company.
Disclosures of wrongdoing are of importance to the
Company’s risk management and corporate governance
framework.
The Company encourages a culture of ‘speaking up’ to
raise concerns about possible unlawful, unethical or
socially irresponsible behaviour or other improprieties
without fear of retaliation or otherwise being
disadvantaged.
The Company’s Whistleblower Policy is available on the
Company’s website. Under the Whistleblower policy,
all Disclosable Matters are reported to the Board or a
committee of the Board.
(a) The Company’s Anti-Bribery and Corruption Policy is
available on the Company’s website.
(b) Any material breaches of the Anti-Bribery and
Corruption Policy are to be reported to the Board or a
committee of the Board.
PRINCIPLE 4: Safeguard the integrity
of corporate reports
The Company has an Audit Committee all of whom are
independent non-executive directors. The Audit Committee
is chaired by an independent director who is not chair of
the Board.
The Charter of the Lion Audit Committee and the relevant
qualifications of the committee’s members is available on
the Company’s website.
Recommendation 3.3
A listed entity should:
(a) have and disclose a whistleblower policy; and
(b) ensure that the board or a committee of the board
is informed of any material incidents reported
under that policy.
Recommendation 3.4
A listed entity should:
(a) have and disclose an anti-bribery and corruption
policy; and
(b) ensure that the board or a committee of the board
is informed of any material breaches of that
policy.
Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:
1. has at least three members, all of whom are
non-executive directors and a majority of
whom are independent directors; and
2. is chaired by an independent director, who is
not the chair of the board,
and disclose:
3. the charter of the committee;
4. the relevant qualifications and experience of
the members of the committee; and
5. in relation to each reporting period, the number
of times the committee met throughout the
period and the individual attendances of the
members at those meetings; or
(b) if it does not have an audit committee, disclose
that fact and the processes it employs that
independently verify and safeguard the integrity of
its corporate reporting, including the processes for
the appointment and removal of the external auditor
and the rotation of the audit engagement partner.
Corporate Governance Statement
24 Lion Selection Group Limited 2024 Annual Report
Prior to approval of any financial statement for a financial
period, the Chief Executive Officer and Chief Financial
Officer of Lion provide to the Lion Board a declaration in
accordance with Section 295A of the Corporations Act
which also accords with Recommendation 4.2.
The Company undertakes significant review of any
information to verify its integrity prior to its release to the
market. This includes separate reviews by the Company’s
Executive Management, Company Secretary and Directors
as necessary. Where a release is to include matter of
substance, the Company will seek additional input and
guidance from its Auditors prior to the information being
released to the market.
PRINCIPLE 5: Make timely and balanced
disclosure
The Company’s Continuous Disclosure Policy provides
details of the Company’s policies and procedures for
compliance with its continuous disclosure obligations.
The Continuous Disclosure Policy is available on the
Company’s website.
The Board reviews and considers each material market
announcement and provides its approval for release prior to
any information being released to the market.
All substantive investor or analyst presentations are
released to the ASX Markets Announcements
Platform ahead of any such presentations. Once
released, the presentations are also published on the
Company’s website.
PRINCIPLE 6: Respect the rights of
security holders
ASX announcements, quarterly reports, presentations,
notices of meetings and explanatory material are posted
to Lion’s website regularly. Other information on the site
includes details of Lion’s investment portfolio, Lion’s share
price, information about the Company and its directors
and management and also the Company’s governance and
policies. Information from the Annual General Meetings
and regular updates to investors as well as links to the
share registry and other sites of interest are also available
on the Company’s website.
Lion’s website contains a specific corporate governance
landing page where information regarding the Company’s
policies is easily accessible by shareholders.
The Company’s investor relations strategy and programs
are reviewed annually by the Lion Board. The Lion Board
and management are mindful of the importance of not only
providing information, but also encouraging and enabling
two-way communication between the Company and its
shareholders.
The Company has adopted a Shareholder Communications
Policy which outlines a range of ways information is
communicated to shareholders. A copy of the Shareholder
Communications Policy is available on the Company’s
website.
Recommendation 4.2
The board of a listed entity should, before it approves
the entity’s financial statements for a financial period,
receive from its CEO and CFO a declaration that,
in their opinion, the financial records of the entity
have been properly maintained and that the financial
statements comply with the appropriate accounting
standards and give a true and fair view of the financial
position and performance of the entity and that the
opinion has been formed on the basis of a sound
system of risk management and internal control which
is operating effectively.
Recommendation 4.3
A listed entity should disclose its process to verify the
integrity of any periodic corporate report it releases
to the market that is not audited or reviewed by an
external auditor.
Recommendation 5.1
A listed entity should have and disclose a written
policy for complying with its continuous disclosure
obligations under listing rule 3.1.
Recommendation 5.2
A listed entity should ensure that its board receives
copies of all material market announcements
promptly after they have been made.
Recommendation 5.3
A listed entity that gives a new and substantive
investor or analyst presentation should release a
copy of the presentation materials on the ASX Market
Announcements Platform ahead of the presentation.
Corporate Governance Statement
Recommendation 6.1
A listed entity should provide information about itself
and its governance to investors via its website.
Recommendation 6.2
A listed entity should have an investor relations
program that facilitates effective two-way
communication with investors.
Lion Selection Group Limited 2024 Annual Report 25
Lion places great importance on the communication
of accurate and timely information to its shareholders
and market participants. Lion recognises that efficient
and continuous contact between the Company and the
interested public, and particularly with shareholders and
their representatives, is an essential part of earning the
trust and loyalty of shareholders, building shareholder value
and allowing shareholders to make informed decisions
regarding their investment in Lion. Lion encourages
shareholder participation at general meetings and
welcomes regular contact with its shareholders.
The Company will continue to comply with
Recommendation 6.4 and ensure all substantive
resolutions at a meeting of security holders will be decided
on a poll rather than a show of hands.
Lion’s register of security holders is maintained by
Computershare Investor Services Pty Limited.
Lion actively encourages security holders to communicate
electronically with the company and Computershare.
Security holders can elect to receive electronic
communications from the Company via the Computershare
Investor Centre. Lion has implemented online voting for
general meetings via the Computershare Investor Centre
to encourage higher voting participation from its security
holders.
PRINCIPLE 7: Recognise and manage risk
In view of the small size of Lion’s Board, the Board in its
entirety acts, effectively, as a committee to oversee risk
and there is no need to further subdivide it.
Lion is a specialist investor in listed and unlisted mining
and exploration companies and assets and its major
business risk is the performance of these companies and
assets. Risks associated with the exploration and mining
industry include geological, technical, political, title and
commodity pricing risks.
The main areas of business risk to the Company arise
from:
●failure of an investee company due to one or a number
of the above causes;
●downturn in the stock market; and
●changes to the law – corporations/taxation legislation.
Individual investments each have their own risks which
relate to the mining industry generally. Under the
guidance of the Lion Board, the Company’s management
has established procedures relating to investment and
divestment decisions, and management of investments
with emphasis on risk assessment. Management reports
through monthly reports and at Board meetings on Lion’s
investments and related risk.
Recommendation 6.4
A listed entity should ensure that all substantive
resolutions at a meeting of security holders are
decided by a poll rather than a show of hands.
Recommendation 6.5
A listed entity should give security holders the
option to receive communications from, and send
communications to, the entity and its security
registry electronically.
Corporate Governance Statement
Recommendation 7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk,
each of which:
1. has at least three members, a majority of
whom are independent directors; and
2. is chaired by an independent director, and
disclose:
3. the charter of the committee;
4. the members of the committee; and
5. as at the end of each reporting period,
the number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(b) if it does not have a risk committee or committees
that satisfy (a) above, disclose that fact and the
processes it employs for overseeing the entity’s
risk management framework.
Recommendation 7.2
The board or a committee of the board should:
(a) review the entity’s risk management framework at
least annually to satisfy itself that it continues to
be sound and that the entity is operating with due
regard to the risk appetite set by the board; and
(b) disclose, in relation to each reporting period,
whether such a review has taken place.
Recommendation 6.3
A listed entity should disclose how it facilitates and
encourages participation at meetings of security
holders.
26 Lion Selection Group Limited 2024 Annual Report
The Board aims to reduce investment risk through
diversifying investments and avoiding over dependence
on a single commodity, investee company or country. In
certain circumstances the Board may elect to have higher
concentrations of the Company’s portfolio in a particular
commodity, investee company or country if the anticipated
rewards merit this approach.
Lion has no internal audit function. The Lion Board and
Audit Committee are responsible for establishing and
maintaining an internal control structure. This structure
is documented and periodically reviewed with the Chief
Financial Officer.
The activities of Lion are subject to risks that can adversely
impact its business and financial condition. Risks and
uncertainties are described in the Company’s Annual Report.
PRINCIPLE 8: Remunerate fairly
and responsibly
Compensation Arrangements and
Remuneration Committee
In June 2024, the Lion Board appointed a Remuneration
Committee consisting of the full Lion board and chaired
by Mr Chris Melloy.
The Company’s remuneration policy in relation to directors
and other key management personnel will be determined by
the Remuneration Committee.
The objective of the Company’s remuneration structure
is to reward and incentivise key management personnel
and employees to ensure alignment with the interests of
shareholders. The remuneration structure also seeks to
reward key management personnel and employees for their
contribution to the Company in a manner that is appropriate
for a company at this stage of its nature and size.
Emoluments of individual Board members and other key
management personnel are determined on the basis of
market conditions and the level of responsibility associated
with their position. Executives and employees receive a base
remuneration which is market related, and may be entitled
to performance based remuneration which is determined on
an annual basis. Overall remuneration policies are subject
to the discretion of the Remuneration Committee and can
be changed to reflect competitive and business conditions
where it is in the interests of the Company and shareholders
to do so. Executive remuneration and other terms of
employment are reviewed annually by the Remuneration
Committee having regard to the performance, relevant
comparative information and expert advice.
Recommendation 7.3
A listed entity should disclose:
(a) if it has an internal audit function, how the
function is structured and what role it performs; or
(b) if it does not have an internal audit function, that
fact and the processes it employs for evaluating
and continually improving the effectiveness of its
risk management and internal control processes.
Recommendation 7.4
A listed entity should disclose whether it has any
material exposure to environmental and social risks
and, if it does, how it manages or intends to manage
those risks.
Corporate Governance Statement
Recommendation 8.1
The board of a listed entity should:
(a) have a remuneration committee which:
1. has at least three members, a majority of
whom are independent directors; and
2. is chaired by an independent director, and disclose:
3. the charter of the committee;
4. the members of the committee; and
5. as at the end of each reporting period, the
number of times the committee met throughout
the period and the individual attendances of the
members at those meetings; or
(b) if it does not have a remuneration committee,
disclose that fact and the processes it employs for
setting the level and composition of remuneration
for directors and senior executives and ensuring that
such remuneration is appropriate and not excessive.
Recommendation 8.2
A listed entity should separately disclose its policies
and practices regarding the remuneration of non-
executive directors and the remuneration of executive
directors and other senior executives.
Lion Selection Group Limited 2024 Annual Report 27
The Board’s remuneration policy reflects its obligation to
align executive remuneration with shareholder interests
and to retain appropriately qualified executive talent for the
benefit of the Company.
Lion’s Constitution stipulates that the aggregate
remuneration available for division amongst the non-
executive directors is determined by the shareholders in
general meeting. With shareholder approval, the aggregate
was increased to $200,000 per annum commencing
1 August 2011. This amount, or some part of it, is divided
among the non-executive directors as determined by the
Board. At present the aggregate annual remuneration
paid to non-executive directors is $120,000.
D&O Insurance and Indemnity
The Company maintains a Directors and Officers and
Company Reimbursement Insurance Policy.
An indemnity agreement has been entered into between
Lion and each of the directors of the Company and with the
Chief Executive Officer and the Company Secretary. Under
the agreement, the Company has agreed to indemnify
those officers against any claim or for any expenses or
costs which may arise as a result of work performed in their
respective capacities to the extent permitted by law. There
is no monetary limit to the extent of this indemnity.
