ABN 51 127 297 170
Metal Bank Limited
and its controlled entity
Annual Financial Report
For the year ended
30 June 2013
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONTENTS
Corporate Directory
Review of Operations
Corporate Governance
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report to the Members of Metal Bank Limited
Additional Information for Listed Companies
1
2 – 7
8- 13
14 – 19
20
21
22
23
24
25 – 52
53
54 – 55
56 – 58
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CORPORATE DIRECTORY
DIRECTORS
Inès Scotland (Non-Executive Chairman)
George Frangeskides (Non-Executive Director)
Guy Robertson (Executive Director)
REGISTERED OFFICE
Level 9, 50 Margaret Street
SYDNEY NSW 2000
Ph: (02) 9078 7669
Fax: (02) 9078 7661
SHARE REGISTRY
Advanced Share Registry Services
150 Stirling Highway,
NEDLANDS WA 6009
Ph: (08) 9389 8033
Fax: (08) 9389 7871
www.advancedshare.com.au
SOLICITORS
Watson Mangioni Lawyers
AUDITORS
RSM Bird Cameron Partners
Level 12, 60 Castlereagh Street
Sydney NSW 2000
BANKERS
Westpac
WEBSITE
www.metalbank.com.au
1
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
REVIEW OF OPERATIONS
Dear Shareholder
On behalf of the directors of Metal Bank Limited (“Metal Bank” or the "Company"), it gives me pleasure to submit to you
the annual report of the Company for the year ended 30 June 2013.
REVIEW OF OPERATIONS
The operations of the consolidated entity during the year are as described below:
SPINIFEX RIDGE EAST PROJECT (80%)
Metal Bank’s Spinifex Ridge East Project consists of 2 granted exploration leases (45/2596, 45/3099) – adjacent to Moly
Mines Ltd (ASX: MOL), Spinifex Ridge Iron Ore Mine and world class Molybdenum project. Metal Bank has an 80%
interest in the Project. The Project is located some 50 km north-east of Marble Bar in the East Pilbara region of Western
Australia. The tenement borders the existing Spinifex Ridge Iron Ore Mine & Moly Mines’ Molybdenum-Copper
Resource.
Figure 1: Prospect Locations E45/2596, E45/3099
The Bamboo Creek shear zone has been a major regional gold producer and the geology that hosts the Bamboo
Creek goldfield continues northwesterly onto the northern extent of Metal Bank’s exploration licence E45/2596
(Figure 1). This geology is considered to hold the greatest potential for short-term identification of potentially
economic mineralisation.
Metal Bank’s Spinifex Ridge East project also covers an extensive portion of a prospective granite-greenstone
contact. The project area is thus attractive for a number of mineralisation styles including porphyry hosted
molybdenum-copper and shear-related gold deposits.
2
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
REVIEW OF OPERATIONS
Prior to Metal Bank acquiring the project in June 2011, rockchip and soil geochemical sampling outlined four
surface copper exposures immediately east of the Spinifex Ridge Mo-Cu deposit - Copper Gossan, Terry’s Gossan,
Copper Find and Norm’s Find – as well as the Northern gold in soil anomaly (Figure 2).
Figure 2 Spinifex Ridge East Project - Key target areas for 2013 focus
During 2012, Metal Bank completed a reconnaissance rockchip sampling program to test a number of these
targets:
Norm’s Find target
Reconnaissance rockchip sampling in 2008 at Norm’s Find identified a 400m long shear zone with outcropping
copper mineralisation. Very high grade copper, gold and silver (and lesser molybdenum) grades were returned
from samples CG208 and CG213 (Table 1). Follow up rockchip sampling by Metal Bank in 2012 returned
exceptional multi-commodity assays of 30.8g/t gold, 154g/t silver and 6.54% copper from sample SE006. This zone
was earmarked as a high priority for a more intensive sampling campaign in 2013.
BC7 target
The BC7 target was one of 21 targets highlighted, but not followed up, during an earlier re-interpretation of
geophysical data over the project area. First pass reconnaissance rockchip sampling undertaken by Metal Bank
during 2012 has enhanced the geophysical interpretation, returning highly encouraging multi-commodity assay
results with gold up to 1.28g/t, silver up to 83.5g/t and copper up to 0.34% (Table 1). The BC7 target is yet to be
systematically assessed and as such its extent is not yet fully defined. This zone was then prioritised for further
detailed sampling in 2013.
Other targets
The east-west trending Northern gold anomaly (Figure 2) is situated along strike from the Bamboo Creek goldfield
and was identified by two 400m spaced soil sampling lines in 2008. Rockchip sampling by Metal Bank during 2012
confirmed the existence of a gold zone with sample number SE009 returning an encouraging 0.31g/t gold and
accessory copper at 0.12% (Table 1). A systematic geological and geochemical assessment of this prospect is
required to adequately test the continuity of gold mineralisation along the >400m gold in soil anomaly, which
remains open to the east.
3
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
REVIEW OF OPERATIONS
The Copper Gossan target was identified by previous explorers and lies along strike some 500m to the west of the
Northern gold anomaly, and also along strike from the Spinifex Ridge Mo-Cu deposit (Figure 2). This target was
then scheduled for further systematic geological assessment in 2013 to validate and extend previous rockchip
results that previously returned up to 0.28% copper, 7.8ppm molybdenum and 0.09g/t gold (Table 1).
During April 2013, a field trip was conducted over Metal Bank’s Spinifex Ridge East Project. The intended purpose of this
work was to take rock and soil samples over recently identified areas of interest on tenement E45/2596, verification of
existing geology datasets, conduct project scale mapping, and to identify high priority targets for future exploration
programmes (See Figure 3).
Figure 3 – Sample results within Metal Bank’s Bamboo Creek tenements
Work was carried out over a number of previously reported prospects, including BC07, BC01, BC02 and Norms Find where
previous exploration had identified mineralisation including 0.31g/t Au and 0.12% Cu, and 30.8g/t Au, 154g/t Ag and 6.54%
Cu. These sample sites occur along strike from the Haoma Bamboo Creek gold operations.
42 rock chip samples were taken during the latest field programme and these included results of up to 16.5% copper,
4.27g/t gold and 251 g/t silver.
Results from the programme confirmed the extent and tenor of the previously identified gold, copper and silver
mineralisation, and additionally identified anomalous fluorite (F) mineralisation.
Norm’s Find Prospect
Five samples from this prospect returned anomalous results, including one sample (BCX025) which returned grades of
16.5% Copper, 4.27g/t Gold, & 251g/t Silver (see Table 1 below). The samples were taken from a quartz vein trending
north-south that displayed evidence of gossanous material, boxwork veining and minor malachite (copper oxide)
mineralisation.
4
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
REVIEW OF OPERATIONS
BC07 Prospect
Widespread anomalous gold and silver mineralisation exists at the BC07 prospect. Grades of 1.34g/t Gold, & 88g/t Silver
(sample BCX004), as well as anomalous fluorite grades of up to 11.5% F were returned from samples at the BC07
Prospect (see Table 1 below).
Fluorite at the reported grades is considered to be anomalous and further investigation of these areas to find economic
zones will be considered in future programmes. Fluorite is considered an industrial mineral and roughly half the world’s
production of fluorite is used in the manufacture of hydrofluoric acid, which has a variety of uses, the most important of
which are in the aluminum and chemical industries. Other uses include using fluorite as a flux in the production of steel
and magnesium.
Mineralisation at the BC07 Prospect is associated with parallel quartz veins, 30 metres apart and separated by a dolerite
dyke and observations in the quartz veins included chalcopyrite, pyrite, molybdenum and fluorite. The structure strikes
at approximately 30 degrees and a quartz outcrop some 1.3 kilometres to the south may be an extension to the
mineralised area sampled during this programme.
Both the Norm’s Find and BC07 Prospects warrant follow up work across the mineralised trends to assist in targeting for
possible drilling in the future. Metal Bank is now looking at all the available options for generating value from this highly
anomalous area.
Sample
Prospect
Easting Northing
ppm
ppm
Co-ordinates
Au
Ag
BCX002
BCX003
BCX004
BCX005
BCX009
BC07
BC07
BC07
BC07
BC07
197875
7683972
197884
7684019
197895
7684010
197692
7683597
197964
7683903
BCX017
Norm's Find
200624
7687040
BCX020
Norm's Find
200625
7687052
BCX025
Norm's Find
200625
7687072
BCX027
Norm's Find
200616
7687071
BCX029
Norm's Find
200618
7687151
BCX040
BCX041
BCX042
BC02
BC07
BC07
201500
7687391
197200
7682642
197178
7682604
0.03
0.01
1.34
0.04
0.22
0.33
0.17
4.27
0.59
0.07
0.13
0.44
0.05
3
2.4
87.6
3.6
3.6
23.1
5.2
251
13.8
5.5
<0.5
2.6
1.8
Cu
%
0.02
0.04
0.03
0.17
0.01
0.64
0.10
16.25
1.07
0.40
0.00
0.02
0.03
Mo
ppm
8
2
3
116
9
38
1
14
8
<1
1
5
5
F
%
10.45
7.14
0.08
7.69
11.85
-
-
-
-
-
-
-
Comment
Also 3910ppm Pb
Also 3580ppm Pb
Also 2500ppm Pb
Table 1: Spinifex Ridge East Project (MBK 80%) – best rock chip sampling results2
2 “Best rockchip sampling results” from the MBK sampling were deemed significant if above a cut off grade of
0.1g/t gold or 0.1% copper
5
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
REVIEW OF OPERATIONS
BOWEN BASIN
Mount MacKenzie
EPM 15668 was granted to King Eagle Resources Pty Limited (KER), a subsidiary of Golden Cross Resources Ltd
(GCR) on 28th Of September 2007 for a period of 5 years. Metal Bank Ltd now owns the tenements outright after
the sale from GCR in March 2011. The tenement is in the Bowen-Collinsville district of North Queensland, and
approximately 30 km west - southwest of the township of Bowen.
Principal exploration targets are high tonnage low-grade porphyry-related Cu-Mo±Au systems and high-grade
mesothermal precious and/or base metal mineralisation. Limited work was undertaken on this prospect during the
year.
Review of Projects
The Company announced to the ASX on 28 May 2012 an acquisition of 100% of the issued share capital of Scott
Creek Coal (SCCA). Since announcing the acquisition, a number of adverse factors, such as the deterioration in the
resources equity markets, decline in coal prices and imposition of increased royalty taxes on coal by the
Queensland Government, took place and the Company and SCCA resolved not to proceed with this acquisition. In
arriving at its decision the board had regard to a number of factors, including the effort and cost that had been
invested in the SCCA transaction, but ultimately, it was concluded that proceeding with the acquisition was not in
all shareholders best interests.
The Company is continuing to review new project opportunities.
Tenements Relinquished
Following a detailed review the Company relinquished the Ten Mile Creek tenement during the year and the Killi
Killi tenement subsequent to year end as prospectivity was determined to be limited.
Future Plans
Metal Bank will continue to review opportunities to expand its project base in base and precious metals and
minerals, which will create shareholder value. In addition the Company will review its existing projects with a view
to extracting maximum value through exploration, joint venture or sale.
We thank our shareholders for their ongoing support.
Guy Robertson
Executive Director
26 September 2013
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METAL BANK LIMITED AND ITS CONTROLLED ENTITY
REVIEW OF OPERATIONS
Schedule of Tenements
Mining Tenements
Location
Percentage Interest
E45/3099
E45/2596
EPM15668
Spinifex Ridge East
Spinifex Ridge East
Mount McKenzie
80%
80%
100%
E – Exploration Licence; EPM – Exploration Permit
Competent Persons Statement
The information in this document that relates to Exploration Results and Mineral Resources is based on information
compiled or reviewed by Mr Warrick Clent, who is a Member of The Australasian Institute of Mining and
Metallurgy. Mr Clent is a consultant to the Company, and is employed by Mining Management Consultants Pty Ltd.
