Minbos Resources Limited
Annual Report 2015

Plain-text annual report

Annual Report For the year ended 30 June 2015 ABN 93 141 175 493 Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Contents Corporate Directory Directors’ Report Auditor’s Independence Declaration Corporate Governance Statement Consolidated Statement of Profit or Loss & Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Directors’ Declaration Independent Auditor’s Report Shareholder Information 2 3 30 31 41 42 43 44 45 86 87 89 1 | P a g e Corporate Directory Directors & Officers Mr Peter Wall - Non-Executive Chairman Mr Damian Black - Non-Executive Director Mr Domingos Catulichi - Non-Executive Director Mr William Oliver - Non-Executive Director Mr Lindsay Reed - Chief Executive Officer Mr Stef Weber - Chief Financial Officer & Company Secretary Registered Office Suite 1, 245 Churchill Avenue Subiaco WA 6008 T: +61 (08) 6270 4610 F: +61 (08) 6270 4614 E-mail: info@minbos.com Website: www.minbos.com Principal Place of Business Suite 1, 245 Churchill Avenue Subiaco WA 6008 PO Box 162 Subiaco WA 6904 Domicile and Country of Incorporation Australia Australian Company Number ACN 141 175 493 Australian Business Number ABN 93 141 175 493 Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Bankers National Australia Bank Fremantle Business Banking Centre Level 1, 88 High Street Fremantle WA 6160 Website: www.nab.com.au Auditors BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008 Website: www.bdo.com.au Share Registry Automic Registry Services Level 1, 7 Ventnor Avenue West Perth WA 6005 Website: www.automic.com.au Solicitors Steinepreis Paganin Level 4, The Read Buildings 16 Miligan street Perth WA 6000 Website: www.steinpag.com.au Public Relations Professional Public Relations (PPR) Level 2, 1 Altona Street West Perth WA 6005 Website: www.ppr.com.au Securities Exchange Australian Securities Exchange Limited (ASX) Home Exchange - Perth ASX Code - MNB (Ordinary Shares) 2 | P a g e Directors’ Report The Directors submit their report of the ‘Consolidated Entity’ or ‘Group’, being Minbos Resources Limited (‘Minbos’ or ‘Company’) and its Controlled entities, for the financial year ended 30 June 2015. Minbos Resources Limited – Annual Report For the year ended 30 June 2015 INFORMATION ON THE BOARD OF DIRECTORS 1. The Directors of the Company at any time during or since the end of the financial year are as follows: Mr Peter Wall Non-Executive Chairman (appointed 21 February 2014) Mr Wall is a corporate lawyer and has been a Partner at Steinepreis Paganin (Perth based corporate law firm) since July 2005. Mr Wall graduated from the University of Western Australia in 1998 with a Bachelor of Laws and Bachelor of Commerce (Finance). Mr Wall has also completed a Masters of Applied Finance and Investment with FINSIA. Mr Wall has a wide range of experience in all forms of commercial and corporate law, with a particular focus on resources (hard rock and oil/gas), equity capital markets and mergers and acquisitions. He also has significant experience in dealing in Africa. During the past three years, Mr Wall held the following directorships in other ASX listed companies:  Non-Executive Chairman of Galicia Energy Corporation Limited (current),  Non-Executive Chairman of Phytotech Medical Limited (current),  Non-Executive Chairman of Aziana Limited (current),  Non-Executive Chairman of Global Metals Exploration NL (current),  Non-Executive Chairman of Activistic Limited (current),  Non-Executive Chairman of MyFiziq Limited (current),  Non-Executive Director of Dourado Resources Limited (current),  Non-Executive Chairman of Discovery Resources Ltd (resigned 8 November 2013), and  Non-Executive Director of NSL Consolidated Limited (resigned December 2012). Mr Damian Black Executive Director (appointed 21 February 2014) Mr Black is a Director at Asia Principal Capital Operations Pty Ltd. He previously worked as an Associate Director (Corporate) at CPS Capital Group and at Tolhurst Ltd. Mr Black has been employed in corporate finance and stockbroking since 2006. Mr Black graduated from Curtin University in 1999 with a Bachelor of Science in Physiotherapy and also completed a Graduate Diploma in Applied Finance and Investment at FINSIA in 2005. Mr Black is experienced in structuring corporate transactions, focusing on junior resources / oil and gas companies and has also worked in an ongoing corporate advisory role with several ASX listed companies in the last 5 years, having guided many of them through the IPO/listing process. During the past three years, Mr Black held the following directorships in other ASX listed companies:  Non-Executive Director of Antilles Oil and Gas NL (current). 3 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Mr Domingos Catulichi Non-Executive Director (appointed 20 July 2010) Mr Catulichi is a mining industry professional and a qualified diamond evaluator. He has over 13 years of experience in the exploration and mining industry in Angola. Mr Catulichi has been directly involved with several alluvial and kimberlite diamond projects in Angola, many of which are now owned and operated by listed entities. Mr Catulichi holds various business interests in Angola including hotels, transportation, general trading and mining. During the past three years, Mr Catulichi has not held directorships in any other ASX listed companies. Mr William (Bill) Oliver Non-Executive Director (appointed 2 September 2013) Mr Oliver is a geologist with over 15 years of experience in the international resources industry working for both major and junior companies. He has substantial experience in the design and evaluation of resource definition programmes as well as co-ordinating all levels of feasibility studies. He has direct experience with bulk commodities having led large scale resource definition projects for Rio Tinto Iron Ore and in his role as a director of Celsius Coal Ltd. Mr Oliver has spent recent years evaluating and assessing several projects across Africa including being responsible for the identification, acquisition and development into production of the Konongo Gold Project while Managing Director of Signature Metals Ltd. He is also fluent in Portuguese having lived and worked in Portugal while managing exploration across a range of commodities for Iberian Resources. Mr Oliver holds an honours degree in Geology from the University of Western Australia as well as a post- graduate diploma in finance and investment from FINSIA. He is a Non-Executive Director of Celsius Coal Ltd and Chief Operating Officer of Orion Gold NL. During the past three years, Mr Oliver held the following directorships in other ASX listed companies:  Technical Director of Orion Gold NL (current),  Non-Executive Director of Celsius Coal Limited (current), and  Non-Executive Director of Signature Metals Limited (resigned 2 October 2012). INFORMATION ON OFFICERS OF THE COMPANY 2. Mr Lindsay Reed Chief Executive Officer (appointed 1 September 2014) Mr Reed is an accomplished mining executive with over 30 years of experience in senior management roles in Australia and overseas. Mr Reed has extensive experience in managing mining projects in a wide range of commodities and countries. He was previously Director and Chief Executive Officer of resource development company Aviva Corporation Limited (Aviva) which divested its West Kenyan gold and base metals assets in late 2012 to African Barrick Plc for $20m cash and a further resource milestone payment of $10m. Mr Reed was responsible for Joint Venturing into the asset with Lonmin Plc and overseeing funding and exploration activities until the divestment of the asset. Mr Reed also oversaw the environmental approval of two power station projects in Australia and Botswana and attracted International heavyweights GDF Suez and AES Corporation as Joint Development Partners. Prior to joining Aviva, Mr Reed was Corporate Development Manager at Murchison United Limited which acquired the Renison Bell Tin mine from RGC Limited. During his involvement Murchison grew from a market capitalisation of $5m to over $100m. Mr Reed is a Mining Engineer and has extensive experience in international mine development, minerals marketing and project funding. 4 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Mr Stef Weber Chief Financial Officer and Company Secretary (appointed 1 November 2014) Mr Weber is a qualified chartered accountant and company secretary with nearly 20 years’ experience in senior management roles in the resources industry across various commodities both in Australia and Africa. Mr Weber has extensive experience in mergers and acquisitions, joint ventures, fundraising (debt and equity), tax planning and financial management of projects from feasibility studies through construction into production. PRINCIPAL ACTIVITIES 3. Minbos Resources Limited is an exploration company focused on the development of phosphate bearing ore within the Cabinda Province of Angola. REVIEW OF OPERATIONS GROUP OVERVIEW 4. (a) Minbos is an exploration and development company focused on phosphate deposits within the Cabinda Province of Angola and the adjoining areas of the far western DRC. Through its subsidiaries and joint ventures, Minbos is focussing on the development of the high grade Cacata project in Cabinda whilst growing its current resource base in incremental stages on the remaining deposits in Angola. The Company’s strategy is to specifically target the exploration and development of low cost fertiliser-based commodities in order to tap into the growing global demand for fertilisers. Phosphate is an essential component in certain agricultural fertilisers, with the market supported by the increasing global demand for food and bio- fuel products. (b) HIGHLIGHTS The highlights during and subsequent to the end of the financial year include: Cabinda Project - During the year under review Minbos made substantial progress on the issue of new licences for the Cabinda project. The new licences are expected to be issued in the near future. In December 2014 Minbos and its 50% Joint Venture Partner Petril (JV partners) signed 2 Mining Investment Agreements (MIA) with the Ministry of Geology (MGM) one for the Cacata deposit and second for the remainder of the Cabinda project deposits (Chivovo, Ueca, Mongo Tando, Chibuete and Cabota). The Mining Code of Angola determines that a concession of Mining Rights are undertaken through a MIA. The MIA’s were homologated by the Minister of Geology and Mines on 18 December 2014. The mining licences will be issued for a period of five years and is renewable for a further 2 years. The Mining Code of Angola determines that a concession of Mining Rights are undertaken through a MIA. The MIA’s were homologated by the Minister of Geology and Mines on 18 December 2014. The last Condition Precedent on the MIA’S were satisfied when the concession order were Published in the Official Angolan Gazette on 13 February 2015. The publication in the Official Gazette states that phosphate rock mineral rights is granted on behalf of Mongo Tando Ltda which holds the rights on behalf of the JV partners. In April 2015 Minbos and its joint venture partner also completed all payments that is required for the issue of the new licences. In addition a Presidential decree was issued with respect to the licences on 8 June 2015. The Presidential decree confirmed that the Cabinda project has been approved and instructs the MGM and other Departments to work together with the JV partners to provide the necessary infrastructure and support for the Cabinda project. In the unlikely case that new licences are not issued for the Cabinda project there is a material uncertainty in relation to the recoverability of the Investment in and Loans to Associate. 5 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Cacata Deposit - Cacata has demonstrated potential to support at least 10 years production utilising a simple “scrub and screen” operation. A scrub and screen project would significantly reduce capital and operational costs as well as development lead times. Agreements with strategic Angolan partner - Minbos concluded agreements with Sociedade de Fosfatos de Angola (‘Sofosa’) to advance and progress the Cabinda project. Sofosa will provide support and services on the Cabinda project and can earn a significant equity stake in Minbos following satisfaction of performance milestones. In terms of the agreements Sofosa will provide support and services on the Cabinda project for a payment of US$15,000 per month retrospective from 1 July 2014. In addition, the agreements outline that Sofosa will be issued, (subject to Minbos shareholder approval) with two separate classes of performance rights that can convert up to a total of 237.8 million fully paid ordinary shares in Minbos. The first class of performance rights can convert to a total of 178.3 million fully paid ordinary shares (75% of 237.8 million shares) subject to Sofosa satisfying the following performance milestones within 12 months from the date the agreements were executed:  The issue of the new mining licences on the Cabinda project;  Sofosa transferring all of the securities that it holds in Mongo Tando Ltda (‘MTL’) to Minbos or its nominee. MTL is the owner of the new licences on the Cabinda project; and  Supporting Minbos strategic initiatives. The second class of performance rights can convert to a total of 59.5 million fully paid ordinary shares (25% of the 237.8 million shares) subject to Minbos receiving a licence to Mine on the Cabinda project within 24 months from the date the agreements were executed and pursuant to Sofosa’ s assistance. Port access in Angola - In July 2015 the Company entered into a non-binding Letter of Intent (‘LOI’) with Port of Caio to secure port access for the Cabinda project. The LOI provides Minbos with initial port capacity to export no less than 800,000 tons of rock phosphate per annum. The parties have agreed to enter into a formal binding port services agreement which will include the following:  Term – Minimum of 10 years with an option to extend for a further 10 years.  Volume – No less than 800,000 tons per annum of rock phosphate being exported.  Berth capacity for approximately 26 vessels per year.  Wharf area to accommodate all of Minbos’ storage and equipment requirements.  Minbos being allocated 5 hectares of working area in the Port of Caio Industrial area. Capital placements - In the September 2014 quarter the company successfully raised $1.6 million before cost pursuant to a rights issue and rights issue shortfall by respectively issuing 104,786,468 and 447,119,610 fully paid ordinary shares. On 8 April 2015 the Company completed an equity placement to place 178 million shares at $0.005 per share to sophisticated and professional investors which raised $890,000 before costs. Key appointments - During the financial year the Company strengthened its Management and Executive Team through the appointment of a new CEO, Mr Lindsay Reed, and a new CFO and Company Secretary Mr Stef Weber. Mr Reed is an accomplished mining executive with more than 30 years’ experience in senior management roles in Australia and overseas. Mr Weber has nearly 20 years’ experience in the Mining Industry in senior financial roles. Sale of Kanzi Project in DRC - On 11 September 2015 the Company announced that it has entered into a binding Deed of Offer and Release (‘Agreement’) with African Phosphate Ltd (AFP) to dispose of its rights in the Kanzi project in the DRC. Under the terms of the Agreement AFP have also acquired all the historical technical data and study reports for total consideration of US$200,000. The only Condition Precedent on the Agreement is the receipt by Minbos of the consideration that is due within 30 days. 6 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Repayment or conversion of all convertible debt securities - During the financial year the company repaid or converted all remaining convertible debt securities. At the date of this report the Company has no debt or debt arrangements in place, other than creditors on normal trading terms. PROJECTS (c) Minbos holds a significant concession area of circa 400,000 ha in the Congo Basin running from Cabinda, Angola to Western DRC. Minbos‘s key project in Africa is the high value Cabinda phosphate project which is a resource of 391 MT@ 9.2% P2O5 being a mixture of high and low grade tonnage and with substantial exploration upside. Minbos’s other projects include the Western Australia Phosphate (100% interest) which has two mining tenements prospective for phosphate. Minbos announced on 11 September 2015 that it has entered into an agreement to sell the Kanzi project in the DRC for US$200,000. The only Condition Precedent on the Agreement is the receipt by Minbos of the consideration that is due within 30 days.  RESOURCES Minbos has delineated a substantial resource of 449.8Mt @ 9.9% P2O5. Within this resource, two high grade projects have been identified at the Cacata and Chivovo Deposits. A summary of JORC resources is shown in Table 1 below. Table 1: Mineral Resource Estimate as at 30 June 2015 and 30 June 2014 (There has been no change in the financial year) Deposit Category Tonnes (Mt) Grade (% P2O5) Cut-Off (% P2O5) Cabinda, Angola Cacata Mongo Tando Chivovo Chibuete Total Measured Indicated Inferred Indicated Inferred Indicated Inferred 5.0 10.2 11.8 24.8 184.0 6.5 149.0 391.3 23.0 25.3 8.8 11.5 8.0 20.5 8.3 9.2 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 Indicated Kanzi, DRC (i) Kanzi 5.0 Grand Total 5.0 (i) Minbos announced on 11 September 2015 that it has entered into an agreement to sell the Kanzi project in the DRC for US$200,000. The only Condition Precedent on the Agreement is the receipt by Minbos of the consideration that is due within 30 days. 58.5 449.8 14.2 9.9  CABINDA PROJECT Overview The Cabinda licence area covers an area of approximately 200,000 ha and all the known and historically explored phosphate Prospects in Cabinda, Angola. During the year under review Minbos made substantial progress on the issue of new licences for the Cabinda project. The new licences are expected to be issued in the near future. 