Performance Evaluation
The small scale of the Board and the nature of the
Company’s activities make the formal establishment
of a performance evaluation strategy unnecessary.
Performance evaluation is managed by the Chairman.
The Chairman assesses each Board member’s
performance, the Board as a whole and its committees
on an annual basis. This process includes one-on-one
and collective meetings.
The Board reviews Performance of Executive
Management. As the Company’s Chief Executive Officer is
a child of the Executive Chairman, the Executive Chairman
obstains from being involved with the Performance
evaluation process for the Chief Executive Officer.
Lion does not have an equity based remuneration scheme.
PRINCIPAL 9: Additional Recommendations
that only apply in certain cases
Not applicable.
Not applicable.
Not applicable.
Recommendation 8.3
A listed entity which has an equity-based remuneration
scheme should:
(a) have a policy on whether participants are permitted
to enter into transactions (whether through the
use of derivatives or otherwise) which limit the
economic risk of participating in the scheme; and
(b) disclose that policy or a summary of it.
Corporate Governance Statement
Recommendation 9.1
A listed entity with a director who does not speak the
language in which board or security holder meetings
are held or key corporate documents are written
should disclose the processes it has in place to ensure
the director understands and can contribute to the
discussions at those meetings and understands and
can discharge their obligations in relation to those
documents.
Recommendation 9.2
A listed entity established outside Australia should
ensure that meetings of security holders are held at a
reasonable place and time.
Recommendation 9.3
A listed entity established outside Australia, and an
externally managed listed entity that has an AGM,
should ensure that its external auditor attends its AGM
and is available to answer questions from security
holders relevant to the audit.
28 Lion Selection Group Limited 2024 Annual Report
The Directors of Lion Selection Group Limited (‘Lion’ or ‘the
Company’) submit their report on the operations of the
Company for the financial year ended 31 July 2024.
At the date of this report Lion had 141,150,775 fully paid
ordinary shares on issue.
Directors
The following persons were directors of Lion during the
financial year and up to the date of this report:
●Robin Widdup – Director
Executive Chairman from 1 February 2024
●Barry Sullivan – Chairman
Non-Executive Director from 1 February to 3 June 2024
●Peter Maloney – Non-Executive Director
●Chris Melloy – Non-Executive Director
Principal Activities
During the financial year the principal continuing activities
of the Company were investment in mining and exploration
companies.
Operating and Financial Review
This financial report is prepared in accordance with
Australian Accounting Standards and therefore includes
the result of the ‘mark to market’ of the Company’s
investment portfolio in both the Statement of Profit or Loss
and Other Comprehensive Income and the Statement of
Financial Position.
The Company’s profit after tax for the year was $1.1 million
(2023: $0.6 million).
Since exiting two large Indonesian investments in 2021
and 2022, Lion’s focus has been on new opportunities in
Australia timed to take advantage of weak markets for pre-
production resource companies considered to be proximal
to a cyclical trough. Lion has invested heavily during the
year, with $17.4 million invested in the portfolio including
Saturn Metals (ASX:STN), Plutonic Limited (unlisted),
Brightstar Resources (ASX:BTR) and Antipa Minerals
(ASX: AXY), along with several smaller investments.
The result for the year reflects a mark to market gain
of $0.7 million with respect to investments, with key
movements in the portfolio value outlined below:
●A mark to market increase of $2.0 million on Lion’s
investment in Saturn Metals benefiting from increasing
gold prices and the company’s progress on plans for a
pilot heap leach plant.
●Decrease in the value of Lion’s investment in PhosCo of
$2.0 million following PhosCo having challenges having
its Chaketma Phosphate Project lease restored.
●A mark to market increase of $0.7 million in the valuation
of Lion’s investment in Erdene Development Corporation,
with Erdene commencing development of its Bayan
Khundii Gold Project in Mongolia.
At 31 July 2024 the Company held investments valued
at $31.8 million (2023: $13.1 million), and cash and term
deposits of $55.9 million (2023: $75.0 million).
Dividends
On 18 October 20231 Lion Selection Group Limited declared
a 1.5¢ps unfranked dividend to shareholders (totalling
$2.1 million) which was paid on 10 November 2023
(2023: $5.0 million).
Compliance with Environmental Regulations
Lion has a policy that environmental impacts of
developments of investees are in line with country/
international standards and do not adversely impact local
communities.
Lion has not been notified by any investee of any
environmental breach by any government or other agency,
and is not aware of any such breach.
Significant Changes in the State of Affairs
During the period the Company agreed arrangements to
directly employ the investment team, and terminating the
Management Agreement with Lion Manager. Hedley Widdup
(Chief Executive Officer) and Craig Smyth (Chief Financial
Officer) became direct Lion employees on 1 July 2024.
There were no significant changes in the state of affairs of
the Company.
Significant Events after Balance Date
There has not arisen in the interval between the end of
the financial year and the date of this report, any item,
transaction or event of a material or unusual nature which
has or may significantly affect the operations of the
Company, the results of those operations, or the state of
affairs of the Company in future periods.
Proceedings on Behalf of the Company
No proceedings have been brought or intervened in on
behalf of the Company with leave of the court under
section 237 of the Corporations Act 2001.
Likely Developments and Future Results
The Company’s future operating results will depend on the
results of its investments. The Company’s ability to sustain
profits is dependent on future sales of investments which
in turn are dependent on market opportunities and the
performance of the Company’s various investments, which
are difficult to predict.
There are a wide variety of risks associated with the mining
and exploration industry including market conditions,
exploration, operational and political risk, tenure of
tenements, liquidity and native title issues.
Director’s Report
1. See ASX Announcement dated 18 October 2023, Lion to pay 1.5¢ps
dividend in November 2023.
Lion Selection Group Limited 2024 Annual Report 29
Because of the vagaries of the mining and exploration
industry and the long-term nature of most of Lion’s
investments, the directors are unable to predict future
results.
Corporate Governance Statement
In recognising the need for the highest standards of
corporate behaviour and accountability, the directors of
Lion support the applicable principles of good corporate
governance. The Company’s corporate governance
statement can be found in the Investor Section of our
website www.lionselection.com.au.
Employees
At 31 July 2024 there was five permanent employees of
the Company (2023: 1 employee).
Remuneration Report
All disclosures in this remuneration report have been
audited. This remuneration report outlines the director and
executive remuneration arrangements of the Company
as required by section 308 (3C) of the Corporations Act
2001. For the purposes of this report, key management
personnel of the Company are defined as those persons
having authority and responsibility for planning, directing
and controlling the major activities of the Company,
directly or indirectly, including any director, and includes the
executive employed by the Company considered to meet
the definition of key management personnel.
Key Management Personnel
Remuneration Framework
Remuneration policy
The remuneration policy in relation to directors is
determined by the full Board. Remuneration of other key
management personnel is determined by the directors of
the Company.
The objective of the Company’s remuneration structure
is to reward and incentivise key management personnel
and employees to ensure alignment with the interests of
shareholders. The remuneration structure also seeks to
reward key management personnel and employees for
their contribution to the Company in a manner that
is appropriate for a company at this stage of its nature
and size.
Emoluments of individual Board members and other key
management personnel are determined on the basis of
market conditions and the level of responsibility associated
with their position. Executives and employees receive
a base remuneration which is market related, and may
be entitled to performance based remuneration which
is determined on an annual basis. Overall remuneration
policies are subject to the discretion of the Board and
can be changed to reflect competitive and business
conditions where it is in the interests of the Company and
shareholders to do so. Executive remuneration and other
terms of employment are reviewed annually by the Board
having regard to the performance, relevant comparative
information and expert advice.
The Board’s remuneration policy reflects its obligation to
align executive remuneration with shareholder interests
and to retain appropriately qualified executive talent for the
benefit of the Company.
Elements of remuneration
Fixed annual remuneration
Key management personnel receive their base pay and
statutory benefits structured as a total fixed remuneration
package.
Base pay for key management is reviewed annually to
ensure the remuneration is competitive with the market
and remains appropriate for the Company and its
operations.
There are no guaranteed base pay increases included in
any employment contracts.
Variable remuneration – Short-term incentive
arrangements
During the year, the Company adopted a Short-Term
Incentive (STI) Scheme. The objective of the STI is to link
the achievement of the Group’s short-term performance
objectives with the remuneration received by senior
management and employees charged with achieving those
measures. STI payments are dependent on the extent to
which performance measures, as set by the Board are
achieved and are ‘at risk’.
No STI payments were made during the year.
Variable remuneration – Long term incentives
Performance Rights
The establishment of an Employee Incentive Plan (the
Plan), and the issue of securities under the Plan was
approved by shareholders at an extraordinary shareholder
meeting on 26 June 2024. During the year, the Company
adopted a Long-Term Incentive (LTI) Scheme and on 1
July 2024, 2,476,000 performance rights were awarded
to key management personnel. See Note 20 and this
Remuneration Report for further details.
LTI’s are anticipated to be issued annually to eligible
employees.
Contractual arrangements for executive KMP
The executive remuneration framework is summarised in
the table on page 31.
Other key management personnel receive a base salary
and superannuation contributions in accordance with
Australian superannuation guarantee legislation.
Director’s Report
30 Lion Selection Group Limited 2024 Annual Report
Component
Executive
Chairman
Chief Executive
Officer
Chief Financial
Officer
Other Key Management
Personnel
Fixed Remuneration
$230,000
$350,000
$350,000
$135,000
on a full time basis
Short term incentive (STI)
None
Company may invite the employee to participate at its sole discretion
Long term incentive (LTI)
None
Company may invite the employee to participate at its sole discretion
Contract duration
Ongoing contract
Ongoing contract
Ongoing contract
Ongoing contract
Notice by the individual/
company
6 months/
3 months
3 months/
12 months
3 months/
12 months
3 months/
3 months
Non-executive director arrangements
Directors’ fees are determined within an aggregate
directors’ fee pool limit, which is periodically recommended
for approval by shareholders. As approved by shareholders
at the Annual General Meeting held on 1 December 2011,
the maximum aggregate amount, including superannuation
contribution, that may be paid to non-executive directors
of the Company as remuneration for their services is
$200,000 for any financial year.
The remuneration policy of the Company with respect to
directors and other key management personnel provides
for Director’s and Officer’s (D&O) Insurance cover, but
does not provide options, shares, loans or any other non-
monetary benefits.
Link between remuneration and performance
Remuneration of executives consists of an un-risked
element (base pay), short-term incentives, and long-term
incentives (performance rights) which vest upon the
satisfaction of performance criteria, based on key strategic,
market and non-financial measures linked to drivers of
performance in future reporting periods. The Company
did not pay any short-term incentives (e.g. cash bonuses)
during the year (2023: nil).
The Group’s summary key performance information,
including earnings and movement in shareholder wealth for
the five (5) years to 31 July 2024, is included above.
Voting and Comments at the Company’s
2023 Annual General Meeting
The Company received more than 99% of ‘yes’ votes on
its Remuneration Report for the previous financial year.
The Company did not receive any specific feedback
at the Company’s 2023 Annual General Meeting on its
remuneration practices.
Details of Remuneration
Details of remuneration paid/payable to directors and the
other key management personnel of the Company are
detailed in the following table.
The executive remuneration framework
The Group’s summary key performance information
Unit
2024
2023
2022
2021
2020
Total income
$’000
4,081
3,168
8,382
31
31,861
Profit/ (Loss) before income tax
$’000
1,486
760
6,152
(2,707)
29,864
Profit/ (Loss) after income tax
$’000
1,107
581
9,031
(5,865)
29,864
Share price at the start of the financial year
Cents per share
44.0
44.5
40.2
43.0
37.8
Share price at the end of the financial year
Cents per share
47.5
43.5
44.0
41.1
43.0
Basic earnings per share
Cents per share
0.8
0.4
6.0
(3.9)
19.9
Diluted earnings per share
Cents per share
0.8
0.4
6.0
(3.9)
19.9
Dividend per share
Cents per share
1.5
3.5
3.5
-
-
Director’s Report
Lion Selection Group Limited 2024 Annual Report 31
# Leave entitlements include recognition of provisions for annual and long service leave assumed by Lion in employing the employee directly.