Mr Clent has sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr
Clent consents to the inclusion in the report of the matters based on his information in the form and context in
which it appears.
7
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CORPORATE GOVERNANCE
The Metal Bank Limited group (“Metal Bank”), through its Board and executives, recognises the need to establish
and maintain corporate governance policies and practices that reflect the requirements of the market regulators
and participants, and the expectations of members and others who deal with Metal Bank. These policies and
practices remain under constant review as the corporate governance environment and good practices evolve.
ASX Corporate Governance Principles and Recommendations
It should be noted that Metal Bank is currently a small cap listed company and that where its processes do not fit
the model of the 8 principles, the Board believes that there are good reasons for the different approach being
adopted.
Reporting against the 8 Principles, we advise as follows:
Principle 1: Lay solid foundations for management and oversight
1.1
Companies should establish the functions reserved to the board and those delegated to senior executives
and disclose those functions.
The primary responsibilities of Metal Bank’s Board include:
(i)
(ii)
the establishment of long term goals of the company and strategic plans to achieve those goals;
the review and adoption of the annual business plan for the financial performance of the company
and monitoring the results on a monthly basis;
(iii) the appointment of a General Manager;
(iv) ensuring that the company has implemented adequate systems of internal control together with
appropriate monitoring of compliance activities; and
the approval of the annual and half-yearly statutory accounts and reports.
(v)
The Board meets on a regular basis, normally every two months, to review the performance of the
company against its goals both financial and non-financial. In normal circumstances, prior to the
scheduled monthly Board meetings, each Board member is provided with a formal board package
containing appropriate management and financial reports.
The responsibilities of senior management are contained in letters of appointment and job descriptions
given to each appointee on appointment and updated at least annually or as required.
The primary responsibilities of senior management are:
achieve Metal Bank’s objectives as established by the Board from time to time;
(i)
(ii) operate the business within the cost budget set by the Board;
(iii) ensure that Metal Bank’s appointees work with an appropriate Code of Conduct and Ethics; and
(iv) ensure that Metal Bank appointees are supported, developed and rewarded to the appropriate
professional standards
1.2
Companies should disclose the process for evaluating the performance of senior executives and
appointees.
The performance of all senior executives and appointees is reviewed at least once a year. The
performance of the General Manager (when appointed) and other senior executives will be reviewed by
the Chairman on an annual basis in conjunction with the Board’s Remuneration and Nominations
Committee. They are assessed against personal and Company Key Performance Indicators established
from time to time as appropriate for Metal Bank.
1.3
Companies should provide the information indicated in the Guide to reporting on Principle 1.
A performance evaluation for each senior executive has taken place in the reporting period in line with the
process disclosed.
A statement covering the primary responsibilities of the Board is set out in 1.1 above.
A statement covering the primary responsibilities of the senior executives is set out in 1.1 above.
The Metal Bank Corporate Governance Charter is available on the Metal Bank web site, and includes
sections that provide a Board charter. The Metal Bank Board reviews its charter when it considers changes
are required.
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METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CORPORATE GOVERNANCE
Principle 2: Structure the board to add value
2.1
A majority of the Board should be independent directors.
During the reporting period, the Metal Bank Board consisted of three directors, the majority of which
were non-executive and independent.
2.2
The Chairperson should be independent.
Inés Scotland, the non-executive chair is independent.
2.3
Chief Executive Officer should not be the same as Chairman.
The Company currently does not have a Chief Executive Officer. An appointment to this position is
expected in the year ahead, but will not be the Chairman.
2.4
A nomination committee should be established.
The Board has established a nominations committee which meets twice per annum.
2.5
Companies should disclose the process for evaluating the performance of the board, its committees and
individual directors.
The Metal Bank Board has three board members, who are in regular contact with each other as they deal
with matters relating to Metal Bank’s business. The Board uses a personal evaluation process to review
the performance of directors, and at appropriate times the Chairman takes the opportunity to discuss
Board performance with individual directors and to give them their own personal assessment. The
Chairman also welcomes advice from Directors relating to their own personal performance. The
Remuneration Committee determines whether any external advice or training is required. The Board
believes that this approach is most appropriate for a company of the size and market cap of Metal Bank.
Companies should provide the information indicated in the Guide to reporting on Principle 2
A description of the skills and experience of each director is contained in the 2013 Directors Report.
Inés Scotland and George Frangeskides are considered to be independent non-executive directors. Mr Guy
Robertson is also the Group’s Chief Financial Officer and is not considered independent.
2.6
Directors are able to take independent professional advice at the expense of the company, with the prior
agreement of the Chairman.
The nomination responsibilities are handled by the nomination committee.
An evaluation of the Board of directors took place during the reporting period and was in accordance with
the process described in 2.5 above.
New directors are selected after consultation of all Board members and their appointment voted on by
the Board. Each year, in addition to any Board members appointed to fill casual vacancies during the year,
one third of directors retire by rotation and are subject to re-election by shareholders at the Annual
General Meeting.
There is no current Board charter for nominations.
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METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CORPORATE GOVERNANCE
Principle 3: Promote ethical and responsible decision-making
3.1
Companies should establish a code of conduct and disclose the code or a summary of the code as to:
•
•
•
the practices necessary to maintain confidence in the company's integrity;
the practices necessary to take into account their legal obligations and the reasonable expectations of
their stakeholders; and
the responsibility and accountability of individuals for reporting and investigating reports of unethical
practices.
Metal Bank’s policies contain a formal code of conduct that applies to all directors and employees, who
are expected to maintain a high standard of conduct and work performance, and observe standards of
equity and fairness in dealing with others. The detailed policies and procedures encapsulate the
company’s ethical standards. The code of conduct is contained in the Metal Bank Corporate Governance
Charter.
3.2
Companies should establish a policy concerning diversity and disclose the policy or a summary of that
policy. The policy should include requirements for the board to establish measurable objectives for
achieving gender diversity for the board to assess annually both the objectives and progress in achieving
them.
As a company with a small market capitalisation, the company has a small Board. The company has no
established policy at present but is aware of the principle and will be alert for opportunities when Board
changes are contemplated.
3.3
Companies should disclose in each annual report the measurable objectives for achieving gender diversity
set by the board in accordance with the diversity policy and progress towards achieving them.
The company has, as yet, no established policy in relation to gender diversity. The company has no
employees at present and as a consequence the opportunity for creating a meaningful gender diversity
policy is limited.
3.4
Companies should disclose in each annual report the proportion of women employees in the whole
organisation, women in senior executive positions and women on the board.
Given the small size of the company and the fact that it has no employees this is not a meaningful statistic
at this time.
Principle 4: Safeguard integrity in financial reporting
4.1
Establish an Audit Committee.
The company has an Audit Committee.
4.2
Audit Committee composition.
The Audit committee is comprised of Inés Scotland and George Frangeskides. As Metal Bank is a company
with a small market capitalisation, the Board considers that two members rather than three are
appropriate for the Audit Committee.
4.3
A formal charter should be established for the audit committee.
The company has adopted an Audit Committee charter. It is publicly available on the Metal Bank website.
4.4
Companies should provide the information indicated in the Guide to reporting on Principle 4.
The Audit Committee met twice during the course of the year.
The Audit Committee provides a forum for the effective communication between the Board and external
auditors. The committee reviews:
10
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CORPORATE GOVERNANCE
•
•
•
the annual and half-year financial reports and accounts prior to their approval by the Board;
the effectiveness of management information systems and systems of internal control; and
the efficiency and effectiveness of the external audit functions.
The committee meets with and receives regular reports from the external auditors concerning any matters
that arise in connection with the performance of their role, including the adequacy of internal controls.
In conjunction with the auditors the Audit Committee monitors the term of the external audit
engagement partner and ensures that the regulatory limit for such term is not exceeded. At the
completion of the term, or earlier in some circumstances, the auditor nominates a replacement
engagement partner.
The committee interviews the nominee to assess relevant prior experience, potential conflicts of interest
and general suitability for the role. If the nominee is deemed suitable, the committee reports to the Board
on its recommendation.
The Audit Committee also reviews the Metal Bank Corporate Governance and Risk Management processes
to ensure that they are effective enough for a listed public company that has a small market capitalisation.
Principle 5: Make timely and balanced disclosure
5.1
Companies should establish written policies designed to ensure compliance with ASX Listing Rule
disclosure requirements and to ensure accountability at a senior executive level for that compliance and
disclose those policies or a summary of those policies.
The Metal Bank Board and senior management are conscious of the ASX Listing Rule Continuous
Disclosure requirements, which are supported by the law, and take steps to ensure compliance. The
company has a policy, which can be summarised as follows:
the Board, with appropriate advice, is to determine whether an announcement is required under the
Continuous Disclosure principles;
all announcements are monitored by the Company Secretary; and
all media comment is managed by the Non-executive Chairman.
Metal Bank believes that the internet is the best way to communicate with shareholders, so Metal Bank
provides detailed announcements to the Australian Securities Exchange on a regular basis to ensure that
shareholders are kept well informed on Metal Bank’s activities.
5.2
Companies should provide the information indicated in the Guide to reporting on Principle 5.
Metal Bank’s disclosure policy to shareholders is set out as part of the Metal Bank Corporate Governance
is publicly available on the Metal Bank website, as are Metal Bank’s recent
charter, which
announcements.
Principle 6: Respect the rights of shareholders
6.1
Companies should design a communications policy for promoting effective communication with
shareholders and encouraging their participation at general meetings and disclose their policy or a
summary of that policy.
Metal Bank provides information to its shareholders through the formal communications processes (e.g.
ASX releases, general meetings, annual report, and occasional shareholder letters). This material is also
available on the Metal Bank website (www.metalbank.com.au).
Shareholders are encouraged to participate in general meetings and time is set aside for formal and
informal questioning of the Board, senior management and the auditors. The external audit partner
attends the annual general meeting to be available to answer any shareholder questions about the
conduct of the audit and the preparation and content of the audit report.
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METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CORPORATE GOVERNANCE
6.2
Companies should provide the information indicated in the Guide to reporting on Principle 6.
The company’s communications policy is described in 6.1 above.
Principle 7: Recognise and manage risk
7.1 Companies should establish a sound system for the oversight and management of material business risks.
The company has established policies for the oversight and management of material business risks.
The Board monitors the risks and internal controls of Metal Bank through the Audit Committee. That
committee looks to the executive management to ensure that an adequate system is in place to identify and,
where possible, on a cost effective basis appropriate for a company with a small market capitalisation, to
manage risks inherent in the business, and to have appropriate internal controls.
As part of the process, Metal Bank’s management formally identifies and assesses the risks to the business,
and these assessments are noted by the Audit Committee and the Board.
7.2 The board should require management to design and implement the risk management and internal control
system to manage the company’s material business risks and report to it on whether those risks are being
managed effectively. The board should disclose that management has reported to it as to the effectiveness of
the company’s management of its material business risks.
The Board has required management to design and implement the risk management and internal control
system appropriate to a company with a small market capitalisation the size of Metal Bank to manage the
company's material business risks and report to it on whether those risks are being managed effectively.
Management has reported to the Board as to the effectiveness of the company's management of its material
business risks.
7.3 The board should disclose whether it has received assurance from the chief executive officer (or equivalent)
and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of
the Corporations Act is founded on a system of risk management and internal control and that the system is
operating effectively in all material respects in relation to financial reporting risks.
The Board has received assurance from the Chief Executive Officer (or equivalent) and the Chief Financial
Officer (or its equivalent) that the declaration provided in accordance with section 295A of the Corporations
Act 2001 is founded on a sound system of risk management and internal control appropriate for a company
with a small market capitalisation the size of Metal Bank, and that the system is operating effectively in all
material respects in relation to financial reporting risks.