7 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report In December 2014 Minbos and its 50% Joint Venture Partner Petril (JV partners) signed 2 Mining Investment Agreements (MIA) with the Ministry of Geology (MGM) one for the Cacata deposit and second for the remainder of the Cabinda project deposits (Chivovo, Ueca, Mongo Tando, Chibuete and Cabota). The Mining Code of Angola determines that a concession of Mining Rights are undertaken through a MIA. The MIA’s were homologated by the Minister of Geology and Mines on 18 December 2014. The mining licences will be issued for a period of five years and is renewable for a further 2 years. The Mining Code of Angola determines that a concession of Mining Rights are undertaken through a MIA. The MIA’s were homologated by the Minister of Geology and Mines on 18 December 2014. The last Condition Precedent on the MIA’S were satisfied when the concession order were Published in the Official Angolan Gazette on 13 February 2015. The publication in the Official Gazette states that phosphate rock mineral rights is granted on behalf of Mongo Tando Ltda which holds the rights on behalf of the JV partners. In April 2015 Minbos and its joint venture partner also completed all payments that is required for the issue of the new licences. In addition a Presidential decree was issued with respect to the licences on 8 June 2015. The Presidential decree confirmed that the Cabinda project has been approved and instructs the MGM and other Departments to work together with the JV partners to provide the necessary infrastructure and support for the Cabinda project. In the unlikely case that new licences are not issued for the Cabinda project there is a material uncertainty in relation to the recoverability of the Investment in and Loans to Associate. Refer to the emphasis of matter on the licences in the audit report and notes 13 and 15 of the financial report. The Cabinda project licences are shown in figure 1 below. Figure 1: Map of Cabinda Project Licences 8 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Cacata deposit Cacata has demonstrated potential to support at least 10 years production utilising a simple “scrub and screen” operation. A scrub and screen project would significantly reduce capital and operating costs as well as development lead times. Minbos is investigating fast track port and shipping options to match the reduced development time needed for a “scrub and screen” operation. Minbos and its joint venture partner Petril Projects (‘Petril’) are committed to completing a pilot plant testwork program that will determine the “scrub and screen” parameters to optimise product specification. In addition the testwork will generate product samples for customer evaluation. Cacata Mineral Resource Scrubbing and Screening (average grade >24% P2O5) CATEGORY Measured* Indicated** TOTAL M&I TONNES (Mt) GRADE (%P2O5) P2O5 (Mt) 4.1 9.0 13.1 24.7 26.6 26.0 1.0 2.4 2.0 CaO/ P2O5 1.5 1.5 1.5 MgO % 1.7 1.0 1.2 R2O3 % 3.6 3.6 3.6 SiO2 % 19.4 18.8 19.0 *Includes 0.6Mt of low grade material with high calcium which might not be selected out during mining and will give reduced recoveries. **Includes 1.7Mt of low grade material with high silica which might not be selected out during mining and will give reduced recoveries when processed. Cacata Scoping Study During 2012, the joint venture company, Mongo Tando Limited, completed a scoping study to assess the economics of developing a standalone phosphate rock export operation to produce 0.8Mtpa of phosphate rock concentrate over a 10 year life of mine (‘LOM’). The Scoping study delivered the following positive results:  Operating costs of US$$57.23 per tonne free-on-board (‘fob’) of phosphate rock;  Capital cost estimate of US$157m, based on owner operated mining, road haulage and ship loading;  Strong opportunity to further reduce capital and operating costs during the Bankable Feasibility Study (‘BFS’):  IRR of 40.2% (pre-tax); and  NPV of US$311m (pre-tax) at a 10% discount rate based on the prevailing Rock Phosphate price at the time of preparing the scoping study of US$180 per tonne. Port facilities The proposed new Caio Deep Water port is approximately 60 km by road from Cacata (refer Figure 2 below) Access to a deep water port could significantly reduce capital cost on the Cacata high grade project. In July 2015 the Company entered into a non-binding LOI with Port of Caio to secure port access for the Cabinda project. The LOI provides Minbos with initial port capacity to export no less than 800,000 tons of rock phosphate per annum. The parties have agreed to enter into a formal binding port services agreement which will include the following:  Term – Minimum of 10 years with an option to extend for a further 10 years.  Volume – No less than 800,000 tons per annum of rock phosphate being exported.  Berth capacity for approximately 26 vessels per year.  Wharf area to accommodate all of Minbos’ storage and equipment requirements.  Minbos being allocated 5 hectares of working area in the Port of Caio Industrial area. 9 | P a g e Directors’ Report Figure 2: Transport Route from Cacata High Grade Project to New Loading Site Change Map Minbos Resources Limited – Annual Report For the year ended 30 June 2015  DISPOSAL OF KANZI PROJECT On 11 September 2015 the Company announced that it has entered into a binding Deed of Offer and Release (‘Agreement’) with African Phosphate Ltd (AFP) to dispose of its rights in the Kanzi project in the DRC. Under the terms of the Agreement AFP have also acquired all the historical technical data and study reports for total consideration of US$200,000. The only Condition Precedent on the Agreement is the receipt by Minbos of the consideration that is due within 30 days. 10 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Competent Person’s Statement Ms Kathleen Body The information in the annual report that relates to the Exploration Results and Phosphate Resources, Production Targets and Cost Estimation was extracted from Minbos’s ASX announcement dated 16 October 2013 and 5 December 2013 respectively entitled ‘’ Minbos announces resource upgrade for the Cabinda licenses in Angola” and “Cabinda Resource Additional Information” which are available to view on the Company’s website at www.minbos.com. The information in the original ASX announcements that related to Exploration Results and Phosphate Resources is based on information compiled or reviewed by and approved for release by Ms Kathleen Body, Pr.Sci.Nat, who has over 19 years of experience in mineral exploration and mineral resource estimation. Ms Body is a Principal Consultant and full-time employee of Coffey Mining (South Africa) (Pty) Ltd and contracted to Minbos. She has sufficient experience in relation to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined by the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (The JORC Code 2012 Edition). Ms Body has consented to inclusion of this information in the form and context in which it appears. Minbos confirms that: a) it is not aware of any new information or data that materially affects the information included in the original ASX announcements; and 30 June 2015 Annual Report b) all material assumptions and technical parameters underpinning the Phosphate Resource, Production Target and related financial information derived from the Production Target included in the ASX announcements and 30 June 2015 Annual Report continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this announcement have not been materially modified from the original ASX announcements and 30 June 2015 Annual Report. 5. DIRECTORS’ SHAREHOLDINGS (DIRECT AND INDIRECT HOLDINGS) The following table sets out each current Director’s relevant interest in shares and options to acquire shares of the Company or a related body corporate as at the date of this report. Directors Mr Peter Wall (a) Mr Damian Black (b) Mr Domingos Catulichi (c) Mr William Oliver (d) Fully Paid Ordinary Shares 71,305,096 88,326,166 17,640,000 153,000 Unlisted Share Options 50,000,000 63,500,000 - 5,000,000 Total 177,424,262 118,500,000 (a) Of the ordinary shares held by Mr Wall, 30,113,430 were acquired prior to his appointment as Non-Executive Chairman, 3,750,000 were acquired in satisfaction of interest payable on convertible notes, 12,441,666 were acquired pursuant to the pro-rata renounceable entitlements offer and 25,000,000 were acquired on conversion of the convertible note facility pursuant to the convertible note trust deed dated 27 August 2013. Of the unlisted options, 25,000,000 were acquired prior to Mr Wall’s appointment as Non-Executive Chairman, the remaining 25,000,000 were acquired on conversion of the convertible note facility pursuant to the convertible note trust deed dated 27 August 2013. (b) Of the ordinary shares held by Mr Black, 31,047,000 were acquired prior to his appointment as Director, 3,750,000 were acquired in satisfaction of interest payable on convertible notes, 28,529,166 were acquired pursuant to the pro-rata renounceable entitlements offer and 25,000,000 were acquired on conversion of the convertible note facility pursuant to the convertible note trust deed dated 27 August 2013. Of the unlisted options held by Mr Black, 28,000,000 were acquired prior to his appointment as Director, 13,500,000 were acquired as consideration for corporate advisory services and the remaining 25,000,000 were acquired on conversion of the convertible note facility pursuant to the convertible note trust deed dated 27 August 2013. Of these options, 3,000,000 expired on 30 December 2014. (c) Of the ordinary shares held by Mr Catulichi, 17,640,000 were vendor shares issued as part of the Tunan Acquisition. (d) Of the ordinary shares held by Mr Oliver, 51,000 were acquired prior to his appointment as Non-Executive Director, the remaining 102,000 were acquired pursuant to the pro-rata renounceable entitlements offer. The 5,000,000 unlisted options were acquired as remuneration, to provide a performance linked incentive component to Mr Oliver’s remuneration. 11 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report 6. DIRECTORS’ MEETINGS The number of Directors’ meetings held during the financial year and the number of meetings attended by each Director during the time the Director held office are: Directors Mr Peter Wall Mr Damian Black Mr Domingos Catulichi Mr William Oliver Number Eligible to Attend 4 Number Attended 4 4 4 4 4 1 4 Due to the size and scale of the Company, there is no Remuneration and Nomination Committee or Audit Committee at present. Matters typically dealt with by these Committees are, for the time being, managed by the Board. For details of the function of the Board please refer to the Corporate Governance Statement. CORPORATE GOVERNANCE 7. The Board recognises the recommendations of the Australian Securities Exchange Corporate Governance Council, and has disclosed its level of compliance with those guidelines within the Corporate Governance Statement which is included as part of this annual report. OPERATING AND FINANCIAL REVIEW 8. A Operations Minbos is a phosphate exploration company which during the financial year operated in Angola, Australia and the Democratic Republic of the Congo (‘DRC’) with a focus to acquire, explore, evaluate and exploit phosphate deposits, and explore prospective tenements for other minerals. The Group creates value for shareholders, through exploration activities which develop and quantify phosphate assets. Once an asset has been developed and quantified within the framework of the JORC guidelines the Company may elect to move to production, to extract and refine ore which is then sold as a primary product. The Group is focussed to commence BFS studies on its Cabinda Project in Angola. On 11 September 2015 the Company announced that it has entered into a binding Deed of Offer and Release (‘Agreement’) with African Phosphate Ltd (AFP) to dispose of its rights in the Kanzi project in the DRC. Under the terms of the Agreement AFP have also acquired all the historical technical data and study reports for total consideration of US$200,000. The only Condition Precedent on the Agreement is the receipt by Minbos of the consideration that is due within 30 days. B Financial Performance & Financial Position The financial results of the Group for the year ended 30 June 2015 are: 12 | P a g e 30-Jun-1530-Jun-14Change$$% Cash and cash equivalents192,87230,727528%Net assets13,789,2099,339,09248%Revenue3,0522,33331%Net loss after tax(2,196,652)(2,680,271)18%Loss per share(0.002)(0.013)(85%) Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Financial Performance The financial result for the year ended 30 June 2015 is a net loss after tax of $2,196,652 (2014: $2,680,271). The Group is creating value for shareholders by asset development through its exploration expenditure and currently has no revenue generating operations. Revenue is generated from interest income from funds held on deposit. Revenue was similar compared with the previous year whilst administration expenses decreased by 43%, largely due to reducing consultant costs. At 30 June 2014 the Company had $1,250,000 of debt, all of which was repaid or converted to securities during the current financial year. This resulted in a 42% decrease in finance costs to $608,119 in the 2015 financial year (2014: $1,046,442). Additionally the Company incurred non-cash costs of $66,259 (2014: $126,328) due to the impairment of the exploration and evaluation expenditure, associated with the Kanzi Project. The Company also incurred exploration expenditure on the Cabinda project of $435,218 (2014: nil) in addition to what was accounted for through the Joint Venture with Petril Phosphate. Financial Position The Group’s main focus during the year was the Cabinda Phosphate project in Angola. The Group’s net assets increased by 48%, largely due to the repayment of all borrowings, from $1,250,000 in the prior year to nil at 30 June 2015, and due to the strengthening USD which resulted in an increase in the Company’s investment in associate, from $10,645,238 in the prior year to $13,201,896 at 30 June 2015. The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. During the year the Group incurred a net loss for the year of $2,196,652 and incurred net cash outflows from operating and investing activities of $1,557,838. At 30 June 2015 the Group had a net working capital deficiency of $108,313 (30 June 2014: $1,901,185). The ability of the Consolidated Entity to continue as a going concern is dependent on the Consolidated Entity being able to raise additional funds as required to fund ongoing exploration commitments and for working capital. An emphasis of matter has been included in the auditor’s report on going concern. Refer to page 46 and the auditor’s report in respect to this matter. The Directors believe that the Group will continue as a going concern. As a result the financial report has been prepared on a going concern basis. No adjustments have been made relating to the recoverability of assets and classification of liabilities that might be necessary should the Group not continue as a going concern. C Business Strategies and Prospects for future financial years The Group actively evaluates the prospects of the Cabinda project as results from the exploration programme become available. These results are available via the ASX platform for shareholders information. The Group then assesses the continued exploration expenditure and further asset development. The Group will continue the evaluation of its Cabinda project in the future. There are specific risks associated with the activities of the Group and general risks which are largely beyond the control of the Group and the Directors. The risks identified below, or other risk factors, may have a material impact on the future financial performance of the Group and the market price of the Company’s shares. The Board reviews the risks of the Group and the action plans to address these risks on a regular basis. 13 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report a) Operating Risks The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction industrial disputes and costs, adverse weather conditions, unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment. industrial and environmental accidents, b) Environmental Risks The operations and proposed activities of the Company are subject to the environmental laws and regulations of Angola, Australia and the DRC. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws. c) Economic General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities. d) Market conditions Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as: i. ii. iii. iv. v. vi. general economic outlook; introduction of tax reform or other new legislation; interest rates and inflation rates; changes in investor sentiment toward particular market sectors; the demand for, and supply of, capital; and terrorism or other hostilities. The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company. e) Additional requirements for capital The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income, the Company will require further financing. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programmes as the case may be. There is no guarantee that the Company will be able to secure any additional funding or be able to secure funding on terms favourable to the Company. f) Speculative investment Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether invest. The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Company’s shares. 14 | P a g e Directors’ Report DIVIDENDS 9. No dividend has been paid during the financial year and no dividend is recommended for the financial year. Minbos Resources Limited – Annual Report For the year ended 30 June 2015 10. SIGNIFICANT CHANGES IN STATE OF AFFAIRS Capital placements / rights issue - On 28 July 2014, the Company announced the closure of its entitlement offer after receiving applications to subscribe for 104,786,468 new shares from eligible shareholders under the Offer to raise approximately $314,359. On 3 September 2014, the Company successfully placed of the rights issue shortfall of 447,119,610 fully paid ordinary shares issued at $0.003 per share to raise approximately $1,341,359. On 8 April 2015, the Company completed an equity placement to place 178 million shares at $0.005 per share to sophisticated and professional investors which raised $890,000 before costs. Key appointments - On 1 September 2014, the Company appointed highly experienced mining company executive Mr Lindsay Reed as Chief Executive Officer of the Company. On 1 November 2014, the Company appointed experienced finance professional Stef Weber as Chief Financial Officer and Company Secretary, following the resignation of Ms Paige Exley as Company Secretary. Repayment or conversion of all convertible debt securities - At 30 June 2014 the Company had $1,250,000 of debt, all of which was repaid or converted to securities during the period, refer table below: BORROWINGS Balance at the beginning of the year CPS Convertible Note (i) Carter Convertible Note (ii) Convertible Security (iii) CPS Convertible Note (iii) Reeves Convertible Note (iv) Balance at the end of the year Date 30/06/2014 25/08/2014 8/09/2014 6/10/2014 6/10/2014 9/10/2014 30/06/2015 Total Debt $1,250,000 ($300,000) ($250,000) ($200,000) ($250,000) ($250,000) - Cash Repayment - - ($250,000) ($100,000) - - ($350,000) Share Repayment - ($300,000) - ($100,000) ($250,000) ($250,000) ($900,000) (i) On 25 August 2014, the Company issued 100,000,000 shares at $0.003 and 100,000,000 options exercisable at $0.01 per share, expiry 30 December 2016, on conversion of $300,000 of an $800,000 convertible note facility pursuant to convertible note trust deed dated 27 August 2013. (ii) On 8 September 2014, the Company fully repaid the principal debt of $250,000 on the Carter convertible note facility. (iii) On 6 October 2014, the Company repaid $100,000 of the $200,000 convertible security which was assigned to sophisticated investors in March 2014. Pursuant to the assignment arrangement the sophisticated investors also received a payment of $20,000 in lieu of interest and 10 million unlisted options exercisable at $0.01, expiring 30 December 2016. In order to conserve the Company’s funds the Convertible Security holders agreed to convert the remaining amount of $100,000 of the Convertible Security to fully paid ordinary shares in the Company at $0.003 per share for which the Company issued 33,333,333 shares. The Company received conversion notices for the remaining 10 convertible notes in relation to the Convertible Note facility established 27 August 2013. Accordingly the Company has converted convertible notes with a face value of $250,000 to fully paid ordinary shares in the Company at $0.003 for the issue of 83,333,332 shares and 83,333,332 unlisted options exercisable at $0.01, expiring 30 December 2016. 