MAXIMUS RESOURCES LIMITED ANNUAL REPORT 2015 CORPORATE DIRECTORY Maximus Resources Limited ABN 74 111 977 354 DIRECTORS Robert Michael Kennedy (Non-executive Chairman) Kevin Malaxos (Managing Director) Leigh Carol McClusky (Non-executive Director) Ewan John Vickery (Non-executive Director) Nicholas John Smart (Alternate for Mr Vickery) COMPANY SECRETARY Rajita Alwis REGISTERED OFFICE Level 3, 100 Pirie Street Adelaide South Australia 5000 PRINCIPAL OFFICE Level 3, 100 Pirie Street Adelaide South Australia 5000 Telephone +61 8 7324 3172 Facsimile +61 8 8312 5501 SOLICITORS DMAW Lawyers Level 3, 80 King William Street Adelaide South Australia 5000 Telephone +61 8 8210 2222 Facsimile +61 8 8210 2233 Minter Ellison Lawyers Level 10, 25 Grenfell Street Adelaide South Australia 5000 Telephone +61 8 8233 5555 Facsimile +61 8 8233 5556 SHARE REGISTRY Computershare Investor Services Level 5, 115 Grenfell Street Adelaide South Australia 5000 Telephone +61 8 8236 2300 Facsimile +61 8 8236 2305 AUDITOR Grant Thornton 67 Greenhill Road Wayville South Australia 5034 BANKER National Australia Bank 48 Greenhill Road Wayville South Australia 5034 STOCK EXCHANGE LISTING Australia Securities Exchange (Adelaide) Maximus Resources Limited shares are listed on the Australian Securities Exchange ASX code: MXR WEBSITE www.maximusresources.com The website includes information about the Company, its strategies, projects, reports and ASX announcements. 2 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 COMPLIANCE STATEMENTS Disclaimer This Annual Report contains forward looking statements that are subject to risk factors associated with the exploration and mining industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a variety of variables which could cause actual results or trends to differ materially. Exploration Targets Exploration Targets are reported according to Clause 18 of the JORC Code, 2004. This means that the potential quantity and grade is conceptual in nature and that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource. Competent Person The information in this report relating to Narndee Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by Mr Steven Cooper who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Cooper is a consultant to Maximus Resources Limited. He has sufficient experience that is relevant to the styles of mineralisation and types of deposit under consideration and consents to the inclusion of the information in this report in the form and context in which it appears. Mr Cooper qualifies as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and consents to the inclusion of the information in this report in the form and context in which it appears. The information in this report relating to Spargoville Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by Mr Stephen Hogan who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Hogan is a consultant to Maximus Resources Limited. He has sufficient experience that is relevant to the styles of mineralisation and types of deposit under consideration and consents to the inclusion of the information in this report in the form and context in which it appears. Mr Hogan qualifies as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and consents to the inclusion of the information in this report in the form and context in which it appears. CONTENTS CHAIRMAN’S REPORT TENEMENT SCHEDULE FINANCIAL REPORT DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS ASX ADDITIONAL INFORMATION 4 7 8 9 16 18 19 20 21 22 41 42 45 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 3 CHAIRMAN’S REPORT Dear Fellow Shareholders You may recall in my address at the alleviated Maximus of the expenditure 2014 AGM, I described the market commitments to retain the significant conditions as the perfect storm for the Millers Creek tenement holding, retained resources sector. Those conditions did an equity share in the project for the not improve throughout 2014 and into company and secured significant 2015. Commodity prices continued to fall, success-based future payments. investor confidence remained subdued and analogies were being drawn between market conditions in 2015 to those of the 1930’s great depression. Unfortunately Monax Alliance failed to identify a significant target to continue the Farm-in Agreement, and withdrew on 14 May 2015. Maximus retains 100% So once again I stand before you with two equity in all tenements forming the Millers options to describe the “year that was” Creek project area. for Maximus. The first is to decry the state of the resources sector and the ongoing difficult conditions faced by resources companies, and in particular exploration focused companies. Alternatively, I can focus on what the board and company has achieved in the past year, and the significant opportunities available to Maximus in the year ahead. I have chosen the latter. The second significant transaction completed recently involves the company securing the large and highly prospective Spargoville tenement package from Tychean Resources Limited. The Managing Director identified and vigorously pursued this project during the financial year given his significant experience in the Kalgoorlie and Coolgardie goldfields. Following due I also reported to shareholders in 2014 diligence on the project area, the project that until markets improve and we was presented to the board of directors, were able to raise additional capital our with only the non-conflicted directors strategy was to seek joint venture parties voting on the proposed Sale and Farm-in or sell projects with a view to retaining Agreement. some upside for the company. Your Managing Director continued to pursue this core objective throughout the year, finalising a significant transaction during the year and commencing a second towards the end of the financial year. Following completion of the Sale and Farm-in Agreement with Tychean, the company immediately commenced on- ground sampling activities, with numerous positive results reported to-date. This early success has justified the company’s Following an initial due diligence period pursuit of the Spargoville tenement in 2013/14, the company was successful package, and we remain confident that in securing the Farm-in Agreement with the Spargoville project is an amazing Monax Alliance (the working vehicle for opportunity for the company with the the Monax Antofagasta Alliance) to fund potential to significant alter the outlook the exploration and drilling program on and share price of Maximus based on the Millers Creek IOCG project within exploration success and potentially the Woomera Prohibited Area in South leading to gold production for Maximus. Australia. This Farm-in Agreement 4 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 In addition to these two more recent appears as a high intensity magnetic metals and our persistence should result transactions, the company continued feature at a relatively shallow depth of in a significant breakthrough. Success at to benefit from the previous sale of the 150 metres from surface. This target Narndee will place the company in the Adelaide Hills tenements to Terramin displays several similarities to the Nova enviable position of having two highly Australia in October 2013. As part of project in the Fraser Range region in prospective and significant areas to that Agreement, Maximus received 25 Western Australia. pursue in its own right. million FPO shares in Terramin. The Company was able to sell this package of shares in November 2014, upon their release from Escrow, for a sum in excess of $1.6 million. This allowed Maximus to continue to fund our exploration activities without the need to approach shareholders and the wider capital markets for funding. There remains two further contingent payments forming part of the Adelaide Hills transaction with Terramin, and there is the potential that we may receive the first payment of $1 million in 2016, but there is no guarantee of this. This payment becomes due on approval to mine from the Department for State Development (DSD) in South Australia. The second contingent payment of a further $1 million is due upon the commencement of mining from the Bird in Hand tenement. We continue to explore on our Narndee tenements in Western Australia, with the most recent drill programs targeting predominantly base metals including copper, lead and zinc in the southern tenement E59/908 located approximately 100km south, south east of Mt Magnet. As part of the continuous review of the significant geological database covering Narndee collected over many years, we have identified a new airborne electromagnetic (EM) anomaly that Further detailed exploration is required to Market conditions have remained confirm the area’s prospectivity. We are extremely challenging throughout 2014 currently preparing for a ground based and 2015 as I have mentioned. Ongoing exploration program commencing with a rationalization of the sizable tenement ground based EM survey that should lead holding in both South Australia and to a drill program in early 2016. Western Australia has reduced the burden Continued success with our exploration at Narndee reaffirms our views that the region is highly prospective for base on the company to meet the significant tenement expenditure commitments. Pursuing joint venture opportunities of NARNDEE Yilgarn Craton Eromanga Basin NORTH GAWLER CRATON MILLERS CREEK SPARGOVILLE Gawler Craton ADELAIDE HILLS Location of activities. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 5 CHAIRMAN’S REPORT (cont) selected tenements within our portfolio meeting an acceptable standard for a will continue to reduce this financial listed company. Our Managing Director burden. However, the significant has worked diligently to progress our transaction completed recently involving exploration within the capital constraints. the Spargoville tenement package should I commend his report to you which will reassure shareholders that your board will expand on our projects. review all worthwhile opportunities that present throughout the year, and is not afraid to commit to project acquisitions, provided we believe they add significantly to your company. I sincerely thank shareholders for their continued support through another difficult year, my fellow Directors, staff and contractors for their assistance and support. I look forward to further We will continue to review other projects, exploration success, both directly and particularly in the current environment, also in collaboration with Joint Venture provided that they present a low risk assets and your continued support for production option for your company. Maximus for the coming year. We continue to operate on minimal budget overheads in order to conserve our capital for exploration whilst Bob Kennedy CHAIRMAN 6 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 TENEMENT SCHEDULE For the year ended 30 June 2015 Tenement number Tenement name Registered holder/applicant Maximus Resources interest WESTERN AUSTRALIA NARNDEE PROJECT E59/908 E59/1335 E59/1917 E59/1918 E59/1829 E59/1830 E59/1831 E58/426 E58/427 E58/428 E58/431 E58/452 E59/1854 SOUTH AUSTRALIA ADELAIDE HILLS PROJECT EL 4641 EL 5351 EL 5354 EL 5135 MILLERS CREEK PROJECT EL 4463 EL4899 EL 4854 EL 4898 Narndee Maximus Resources Ltd 4 Corner Bore Maximus Resources Ltd Bricky Bore Maximus Resources Ltd Dromedary Hill Maximus Resources Ltd Milgoo Peak 1 Maximus Resources Ltd Milgoo Peak 2 Maximus Resources Ltd Narndee Homestead Maximus Resources Ltd Naluthanna Hill Maximus Resources Ltd Paynesville Maximus Resources Ltd Kantie Murdana Hill Maximus Resources Ltd Mt Carron Corner Well Boondanoo Maximus Resources Ltd Maximus Resources Ltd Maximus Resources Ltd Echunga Maximus Resources Ltd Mount Monster Maximus Resources Ltd Williamstown Mount Rufus Maximus Resources Ltd Maximus Resources Ltd Billa Kalina Maximus Resources Ltd Bamboo Lagoon Maximus Resources Ltd Millers Creek Paisley Creek Maximus Resources Ltd Maximus Resources Ltd ELA 2015/00051 Curdlawidny Lagoon Maximus Resources Ltd NORTHERN GAWLER CRATON PROJECT 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% EL 5248 Welbourn Hill Maximus Resources Ltd 100% MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 7 FINANCIAL REPORT For the year ended 30 June 2015 Maximus Resources Limited ABN 74 111 977 354 These financial statements are the consolidated financial statements of the consolidated entity consisting of Maximus Resources Limited and its subsidiaries. The financial statements are presented in the Australian currency. Maximus Resources Limited is a company limited by shares, is listed on the Australian Securities Exchange (ASX) under the code “MXR” and is incorporated and domiciled in Australia. The registered office and principal place of business is: Maximus Resources Limited Level 3, 100 Pirie Street Adelaide SA 5000 Registered postal address is: Maximus Resources Limited Level 3, 100 Pirie Street Adelaide SA 5000 A description of the nature of the Company’s operations and its principal activities is included in the directors’ report on pages 9 to 10, which is not part of these financial statements. The financial statements were authorised for issue by the directors on 28 August 2015. The directors have the power to amend and reissue the financial statements. Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press releases, financial reports and other information are available on our website: www.maximusresources.com. 8 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 DIRECTORS’ REPORT Your directors present their report on Maximus Resources Limited (referred to hereafter as the Company) at the end of, or during, the year ended 30 June 2015. Directors The following persons were directors of the Company during the whole of the financial year and up to the date of this report: Robert Michael Kennedy (Non-executive chairman) Kevin John Malaxos (Managing Director) Leigh Carol McClusky (Non-executive director) Ewan John Vickery (Non-executive director) Nicholas John Smart (Alternate director for E J Vickery) Principal activities During the year the principal activities of the Company consisted of natural resources exploration and development. Dividends There were no dividends declared or paid during the year (2014: Nil). OPERATIONAL AND FINANCIAL REVIEW 1. Operating results and financial position The net result of operations of the Company for the financial year was a loss of $97,389 (2014: $2,678,300). The net assets of the Company have decreased by $499,157 during the financial year from $4,063,077 at 30 June 2014 to $3,563,920 at 30 June 2015. 2. Review of Operations Narndee The Narndee tenements in Western Australia continued as the primary exploration focus for the company, with completion of a 12 hole reverse circulation (RC) drill program in July 2014 for a total of 1,860 metres. This 12 hole program was planned to test targets identified during an earlier induced polarisation (IP) survey completed in January 2014 and to further test the mineralised sulphide intersections reported in the phase 1 and phase 2 drilling programs. Assay results returned from the Perth based assay laboratory confirmed significant copper grades in addition to substantial copper and zinc mineralised intervals and contribute to our growing confidence that the area has the potential to host a significant volcanic massive sulphide (VMS) style copper-gold orebody, similar to other projects in the region. Rock chip samples from the RC drilling were analysed using a hand-held XRF unit to reconfirm mineral content and record sulphide content. Result continued to encourage, but we were not able to plot consistent intervals of mineralisation across adjacent intersections. All existing data is being independently reviewed to determine if a step-out ground EM survey is the optimum next phase to establish additional drill targets. A shallow 13 hole RC drill program was completed on E58/431 for a total of 756 metres to commence testing for gold occurrences on the northern tenements within the Narndee tenement package. Consistent assays were not achieved from this drill program despite being centered on historic underground workings. No further drilling is planned at this stage, until additional targets are identified on this and adjacent MXR held tenements. Several tenements relinquished in the southern portion of the Narndee tenement block during 2012/13 due to not achieving the annual expenditure commitments were re-acquired in 2014/15 from the tenement holder. Initially a joint venture agreement was planned but due to continued worsening market conditions in 2014, the tenement holder elected not to contribute to the ongoing exploration of these tenements and recommended that Maximus purchase the tenements for a nominal cost per tenement. Transfer documents were prepared in August 2014 and forwarded to the Department of Mines and Petroleum for action. The tenement titles were eventually transferred to Maximus in July 2015. Adelaide Hills In October 2013, Maximus signed a binding agreement with Terramin Exploration Pty Ltd (a subsidiary of Terramin Australia Limited) for the sale of five Adelaide Hills tenements. The total transaction was valued at $3,500,000, plus a 0.5% gross royalty on gold in excess of 50,000 oz mined plus 25 million Terramin fully paid ordinary (FPO) shares. The first payment of $1.5 million plus 25 million shares to Maximus was completed in November 2013 following signing of the formal sales agreement and receipt of Ministerial approval for the transfer of the tenements. In November 2014, the parcel of 25 million FPO Terramin shares was released from Escrow. Maximus arranged the sale of the share package to significant investors associated with Terramin at a small discount to the five day volume weighted average price (VWAP) for TZN shares traded on the ASX. The transaction netted $1.602 million for Maximus. Two contingent payments remain outstanding and are dependent on Environmental approval to mine (PEPR) from the Department for State Development (DSD, formerly DMITRE) ($1 million) and the commencement of bullion production from the site ($1 million). Maximus retains four tenements in the Adelaide Hills region and has completed minor exploration activities on these tenements during 2014/15. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 9 DIRECTORS’ REPORT (cont) Millers Creek (formerly Billa Kalina The Millers Creek project is located north west of Lake Torrens in the Eromanga Basin within the Woomera Prohibited Area (WPA) in central South Australia. The project comprises four granted tenements and one application for a total of 2,618 sq km. A binding Memorandum of Understanding was signed with Monax Alliance in November 2013 providing Monax Alliance six months to complete due diligence on the four granted Millers Creek tenements prior to making a final decision to enter into a farm-in joint venture agreement. Monax Alliance notified Maximus in May 2014 of its intention to enter into a farm-in agreement, subject to satisfactory agreement of formal documentation. The farm-in agreement was completed and signed during February 2015 and drilling commenced shortly there-after in March. Alliance planned a single 1,100 metre deep single diamond drill hole to test the Oliffes Dam iron oxide copper-gold (IOCG) target. The hole was stopped at 911 down-hole, when it was determined that basement rock had been intersected. Alliance notified Maximus of its intention to withdraw from the farm-in joint venture agreement in May 2015, with no substantial explanation given. Alliance was targeting an IOCG body and order of magnitude larger than a Carrapateena sized orebody. The location of the Oliffes Dam drillhole eliminated an ore zone of this size within the coincident mag-gravity envelope identified. Maximus retains 100% equity in the Millers Creek tenement package, and all data and information gathered by alliance during the due diligence period. Maximus continues to search for suitable joint venture parties to cooperate on drill testing the remaining targets on the Millers Creek tenements. Northern Gawler Craton Maximus acquired two tenements located in the northern Gawler craton region of SA to follow-up on anomalous copper assay results by the previous tenement holder. A review of the dataset followed by an airborne magnetic survey was completed in March 2015 but failed to identify a suitable host for large tonnage copper deposits. Maximus retained the Welbourn Hill tenement, relinquishing the adjacent Nicholson Hill tenement and continues the search for a joint venture party to conduct further exploration on the remaining tenement. Corporate During August, one million MXR shares were issued to a consultant for information supplied relating to the historic Echunga diamond field located within Maximus held tenements in the Adelaide Hills region. Summary Market conditions in 2014/15 continued on from the previous year with further deterioration, an ever tightening capital market and small and mid- tier exploration and production companies continuing to fail, particularly in the iron ore sector. Maximus was able to operate through these challenging times as a result of minimal expenditures outside of pure exploration. Additional exploration on the Narndee tenements in Western Australia provided encouraging results, confirming significant intersections of massive sulphide mineralisation, high grade copper and zinc intersections and anomalous lead grades. Sale of the Terramin share package, upon release from escrow enabled the company to continue to fund exploration activities without the need to approach shareholders or other capital market sources for working capital. The signing of the farm-in agreement with Monax Alliance and the completion of the first diamond drill hole on the tenements for many years is a significant step and will facilitate renewed exploration activities in the region. Despite the Alliance’ withdrawal from the farm-in agreement, we continue to believe that Millers Creek has the potential to be a significant stand-alone project for the Company. 3. Significant changes in the state of affairs There have been no significant changes in the state of affairs from the 2014 financial year to 2015. 4. Events arising since the end of the reporting period The Company signed a farm-in agreement with Tychean Resources Limited to secure up to 90% of the Spargoville gold project, located 70 kilometres south of Kalgoorlie in Western Australia’s Eastern Goldfields, within three years. The Company will acquire 25% equity of all Tychean rights in the Spargoville tenements with a payment of $200,000 (paid in August 2015) and the issue of an additional $200,000 shares in the Company upon transfer of equity in the tenements. The Company will manage all future exploration activities and expenditure allocations and can increase equity in the tenements to 51% within two years from commencement by investing a further $200,000 in exploration. The Company can increase its total equity to 90% by investing a further $600,000 in exploration within three years from commencement of the farm-in agreement. There has been no other transaction or event of a material and unusual nature that has arisen in the interval between the end of the financial year and the date of this report that is likely, in the opinion of the directors, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years. 5. Future business developments, prospects and business strategies The strategy for the coming year is to continue pursuing exploration activities on our core assets of Narndee, Welbourn Hill and the recently acquired exploration rights on the Spargoville tenement package. Consolidation and rationalisation of the Narndee tenements in Western Australia was largely completed during 2014/15 and our aim is to pursue large base metal deposits. Welbourn Hill is a single target prospect, and we continue our efforts to secure a joint venture party to further investigate the identified target. Millers Creek hosts a number of IOCG targets and this package of tenements has been listed as available for joint venture or sale to interested parties. Maximus entered into a sale and farm-in agreement with Tychean Resources Limited on the Spargoville suite of tenements with the aim of identifying repeat Wattle Dam type deposits. 6. Environmental regulation The Company’s operations are subject to significant environmental regulation under both Commonwealth and relevant State legislation in relation to discharge of hazardous waste and materials arising from any exploration or mining activities and development conducted by the Company on any of its tenements. The Company believes it is not in breach of any environmental obligation. 