7.4 Companies should provide information in the Guide to reporting on Principle 7.
The Board has received the report from management under Recommendation 7.2; and the Board has
received the assurances referred to under Recommendation 7.3. The company’s policies on risk oversight and
management of material business risks for a company with a small market capitalisation the size of Metal
Bank are not publicly available.
Principle 8: Remunerate fairly and responsibly
8.1 Establish a remuneration committee.
Metal Bank has established a remuneration committee of two directors being Inès Scotland and Guy
Robertson.
8.2 The remuneration committee should be structured so that it:
-
-
-
consists of a majority of independent directors
is chaired by an independent chair
has at least three members
As it is a company with a small market capitalisation, Metal Bank believes that a remuneration committee of
two board members is appropriate at present.
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METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CORPORATE GOVERNANCE
8.3 Companies should clearly distinguish the structure of non-executive directors' remuneration from that of
executive directors and senior executives.
The remuneration details of non-executive directors, executive directors and senior management are set out
in the Remuneration Report that forms part of the Directors’ report.
Senior executives remuneration packages are reviewed by reference to Metal Bank’s performance, the
executive director’s or senior executive’s performance, as well as comparable information from industry
sectors and other listed companies in similar industries, which is obtained from external remuneration
sources. This ensures that base remuneration is set to reflect the market for a comparable role.
The performance of the executive director and senior executives is measured against criteria agreed annually
and bonuses and incentives are linked to predetermined performance criteria and may, with shareholder
approval, include the issue of shares and / or options.
There are no schemes for retirement benefits, other than statutory superannuation for non-executive
directors. A copy of the Remuneration committee charter is publicly available on the Metal Bank web site
www.metalbank.com.au
8.4 Companies should provide the information indicated in the Guide to reporting on Principle 8.
The information is as outlined above.
13
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
Your directors present their report on Metal Bank Limited and its subsidiary (Consolidated Entity or the Group) for
the year ended 30 June 2013.
DIRECTORS
The names of directors in office at any time during or since the end of the year are:
Current Directors
INĖS SCOTLAND
NON-EXECUTIVE
CHAIRMAN
GEORGE
FRANGESKIDES
NON-EXECUTIVE
DIRECTOR
Ms Scotland was most recently the Managing Director and CEO of Ivanhoe
Australia, an ASX listed entity with a market capitalisation of $500m.
Prior to this Inés was the Managing Director and CEO of Citadel Resource Group
Limited. Inés was a founding shareholder of Citadel and was its managing director
through its growth, until its acquisition by Equinox Minerals in January 2011.
At the time of acquisition by Equinox, Citadel was developing the Jabal Sayid
Copper Project in Saudi Arabia, had a market capitalisation of $1.3B and had
raised more than $380m on the equity markets.
Inés has worked in the mining industry for over 20 years for large scale gold and
copper companies in Australia, Papua New Guinea, USA and the Middle East. This
has included working for Rio Tinto companies, Comalco, Lihir and Kennecott Utah
Copper.
Appointed as a Non-executive Chairman on 13 August 2013.
Mr Frangeskides has a broad range of experience gained from over 15 years in the
legal and corporate advisory sectors in Australia and the United Kingdom.
George is an Executive Director at Berwick Capital, a corporate advisory firm
which specialises in natural resources and which advises ASX and AIM-listed
companies on projects and transactions in the mining and oil and gas sectors.
Prior to establishing Berwick Capital, George practised as a lawyer focusing on
corporate finance, commercial and capital market transactions.
Appointed as a Non-executive Director on 12 October 2012.
GUY ROBERTSON
EXECUTIVE DIRECTOR
B Com (Hons), CA.
Mr Robertson has more than 30 years’ experience as Chief Financial Officer,
Company Secretary and Director of both public and private companies in
Australia and Hong Kong.
Previous roles included Chief Financial Officer/GM Finance of Jardine Lloyd
Thompson, Colliers International Limited and Franklins Limited.
Mr Robertson has over 5 years’ experience in ASX listed mineral exploration
companies and is currently a director of Artemis Resources Limited and Hastings
Rare Metals Limited.
Mr Robertson was appointed as an Executive Director on 17 September 2012.
Former Directors
MICHAEL SUTHERLAND
VINCENT FAYAD
NOEL HALGREEN
ANTHONY HO
Appointed 20 May 2011, resigned 17 August 2012.
Appointed on 20 May 2011, resigned 12 October 2012.
Appointed 17 August 2012, resigned 17 September 2012.
Appointed on 12 October 2011, resigned 13 August 2013.
14
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
Directors have been in office since the start of the financial period to the date of this report unless otherwise
stated.
Secretary
SUE-ANN HIGGINS
(Company Secretary)
Sue-Ann is an experienced company executive who has worked for over 20
years in the mining industry. Sue-Ann has global corporate experience,
particularly in Asia and the Middle East and extensive experience in mergers
and acquisitions and equity capital markets.
Sue-Ann has legal and company secretarial qualifications and has held senior
legal and commercial roles with ARCO Coal Australia Inc, WMC Resources
Ltd, Oxiana Limited and Citadel Resource Group Limited.
Sue-Ann was appointed Company Secretary on 21 August 2013.
Interest in the shares and options of the Company
As at the date of this report, the interests of the directors in the shares and options of Metal Bank Limited were:
Inés Scotland
George Frangeskides
Guy Robertson
Ordinary Shares
Options
17,500,000
-
-
3,000,000
-
250,000
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than as outlined in the Chairman’s report, there were no significant changes in the state of affairs of the
Company during the year.
PRINCIPAL ACTIVITIES
The principal activity of the Company during the financial year was mineral exploration. There have been no
significant changes in the nature of the Company’s principal activities during the financial year.
SIGNIFICANT AFTER BALANCE SHEET DATE EVENTS
The following significant matters have occurred after balance date:
On 13 August 2013 the Company announced the appointment of Ms Inés Scotland to replace Mr Tony Ho as
Chairperson.
In addition, on 13 August 2013 the Company announced that it had received a firm commitment to raise $1.75
million through the placement to strategic sophisticated investors of 87,500,000 ordinary shares at 2 cents a share.
The Company has also issued to these investors 15,000,000 share options at an issue price of $0.0001 per option,
with an exercise price of $0.03 and expiring on 31 March 2015.
Other than as outlined above, there are currently no matters or circumstances that have arisen since the end of
the financial period that have significantly affected or may significantly affect the operations of the consolidated
entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.
15
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
LIKELY FUTURE DEVELOPMENTS AND EXPECTED RESULTS
The primary objective of Metal Bank is to explore its current tenements in Australia and the Company continues to
look to invest in mineral resources projects which have the potential to become mines.
The material business risks faced by the Company that are likely to have an effect on the financial prospects of the
Company, and how the Company manages these risks, are:
• Future Capital Needs – the Company does not currently generate cash from its operations. The Company will
require further funding in order to meet its corporate expenses, continue its exploration activities and
complete studies necessary to assess the economic viability of its projects.
• Exploration and Developments Risks – the Company may fail to discover mineral deposits on its projects and
once determined there is a risk that the Company’s mineral deposits may not be economically viable. The
Company employs geologists and other technical specialists, and engages external consultants where
appropriate to address this risk.
• Commodity Price Risk – as a Company which is focused on the exploration of gold and base and precious
metals, it is exposed to movements in the price of these commodities. The Company monitors historical and
forecast price information from a range of sources in order to inform its planning and decision making.
PERFORMANCE IN RELATION TO ENVIRONMENTAL REGULATION
The consolidated entity will comply with its obligations in relation to environmental regulation on its Western
Australian and Queensland projects and when it undertakes exploration in the future. The Directors are not aware
of any breaches of any environmental regulations during the period covered by this report.
OPERATING RESULTS AND FINANCIAL REVIEW
The loss of the consolidated entity after providing for income tax amounted to $881,641 (2012: loss of $1,199,678).
The result for the year was impacted by the following:
The Group’s operating income declined to $19,857 (2012-$35,339) primarily the result of reduced interest income
given lower funds on hand.
Expenses declined to $901,498 (2012-$1,234,907). Current year expenses were adversely affected by legal and
consulting fees associated with the terminated Scott Creek Coal acquisition of $137,117. In general costs declined
given an overall focus to reduce overhead costs which is ongoing.
Exploration costs decreased to $399,462 (2012- $523,958) reflecting the relinquishment of the Ten Mile Creek and
Killi Killi South tenements.
Net assets declined to $514,878 (2012-$809,019) reflecting the trading result for the year partially offset by an
increase in share capital of $590,000 of which $350,000 was in settlement of a debt obligation.
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a
dividend to the date of this report.
16
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
REMUNERATION REPORT
Remuneration Policy
The remuneration policy of Metal Bank has been designed to align director objectives with shareholder and
business objectives by providing a fixed remuneration component which is assessed on an annual basis in line with
market rates. The Board of Metal Bank believes the remuneration policy to be appropriate and effective in its
ability to attract and retain the best directors to run and manage the company, as well as create goal congruence
between directors and shareholders.
The Board’s policy for determining the nature and amount of remuneration for Board members is as follows:
•
•
•
•
•
the remuneration policy, setting the terms and conditions (where appropriate) for the executive directors and
other senior staff members, was developed by the Chairman and Company Secretary and approved by the
Board;
in determining competitive remuneration rates, the Board may seek independent advice on local and
international trends among comparative companies and industry generally. It examines terms and conditions
for employee incentive schemes, benefit plans and share plans. Independent advice may be obtained to
confirm that executive remuneration is in line with market practice and is reasonable in the context of
Australian executive reward practices;
the Company is a mineral exploration company, and therefore speculative in terms of performance. Consistent
with attracting and retaining talented executives, directors and senior executives, such personnel are paid
market rates associated with individuals in similar positions within the same industry. Options and
performance incentives may be issued particularly if the Company moves from exploration to a producing
entity and key performance indicators such as profit and production can be used as measurements for
assessing executive performance.
all remuneration paid to directors is valued at the cost to the Company and expensed. Where appropriate,
shares given to directors and executives are valued as the difference between the market price of those shares
and the amount paid by the director or executive. Options are valued using the Black-Scholes methodology.
Given the early stages in the Company’s development no options or long term incentives have been issued and
no key performance indicators have yet been developed for executives.
the Board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The Chairman in consultation with independent advisors determines
payments to the non-executive directors and reviews their remuneration annually, based on market practice,
duties and accountability.
DIRECTORS' AND EXECUTIVE OFFICERS’ EMOLUMENTS
(a) Details of Directors and Key Management Personnel
(i)
Current Directors
Inés Scotland – Non-Executive Chairperson (appointed 13 August 2013)
George Frangeskides – Non-Executive Director (appointed 12 October 2012)
Guy Robertson – Executive Director (appointed 17 September 2012)
Former Directors
Vincent John Paul Fayad – Non-Executive Chairman (resigned 12 October 2012)
Anthony Ho – Non-Executive Chairman (resigned 13 August 2013)
Michael Sutherland – Non - Executive Director (resigned 17 August 2012)
Noel Halgreen – Non – Executive Director (resigned 17 September 2012)
(ii)
(iii)
Company Secretary
Sue-Ann Higgins (appointed 21 August 2013)
Key Management Personnel
Nil
17
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
Other than the directors and the company secretary, the Company had no Key Management Personnel for the
financial year ended 30 June 2013.
Directors’ remuneration and other terms of employment are reviewed annually by the Board having regard to
performance against goals set at the start of the year, relative comparative information and independent expert
advice.