15 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report (iv) On 9 October 2014, the Company repaid the Reeves Convertible Note for the amount of $250,000 and outstanding convertible note interest totalling $10,110 through the issue of 86,703,200 fully paid ordinary shares in the Company at $0.003 per share. Renewal of licences - During the year under review Minbos made substantial progress on the issue of new licences for the Cabinda project. The new licences are expected to be issued in the near future. In December 2014 Minbos and its 50% Joint Venture Partner Petril (JV partners) signed 2 Mining Investment Agreements (MIA) with the Ministry of Geology (MGM) one for the Cacata deposit and second for the remainder of the Cabinda project deposits (Chivovo, Ueca, Mongo Tando, Chibuete and Cabota). The Mining Code of Angola determines that a concession of Mining Rights are undertaken through a MIA. The MIA’s were homologated by the Minister of Geology and Mines on 18 December 2014. The mining licences will be issued for a period of five years and is renewable for a further 2 years. The Mining Code of Angola determines that a concession of Mining Rights are undertaken through a MIA. The MIA’s were homologated by the Minister of Geology and Mines on 18 December 2014. The last Condition Precedent on the MIA’S were satisfied when the concession order were Published in the Official Angolan Gazette on 13 February 2015. The publication in the Official Gazette states that phosphate rock mineral rights is granted on behalf of Mongo Tando Ltda which holds the rights on behalf of the JV partners. In April 2015 Minbos and its joint venture partner also completed all payments that is required for the issue of the new licences. In addition a Presidential decree was issued with respect to the licences on 8 June 2015. The Presidential decree confirmed that the Cabinda project has been approved and instructs the MGM and other Departments to work together with the JV partners to provide the necessary infrastructure and support for the Cabinda project. In the unlikely case that new licences are not issued for the Cabinda project there is a material uncertainty in relation to the recoverability of the Investment in and Loans to Associate. EVENTS SINCE THE END OF THE FINANCIAL YEAR 11. In July 2015 the Company entered into a non-binding Letter of Intent (‘LOI’) with Port of Caio to secure port access for the Cabinda project. The LOI provides Minbos with initial port capacity to export no less than 800,000 tons of rock phosphate per annum. The parties have agreed to enter into a formal binding port services agreement which will include the following:  Term – Minimum of 10 years with an option to extend for a further 10 years.  Volume – No less than 800,000 tons per annum of rock phosphate being exported.  Berth capacity for approximately 26 vessels per year.  Wharf area to accommodate all of Minbos’ storage and equipment requirements.  Minbos being allocated 5 hectares of working area in the Port of Caio Industrial area. In September 2015 the Company advised that merger discussions with JV partner Petril have been discontinued as the parties could not come to a mutually satisfactory outcome on certain key terms. The principal terms requiring agreement were the escrow conditions for existing and incoming shareholders (with Petril proposing that MNB’s major shareholders should be escrowed until completion of BFS). The negotiations on the merger were complicated by the difficulties of combining a public listed and private company and the different cultures, both in terms of the needs of the various stakeholders but also the different business culture and approach. Minbos and Petril are developing the Cabinda project under an existing and current JV agreement and will now proceed to move the project towards production on that basis. The Cabinda project is without peer in the Atlantic basin. 16 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report On 11 September 2015 the Company announced that it has entered into a binding Deed of Offer and Release (‘Agreement’) with African Phosphate Ltd (AFP) to dispose of its rights in the Kanzi project in the DRC. Under the terms of the agreement AFP have also acquired all the historical technical data and study reports for total consideration of US$200,000. The only Condition Precedent on the Agreement is the receipt by Minbos of the consideration that is due within 30 days. The Directors are not aware of any other matters or circumstances at the date of the report, other than those referred to in this report or the financial statements or notes thereto, that have significantly affected or may significantly affect the operations, the results of operations or the state of affairs of the Company in subsequent financial years. CORPORATE STRUCTURE 12. Minbos Resources Limited is a Company limited by shares that is incorporated and domiciled in Australia. The Company is listed on the Australian Securities Exchange (‘ASX’) under ASX code MNB and whose shares are publicly traded on the Australian Securities Exchange Limited. An overview of the ownership structure for Minbos Resources Limited is shown below: 17 | P a g e KEY:DRCIncorporated in the Democratic Republic of Congo.BVIIncorporated in the British Virgin Isles.SAIncorporated in South Africa.Refers to the Project area and its licences.Refers to Minbos Resources Limited and its Controlled entities.Refers to third-parties that have part ownership with Minbos or one of its controlled entities in a joint venture company that holds the project licence/s.Incorporated in Angola. Legal entitlement that Mongo Tando BVI will hold 100% of Mongo Tando Ltda, however current holdings is 50% by Terra Fertil (a full subsidiary of Petril Phosphates Ltda) and 50% by SOFOSA (Minbos Non-Executive Director Mr Catulichi is a Director and shareholder of SOFOSA).ANGTunan Mining Ltd (BVI)Mongo Tando Limited (BVI)Tunan Mining Pty Ltd (SA)Agrim SPRL(DRC)50%100%100%Mongo Tando Ltda (Angola)(ProjectLicense Holder)Mongo Tando Holdings (subsidiary of Petril Phosphates Limited) Minbos Resources Ltd100%"CabindaPhosphate Project""Kanzi Project"50%Phosphalux SPRL (DRC)"Phosphalux JV"49%51%Allamanda Trading Ltd (BVI)(ProjectLicense Holder) Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report REMUNERATION REPORT (Audited) 13. This report for the year ended 30 June 2015 outlines the remuneration arrangements of the Group in accordance with the requirements of the Corporations Act 2001 (‘the Act’) and its regulations. This information has been audited as required by section 308(3C) of the Act. The remuneration report details the remuneration arrangements for key management personnel (‘KMP’) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Parent company. For the purposes of this report, the term ‘Executive’ includes the Chief Executive Officer (‘CEO’) and Chief Financial Officer (‘CFO’), whilst the term ‘NED’ refers to Non-Executive Directors only. Individual key management personnel disclosure Details of KMP of the Group who held office during the year are as follows: Directors Peter Wall Damian Black Domingos Catulichi William Oliver Position Non-Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director Other Key Management Personnel Position Lindsay Reed Stef Weber Chief Executive Officer Chief Financial Officer & Company Secretary Appointment 21/02/2014 21/02/2014 20/07/2010 2/09/2013 Appointment 1/09/2014 1/11/2014 There have been no other changes after reporting date and up to the date that the financial report was authorised for issue. The Remuneration Report is set out under the following main headings: Contractual Arrangements Share-based Compensation Equity Instruments Issued on Exercise of Remuneration Options Remuneration Philosophy Remuneration Governance, Structure and Approvals Remuneration and Performance A B C D Details of Remuneration E F G H Value of Shares to Key Management Personnel I J Loans to key management personnel K Loans from key management personnel L Other transactions with key management personnel Voting and comments made at the Company’s 2014 Annual General Meeting 18 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Remuneration Philosophy A KMP have authority and responsibility for planning, directing and controlling the activities of the Group. KMP of Minbos comprise the Board of Directors, the Chief Executive Officer (appointed 1 September 2014) and the Chief Financial Officer (appointed 1 November 2014). The performance of the Group depends upon the quality of its key management personnel. To prosper the Company must attract, motivate and retain appropriately skilled Directors and Executives. The Group’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality. No remuneration consultants were employed during the financial year. B Remuneration Governance, Structure and Approvals Remuneration of Directors is currently set by the Board of Directors. The Board has not established a separate Remuneration Committee at this point in the Group's development, nor has the Board engaged the services of an external remuneration consultant. It is considered that the size of the Board along with the level of activity of the Group renders this impractical. The Board is primarily responsible for:  The over-arching executive remuneration framework;  Operation of the incentive plans which apply to executive directors and senior executives (the executive team), including key performance indicators and performance hurdles;  Remuneration levels of executives, and  Non-executive director fees. Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term interests of the Company.  Non-Executive Remuneration Structure The remuneration of Non-Executive Directors consists of Directors’ fees, payable in arrears. The Board, in accordance with the Company’s Constitution and the ASX listing rules specify that the Non-Executive Directors fee pool shall be determined from time to time by a general meeting. The latest determination was at the 2010 Annual General Meeting (‘AGM’) held on 30 November 2010 when shareholders approved an aggregate fee pool of $300,000 per year (in accordance with the terms and conditions set out in the Explanatory Statement that accompanied the Notice of Meeting). The Board will not seek any increase for the Non-Executive Director pool at the 2015 Annual General Meeting. Remuneration of Non-Executive Directors is based on fees approved by the Board of Directors and is set at levels to reflect market conditions and encourage the continued services of the Directors. Non-Executive Directors do not receive retirement benefits but are able to participate in share-based incentive programmes in accordance with Company policy. The remuneration of Non-Executives is detailed in Table 1a and Table 1b, and their contractual arrangements are disclosed in “Section E – Contractual Arrangements”.  Non-Executive Remuneration Approvals The Board, in accordance with the Company’s Constitution, sets the aggregate remuneration of Non-Executive Directors, subject to shareholder approval. Within this pre-approved aggregate remuneration pool, fees paid to Non-Executive Directors are approved by the Board of Directors in the absence of the Remuneration Committee and is set at levels to reflect market conditions and encourage the continued services of the Directors. 19 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Remuneration may also include an invitation to participate in share-based incentive programmes in accordance with Company policy. The nature and amount of remuneration is collectively considered by the Board of Directors with reference to relevant employment conditions and fees commensurate to a company of similar size and level of activity, with the overall objective of ensuring maximum stakeholder benefit from the retention of high performing Directors.  Executive Remuneration Structure The nature and amount of remuneration of executives are assessed on a periodic basis with the overall objective of ensuring maximum stakeholder benefit from the retention of a high performing Executives. The main objectives sought when reviewing executive remuneration is that the Company has:  Coherent remuneration policies and practices to attract and retain executives;  Executives who will create value for shareholders;  Competitive remuneration offered benchmarked against the external market; and  Fair and responsible rewards to Executives having regard to the performance of the Group, the performance of the Executives and the general pay environment. The remuneration of Executives is detailed in Table 1a and Table 1b, and their contractual arrangements are disclosed in “Section E – Contractual Arrangements”.  Executive Remuneration Approvals The Company aims to reward Executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and aligned with market practice. Executive contracts are reviewed annually by the Board, in the absence of a Remuneration Committee, for their approval. The process consists of a review of company, business unit and individual performance, relevant comparative remuneration internally and externally and, where appropriate, external advice independent of management. Executive remuneration and incentive policies and practices must be aligned with the Company’s vision, values and overall business objectives. Executive remuneration and incentive policies and practices must be designed to motivate management to pursue the Company’s long term growth and success and demonstrate a clear relationship between the Company’s overall performance and the performance of executives. Remuneration & Performance C The following table shows the gross revenue, losses and share price of the Group as at 30 June for the last five financial years: Short Term Incentive Package On 26 September 2014 the Company approved remuneration of 37,000,000 units to Mr Reed in the Employee Share Trust (‘EST’) valued at $0.0029 per unit (Tranche A). Half of these units (18,500,000) vest within 12 months and are therefore considered a short term incentive. Refer to section F in the Remuneration Report for further detail. There were no other short term incentive based payments made during the financial year (2014: nil). 20 | P a g e 30-Jun-1530-Jun-1430-Jun-1330-Jun-1230-Jun-11Revenue ($)3,0522,33319,41393,572116,043Net loss after tax ($)(2,196,652)(2,680,271)(6,026,830)(7,919,244)(2,481,251)Share Price ($)0.0050.0020.020.180.36 Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Long Term Incentive Package On 26 September 2014 the Company approved remuneration of 37,000,000 units to Mr Reed in the Employee Share Trust (‘EST’) valued at $0.0035 per unit (Tranche B). Half of these units (18,500,000) vest over 24 months and are therefore considered a long term incentive. Refer to section F in the Remuneration Report for further detail. Options: The Board is of the opinion that the expiry date and exercise price of the options currently on issue to the Directors, other Key Management Personnel and its Executives is a sufficient, long term incentive to reward Executives in a manner which aligns the element of remuneration with the creation of shareholder wealth. Subsequently, the issue of options are not linked to performance conditions because by setting the option price at a level above the current share price at the time the options are granted, provides incentive for management to improve the Group’s performance. Currently, 312,816,665 options are on issue, of which 118,500,000 have been issued to Key Management Personnel. During the 2014 financial year the Company issued 5,000,000 unlisted options to William Oliver (Non-Executive Director) to provide a performance incentive component in the remuneration package to motivate, reward and further align the Director’s interest with that of the shareholders. During the 2015 financial year and subsequent to 30 June 2015 there were no options exercised, nor did any options lapse. When exercisable, each option is convertible into one ordinary share of the Company. Details of Remuneration D During the financial year ended 30 June 2015 and 30 June 2014, Key Management Personnel received short-term employee benefits, post-employment benefits, share-based payments and employee benefits expenses. Table 1a: Remuneration of Key Management Personnel of the Group for the year ended 30 June 2015 is set out below: (i) Of Mr Wall’s Director Fees, $3,000 was outstanding and a payable at 30 June 2015. (ii) Of Mr Black’s Director Fees, $3,000 was outstanding and a payable at 30 June 2015. (iii) Of Mr Oliver’s Director Fees, $3,000 was outstanding and a payable at 30 June 2015. (iv) Of Mr Reed’s salary and fees, $20,833 was outstanding and a payable at 30 June 2015. (v) Of Mr Weber’s salary and fees, $16,000 was outstanding and a payable at 30 June 2015. 21 | P a g e 30-Jun-15$$$$$$$$DirectorsPeter Wall (i) 36,000 - - - - - - 36,000 Damian Black (ii) 36,000 - - - - - - 36,000 Domingos Catulichi - - - - - - - - William Oliver (iii) 36,000 - - - - - - 36,000 Sub-total 108,000 - - - - - - 108,000 Other Key ManagementLindsay Reed (iv) 208,333 - - - 19,792 - 69,640 297,765 Stef Weber (v) 92,000 - - - 8,740 - - 100,740 Sub-total 300,333 - - - 28,532 - 69,640 398,505 Total 408,333 - - - 28,532 - 69,640 506,505 Short-term employee benefitsTotalEmployee benefits expenseShare-based paymentsPost-employment benefitsSalary & feesCash bonusNon-monetaryOtherSuper-annuationOptions &rightsShares Directors’ Report Table 1b: Remuneration of Key Management Personnel of the Group for the year ended 30 June 2014 is set out below: Minbos Resources Limited – Annual Report For the year ended 30 June 2015 (i) Mr Wall’s Director Fees of $12,750 were outstanding and a payable at 30 June 2014. (ii) Mr Black’s Director Fees of $12,750 were outstanding and a payable at 30 June 2014. (iii) Mr Oliver’s Director Fees of $30,000 were outstanding and a payable at 30 June 2014. (iv) Mr Sullivan received $130,664 in salary & fees and $12,086 in superannuation during the financial year. The remainder of his entitlements, which include $69,336 in salary & fees and $6,414 in superannuation has been deferred, but accrued for the purpose of this report. During the financial year Mr Sullivan also received $2,905 in interest, a result of late payment of his outstanding entitlements. Mr Sullivan resigned as Managing Director on 21 February 2014. (v) Mr Reeves’ Director Fees of $23,250 were outstanding and a payable at 30 June 2014. During the financial year Mr Reeves’ also received $29,836 in interest on his convertible note, of which $5,014 was outstanding and a payable at 30 June 2014. Mr Reeves resigned as Non-Executive Director on 21 February 2014. (vi) Mr Richards’ Director Fees of $5,000 were outstanding and a payable at 30 June 2014. Mr Richards resigned as Executive Chairman on 6 August 2013. (vii) Mr Carter’s consulting fees of $20,000 were outstanding and a payable at 30 June 2014. During the financial year Mr Carter also received $33,986 in interest on his convertible note, of which $3,082 was outstanding and a payable at 30 June 2014. Mr Carter resigned as Chief Financial Officer on 30 August 2013. 