10 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 INFORMATION ON DIRECTORS Robert Michael Kennedy ASAIT, Grad Dip (Systems Analysis), FCA, ACIS, Life Member AIM, FAICD NON-EXECUTIVE CHAIRMAN Experience and expertise Mr Kennedy, a Chartered Accountant, has been non-executive chairman of Maximus Resources Limited since 2004. Mr Kennedy brings to the Board his expertise and extensive experience as chairman and non-executive director of a range of listed public companies in the resources sector. Apart from his attendance at Board and Committee meetings, Mr Kennedy leads the development of strategies for the development and future growth of the Company. He leads the Board’s external engagement of the Company meeting with Government, investors and is engaged with the media. He is a regular attendee of Audit Committee functions of the major accounting firms. He conducts the review of the Board including the Managing Director in his executive role. Independence In assessing Mr Kennedy’s independence, the Board (excluding Mr Kennedy), took into account his ability and consistent track record to think and act independently across a wide range of issues. Whilst Mr Kennedy has been appointed to a number of Resource Industry Boards, due to his knowledge of the industry and the companies all operating domestically, the time required across these companies in no way impedes on his dedication to his role as Chairman of the Board. In taking all of these issues into account, the Board (excluding Mr Kennedy), were unanimous in declaring Mr Kennedy as independent. Other current directorships Mr Kennedy is a director of ASX listed companies Flinders Mines Limited (since 2001), Monax Mining Limited (since 2004), Ramelius Resources Limited (since 2003) and Tychean Resources Limited(since March 2006). Former directorships in the last three years Formerly he was a director of Beach Energy Limited (from December 1991 to December 2012, Crestal Petroleum Limited (formerly Tellus Resources Limited (from December 2013 to February 2015) and Marmota Energy Limited (from April 2006 to April 2015). Special responsibilities Chairman of the Board. Member of the Audit and Risk Committee. Interests in shares and options 50,000,000 ordinary shares in Maximus Resources Limited. Kevin John Malaxos BSc Mining Engineering MANAGING DIRECTOR Experience and expertise A director since 13 December 2010, Mr Malaxos has 28 years experience in the resources sector in senior management and executive roles across a suite of commodities including gold, nickel, iron ore, silver, lead, zinc and chromium. He has managed surface and underground mining operations and brings a wealth of experience in project evaluation and development, project approval and Government liaison. Mr Malaxos’ previous roles include CEO for Mt Gibson Mining (MGX) and COO of listed iron ore developer Centrex Metals Limited (CXM), where he was responsible for project development, project approvals and community and government consultation. Other current directorships Mr Malaxos is a non-executive director of ASXlisted company Flinders Mines Limited (since December 2010). Special responsibilities Managing Director. Interests in shares, options and rights 20,000,000 ordinary shares in Maximus Resources Limited. Leigh Carol McClusky NON-EXECUTIVE DIRECTOR Experience and expertise Appointed as a director on 1 September 2010, Ms McClusky is the Managing Director of the McCo Group, a strategic communications company with offices in Adelaide, Melbourne and Geelong. After more than 30 years in key media roles across Melbourne, Sydney and Adelaide, Ms McClusky now works closely with a range of organisations and industries to develop proactive communication campaigns and to deflect potentially damaging impacts on corporate reputations. Her role also includes stakeholder engagement and management, client advocacy and crisis communications. Special responsibilities Member of the Audit and Risk Committee. Interests in shares, options and rights 2,456,668 ordinary shares in Maximus Resources Limited. Ewan John Vickery LLB NON-EXECUTIVE DIRECTOR Experience and expertise A director since incorporation 17 December 2004, Mr Vickery is a corporate and business lawyer with over 30 years’ experience in private practice in Adelaide. He has acted as an advisor to companies on a variety of corporate and business issues including capital and corporate restructuring, native title and land access issues, and as lead native title advisor and negotiator for numerous mining and petroleum companies. He is a member of the Exploration Committee of the South Australian Chamber of Mines and Energy Inc, the International Bar Association Energy and Resources Law Section, the Australian Institute of Company Directors and is a past national president of Australian Mining and Petroleum Law Association (AMPLA Limited). Other current directorships Mr Vickery is a non-executive director of Flinders Mines Limited (since 2000). Mr Vickery is also a non-executive director of Tychean Resources Limited (Appointed May 2013). Special responsibilities Chairman of the Audit and Risk Committee. Interests in shares and options 16,070,001 ordinary shares in Maximus Resources Limited. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 11 DIRECTORS’ REPORT (cont) Nicholas John Smart ALTERNATE DIRECTOR FOR E J VICKERY Experience and expertise An alternate director since 9 May 2005, Mr Smart has held positions as a general manager in Australia and internationally. Previously a full Associate Member of the Sydney Futures Exchange and adviser with a national share broking firm, with over 25 years experience in the corporate arena including capital raising for private and listed companies. Other experience includes startup companies in technology development including commercialisation of the Synroc process for safe storage of high level nuclear waste, controlled temperature and atmosphere transport systems and the beneficiation of low rank coals. He is an alternate director for Maximus Resources Limited (since May 2005) and an alternate director for Flinders Mines Ltd (since 2009). Mr Smart currently consults to various public and private companies. Interests in shares and options Nil COMPANY SECRETARY Rajita Shamani Alwis LLB BCom, CA Experience and expertise Ms Alwis has been the Company Secretary since 30 June 2011 to the date of this report. Ms Alwis has over 15 years’ experience in public practice and commerce and has been a Chief Financial Officer and Company Secretary of numerous listed and proprietary companies. Meetings of directors The numbers of meetings of the Company’s board of directors and of each board committee held during the year ended 30 June 2015, and the number of meetings attended by each director were: Full meetings of directors Audit and risk committee meetings A 11 11 9 11 B 11 11 11 11 A 3 3 3 3 B 3 3 3 3 Robert Michael Kennedy Kevin John Malaxos Leigh Carol McClusky Ewan John Vickery Nicholas John Smart A = Number of meetings attended B = Number of meetings held during the time the director held office or was a member of the committee during the year Indemnification and insurance of officers The Company has entered into deeds of indemnity with each director whereby, to the extent permitted by the Corporations Act 2001, the Company agreed to indemnify each director against all loss and liability incurred as an officer of the Company, including all liability in defending any relevant proceedings. The Company is required to indemnify the directors and other officers of the Company against any liabilities incurred by the directors and officers that may arise from their position as directors and officers of the Company. No costs were incurred during the year pursuant to this indemnity. Insurance premiums Since the end of the previous year the Company has paid insurance premiums of $20,814 to insure the directors and officers in respect of directors’ and officers’ liability and legal expenses insurance contracts. Proceedings on behalf of company No person has applied to the Court under section 237 of the Corporations Act 2001 to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001. Non-audit services The Board of Directors, in accordance with advice from the Audit Committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons: • all non-audit services are reviewed and approved by the Audit Committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and • the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. Fees for non-audit services paid or payable to the external auditors or its related practices during the year ended 30 June 2015 was $2,200 (2014: $4,000). 12 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 The Company also has an Employee Incentive Rights Plan approved by shareholders that enables the Board to offer eligible employees rights to acquire ordinary fully paid shares in the Company. Under the terms of the Plan, rights to acquire ordinary fully paid shares at no cost may be offered to the Company’s eligible employees as determined by the Board in accordance with the terms and conditions of the Plan. The objective of the Plan is to align the interests of employees and shareholders by providing employees of the Company with the opportunity to participate in the equity of the Company as a longterm incentive to achieve greater success and profitability for the Company and to maximise the long term performance of the Company. The employment conditions of the Managing Director were formalised in a contract of employment. The base salary as set out in the employment contract is reviewed annually. The Managing Director’s contract may be terminated at any time by mutual agreement and in instances of serious misconduct the Company may terminate his agreement without notice. No remuneration consultants were engaged for the year ending 30 June 2015 or 2014. B Voting and comments made at the company’s 2014 Annual General Meeting Maximus Resources Limited received more than 80% of ‘yes’ votes on its remuneration report for the 2014 financial year. The company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. C Details of remuneration This report details the nature and amount of remuneration for each key management person of the Company. The names and positions held by directors and key management personnel of the Company during the financial year are: Mr R M Kennedy Chairman, non-executive Mr K J Malaxos Managing Director Ms L C McClusky Director, non-executive Mr E J Vickery Director, non-executive Mr N J Smart Alternate director for E J Vickery, non-executive Ms R S Alwis Company Secretary REMUNERATION REPORT – AUDITED The remuneration report is set out under the following main headings: A Principles used to determine the nature and amount of remuneration B Voting and comments made at the Company’s 2014 Annual General Meeting C Details of remuneration D Service agreements E Share-based compensation The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. A Principles used to determine the nature and amount of remuneration The Company’s policy for determining the nature and amounts of emoluments of board members and senior executive officers of the Company is as follows: The Company’s Constitution specifies that the total amount of remuneration of non-executive directors shall be fixed from time to time by a general meeting. The current maximum aggregate remuneration of non-executive directors has been set at $300,000 per annum. Directors may apportion any amount up to this maximum amount amongst the non- executive directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in performing their duties as directors. The remuneration of the Managing Director is determined by the non-executive directors on the Board as part of the terms and conditions of his employment which are subject to review from time to time. The remuneration of other executive officers and employees is determined by the Managing Director subject to the approval of the Board. Non-executive director remuneration is by way of fees and statutory superannuation contributions. Non-executive directors do not participate in schemes designed for remuneration of executives nor do they receive options or bonus payments and are not provided with retirement benefits other than salary sacrifice and statutory superannuation. The Company’s remuneration structure is based on a number of factors including the particular experience and performance of the individual in meeting key objectives of the Company. The Board is responsible for assessing relevant employment market conditions and achieving the overall, long term objective of maximising shareholder benefits, through the retention of high quality personnel. The Company does not presently emphasise payment for results through the provision of cash bonus schemes or other incentive payments based on key performance indicators of the Company given the nature of the Company’s business as a junior listed mineral exploration entity and the current status of its activities. However the Board may approve the payment of cash bonuses from time to time in order to reward individual executive performance in achieving key objectives as considered appropriate by the Board. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 13 DIRECTORS’ REPORT (cont) REMUNERATION REPORT (AUDITED) (CONT) Key management personnel and other executives of the Company Total key management personnel compensation 250,755 251,143 Key management personnel and other executives of the Company 2015 Name Robert M Kennedy Kevin J Malaxos Leigh C McClusky Ewan J Vickery Nicholas J Smart Rajita S Alwis 2014 Name Robert M Kennedy Kevin J Malaxos Leigh C McClusky Ewan J Vickery Nicholas J Smart Rajita S Alwis Short-term employee benefits Short-term employee benefits Short-term employee benefits Post- employment benefits Share-based payments Share-based payments Salary Bonus Superannuation Options Rights Fees $ 82,283 $ - - 251,143 54,500 49,772 - 64,200 - - - - $ - - - - - - - $ 7,817 23,857 - 4,728 - - 36,402 $ - - - - - - - $ - - - - - - - Short-term employee benefits Short-term employee benefits Short-term employee benefits Post- employment benefits Share-based payments Share-based payments Salary Bonus Superannuation Options Rights Fees $ 82,454 $ - $ - - 251,662 45,767* 54,500 49,875 - 66,169 - - - - - - - - $ 7,646 27,571 - 4,625 - - $ - - - - - - - $ - - - - - - - Total $ 90,100 275,000 54,500 54,500 - 64,200 538,300 Total $ 90,100 325,000 54,500 54,500 - 66,169 590,269 Total key management personnel compensation 252,998 251,662 45,767 39,842 * Mr Malaxos received a cash bonus during the 2014 in relation to the execution of the Binding Agreement with Terramin Australia Limited for the sale of five Adelaide Hills tenements. The relative proportions of remuneration that are fixed and those that are at risk are as follows: Name Fixed remuneration Fixed remuneration At risk – STI* At risk – STI* At risk – LTI** At risk – LTI** Kevin John Malaxos 2015 % 100 2014 % 85 2015 % - 2014 % - 2015 % - 2014 % 15 * Short-term incentives (STI) include cash incentive payments (bonuses) linked to company and/or individual performance. ** Long-term incentives (LTI) include equity grants issued via the Company’s Employee Share Option and Incentive Rights Plans. This plan is designed to provide longterm incentives for executives to deliver longterm shareholder returns. D Service agreements The Board has negotiated a contract with Mr Malaxos with no fixed term at a salary of $275,000 per annum inclusive of superannuation guarantee contributions to be reviewed annually and with termination on three months’ notice. Messrs Kennedy and Vickery and Ms McClusky are engaged as directors with formal agreements per the ASX Corporate Governance Principles and Recommendations Third Edition. 14 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 E Share-based compensation Incentive rights The Company has an Employee Incentive Rights Plan approved by shareholders that enables the Board to offer eligible employees rights to acquire ordinary fully paid shares in the Company. Under the terms of the Plan, rights to acquire ordinary fully paid shares at no cost may be offered to the Company’s eligible employees as determined by the Board in accordance with the terms and conditions of the Plan. No rights were issued during the year. Options granted as remuneration No options were granted during the year. Shares issued on exercise of remuneration options No shares were issued to directors as a result of the exercise of remuneration options during the financial year. Directors’ interests in shares and options i) Option holdings The numbers of options over ordinary shares in the Company held during the financial year by each director of Maximus Resources Limited and other key management personnel of the Company, including their personally related parties, are set out below. 2015 Name Balance at start of the year Issued as remuneration Exercised (expired/ purchased) Acquired during the year Balance at end of the year Vested and exercisable Unvested R M Kennedy 18,000,000 K J Malaxos L C McClusky E J Vickery N J Smart 2014 Name 7,000,000 1,223,334 6,072,001 - Balance at start of the year R M Kennedy 18,000,000 K J Malaxos L C McClusky E J Vickery N J Smart iii) Share holdings 7,000,000 1,223,334 6,072,001 - - - - - - (7,000,000) (1,223,334) (6,072,0001) - - - - - - - - - - - - - - - - - - - - - Issued as remuneration Exercised (expired/ purchased) Acquired during the year Balance at end of the year Vested and exercisable Unvested - - - - - - - - - - - - - - - 18,000,000 18,000,000 7,000,000 7,000,000 1,223,334 1,223,334 6,072,001 6,072,001 - - - - - - - The numbers of shares in the Company held during the financial year by each director of Maximus Resources Limited and other key management personnel of the Company, including their personally related parties, are set out below. 2015 Name R M Kennedy KJ Malaxos L C McClusky E J Vickery N J Smart 2014 Name R M Kennedy KJ Malaxos L C McClusky E J Vickery N J Smart Balance at start of the year 50,000,000 20,000,000 2,456,668 16,070,001 - Balance at start of the year 50,000,000 20,000,000 2,456,668 16,070,001 - Received as compensation Exercise of options/rights Acquired/ (disposed) - - - - - - - - - - - - - - - Received as compensation Exercise of options/rights Acquired/ (disposed) - - - - - - - - - - - - - - - Balance at the end of the year 50,000,000 20,000,000 2,456,668 16,070,001 - Balance at the end of the year 50,000,000 20,000,000 2,456,668 16,070,001 - Shares under option There are no unissued ordinary shares of Maximus Resources Limited under option at the date of this report. END OF AUDITED REMUNERATION REPORT MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 15 DIRECTORS’ REPORT (cont) AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 17. This report is signed and dated in Adelaide on this 28th day of August 2015 and made in accordance with a resolution of the directors. Robert M Kennedy Director 16 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 AUDITOR’S INDEPENDENCE DECLARATION Level 1, 67 Greenhill Rd Wayville SA 5034 Correspondence to: GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF MAXIMUS RESOURCES LIMITED In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Maximus Resources Limited for the year ended 30 June 2015, I declare that, to the best of my knowledge and belief, there have been: no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and a no contraventions of any applicable code of professional conduct in relation to the b audit. GRANT THORNTON AUDIT PTY LTD Chartered Accountants J L Humphrey Partner – Audit & Assurance Adelaide, 28 August 2015 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 17 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2015 Other income Administrative expenses Compliance expenses Depreciation expense Employment expenses (excluding superannuation) Marketing expenses Superannuation Exploration expenditure written off Loss on sale of exploration assets Loss on sale of assets Gain on sale of Available-for-sale financial assets Impairment of financial assets (Loss) before income tax Income tax Loss for the year 3 4 4 4 15 5 Other comprehensive income (Items that maybe reclassified subsequently to profit or loss) Changes in the fair value of available-for-sale financial assets 16 Other comprehensive income for the year (net of tax) Total comprehensive loss for the year (Loss) is attributable to: Maximus Resources Limited Notes Consolidated 30 June 2015 $ Consolidated 30 June 2014 $ 22,222 (147,800) (97,392) (1,867) (258,626) (5,048) (17,230) (20,304) (2,147,985) (4,270) - (2,678,300) 29,121 (190,023) (103,988) (1,800) (282,128) (4,755) (20,407) (536,271) - (424) 1,102,500 (89,214) (97,389) - - (97,389) (2,678,300) (405,393) (405,393) (502,782) 450,000 450,000 (2,228,300) (97,389) (2,678,300) Total comprehensive loss for the year is attributable to: Maximus Resources Limited (502,782) (2,228,300) Earnings per share for (loss) from continuing operations attributable to the ordinary equity holders of the Company: Basic earnings per share Diluted earnings per share 26 26 (0.01) (0.01) (0.31) (0.31) Cents Cents This statement should be read in conjunction with the notes to the financial statements. 18 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2015 ASSETS Current assets Cash and cash equivalents Trade and other receivables Available-for-sale assets Other current assets Total current assets Non-current assets Plant and equipment Exploration and evaluation Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Provisions Total current liabilities Non-current liabilities Provisions Total non-current liabilities Total liabilities Net assets EQUITY Contributed equity Reserves Retained losses Total equity Notes Consolidated 30 June 2015 $ Consolidated 30 June 2014 $ 6 7 9 5 10 11 12 13 14 15 16 16 905,455 4,665 90,214 11,794 1,012,128 2,827 2,660,621 2,663,448 625,036 5,005 1,083,821 9,601 1,723,463 5,305 2,437,811 2,443,116 3,675,576 4,166,579 64,652 29,664 94,316 17,340 17,340 65,615 22,592 88,207 15,295 15,295 111,656 103,502 3,563,920 4,063,077 35,398,391 - 35,394,766 405,393 (31,834,471) (31,737,082) 3,563,920 4,063,077 This statement should be read in conjunction with the notes to the financial statements. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 19 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2015 Consolidated Notes Balance at 1 July 2014 Total comprehensive loss for the year: (Loss) for the year Other comprehensive income 16 Transactions with owners in their capacity as owners: Contributions of equity 15 Contributed equity $ Reserves $ Retained losses $ Total equity $ 35,394,766 405,393 (31,737,082) 4,063,077 - - 3,625 3,625 - (405,393) (405,393) (97,389) - (97,389) (97,389) (405,393) (502,782) - - - - - 3,625 3,625 (31,834,471) 3,563,920 Balance at 30 June 2015 35,398,391 Balance at 1 July 2013 35,394,765 1,358,489 (30,461,878) 6,291,376 Total comprehensive loss for the year: (Loss) for the year Other comprehensive income 16 Transactions with owners in their capacity as owners: Employee options lapsed Contributions of equity 16 15 - - - 1 1 - (2,678,300) 450,000 450,000 - (2,678,300) (2,678,300) 450,000 (2,228,300) (1,403,096) 1,403,096 - - (1,403,096) 1,403,096 - 1 1 Balance at 30 June 2014 35,394,766 405,393 (31,737,082) 4,063,077 This statement should be read in conjunction with the notes to the financial statements. 20 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2015 Notes Consolidated 30 June 2015 $ Consolidated 30 June 2014 $ Cash flows from operating activities Payments to suppliers and employees Interest received Net cash used in operating activities 25 Cash flows from investing activities Payments for plant and equipment Proceeds from sale of tenements Payments for available-for-sale financial assets Proceeds from sale of available-for-sale financial assets Payments for exploration and evaluation Net cash provided by investing activities Cash flows from financing activities Proceeds from issues of shares and other equity securities Net cash provided by financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year 6 (593,738) 28,112 (565,626) - - (1,000) 1,602,500 (756,081) 845,419 626 626 280,419 625,036 905,455 (531,218) 22,222 (508,996) (2,037) 1,500,000 - - (629,777) 868,186 1 1 359,191 265,845 625,036 This statement should be read in conjunction with the notes to the financial statements. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 21 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 June 2015 1 Summary of significant accounting policies c) Employee benefits The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the consolidated entity consisting of Maximus Resources Limited and its subsidiaries. a) Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001. Maximus Resources Limited is a for-profit entity for the purpose of preparing the financial statements. i) Compliance with IFRS The consolidated financial statements of the Maximus Resources Limited company also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRSs ensures that the financial statements and notes comply with International Financial Reporting Standards (IFRS). ii) Historical cost convention These financial statements have been prepared on an accrual basis, under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss and certain classes of property, plant and equipment. iii) Critical accounting estimates The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company. b) Basis of consolidation The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2015. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30 June. All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable. Short-term employee benefits Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly within twelve (12) months after the end of the period in which the employees render the related service. Examples of such benefits include wages and salaries, non-monetary benefits and accumulating sick leave. Short-term employee benefits are measured at the undiscounted amounts expected to be paid when the liabilities are settled. Other long-term employee benefits The Group’s liabilities for annual leave and long service leave are included in other long term benefits as they are not expected to be settled wholly within twelve (12) months after the end of the period in which the employees render the related service. They are measured at the present value of the expected future payments to be made to employees. The expected future payments incorporate anticipated future wage and salary levels, experience of employee departures and periods of service, and are discounted at rates determined by reference to market yields at the end of the reporting period on high quality corporate bonds (2014: government bonds) that have maturity dates that approximate the timing of the estimated future cash outflows. Any re-measurements arising from experience adjustments and changes in assumptions are recognised in profit or loss in the periods in which the changes occur. The Group presents employee benefit obligations as current liabilities in the statement of financial position if the Group does not have an unconditional right to defer settlement for at least twelve (12) months after the reporting period, irrespective of when the actual settlement is expected to take place. d) Changes in accounting estimates During the current reporting period, the Group changed the discount rate used in measuring its Australian dollar dominated defined benefit obligations and other long term employee benefits from the Australian government bond rate to the high quality corporate bond rate. This change was necessitated by developments in the Australian business environment that confirmed there is a sufficiently observable, deep and liquid market in high quality Australian corporate bonds to satisfy the requirements in AASB 119 Employee Benefits. The Group has concluded that this amendment has resulted in a ‘change in accounting estimate’ in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. The Group is not able to predict the impact of changing to high quality corporate bond rates in periods after the next reporting period due to the inherent uncertainty in measuring defined benefit obligations. e) 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 has been identified as the Board of Directors. f) Income tax The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. 22 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. g) Impairment of nonfinancial assets Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested 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 amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cashgenerating units). Nonfinancial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. h) Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other shortterm, highly liquid investments with original maturities of 12 months or less 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 in the statement of financial position. i) Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date. j) Investments and other financial assets Recognition and derecognition Regular purchases and sales of financial assets are recognised on trade-date – the date on which the Company commits to purchase or sell the asset. 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. When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to profit or loss as gains and losses from investment securities. Measurement At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. Loans and receivables and held to maturity investments are subsequently carried at amortised cost using the effective interest method. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in profit or loss within other income or other expenses in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in profit or loss as part of revenue from continuing operations when the Company’s right to receive payments is established. Interest income from these financial assets is included in the net gains/(losses). k) Investments and other financial assets Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences related to changes in the amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income. Changes in the fair value of other monetary and nonmonetary securities classified as available-for- sale are recognised in other comprehensive income. Details on how the fair value of financial instruments is determined are disclosed in note 2. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 23 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont) 30 June 2015 Fair value The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entityspecific inputs. Impairment The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator that the assets are impaired. If there is evidence of impairment for any of the Company’s financial assets carried at amortised cost, the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the financial asset’s original effective interest rate. The loss is recognised in the statement of profit or loss and other comprehensive income. l) Plant and equipment Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets’ employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Subsequent costs are included in the assets’ carrying amount or recognised as separate assets as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straightline basis over their useful lives to the Company commencing from the time the asset is held ready for use. The depreciation rates used for plant & equipment are from 12.5 to 40%. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount note 1(g). Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of profit or loss and other comprehensive income. When revalued assets are sold, it is Company policy to transfer any amounts included in other reserves in respect of those assets to retained earnings. m) Trade and other payables These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. n) Earnings per share (EPS) i) Basic earnings per share Basic earnings per share is calculated by dividing: ¬ the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares ¬ by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares. ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account: ¬ the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and ¬ the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. o) Exploration and evaluation expenditure Exploration and evaluation costs related to an area of interest are written off as incurred except they may be carried forward as an item in the statement of financial position where the rights of tenure of an area are current and one of the following conditions is met: – the costs are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; and – exploration and/or evaluation activities in the area of interest have not at the end of each reporting period reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Capitalised costs include costs directly related to exploration and evaluation activities in the relevant area of interest. General and administrative costs are allocated to an exploration or evaluation asset only to the extent that those costs can be related directly to operational activities in the area of interest to which the asset relates. Capitalised exploration and evaluation expenditure is written off where the above conditions are no longer satisfied. All capitalised exploration and evaluation expenditure is assessed for impairment if facts and circumstances indicate that an impairment may exist. Exploration and evaluation assets are also tested for impairment once commercial reserves are found, before the assets are transferred to development properties. 24 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 p) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. q) Comparative figures Comparative figures are adjusted to conform to Accounting Standards when required. 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 Company reacquires its own equity instruments, for example as the result of a share buy-back or a share-based payment plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of Maximus Resources Limited as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of Maximus Resources Limited. s) Key estimates The preparation of the financial statements requires management to make estimates and judgments. These estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Impairment The Company assesses impairment at each reporting date by evaluating conditions specific to the Company that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Valueinuse calculations performed in assessing recoverable amounts incorporate a number of key estimates. Exploration and evaluation The Company’s policy for exploration and evaluation is discussed in Note 1(o). The application of this policy requires management to make certain assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure, management concludes that the capitalised expenditure is unlikely to be recovered by future sale or exploration, then the relevant capitalised amount will be written off through the statement of profit or loss and other comprehensive income. Share-based payments The Group measures share-based payments at fair value at the grant date using the Black-Scholes or Binomial formula taking into account the terms and conditions upon which the instrument was granted, as discussed in note 31. t) New and revised standards that are effective for these financial statements A number of new and revised standards and an interpretation became effective for the first time to annual periods beginning on or after 1 July 2014. Information on these new standards is presented below. AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities AASB 2012-3 adds application guidance to AASB 132 to address inconsistencies identified in applying some of the offsetting criteria of AASB 132, including clarifying the meaning of “currently has a legally enforceable right of set-off” and that some gross settlement systems may be considered equivalent to net settlement. AASB 2012-3 is applicable to annual reporting periods beginning on or after 1 January 2014. The adoption of these amendments has not had a material impact on the Group as the amendments merely clarify the existing requirements in AASB 132. AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets These narrow-scope amendments address disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. When developing IFRS 13 Fair Value Measurement, the IASB decided to amend IAS 36 Impairment of Assets to require disclosures about the recoverable amount of impaired assets. The IASB noticed however that some of the amendments made in introducing those requirements resulted in the requirement being more broadly applicable than the IASB had intended. These amendments to IAS 36 therefore clarify the IASB’s original intention that the scope of those disclosures is limited to the recoverable amount of impaired assets that is based on fair value less costs of disposal. AASB 2013-3 makes the equivalent amendments to AASB 136 Impairment of Assets and is applicable to annual reporting periods beginning on or after 1 January 2014. The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of existing requirements. AASB 2013-5 Amendments to Australian Accounting Standards – Investment Entities The amendments in AASB 2013-5 provide an exception to consolidation to investment entities and require them to measure unconsolidated subsidiaries at fair value through profit or loss in accordance with AASB 9 Financial Instruments (or AASB 139 Financial Instruments: Recognition and Measurement where AASB 9 has not yet been adopted). The amendments also introduce new disclosure requirements for investment entities that have subsidiaries. These amendments apply to investment entities, whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both. Examples of entities which might qualify as investment entities would include Australian superannuation entities, listed investment companies, pooled investment trusts and Federal, State and Territory fund management authorities. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 25 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont) 30 June 2015 AASB 2013-5 is applicable to annual reporting periods beginning on or after 1 January 2014. This Standard has not had any impact on the Group as it does not meet the definition of an ‘investment entity’ in order to apply this consolidation exception. AASB 2014-1 Amendments to Australian Accounting Standards (Part A: Annual Improvements 2010-2012 and 2011-2013 Cycles) Part A of AASB 2014-1 makes amendments to various Australian Accounting Standards arising from the issuance by the IASB of International Financial Reporting Standards Annual Improvements to IFRSs 2010-2012 Cycle and Annual Improvements to IFRSs 2011-2013 Cycle. Among other improvements, the amendments arising from Annual Improvements to IFRSs 2010-2012 Cycle: – clarify that the definition of a ‘related party’ includes a management entity that provides key management personnel services to the reporting entity (either directly or through a group entity), – amend AASB 8 Operating Segments to explicitly require the disclosure of judgements made by management in applying the aggregation criteria Among other improvements, the amendments arising from Annual Improvements to IFRSs 2011-2013 Cycle clarify that an entity should assess whether an acquired property is an investment property under AASB 140 Investment Property and perform a separate assessment under AASB 3 Business Combinations to determine whether the acquisition of the investment property constitutes a business combination. Part A of AASB 2014-1 is applicable to annual reporting periods beginning on or after 1 July 2014. The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of existing requirements. u) Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the group: The accounting standards that have not been early adopted for the year ended 30 June 2015, but will be applicable to the group in future reporting periods, are detailed below. Apart from these standards, other accounting standards that will be applicable in future periods have been reviewed, however they have been considered to be insignificant to the group. At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the group. Management anticipates that all of the relevant pronouncements will be adopted in the group’s accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the group’s financial statements is provided below. Year ended 30 June 2018: IFRS 15: Revenue from Contracts with Customers This standard will change the timing and in some cases the quantum of revenue received from customers. IFRS 15 requires an entity to recognise revenue by identifying for each customer contract, the performance obligations in the contract and the transaction price. The transaction price is then allocated against the performance obligations in the contract with revenue recognised when (or as) the entity satisfies each performance obligation. Management are currently assessing the impact of the new standard but it is not expected to have a material impact on the financial performance or financial position of the consolidated entity. Year ended 30 June 2019: AASB 9: Financial Instruments This standard introduces new requirements for the classification and measurement of financial assets and liabilities. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. The main changes are: – Financial assets that are debt instruments will be classified based on (1) the objective of the entity’s business model for managing the financial assets; and (2) the characteristics of the contractual cash flows. – Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income (instead of in profit or loss). – Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument. – Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases. – Where the fair value option is used for financial liabilities the change in fair value is to be accounted by presenting changes in credit risk in other comprehensive income (OCI) and the remaining change in the statement of profit or loss. This standard is not expected to result in a material change to the manner in which the Group’s financial result is determined or upon the extent of disclosures included in future financial reports although the Group will quantify the effect of the application of AASB 9 when the final standard, including all phases, is issued. There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. 2 Financial risk management The Company’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company. Risk management is carried out by management under policies approved by the Board of Directors. Management identifies and evaluates financial risks in close cooperation with the Company’s operating units. The Board provides principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, the use of financial instruments and investment of excess liquidity. The Company’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, and loans to associated companies. 26 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 The Company holds the following financial instruments: Financial assets Cash and cash equivalents Trade and other receivables Available-for-sale financial assets Financial liabilities Trade and other payables a) Market risk i) Price risk Consolidated 30 June 2015 $ Consolidated 30 June 2014 $ 905,455 4,665 90,214 1,000,334 64,652 64,652 625,036 5,005 1,083,821 1,713,863 65,615 65,615 Price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a result of changes in market prices (other than those arising from foreign exchange or interest rate risk). The Company is not exposed to any material price risk. ii) Cash flow and fair value interest rate risk Interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted interest rates on classes of financial assets and financial liabilities. Interest rate risk is managed by the Company with the use of rolling shortterm deposits. The Company has no long term financial liabilities upon which it pays interest. As at the end of the reporting period, Maximus Resources Limited had the following variable rate cash and cash equivalent holdings: Cash and cash equivalents Net exposure to cashflow interest rate 30 June 2015 30 June 2015 30 June 2014 30 June 2014 Weighted average interest rate % 2.05% Balance $ 905,455 905,455 Weighted average interest rate % 3.25% Balance $ 625,036 625,036 Interest rate sensitivity analysis At 30 June 2015, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows: Interest rate risk Increase 2% Decrease 2% 30 June 2015 Financial assets Carrying amount $ Cash and cash equivalents 905,455 Total increase/ (decrease) Profit $ 582 582 Equity $ 582 582 Profit $ (582) (582) Increase 2% Decrease 2% Interest rate risk 30 June 2014 Financial assets Carrying amount $ Cash and cash equivalents 625,036 Total increase/ (decrease) Profit $ 444 444 Equity $ 444 444 Profit $ (444) (444) Equity $ (582) (582) Equity $ (444) (444) MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 27 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont) 30 June 2015 b) Credit risk Credit risk is the risk of default by borrowers and transactional counterparties as well as the loss of value of assets due to deterioration in credit quality. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. Sales to retail customers are required to be settled in cash or using major credit cards, mitigating credit risk. c) Liquidity risk Liquidity risk is the risk that the Company may encounter difficulty in settling its debts or otherwise meeting its obligations. The Company manages liquidity risk by monitoring cash flows and ensuring that adequate funds are available to meet cash demands. At the reporting date the Company held deposits at call of $35,000 (2014: $35,000) that are expected to readily generate cash inflows for managing liquidity risk. d) Fair value measurements The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. AASB 7: Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2),and c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3) The following table presents the Company’s assets and liabilities measured and recognised at fair value at 30 June 2015 and 30 June 2014. 30 June 2015 Assets Available-for-sale financial assets Tychean Resources Limited 30 June 2014 Assets Available-for-sale financial assets Terramin Australia Limited Tychean Resources Limited 3 Segment information a) Description of segments Level 1 $ 90,214 90,214 Level 1 $ 950,000 133,821 1,083,821 Level 2 Level 3 $ - - $ - - Level 2 Level 3 $ - - - $ - - - Total $ 90,214 90,214 Total $ 950,000 133,821 1,083,821 Identification of reportable segments Management has determined the operating segments based on the reports reviewed and used by Managing Director (the chief operating decision maker) are used to make strategic decisions. The Company is managed primarily on the basis of geographical area of interest, since the diversification of the Company operations inherently has notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis. Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following: – external regulatory requirements – geographical and geological styles Accounting policies developed Unless stated otherwise, all amounts reported to the Managing Director as chief decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Company. 28 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 b) Business segments 2015 Segment revenue Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) Impairment Segment assets Segment asset movements for the year: Capital expenditure Capital expenditure impaired Total movement for the year Total segment assets Unallocated assets Total assets Total segment liabilities Unallocated liabilities Total liabilities 2014 Segment revenue Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) Loss on sale of exploration assets Impairment Segment assets Segment asset movements for the year: Millers Creek Adelaide Hills Province $ - $ - (326,296) (61,803) (326,296) (61,803) Narndee Other Total $ - - - $ - $ - (148,172) (536,271) (148,172) - (536,271) 2,660,621 - - 2,660,621 165,964 (326,296) (165,964) 10,976 (61,803) (50,827) 440,340 - 440,340 141,800 (148,172) 6,372 - - - - 759,080 (536,270) 222,810 2,660,621 1,014,955 3,675,576 - 111,656 111,656 Millers Creek Adelaide Hills Province Narndee Other Total $ - $ - $ - $ - (2,147,985) (4,270) (20,304) (2,172,559) (2,147,985) - - - 165,964 50,826 2,214,649 - (2,147,985) $ - - - - Capital expenditure 71,729 198,811 334,078 Capital expenditure impaired Disposals - - - (4,147,985) - - Total movement for the year 71,729 (3,949,174) 334,078 Total segment assets Unallocated assets Total assets Total segment liabilities Unallocated liabilities Total liabilities - - - - (20,304) 6,372 26,675 (20,304) - 6,371 (20,304) 2,437,811 631,293 (20,304) (2,147,985) (1,536,996) 2,437,811 1,728,768 4,166,579 - 103,502 103,502 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 29 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont) 30 June 2015 i) Adjusted EBITDA A reconciliation of adjusted EBITDA to operating profit before income tax is provided as follows: Allocated: Adjusted EBITDA Unallocated: Interest revenue Impairment of financial assets Gain on sale of Available-for-sale financial assets Loss on sale of assets Administrative expenses Marketing expenses Profit before income tax from continuing operations (ii) Segment assets Allocated: Segment assets Unallocated: Cash and cash equivalents Trade and other receivables Other assets Available-for-sale financial assets Plant and equipment Total assets as per the consolidated statements of financial position (iv) Segment liabilities Reportable segments’ liabilities are reconciled to total liabilities as follows: Allocated: Allocated segment liabilities Unallocated: Trade and other payables Provisions Total liabilities as per the consolidated statements of financial position 3 Other income Interest received 30 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 Consolidated 30 June 2015 Consolidated 30 June 2014 (536,271) (2,172,559) 29,121 (89,214) 1,102,500 (424) (598,346) (4,755) (97,389) 22,222 - - - (522,915) (5,048) (2,678,300) Consolidated 30 June 2015 Consolidated 30 June 2014 2,660,621 2,437,811 905,455 4,665 11,794 90,214 2,827 3,675,576 625,036 5,005 9,601 1,083,821 5,305 4,166,579 Consolidated 30 June 2015 Consolidated 30 June 2014 - - 64,652 47,004 111,656 65,615 37,887 103,502 Consolidated 30 June 2015 Consolidated 30 June 2014 29,121 29,121 22,222 22,222 4 Expenses Administration Administration costs Legal fees Marketing Marketing and promotion Exploration expenses General exploration expenditure written off Capitalised exploration expenditure impaired 5 Income tax expense a) Income tax expense: Current tax b) Numerical reconciliation of income tax expense to prima facie tax payable Loss from continuing operations before income tax expense Tax at the Australian tax rate of 30% (2014: 30%) Tax effect of amounts which are not deductible (assessable) in calculating taxable income: Temporary differences not brought to account Income tax expense Consolidated 30 June 2015 Consolidated 30 June 2014 188,449 1,574 190,023 4,755 4,755 33,764 502,507 536,271 147,575 225 147,800 5,048 5,048 20,304 - 20,304 Consolidated 30 June 2015 Consolidated 30 June 2014 - - (97,389) (29,217) (29,217) - - - (2,678,300) (803,490) 803,490 - A deferred tax asset (DTA) has not been recognised in respect of temporary differences as they do not meet the recognition criteria as outlined in Note 1(e) of the financial statements. A DTA has not been recognised in respect of tax losses either as realisation of the benefit is not regarded as probable. The Company has unrecognised DTAs of $6,140,478 (2014: $6,111,261) that are available indefinitely for offset against future taxable profits. The tax rates applicable to each potential tax benefit are as follows: • • timing differences 30% tax losses 30% 6 Current assets – Cash and cash equivalents