Except as detailed in Notes (a) – (c) to the Remuneration Report, no director or officer has received or become
entitled to receive, during or since the financial year, a benefit because of a contract made by the Company or a
related body corporate with a director, a firm of which a director is a member or an entity in which a director has a
substantial financial interest. This statement excludes a benefit included in the aggregate amount of emoluments
received or due and receivable by directors and shown in Notes (a) – (c) to the Remuneration Report, prepared in
accordance with the Corporations Regulations, or the fixed salary of a full time employee of the Company.
(b) Remuneration of Directors and Key Management Personnel
Remuneration Policy
The Board of Directors is responsible for determining and reviewing compensation arrangements. The Board will
assess the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by
reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder
benefit from the retention of a high quality Board and executive team. Remuneration of Directors of the Group is
set out below.
Given the early stages in the Company’s development no performance remuneration has been granted.
Parent & Group Key Management Personnel
2013
Base Salary
and Fees
Share
Based
Payments
Super-
annuation
Total
2012
Base
Salary
and Fees
Super-
annuation
Total
G. Robertson
48,333
-
-
48,333
60,000
-
60,000
G. Frangeskides
V. Fayad
A. Ho
M. Sutherland
B. Cooper
Totals
24,243
6,000
40,000
4,167
-
122,743
-
-
20,000¹
-
-
20,000
-
-
-
-
-
-
24,243
6,000
60,000
-
53,080
22,500
4,167
27,084
-
142,743
170,000
332,664
-
-
-
-
-
-
-
53,080
22,500
27,084
170,000
332,664
¹Shares to be issued in lieu of cash remuneration, subject to approval of shareholders.
There are no other employment benefits, either short term, post-employment or long term, non-monetary or
otherwise other than those outlined above.
(c) Employee Related Share-based compensation
To ensure that the Company has appropriate mechanisms to continue to attract and retain the services of
Directors and Employees of a high calibre, the Company has a policy of issuing options that are exercisable in
future at a certain fixed price.
No options were issued to Directors and Employees during the year. Guy Robertson currently holds 250,000
unlisted share options exercisable at 20 cents and expiring 30 June 2014.
OPTIONS ISSUED AS PART OF REMUNERATION
No options have been issued to directors and executives as part of their remuneration for the year ended 30 June
2013.
18
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
MEETINGS OF DIRECTORS
The number of directors' meetings (including committees) held during the financial period each director held office
during the financial period and the number of meetings attended by each director are:
Director
V. Fayad*
A. Ho*
M. Sutherland
G. Frangeskides
G. Robertson*
N. Halgreen
Directors Meetings
Audit Committee Meetings
Meetings Attended
Number Eligible to
Attend
Meetings Attended
Number Eligible to
Attend
3
5
2
1
2
-
3
5
2
1
2
2
1
2
-
1
2
-
1
2
-
1
2
-
* Two meetings were also held and attended by the remuneration and nomination committee.
In addition to the board meetings there were three circular resolutions by the board.
INDEMNIFYING OFFICERS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001, every officer or
agent of the Company shall be indemnified out of the property of the Company against any liability incurred by
him or her in his or her capacity as officer or agent of the Company or any related corporation in respect of any act
or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.
The Company paid insurance premiums of $13,915 in August 2013 in respect of directors’ and officers’ liability. The
insurance premiums relate to:
•
•
costs and expenses incurred by the relevant officers in defending legal proceedings, whether civil or criminal
and whatever their outcome;
other liabilities that may arise from their position, with the exception of conduct involving wilful breach of
duty or improper use of information to gain a personal advantage.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceeding 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. The Company was not a party to any such proceedings during the year.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration under Section 307C in relation to auditor’s independence for the year
ended 30 June 2013 has been received and can be found on the following page.
NON-AUDIT SERVICES
The Board of Directors advises that no non-audit services were provided by the Company’s auditors during the
year.
This report is made in accordance with a resolution of the directors.
Guy Robertson
Director
Sydney, 26 September 2013
19
RSM Bird Cameron Partners
Level 12, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 2 8226 4500 F +61 2 8226 4501
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Metal Bank Limited for the year ended 30 June 2013, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM BIRD CAMERON PARTNERS
C J HUME
Partner
Sydney, NSW
Dated: 25 September 2013
Liability limited by a
scheme approved
under Professional
Standards Legislation
Major Offices in:
Perth, Sydney,
Melbourne, Adelaide,
Canberra and Brisbane
ABN 36 965 185 036
RSM Bird Cameron Partners is a member of the RSM network. Each member
of the RSM network is an independent accounting and advisory firm which
practises in its own right. The RSM network is not itself a separate legal entity
in any jurisdiction.
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2013
Revenue
Administration expenses
Personnel costs
Compliance and regulatory expenses
Legal fees
Occupancy costs
Marketing
Directors fees
Management and exploration consulting fees
Travel expenses
Exploration expenditure written off
Loss on sale of investments
Depreciation
Share based payments
(LOSS) BEFORE INCOME TAX
Income tax expense
(LOSS) FOR THE YEAR
Note
2
2013
$
19,857
(47,024)
(9,508)
(47,174)
(69,105)
(2,633)
(18,881)
(97,404)
(371,582)
(10,707)
(189,980)
(17,500)
-
(20,000)
2012
$
35,229
(72,564)
(36,562)
(79,055)
(126,149)
(33,752)
(29,142)
(258,080)
(218,721)
(17,894)
(97,609)
(14,083)
(6,323)
(244,973)
3
4
(881,641)
(1,199,678)
-
-
(881,641)
(1,199,678)
(LOSS) ATTRIBUTABLE TO MEMBERS OF
METAL BANK LIMITED
(881,641)
(1,199,678)
OTHER COMPREHENSIVE INCOME
-
-
TOTAL COMPREHENSIVE INCOME
(881,641)
(1,199,678)
Loss for the year is attributable to:
Owners of Metal Bank Limited
Non controlling interest
Total Comprehensive income for the year is
attributable to:
Owners of Metal Bank Limited
Non controlling interest
Earnings per share
Basic and diluted loss per share
(cents per share)
(881,641)
-
(881,641)
(1,199,678)
-
(1,199,678)
(881,641)
-
(881,641)
(1,199,678)
-
(1,199,678)
20
(1.48)
(2.72)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income are to be read in conjunction with
the attached notes
21
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2013
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Exploration and evaluation expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Liability for deferred consideration
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Reserves
Accumulated losses
Non controlling interest
TOTAL EQUITY
Note
2013
$
2012
$
5
6
7
8
10
11
12
13
14
510,254
11,324
32,500
554,078
1,117,989
200,477
52,500
1,370,966
-
399,462
399,462
-
523,958
523,958
953,540
1,894,924
188,662
250,000
438,662
815,905
270,000
1,085,905
438,662
1,085,905
514,878
809,019
5,612,303
250,973
(5,348,398)
514,878
-
5,022,303
253,473
(4,466,757)
809,019
-
514,878
809,019
The Consolidated Statement of Financial Position are to be read in conjunction with the attached notes.
22
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2013
Issued
Capital
$
Reserves
Accumulated
Losses
$
5,022,303
-
253,473
-
(4,466,757)
(881,641)
-
-
-
-
-
(881,641)
-
590,000
-
5,612,303
3,931,591
-
-
-
-
-
1,123,000
(32,288)
5,022,303
(2,500)
-
-
250,973
-
-
-
-
250,973
2,500
-
-
253,473
-
-
-
(5,348,398)
(3,267,079)
(1,199,678)
-
(1,199,678)
-
-
-
-
(4,466,757)
Balance as at 1 July 2012
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Transfer from asset
revaluation reserve
Issue of share capital
Cost of share capital issued
Balance as at 30 June 2013
Balance as at 1 July 2011
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Transfer to options based
payments reserve
Transfer to asset
revaluation reserve
Issue of share capital
Cost of share capital issued
Balance as at 30 June 2012
Non-
controlling
interest
Total
$
809,019
(881,641)
-
(881,641)
(2,500)
590,000
-
514,878
664,512
(1,199,678)
-
(1,199,678)
250,973
2,500
1,123,000
(32,288)
809,019
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The Consolidated Statement of Changes in Equity are to be read in conjunction with the attached notes.
23
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Payment for exploration and evaluation
Interest received
NET CASH USED IN OPERATING ACTIVITIES
22
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of financial assets
Loan repaid by unrelated entity
NET CASH PROVIDED BY INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Costs of issue of shares
NET CASH PROVIDED BY FINANCING ACTIVITIES
2013
$
(999,490)
(65,484)
25,142
(1,039,832)
-
192,097
192,097
240,000
-
240,000
2012
$
(686,450)
(288,945)
29,944
(945,451)
281,151
-
281,151
340,000
-
340,000
NET DECREASE IN CASH HELD
(607,735)
(324,300)
Cash at the beginning of the financial year
CASH AT THE END OF THE FINANCIAL YEAR
1,117,989
510,254
1,442,289
1,117,989
The Consolidated Statement of Cash Flows are to be read in conjunction with the attached notes.
24
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
This financial report includes the consolidated financial statements and notes of Metal Bank Limited and its
controlled entity (Consolidated Group or Group), and a separate note on the accounts of Metal Bank Limited
as the parent entity (‘Parent’).
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards. Material accounting policies adopted in the preparation of
this financial report are presented below and have been consistently applied unless otherwise stated.
This financial report is presented in Australian Dollars.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
The financial report covers the Group of Metal Bank Limited and controlled entity. Metal Bank Limited is a
public listed company, incorporated and domiciled in Australia.
a.
Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled
by Metal Bank Limited at the end of the reporting period. A controlled entity is any entity over which
Metal Bank Limited has the ability and right to govern the financial and operating policies so as to obtain
benefits from the entity’s activities.
Where controlled entities have entered or left the Group during the year, the financial performance of
those entities is included only for the period of the year that they were controlled. A list of controlled
entities is contained in Note 9 to the financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions between
entities in the consolidated group have been eliminated in full on consolidation.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a
parent, are reported separately within the equity section of the consolidated statement of financial
position and statement of comprehensive income. The non-controlling interests in the net assets
comprise their interests at the date of the original business combination and their share of changes in
equity since that date.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination
involving entities or businesses under common control. The business combination will be accounted for
from the date that control is attained, whereby the fair value of the identifiable assets acquired and
liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting
from a contingent consideration arrangement is also included. Subsequent to initial recognition,
contingent consideration classified as equity is not remeasured and its subsequent settlement is
accounted for within equity. Contingent consideration classified as an asset or liability is remeasured each
reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in
value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statement of
comprehensive income.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
25
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
b. Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity
of normal business activities and the realisation of assets and liabilities in the normal course of business.
As disclosed in the financial statements, the company and consolidated entity recorded operating losses
of $881,641 and the consolidated entity had net cash outflows from operating activities of $1,039,832 for
the year ended 30 June 2013.
The Directors believe that the company and consolidated entity will be able to continue as going concerns
and that it is appropriate to adopt that basis of accounting in the preparation of the financial report after
consideration of the following factors:
•
•
The company has been successful in raising capital during the period ($240,000) and has raised
$1.75 million, subsequent to year end (see Note 13);
The company has the ability to continue to raise additional funds on a timely basis, pursuant to
the Corporations Act 2001;
• Directors have prepared cash flow projections for the consolidated entity and have satisfied
themselves that it has adequate funding available for the 12 months following the date of this
report to settle any obligations as and when they become due.
c. Adoption of New and Revised Accounting Standards
Changes in accounting policies on initial application of Accounting Standards
In the year ended 30 June 2013, the Group has reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to its operations and effective for the current annual
reporting period.
It has been determined by the Group that there is no impact, material or otherwise, of the new and
revised Standards and Interpretations on its business and, therefore, no change is necessary to Group
accounting policies.
The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet
effective for the year ended 30 June 2013. As a result of this review the Directors have determined that
there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its
business and, therefore, no change necessary to Group accounting policies.