(a) B J K Sullivan deceased 3 June 2024.
(b) R A Widdup was employed by Lion Manager Pty Ltd until 31 January 2024 and did not receive any remuneration from the Company.
On 1 February 2024 R A Widdup was appointed Executive Chairman of Lion Selection Group. Leave entitlements include recognition of provisions for
annual and long service leave assumed by Lion in employing the employee directly.
(c) H J Widdup and C K Smyth were employed by Lion Manager Pty Ltd until 30 June 2024 and did not receive any remuneration from the Company.
On 1 July 2024 H J Widdup was appointed Chief Executive Officer and C K Smyth continued on in his role of Chief Financial Officer of Lion Selection
Group. Leave entitlements include recognition of provisions for annual and long service leave assumed by Lion in employing each employee directly.
(a) R A Widdup and C K Smyth are employed by Lion Manager Pty Ltd, and do not receive any remuneration from the Company.
Both Mr R A Widdup and Mr C K Smyth were executive directors and beneficial owners of Lion Manager Pty Ltd (Lion
Manager) and have the capacity to significantly influence decision making of that company. Lion Manager provided
management and investment services to Lion.
Prior to 1 July 2024, Lion had a Management Agreement with Lion Manager, under which Lion Manager provided the
Company with management and investment services. These arrangements were approved by shareholders at Lion’s AGM
on 5 December 2012, with management fees of 1.5% p.a. based on the direct investments under management. There was
also an incentive applicable which would apply where Lion’s performance outperforms a benchmark (no incentive fee had
accrued with respect to the Lion Manager contract during the year).
Effective 1 July 2024 the Company and Lion Manager completed an agreement under which the existing Management
Agreement was terminated and the Company’s investment team employed directly by Lion. Lion also acquired the plant
and equipment items from Lion Manager and assumed responsibility for employee entitlement for no consideration.
2024
Fixed Remuneration
Variable Remuneration
Salaries/Fees
Leave Entitlements
Post-Employment
Superannuation
Cash
Bonus
Share Based
Payments
Total
Name
Notes
$
$
$
$
$
$
Directors
B J K Sullivan
(a)
56,306
-
6,194
-
-
62,500
P J Maloney
32,292
-
27,708
-
-
60,000
C Melloy
32,292
-
27,708
-
-
60,000
R A Widdup
(b)
102,500
32,673#
12,500
-
-
147,673
Other Key Management Personnel
H J Widdup
(c)
26,667
68,149#
2,500
-
15,356
112,672
C K Smyth
(c)
26,667
88,347#
2,500
-
15,356
132,870
J M Rose
90,513
(6,907)
9,987
-
-
93,593
Total
367,237
182,262
89,097
-
30,712
669,308
2023
Fixed Remuneration
Variable Remuneration
Salaries/Fees
Leave Entitlements
Post-Employment
Superannuation
Cash Bonus
Total
Name
Notes
$
$
$
$
$
Directors
B J K Sullivan
59,175
-
6,242
-
65,417
P J Maloney
24,167
-
27,500
-
51,667
C Melloy
24,167
-
27,500
-
51,667
R A Widdup
(a)
-
-
-
-
-
Other Key Management Personnel
C K Smyth
(a)
-
-
-
-
-
J M Rose
113,080
(4,631)
11,920
-
120,369
Total
220,589
(4,631)
73,162
-
289,120
Key Management Personnel of the Company – Remuneration for year to 31 July 2024
Director’s Report
32 Lion Selection Group Limited 2024 Annual Report
Shareholdings of Key Management Personnel of the Company
Name
Balance
1 August 2023
Shares issued as
Remuneration
Ceasing to be
a Director
Closing Balance
31 July 2024
Directors
P J Maloney
2,190,389
-
-
2,190,389
C Melloy
5,800,000
-
-
5,800,000
R A Widdup
16,717,277
-
-
16,717,277
B J K Sullivan*
813,074
-
(813,074)
-
Other Key Management Personnel
H J Widdup
1,174,139
-
-
1,174,139
C K Smyth
1,505,137
-
-
1,505,137
J M Rose
-
-
-
-
Total
28,200,016
-
(813,074)
27,386,942
Name
Balance
1 August 2022
Shares issued as
Remuneration
On-Market Purchase
of Shares
Closing Balance
31 July 2023
Directors
P J Maloney
2,190,389
-
-
2,190,389
C Melloy
5,800,000
-
-
5,800,000
R A Widdup
16,717,277
-
-
16,717,277
B J K Sullivan*
813,074
-
-
813,074
Other Key Management Personnel
C K Smyth
1,505,137
1,505,137
J M Rose
-
-
-
-
Total
27,025,877
-
-
27,025,877
Key Management Personnel Shareholdings
At the date of this report the direct and indirect interests of the directors and other key management personnel in the
ordinary shares and options of Lion are detailed below. No shares or options were issued as remuneration.
* B J K Sullivan deceased 3 June 2024.
Performance Shares
Lion issued performance rights to eligible Key Management Personnel under its Long-Term Incentive Plan on 1 July 2024.
Each performance right will convert to one ordinary share in the Company during the performance period subject to the
satisfaction of the performance conditions. The rights are not transferable.
These rights will constitute a share-based payment transaction for accounting purposes. Refer Note 20 for further detail.
Name
Balance
1 August 2023
Performance
Shares issued
Closing Balance
31 July 2024
H J Widdup
-
1,238,000
1,238,000
C K Smyth
-
1,238,000
1,238,000
Total
-
2,476,000
2,476,000
Director’s Report
Lion Selection Group Limited 2024 Annual Report 33
For the performance rights granted during the current financial year, the key conditions and valuation model inputs used to
determine the fair value at the grant date, are as follows:
Grant Date
1 July 2024
Total number of
Performance Rights
2,476,000
Issue Price
Nil
Measurement Period
Grant Date to 31 July 2027
Exercise Price
Nil
Vesting Date
Performance will be measured at the end of each 'Performance Year' during the Measurement
Period, being 31 July 2025, 31 July 2026 and 31 July 2027.
Assessment for each Performance Year will be reduced to the extent that shares have been
issued in previous Performance Years under the same Performance Rights tranche.
Performance Rights will vest upon the date upon which the relevant Vesting Condition has been
satisfied, as determined by the Board, provided this occurs prior to the Expiry Date.
Disposal
Restrictions
Shares received upon exercise of any vested LTI Performance Rights will be subject to a two-year
escrow period from the date of exercise.
Vesting Conditions
TRANCHE 1
Up to 1,000,000 Performance Rights vest based on share price performance measured based on
the Company’s highest 30-day volume weighted average price (VWAP) in the Performance Year.
●VWAP less than 56¢ – Nil Performance Rights vest;
●VWAP equals 56¢ –500,000 Performance Rights vest;
●VWAP between 56¢ and 76¢ – pro rata Performance Rights vest between 500,000 and
1,000,000 Performance Rights.
●VWAP equals 76¢ or more – 1,000,000 Performance Rights Vest
Any dividends paid during the Performance Year will added to the current VWAP from the point
that the Company trades ex-dividend.
TRANCHE 2
Up to 1,000,000 Rights vest based on the Company’s portfolio value per share measured based
on the Company’s highest month-end fair value in accordance with Australian Accounting
Standards (currently referred to as Net Tangible Assets) (Portfolio Value) in the Performance Year:
●Portfolio Value less than 71¢ – Nil Performance Rights vest;
●Portfolio Value equals 71¢ –500,000 Performance Rights vest;
●Portfolio Value between 71¢ and 83¢ – pro rata Performance Rights vest between 500,000 and
1,000,000 Performance Rights;
●Portfolio Value equals 83¢ or more – 1,000,000 Performance Rights vest.
Any dividends paid during the Performance Year will added to the current Portfolio Value from the
point that the Company trades ex-dividend.
RETENTION TRANCHE
Up to 476,000 Performance Rights vest based on continuous service with the Company
measured at each Performance Year:
●95,200 Performance Rights Vest on 31 July 2025;
●95,200 Rights Performance Rights on 31 July 2026;
●285,600 Performance Rights on 31 July 2027.
Director’s Report
34 Lion Selection Group Limited 2024 Annual Report
Information on Directors
Robin Widdup
BSc (Hons) – Executive Chairman
Robin has almost 50 years industry experience spanning
work in large mines in Africa, UK and Australia, mining
analysis for stockbroker JBWere and founding Lion
Selection Group in 1997.
A number of directorships of listed and unlisted mining
companies have been held over recent decades covering a
variety of commodities.
Robin was appointed Executive Chairman of Lion on
1 February 2024 and previously was a non-executive
director of Lion. Robin is Chairman of PhosCo Ltd.
Barry Sullivan
BSc (Min), ARSM, FAusIMM, MAICD – Non-Executive Director
Deceased 3 June 2024
Barry Sullivan was an experienced and successful mining
engineer with a career spanning over 40 years in the
mining industry. His initial mining experience was gained
in the South African gold mining industry, followed by
more than 20 years with Mount Isa Mines. In the final five
years of his tenure with MIM, Barry was Executive General
Manager responsible for the extensive Mount Isa and
Hilton operations.
Barry was previously Non-Executive Chairman for
EganStreet Resources, non-executive Director and
Chairman of Exco Resources and a non-executive Director
of Catalpa Resources, Sedimentary Holdings, Bass Metals
and Allegiance Mining. He was also a non-executive director
of Lion’s predecessor company, Lion Selection Limited.
Barry served as Chairman of Lion between December
2011 and January 2024. Prior to December 2011 and from
February 2024 had been a non-executive director. Barry
was also a member of the Lion Audit Committee. Barry
passed away on 3 June 2024.
Peter Maloney
BComm, MBA (Roch) – Non-Executive Director
Peter Maloney has broad commercial, financial and
management expertise and experience. He has been Chief
Financial Officer of Lion and an executive director of Lion
Manager. Prior to that he held senior executive positions
with WMC Resources and a number of other companies.
Peter holds a Bachelor of Commerce from the University of
Melbourne and an MBA from University of Rochester. He
has also completed the Advanced Management Program
at Harvard Business School.
Peter has been a non-executive director of Lion since
December 2010, including serving as Chairman between
1 January 2012 and 24 February 2016. Peter is also
Chairman of the Lion Audit Committee.
Chris Melloy
BE (Mining) (Hons), MEngSc, MAusIMM, F Fin
Non-Executive Director
Chris Melloy is a mining engineer with some 40 years’
experience in the mining industry in operations, securities
analysis and investment. He held senior positions in MIM
and JBWere & Son prior to joining Lion.
Chris was an Executive Director of Lion Manager from
its inception in 1997 through to 2011, becoming a non-
executive director of Lion on 1 November 2012. Chris is
also a member of the Lion Audit Committee.
Other Key Management Personnel
Hedley Widdup
Bsc (Hons), MAusIMM – Chief Executive Officer
Hedley Widdup graduated as a geologist with first class
honours from the University of Melbourne in 2000. Upon
finishing his degree, Hedley joined WMC Resources as a
geologist working at the Mt Keith Nickel Mine.
Hedley has extensive experience as a mine geologist
having worked at Olympic Dam, Mt Isa (Black Star open cut
mine) and the St Ives Gold Mine where he was Senior Mine
Geologist of the combined open pits. Hedley joined the
Lion Manager team in July 2007 as an analyst.
Hedley is a non-executive director of Erdene Resources
Development Corporation (TSX.ERD), non-executive
Chairman of Plutonic Limited (Unlisted), and a member of
the Melbourne Mining Club Steering Committee.