Cash at bank and in hand Term deposits a) Risk exposure Consolidated 30 June 2015 Consolidated 30 June 2014 120,455 785,000 905,455 90,036 535,000 625,036 The Company’s exposure to interest rate risk is discussed in note 2. The maximum exposure to credit risk at the end of each reporting period is the carrying amount of each class of cash and cash equivalents mentioned above. b) Deposits at call The deposits are bearing a weighted average interest rate of 2.05% (2014: 3.25%). MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 31 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont) 30 June 2015 7 Current assets – Trade and other receivables Net trade receivables Trade and other receivables GST paid on purchases 8 Current assets – Other current assets Prepayments 9 Available-for-sale financial assets a) Fair values Available-for-sale financial assets include the following classes of financial assets: Current Shares in listed companies Total available-for-sale financial assets b) Listed securities Consolidated 30 June 2015 Consolidated 30 June 2014 4,120 545 4,665 5,005 - 5,005 Consolidated 30 June 2015 Consolidated 30 June 2014 11,794 11,794 9,601 9,601 Consolidated 30 June 2015 Consolidated 30 June 2014 90,214 90,214 90,214 1,083,821 1,083,821 1,083,821 Maximus Resources Limited holds 45,107,143 (2014: 44,607,143) shares in Tychean Resources Limited. There are no fixed returns or fixed maturity dates attached to this investment. These shares are held as available-for-sale and their value is markedtomarket at financial year end. In April 2015 the Company purchased 500,000 ordinary shares in Tychean Resources Ltd for $1,000.00 by participating in its non-renounceable rights issue. Tychean Resources Limited is a related party of Messrs Kennedy and Vickery. In the 2014 year Maximus Resources Limited held 25,000,000 shares in Terramin Australia Limited. The Company disposed of these shares in the 2015 year. 32 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 10 Plant and equipment Consolidated At 30 June 2014 Cost or fair value Accumulated depreciation Net book amount Year ended 30 June 2015 Opening net book amount Depreciation charge Closing net book amount At 30 June 2015 Cost or fair value Accumulated depreciation Net book amount Consolidated Year ended 30 June 2014 Opening net book amount Additions Disposals Depreciation charge Closing net book amount At 30 June 2014 Cost or fair value Accumulated depreciation Net book amount Plant and equipment Furniture, fittings and equipment Computer equipment and software $ $ $ 11,984 (10,524) 1,460 1,460 (1,356) 104 11,984 (11,880) 104 2,216 (1,700) 516 516 (258) 258 2,216 (1,958) 258 4,987 (1,658) 3,329 3,329 (864) 2,465 4,987 (2,522) 2,465 Plant and equipment Furniture, fittings and equipment Computer equipment and software $ $ 3,824 - (861) (1,503) 1,460 11,984 (10,524) 1,460 4,852 - (3,409) (927) 516 2,216 (1,700) 516 $ 2,245 2,037 - (953) 3,329 4,987 (1,658) 3,329 Total $ 19,187 (13,882) 5,305 5,305 (2,478) 2,827 19,187 (16,360) 2,827 Total $ 10,921 2,037 (4,270) (3,383) 5,305 19,187 (13,882) 5,305 11 Non-current assets – Exploration and evaluation, development and mine properties Exploration and evaluation Movement: Opening balance Expenditure incurred Disposal Loss on sale of exploration assets Impairment of capitalised expenditure Closing balance Closing balance comprises: Exploration and evaluation – 100% owned Exploration and evaluation phases – joint ventures Consolidated 30 June 2015 Consolidated 30 June 2014 2,437,811 759,080 - - (536,270) 2,660,621 2,660,621 - 2,660,621 5,974,807 631,293 (2,000,000) (2,147,985) (20,304) 2,437,811 223,162 2,214,649 2,437,811 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 33 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont) 30 June 2015 12 Current liabilities – Trade and other payables Trade payables 13 Current liabilities – Provisions Annual leave 14 Non-current liabilities – Provisions Long service leave 15 Contributed equity a) Share capital Ordinary shares Fully paid b) Movements in ordinary share capital: Consolidated 30 June 2015 Consolidated 30 June 2014 64,652 64,652 65,615 65,615 Consolidated 30 June 2015 Consolidated 30 June 2014 29,664 29,664 22,592 22,592 Consolidated 30 June 2015 Consolidated 30 June 2014 17,340 17,340 15,295 15,295 Consolidated 30 June 2015 Shares Consolidated 30 June 2014 Shares Consolidated 30 June 2015 $ Consolidated 30 June 2014 $ 870,407,498 869,376,390 35,398,391 35,394,766 Date Details Number of shares Issue price $ 1 July 2013 Opening balance 12 February 2014 Exercise of options 869,376,363 27 $0.02 Less: Transaction costs arising on share issues Deferred tax credit recognised directly in equity 30 June 2014 Balance 11 August 2014 Issue of shares – consultant 30 April 2015 Exercise of options 869,376,390 1,000,000 31,108 $0.003 $0.02 Less: Transaction costs arising on share issues Deferred tax credit recognised directly in equity 35,394,765 1 35,394,766 - - 35,394,766 3,000 625 - - 30 June 2015 Balance 870,407,498 35,398,391 34 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 c) Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. At shareholders’ meetings, on a show of hands every holder of ordinary shares present in person or by proxy is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares have no par value and the Company does not have a limited amount of authorised capital. d) Options and rights Information relating to the Maximus Resources Limited Employee Share Option and Incentive Rights Plans, including details of options and rights issued, exercised and lapsed during the financial year and the options/rights outstanding at the end of the financial year, is set out in note 31. e) Capital risk management The Company has no debt capital. There are no externally imposed capital requirements. The Company’s debt and capital includes ordinary share capital, supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the Company’s capital by assessing its financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. There have been no changes in the strategy adopted by management to control the capital of the Company since the prior year. This strategy is to ensure that the Company has no debt. 16 Reserves and retained losses a) Reserves Available-for-sale investments revaluation reserve (i) Movements: i) Available-for-sale investments revaluation reserve Balance 1 July Impairment Disposal of financial assets Revaluation of financial assets (net of tax) (note 13) Balance 30 June ii) Share-based payments reserve Balance 1 July Employee options lapsed Balance 30 June Retained Earnings Balance 1 July Transfer from share based payment reserve Net loss for the year Balance 30 June b) Nature and purpose of reserves i) Available-for-sale reserve Consolidated 30 June 2015 Consolidated 30 June 2014 - - 405,393 (89,214) (317,179) - - - - - 405,393 405,393 (44,607) - - 450,000 405,393 1,403,096 (1,403,096) - (31,737,082) (30,461,878) - (97,389) 1,403,096 (2,678,300) (31,834,471) (31,737,082) Changes in the fair value of instruments, such as equities, classified as available-for-sale financial assets, are recognised in other comprehensive income, as described in note 1(k) and accumulated in a separate reserve within equity. Amounts are reclassified to profit or loss when the associated assets are sold or impaired. ii) Share-based payments reserve The share-based payments reserve records items recognised as expenses on valuation of employee options and rights and options issued to external parties in consideration for goods and services rendered. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 35 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont) 30 June 2015 17 Key management personnel disclosures Key management personnel compensation Short-term employee benefits Postemployment benefits Share-based payments Consolidated 30 June 2015 Consolidated 30 June 2014 501,898 36,402 - 538,300 550,427 39,842 - 590,269 Detailed remuneration disclosures and interests held by key management personnel are provided in sections A to D of the remuneration report on pages 13 to 15. 18 Remuneration of auditors During the year the following fees were paid or payable for services provided by the auditor of the Company and its related practices: Grant Thornton Taxation Services Audit and review of financial reports Total auditors’ remuneration 19 Contingencies a) Contingent liabilities Consolidated 30 June 2015 Consolidated 30 June 2014 2,200 28,000 30,200 4,000 28,300 32,300 The Group had no known contingent liabilities as at 30 June 2015 (2014: Nil). b) Contingent assets The Adelaide Hills tenement package was reduced to 4 tenements following the sale of 5 tenements, including the Bird in Hand project to Terramin Australia Limited (“Terramin”). The consideration included the following contingent payment from Terramin: – $1,000,000 payable upon approval of a Program for Environmental Protection and Rehabilitation; and – $1,000,000 payable upon commencement of bullion production. Maximus is also entitled to a 0.5% royalty payable upon bullion production in excess of 50,000 ozs. 20 Commitments a) Commitments for exploration and joint venture expenditure In order to maintain current rights of tenure to exploration tenements the Company will be required to outlay in the year ending 30 June 2016 amounts of approximately $260,129 (2015: $131,571) in respect of tenement lease rentals and to meet minimum expenditure requirements pursuant to various joint venture requirements. b) Lease commitments: Company as lessee The State Government departments responsible for mineral resources require performance bonds for the purposes of rehabilitation of areas disturbed by exploration activities. At 30 June 2015, the Group had $35,000 of bank guarantees in place for this purpose (2014: $35,000). 36 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 21 Key management personnel a) Key management personnel Disclosures relating to key management personnel are set out in note 17. b) Transactions with key management personnel The following transactions occurred with related parties: – The Company subscribed for 500,000 ordinary shares at $0.002 per share ($1,000.00) in Tychean Resources Limited as part of its non- renounceable rights issue in April 2015. Messrs Kennedy and Vickery are directors of Tychean Resources Limited – Monax Alliance Pty Ltd (subsidiary of Monax Mining Limited) paid to the Company $39,177 (2014: $51,649) for costs relating to the Millers Creek project. Mr Kennedy is a director of Monax Mining Limited. – The Company reimbursed Tychean Resources Ltd $23,456 for providing office and administration services. Messrs Kennedy and Vickery are directors of Tychean Resources Limited. – The Company signed a Farm-in Agreement with Tychean Resources in August 2015 to secure up to 90% of the Spargoville Gold Project. The Company will acquire 25% equity in the Spargoville tenements with a payment of $200,000 (paid in August 2015) and the issue of an additional $200,000 shares Maximus Resources Limited upon formal transfer of the equity in the tenements. Messrs Kennedy and Vickery are directors of Tychean Resources Limited. Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. 22 Subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1(b): Name of entity Country of incorporation Class of shares Maxiron Pty Ltd MXR Metals Pty Ltd MXR Minerals Pty Ltd Australia Australia Australia Ordinary Ordinary Ordinary Maxiron Pty Ltd and MXR Minerals Pty Ltd were deregistered in February 2015. 23 Interests in joint ventures Maximus Resources Limited has the following interests in unincorporated joint ventures: Equity holding Equity holding 2015 % - - 100 2014 % 100 100 100 Agreement name Parties Summary State WA Corporate Group Agreement WA Creasy Agreement MXR and Corporate Resource Consultants Pty Ltd, B Legendre and TE Johnston and Associates Pty Ltd MXR and Nemex Pty Ltd and M G Creasy WA Orex Ironstone Well Deed of Assignment MXR and Orex Mining Pty Ltd and Nemex Pty Ltd Corporate Group retains a 10% free carried interest in all or specified blocks within several exploration licences in the Narndee Project. Creasy retains a 30% free carried interest in prospecting licences 53/1308 to 53/1311 following MXR’s purchase of 90% of Nemex’s interest in the Ironstone Well Project. MXR has sold a 90% interest in all minerals except iron in E53/1223 and a 90% interest in all minerals in the remaining Ironstone Well Project tenements for a future production royalty capped at $4 million. 