The following Australian Accounting Standards have been issued or amended and are applicable to the
Company but are not yet effective.
The Group does not anticipate the early adoption of any of the following Australian Accounting Standards:
Reference
Title
Summary
AASB 9
Financial Instruments
2010-7
Amendments to
Australian Accounting
Standards arising from
AASB 9 (December
2010)
Replaces the requirements of AASB
139 for the classification and
measurement of financial assets. This is
the result of the first part of Phase 1 of
the IASB’s project to replace IAS 39.
Amends AASB 1, 3, 4, 5, 7, 101, 102,
108, 112, 118, 120, 121, 127, 128, 131,
132, 136, 137, 139, 1023 & 1038 and
Interpretations 2, 5, 10, 12, 19 & 127
for amendments to AASB 9 in
December 2010
Application
date (financial
years
beginning)
1 January 2015
1 January 2015
Expected
Impact
Unlikely to
have
significant
impact
Unlikely to
have
significant
impact
26
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Reference
Title
Summary
2009-11
Amendments to
Australian Accounting
Standards arising from
AASB 9
AASB 10
Consolidated Financial
Statements
AASB 11
Joint Arrangements
AASB 12
Disclosure of Interests
in Other Entities
AASB 127
Separate Financial
Statements
AASB 128
Investments in
Associates and Joint
Ventures
2011-7
Amendments to
Australian Accounting
Standards arising from
AASB 10,11,12,127,128
AASB 13
Fair Value
Measurement
2011-8
Amendments to
Australian Accounting
Standards arising from
AASB 13
Amends AASB 1, 3, 4, 5, 7, 101, 102,
108, 112, 118, 121, 127, 128, 131, 132,
136, 139, 1023 and 1038 and
Interpretations 10 and 12 as a result of
the issuance of AASB 9.
Replaces the requirements of AASB
127 and Interpretation 112 pertaining to
the principles to be applied in the
preparation and presentation of
consolidated financial statements.
Replaces the requirements of AASB
131 pertaining to the principles to be
applied for financial reporting by entities
that have in interest in arrangements
that are jointly controlled.
Replaces the disclosure requirements
of AASB 127 and AASB 131 pertaining
to interests in other entities.
Prescribes the accounting and
disclosure requirements for investments
in subsidiaries, joint ventures and
associates when an entity prepares
separate financial statements.
Prescribes the accounting for
investments in associates and sets out
the requirements for the application of
the equity method when accounting for
investments in associates and joint
ventures.
Amends AASB 1,2,3,5,7,9,2009-
11,101,107,112,118,121,124,132,133,1
36,13 8,139,1023 & 1038 and
Interpretations 5,9,16 & 17 as a result
of the issuance of AASB 10, 11, 12,
127 and 128
Provides a clear definition of fair value,
a framework for measuring fair value
and requires enhanced disclosures
about fair value measurement.
Amends AASB 1, 2, 3, 4, 5, 7, 9, 101,
102, 108, 110, 116, 117, 118, 119, 120,
121, 132, 133, 134, 136, 138, 139, 140,
141, 1004, 1023 & 1038 and
Interpretations 2, 4, 12, 13, 14, 17, 19,
131 & 132 as a result of issuance of
AASB 13 Fair Value Measurement.
Expected
Impact
Unlikely to
have
significant
impact
Unlikely to be
significant
No Impact
No Impact
No Impact
No Impact
No Impact
Application
date (financial
years
beginning)
1 January 2015
1 January 2013
(for-profit) / 1
January 2014
(Not For Profit)
1 January 2013
(for-profit) / 1
January 2014
(Not For Profit)
1 January 2013
(for-profit) / 1
January 2014
(Not For Profit)
1 January 2013
(for-profit) / 1
January 2014
(Not For Profit)
1 January 2013
(for-profit) / 1
January 2014
(Not For Profit)
1 January 2013
(for-profit) / 1
January 2014
(Not For Profit)
1 January
2013
1 January
2013
Unlikely to be
significant
Unlikely to be
significant
27
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Reference
Title
Summary
2012-1
Amendments to
Australian Accounting
Standards – Fair Value
Measurement –
Reduced Disclosure
Requirements
AASB 119
Employee Benefits
2011-10
2011-11
Amendments to
Australian Accounting
Standards arising from
AASB 119
Amendments to AASB
119 arising from
Reduced Disclosure
Requirements
AASB 1053
Application of Tiers of
Australian Accounting
Standards
2010-2
Amendments to
Australian Accounting
Standards arising from
Reduced Disclosure
Requirements
2010-10
2011-2
Further Amendments to
Australian Accounting
Standards –Removal of
Fixed Dates for First-
time Adopters
Amendments to
Australian Accounting
Standards arising from
the Trans-Tasman
Convergence Project -
Reduced Disclosure
Requirements
This Standard makes amendments to
AASB 3, 7, 13, 140 and 141 to
establish reduced disclosure
requirements for entities preparing
general purpose financial statements
under Australian Accounting Standards
– Reduced Disclosure Requirements
for additional and amended disclosures
arising from AASB 13 and the
consequential amendments
implemented through AASB 2011-8
Amendments to Australian Accounting
Standards arising from AASB 13.
The amendments to this Standard
eliminates the option for defined
benefit plans to use the corridor
approach to defer the recognition of
actuarial gains and losses and
introduce enhanced disclosures
about defined benefit plans.
The amendments also incorporate
changes to the accounting for
termination benefits.
Amends AASB 1, 8, 101, 124, 134,
1049, 2011-8 & Interpretation 14 as a
result of the issuance of AASB 119
Employee Benefits.
This Standard makes amendments to
AASB 119 Employee Benefits, to
incorporate reduced disclosure
requirements into the Standard for
entities applying Tier 2 requirements in
preparing general purpose financial
statements.
This standard establishes a differential
financial reporting framework consisting
of two Tiers of reporting requirements
for preparing general purpose financial
statements.
This Standard gives effect to
Australian Accounting Standards –
Reduced
Disclosure Requirements and amends
AASB 1, 2, 3, 5, 7, 8, 101, 102, 107,
108, 110, 111, 112, 116, 117, 119, 121,
123, 124, 127, 128, 131, 133, 134, 136,
137, 138, 140, 141, 1050 & 1052 and
Interpretations 2, 4, 5, 15, 17, 127, 129
& 1052.
Amends AASB 1 for first-time adopters
This Standard makes amendments to
AASB 101 & AASB 1054 in relation to
the Australian additional disclosures
arising from the Trans-Tasman
Convergence Project.
28
Application
date (financial
years
beginning)
1 July 2013
Expected
Impact
Disclosure
only
1 January
2013
Unlikely to be
significant
1 January
2013
Unlikely to be
significant
1 July 2013
No Impact
1 July 2013
No Impact
1 July 2013
No Impact
1 January
2013
No Impact
1 July 2013
No Impact
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Reference
Title
Summary
2011-4
2011-6
IFRIC
Interpretatio
n 20
Amendments to
Australian Accounting
Standards to Remove
Individual Key
Management Personnel
Disclosure
Requirements
Amendments to
Australian Accounting
Standards –Extending
Relief from
Consolidation, the
Equity Method and
Proportionate
Consolidation –
Reduced Disclosure
Requirements
Stripping Costs in the
Production Phase of a
Surface Mine
2011-12
Amendments to
Australian Accounting
Standards arising from
Interpretation 20
2012-2
2012-3
2012-4
2012-5
2012-6
Amendments to
Australian Accounting
Standards –Disclosures
–Offsetting Financial
Assets and Financial
Liabilities
Amendments to
Australian Accounting
Standards –Offsetting
Financial Assets and
Financial Liabilities
Amendments to
Australian Accounting
Standards –
Government Loans
Amendments to
Australian Accounting
Standards arising from
Annual Improvements
2009-2011 Cycle
Amendments to
Australian Accounting
Standards –Mandatory
Effective Date of AASB
9 and Transition
Disclosures
This Standard amends AASB 124
Related Party Disclosures to remove all
the individual key management
personnel (KMP) disclosures contained
in Aus paragraphs 29.1 to 29.9.3.
This Standard makes amendments to
AASB 127, 128 & 131 to extend the
relief from consolidation, the equity
method and proportionate consolidation
to not for profit entities
This Interpretation clarifies the
requirements for accounting for
stripping costs in the production phase
of a surface mine, such as when such
costs can be recognised as an asset
and how that asset should be
measured, both initially and
subsequently.
This Standard makes amendments to
Australian Accounting Standard AASB
1 First-time Adoption of Australian
Accounting Standards. These
amendments arise from the issuance of
IFRIC Interpretation 20 Stripping Costs
in the Production Phase of a Surface
Mine.
This Standard amends the required
disclosures in AASB 7 to include
information that will enable users of an
entity’s financial statements to evaluate
the (potential) effect of netting
arrangements. It also amends AASB
132 to refer to the additional
disclosures added to AASB 7 by this
Standard.
This Standard adds application
guidance to AASB 132 to address
inconsistencies identified in applying
some of the offsetting criteria of AASB
132.
This Standard makes amendments to
AASB 1 as a consequence of the
issuance of IFRS 1.
This Standard makes amendments to
AASB 1, 101, 116, 132, 134 &
Interpretation 2 as a result from 2009-
2011 Annual Improvements Cycle.
This Standard amends the mandatory
effective date of AASB 9 Financial
Instruments so that AASB 9 is required
to be applied for annual reporting
periods beginning on or after 1 January
2015 instead of 1 January 2013.
29
Application
date (financial
years
beginning)
1 July 2013
Expected
Impact
No Impact
1 July 2013
No Impact
1 January
2013
No Impact
1 January
2013
No Impact
1 January
2013
Unlikely to be
significant
1 January
2014
Unlikely to be
significant
1 January
2013
1 January
2013
1 January
2015
No Impact
No Impact
No Impact
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Reference
Title
Summary
2012-7
2012-9
2012-10
Amendments to
Australian Accounting
Standards arising from
Reduced Disclosure
Requirements
Amendment to AASB
1048 arising from the
Withdrawal of
Australian Interpretation
1039
Amendments to
Australian Accounting
Standards –Transition
Guidance and Other
Amendments
2012-11
2013-1
Amendments to
Australian Accounting
Standards –Reduced
Disclosure
Requirements and
Other Amendments
Amendments to AASB
1049 –Relocation of
Budgetary Reporting
Requirements
AASB 1055
Budgetary Reporting
This Standard adds to or amends the
Australian Accounting Standards –
Reduced Disclosure Requirements for
AASB 7, 12, 101 and 127.
This Standard amends AASB 1048
Interpretation of Standards as a
consequence of the withdrawal of
Australian Interpretation 1039
Substantive Enactment of Major Tax
Bills in Australia.
Amends AASB 10, AASB 11 and
related Standards with respect to
transition guidance to clarify the
circumstances in which adjustments to
an entity’s previous accounting for its
involvement with other entities are
required and the timing of such
adjustments. In addition amends these
standards so that they apply
mandatorily to not-for-profit entities
from 1 January 2014, with early
application permitted for not-for-profit
entities only from 1 January 2013.
The Standard makes various editorial
corrections to Australian Accounting
Standards – Reduced Disclosure
Requirements (Tier 2).
This Standard moves the requirements
relating to the disclosure of budgetary
information from AASB 1049 (without
substantive amendment) to a single,
topic-based, Standard AASB 1055
Budgetary Reporting.
This Standard specifies the nature of
budgetary disclosures and the
circumstances in which they are to be
included in. Furthermore, it requires
disclosures about explanations of major
variances between actual and budgeted
amounts.
Application
date (financial
years
beginning)
1 July 2013
Expected
Impact
No Impact
1 January
2013
1 January
2013
No Impact
No Impact
1 July 2013
No Impact
1 July 2014
No Impact
1 July 2014
No Impact
d.