22 | P a g e 30-Jun-14$$$$$$$$DirectorsPeter Wall (i) 12,750 - - - - - - 12,750 Damian Black (ii) 12,750 - - - - - - 12,750 Domingos Catulichi - - - - - - - - William Oliver (iii) 30,000 - - - - 29,886 - 59,886 Scott Sullivan (iv) 200,000 - - 2,905 18,500 - 122,891 344,296 David Reeves (v) 23,250 - - 29,836 - - - 53,086 Peter Richards (vi) 5,000 - - - - - - 5,000 Sub-total 283,750 - - 32,741 18,500 29,886 122,891 487,768 Other Key ManagementJames Carter (vii) 20,000 - - 33,986 - - 19,220 73,206 Sub-total 20,000 - - 33,986 - - 19,220 73,206 Total 303,750 - - 66,727 18,500 29,886 142,111 560,974 TotalSuper-annuationOptions & rightsSharesEmployee benefits expenseShare-based paymentsPost-employment benefitsShort-term employee benefitsSalary & feesCash bonusNon-monetaryOther (viii) Directors’ Report The relative proportions of remuneration that are linked to performance and those that are fixed are as follows: Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Table 2: Shareholdings of Key Management Personnel (Direct and Indirect Holdings) Table 3: Option holdings of Key Management Personnel (Direct and Indirect Holdings) 23 | P a g e 201520142015201420152014DirectorsPeter Wall 100%100% - - - - Damian Black100%100% - - - - Domingos Catulichi - - - - - - William Oliver 100%50% - 50% - - Scott Sullivan (Resigned 21/02/14) - 64% - - - 36%David Reeves (Resigned 21/02/14) - 100% - - - - Peter Richards (Resigned 06/08/13) - 100% - - - - Other Key ManagementLindsay Reed77% - - - 23% - Stef Weber100% - - - - - James Carter (Resigned 30/08/13) - 74% - - - 26%NameAt risk - STI (%)At risk - LTI (%)Fixed remuneration30-Jun-15Balance at 1/07/2014Granted as remunerationOn exerciseof optionsNet change otherBalance at 30/06/2015DirectorsPeter Wall33,863,430--37,441,66671,305,096Damian Black34,797,000--53,529,16688,326,166Domingos Catulichi17,640,000---17,640,000William Oliver51,000--102,000153,00086,351,430--91,072,832177,424,262Lindsay Reed-37,000,000-83,333,333120,333,333Stef Weber-----86,351,43037,000,000-174,406,165297,757,595Other Key Management30-Jun-15Balance at 1/07/2014Granted as remunerationExercisedNet change otherBalance at 30/06/2015Vested & exercisableDirectorsPeter Wall25,000,000--25,000,00050,000,00050,000,000Damian Black41,500,000--22,000,00063,500,00063,500,000Domingos Catulichi------William Oliver5,000,000---5,000,0005,000,00071,500,000--47,000,000118,500,000118,500,000Lindsay Reed------Stef Weber------71,500,000--47,000,000118,500,000118,500,000Other Key Management Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report E Contractual Arrangements  Mr Peter Wall – Non-Executive Chairman - Contract: Commenced on 21 February 2014. - Director’s Fee: $3,000 per month (plus GST). Remuneration levels of Non-Executive Directors (‘NED’s’) are discussed further in Note 1 below. - Term: See Note 2 below for details pertaining to re-appointment and termination.  Mr Damian Black – Non-Executive Director - Contract: Commenced on 21 February 2014. - Director’s Fee: $3,000 per month (plus GST). - Term: See Note 2 below for details pertaining to re-appointment and termination.  Mr Domingos Catulichi – Non-Executive Director - Contract: Commenced on 20 July 2010. - Director’s Fee: From July 2012 Mr Catulichi received $2,000 per month (excluding GST) which was reduced to nil in May 2013. Remuneration levels of NED’s are discussed further in Note 1 below. - Term: See Note 2 below for details pertaining to re-appointment and termination.  Mr William Oliver – Non-Executive Director - Contract: Commenced on 2 September 2013. - Director’s Fee: $3,000 per month (plus GST). Remuneration levels of NED’s are discussed further in Note 1 below. - Term: See Note 2 below for details pertaining to re-appointment and termination. Note 1: Remuneration of NED’s are reviewable annually by the Board and subject to shareholder approval (if applicable). The latest determination was at the 2010 AGM held on 30 November 2010 when shareholders approved an aggregate fee pool of $300,000 per year (in accordance with the terms and conditions set out in the Explanatory Statement that accompanied the Notice of Meeting). The Board will not seek any increase for the NED pool at the 2015 Annual General Meeting. Note 2: The term of each NED is open to the extent that they hold office subject to retirement by rotation, as per the Company’s Constitution, at each AGM and are eligible for re-election as a Director at that meeting. Appointment shall cease automatically in the event that the Director gives written notice to the Board, or the Director is not re-elected as a Director by the shareholders of the Company. There are no entitlements to termination or notice periods. 24 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report Other Key Management Personnel that have service contracts in place with the Company are as follow:  Mr Lindsay Reed – Chief Executive Officer - Contract: Commenced on 1 September 2014. - Base Salary: $250,000 per annum (plus statutory superannuation entitlements). - Termination: Either party may terminate the employment agreement with three months written notice. - Performance Based Bonuses: The Company may at any time pay Mr Reed a performance based bonus over and above his salary. In determining the extent of any performance based bonus, the Company shall take into consideration the key performance indicators of Mr Reed and the Company, as the Company may set from time to time, and any other matter that it deems appropriate. Mr Reed did not receive any short term incentive remuneration during the financial year. - Short Term and Long Term Incentive Package: Mr Reed or his nominees will be entitled to shares under the existing Employee Share Loan Plan for fully ordinary shares up to 2.5% of the fully diluted capital. On 26 September 2014 the Company approved a remuneration of 37,000,000 units to Mr Reed in the Employee Share Trust (‘EST’). The Company allocated 6,000,000 shares from the EST to Mr Reed and issued the remaining 31,000,000 shares on the 12 November 2014. These shares were issued at an exercise price of $0.003 per share.  Mr Stef Weber – Chief Financial Officer and Company Secretary - Contract: Commenced on 1 November 2014. - Base Salary: Commenced on a part-time basis on $96,000 per annum (plus statutory superannuation entitlements), amended 16 March 2015 to a permanent basis at a remuneration of $192,000 per annum (plus statutory superannuation entitlements). - Termination: Either party may terminate the employment agreement with three months written notice. - Performance Based Bonuses: The Company may at any time pay Mr Weber a performance based bonus over and above his salary. In determining the extent of any performance based bonus, the Company shall take into consideration the key performance indicators of Mr Weber and the Company, as the Company may set from time to time, and any other matter that it deems appropriate. Mr Weber did not receive any short term incentive remuneration during the financial year. - Long Term Incentive Package: The Company may at any time decide to provide Mr Weber with share based incentives. Mr Weber did not receive any long term incentive remuneration during the financial year. Share-based Compensation F The Company rewards Directors and senior management for their performance and aligns their remuneration with the creation of shareholder wealth by issuing share options and or shares. Share-based compensation is at the discretion of the Board and no individual has a contractual right to participate in any share-based plan or to receive any guaranteed benefits.  Options No performance incentive based options were issued as remuneration to Directors or other key management personnel during the current financial year. During the 2014 financial year the Company issued 5,000,000 unlisted options to William Oliver (Non-Executive Director) to provide a performance incentive component in the remuneration package to motive, reward and further align the Director’s interest with that of the shareholders. During the 2015 financial year 3,000,000 options held by Damian Black expired and no options were exercised. At the date of this report, the unissued ordinary shares of Minbos under option carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share of the Company. 25 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report  Shares Short and Long-term incentives In the current financial year Mr Reed was eligible to participate in a short and long term incentive package for the issue of securities (shares, performance rights or options, or a combination of any) in the capital of the Company. Employee Share Plan – Lindsay Reed Shareholders approved the establishment of the Minbos Resources Limited Employee Share Plan via an Employee Share Trust (‘EST’) at a general meeting on 14 March 2013. The company believes that the employee share plan provides eligible key employees and Directors effective incentive for their work and ongoing commitment and contribution to the Company. Eligible key employees and Directors offered shares under the plan are provided an interest free, non- recourse loan from the EST. Under this plan, on 26 September 2014 the company approved a remuneration of 37,000,000 share units to Lindsay Reed in the EST. These shares were issued at an exercise price of $0.003 per share. These shares were subject to the following vesting conditions:  18,500,000 share units shall vest; (a) one year from the Commencement Date (being 1 September 2015); and (b) if an announcement is made to the market by the Company of the renewal of the exploration licence 0006/06/01/L.P/GOV.ANG.MGM.2010 granted to Mongo Tando Ltda, which expired in January 2013.  18,500,000 share units shall vest; (a) two years from the Commencement Date (being 1 September 2016); and (b) upon presentation of a definitive feasibility study by the Company’s joint venture partner in relation to the Cabinda Project. In the event of a change of control event, the share units will vest automatically. Summary of the key loan terms: Aggregate loan amount: $111,000 Interest rate: 0% Subject to the conditions of the Employee Share Plan as approved by shareholder on 14 March 2013. The employee share units issued to Lindsay Reed have been valued using the black-scholes model. The total expense recognised as an employee benefits expense is therefore $119,184, prorated over 12 months and 24 months, per the vesting conditions mentioned above. For details on the valuation of the option over shares, including models and assumptions used, please refer to Note 25 in the consolidated financial statements. There were no other shares issued as compensation to Key Management Personnel during the financial year nor as at the date of signing this report. Equity Instruments Issued on Exercise of Remuneration Options G No remuneration options were exercised during the financial year. 26 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report H Value of Shares to Key Management Personnel Employee Share Plan * The value of expense recognised is the fair value of the options over shares recognised over the expected vesting period. Voting and comments made at the Company’s 2014 Annual General Meeting I The adoption of the Remuneration Report for the financial year ended 30 June 2014 was put to the shareholders of the Company at the AGM held 27 November 2014. The resolution was passed without amendment, on a show of hands. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. J Loans to key management personnel There were no loans made to any key management personnel during the year ended 30 June 2015 (2014: nil). K Loans from key management personnel There were no loans from any key management personnel during the year ended 30 June 2015. L Other transactions with key management personnel Agreements with strategic Angolan partner During the financial year, Minbos concluded agreements with Sofosa to advance and progress the Cabinda project, a Company which Mr Catulichi (Non-Executive Director) is a shareholder and Director. Sofosa will provide support and services on the Cabinda project for a payment of US$15,000 per month retrospective from 1 July 2014. In addition, the agreements outline that Sofosa will be issued with two separate classes of performance rights that can convert up to a total of 237.8 million fully paid ordinary shares in Minbos. The first class of performance rights can convert to a total of 178.3 million fully paid ordinary shares (75% of 237.8 million shares) subject to Sofosa satisfying performance milestones within 12 months from the date of the agreement. The second class of performance rights can convert to a total of 59.5 million fully paid ordinary shares (25% of 237.8 million shares) subject to Minbos receiving a licence to Mine on the Cabinda project within 24 months from the date the agreements were executed and pursuant to Sofosa’s assistance. During the year the Company incurred fees from Sofosa of $229,471 (US$180,000) of which $19,510 (US$15,000) was outstanding at 30 June 2015. There are no other transactions with key management personnel during the financial year ended 30 June 2015. End of Audited Remuneration Report 27 | P a g e Lindsay Reed18,500,000 1/09/2014$0.003$0.00291/09/2015$54,171$44,132$10,039- - Lindsay Reed18,500,000 1/09/2014$0.003$0.00351/09/2016$65,013$25,508$39,505- - $119,184$69,640$49,544Issue DateExercisepriceper shareVestingdateKeyManagementPersonnel%Shares VestedVestedNumber of SharesOptionsoversharesDuringthe yearNot yetrecognisedEmployee Benefits Expense *Fair value of sharesFair value of options Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report 14. OPTIONS At the date of this report, the unissued ordinary shares of Minbos under option are as follows: Class Placement Options Director Options Consultancy Options Conversion of Convertible note Conversion of Convertible note Consideration for Convertible security Date of Expiry 08-Mar-16 30-Dec-16 30-Dec-16 30-Dec-16 30-Dec-16 30-Dec-16 Exercise Price $0.0937 $0.01 $0.01 $0.01 $0.01 $0.01 Number Under Option 1,150,000 88,333,333 30,000,000 100,000,000 83,333,332 10,000,000 312,816,665 No person entitled to exercise these options had or has any right by virtue of the option to participate in any share issue of any other body corporate. There were no shares issued on the exercise of any options during the financial year. 15. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purposes of taking responsibility on behalf of the Company for all or part of those proceedings. INDEMNIFYING OFFICERS 16. During the financial year, the Company paid a premium in respect of a contract insuring all its Directors and current and former executive officers against a liability incurred as such a Director or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company against a liability incurred as such an officer or auditor. 17. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS As disclosed in the Quarterly Activities Report for the three months ended 30 June 2015, the likely developments of the Company are anticipated to be as follows:  BFS studies - Initial focus of the BFS is on the bulk sample and pilot plant testwork for the Cacata deposit.  Disposal of Kanzi Project in the DRC - On 11 September 2015 the Company announced that it has entered into a binding Deed of Offer and Release (‘Agreement’) with African Phosphate Ltd (AFP) to dispose of its rights in the Kanzi project in the DRC. Under the terms of the agreement AFP have also acquired all the historical technical data and study reports for total consideration of US$200,000. The only Condition Precedent on the Agreement is the receipt by Minbos of the consideration that is due within 30 days.  Binding port services agreement - Commence discussions with Port of Caio for a formal binding port services agreement. For further information on the abovementioned likely developments and expected results of operation refer to the Review of Operations section disclosed within this Annual Report. 28 | P a g e Minbos Resources Limited – Annual Report For the year ended 30 June 2015 Directors’ Report 18. ENVIRONMENTAL REGULATIONS The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and energy use. The Directors have assessed that there are no current reporting requirements under the National Greenhouse and Energy Reporting Act 2007. The Group is subject to environmental regulation in respect to its activities in Angola, Australia and the DRC. The Group aims to ensure that appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The Directors of the Group are not aware of any breach of environmental legislations as they apply to the Group during the year. 19. NON-AUDIT SERVICES The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the group are important. Details of the amounts paid or payable to the auditor (BDO Audit (WA) Pty Ltd) for non-audit services provided during the year are set out below. The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independent requirements of the Corporations Act 2001 for the following reasons:  All non-audit services have been reviewed by the Board of Directors to ensure they do not impact the impartiality and objectivity of the auditor; and  None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants. Non-Audit Services Remuneration for other services BDO Corporate Tax (WA) Pty Ltd - Taxation services BDO Corporate Finance (WA) Pty Ltd - Other professional services Total Non-Audit Services 30-Jun-15 $ 30-Jun-14 $ - - - 980 3,060 4,040 20. LEAD AUDITOR’S INDEPENDENCE DECLARATION The Lead Auditor’s Independence Declaration is set out on page 30 and forms part of the Directors’ Report for the financial year ended 30 June 2015. Signed in accordance with a resolution of the Board of Directors. Mr Peter Wall Non-Executive Chairman 24 September 2015 29 | P a g e Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au 38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF MINBOS RESOURCES LIMITED As lead auditor of Minbos Resources Limited for the year ended 30 June 2015, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Minbos Resources Limited and the entities it controlled during the period. Phillip Murdoch Director BDO Audit (WA) Pty Ltd Perth, 24 September 2015 BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Corporate Governance Statement CORPORATE GOVERNANCE The Board of Directors of Minbos Resources Limited (the “Company” or “Minbos”) is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of Minbos on behalf of the security holders by whom they are elected and to whom they are accountable. This Corporate Governance Statement sets out the Company’s current compliance with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (Principles and Recommendations). The Principles and Recommendations are not mandatory. The Statement below discloses the extent to which the Company has followed the Principles and Recommendations, furthermore, the Board of the Company currently has in place a Corporate Governance Plan which is located on the Company’s website at www.minbos.com PRINCIPLES AND RECOMMENDATIONS 1. 1.1 Lay solid foundations for management and oversight Companies should disclose the respective roles and responsibilities of its board and management and those matters expressly reserved to the board and those delegated to management. The Board of Directors guide and monitor the business affairs of the Company on behalf of security holders and have formally adopted a corporate governance plan, including a Board Charter and a delegation of authority framework, which is designed to encourage Directors to focus their attention on accountability, risk management and ethical conduct. The corporate governance plan is available on the Company’s website www.minbos.com The roles and responsibilities of the Board include:  appointment of the Chairman, Chief Executive Officer and other senior executives and the determination of their terms and conditions including remuneration and termination;  assessing the performance of the Chief Executive Officer and other senior executives;  driving the strategic direction of the Company, ensuring appropriate resources are available to meet objectives and monitoring management’s performance;  reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct and legal compliance;  approving and monitoring the progress of major capital expenditure, capital management and significant acquisitions and divestments;  approving and monitoring the business plan, budget and the adequacy and integrity of financial and other reporting;  approving the annual and half yearly report and any other significant announcements;  approving significant changes to the organisational structure;  approving the issue of any shares, options, equity instruments or other securities in the Company (subject to compliance with ASX Listing Rules);  ensuring a high standard of corporate governance practice and regulatory compliance and promoting ethical and responsible decision making;  recommending to security holders the appointment and/or removal of the external auditor;  meeting with the external auditor, at their request, without management being present;  determining the size and composition of the board;  reporting to security holders, stakeholders and the investment community on the performance of the board; and  approving the entity’s remuneration framework. 