24 Events occurring after the reporting period The Company signed a Farm-in Agreement with Tychean Resources Limited (Tychean) to secure up to 90% of the Spargoville Gold Project located 70 kilometers south of Kalgoorlie in Western Australia’s Eastern Goldfields within 3 years. The Company will acquire 25% equity of all of Tychean’s rights in the Spargoville tenements with a payment of $200,000 (paid in August 2015) and the issue of an additional $200,000 shares in the Company upon transfer of equity in the tenements. The Company will manage all future exploration activities and expenditure allocations can increase the equity in the tenements to 51% within 2 years from commencement by investing a further $200,000 in exploration. The Company can increase is total equity to 90% by investing a further $600,000 in exploration within 3 years from commencement of the Farm-in Agreement. No matter or circumstance has occurred subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in subsequent financial years. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 37 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont) 30 June 2015 25 Reconciliation of profit after income tax to net cash inflow from operating activities (Loss) for the year Depreciation Loss on sale of exploration assets Impairment of capitalised exploration expenditure Impairment of financial assets Net (gain)/loss on disposal of non-current assets Change in operating assets and liabilities: Decrease/(increase) in trade and other receivables Decrease/(increase) in other operating assets (Decrease)/increase in trade and other payables (Decrease)/increase in provisions Net cash (outflow)/inflow from operating activities 26 Earnings per share a) Basic earnings per share Consolidated 30 June 2015 Consolidated 30 June 2014 (97,389) (2,678,300) 1,800 - 536,271 89,214 - (340) 25,990 964 9,116 1,867 2,147,985 20,304 - 4,270 (4,781) 1,220 (17,957) 16,396 565,626 (508,996) Consolidated 30 June 2015 Consolidated 30 June 2014 Loss from continuing operations attributable to the ordinary equity holders (97,389) (2,678,300) Weighted average number of ordinary shares outstanding during the year used to calculate basic earnings per share Basic earnings per share (cents) b) Diluted earnings per share 869,770,630 869,376,373 (0.01) (0.31) Loss from continuing operations attributable to the ordinary equity holders (97,389) (2,678,300) Weighted average number of options outstanding during the year used to calculate diluted earnings per share Weighted average number of ordinary shares outstanding during the year used to calculate diluted earnings per share - - 869,770,630 869,376,373 Diluted earnings per share (cents) (0.01) (0.31) Options Options granted to employees under the Maximus Resources Limited Employee Share Option Plan are considered to be potential ordinary shares. These have a dilutive effect on the weighted average number of ordinary shares. As the Company has reported a loss of $97,389 this financial year (2014: $2,678,300), the options have not been included in the determination of diluted earnings per share. Details relating to the options are set out in note 31. 38 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 27 Share-based payments a) Employee option plan No option arrangements existed at 30 June 2015: On 4 February 2009 1,645,000 options were issued to employees under the Company’s Employee Share Option Plan. These options expired on 3 February 2014 Set out below is a summary of the options granted under the plan: 2014 Balance Expired Number of options Weighted average exercise price 1,645,000 (1,645,000) - $ 0.040 0.040 - Fair value of options granted No employee options were granted during the year ended 30 June 2015 (2014: Nil). Therefore no calculation of the fair value of options granted during the year was required to be made using the Black-Scholes option pricing model. b) Employee incentive rights plan No incentive rights arrangements existed at 30 June 2015 and 2014. 28 Going concern The financial report has been prepared on the basis of going concern. The cash flow projections of the company and consolidated entity evidence that the company will require positive cash flows from additional capital for continued operations. The company incurred a loss of $97,389(2014 $2,678,300) and operations were funded by the a net cash outlay of $1,322,751 from operating and investing activities after excluding the cash proceeds of $1,602,500 from the sale shares in Terramin Australia Limited. The company and consolidated entity’s ability to operate as a going concern is contingent upon obtaining additional capital. If additional capital is not obtained, the going concern basis of accounting may not be appropriate, as a result that the company may have to realise its assets and extinguish its liabilities, other than in the ordinary course of business in amounts which could be different from those stated in the financial report. No allowance for such circumstances has been made in the financial report. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 39 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont) 30 June 2015 29 Parent entity Statement of financial position Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets Shareholder’s equity Contributed equity Reserves Retained losses Capital and reserves attributable to owners Statement of profit or loss and other comprehensive income Profit for the year Other comprehensive income Total comprehensive income Parent 2015 $ 1,012,655 2,663,448 3,676,103 94,315 17,340 111,655 Parent 2014 $ 1,724,904 2,443,116 4,168,020 94,994 8,506 103,501 3,564,448 4,064,519 35,398,391 - 35,394,768 405,393 (31,833,943) (31,734,642) 3,564,448 4,064,519 (97,389) (405,393) (502,782) (2,678,300) 450,000 (2,228,300) 40 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 DIRECTORS’ DECLARATION 30 June 2015 In the directors’ opinion: a) the consolidated financial statements and notes set out on pages 18 to 40 are in accordance with the Corporations Act 2001, including: i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of their performance for the financial 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, and c) the financial statements comply with International Financial Reporting Standards as confirmed in note 1(a). The directors have been given the declarations by the Managing Director and Company Secretary required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the directors. Robert M Kennedy Director Adelaide 28th August 2015 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 41 INDEPENDENT AUDITOR’S REPORT 30 June 2015 Level 1, 67 Greenhill Rd Wayville SA 5034 Correspondence to: GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MAXIMUS RESOURCES LIMITED Report on the financial report We have audited the accompanying financial report of Maximus Resources Limited (the “Company”), which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ responsibility for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors responsibility also includes such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. 42 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 An audit involves performing procedures to obtain audit evidence about the amounts and An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the financial report that gives a true and fair view in order to Company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report. overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. Auditor’s opinion Auditor’s opinion In our opinion: In our opinion: a a the financial report of Maximus Resources Limited is in accordance with the Corporations Act 2001, including: the financial report of Maximus Resources Limited is in accordance with the Corporations Act 2001, including: i i ii ii giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and financial performance for the year ended on that date; and giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and financial performance for the year ended on that date; and complying with Australian Accounting Standards and the Corporations Regulations 2001; and complying with Australian Accounting Standards and the Corporations Regulations 2001; and b b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements. the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements. Emphasis of matter Emphasis of matter Without qualifying our opinion, we draw attention to Note 28 in the financial report which Without qualifying our opinion, we draw attention to Note 28 in the financial report which indicates that the consolidated entity incurred a net loss of $97,389 during the year ended 30 indicates that the consolidated entity incurred a net loss of $97,389 during the year ended 30 June 2015 and operations were funded by a net cash outlay of $1,322,707 from operating June 2015 and operations were funded by a net cash outlay of $1,322,707 from operating and investing activities after excluding the cash proceeds of $1,602,500 from the sale of the and investing activities after excluding the cash proceeds of $1,602,500 from the sale of the Terramin shares. These conditions, along with other matters as set forth in Note 28, indicate Terramin shares. These conditions, along with other matters as set forth in Note 28, indicate the existence of a material uncertainty which may cast significant doubt about the the existence of a material uncertainty which may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of entity may be unable to realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report. business, and at the amounts stated in the financial report. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 43 INDEPENDENT AUDITOR’S REPORT 30 June 2015 Report on the remuneration report Report on the remuneration report We have audited the remuneration report included in the directors’ report for the year We have audited the remuneration report included in the directors’ report for the year ended 30 June 2015. The Directors of the Company are responsible for the preparation and ended 30 June 2015. The Directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the 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 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. report, based on our audit conducted in accordance with Australian Auditing Standards. Auditor’s opinion on the remuneration report In our opinion, the remuneration report of Maximus Resources Limited for the year ended 30 June 2015, complies with section 300A of the Corporations Act 2001. Auditor’s opinion on the remuneration report In our opinion, the remuneration report of Maximus Resources Limited for the year ended 30 June 2015, complies with section 300A of the Corporations Act 2001. GRANT THORNTON AUDIT PTY LTD Chartered Accountants GRANT THORNTON AUDIT PTY LTD Chartered Accountants J L Humphrey Partner – Audit & Assurance J L Humphrey Partner – Audit & Assurance Adelaide, 28 August 2015 Adelaide, 28 August 2015 44 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 ASX ADDITIONAL INFORMATION The shareholder information set out below was applicable as at 6 October 2015. A Distribution of equity securities Analysis of numbers of equity security holders by size of holding: Holding 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Shares 132 217 235 801 673 2,058 There were 1,646 holders of less than a marketable parcel of ordinary shares. At a share price of $0.002, an unmarketable parcel is 250,000 shares. B Equity security holders Twenty largest quoted equity security holders The names of the twenty largest equity holders of quotes securities are listed below: Rank Name 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. MR STEPHEN MARKS + MRS EMMA JANE MARKS MR MARK ANDREW TKOCZ + MS SUSAN ELIZABETH EVANS MR NICHOLAS BARADAKIS TRIPLE EIGHT GOLD PTY LTD RMK SUPER PTY LTD MRS LILY YAN HONG LI MR KEVIN MICHAEL KELLY KENNY INVESTMENTS PTY LTD FLINDERS MINES LIMITED MR DARREN WARES COLIN JOHN HOUGH MR DARRYN ANTHONY MRS GWENDOLINE MALAXOS ROVER INVESTMENTS PTY LTD J P MORGAN NOMINEES AUSTRALIA LIMITED ITONE PTY LTD COLIN HOUGH KELLY BROS PROPRIETARY LIMITED LAWRENCE CROWE CONSULTING PTY LTD MR BRIAN WILLCOCKS + MRS SHONA WILLCOCKS Totals: Top 20 holders of ordinary fully paid shares (total) Total remaining holders balance Units % of units 33,946,941 31,500,000 30,000,000 29,088,202 20,911,798 20,000,000 19,310,416 17,000,000 16,305,555 15,697,009 15,000,153 15,000,000 12,350,000 12,000,000 11,122,042 11,000,000 10,150,000 10,000,000 10,000,000 10,000,000 350,382,116 520,025,382 3.90 3.62 3.45 3.34 2.40 2.30 2.22 1.95 1.87 1.80 1.72 1.72 1.42 1.38 1.28 1.26 1.17 1.15 1.15 1.15 40.25 59.75 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015 45 C Substantial holders As at 7 October 2015 the following were substantial shareholders: Shareholder Number of Shares Mr Robert Kennedy 50,000,000 D Voting rights The voting rights attaching to each class of equity securities are set out below: Ordinary Shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have once vote. Options No voting rights. 46 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2015