Income Taxes
The income tax expense (revenue) for the year comprises current income tax expense (income) and
deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable
on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at
reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid
to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well unused tax losses. Current and deferred income tax expense (income) is charged or
credited directly to equity instead of the profit or loss when the tax relates to items that are credited or
charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements. Deferred tax assets also result where amounts have been fully expensed but future
tax deductions are available. No deferred income tax will be recognised from the initial recognition of an
30
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
asset or liability, excluding a business combination, where there is no effect on accounting or taxable
profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at
reporting date. Their measurement also reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary
differences and unused tax losses are recognised only to the extent that it is probable that future taxable
profit will be available against which the benefits of the deferred tax asset can be utilised. Where
temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not probable that the reversal will occur in the
foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off
exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods in
which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
e.
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Plant and equipment – over 5 years
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each balance date, with
recoverable amount being estimated when events or changes in circumstances indicate that the carrying
value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in
use.
An impairment exists when the carrying value of an asset exceeds its estimated recoverable amount. The
asset is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the statement of comprehensive income.
An annual transfer from the asset revaluation reserve to retained earnings is made for the difference
between depreciation based on the re-valued carrying amounts of the assets and depreciation based on
the assets’ original costs. Additionally, any accumulated depreciation as at the revaluation date is
eliminated against the gross carrying amounts of the assets and the net amounts are restated to the re-
valued amounts of the assets.
Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred to
retained earnings.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the
31
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
asset (calculated as the difference between the net disposal proceeds and the carrying amount of the
asset) is included in the statement of comprehensive income in the year the asset is derecognised.
f.
Exploration and Evaluation Costs
Exploration, evaluation and development expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that they are expected to
be recouped through the successful development of the area or where activities in the area have not yet
reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the
year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over
the life of the area according to the rate of depletion of the economically recoverable reserves. A regular
review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest. Costs of site restoration are provided over the life of the
facility from when exploration commences and are included in the costs of that stage. Site restoration
costs include the dismantling and removal of mining plant, equipment and building structures, waste
removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have
been determined using estimates of future costs, current legal requirements and technology on an
undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs
of site restoration, there is uncertainty regarding the nature and extent of the restoration due to
community expectations and future legislation. Accordingly the costs have been determined on the basis
that the restoration will be completed within one year of abandoning the site.
g.
Financial Instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the company commits
itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified “at fair value through profit or loss”, in which case transaction costs are expensed
to profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest
rate method, or cost.
Amortised cost is the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative
recognized of the difference between that initial amount and the maturity amount calculated using the
effective interest method.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
The effective interest method is used to allocate interest income or interest expense over the relevant
period and is equivalent to the rate that discounts estimated future cash payments or receipts (including
fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot
be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the
financial asset or financial liability. Revisions to expected future net cash flows will necessitate an
adjustment to the carrying value with a consequential recognition of an income or expense item in profit
or loss.
32
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being
subject to the requirements of Accounting Standards specifically applicable to financial instruments.
(ii) Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for trading for the
purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are
designated as such to avoid an accounting mismatch or to enable performance evaluation where a Group
of financial assets is managed by key management personnel on a fair value basis in accordance with a
documented risk management or investment strategy. Such assets are subsequently measured at fair
value with changes in carrying value being included in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, where they are expected to mature within 12
months after the end of the reporting period.
(iii) Held-to-maturity investments
Held-to-maturity investments are included in non-current assets where they are expected to mature
within 12 months after the end of the reporting period. All other investments are classified as current
assets.
(iv) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be
classified into other categories of financial assets due to their nature, or they are designated as such by
management. They comprise investments in the equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
They are subsequently measured at fair value with changes in such fair value (ie gains or losses)
recognized in other comprehensive income (except for impairment losses and foreign exchange gains and
losses). When the financial asset is recognised, the cumulative gain or loss pertaining to that asset
previously recognised in other comprehensive income is reclassified into profit or loss.
Available-for-sale financial assets are included in non-current assets where they are expected to be sold
within 12 months after the end of the reporting period. All other financial assets are classified as current
assets.
(v) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost.
Derivative instruments
The Group designates certain derivatives as either:
i. hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or
ii. hedges of highly probable forecast transactions (cash flow hedges).
At the inception of the transaction the relationship between hedging instruments and hedged items, as
well as the Group’s risk management objective and strategy for undertaking various hedge transactions, is
documented.
33
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used
in hedging transactions have been and will continue to be highly effective in offsetting changes in fair
values or cash flows of hedged items, are also documented.
(i) Fair value hedge
Changes in the fair value of derivatives that are designated and qualified as fair value hedges are
recorded in the statement of comprehensive income, together with any changes in the fair value of
hedged assets or liabilities that are attributable to the hedged risk.
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges is deferred to a hedge reserve in equity. The gain or loss relating to the ineffective
portion is recognised immediately in the statement of comprehensive income.
Amounts accumulated in the hedge reserve in equity are transferred to the statement of comprehensive
income in the periods when the hedged item will affect profit or loss.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a
financial instrument has been impaired. In the case of available-for-sale financial instruments, a
prolonged decline in the value of the instrument is considered to determine whether an impairment has
arisen. Impairment losses are recognised in profit or loss. Also, any cumulative decline in fair value
previously recognised in other comprehensive income is reclassified to profit or loss at this point.
Financial guarantees
Where material, financial guarantees issued that require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due are
recognised as a financial liability at fair value on initial recognition.
The guarantee is subsequently measured at the higher of the best estimate of the obligation and the
amount initially recognised less, when appropriate, cumulative amortisation in accordance with
AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised
under AASB 118.
The fair value of financial guarantee contracts has been assessed using a probability-weighted discounted
cash flow approach. The probability has been based on:
(iii) the likelihood of the guaranteed party defaulting in a year period;
(iv) the proportion of the exposure that is not expected to be recovered due to the guaranteed
party defaulting; and
(v) the maximum loss exposed if the guaranteed party were to default.
Derecognition
Financial assets are recognised where the contractual rights to receipt of cash flows expire or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in
the risks and benefits associated with the asset. Financial liabilities are recognised where the related
obligations are discharged, cancelled or expired. The difference between the carrying value of the
financial liability extinguished or transferred to another party and the fair value of consideration paid,
including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
h.
Impairment of Assets
At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and
34
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its
recoverable amount is expensed to the consolidated statement of comprehensive income. Impairment
testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. In the case of
available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to
determine whether impairment has arisen.
i.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of 3 months or less, and bank overdrafts. Bank overdrafts are
shown within short-term borrowings in current liabilities on the statement of financial performance.
j.
Revenue Recognition
Interest revenue is recognised using the effective interest method. It includes the amortisation of any
discount or premium.
k. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables
in the statement of financial position are shown inclusive of GST. Cash flows are presented in the
statement of cash flows on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
l.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes
in presentation for the current financial year.
m. Significant judgements and key assumptions
The directors evaluate estimates and judgements 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.
n. Key judgements and estimates
Key Judgment Exploration Expenditure
The Company capitalises expenditure relating to exploration and evaluation where it is considered likely
to be recoverable or where the activities have not reached a stage which permits a reasonable assessment
of the existence of reserves. While there are certain areas of interest from which no reserves have been
extracted, the directors are of the continued belief that such expenditure should not be written off since
feasibility studies in such areas have not yet concluded. Such capitalised expenditure is carried at
reporting date at $399,462.
Key Judgment Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or
enacted environmental legislation, and the directors understanding thereof. At the current stage of the
company’s development and its current environmental impact the directors believe such treatment is
reasonable and appropriate.
35
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Key Estimate Taxation
Balances disclosed in the financial statements and the notes thereto, relating to taxation, are based on the
best estimates of directors. These estimates take into account both the financial performance and
position of the company as they pertain to current income taxation legislation, and the directors
understanding thereof. No adjustment has been made for pending or future taxation legislation. The
current income tax position represents that directors’ best estimate, pending an assessment by the
Australian Taxation Office.
Key Estimates Share based payment transactions
The Company measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by reference to the market
price. Refer note 25.
2. REVENUE AND OTHER INCOME
Interest received
3. LOSS FOR THE YEAR
Loss for the year is after charging:
2013
$
2012
$
19,857
19,857
35,229
35,229
2013
$
2012
$
Superannuation
-
2,534
4. INCOME TAX EXPENSE
(a) No income tax is payable by the parent or consolidated entity as they recorded losses for income tax
purposes for the period.
(b) Reconciliation between income tax expense and prima facie tax on accounting profit (loss)
Accounting profit (loss)
Tax at 30%
Tax effect of non-deductible expenses
Deferred tax asset not recognised
Income tax expense
(c) Deferred tax assets
Revenue tax losses
Deferred tax assets not recognised
Set off deferred tax liabilities
Income tax expense
2013
$
(881,641)
(264,492)
6,000
258,492
-
2012
$
(1,199,678)
(359,903)
73,492
286,411
-
315,486
(258,492)
(56,994)
-
347,351
(286,411)
(60,940)
-
36
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
(d) Deferred tax liabilities
Exploration expenditure
Set off deferred tax assets
(e) Tax losses
56,994
60,940
(56,994)
-
(60,940)
-
Unused tax losses for which no deferred tax asset has
been recognised
3,232,594
2,560,933
Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not
been brought to account at 30 June 2013 because the directors do not believe it is appropriate to regard
realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained if:
- the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deductions for the loss and exploration expenditure to be realised;
- the Company continues to comply with conditions for deductibility imposed by law; and
- no changes in tax legislation adversely affect the company in realising the benefit from the deductions for the
loss and exploration expenditure.
The applicable tax rate is the national tax rate in Australia for companies, which is 30% at the reporting date.
5. CASH AND CASH EQUIVALENTS
Cash and cash equivalents
510,254
1,117,989
2013
$
2012
$
6. TRADE AND OTHER RECEIVABLES
CURRENT
Other receivables
Loan to Scott Creek Coal Pty Ltd¹
¹ The loan to Scott Creek Coal Pty Ltd was repaid in full on 13 November 2012.
7. FINANCIAL ASSETS
CURRENT
ASX Listed Shares
Financial assets available for sale¹
2013
$
11,324
-
11,324
2013
$
32,500
32,500
2012
$
8,380
192,097
200,477
2012
$
52,500
52,500
¹ 250,000 shares in Stratum Metals Limited at 13 cents per shares as at 30 June 2013.
37
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
8. PLANT AND EQUIPMENT
Office equipment
At Cost
Accumulated depreciation
Office equipment
Opening balance
Purchases
Depreciation
Closing balance
9. CONTROLLED ENTITY
Parent Entity:
Metal Bank Limited
Subsidiary:
Spinifex Ridge East Pty Limited
2013
$
2012
$
-
-
-
-
-
-
-
-
-
-
6,323
-
(6,323)
-
Country of
Incorporation
Ownership %
2013
Ownership %
2012
Australia
Australia
-
80
-
80
10. EXPLORATION AND EVALUATION EXPENDITURE
2013
$
2012
$
Exploration and evaluation expenditure
399,462
523,958
Reconciliation of carrying amount
Balance at beginning of financial year
Expenditure in current year
Exploration expenditure written off¹
Balance at end of financial period
523,958
65,484
(189,980)
399,462
403,264
218,303
(97,609)
523,958
¹The Company wrote off exploration expenditure during the year relating to those tenements relinquished
which include Ten Mile Creek and Killi Killi South.
11. TRADE AND OTHER PAYABLES
CURRENT
Unsecured liabilities:
Trade payables
Sundry payables and accrued expenses¹
2013
$
2012
$
88,661
100,001
188,662
421,311
394,594
815,905
¹ Sundry payables and accrued expenses include an amount of $300,000 in 2012 owing the vendor of Spinifex Ridge’s
advisor. Shareholders have approved the issue of 6,000,000 shares in settlement of this debt, which shares were issued in
the 2013 year.