31 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Corporate Governance Statement The roles and responsibilities of management include:  develop and recommend internal control and accountability systems;  develop, implement and maintain systems, corporate strategy and performance objectives;  implement and maintain systems of risk management, internal compliance and controls, codes of conduct, legal compliance and any other regulatory compliance to meet statutory deadlines;  monitor employee performance and manage appropriate human resources;  prepare required financial reports, tax lodgements, budgets and other financial reports;  monitor company performance against budget;  protect the assets of the Company, including through insurance and prepare Board recommendations on acquisitions and divestment of assets; and  undertake best endeavours to add value to the Company in a professional, ethical and accountable manner. 1.2 Companies should undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election as a director and provide security holders with all material information. Companies should also provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director. The Company undertakes appropriate checks before appointing a new director or putting forward to security holders a candidate for election as a director. These include checks about the person’s character, experience, and education, any criminal record or bankruptcy record. The Company provides sufficient and all the material information to security holders to assist in their decision to elect or re-elect a director. The information provided includes:  biographical details; including relevant qualifications and skills;  details of any other material directorships;  any material adverse information revealed by background checks;  positions or interest that might impact independent judgement;  if the candidate is an independent director; and  term of the office currently served by the director. 1.3 Companies should have a written agreement with each director and senior executive setting out the terms of their appointment All directors and senior executives are appointed through a written agreement that sets out their duties, rights and responsibilities. Directors Deed of Appointments include the following matters :     time commitment required; requirement to disclose director interests and any other matters that might influence directors independence; indemnity and insurance arrangements; rights to seek independent professional advice;  access to company secretary and corporate records; and  remuneration. 32 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Corporate Governance Statement 1.4 The Company Secretary should be accountable directly to the Board, through the Chair on all matters to do with the proper functioning of the Board. The Board Charter makes provision that the Company Secretary is accountable to the Board through the Chairman and that each Director is able to communicate directly with the Company Secretary and vice versa. The Company Secretary is responsible for:  advising the Board on Corporate Governance matters;  managing the Company Secretarial function;  to facilitate the induction of new directors and Board policies and procedures; and  organize Board and Shareholder meetings, taking minutes and communicating with the ASX. 1.5 The Company should have a diversity policy which include requirements for the board to set measureable objectives for achieving gender diversity and to assess annually both the objectives and progress in achieving them. The Company should disclose that policy or a summary of it and its progress towards achieving the objectives. The Company adopted a diversity policy on the 1 July 2011, revised in June 2015 as part of their Corporate Governance Plan. The Company recognises the benefits arising from board diversity, and is committed to providing a diverse workplace that embraces and promotes diversity. Minbos Resources Limited is an equal opportunity employer and welcomes people from different backgrounds. Full details of the Company’s diversity policy that is included in the corporate governance plan can be found on the Company website www.minbos.com The Company has no female directors and four male directors. The Company intends to appoint at least one female director to the Board should a vacancy arise and an appropriately qualified and experienced individual is available. The current management is comprised of Mr Lindsay Reed as Chief Executive Officer and Mr Stef Weber as Chief Financial Officer and Company Secretary. 1.6 Companies should disclose the process for periodically evaluating the performance of the board, its committees and individual directors. The entity should disclose whether a performance evaluation was undertaken during the reporting period in accordance with that process. The Board Charter that forms part of the Corporate Governance plan requires that an annual performance evaluation be undertaken by the Board to ensure that the responsibilities of the Board are discharged in an appropriate manner. The performance review includes a comparison of the performance of the Board with the requirements of the Board Charter, critically reviewing the mix of the Board, and amending the Board Charter as appropriate. The performance review is led by the Chairman that is a Non-Executive Director. The performance of the Board has been reviewed and evaluated internally during the period. 1.7 Companies should disclose the process for periodically evaluating the performance of its senior executives. The entity should disclose whether a performance evaluation was undertaken during the reporting period. During the financial year, the senior executives of the Company, who were not Directors, were the Chief Executive Officer (CEO) and the Chief Financial Officer(CFO)/ Company Secretary. The evaluation of the performance of the CEO and CFO/Company Secretary is assessed annually by the Board and in accordance with the terms and conditions of the service agreement entered into by the Company with these senior executives. The performance of the CEO and CFO/Company Secretary has been reviewed and evaluated internally during the period. 33 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Corporate Governance Statement 2. Structure the board to add value 2.1 The board should establish a nomination committee. The nomination committee should be structured so that it:  has at least three members  consists of a majority of independent directors  is chaired by an independent director,  disclose the charter and the members of the committee; and  disclose the number of times the committee met throughout the period and the individual attendances The Company is currently not of a relevant size that requires the formation of a separate Nomination Committee and there are not a sufficient number of independent directors to form a separate committee. The Board has developed a nomination committee charter and the matters typically dealt with by such a committee are dealt with by the Board of Directors. The charter is included in the Company’s corporate governance plan which is available on the Company’s website www.minbos.com The Company does not comply with ASX Principle 2.1 as the majority of the Board is not independent and the Board performs the role of the committee. The Company intends to seek out and appoint additional independent directors to the Board when the size and scale of the Company justify and warrant their inclusion. In the interim the Company will maintain a mix of Directors from different backgrounds with complementary skills and experience. When a board vacancy becomes available, the Board will consider the existing mix of skills of the Board and define the skill set that will be sought in candidates to fill the vacancy. Directors will review a range of suitable candidates and may obtain the services of a reputable recruitment agent to assist with candidate selection. The most appropriate candidate will be appointed to the role until the director is elected by members at the next annual general meeting of the Company. The board should disclose a board skills matrix setting out the mix of skills and diversity that the Board currently has or is looking to achieve in its membership The Board has a skills matrix that are reviewed on a regular basis. The table below shows the skills and experience that Board considers to be important for the company and the amount of Board members that have the relevant skills and experience 2.2 EXPERIENCE, SKILLS AND ATTRIBUTES Total directors EXPERIENCE Resources industry experience Experience in exploration phase of mining industry, specifically phosphate Board level experience Board member of other listed entities(last 3 years) Geographic experience Angola and DRC Capital market experience Feasibility studies and Project development SKILLS AND ATTRIBUTES Strategic Risk and Compliance Mergers and Acquisitions Legal, corporate finance and tax Board 4 4 3 4 3 4 4 3 3 2 34 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Corporate Governance Statement 2.3 The board should disclose the names of the directors considered by the Board to be independent directors and the length of service of each director In making this assessment, the Board considers all relevant facts and circumstances. Relationships that the Board will take into consideration when assessing independence are whether a Director:   is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company; is employed, or has previously been employed in an executive capacity by the Company or another Company member, and there has not been a period of at least three years between ceasing such employment and serving on the Board;  has within the last three years been a principal of a material professional advisor or a material consultant to the Company or another Company member, or an employee materially associated with the service provided;  is a material supplier or customer of the Company or other Company member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; or  has a material contractual relationship with the Company or another Company member other than as a Director. All 4 directors are Non-Executive Directors but only Mr Bill Oliver is considered to be an independent director. Mr Oliver has been a director of Minbos since September 2013. 2.4 A majority of the board of the Company should be independent directors. The Company does not currently comply with this recommendation as only one of the 4 directors Mr Bill Oliver is regarded as an independent director. The Company maintains a mix of Directors from different backgrounds with complementary skills and experience, however, is aware of the importance of having a Board with a majority of its directors being independent. In the future, the Company intends to seek out and appoint independent directors to the Board when additional directors are required in order to meet the ASX recommendation of maintaining a majority of independent Non-Executive Directors. Messrs Peter Wall and Damian Black is both substantial security holders. In addition Mr Wall is a partner at Steinepreis Paganin Lawyers and Consultants that provides legal services to the Company. Mr Domingos Catulichi is a security holder and director of Sociedade de Fosfatos de Angola (Sofosa). During the period under review the Company concluded an agreement with Sofosa in terms of which they can be issued with performance rights that can be converted to up to 237.8 million fully paid ordinary shares. In addition Sofosa receives a payment of US$15,000 per month for services that they provide on the Cabinda phosphate project in Angola. 2.5 The chair of the Board should be an independent director and should not be the same person as the CEO. Mr Lindsay Reed is the CEO of Minbos and Mr Peter Wall the Chairman. Mr Wall is not an independent director. The Company intends to seek out and appoint an independent chairman in the future as operations expand; however, the Company believes that the current Board structure is best suited to enable the Company to deliver shareholder value. 35 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Corporate Governance Statement 2.6 The Company should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain their skills and knowledge needed to perform their roles as directors effectively. All new directors are appointed through a written agreement that sets out their duties, rights and responsibilities. The Company Secretary through the Board is responsible for the program to induct new directors. The Board encourages directors to continue their education and maintain the skills required to discharge their duties by providing professional development opportunities. During the period under review two of the directors visited the Company’s project in the Cabinda province in Angola. The Board, Board Committees or individual Directors may seek independent external professional advice as considered necessary at the expense of the Company, subject to prior consultation with the Chairman. A copy of any such advice received is made available to all members of the Board. 3. 3.1 Act ethically and responsibly Companies should establish a code of conduct for its Directors, senior executives and employees and disclose the code or a summary of the code. The Board is bound by the Company’s Corporate Code of Conduct that is included in the Company’s corporate governance plan which is available on the Company’s website www.minbos.com . The Board understands the obligations for ethical and responsible decision making. All Directors, senior executives and employees are expected to: comply with the law; act in the best interests of the Company; be responsible and accountable for their actions; observe the ethical principles of honesty and fairness, including prompt disclosure of potential conflicts; and respect the rights of employees and create a safe and non-discriminatory workplace. a) b) c) d) e) 4. Safeguard integrity in corporate reporting 4.1 The board should have an audit committee. The audit committee should be structured so that it:        has at least three members; consists only of Non-Executive Directors; consists of a majority of independent directors; is chaired by an independent chair, who is not chair of the board; has a formal charter and disclose the charter of the committee; disclose the relevant qualifications and experience of the members of the committee; and the number of times the committee met throughout the period and the individual attendances. If the Company does not have an audit committee disclose the fact and the process it employs that independently verify and safeguard the integrity of its corporate reporting, including the process for appointment and removal of the external auditor and rotation of the engagement partner. The Company is not of a size at the moment that requires having a separate audit committee and there are not a sufficient number of independent directors to form a separate committee. 36 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Corporate Governance Statement Matters typically dealt with the Audit Committee are currently dealt with by the Board of Directors. The Company does not comply with ASX Principle 4.1 as the majority of the Board is not independent and the Board performs the role of the committee. The Company intends to seek out and appoint additional independent directors to the Board when the size and scale of the Company justify and warrant their inclusion. In the interim the Company will maintain a mix of Directors from different backgrounds with complementary skills and experience. The Board has adopted a formal audit committee charter, as disclosed in the Corporate Governance Plan available on the Company’s website www.minbos.com 4.2 The Board should before it meets to approve the entity’s financial statements for a financial period receive from its Chief Executive Officer and the Chief Financial Officer a declaration that in their opinion the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. 4.3 5. 5.1 A written declaration has been provided by the Chief Executive Officer and Chief Financial Officer in accordance with section 295A of the Corporations Act to the Board in regards to the preparation of financial reports. The declaration confirms that the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. The company’s external auditor should attend the AGM and must be available to answer questions from security holder relevant to the audit. The Company’s auditor attends each AGM. The Chairman allows a reasonable opportunity for the security holders to ask the auditor questions about:     the conduct of the audit; the preparation and content of the auditor’s report; the accounting policies adopted by the Company in relation to the preparation of the financial statements; and the independence of the auditor in relation to the conduct of the audit. Security holders can also provide written questions before the AGM. A list of these questions will be distributed at the meeting and the Chairman will allow reasonable opportunity for the auditor to respond to the questions. Make timely and balanced disclosure Companies should have a written policy for complying with its continuous disclosure obligations under the Listing Rules and disclose the policy or a summary of it. The Company has a continuous disclosure policy that is included in the Company’s corporate governance plan which is available on the Company’s website www.minbos.com The Company is committed to ensuring that security holders and the market are provided with full and timely information. The Company has a continuous disclosure program in place designed to ensure the compliance with ASX Listing Rule disclosure and to ensure accountability at a senior executive level for compliance and factual presentation of the Company. The Company Secretary has been nominated as the person responsible for communicating with ASX on behalf of the Company. This role includes liaising with the directors and senior management to ensure all necessary compliance with disclosure requirements has been met. 37 | P a g e Corporate Governance Statement Minbos Resources Limited – Financial Report For the year ended 30 June 2015 6. 6.1 Respect the rights of security holders The Company should provide information about itself and its governance to investors via its website. The Company’s website (www.minbos.com) provides timely and equal access to security holders about the Company’s activities so that they can make informed decisions. Minbos’ website has a dedicated Investors & Media section which publishes all important Company information and relevant announcements made to the market as soon as practicable after their release The Company’s website has a Corporate Governance and Structure section that includes a Corporate Governance Plan, the Corporate Governance Statement and the Securities Trading Policy. The Company’s Corporate Governance Plan includes some of the Company’ key governance policies and charters. The Company’s website also include various videos to assist security holders and potential investors to understand the Company’s business. 6.2 Companies should design and implement an investor relations program to facilitate effective two way communication with investors. The Company is committed to ensure that investors are kept fully and regularly informed about major developments concerning the Company through efficient, effective and timely communication. The Board actively engages with security holders at general meetings and annual general meetings. All ASX announcements including annual, quarterly half yearly reports, and Notice of Meetings are placed on the Company’s website. The lead engagement partner of the Company’s auditor BDO attends the Annual General Meeting and answer questions from security holders about the conduct of the audit and the preparation and content of the auditor’s report. The Company has made available the relevant contact details (via the website) for security holders to make enquires and have also included contact details of the share registry in the Corporate Directory section. 