Craig Smyth
BCA (Acctg), M App Fin, CA – Chief Financial Officer
Craig Smyth graduated from the Victoria University
of Wellington with a Bachelor of Commerce and
Administration, and has completed his Master of Applied
Finance at the University of Melbourne. Craig’s financial
background includes Coopers & Lybrand, Credit Suisse
First Boston (London) and ANZ Investment Bank. Craig
is a member of the Institute of Chartered Accountants of
Australia and New Zealand. Craig has 19 years resources
experience since joining Lion in 2005 as Financial
Controller, before becoming Chief Financial Officer in 2010.
Craig is the interim Chief Financial Officer of Lion investee
PhosCo Ltd and has represented Lion on the Pani Joint
Venture and within Nusantara Resources Limited.
Jane Rose
Investor Relations Manager & Company Secretary
Jane Rose commenced work in 1983 as a legal
administrative assistant. During the following 12 years,
Jane held senior administrative positions with Phillips Fox
and Corrs Chambers Westgarth in Melbourne and Nabarro
Nathanson in London.
On returning to Australia, Jane worked as Executive
Assistant to the Managing Director of Acacia Resources
Limited and AngloGold Ashanti Limited where she was
also responsible for the management of various corporate
initiatives, including marketing and co-ordination of
investor relations activities. From 2002 to 2006, Jane
worked for several Lion investees, including MPI Mines
Ltd, Leviathan Resources and Indophil Resources. Jane
worked with Lion in early 2007 to assist with the merger,
and she subsequently joined the company in July 2007 as
Corporate Relations Manager. In November 2008 Jane was
appointed Company Secretary.
Director’s Report
Lion Selection Group Limited 2024 Annual Report 35
Directors’ Meetings
During the year and up until the date of this report, the
Company held seven directors’ meetings. The table below
reflects attendances of the directors at meetings of Lion’s
Board.
* B J K Sullivan deceased 3 June 2024.
Audit Committee Meeting
During the year and up until the date of this report, the
Company held two Audit Committee meetings.
The table below reflects attendances of the Audit
Committee meetings.
Directors’ Benefits
Since the end of the preceding financial year, no director
has received or become entitled to receive a benefit, other
than benefits disclosed in this report as emoluments or
the fixed salary of a full time employee of the Company or
a related body corporate, by reason of a contract made by
the Company or related body corporate with the director
or with a firm of which he is a member, or with an entity in
which he has a substantial financial interest.
Indemnification of Directors and Officers
An indemnity agreement has been entered into between
Lion and each of the Company’s directors named earlier
in this report and with the Company Secretary. Under the
agreement, the Company has agreed to indemnify those
officers against any claim or for any expenses or costs
which may arise as a result of work performed in their
respective capacities to the extent permitted by law. There
is no monetary limit to the extent of this indemnity.
Lion has paid an insurance premium of $87,154 in respect
of a contract insuring each of the directors, previous
directors of the Company, and other key management
personnel, against all liabilities and expenses arising as a
result of work performed in their respective capacities, to
the extent permitted by law.
Auditor Independence
We have obtained an independence declaration from our
auditors, Nexia Melbourne Audit Pty Ltd, as required under
section 307 of the Corporations Act 2001. A copy can be
found on page 37 of this financial report.
Non-Audit Services
No fees for non-audit services were paid/payable to the
external auditors during the year ended 31 July 2024.
The directors are satisfied that the provision of non-
audit services is compatible with the general standard of
independence for auditors imposed by the Corporations
Act 2001.
Rounding of Amounts
The Company is of a kind referred to in ASIC Instrument
2016/191 relating to the ‘rounding off’ of amounts in the
financial report and Directors’ report. Amounts in the
financial report and Directors’ report have been rounded
off in accordance with that Instrument to the nearest
thousand dollars unless specifically stated to be otherwise.
This report has been made in accordance with a resolution
of the directors.
R A Widdup
Chairman
P J Maloney
Director
Melbourne
Board Of Directors
Attended
Max. Possible Attended
P J Maloney
7
7
R A Widdup
7
7
B J K Sullivan*
5
5
C P Melloy
7
7
Audit Committee
Attended
Max. Possible Attended
P J Maloney
2
2
B J K Sullivan
2
2
C P Melloy
2
2
Director’s Report
36 Lion Selection Group Limited 2024 Annual Report
Auditor's Independence Declaration under section 307C of the
Corporations Act 2001
To the Directors of Lion Selection Group Limited
As lead partner for the audit of the financial statements of Lion Selected Group Limited for the
financial year ended 31 July 2024, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b)
any applicable code of professional conduct in relation to the audit.
Nexia Melbourne Audit Pty Ltd
Richard Cen
Melbourne
Director
Dated this 12th day of September 2024
Registered Audit Company 291969
Nexia Melbourne Audit Pty Ltd (ABN 86 005 105 975) is a firm of Chartered Accountants. It is affiliated with, but independent from Nexia Australia Pty Ltd. Nexia
Australia Pty Ltd is a member of Nexia International, a leading, global network of independent accounting and consulting firms. For more information please see
www.nexia.com. au/legal. Neither Nexia International nor Nexia Australia Pty Ltd provide services to clients.
Liability limited under a scheme approved under Professional Standards Legislation.
Australia
Australia
Level 35, 600 Bourke St
Melbourne VIC 3000
E: info@nexiamelbourne.com.au
P: +61 3 8613 8888
F: +61 3 8613 8800
nexia.com.au
Nexia Melbourne Audit Pty Ltd
Lion Selection Group Limited 2024 Annual Report 37
Lion Selection Group Limited
Directors’ Declaration
In accordance with a resolution of the directors of Lion Selection Group Limited, we declare that:
1.
In the opinion of the directors:
(a)
The financial statements, notes set out on pages 39 to 64 are in accordance with the Corporations Act 2001
and other mandatory reporting requirements, including:
(i)
complying with the Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
(ii)
giving a true and fair view of the financial position of the Company’s position as at 31 July 2024
and its performance for the year ended on that date; and
(b)
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
(c)
The consolidated entity disclosure statement on page 64 is true and correct.
2.
Note 2(a) confirms that the financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
3.
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with section 295A of the Corporations Act 2001 for the financial year ended 31 July 2024.
4.
The directors have been given the declaration by the chief executive officer required by section 295A of the
Corporations Act 2001.
On behalf of the Board
R A Widdup
P J Maloney
Chairman
Director
Melbourne
Date: 12 September 2024
38 Lion Selection Group Limited 2024 Annual Report
Statement of Profit or Loss and Other Comprehensive Income for the Year ended 31 July 2024
Notes
2024
$’000
2023
$’000
Gain/(loss) attributable to movement in fair value
4
694
904
Interest income
3,322
2,195
Other income
65
69
Management fees
(1,305)
(1,521)
Employee benefits
4
(733)
(289)
Other expenses
4
(557)
(598)
Profit/(loss) before income tax
1,486
760
Income tax (expense)/benefit
5
(379)
(179)
Net profit/(loss) after tax
1,107
581
Other comprehensive income
-
-
Total comprehensive income/(loss) for the year
1,107
581
Attributable to:
Members
1,107
581
Cents per
share
Cents per
share
Basic earnings/(loss) per share
0.8
0.4
Diluted earnings/(loss) per share
0.8
0.4
The above statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
Financial Statements
Lion Selection Group Limited 2024 Annual Report 39
Financial Statements
Statement of Financial Position as at 31 July 2024
Notes
2024
$’000
2023
$’000
Current Assets
Cash and cash equivalents
13
11,640
7,534
Term deposits
3
44,240
67,500
Trade receivables and other assets
6
1,214
1,169
Total current assets
57,094
76,203
Non-Current Assets
Financial assets
7
31,768
13,101
Property, plant and equipment
8
203
296
Total non-current assets
31,971
13,397
Total Assets
89,065
89,600
Current Liabilities
Trade and other payables
9
95
75
Tax payable
57
-
Employee Entitlements
250
21
Lease liabilities
97
89
Total current liabilities
499
185
Non-Current Liabilities
Lease liabilities
123
220
Deferred tax liabilities
5 (b)
447
220
Total non-current liabilities
570
440
Total Liabilities
1,069
625
Net Assets
87,996
88,975
Equity
Contributed equity
11
121,900
121,900
Reserves
12
31
1,341
Accumulated losses
10
(33,935)
(34,266)
Total Equity
87,996
88,975
The above statement of financial position should be read in conjunction with the accompanying notes.
40 Lion Selection Group Limited 2024 Annual Report
Financial Statements
Statement of Cash Flows for the Year ended 31 July 2024
Notes
2024
$’000
2023
$’000
Cash flows from operating activities
Interest received
3,261
1,129
Other income received
65
69
Payments to suppliers and employees (including GST)
(2,193)
(2,316)
Interest paid
(14)
(17)
Income tax paid
(96)
(238)
Net cash inflow/(outflow) from operating activities
13(b)
1,023
(1,373)
Cash flows from investing activities
Payments for investments
(17,971)
(2,263)
Funds placed on term deposit
23,260
(47,500)
Proceeds from investments
-
46,705
Net cash inflow/(outflow) from investing activities
5,289
(3,058)
Cash flows from financing activities
Dividends paid
(2,117)
(5,036)
On-market share buy-back
-
(3,537)
Payments for lease liability
(89)
(81)
Net cash inflow/(outflow) from financing activities
(2,206)
(8,654)
Net increase/(decrease) in cash and cash equivalents
4,106
(13,085)
Cash and cash equivalents at beginning of financial year
7,534
20,619
Cash and cash equivalents at end of financial year
11,640
7,534
The above statement of cash flows should be read in conjunction with the accompanying notes
Lion Selection Group Limited 2024 Annual Report 41
Financial Statements
The above statement of changes in equity should be read in conjunction with the accompanying notes
Statement of Changes in Equity for the Year ended 31 July 2024
Issued
Capital
$’000
Reserves
$’000
Accumulated
Losses
$’000
Total
$’000
Balance at 1 August 2023
121,900
1,341
(34,266)
88,975
Total comprehensive income/(loss)
-
-
1,107
1,107
Transactions with owners in their capacity as owners
Dividends paid
-
-
(2,117)
(2,117)
Transfer from Share Based Payments Reserve
– Expiry of Options unexercised
-
(1,341)
1,341
-
Issue of performance rights
-
31
-
31
Balance at 31 July 2024
121,900
31
(33,935)
87,996
Balance at 1 August 2022
125,404
1,341
(29,811)
96,934
Total comprehensive income/(loss)
-
-
581
581
Transactions with owners in their capacity as owners
Dividends paid
-
-
(5,036)
(5,036)
Share buy-back
(3,504)
-
-
(3,504)
Balance at 31 July 2023
121,900
1,341
(34,266)
88,975
42 Lion Selection Group Limited 2024 Annual Report
Financial Statements
Notes to the Financial Statements for the Year ended 31 July 2024
NOTE 1. CORPORATE INFORMATION
The financial report of Lion Selection Group Limited (‘Lion’ or ‘the Company’) for the year ended 31 July 2024 was
authorised for issue in accordance with a resolution of the directors on 11 September 2024. The directors have the
power to amend and reissue the financial report.
Lion is a company limited by shares incorporated in Australia. The nature of the operations and principal activities
of the Company are described in the Directors’ Report. The registered address of Lion is Level 2, 175 Flinders Lane,
Melbourne.
NOTE 2. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated. Comparative information is
reclassified where appropriate to enhance comparability.
(a)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001.
Lion is a for-profit entity for the purpose of preparing the financial statements.
The financial report complies with Australian Accounting Standards. The financial report also complies with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
The financial report has been prepared on a historical cost basis, except for certain financial assets and financial
liabilities that have been measured at fair value.
The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars
($’000) unless otherwise stated under the option available to Lion under ASIC Instrument 2016/191. Lion is an
entity to which the class order applies.
Lion meets the qualifying criteria under AASB 10 of an ‘investment entity’, and entities controlled by Lion do not
provide investment related services to the Company. Accordingly, the Company has applied the exemption from
consolidating these entities and continues to carry these investments at fair value.