38
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
12. LIABILITY FOR DEFERRED CONSIDERATION
2013
$
2012
$
Liability for deferred consideration¹
250,000
270,000
¹ The liability for deferred consideration arose on the acquisition of Spinifex Ridge East Pty Limited in 2011, in which the
Company has an 80% interest. The Company has agreed to settle the liability through the issue of 12 million shares,
which shares have yet to be issued.
13. SHARE CAPITAL
71,485,001 (2012 – 52,485,001) fully
paid ordinary shares
2013
$
2012
$
5,612,303
5,022,303
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to
the number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is
called, otherwise each shareholder has one vote on a show of hands.
Reconciliation of movements in share capital during the year:
Opening balance – start of
reporting period
Share Issue – 21 September 2011
Share Issue – 21 September 2011
Share Issue – 12 June 2012
Share Issue – 10 October 2012
Share Issue – 31 October 2012*
Share Issue – 16 April 2013
Cost of raising capital
2013
No. Shares
2012
No. Shares
2013
$
2012
$
52,485,001
-
-
-
1,000,000
6,000,000
12,000,000
-
71,485,001
36,985,001
6,200,000
2,500,000
6,800,000
-
-
-
-
52,485,001
5,022,303
-
-
-
50,000
300,000
240,000
-
5,612,303
3,931,591
558,000
225,000
340,000
-
-
-
(32,288)
5,022,303
* On 31 October 2012 shareholders approved the issue of 6,000,000 in settlement of a $300,000 debt as per note 11.
On 13 August 2013 the Company announced that it had received firm commitments to raise $1.75 million through the
placement of 87,500,000 ordinary shares to sophisticated investors. The funds have since been received by the Company. In
addition the Company has issued 17,500,000 share options exercisable at 3 cents per share before 31 March 2015 to these
investors.
Capital Management
The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern, so
that it may continue to provide returns for shareholders and benefits for other stakeholders.
The Company’s capital includes ordinary share capital and financial liabilities, supported by financial assets.
Due to the nature of the Company’s activities, being mineral exploration, it does not have ready access to credit
facilities, with the primary source of funding being equity raisings. Accordingly, the objective of the Company’s
capital risk management is to balance the current working capital position against the requirements of the
Company to meet exploration programmes and corporate overheads. This is achieved by maintaining
appropriate liquidity to meet anticipated operating requirements, with a view to initiating appropriate capital
raisings as required.
39
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Capital Management (continued)
Cash and cash equivalents
Trade and other receivables
Financial assets
Trade and other payables
Liability for deferred consideration
Working capital position
Share options
Movements in share options
At 1 July
2013
$
2012
$
510,254
1,117,989
11,324
32,500
200,477
52,500
(188,662)
(815,905)
(250,000)
(270,000)
115,416
285,061
2013
No.
2012
No.
21,000,000
-
Company options issued during the year - unlisted
-
21,000,000
At 30 June
21,000,000
21,000,000
The Company has the following options outstanding as at 30 June 2013.
Grant/Issue Date
Expiry Date
Exercise Price
Number
Listed/Unlisted
12 December 2011
21 February 2012
30 June 2014
30 November 2014
20 cents
10 cents
15,000,000
6,000,000
Unlisted
Unlisted
The following table illustrates the number (No.) and weighted average exercise prices of and movements in
share options issued during the year:
Weighted
average
exercise price
Weighted
average
exercise price
2013
No.
2013
$
2012
No.
2012
$
Outstanding at the beginning of the
year
Granted during the year
Exercised during the year
21,000,000
-
-
$0.17
-
-
-
21,000,000
-
-
$0.17
-
Outstanding at the end of the year
21,000,000
$0.17
21,000,000
$0.17
Exercisable at the end of the year
21,000,000
$0.17
21,000,000
$0.17
The share options outstanding at the end of the year had a weighted average exercise price of $0.17 (2012:
$0.17 and weighted average remaining contractual life of 1.12 years (2012: 2.48 years).
No options were granted during the year.
40
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
The following share-based payment arrangements are in place during the current and prior periods:
Series
Number
Series 1
15,000,000
Series 2
6,000,000
Grant/Issue
Date
21/12/11
21/02/12
Expiry date
Exercise
Price
Fair Value at Grant
Date
30/06/14
30/11/14
20 cents
10 cents
188,236
62,737
Listed/
Unlisted
Unlisted
Unlisted
Series 1
Series 2
Expected volatility (%)
Risk-free interest free (%)
Expected life of option (years)
80%
3.65%
2.53
80%
3.65%
2.36
Exercise price
($)
20 cents
10 cents
Grant date share price
6 cents
4 cents
14. RESERVES
Option issue reserve
Unrealised gains reserve
(a) Movements in options issue reserve - nil
(b) Movements in unrealised gains reserve
Opening balance
Decrease in value of financial assets
Increase in value of financial assets
Closing balance
2013
$
2012
$
250,973
250,973
-
2,500
250,973
253,473
2013
$
2012
$
2,500
-
-
2,500
(2,500)
-
-
2,500
41
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
15. FINANCIAL RISK MANAGEMENT
The group’s principal financial instruments comprise mainly of deposits with banks and shares in listed
companies shown as financial assets at fair value through profit and loss. The main purpose of the financial
instruments is to earn the maximum amount of interest at a low risk to the group. The group also has other
financial instruments such as trade debtors and creditors which arise directly from its operations.
The consolidated entity holds the following financial instruments at the end of the reporting period:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value
through profit and loss
Financial liabilities
Trade and other payables
Liability for deferred consideration
2013
$
2012
$
510,254
11,324
32,500
554,078
188,662
250,000
438,662
1,117,989
200,477
52,500
1,370,966
815,905
270,000
1,085,905
The main risks arising from the Company’s financial instruments are market risk, credit risk and liquidity risk.
The Board reviews and agrees policies for managing each of these risks and they are summarised below:
a. Market risk
Cash flow and fair value interest rate risk
The group’s main interest rate risk arises from cash deposits to be applied to exploration and
development areas of interest. It is the group’s policy to invest cash in short term deposits to minimise
the group’s exposure to interest rate fluctuations. The group’s deposits were denominated in
Australian dollars throughout the year. The group did not enter into any interest rate swap contracts
during the year ended 30 June 2013. Neither the group nor the parent has any short or long term debt,
and therefore this risk is minimal.
b. Credit Risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in
financial loss to the group. The group has adopted the policy of only dealing with credit worthy
counterparties and obtaining sufficient collateral or other security where appropriate, as a means of
mitigating the risk of financial loss from defaults. The cash transactions of the group are limited to high
credit quality financial institutions.
The group does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The carrying amount of financial assets recorded in the
financial statements, net of any provisions for losses, represents the group’s maximum exposure to
credit risk.
All cash holdings within the Group are currently held with AA rated financial institutions.
c. Liquidity Risk
The group manages liquidity risk by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities. Surplus funds when available are
generally only invested in high credit quality financial institutions in highly liquid markets.
42
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Financial Instrument composition and maturity analysis
The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed
period of maturity, as well as management’s expectations of the settlement period for all other financial
instruments. As such, the amounts may not reconcile to the statement of financial position.
Consolidated Group
Within 1 year
1 to 5 years
Over 5 years
Total
2013
$
2012
$
2013
$
2012
$
2013
$
2012
$
2013
$
2012
$
Financial liabilities -
due for payment:
Trade and other
payables
Liability for deferred
consideration
Total contractual
outflows
Financial assets –
cash flows realisable
Cash and cash
equivalents
Trade and other
receivables
Financial assets
Total anticipated
inflows
Net inflow on
financial
instruments
188,662
815,905
250,000
270,000
438,662
1,085,905
510,254
1,117,989
11,324
32,500
200,477
52,500
554,078
1,370,966
115,416
285,061
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
188,662
815,905
250,000
270,000
438,662
1,085,905
510,254
1,117,989
11,324
32,500
200,477
52,500
554,078
1,370,966
-
115,416
285,061
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity
and profit or loss by the amounts shown below.
30 June 2013
Change in profit
Change in equity
Carrying
Value
$
100bp
Increase
$
100bp
decrease
$
100bp
increase
$
100bp
decrease
$
Cash and cash equivalents
510,254
5,103
(5,103)
5,103
(5,103)
30 June 2012
Cash and cash equivalents
1,117,989
11,180
(11,180)
11,180
(11,180)
43
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Maturity of financial assets and liabilities
The note below summarises the maturity of the group’s financial assets and liabilities as per the director’s
expectations. The amounts disclosed are the contractual undiscounted cash flows. There are no derivatives.
30 June 2013
Trade and other receivables
Trade and other payables
Liability for deferred consideration
30 June 2012
Trade and other receivables
Trade and other payables
Liability for deferred consideration
< 6 months
$
11,324
188,662
250,000
200,477
815,905
270,000
6 – 12
months
$
1- 5 years
>5 years
Total
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,324
188,662
250,000
200,477
815,905
270,000
Fair value of financial assets and financial liabilities
There is no difference between the fair values and the carrying amounts of the group’s financial instruments.
The Group has no unrecognised financial instruments at balance date.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed and
classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements.
The fair value hierarchy consists of the following levels:
•
•
•
quoted prices in active markets for identical assets or liabilities (Level 1);
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(Level 3).
Sensitivity analysis on changes in market rates
A change of 20% in equity prices at the reporting date would increase/(decrease) equity and profit or loss as
shown below:
30 June 2013
Financial assets available for sale
ASX listed investments
30 June 2012
Financial assets available for sale
ASX listed investments
Carrying
Value
$
Change in profit
20%
increase
$
20%
decrease
$
Change in equity
20%
20%
decrease
increase
$
$
32,500
6,500
(6,500)
6,500
(6,500)
52,500
10,500
(10,500)
10,500
(10,500)
44
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
16. COMMITMENTS
The consolidated group currently has commitments for expenditure at 30 June 2013 on its Australian
exploration tenements as follows:
Not later than 12 months
Between 12 months and 5 years
Greater than 5 years
2013
$
2012
$
160,000
160,000
-
320,000
373,000
40,500
-
413,500
The group has a further commitment to pay a retainer fee under outsourced consultancy and management
agreements for the provision of geological and service personnel. These agreements can be cancelled with
varying notice periods up to 12 months.
Not later than 12 months
Between 12 months and 5 years
Greater than 5 years
2013
$
2012
$
108,000
36,000
-
144,000
200,000
-
-
200,000
17. CONTINGENT LIABILITIES AND CONTINGENT AS SETS
There are no contingent liabilities or assets in existence at balance sheet date.
18. RELATED PARTY DISCLOSURES
Refer to the Remuneration Report contained in the Directors Report for details of the remuneration paid or
payable to each member of the Group’s key management personnel for the year ended 30 June 2013. Other
than the Directors and secretary, the Company had no key management personnel for the financial period
ended 30 June 2013.
The total remuneration paid to key management personnel of the company and the group during the year are
as follows:
Short term employee benefits
Share based payments
2013
$
122,743
20,000
142,743
2012
$
332,664
-
332,664
45
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
DIRECTORS' AND EXECUTIVE OFFICERS’ EMOLUMENTS
(a) Details of Directors and Key Management Personnel
(i) Directors
Inés Scotland (Non-Executive Chairman) (Appointed 13 August 2013)
George Frangeskides (Non-Executive Director) (Appointed 12 October 2012)
Guy Robertson (Executive Director) (Appointed 17 September 2102)
(ii) Company secretary
Sue-Ann Higgins – Company Secretary (Appointed 21 August 2013)
(iii) Directors’ remuneration
Directors’ remuneration and other terms of employment are reviewed annually by the Board having regard to
performance against goals set at the start of the year, relative comparative information and, where applicable,
independent expert advice.