6.3 Companies should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders. The Company is committed to provide security holders with the opportunity to participate in all general meetings and annual general meetings. At any general meeting or annual general meeting the Chairman allows a reasonable opportunity for security holders to ask questions or make comments on the management of the company and about the audit to the lead engagement partner of the company’s auditors Security holders are also encouraged to submit questions before meetings. These questions will be distributed before the meeting and the Board, management or the auditor will respond to these questions at the meeting. 6.4 Companies should give security holders the option to receive communications from, and send communications to the entity and its security register electronically. Security holders have the option to receive communication from the Company and the share register electronically. The Company provides the option on the website for all investors or interested to subscribe to e-mail alerts from the Company. The Company has provided the opportunity (via the website) for security holders to make electronic enquires to the company and to the security register. The electronic contact details for the security registry is included in the Corporate Directory section of the website. 38 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Corporate Governance Statement 7. Recognise and manage risk 7.1 Companies should have a committee or committees to oversee risk each of which:      has at least three members a majority of whom are independent directors; is chaired by an independent director; disclose the charter of the committee; disclose the members of the committee; and disclose the number of times the committee met throughout the period and the individual attendances If the Company does not have a risk committee or committees disclose the fact and the process it employs to oversee the entity’s risk management framework. The Company is not of a size at the moment that requires having a separate risk committee and there are not a sufficient number of independent directors to form a separate committee. Matters typically dealt with the Risk Committee are currently dealt with by the Board of Directors. The Company does not comply with ASX Principle 7.1 as the majority of the Board is not independent and the Board performs the role of the committee. The Company intends to seek out and appoint additional independent directors to the Board when the size and scale of the Company justify and warrant their inclusion. The Company maintains a mix of Directors from different backgrounds with complementary skills and experience. The Board has adopted a formal audit and risk committee charter as disclosed in the Corporate Governance Plan available on the Company’s website (www.minbos.com) The Company has a risk management framework in place that is reviewed on an annual basis by the Board or on a more regular basis if there is a significant change in the Company’s business. The Company also has adequate policies in relation to risk management, compliance and internal control systems. The Company has a risk register which is reviewed regularly and ensures that strategic, operational, legal, reputational and financial risks are identified, assessed effectively, efficiently managed and monitored to enable achievement of the Company’s business objectives. 7.2 The Board should review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and disclose in relation to each reporting period whether such a review has taken place. The Company has a risk management framework in place that is based on the principles of AS/NZS 31000:2009 and the ASX Corporate governance principles and recommendations. During the period under review Management and Board of the Company did a comprehensive review of the risk management framework and made amendments as required. 7.3 The Board should disclose if it has an internal audit function, how the function is structured and what role it performs or if it does not have an internal audit function the fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes. The Company is not of a size at the moment that requires a separate internal audit function. The Company has a risk management framework and audit and risk committee charter in place that is reviewed by the Board on an annual basis and amended as required. The Company also has adequate policies in relation to risk management, compliance and internal control systems. The Company’s has a risk register in place which is reviewed regularly and ensures that strategic, operational, legal, reputational and financial risks are identified, assessed effectively, efficiently managed and monitored to enable achievement of the Company’s business objectives. 39 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Corporate Governance Statement 7.4 A company should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does how it manages or intends to manage those risks The Company is an ASX listed exploration company focussed on rock phosphate. Due to the nature of its business the company is exposed to economic, environmental and social sustainability risks. The Company has a risk management framework in place and a risk register and polices to ensure compliance and sufficient internal control systems. The risk register is reviewed and assessed on a regular basis and embedded in the culture and practices of the company. Risk treatment plans are in place to identify how risk identified will be mitigated. 8. 8.1 Remunerate fairly and responsibly The Board should establish a remuneration committee which:      has at least three members a majority of whom are independent directors; is chaired by an independent director; disclose the charter of the committee; disclose the members of the committee; and disclose the number of times the committee met throughout the period and the individual attendances If the Company does not have a remuneration committee disclose the fact and the process it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive. The Board has not established a remuneration committee at this point in the Company’s development. It is considered that the size of the Board along and the number of independent directors renders this impractical. The full Board considers in detail all of the matters for which the directors are responsible. The remuneration philosophy, structure and approvals process is explained in detail in Section 13 of the audited Remuneration Report contained within the Directors’ Report. 8.2 The company should separately disclose its policies and practices regarding the remuneration of non –executive directors and the remuneration of executive directors and other senior executives: 8.3 The Board has adopted a formal charter of a remuneration committee, as disclosed in the Corporate Governance Plan available on the Company’s website. www.minbos.com The policies and practices regarding the remuneration of non –executive directors and the remuneration of executive directors and other senior executives is explained in Section 13 of the audited Remuneration Report contained within the Directors’ Report. Companies which has an equity based remuneration scheme should have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme and disclose that policy or a summary of it. In terms of the Company’s security trading policy all persons offered equity-based remuneration or incentives by the Company are prohibited from entering into transactions in associated products which limit economic risk of participating in unvested entitlements under equity-based remuneration schemes. 40 | P a g e Consolidated Statement of Profit or Loss & Other Comprehensive Income Minbos Resources Limited – Financial Report For the year ended 30 June 2015 The Consolidated Statement of Profit or Loss & Other Comprehensive Income is to be read in conjunction with the accompanying notes. 41 | P a g e Notes30-Jun-1530-Jun-14$$Revenue from continuing operations6 3,052 2,333 Administration expenses7(393,409)(687,228)Depreciation expense12(25,852)(29,096)Exploration expenditure Cabinda project(435,218) - Finance costs7(608,119)(1,046,442)Foreign exchange loss(4,365)(346)Impairment of exploration and evaluation expenditure14(66,259)(126,328)Loss from sale of plant and equipment(3,410)(19,031)Personnel expenses and director fees7(587,553)(526,255)Share-based payments24(b) - (114,576)Share of net loss from associate13(75,519)(133,302)Loss from continuing operations before income tax(2,196,652)(2,680,271)Income tax expense8(a) - - Loss from continuing operations after income tax(2,196,652)(2,680,271)Other comprehensive incomeItems that may be reclassified to profit or lossExchange differences on translation of foreign operations2,651,645(372,138)Other comprehensive income / (loss) for the year, net of tax2,651,645(372,138)Total comprehensive income / (loss) for the year454,993(3,052,409)Loss for the year is attributable to the owners of Minbos Resources Limited(2,196,652)(2,680,271)Total comprehensive income / (loss) for the year is attributable to the owners of Minbos Resources Limited454,993(3,052,409)Loss per share attributable to ordinary equity holders - Basic loss per share 9(0.002)(0.013)- Diluted loss per share 9(0.002)(0.013) Consolidated Statement of Financial Position Minbos Resources Limited – Financial Report As at 30 June 2015 The Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes. 42 | P a g e Notes30-Jun-1530-Jun-14$$ASSETSCurrent assetsCash and cash equivalents10192,87230,727Trade and other receivables1133,10213,653Total current assets225,97444,380Non-current assetsPlant and equipment1218,335 44,456 Investment in associate13 13,201,896 10,645,238 Exploration and evaluation expenditure1433,629 49,575 Other financial assets15 4,579,299 4,436,645 Total non-current assets17,833,159 15,175,914 Total assets18,059,13315,220,294LIABILITIESCurrent liabilitiesTrade and other payables 16312,403586,963Provisions17 21,884 28,602 Borrowings18 - 1,250,000 Share placement liability19 - 80,000 Total current liabilities334,2871,945,565Non-current liabilitiesDeferred tax liabilities8(b) 3,935,637 3,935,637 Total non-current liabilities 3,935,637 3,935,637 Total liabilities4,269,9245,881,202Net assets13,789,2099,339,092EQUITYIssued capital2029,733,20026,172,620Reserves21 6,089,536 3,003,347 Accumulated losses22(22,033,527)(19,836,875)Total equity13,789,2099,339,092 Consolidated Statement of Changes in Equity Minbos Resources Limited – Financial Report For the year ended 30 June 2015 The Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes. 43 | P a g e IssuedCapitalOption ReserveShare-based Payment ReserveEmployee Share Plan ReserveForeign Currency Translation ReserveAccumulated LossesTotal Equity$$$$$$$At 1 July 201426,172,620 - 1,820,531 340,000 842,816 (19,836,875)9,339,092 Comprehensive income:Loss for the year- - - - - (2,196,652)(2,196,652)Other comprehensive income- - - - 2,651,645 - 2,651,645 Total comprehensive income /(loss) for the year- - - - 2,651,645 (2,196,652)454,993 Transactions with owners in their capacity as owners:Issue of share capital3,704,670 - - - - - 3,704,670 Capital raising costs(144,090)- - - - - (144,090)Options issued on repayment of borrowings- 364,904 - - - - 364,904 Employee benefits expense- - 69,640 - - 69,640 At 30 June 201529,733,200 364,904 1,820,531 409,640 3,494,461 (22,033,527)13,789,209 Issued CapitalOption ReserveShare-based Payment ReserveEmployee SharePlanReserveForeign Currency Translation ReserveAccumulated LossesTotal Equity$$$$$$$At 1 July 201325,440,555- 1,269,657 197,889 1,214,954(17,156,604)10,966,451 Comprehensive income:Loss for the year- - - - - (2,680,271)(2,680,271)Other comprehensive loss- - - - (372,138)- (372,138)Total comprehensive loss for the year- - - - (372,138)(2,680,271)(3,052,409)Transactions with owners in their capacity as owners:Issue of share capital748,083- - - - - 748,083 Capital raising costs(16,018)- - - - - (16,018)Share-based payments - - 550,874 - - - 550,874 Employee benefits expense- - - 142,111 - - 142,111 At 30 June 201426,172,620 - 1,820,531 340,000 842,816 (19,836,875)9,339,092 Consolidated Statement of Cash Flows Minbos Resources Limited – Financial Report For the year ended 30 June 2015 The Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes. 44 | P a g e 30-Jun-1530-Jun-14$$Cash flows from operating activitiesPayment to suppliers and employees(1,117,298)(675,544)Interest received3,0522,333Interest paid(57,917)(61,631)Net cash outflow from operating activities10(c)(1,172,163)(734,842)Cash flows from investing activitiesProceeds from the sale of plant and equipment8,32441,841Payment for plant and equipment(4,053)- Payment for exploration and evaluation expenditure(389,946)(164,741)Net cash outflow from investing activities(385,675)(122,900)Cash flows from financing activitiesProceeds from unissued shares, net of costs19- 80,000Proceeds from the issue of shares, net of costs2,222,215(11,131)Loan to associate(152,232)(213,259)(Repayment) / proceeds from convertible note facility, net of costs(350,000)999,613 Net cash inflow from financing activities1,719,983855,223Net increase / (decrease) in cash and cash equivalents162,145(2,519)Cash and cash equivalents at the beginning of the year30,72753,685Effect of exchange rate fluctuations on cash held- (20,439)Cash and cash equivalents at the end of the year10(a)192,87230,727 Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements 1. REPORTING ENTITY Minbos Resources Limited (referred to as ‘Minbos’ or the ‘Company’ or ‘Parent Entity’) is a company domiciled in Australia. The address of the Company’s registered office and principal place of business is disclosed in the Corporate Directory of the annual report. The consolidated financial statements of the Company as at and for the year ended 30 June 2015 comprise the Company and its subsidiaries (together referred to as the ‘Consolidated Entity’ or the ‘Group’). The Group is primarily involved in phosphate exploration in Africa. 2. BASIS OF PREPARATION The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Minbos Resources Limited is a for-profit entity for the purpose of preparing the financial statements. The financial report was authorised for issue by the Directors on 24 September 2015. (a) Compliance with IFRS The consolidated financial statements of the Consolidated Entity also comply with International Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’). (b) New and amended standards adopted by the Group The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. Any significant impact on the accounting policies of the consolidated entity from the adoption of these Accounting Standards and Interpretations are disclosed below. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity. The following Accounting Standards and Interpretations are most relevant to the consolidated entity: AASB 2012-3 Amendments to Australian Accounting Standards - Offsetting Financial Assets and Financial Liabilities The consolidated entity has applied AASB 2012-3 from 1 July 2014. The amendments add application guidance to address inconsistencies in the application of the offsetting criteria in AASB 132 'Financial Instruments: Presentation', by clarifying the meaning of 'currently has a legally enforceable right of set-off'; and clarifies that some gross settlement systems may be considered to be equivalent to net settlement. AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial Assets The consolidated entity has applied AASB 2013-3 from 1 July 2014. The disclosure requirements of AASB 136 'Impairment of Assets' have been enhanced to require additional information about the fair value measurement when the recoverable amount of impaired assets is based on fair value less costs of disposals. Additionally, if measured using a present value technique, the discount rate is required to be disclosed. 45 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements AASB 2014-1 Amendments to Australian Accounting Standards (Parts A to C) The consolidated entity has applied Parts A to C of AASB 2014-1 from 1 July 2014. These amendments affect the following standards: AASB 2 'Share-based Payment': clarifies the definition of 'vesting condition' by separately defining a 'performance condition' and a 'service condition' and amends the definition of 'market condition'; AASB 3 'Business Combinations': clarifies that contingent consideration in a business combination is subsequently measured at fair value with changes in fair value recognised in profit or loss irrespective of whether the contingent consideration is within the scope of AASB 9; AASB 8 'Operating Segments': amended to require disclosures of judgements made in applying the aggregation criteria and clarifies that a reconciliation of the total reportable segment assets to the entity's assets is required only if segment assets are reported regularly to the chief operating decision maker; AASB 13 'Fair Value Measurement': clarifies that the portfolio exemption applies to the valuation of contracts within the scope of AASB 9 and AASB 139; AASB 116 'Property, Plant and Equipment' and AASB 138 'Intangible Assets': clarifies that on revaluation, restatement of accumulated depreciation will not necessarily be in the same proportion to the change in the gross carrying value of the asset; AASB 124 'Related Party Disclosures': extends the definition of 'related party' to include a management entity that provides KMP services to the entity or its parent and requires disclosure of the fees paid to the management entity; AASB 140 'Investment Property': clarifies that the acquisition of an investment property may constitute a business combination. None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2014 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future periods. (c) Early adoption of standards The Group has not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2014. (d) Going concern The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. During the year the Group incurred a net loss for the year of $2,196,652 and incurred net cash outflows from operating and investing activities of $1,557,838. At 30 June 2015 the Group had a net working capital deficiency of $108,313 (30 June 2014: $1,901,185) and had to extend the payment terms with its creditors to ensure the Company did not breach its obligations. The ability of the Consolidated Entity to continue as a going concern is dependent on the Consolidated Entity being able to renew its Cabinda exploration permit and raise additional funds as required to fund ongoing exploration commitments and for working capital. However should the Company be unsuccessful in undertaking additional raisings the Company may not be able to meet its financial obligations. No adjustments have been made relating to the recoverability of assets and classification of liabilities that might be necessary should the Group not continue as a going concern. 46 | P a g e Notes to the Consolidated Financial Statements (e) Critical accounting estimates and judgments Minbos Resources Limited – Financial Report For the year ended 30 June 2015 The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. These accounting policies have been consistently applied by each entity in the Group. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes: (i) Note 8: Income Tax Expense - The Group is subject to income taxes in Australia, South Africa, Angola and Democratic Republic of Congo. Significant judgement is required when determining the Group’s provision for income taxes. The Group estimates its tax liabilities based on the Group’s understanding of the tax law. No tax liabilities are recognised in 2015 (2014: nil) for the group. (ii) Note 13: Investment in Associate and Note 15: Other Financial Assets - In accordance with AASB 136, an impairment assessment on the Investment in and Loans to Associate was undertaken in acknowledgement of the impairment indicator existing at year end, being the net asset position of the Group exceeding its market capitalisation. An impairment loss would be recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. The directors believe that the recoverable amount of the Investment in and Loan to Associate is supported by the fair value of the Associate’s underlying asset, being the Cabinda project. The directors have used a fair value less costs to sell basis by direct reference to recent sales on comparable assets in the market (market approach). The directors believe that this approach is the most appropriate basis for determining recoverable value given the exploration stage of the project. The fair value of the Cabinda project assets is included in the Level 3 fair value hierarchy, with the main unobservable input being the total Phosphate resource. As a result of this assessment, the directors have determined that there is no impairment required as at 30 June 2015. As discussed in Note 13 and 15, the recoverable amount is dependent upon the renewal of the Cabinda exploration licence which are successfully progressing. (iii) Note 14: Exploration and evaluation expenditure - The Group’s accounting policy for exploration and evaluation is set out in note 3(k). If, after having capitalised expenditure under this policy, the Directors conclude that the Group is unlikely to recover the expenditure by future exploration or sale, then the relevant capitalised amount will be written off to the Statement of Profit and Loss and Other Comprehensive Income. At 30 June 2015, Allamanda continued to hold the Kanzi Joint Venture licences, accordingly the Group has impaired the exploration expenditure incurred during the financial year. Subsequent to year end on 11 September 2015 Minbos announced that it had entered into an agreement to dispose of the Kanzi Project. (iv) Note 24: Share-based payments - The Group measures the cost of equity settled share based payments at fair value at the grant date using the Black-Scholes option pricing model, the Binomial option pricing model and/or the Monte Carlo option pricing model, taking into account the exercise price, the term of the option, the impact of dilution, the share price at grant date, the expected volatility of the underlying share, the expected dividend yield and risk free interest rate for the term of the option. 47 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements SIGNIFICANT ACCOUNTING POLICIES 3. (a) Principles of consolidation (i) Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Minbos Resources Limited (‘Company’ or ‘Parent Entity’) as at 30 June 2015 and the results of all subsidiaries for the year then ended. Minbos Resources Limited and its subsidiaries together are referred to in this financial report as the Group or the Consolidated Entity. Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Statement of Profit or Loss & Other Comprehensive Income and Consolidated Statement of Financial Position respectively. (ii) Associates Associates are entities over which the consolidated entity has significant influence but not control or joint control. Investments in associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive income. Investments in associates are carried in the statement of financial position at cost plus post-acquisition changes in the consolidated entity's share of net assets of the associates. Dividends received or receivable from associates reduce the carrying amount of the investment. When the consolidated entity’s share of losses in an associate equals or exceeds its interest in the associate, including any unsecured long-term receivables, the consolidated entity does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. (iii) Changes in ownership interests The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interest in the subsidiary. Any differences between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of Minbos Resources Limited. When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. 48 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate. (b) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers. The chief operating decision makers, who are responsible for allocating resources and assessing performance of the operating segments, have been identified as the Board of Directors and the Chief Executive Officer. (c) Foreign currency translation (i) Functional and presentation currency These consolidated financial statements are presented in Australian dollars. The functional and presentation currency of the Company is Australian dollars. The functional currency of the subsidiaries are United States dollars (USD) and South African Rand (ZAR). (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investments in a foreign operation. Foreign exchange gains and losses that relate to borrowings are presented in the Consolidated Statement of Profit or Loss and Other Comprehensive Income, within finance costs. All other foreign exchange gains and losses are presented in the Consolidated Statement of Profit or Loss and Other Comprehensive Income on a net basis within other income or other expenses. (iii) Group companies The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:  Assets and liabilities for each Statement of Financial Position presented are translated at the closing  rate at the date of that Statement of Financial Position, Income and expenses for each Statement of Profit or Loss and Other Comprehensive Income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and  All resulting exchange differences are recognised in other comprehensive income. On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale. 49 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (d) Revenue recognition The Group recognises revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity. (i) Interest income Interest income is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income as it accrues, using the effective interest method. (e) Income tax The income tax expense for the financial year is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred tax assets and liabilities are recognised for all temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and their respective tax losses, at the tax rates expected to apply when the assets are recovered or liabilities settled based on those tax rates which are enacted or substantively enacted for each jurisdiction. Exceptions are made for certain temporary differences arising on initial recognition of an asset or a liability if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit. Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available to utilise those temporary difference and losses. Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax base of investments in subsidiaries, associated and interests in joint ventures where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Current and deferred tax balances relating to amounts recognised directly in other comprehensive income are also recognised directly in other comprehensive income. (f) Impairment of assets Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non- financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. 50 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (g) Cash and cash equivalents Cash and cash equivalents comprise cash balances, short term bills and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the Consolidated Statement of Cash Flows. (h) Trade and other receivables Trade and other receivables are recorded at amounts due less any allowance for doubtful debts. Trade and other receivables are generally due for settlement within 30 days. (i) Financial instruments (i) Non-derivative financial instruments Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition non-derivative financial instruments are measured as described below. A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled. Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the Consolidated Statement of Cash Flows. (ii) Subsequent measurement Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. Details on how the fair value of financial instruments is determined are disclosed in Note 4: Financial Risk Management. (iii) Impairment The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the assets (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost it considered an indicator that the assets are impaired. (iv) Assets carried at amortised cost For loans and receivables, the amount of loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. If a loan or held-to maturity investment has a variable interest rate, the discount rate or measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair value using an observable market price. 51 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. (j) Plant and equipment (i) Owned assets Items of plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self- constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a work condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components). (ii) Subsequent costs The Group recognises in the carrying amount of an item of plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income as an expense as incurred. (iii) Depreciation Depreciation is charged to the Consolidated Statement of Profit or Loss and Other Comprehensive Income using a straight line method over the estimated useful lives of each part of an item of plant and equipment. The estimated useful lives in the current and comparative periods are as follows:  Computer equipment: 3 years  Vehicles: 5 years  Office equipment: 6 to 10 years The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually. (k) Exploration and evaluation expenditure Exploration and evaluation expenditure, which are intangible costs, including the costs of acquiring licences, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the Consolidated Entity has obtained the legal rights to explore an area are recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either: (i) the expenditures are expected to be recouped through successful development and exploitation of the area of interest; or (ii) activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable assessment of the existence or other wise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing. 52 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from intangible assets to mineral property and development assets within plant and equipment. (l) Other financial assets The Group classifies its other financial assets in the following categories: loans and receivables. The classification depends on the purpose for which the other financial assets were acquired. Management determines the classification of its other financial assets at initial recognition and re-evaluates this designation at each reporting date. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non-current assets. Investments in subsidiaries are carried at cost, net of any impairment losses in the Parent entity’s financial statements. (m) Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. (n) Interest-bearing loans and borrowings All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised costs using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised. Convertible note liability and derivative Convertible note issued by the Company comprise a convertible note that can be converted to ordinary shares at the option of the holder and a convertible note derivative whose fair value changes with the Company’s underlying share price. The liability component of a convertible note is recognised initially at fair value of a similar liability that does not have an equity conversion option. The embedded derivative component is firstly recognised at fair value and the liability component is calculated as the difference between the financial instruments as a whole and the value of the derivative at inception. Any directly attributable transaction costs are allocated to the convertible note liability and convertible note derivative in proportion to their initial carrying amounts. The fair value of the derivative portion has been valued using a valuation technique including inputs that include reference to similar instruments and options pricing models. Subsequent to initial recognition, the liability component of the convertible note is measured at amortised cost using the effective interest method. The convertible note derivative is measured at fair value through profit or loss. 53 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements The convertible note liability and derivatives are removed from the Consolidate Statement of Financial Position when the obligations specified in the contract are discharged. This can occur upon the option holder exercising their option or the option period lapses requiring the Company to discharge the obligation. Both the convertible note liability and derivative are classified as current liability as the option holder has the right to convert at any time. Certain convertible notes issued by the Group which includes embedded derivatives (holder’s option to convert to variable number of shares) are recognised as financial liabilities at fair value through profit or loss. On initial recognition, the fair value of the convertible note will equate to the proceeds received and subsequently the liability is measured at fair value at each reporting period until settlement the fair value movements are recorded in the profit and loss at cost. (o) Borrowings Costs Borrowing costs are recognised as an expense when incurred. (p) Provisions A provision is recognised in the Consolidated Statement of Financial Position when the Consolidated Entity has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability. (i) Site restoration In accordance with the Consolidated Entity’s environmental policy and applicable legal requirements, a provision for site restoration in respect of contaminated land is recognised when the land is contaminated. The provision is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date, based on current legal requirements and technology. Future restoration costs are reviewed annually and any changes are reflected in the present value of the restoration provision at the end of the reporting period. The amount of the provision for future restoration costs is capitalised and is depreciated over the useful life of the mineral reserve. The unwinding of the effect of discounting on the provision is recognised as a finance cost. (q) Employee benefits (i) Share-based payments The share option programme allows the Consolidated Entity employees to acquire shares of the Company. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using a Black-Scholes option-pricing model, taking into account the terms and conditions upon which the options were granted including market conditions attached to the grant. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is only due to share prices not achieving the threshold for vesting. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. 54 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (ii) Wages, salaries and annual leave Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12 months of the reporting date represent present obligations resulting from employees’ services provided to reporting date, are calculated at undiscounted amounts based on remuneration wage and salary rates that the Consolidated Entity expects to pay as at reporting date including related on-costs, such as workers compensation insurance and payroll tax. (r) Contributed equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. If the entity reacquires its own equity instruments, for example as a result of a share buy-back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in equity. (s) Dividends Dividends are recognised as a liability in the year in which they are paid and appropriately authorised. (t) Earnings per share (i) Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by weighted average number of ordinary shares outstanding during the financial year, adjusted for the bonus elements in ordinary shares issued during the year. (ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. (u) Goods and Services Tax (‘GST’) Revenue, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included as a current asset or liability in the Consolidated Statement of Financial Position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the taxation authority, are presented as operating cash flows. 55 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (v) New Accounting Standards and Interpretations not yet mandatory or early adopted At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yet effective. The Group does not anticipate that there will be a material effect on the financial statements from the adoption of these standards. Standard/Interpretation Effective for annual reporting periods beginning on or after Expected to be initially applied in the financial year ending AASB 9 ‘Financial Instruments’, and the relevant amending standards 1 January 2018 30 June 2018 AASB 15 ‘Revenue from Contracts with Customers’ 1 January 2018 30 June 2018 FINANCIAL RISK MANAGEMENT 4. The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of the financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rate and foreign exchange prices. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future cash flow forecasts. Risk management is carried out by Management and overseen by the Board of Directors with assistance from suitably qualified external advisors. The main risks arising for the Group are foreign exchange risk, interest rate risk, credit risk and liquidity risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. The carrying values of the Group’s financial instruments are as follows: 56 | P a g e 30-Jun-1530-Jun-14$$Financial assetsCash and cash equivalents192,872 30,727 Trade and other receivables33,102 13,653 Other financial assets4,579,299 4,436,645 4,805,273 4,481,025 Financial liabilitiesTrade and other payables312,403 586,963 Borrowings- 1,250,000 312,403 1,836,963 Net exposure4,492,870 2,644,062 Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (a) Market Risk (i) Foreign exchange risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. Interest rate risk (ii) The Group is exposed to interest rate risk due to variable interest being earned on its interest-bearing bank accounts. At the end of the reporting period, the Group had the following interest-bearing financial instruments: Sensitivity Within this analysis, consideration is given to potential renewals of existing positions and the mix of fixed and variable interest rates. The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date. The 1% increase and 1% decrease in rates is based on reasonably expected possible changes over a financial year, using the observed range of historical rates for the preceding five year period. At 30 June 2015, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post-tax losses and equity would have been affected as follows: The other financial instruments of the Group that are not included in the above tables are non-interest bearing and are therefore not subject to interest rate risk. (b) Credit risk Credit risk is the risk of financial loss to the Group if a counter party to a financial instrument fails to meet its contractual obligations. During the year credit risk has principally arisen from the financial assets of the Group, which comprise cash and cash equivalents and trade and other receivables. The Group’s exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to the carrying amount of these instruments. The carrying amount of financial assets included in the Consolidated Statement of Financial Position represents the Group’s maximum exposure to credit risk in relation to those assets. The Group does not hold any credit derivatives to offset its credit exposure. The Group trades only with recognised, credit worthy third parties and as such collateral is not requested nor is it the Group’s policy to securitise its trade and other receivables. Receivable balances are monitored on an ongoing basis with the result that the Group does not have a significant exposure to bad debts. 