(b)
New accounting standards and interpretations
New standards
The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. Any new or
amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Accounting standards issued but not yet effective
There are no standards that are not yet effective and that would be expected to have a material impact on the entity
in the current or future reporting periods and on foreseeable future transactions.
(c)
Critical accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have an impact on the carrying amounts of certain assets
and liabilities are:
(i)
Fair value of investments and other financial assets
The Company carries its investments at fair value with changes in the fair values recognised in profit or loss.
The fair value of investments and other financial assets that are not traded in an active market is determined
based on either a recent sale price, or where not available, the market value of underlying investments.
Determination of market value involves the Company’s judgment to select a variety of methods and in making
assumptions that are mainly based on market conditions existing at each balance sheet date. The key
assumptions used in this determination are set out in note 2(j).
Lion Selection Group Limited 2024 Annual Report 43
Financial Statements
Notes to the Financial Statements for the Year ended 31 July 2024
(ii) Income taxes
Lion is subject to income taxes in Australia. Judgment is required in determining the provision for income taxes
and deferred taxes. There are many transactions and calculations undertaken during the ordinary course of
business for which the ultimate tax determination is uncertain. Lion recognises liabilities for anticipated tax
audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such differences will impact the current and
deferred tax provisions in the period in which such determination is made.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that sufficient future taxable amounts will be available to utilise those temporary differences and
losses. This involves judgment regarding the future financial performance and is therefore inherently uncertain.
To the extent assumptions regarding future profitability change, there can be an increase or decrease in the level
of deferred tax assets recognised which can result in a charge or credit in the period in which the change occurs.
(d)
Other Income
Other income is recognised to the extent that it is probable that the economic benefits will flow to Lion and the other
income can be reliably measured. The following specific recognition criteria must also be met before other income
is recognised:
(i)
Interest
Income is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the
effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to the fair value of the financial asset.
(ii) Dividends
Dividend income is recognised when the shareholders’ right to receive the payment is established.
(e)
Cash, cash equivalents and term deposits
For cash flow statement purposes, cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with maturities of three months or less or that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and
bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. Other short-
term, highly liquid investments with original maturities of more than three months are shown within term deposits
on the balance sheet.
(f)
Trade and other receivables
Trade receivables are generally due for settlement within 30 days and therefore are all classified as current. Trade
receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less loss allowance.
The Company applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. The Company recognises a provision based on historical default
rates, debtor analysis and the Company’s monitoring of credit risk. Trade and other receivables are written off when
there is no reasonable expectation of recovery.
(g)
Foreign currency translation
Both the functional and presentation currency of Lion is Australian dollars (AUD).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges
and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
44 Lion Selection Group Limited 2024 Annual Report
Financial Statements
Transactions and balances (continued)
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value
are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and
liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair
value gain or loss.
(h)
Income tax
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. 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 on all temporary differences at the balance sheet date between the tax bases 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 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 sheet date 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 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 sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity as part of other comprehensive
income.
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.
Notes to the Financial Statements for the Year ended 31 July 2024
Lion Selection Group Limited 2024 Annual Report 45
Financial Statements
(i)
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
•
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item
as applicable; and
•
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the balance sheet.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(j)
Investments, other financial assets and Investments in associates
The Company classifies its financial assets into the following categories:
•
those to be measured subsequently at fair value (either through OCI or through profit or loss), and
•
those to be held at amortised cost.
The classification depends on the business model for managing the financial assets and the contractual terms of
the cash flows.
Lion is a venture capital organisation and designates its investments as being fair value through profit or loss. The
scope of AASB 128 Investments in Associates allows the Company to elect to measure that investment at fair value
through profit or loss in accordance with AASB 9. After initial recognition, investments are measured at fair value,
with gains or losses on fair value of investments being recognised in the Statement of Profit or Loss and Other
Comprehensive Income. The fair value of assets is re-measured at each reporting date. This recognition is more
relevant to shareholders and consistent with internal investment evaluation.
The fair value of financial assets traded in active markets is based on their quoted market prices at the end of
the reporting period without any deduction for estimated future selling costs. The quoted market price used for
financial assets held by the Company is the current bid price.
The fair value of financial assets that are not traded in an active market are determined using valuation techniques.
The Company uses a variety of methods and makes assumptions that are based on market conditions existing at
each reporting date. Valuation techniques used include the use of comparable recent arm’s length transactions,
reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models
and other valuation techniques commonly used by market participants making the maximum use of market inputs
and relying as little as possible on entity-specific inputs.
All regular purchases and sales of financial assets are recognised on the trade date (i.e. the date that the Company
commits to purchase the asset). Regular 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 marketplace.
Investments in controlled entities
During the period the Company held a 100% ownership interest in Lion Selection Asia Limited (deregistered on 26 July
2024). Lion is an investment entity for the purposes of AASB 10 Consolidated Financial Statements, AASB 127 Separate
Financial Statements, and AASB 2013-5 Amendments to Australian Accounting Standards – Investment Entities.
AASB 2013-5 Amendments to Australian Accounting Standards – Investment Entities is effective for annual periods
beginning on or after 1 August 2014, exempting ‘Investment entities’ from consolidating controlled investees. Investment
entities are entities that:
Notes to the Financial Statements for the Year ended 31 July 2024
46 Lion Selection Group Limited 2024 Annual Report
Financial Statements
Investments in controlled entities (continued)
(a) obtain funds from one or more investors for the purpose of providing those investors with investment
management services;
(b) commit to their investor(s) that their business purpose is to invest funds solely for returns from capital
appreciation, investment income or both, and
(c)
measure and evaluate the performance of substantially all of their investments on a fair value basis.
(k)
Derecognition of financial assets and financial liabilities
(i)
Financial assets
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired
or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.
(ii) Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability, and the difference in the respective
carrying amounts is recognised in profit or loss.
(l)
Leases
Right-of-use assets and lease liabilities are established on the balance sheet for leases with an expected term
greater than one year. The lease term is equal to the base contractual term and, where material, is adjusted for
renewal or termination options that are reasonably certain to be exercised. Leases are recognised when the leased
asset is available for use by the Company. Assets and liabilities arising from a lease are initially measured on a
present value basis.
Lease liabilities include the net present value of the outstanding lease payments, which mainly comprise fixed
payments (including in-substance fixed payments) and variable lease payments that are based on an index or
rate, plus if applicable any residual value guarantees, purchase options and termination payments less any lease
incentive receivable. When material adjustments to variable lease payments based on an index or rate take effect,
the lease liability is reassessed and adjusted against the right of use asset. The portion of fixed payments related
to service costs is included in the calculation of lease liabilities. The lease payments are discounted using the
interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in
the Company, the Company’s incremental borrowing rate is used, being the rate that the entity would have to pay
to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar environment
with similar terms, security and conditions. The lease liability is subsequently measured at amortised cost using
the effective interest method. Each lease payment is allocated between the liability and finance cost. The finance
cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Right-of-use assets are measured at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date and any lease incentive received. Initial direct costs
incurred are not considered to be significant and have been excluded from measurement of the right-of-use asset. The
right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight line basis.
Payments associated with short term leases (i.e. lease with a term of 12 months or less) and leases of low value
assets are charged to expenditure as incurred over the duration of the lease. Variable payments under these lease
agreements are not significant.
(m)
Impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment.
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset’s
fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash flows (cash generating units).
Notes to the Financial Statements for the Year ended 31 July 2024
Lion Selection Group Limited 2024 Annual Report 47
Financial Statements
(n)
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in the Statement of Profit or Loss and Other Comprehensive Income over the period of the
borrowings using the effective interest method.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished
or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless Lion has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
(o)
Payables
Payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method. Payables represent liabilities for goods and services provided to the Company prior to the end
of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in
respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within
30 days of recognition.
(p)
Provisions and contingencies
Provisions are recognised when Lion 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 Lion 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 Statement of Profit or Loss and Other Comprehensive Income net of
any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage
of time is recognised as an interest expense.
A contingent liability is disclosed when the Company has a:
(i)
possible obligation arising from past events where it has yet to be confirmed whether the entity has a present
obligation that could lead to an outflow of resources embodying economic benefits; or
(ii)
present obligation that does not meet the recognition criteria of a provision (because either it is not probable
that an outflow of resources embodying economic benefits will be required to settle the obligation, or a
sufficiently reliable estimate of the amount of the obligation cannot be made).
(q)
Employee benefits
Wages, salaries, annual leave and long service leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave that are
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. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are
measured at the rates paid or payable.
The liability for long service leave for which Lion has an unconditional right to defer settlement for at least 12
months after the balance sheet date 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 periods
of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds
with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Notes to the Financial Statements for the Year ended 31 July 2024
48 Lion Selection Group Limited 2024 Annual Report
Financial Statements
(q)
Employee benefits (continued)
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, performance rights or options over shares, that are provided
to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the
exchange of services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is determined using the
Monte Carlo, Binomial or Black-Scholes option pricing model as appropriate, taking into account the exercise price,
the term of the instrument, the impact of dilution, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate, together with non-vesting conditions
that do not determine whether the Company receives the services that entitle the employees to receive payment.
No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over
the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the
award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting
period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting
date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined using the
Monte Carlo, Binomial or Black-Scholes option pricing model as appropriate, taking into consideration the terms
and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the
liability is calculated as follows:
•
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied
by the expired portion of the vesting period.
•
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability
at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash
paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all
other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases
the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Company or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the Company or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period,
unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the
cancelled and new award is treated as if they were a modification.
(r)
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.
If the entity reacquires its own equity instruments, for example, as a result of a share buy-back, those instruments
are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss
and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised
directly in equity.
Notes to the Financial Statements for the Year ended 31 July 2024
Lion Selection Group Limited 2024 Annual Report 49
Financial Statements
(s)
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
(t)
Earnings per share
Basic earnings per share is calculated as net profit after tax, adjusted to exclude any costs of servicing equity (other
than dividends) and preference share dividends, divided by the weighted average number of ordinary shares.
Diluted earnings per share is calculated as net profit, adjusted for:
•
costs of servicing equity (other than dividends) and preference share 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, divided by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
(u)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the segments, has been identified as the Board.
Investments have similar characteristics and so segments are determined on a geographical basis. Lion invests
only in small and medium mining and exploration companies with gold and base metal activities in Australia, Africa
and Asia.
NOTE 3. FINANCIAL RISK MANAGEMENT
Lion’s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit risk
and liquidity risk. Lion’s overall risk management program is carried out under policies approved by the Board of Directors,
focuses on the unpredictability of the financial markets and seeks to minimise potential adverse effects on the financial
performance of the Company. The Board provides written principles for overall risk management, as well as policies covering
specific areas. The Board reviews and agrees policies for managing each of these risks and they are summarised below. Lion
also monitors the market price risk arising from all financial instruments.
Lion holds the following financial instruments:
2024
$’000
2023
$’000
Financial assets
Cash and cash equivalents
11,640
7,534
Term deposits
44,240
67,500
Financial assets
31,768
13,101
Trade receivables and other assets
1,214
1,169
88,862
89,304
Financial liabilities
Trade and other payables
95
75
95
75
Notes to the Financial Statements for the Year ended 31 July 2024
50 Lion Selection Group Limited 2024 Annual Report
Financial Statements
2024
Floating
Interest
Rate
$’000
Fixed
Interest
Rate
$’000
Non
Interest
Bearing
$’000
Total
$’000
Average Interest Rate
Floating %
Fixed %
Financial assets
Cash – AUD
11,625
-
-
11,625
5.0
-
Cash – USD
15
-
-
15
-
-
Term deposits
-
44,240
-
44,240
-
4.0
Investments in securities
-
-
31,716
31,716
-
-
Investments in securities
-
52
52
10.0
-
Financial liabilities
Trade and other payables
-
-
95
95
-
-
2023
Financial assets
Cash – AUD
7,520
-
-
7,520
3.1
-
Cash – USD
14
-
-
14
-
-
Term deposits
-
67,500
-
67,500
-
4.1
Investments in securities
-
-
13,101
13,101
-
-
Financial liabilities
Trade and other payables
-
-
75
75
-
-
(a)
Market risk
(i)
Price risk
Lion is exposed to equity securities price risk, with many of the Company’s equity investments being publicly
traded. This arises from investments held by Lion and classified on the balance sheet as fair value through
profit or loss.