Except as detailed in Notes (a) – (c) to the Remuneration Report in the Director’s Report, no director has
received or become entitled to receive, during or since the financial period, a benefit because of a contract
made by the Company or a related body corporate with a director, a firm of which a director is a member or an
entity in which a director has a substantial financial interest. This statement excludes a benefit included in the
aggregate amount of emoluments received or due and receivable by directors and shown in Notes (a) – (c) to
the Remuneration Report, prepared in accordance with the Corporations regulations, or the fixed salary of a
full time employee of the Company.
(b) Key Management Personnel
Other than the Directors and secretary, the Company had no key management personnel for the financial
period ended 30 June 2013.
(c) Remuneration Options: Granted and vested during the financial year ended 30 June 2013
There were no remuneration options granted during the financial year ended 30 June 2013.
(d) Share and Option holdings
All equity dealings with directors have been entered into with terms and conditions no more favourable than
those that the entity would have adopted if dealing at arm’s length.
Guy Robertson holds 250,000 unlisted share options exercisable at 20 cents and expiring 30 June 2014.
Shares held by Directors and Officers
Period from 1 July 2012 to 30 June 2013
Received as
Remuneration
Purchased
Net Change
Other
Balance at
end of year
Balance at
beginning
of period
62,500
-
-
-
-
62,500
V. Fayad¹
A. Ho²
G. Robertson
I. Scotland
G. Frangeskides
¹ Resigned as a director on 12 October 2012
² Resigned as a director on 13 August 2013
-
-
-
-
-
-
(62,500)
-
-
-
-
-
-
-
- -
-
(62,500)
-
-
-
-
-
-
46
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Period from 1 July 2011 to 30 June 2012
Balance at
beginning
of period
62,500
-
600,001
662,501
V. Fayad¹
A. Ho²
B. Cooper³
Received as
Remuneration
Purchased
Net Change
Other
Balance at
end of year
-
-
-
-
-
-
-
-
-
-
(600,001)
(600,001)
62,500
-
-
62,500
¹ Resigned as a director on 12 October 2012
² Resigned as a director on 13 August 2013
³ 600,000 shares held indirectly by Cooper Corporate and Consulting Pty Limited.
(e) Related Party Transactions
Payments to:
2013
$
2012
$
Lawler Corporate Finance Pty Limited¹
24,000
27,562
¹ Fees paid in the normal course of business for service rendered. Mr Vincent Fayad, a former director of the Company is a
director of Lawler Corporate Finance Pty Ltd.
19. SEGMENT INFORMATION
The group’s operations are in one business segment being the resources sector. The group operates in one
geographical segment being Australia. All subsidiaries in the group operate within the same segment.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the 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.
Inter-segment transactions
Inter-segment loans payable and receivable are initially recognised at the consideration received net of
transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are not
adjusted to fair value based on market interest rates. This policy represents a departure from that applied to
the statutory financial statements
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the
majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable
on the basis of their nature and physical location.
Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and
intangible assets have not been allocated to operating segments.
47
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the
operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Company as a
whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.
Unallocated items
Administration and other operating expenses are not allocated to operating segments as they are not
considered part of the core operations of any segment.
20. EARNINGS PER SHARE
Reconciliation of earnings per share
Basic and diluted earnings per share
Profit/(loss) used in the calculation of the basic
earnings per share
Weighted average number of ordinary shares:
Used in calculating basic earnings per ordinary share
Dilutive potential ordinary shares
Used in calculating diluted earnings per share
21. AUDITORS REMUNERATION
Auditor of parent entity
Audit or review of financial reports
Non-audit services
2013
Cents
2012
Cents
(1.48)
(2.72)
(881,641)
(1,199,678)
No. of shares
No. of shares
59,649,385
-
59,649,385
44,065,823
-
44,065,823
2013
$
2012
$
21,300
-
21,300
21,000
-
21,000
48
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
22. CASH FLOW INFORMATION
Reconciliation of net cash used in operating activities with profit after income tax
Loss after income tax
Non-cash flows in loss:
Impairment of investments
Share based payments
Exploration written off
Loss on sale of shares
Depreciation
Changes in assets and liabilities:
(Increase) in trade and other receivables
(Decrease)/Increase in trade and other payables
Increase in exploration
Net cash (outflow) from operating activities
Non-cash Financing and Investing Activities
Share issue
2013
$
2012
$
(881,641)
(1,198,678)
17,500
20,000
189,980
-
-
(2,944)
(317,243)
(65,484)
(1,039,832)
-
244,973
41,956
14,083
6,323
(59,450)
295,287
(288,945)
(945,451)
During the year 6,000,000 ordinary shares were issued as consideration for the acquisition of Spinifex Ridge
East Pty Limited in 2011. Also during the year 1,000,000 ordinary shares were issued as consideration for
services rendered.
49
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
23. PARENT ENTITY DISCLOSURES
Financial Position
Current Assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Total Current Assets
Non-current Assets
Financial assets
Evaluation and exploration expenditure
Total Non-current assets
2013
$
2012
$
510,254
203,336
32,500
746,090
140,002
67,448
207,450
1,117,989
345,106
52,500
1,515,595
140,002
239,327
379,329
Total Assets
953,540
1,894,924
Current Liabilities
Trade and other payables
Liability for deferred consideration
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Statement of Profit or Loss and Other Comprehensive Income
Total loss
Total comprehensive loss
i. Financial Performance
188,662
250,000
438,662
815,905
270,000
1,085,905
438,662
1,085,905
514,878
809,019
5,612,304
250,973
(5,348,399)
5,022,303
253,473
(4,466,757)
514,878
809,019
(881,641)
(1,199,678)
(881,641)
(1,199,678)
The subsidiary acquired did not trade from the date of acquisition with the result that the result of the Group
equates to the result of the parent for the year.
ii. Contingent liabilities and contingent assets
The parent entity is responsible for the contingent liabilities and contingent assets outlined in note 17.
iii. Commitments
The parent entity is responsible for the commitments outlined in note 16.
iv. Related parties
An interest in subsidiary is set out in note 9.
Disclosures relating to key management personnel are set out in note 18.
50
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
24. SIGNIFICANT AFTER BALANCE DATE EVENTS
The following significant matters have occurred after balance date:
On 13 August 2013 the Company announced the appointment of Ms Scotland to replace Mr Tony Ho as
Chairperson.
In addition on 13 August 2013 the Company announced that it had received a firm commitment to raise $1.75
million through the placement to strategic sophisticated investors of 87,500,000 ordinary shares at 2 cents a
share. The Company has also issued to these investors 15,000,000 share options at an issue price of $0.0001
per option, with an exercise price of $0.03 and expiring on 31 March 2015.
Other than as outlined above, there are currently no matters or circumstances that have arisen since the end of
the financial period that have significantly affected or may significantly affect the operations of the
consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future
financial years.
25. SHARE BASED PAYMENTS
Goods or services received or acquired in a share-based payment transaction are recognised as an increase in
equity if the goods or services were received in an equity-settled share-based payment transaction or as a
liability if the goods and services were acquired in a cash settled share-based payment transaction.
For equity-settled share-based transactions, goods or services received are measured directly at the fair value
of the goods or services received provided this can be estimated reliably. If a reliable estimate cannot be made
the value of the goods or services is determined indirectly by reference to the fair value of the equity
instrument granted.
Transactions with employees and others providing similar services are measured by reference to the fair value
at grant date of the equity instrument granted.
The following share based payments were made during the year:
Ordinary shares
(a) On 21 September 2011, 6,200,000 ordinary shares were issued to
vendors as part consideration for acquisition of Spinifex Ridge East
Pty Limited.
(b) On 21 September 2011, 2,500,000 ordinary shares were issued to
vendors advisors as part consideration for acquisition of Spinifex
Ridge East Pty Limited.
(c) On 10 October 2012, 1,000,000 ordinary shares were issued to
Price per
share*
2013
$
2012
$
9 cents
9 cents
-
-
558,000
225,000
vendors as consideration for services rendered.
5 cents
50,000
-
(d) On 31 October 2012, 6,000,000 ordinary shares were issued to
vendors advisors as part consideration for acquisition of Spinifex
Ridge East Pty Limited.
5 cents
300,000
350,000
-
783,000
*The fair value of shares issued during the year was determined by reference to market price.
51
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Share options
(a) 0n 12 December 2011, 15,000,000 options were issued to the
vendor and advisors associated with the Spinifex Ridge East
acquisition, with an exercise price of 20 cents and an expiry date of 30
June 2014
(b) On 21 February 2012, 6,000,000 options were issued to advisors
and consultants, with an exercise price of 10 cents and an expiry date
of 30 November 2014
Series
1
2
2013
$
2012
$
-
-
-
188,236
62,737
250,973
The fair value of equity – settled unlisted share options granted is estimated as at the date of grant using the
Black and Scholes model taking into account the terms and conditions upon which the options were granted.
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of
future trends, which may also not necessarily be the actual outcome. No other features of options granted
were incorporated into the measurement of fair value.
52
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
In accordance with a resolution of the directors of Metal Bank Limited, the directors of the company declare
that:
1.
the financial statements and notes, as set out on pages 21 to 52, are in accordance with the
Corporations Act 2001 and:
a. comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the
financial statements, constitutes compliance with International Financial Reporting Standards (IFRS);
and
b. give a true and fair view of the financial position as at 30 June 2013 and of the performance for the
year ended on that date of the consolidated group;
2.
3.
in the directors’ opinion 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
the directors have been given the declarations required by s295A of the Corporations Act 2001 from the
Chief Executive Officer and Chief Financial Officer.
Guy Robertson
Director
Sydney, 26 September 2013
53
RSM Bird Cameron Partners
Level 12, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 2 8226 4500 F +61 2 8226 4501
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
METAL BANK LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Metal Bank Limited, which comprises the consolidated
statement of financial position as at June 2013 , and the consolidated statement of 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 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that is free from
material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor's judgement, including the assessment of the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the
financial report in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Liability limited by a
scheme approved
under Professional
Standards Legislation
Major Offices in:
Perth, Sydney,
Melbourne, Adelaide,
Canberra and Brisbane
ABN 36 965 185 036
RSM Bird Cameron Partners is a member of the RSM network. Each member
of the RSM network is an independent accounting and advisory firm which
practises in its own right. The RSM network is not itself a separate legal entity
in any jurisdiction.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We
confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
directors of Metal Bank Limited, would be in the same terms if given to the directors as at the time of this auditor's
report.
Opinion
In our opinion:
(a)
the financial report of Metal Bank Limited is in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at June 2013 and of its
performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in Note 1
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 17 to 18 of the directors’ report for the year ended
30 June 2013. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to
express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Opinion
In our opinion the Remuneration Report of Metal Bank Limited for the year ended 30 June 2013 complies with
section 300A of the Corporations Act 2001.
RSM BIRD CAMERON PARTNERS
Sydney, NSW
Dated: 26 September 2013
C J HUME
Partner
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
ADDITIONAL INFORMATION FOR LISTED COMPANIES
AS AT 16 SEPTEMBER 2013
The following additional information is required by the Australian Securities Exchange pursuant to Listing Rule
4.10.
a. Distribution of Shareholders
Number of
Number held
share holders
Number of shares
% of number of
shares
1 – 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
Total
4
7
61
113
79
264
11
25,900
601,571
4,970,666
153,386,853
158,985,001
0.00%
0.02%
0.38%
3.12%
96.48%
100.00%
b. The number of shareholders who hold less than a marketable parcel is 85.
c. Substantial shareholders
The names of the substantial shareholders in the Company, the number of equity securities to which
each substantial shareholder and substantial holder’s associates have a relevant interest, as disclosed
in substantial holding notices given to the Company are:
Pershing Australia Nominees Pty Ltd
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