To manage its price risk, including exposure to changes in commodity prices arising from investments in
equity securities, the Company diversifies its portfolio. Diversification by way of different commodities and
locations of the portfolio is done in accordance with the limits set by the Company, however from time to
time the Company may seek to increase exposure to particular investments. Lion does not hedge its equities
securities price risk. Based on the financial instruments held at the end of the period, if the value of equity
securities had increased by 10%/decreased by 10% with all other variables held constant, the Company’s post-
tax profit for the year would have been $3,171,600 higher/lower (2023: $1,310,000 higher/lower) as a result of
gains/losses on equity securities classified as fair value through profit or loss.
(ii) Interest rate risk exposures
Lion is exposed to interest rate risk through its primary financial assets. The interest rate risk exposures
together with the effective interest rate for each class of financial assets and financial liabilities at balance date
are summarised below. Most assets and liabilities are current, maturing within one year, with the exception of
investments in securities, the value of which will be realised at the discretion of the Company.
Notes to the Financial Statements for the Year ended 31 July 2024
Lion Selection Group Limited 2024 Annual Report 51
Financial Statements
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
At 31 July 2024
Assets
Financial assets at fair value through profit or loss
Investments
24,401
7,367
-
31,768
Total Assets
24,401
7,367
-
31,768
At 31 July 2023
Assets
Financial assets at fair value through profit or loss
Investments
9,691
3,410
-
13,101
Total Assets
9,691
3,410
-
13,101
NOTE 3. FINANCIAL RISK MANAGEMENT (continued)
(b)
Credit risk
Lion is exposed to credit risk. Credit risk arises from cash and cash equivalents and deposits with banks as well
as credit exposures to counterparties, including outstanding receivables and committed transactions. Lion has a
policy of maintaining its cash and cash equivalents with the ‘top 4’ Australian Banks. For other counterparties, if
there is no independent rating, management assesses the credit quality of the party, taking into account its financial
position, past experience and other factors. The maximum exposure to credit risk approximates the carrying values
as disclosed above.
Based on historical default rates, debtor analysis and the Group’s monitoring of credit risk, no impairment allowance
is considered necessary in respect of trade receivables not past due.
(c)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the ability to
close out market positions. Lion manages liquidity risk by continuously monitoring forecast and actual cash flows
and matching the maturity profiles of financial assets and liabilities.
(d)
Fair value measurements
The Company carries its investments at fair value with changes in value recognised in profit or loss.
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
(a) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
(b) Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices); and
(c)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair value of financial instruments traded in active markets (such as publicly traded securities) is based on
quoted market prices at the reporting date.
Recognised fair value measurements
The following tables present the Company’s assets and liabilities measured and recognised at fair value for the
periods ended 31 July 2024 and 31 July 2023.
Notes to the Financial Statements for the Year ended 31 July 2024
52 Lion Selection Group Limited 2024 Annual Report
Financial Statements
(d)
Fair value measurements(continued)
Valuation techniques used to derive level 2 and level 3 fair values
The fair value of financial instruments that are not traded in an active market (for example, unlisted investments) is
determined using valuation techniques. These valuation techniques maximise the use of observable market data
where it is available and rely as little as possible on unobservable inputs. If all significant inputs required to fair value
an instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.
Specific valuation techniques used to value financial instruments are applied in accordance with the International
Private Equity and Venture Capital Valuation Guidelines, including:
•
Net assets, looking through to the underlying assets held through interposed investment vehicles.
•
The fair value of unlisted option contracts is determined using a Black Scholes valuation at the reporting date.
•
The use of quoted market prices or dealer quotes for similar instruments where available.
•
Other techniques, such as Monte Carlo option-pricing models and discounted cash flow analysis, are used to
determine fair value for the remaining financial instruments.
The price of a recent investment conducted in an orderly transaction between market participants generally
represents fair value as of the transaction date. At subsequent measurement dates, the price of a recent investment
may be an appropriate reference point for estimating fair value subject to the current facts and circumstances
including changes in market conditions or changes in the performance of the investee company that would impact
a market participant’s perspective of fair value.
Valuation processes
The Lion management team performs monthly valuations of the financial instruments required for financial
reporting purposes, including level 3 fair values. This team reports directly to the Lion Board. Discussions of
valuation processes and results are held between Lion management and the Lion Board at least once every six
months in line with Lion’s half-yearly reporting dates, including changes in level 2 and 3 fair values.
Notes to the Financial Statements for the Year ended 31 July 2024
Lion Selection Group Limited 2024 Annual Report 53
Financial Statements
NOTE 4. INCOME AND EXPENSES
Lion is a long term investor and investment performance generally spans a number of financial periods. Measured on historic
cost, gross profit/(loss) on investments realised during the year includes mark to market adjustments realised in the current
year as well as mark to market adjustments recognised in the Statement of Profit or Loss and Other Comprehensive Income
in prior years as set out in the table below.
2024
$’000
2023
$’000
Gain/(loss) attributable to movement in fair value of investments
Mark to Market adjustment for year – investments realised during year
-
(140)
Mark to Market adjustment for year – deferred consideration
-
2,568
Mark to Market adjustment for year – investments held at end of year
694
(1,524)
Gain/(loss) attributable to movement in fair value of investments
as recorded in the Statement of Comprehensive Income
694
904
2024
$’000
2023
$’000
Results of investments realised during year
Proceeds from sale of shares
-
87
Historical cost of investment sales
-
(4,049)
Gross profit/(loss) measured at historical cost on investments realised
-
(3,962)
Represented by:
Mark to Market recognised in prior periods (including on acquisition)
-
(3,822)
Mark to Market recognised in current year
-
(140)
-
(3,962)
Employment Expenses
Salaries, Superannuation and Directors Fees
473
294
Leave provided
229
(5)
Share based shares expense
31
-
Total other expenses
733
289
The total profit/(loss) is after charging the following other expenses
Investor relations
119
103
Directors and Officers insurance
95
93
Legal expenses
23
38
Depreciation
94
96
Corporate overheads
226
268
Total other expenses
557
598
Notes to the Financial Statements for the Year ended 31 July 2024
54 Lion Selection Group Limited 2024 Annual Report
Financial Statements
NOTE 5. INCOME TAX EXPENSE
2024
$’000
2023
$’000
(a) Statement of Profit or Loss and Other Comprehensive Income
Current income tax expense/(benefit)
100
(299)
Deferred income tax expense/(benefit)
226
478
Under/over tax expense/(benefit)
53
-
Income tax expense/(benefit) reported in the
Statement of Profit or Loss and Other Comprehensive Income
379
179
Reconciliation of income tax expense
Profit/(loss) from ordinary activities before income tax
1,486
760
Prima facie tax thereon at 30%
446
228
Tax effect of permanent and temporary differences:
Other non-deductible or non-assessable amounts
2
(21)
Assessable income brought to revenue account
200
311
Tax losses utilised – revenue account
(322)
(339)
Under/Over tax expense
53
-
Total income tax (expense/(benefit)
379
179
(b) Deferred tax liabilities
The balance comprises temporary differences attributable to:
Unrealised investments – revenue account
1,042
634
Accrued interest income
342
324
Other temporary differences
7
7
1,391
965
Set-off of deferred tax assets pursuant to set-off provisions
Tax losses available – revenue account
(852)
(719)
Other temporary differences
(92)
(26)
Net deferred tax liabilities
447
220
(c) Unrecognised temporary differences
A deferred tax asset has not been recognised in the Statement of Financial Position
as the benefits will only be realised if the conditions for deductibility and/or
recognition set out in Note 2(h) occur.
Unrecognised temporary differences at 31 July relate to the following:
Tax losses available – revenue account
53,176
55,653
Unrecognised tax losses and temporary differences at 31 July
53,176
55,653
Potential tax benefit at 30%
15,953
16,696
Notes to the Financial Statements for the Year ended 31 July 2024
Lion Selection Group Limited 2024 Annual Report 55
Financial Statements
NOTE 7. FINANCIAL ASSETS
NOTE 6. TRADE RECEIVABLES AND OTHER ASSETS
2024
$’000
2023
$’000
Interest Receivable
1,140
1,082
Prepayments
35
34
Security deposits
36
35
Sundry debtors
3
18
Total trade receivables and other assets, net
1,214
1,169
Listed investments (at fair value)
24,401
9,691
Unlisted investments (at fair value)
7,367
3,410
Total financial assets
31,768
13,101
Listed shares are readily saleable with no fixed terms.
NOTE 8 PROPERTY, PLANT AND EQUIPMENT
NOTE 9. TRADE AND OTHER PAYABLES
Property, plant, and equipment – Cost
506
506
Accumulated depreciation
(303)
(210)
Total property, plant and equipment
203
296
Sundry creditors and accruals
95
75
Total trade and other payables
95
75
Movements in accumulated losses were as follows:
Accumulated losses at the beginning of the financial year
(34,266)
(29,811)
Net profit/(loss) for period
1,107
581
Transfer from Share Based Payments Reserve – Expiry of Options Unexercised
1,341
-
Dividends paid
(2,117)
(5,036)
Accumulated losses at the end of the financial year
(33,935)
(34,266)
NOTE 10. ACCUMULATED LOSSES
Issued and paid up capital (fully paid)
Opening balance
121,900
125,404
Share buy-back
-
(3,504)
Issued and paid up capital (fully paid)
121,900
121,900
NOTE 11. CONTRIBUTED EQUITY
Notes to the Financial Statements for the Year ended 31 July 2024
56 Lion Selection Group Limited 2024 Annual Report
Financial Statements
Capital Risk Management
Lion’s objective when managing capital is to safeguard its ability to continue as a going concern, so that it can continue to
provide returns for shareholders. In order to maintain or adjust the capital structure, Lion may adjust the amount of dividends
paid to shareholders, return capital to shareholders or issue new shares.
# The reserve balance relates to historical options that were issued under the terms of Lion’s acquisition of One Asia
Resources Limited’s interest in the Pani gold project. These options expired on 12 April 2020.
NOTE 13. NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of cash and cash equivalents
For the purpose of the Statement of Financial Position and Statement of Cash Flows, cash and cash equivalents includes
cash on hand and in banks, term deposits, cash managed by third parties and other bank securities which can be
liquidated at short notice (less than three months), net of outstanding bank overdrafts if applicable.
Cash at the end of the year as shown in the Statement of Cash Flows is reconciled to the related item in the Statement
of Financial Position as follows:
NOTE 11. CONTRIBUTED EQUITY (continued)
2024
Shares
2023
Shares
Share capital
Issued and paid up capital (fully paid)
Opening balance
141,150,775
148,406,526
Share buy-back
-
(7,255,751)
Issued and paid up capital (fully paid)
141,150,775
141,150,775
NOTE 12. SHARE BASED PAYMENT RESERVE
2024
$’000
2023
$’000
Opening balance
1,341
1,341
Transfer to Retained Earnings – Options expired unexercised#
(1,341)
-
Share based payments – Performance Rights (refer Note 20)
31
-
Share Based Payment Reserve
31
1,341
Cash on hand and at bank
11,640
7,534
Notes to the Financial Statements for the Year ended 31 July 2024
Lion Selection Group Limited 2024 Annual Report 57
Financial Statements
The 2,476,000 Performance Rights granted on 1 July 2024 under the Employee Incentive Plan are considered to be potential
ordinary shares. They have been included from the date of issue in the determination of diluted earnings per share as if
the required hurdles would have been met at the reporting date. The Performance Rights have not been included in the
determination of basic earnings per share as the vesting conditions have not been met. Details relating to the Performance
Rights are set out in Note 20.
NOTE 13. NOTES TO THE STATEMENT OF CASH FLOWS (continued)
2024
$’000
2023
$’000
(b) Reconciliation of net profit/(loss) after income tax to net cash inflow/
(outflow) from operating activities
Net profit/(loss) after income tax
1,107
581
Adjustments for non-cash income and expense items:
Movement in fair value of investments (increase)/decrease in assets
(694)
(904)
Other non-cash (income)/expenses
123
98
Decrease/(increase) in assets:
Other receivables
(45)
(1,067)
(Decrease)/increase in liabilities:
Current income tax liabilities
57
(237)
Deferred tax liabilities
226
178
Payables
249
(22)
Net cash inflow/(outflow) from operating activities
1,023
(1,373)
NOTE 14. EARNINGS PER SHARE
(a) Profit/(loss) used in calculating earnings per share
1,107
581
2024
Number
2023
Number
(a) Weighted average number of ordinary shares for basic earnings per share
141,150,775
143,699,115
Weighted average number of ordinary shares for diluted earnings per share
141,361,065
143,699,115
NOTE 15. COMMITMENTS AND CONTINGENT LIABILITIES
Superannuation Commitments
Lion does not have its own superannuation plan. The only commitment to superannuation is with respect to statutory
commitments. At balance date, the Company was contributing to various approved superannuation funds at the choice of
employees at a minimum rate of 11.5% of salaries paid. Employees are able to make additional contributions to their chosen
superannuation funds by way of salary sacrifice up to the age based deductible limits for taxation purposes.
Contingent Liabilities
Lion has a potential liability for contingent consideration that may be payable if Lion sells its investment in either PhosCo
(formerly Celamin) or Atlantic Tin (formerly Kasbah). This obligation arises following Lion agreeing to purchase the shares it
did not own in African Lion 3 Ltd (AFL3) to consolidate ownership (with the exception of Lion Manager who opted to hold its
investment). The transaction involved part cash consideration and Lion agreeing to pay contingent consideration to be paid
in certain circumstances for up to 5 years until March 2026. The value of the contingent consideration decreases annually
and depends on the ultimate exit price for PhosCo and/or Atlantic Tin, how long Lion holds the investments, and how much
additional investment is required. The decision to sell the investments in PhosCo and Atlantic Tin is entirely at Lion’s discretion.
Based on a theoretical sale at the carrying value for both investments at 31 July 2024, contingent consideration of $1.0M
would arise.
Notes to the Financial Statements for the Year ended 31 July 2024
58 Lion Selection Group Limited 2024 Annual Report
Financial Statements
(b) Non-audit services
No fees for non-audit services were paid/payable to the external auditors during the year ended 31 July 2024 (2023: Nil).
NOTE 17. RELATED PARTY DISCLOSURES
(a) Directors and Key Management Personnel
The directors and key management personnel in office during the financial year and up until the date of this report are
as follows:
Barry Sullivan
(Non-Executive Chairman until 31 January 2024, Non-Executive Director from 1 February 2024)
(Deceased 3 June 2024)
Robin Widdup
(Director, Executive Chairman from 1 February 2024)
Peter Maloney
(Non-Executive Director)
Chris Melloy
(Non-Executive Director)
Hedley Widdup
(Chief Executive Officer from 1 July 2024)
Craig Smyth
(Chief Financial Officer)
Jane Rose
(Company Secretary)
(b) Subsidiaries and Associates
Lion meets the qualifying criteria under AASB 10 of an ‘investment entity’, and entities controlled by Lion do not provide
investment related services to the Company. Accordingly, the Company has applied the exemption from consolidating
these entities and continues to carry these investments at fair value. Similarly, the scope of AASB 128 Investments in
Associates allows the Company to elect to measure that investment at fair value through profit or loss in accordance
with AASB 9.
Transactions with controlled entities:
Lion Selection Asia Limited (100% ownership interest)
During 2023, the Company received net funds from Lion Selection Asia Limited of US$32,622,411 (A$46,604,787).
During the year the process to wind up Lion Selection Asia commenced, with the company deregistered on 26 July 2024.
Lion Selection Asia Limited was registered in Hong Kong, was a body corporate, and was tax resident in Australia.
African Lion 3 Limited (99% ownership interest)
In March 2021, Lion agreed to purchase the shares it did not own in AFL3 to consolidate ownership (with the exception of
Lion Manager who opted to hold its investment). The transaction involved the payment of $392,000 in cash consideration
to the other AFL3 Shareholders, with all AFL3 investments distributed in specie to Lion and Lion Manager on a pro rata
basis. Lion also agreed for contingent consideration to be paid in certain circumstances for up to 5 years. Refer to
Note 15 Commitments and Contingent Liabilities for further details. African Lion 3 Limited was wound up in 2023.
NOTE 16. REMUNERATION OF AUDITORS
2024
$
2023
$
(a) Audit services
Audit and review of financial reports
PricewaterhouseCoopers
5,253
122,200
Nexia Melbourne Audit Pty Ltd
64,252
-
Total remuneration for audit services
69,505
122,200
Notes to the Financial Statements for the Year ended 31 July 2024
Lion Selection Group Limited 2024 Annual Report 59
Financial Statements
Carrying Amount
Entity Ownership
2024
$’000
2023
$’000
2024
%
2023
%
The Company had direct and indirect ownership of
the following material investments at year end:
Saturn Metals
10,046
-
19
-
Plutonic Limited
4,800
1,000
42
32
Antipa Minerals
2,200
-
4
-
Brightstar Resources
2,143
-
3
-
Erdene Resource Development
5,920
5,228
4
4
Atlantic Tin
2,013
2,013
4
4
PhosCo Ltd
1,096
3,126
15
15
Lion Selection Asia (deregistered on 26 July 2024)
-
-
-
100
NOTE 18. MATERIAL INVESTMENTS
Each of the above companies is involved in the mining and exploration industry.
NOTE 17. RELATED PARTY DISCLOSURES (continued)
2024
$
2023
$
(c) Key Management Personnel Remuneration
Short term employee benefits
367,237
220,589
Leave entitlements
182,262
(4,631)
Post-employment benefits
89,097
73,162
Share based payments
30,712
-
669,308
289,120
(d) Lion Manager Contract
Prior to 1 July 2024, Lion had a Management Agreement with Lion Manager, under which Lion Manager provided the
Company with management and investment services. These arrangements were approved by shareholders at Lion’s
AGM on 5 December 2012, with management fees of 1.5% p.a. based on the direct investments under management.
There was also an incentive applicable which would apply where Lion’s performance outperforms a benchmark (no
incentive fee had accrued with respect to the Lion Manager contract during the year).
Effective 1 July 2024 the Company and Lion Manager completed an agreement under which the existing Management
Agreement was terminated and the Company’s investment team employed directly by Lion. Lion also acquired the plant
and equipment items from Lion Manager and assumed responsibility for employee entitlement for no consideration.
Notes to the Financial Statements for the Year ended 31 July 2024
60 Lion Selection Group Limited 2024 Annual Report
Financial Statements
NOTE 19. SEGMENT INFORMATION
Management has determined the Company’s segments based on the internal reporting reviewed by the Board to make
strategic decisions. The Company provides patient equity capital to carefully selected small and medium mining enterprises.
Investments have similar characteristics and so segments are determined on a geographical basis. Lion invests only in
mining and exploration companies and projects with gold and base metal activities in Australia, Africa, and Asia. Information
with respect to geographical segments is set out below.
Australia
Legacy Investments
2024
Investment
$’000
Corporate
$’000
Africa
$’000
Asia
$’000
Total
$’000
Mark to Market adjustment
2,032
-
(2,030)
692
694
Segment Income
2,032
3,385
(2,030)
694
4,081
Segment Expense
-
(2,595)
-
-
(2,595)
Segment Result Before Tax
2,032
790
(2,030)
694
1,486
Segment assets
22,361
57,297
3,110
6,297
89,065
Segment liabilities
-
1,069
-
-
1,069
Other Segment Information
Assets acquired during the period
17,921
-
-
50
17,971
Cash Flow Information
Net cash flow from operating activities
-
1,023
-
-
1,023
Net cash flow from investing activities
(17,921)
23,260
-
(50)
5,289
Net cash inflow from financing activities
-
(2,206)
-
-
(2,206)
Australia
Legacy Investments
2023
Investment
$’000
Corporate
$’000
Africa
$’000
Asia
$’000
Total
$’000
Mark to Market adjustment
(47)
-
(2,558)
3,509
904
Segment Income
(47)
2,264
(2,558)
3,509
3,168
Segment Expense
-
(2,408)
-
-
(2,408)
Segment Result Before Tax
(47)
(144)
(2,558)
3,509
760
Segment assets
2,408
76,499
5,140
5,553
89,600
Segment liabilities
-
625
-
-
625
Other Segment Information
Assets acquired during the period
2,250
-
-
13
2,263
Cash Flow Information
Net cash flow from operating activities
-
(1,373)
-
-
(1,373)
Net cash flow from investing activities
(2,250)
(47,500)
-
46,692
(3,058)
Net cash inflow from financing activities
-
(8,654)
-
-
(8,654)
Notes to the Financial Statements for the Year ended 31 July 2024
Lion Selection Group Limited 2024 Annual Report 61
Financial Statements
NOTE 20. SHARE BASED PAYMENTS
(a) Performance rights
The establishment of an Employee Incentive Plan (the Plan), and the issue of securities under the Plan was approved by
shareholders at an extraordinary shareholder meeting on 26 June 2024. The Plan aims to drive long term performance
for shareholders, a culture of employee share ownership in the Company and retention of executives.
The Plan allows the Board to grant performance rights as well as other equity instruments to eligible employees.
During the period ended 31 July 2024, 2,476,000 performance rights over fully paid ordinary shares in the Company were
granted to employees of the Company. These performance rights have a number of performance hurdles and service
conditions, the successful achievement of which enables the holder to exercise their performance rights.
For the performance rights granted during the current financial year, the key conditions and valuation model inputs used
to determine the fair value at the grant date, are as follows:
Notes to the Financial Statements for the Year ended 31 July 2024
Grant Date
1 July 2024
Total number of
Performance Rights
2,476,000
Issue Price
Nil
Measurement Period
Grant Date to 31 July 2027
Exercise Price
Nil
Vesting Date
Performance will be measured at the end of each 'Performance Year' during the Measurement
Period, being 31 July 2025, 31 July 2026 and 31 July 2027.
Assessment for each Performance Year will be reduced to the extent that shares have been
issued in previous Performance Years under the same Performance Rights tranche.
Performance Rights will vest upon the date upon which the relevant Vesting Condition has been
satisfied, as determined by the Board, provided this occurs prior to the Expiry Date.
Vesting Conditions
TRANCHE 1
Up to 1,000,000 Performance Rights vest based on share price performance measured based on
the Company’s highest 30-day volume weighted average price (VWAP) in the Performance Year.
●VWAP less than 56¢ – Nil Performance Rights vest;
●VWAP equals 56¢ –500,000 Performance Rights vest;
●VWAP between 56¢ and 76¢ – pro rata Performance Rights vest between 500,000 and
1,000,000 Performance Rights.
●VWAP equals 76¢ or more – 1,000,000 Performance Rights Vest
Any dividends paid during the Performance Year will added to the current VWAP from the point
that the Company trades ex-dividend.
TRANCHE 2
Up to 1,000,000 Rights vest based on the Company’s portfolio value per share measured based
on the Company’s highest month-end fair value in accordance with Australian Accounting
Standards (currently referred to as Net Tangible Assets) (Portfolio Value) in the Performance Year:
●Portfolio Value less than 71¢ – Nil Performance Rights vest;
●Portfolio Value equals 71¢ –500,000 Performance Rights vest;
●Portfolio Value between 71¢ and 83¢ – pro rata Performance Rights vest between 500,000 and
1,000,000 Performance Rights;
●Portfolio Value equals 83¢ or more – 1,000,000 Performance Rights vest.
Any dividends paid during the Performance Year will added to the current Portfolio Value from the
point that the Company trades ex-dividend.
62 Lion Selection Group Limited 2024 Annual Report
Financial Statements
Notes to the Financial Statements for the Year ended 31 July 2024
Vesting Conditions
(continued)
RETENTION TRANCHE
Up to 476,000 Performance Rights vest based on continuous service with the Company
measured at each Performance Year:
●95,200 Performance Rights Vest on 31 July 2025;
●95,200 Rights Performance Rights on 31 July 2026;
●285,600 Performance Rights on 31 July 2027.
Disposal
Restrictions
Shares received upon exercise of any vested LTI Performance Rights will be subject to a two-year
escrow period from the date of exercise.
TRANCHE 1
Market based – Lion’s 30-day VWAP
of at least $0.56 over a 3-year period
Monte carlo valuation of $0.2521 per right
TRANCHE 2
Market based – Lion’s Portfolio Value
of at least $0.71 over a 3-year period
Monte carlo valuation of $0.3074 per right
RETENTION TRANCHE
Non-market based – continuing employment of the
employee during the vesting period
Binomial valuation of between $0.3517 to $0.3812 per right
Underlying Company share price at measurement date
$0.43 per share
Volatility
45.91%
Risk Free Rate
4.102%
(a) Expenses arising from Share Based Transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were as follows:
NOTE 20. SHARE BASED PAYMENTS (continued)
NOTE 21. EVENTS OCCURRING AFTER THE REPORTING PERIOD
There has not arisen in the interval between the end of the financial year and the date of this report, any item, transaction
or event of a material or unusual nature which has or may significantly affect the operations of the Company, the results of
those operations, or the state of affairs of the Company in future periods.
2024
$
2023
$
Share Based Payments
Short term employee benefits
30,712
-
30,712
-
Lion Selection Group Limited 2024 Annual Report 63
Financial Statements
Lion Selection Group Limited is not required by the Australian Accounting Standards to prepare consolidated
financial statements. Therefore, section 295(3A) of the Corporations Act 2001 does not apply to the entity.
Consolidated Entity Disclosure Statement
64 Lion Selection Group Limited 2024 Annual Report
Financial Statements
Australia
Australia
Registered Audit Company 291969
Nexia Melbourne Audit Pty Ltd (ABN 86 005 105 975) is a firm of Chartered Accountants. It is affiliated with, but independent from Nexia Australia Pty Ltd. Nexia
Australia Pty Ltd is a member of Nexia International, a leading, global network of independent accounting and consulting firms. For more information please see
www.nexia.com. au/legal. Neither Nexia International nor Nexia Australia Pty Ltd provide services to clients.
Liability limited under a scheme approved under Professional Standards Legislation.
Level 35, 600 Bourke St
Melbourne VIC 3000
E: info@nexiamelbourne.com.au
P: +61 3 8613 8888
F: +61 3 8613 8800
nexia.com.au
Nexia Melbourne Audit Pty Ltd
Independent Auditor’s Report
to the Members of Lion Selection Group Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Lion Selection Group Limited (the Company), which comprises
the statement of financial position as at 31 July 2024, the statement of profit or loss and other
comprehensive income, statement of changes in equity and statement of cash flows for the year then
ended, and notes to the financial statements, including material accounting policy information, the
consolidated entity disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of Lion Selection Group Limited is in accordance
with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s financial position as at 31 July 2024 and of its
financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Company in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Lion Selection Group Limited 2024 Annual Report 65
Financial Statements
Key audit matter
How our audit addressed the key audit
matter
Fair Value of Financial Assets
Refer to notes 3(d) and 7.
At 31 July 2024, the Company held investments
in listed entities totalling $24.4m and investments
in unlisted entities totalling $7.4m. These
financial assets are classified as fair value through
profit or loss in accordance with AASB 9 Financial
Instruments. The investments in listed entities
are measured using Level 1 inputs, while
investments in unlisted entities are measured
using Level 2 inputs, in accordance with AASB 13
Fair Value Measurement.
This is a key audit matter due to the significant
impact that any movement in the fair value could
have on the net assets as at 31 July 2024 and the
operating result for the year.
We obtained the Company’s investment schedule as
at 31 July 2024, which includes a listing of each
investment held, and compared the total of the
investment schedule to the amount recorded in the
financial statements.
We assessed whether the investment valuation
techniques
used by the Company were in
accordance with Australian Accounting Standards.
We performed the following procedures, amongst
others, on the fair value of these investments:
•
For
a
sample
of
listed
and
unlisted
investments, we compared the number of
shares held to supporting evidence such as
holding statements.
•
For
a
sample
of
listed
and
unlisted
investments, we assessed the fair value with
reference to quoted market prices or market
observable data, if available. Where that
information was unavailable, we considered
other observable financial information in
assessing the fair value.
Australia
Australia
66 Lion Selection Group Limited 2024 Annual Report
Financial Statements
Other Information
The directors are responsible for the other information. The other information comprises the
information in the Company’s annual report for the year ended 31 July 2024 but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report, or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the
other information we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a) the financial report (other than the consolidated entity disclosure statement) that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001; and
b) the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i)
the financial report (other than the consolidated entity disclosure statement) that gives a
true and fair view and is free from material misstatement, whether due to fraud or error;
and
ii)
the consolidated entity disclosure statement that is true and correct and is free of
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
Australia
Australia
Lion Selection Group Limited 2024 Annual Report 67
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Australia
Australia
68 Lion Selection Group Limited 2024 Annual Report
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in page 2 of the Directors’ Report for the year
ended 31 July 2024.
In our opinion, the Remuneration Report of Lion Selection Group Limited for the year ended 31 July
2024, complies with section 300A of the Corporations Act 2001.
Responsibilities
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.
Nexia Melbourne Audit Pty Ltd
Richard Cen
Melbourne
Director
Dated this 12th day of September 2024
Australia
Australia
Lion Selection Group Limited 2024 Annual Report 69
Shareholder Information
Rank
Name
No. of Shares
% of Units
1
Rojana Hero Pty Ltd
7,483,653
5.30
2
Mr Robin Anthony Widdup + Mrs Janet Widdup
7,319,369
5.19
3
BNP Paribas Noms Pty Ltd
5,446,009
3.86
4
Inconsultare Pty Ltd
4,750,000
3.37
5
Mr Mark Gareth Creasy
4,448,976
3.15
6
Brigstow Pty Ltd
3,791,841
2.69
7
Mrs Pamela Julian Sargood
3,400,000
2.41
8
CPAC Melloy Super Pty Ltd
3,382,259
2.40
9
Retzos Executive Pty Ltd
3,150,000
2.23
10
Mr Thomas James Hudson + Mrs Carol Ann Hudson
2,575,206
1.82
11
HSBC Custody Nominees (Australia) Limited
2,473,196
1.75
12
Liangrove Media Pty Limited
2,280,000
1.62
13
Mr Dominic Paul McCormick
2,001,609
1.42
14
Perpetual Corporate Trust Ltd
2,000,000
1.42
15
J P Morgan Nominees Australia Pty Limited
1,619,347
1.15
16
BNP Paribas Nominees Pty Ltd
1,455,096
1.03
17
Mr John Joseph Ryan
1,385,000
0.98
18
Citicorp Nominees Pty Limited
1,365,519
0.97
19
WAL Assets Pty Ltd
1,207,802
0.86
20
Majoli Pty Ltd
1,195,651
0.85
Total Top 20 holders of Ordinary Fully Paid Shares
62,730,533
44.44
Total Remaining Holders Balance
78,420,242
55.56
Size of Holding (Ordinary Fully Paid Shares)
Total holders
% of Units
1 – 1,000
327
0.09
1,001 – 5,000
856
1.51
5,001 –10,000
263
1.41
10,001 – 100,000
639
17.08
100,001 Over
177
79.91
Total Shareholders
2,262
100.00
Number of ordinary shareholders with less than a marketable parcel
287
Top 20 holders of Ordinary Fully Paid Shares – 30 September 2024
Distribution of Shareholdings as at 30 September 2024
70 Lion Selection Group Limited 2024 Annual Report
Shareholder Information
Voting Rights
All ordinary shares issued by Lion Selection Group Limited carry one vote per share without restriction.
Substantial Shareholders as at 30 September 2024
The following information is extracted from notices received by the company.
Lion Directors and Lion Manager Holdings
As at 30 September 2023, the members of the Lion Board and Lion Manager held shares directly and/or indirectly in
Lion Selection Group Limited as follows:
Name
No. of Ordinary Shares
Robin Anthony Widdup
16,717,277
Chris Retzos
9,147,942
Name
No. of Ordinary Shares
Peter Maloney
2,330,389
Chris Melloy
5,800,000
Robin Widdup
16,717,277
Craig Smyth
1,505,137
Hedley Widdup
1,174,139
Total
27,526,942
Lion Selection Group Limited 2024 Annual Report 71
Lion Selection Group Limited Registry
You can gain access to your security holding information
in a number of ways. The details are managed via our
registrar, Computershare Investor Services, and can be
accessed as outlined below.
Investorphone
InvestorPhone provides telephone access 24 hours a day
7 days a week.
STEP 1
Call 1300 850 505 (within Australia) or
61 3 9415 4000 (outside Australia)
STEP 2
Say ‘Lion Selection Group Limited’
STEP 3
Follow the prompts to gain secure, immediate
access to your holding details, registration
details and payment information.
Internet account access via Investor Centre
Securityholders can view their details online via
Investor Centre:
STEP 1
Go to www-au.computershare.com/Investor/
STEP 2
Select ’Single Holding’.
STEP 3
Enter your Securityholder Reference Number
(SRN) or Holder Identification Number (HIN),
postcode or country if outside Australia.
STEP 4
Enter LSX or Lion Selection Group Limited.
STEP 5
Type in the characters shown and click the
‘Agree and Continue’ button to accept the
Terms and Conditons.
Alternatively, update your details or manage your portfolio
by registering as a member of Investor Centre:
STEP 1
Go to www-au.computershare.com/Investor/
STEP 2
Click on ‘Login’ and enter your User ID and follow
the prompts to login, or for new users click on
the ‘Register Now’ link and follow the prompts
to register.
Computershare Investor
Services Pty Limited
Enquiries within Australia
1300 850 505
Enquiries outside Australia
+61 3 9415 4000
Investor Enquiries Facsimile
+61 3 9473 2500
Investor Enquiries Online
www.investorcentre.com/contact
72 Lion Selection Group Limited 2024 Annual Report
Corporate Directory
Registered and Principal Office
Level 2
175 Flinders Lane
Melbourne Vic 3000
Telephone
+61 3 9614 8008
Facsimile
+61 3 9614 8009
Email
info@lsg.com.au
Website
www.lionselection.com.au
Directors
Robin Widdup – Executive Chairman
Peter Maloney – Non-Executive Director
Chris Melloy – Non-Executive Director
Chief Executive Officer
Hedley Widdup
Chief Financial Officer
Craig Smyth
Company Secretary
Jane Rose
Auditors
Nexia Melbourne Audit Pty Ltd
Share Registry
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnston Street
Abbotsford Vic 3067
Postal Address
GPO Box 2975 Melbourne Vic 3001
Enquiries within Australia
1300 850 505
Enquiries outside Australia
+61 3 9415 4000
Investor Enquiries Facsimile
+61 3 9473 2500
Investor Enquiries Online
www.investorcentre.com/contact
Website
www.computershare.com
Lion Selection Group Limited 2024 Annual Report 73
Lion Selection Group Limited
ABN 26 077 729 572
Level 2, 175 Flinders Lane
Melbourne Vic 3000.
Tel: +61 3 9614 8008
www.lionselection.com.au