57 | P a g e BalanceBalance$$Cash and cash equivalents1.42%192,872 0.22%30,727 30-Jun-1530-Jun-14Weighted average interest rateWeighted average interest rate30-Jun-1530-Jun-1430-Jun-1530-Jun-14$$$$+ 1.0% (100 basis points)1,350 215 - - - 1.0% (100 basis points)(1,350) (215) - - Judgements of reasonably possible movements:Post tax profitOther comprehensive higher/(lower)higher/(lower) Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements The Group has no significant concentrations of credit risk within the Group except for the following:  Financial asset (unsecured interest-free loan) with Mongo Tando Limited of $4,579,299 at 30 June 2015, and  Cash held with National Australia Bank. (i) Cash The Group’s primary banker is National Australia Bank and Standard Bank of South Africa. The Board considers the use of these financial institutions, which has a rating of AA- and BBB- from Standards and Poor’s, respectively, to be sufficient in the management of credit risk with regards to these funds. Cash at bank and short-term bank deposits: (ii) Trade Debtors While the Group has policies in place to ensure that transactions with third parties have an appropriate credit history, the management of current and potential credit risk exposures is limited as far as is considered commercially appropriate. Up to the date of this report, the Board has placed no requirement for collateral on existing debtors. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. (c) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. The Directors and Management monitor the cash outflow of the Group on an on-going basis against budget and the maturity profiles of financial assets and liabilities to manage its liquidity risk. The financial liabilities the Group had at reporting date were trade payables incurred in the normal course of the business. Trade payables were non-interest bearing and were deducted within the normal 30-60 day terms of creditor payments. The table below reflects the respective undiscounted cash flows for financial liabilities existing at 30 June 2015. (i) $1,250,000 relates to debt and $41,493 relates to interest. 58 | P a g e 30-Jun-1530-Jun-14$$Standard & Poors ratingAA-185,983 20,998 BBB-6,889 9,729 192,872 30,727 $$$$$30-Jun-15Trade and other payables312,403 - - 312,403 312,403 312,403 - - 312,403 312,403 30-Jun-14Trade and other payables586,963 - - 586,963 586,963 Borrowings (i)1,291,493 - - 1,291,493 1,291,493 1,878,456 - - 1,878,456 1,878,456 Contractual maturitiesof financial liabilities<6 months>6-12 months>12 monthsCarrying amountTotal contractual cash flows Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (d) Fair value hierarchy AASB 13 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: (i) Level 1 - the instrument has quoted prices (unadjusted) in active markets for identical assets and liabilities; (ii) Level 2 - a valuation technique using inputs other than quoted prices within Level 1 that are observable for the financial instrument, either directly (i.e. as prices), or indirectly (i.e. derived from prices); or (iii) Level 3 - a valuation technique using inputs that are not based on observable market data (unobservable inputs). At 30 June 2015 the Group did not have financial liabilities measured and recognised at fair value. Due to their short term nature, the carrying amount of the current receivables and payables is assumed to approximate their fair value. The Groups financial liabilities at 30 June 2014 have been presented in the following table: Valuation techniques used to derive level 2 and level 3 fair values The fair value of financial instruments traded in active markets is based upon quoted market prices at the end of the reporting period. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Group makes a number of assumptions based upon observable market data existing at each reporting period. For current borrowings, the fair value approximates the carrying value amount, as the impact of discounting is not significant. The convertible notes carried at fair value through profit and loss is calculated based on the number of shares to be issued at conversion price of $0.003 per share and the share price of the group at balance sheet date. They are classified under Level 2 of the fair value hierarchy as the significant inputs to the valuation is based on observable share price of the Company. Options issued on conversion of the notes are valued using the black- scholes model which takes into account the share price, conversion price and volatility of the Company’s share price at the date of issue. The Group does not have any level 3 assets or liabilities. SEGMENT INFORMATION 5. The Group operates only in one reportable segment being predominately in the area of phosphate mineral exploration in the DRC and Angola, within Africa. The Board considers its business operations in phosphate mineral exploration to be its primary reporting function. Results are analysed as a whole by the chief operating decision maker, this being the Chief Executive Officer and the Board of Directors. Consequently revenue, profit, net assets and total assets for the operating segment are reflected in this financial report. 59 | P a g e Level 1Level 2Level 3TotalYear ended 30 June 2014$$$$Financial liabilitiesBorrowings (refer note 18(c))- (550,000) - (550,000) - (550,000) - (550,000) Notes to the Consolidated Financial Statements 6. REVENUE FROM CONTINUING OPERATIONS Minbos Resources Limited – Financial Report For the year ended 30 June 2015 7. EXPENSES (i) The fair value movement on the convertible notes have been valued internally by the Company by adopting a Black-Scholes option pricing model. The model inputs are shown in Note 18. 60 | P a g e 30-Jun-1530-Jun-14$$Other revenueInterest revenue3,052 2,333 3,052 2,333 30-Jun-1530-Jun-14$$Administration expensesAdvertising and marketing expenses27,310 39,085 Compliance and regulatory expenses124,363 88,944 Computer expenses17,222 13,197 Consulting and corporate expenses143,983 406,372 Provision for doubtful debts(4,500) 22,575 Rent expense56,299 35,241 Travel and accommodation expenses604 45,806 Other administration expenses28,128 36,008 393,409 687,228 Finance costsFair value movement on convertible notes at fair value through profit or loss (i)581,571 669,631 Establishment fees on convertible notes- 78,500 Interest expense on convertible notes22,300 205,202 Other4,248 93,109 608,119 1,046,442 Personnel expenses and director feesWages and salaries, including superannuation376,983 104,394 Director fees and other benefits108,000 279,750 Employee share plan expense69,640 142,111 Other employee expenses32,930 - 587,553 526,255 Notes to the Consolidated Financial Statements 8. INCOME TAX EXPENSE Minbos Resources Limited – Financial Report For the year ended 30 June 2015 61 | P a g e (a) Numerical reconciliation of accounting losses to income tax expense30-Jun-1530-Jun-14$$Accounting loss before income tax(2,196,652) (2,680,271) At the entity's Australian statutory income tax rate of 30% (2014: 30%)(707,825) (711,502) At the entity's Angolan statutory income tax rate of 40% (2014: 40%)- - At the entity's DRC statutory income tax rate of 30% (2014: 30%)(11,050) (25,953) At the entity's South African statutory income tax rate of 28% (2014: 28%)(24,581) (30,101) Adjusted for tax effect of the following amounts:Non-deductible / taxable items348,266 468,389 Non-taxable / deductible items(69,701) (67,518) Prior year adjustment- (96,000) Income tax benefits not brought to account 464,891 462,685 Income tax expense / (benefit)- - A reconciliation between income tax expense and the accounting loss before income tax multiplied by the entity's applicable income tax rate is as follows:(b) Recognised deferred tax assets and liabilities30-Jun-1530-Jun-14$$Deferred tax liabilitiesInvestment in associateOpening balance3,935,637 3,935,637 Charges / (credited) to income- - Closing balance3,935,637 3,935,637 Total deferred tax liability recognised3,935,637 3,935,637 (c) Deferred tax assets and liabilities not brought to account30-Jun-1530-Jun-14$$On income tax account:Carried forward tax losses2,101,700 1,608,262 Deductible temporary differences45,992 74,538 Unrecognised deferred tax assets2,147,692 1,682,800 The directors estimate that the potential deferred tax assets and liabilities carried forward but not brought to account at year end at the Australian corporate tax rate of 30% are made up as follows: Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements The Group has Australian carried forward tax losses of $7,005,667 (tax effected at 30%, $2,101,700) as at 30 June 2015 (2014: $5,360,872 (tax effected at 30%, $1,608,262)). In view of the Group's trading position, the Directors have not included this tax benefit in the Group's Consolidated Statement of Financial Position. A tax benefit will only be recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. The tax benefits of the above deferred tax assets will only be obtained if: (a) The Consolidated Entity derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised; (b) The Consolidated Entity continues to comply with the conditions for deductibility imposed by law; and (c) No changes in income tax legislation adversely affect the Consolidated Entity from utilising the benefits. EARNINGS PER SHARE 9. (a) Basic loss per share The calculation of basic loss per share at 30 June 2015 was based on the loss attributable to ordinary shareholders of $2,196,652 (2014: $2,680,271) and a weighted average number of ordinary shares outstanding during the financial year ended 30 June 2015 of 1,061,926,322 (2014: 210,958,463) calculated as follows: (b) Diluted loss per share Potential ordinary shares are not considered dilutive, thus diluted loss per share is the same as basic loss per share. 62 | P a g e 30-Jun-1530-Jun-14Net loss attributable to the ordinary equity holders of the Group ($)(2,196,652)(2,680,271)Weighted average number of ordinary shares for basis per share (No) 1,061,926,322 210,958,463 Continuing operations- Basic loss per share ($)(0.002)(0.013) Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements 10. CASH AND CASH EQUIVALENTS (a) Reconciliation to cash at the end of the year (b) Interest rate risk exposure The Group’s exposure to interest rate risk is discussed in Note 4: Financial Risk Management. (c) Reconciliation of net cash flows from operating activities (d) Non-cash financing and investing activities 63 | P a g e 30-Jun-1530-Jun-14$$Cash at bank and in hand191,680 29,727 Short-term deposit1,192 1,000 192,872 30,727 30-Jun-1530-Jun-14$$Loss for the financial year(2,196,652) (2,680,271) Adjustments for:Exploration expenditure Cabinda project435,218 - Depreciation expense25,852 29,096 Employee benefits expense69,640 142,111 Finance costs608,119 984,811 Foreign currency translation4,365 346 Impairment of exploration and evaluation expenditure66,259 126,328 Loss from sale of plant and equipment3,410 19,031 Share-based payments- 114,576 Share of net loss from associate75,519 133,302 Change in assets and liabilities (Increase) / decrease in trade and other receivables(19,449) 58,259 (Decrease) / increase in trade and other payables(237,726) 325,848 (Decrease) / increase in provisions(6,718) 11,721 Net cash used in operating activities(1,172,163) (734,842) 30-Jun-1530-Jun-14$$Consideration for tenement acquisition (refer note 20)- 28,000 Conversion of convertible notes (refer note 20)910,110 1,019,631 Conversion of Director fees83,325 - Conversion of corporate advisory fees48,263 - Consideration shares pursuant to settlement deed (refer note 20)- 33,000 Consideration for interest- 103,750 Notes to the Consolidated Financial Statements 11. TRADE AND OTHER RECEIVABLES Minbos Resources Limited – Financial Report For the year ended 30 June 2015 (a) Other receivables On 5 December 2012 Minbos signed a binding loan agreement with Robert McCrae (former Chief Executive Officer) to repay his outstanding loan by 31 May 2013 and provide Minbos with security over 1,500,000 of the Company’s shares for the outstanding loan. At 30 June 2015 the loan had not been repaid, the Company therefore made a provision against the unrecoverable portion of the loan. The outstanding balance at 30 June 2015 was $7,500 (2014: $3,000) being the value of the 1,500,000 Minbos shares held as security at 30 June 2015. In the previous financial year the Company impaired $22,500 of Other Receivables as they were not considered recoverable. No other current receivables are impaired or past due but not impaired. (b) Risk exposure Information about the Group's exposure to credit risk, foreign exchange and interest rate risk is provided in Note 4: Financial Risk Management. 12. PLANT & EQUIPMENT 64 | P a g e 30-Jun-1530-Jun-14$$Other receivables (a)7,500 3,000 Taxes receivable16,440 10,192 Prepayments9,093 - Deposits69 461 33,102 13,653 $$$$$Year ended 30 June 2015Opening net book amount23,835 900 852 18,869 44,456 Additions- 4,053 - - 4,053 Disposals(10,297) (385) (522) - (11,204) Foreign exchange translation3,504 56 42 3,280 6,882 Depreciation charge(12,374) (1,416) (318) (11,744) (25,852) Closing net book amount4,668 3,208 54 10,405 18,335 At 30 June 2015Cost44,157 4,785 808 36,418 86,168 Accumulated depreciation(39,489) (1,577) (754) (26,013) (67,833) Net book amount4,668 3,208 54 10,405 18,335 Motor VehicleComputer EquipmentFurniture & FittingsTotalOther Fixed Assets Notes to the Consolidated Financial Statements Minbos Resources Limited – Financial Report For the year ended 30 June 2015 INVESTMENT IN ASSOCIATE 13. As part of the acquisition of Tunan Mining Limited in the 2011 financial year, Minbos acquired a 50% interest in Mongo Tando Limited, a company incorporated in the British Virgin Isles. By virtue of holding less than 50% of the voting rights the entity has been accounted for as an investment in an associate. (a) Movements in carrying amounts During the year under review Minbos made substantial progress on the issue of new licences for the Cabinda project. The new licences are expected to be issued in the near future. In December 2014 Minbos and its 50% Joint Venture Partner Petril (JV partners) signed 2 Mining Investment Agreements (MIA) with the Ministry of Geology (MGM) one for the Cacata deposit and second for the remainder of the Cabinda project deposits (Chivovo, Ueca, Mongo Tando, Chibuete and Cabota). The Mining Code of Angola determines that a concession of Mining Rights are undertaken through a MIA. The MIA’s were homologated by the Minister of Geology and Mines on 18 December 2014. The mining licences will be issued for a period of five years and is renewable for a further 2 years. The Mining Code of Angola determines that a concession of Mining Rights are undertaken through a MIA. The MIA’s were homologated by the Minister of Geology and Mines on 18 December 2014. The last Condition Precedent on the MIA’S were satisfied when the concession order were Published in the Official Angolan Gazette on 13 February 2015. The publication in the Official Gazette states that phosphate rock mineral rights is granted on behalf of Mongo Tando Ltda which holds the rights on behalf of the JV partners. 65 | P a g e $$$$$Year ended 30 June 2014Opening net book amount107,733 1,789 1,156 25,548 136,226 Additions- - - - - Disposals(60,872) - - - (60,872) Foreign exchange translation(991) (134) (100) (577) (1,802) Depreciation charge(22,035) (755) (204) (6,102) (29,096) Closing net book amount23,835 900 852 18,869 44,456 At 30 June 2014Cost73,229 2,158 1,434 29,738 106,559 Accumulated depreciation(49,394) (1,258) (582) (10,869) (62,103) Net book amount23,835 900 852 18,869 44,456 Motor VehicleComputer EquipmentFurniture & FittingsTotalOther Fixed Assets30-Jun-1530-Jun-14$$Carrying amount of the investment in associate13,201,896 10,645,238 Movement reconciliationBalance at the beginning of the financial year10,645,238 11,128,980 Exchange differences2,632,177(350,440)Share of net loss in associate(75,519)(133,302)Balance at the end of the financial year13,201,896 10,645,238 Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements In April 2015 Minbos and its joint venture partner also completed all payments that is required for the issue of the new licences. In addition a Presidential decree was issued with respect to the licences on 8 June 2015. The Presidential decree confirmed that the Cabinda project has been approved and instructs the MGM and other Departments to work together with the JV partners to provide the necessary infrastructure and support for the Cabinda project. In the unlikely case that new licences are not issued for the Cabinda project there is a material uncertainty in relation to the recoverability of the Investment in and Loans to Associate. (b) Statement of Financial Position of the associate 66 | P a g e 30-Jun-1530-Jun-14ASSETS$$Current assetsCash and cash equivalents 298,695 215,632 Total current assets 298,695 215,632 Non-current assets 9,118,488 7,270,504 Total non-current assets 9,118,488 7,270,504 Total assets 9,417,183 7,486,136 LIABILITIESCurrent liabilitiesTrade and other payables 492,068 342,298 Borrowings 12,063,506 9,585,341 Total current liabilities 12,555,574 9,927,639 Total liabilities 12,555,574 9,927,639 Net liabilities(3,138,391) (2,441,503) EQUITYIssued capital130 106 Accumulated losses(3,138,521) (2,441,609) Total equity(3,138,391) (2,441,503) Minbos share of total equity (50%)(1,569,196) (1,220,752) Add fair value uplift on acquisition date14,771,092 11,865,990 Carrying amount of the investment in associate13,201,896 10,645,238 Exploration and evaluation expenditure Notes to the Consolidated Financial Statements (c) Statement of Profit or Loss & Other Comprehensive Income Minbos Resources Limited – Financial Report For the year ended 30 June 2015 (d) Summarised financial information of associates The Group’s share of the results of its principal associate and its aggregated assets and liabilities are as follows: (e) Contingent liabilities of the associate There are no contingent liabilities of the associate for which the Company is severally liable. 14. EXPLORATION AND EVALUATION EXPENDITURE (i) In the previous year, the Company acquired two tenements in the Carnarvon Shire for cash consideration of $5,000 and share consideration of 2 million shares with a deemed value of $28,000. (ii) At 30 June 2015, Allamanda continued to hold the Kanzi Joint Venture licences, accordingly the Group has impaired the exploration expenditure incurred during the year. Subsequent to year end on 11 September 2015 Minbos announced that it had entered into an agreement to dispose of the Kanzi project. 67 | P a g e 30-Jun-1530-Jun-14$$Revenue from continuing operations- - Administration expenses(146,314) (266,231) Finance costs(4,724) (372) Loss from continuing operations before income tax(151,038) (266,603) Income tax expense- - Loss from continuing operations after income tax(151,038) (266,603) AssetsLiabilitiesRevenueProfit/(Loss)%$$$$Mongo Tando Limited30-Jun-1550%4,708,591(6,277,787)-(75,519)Mongo Tando Limited30-Jun-1450%3,743,068(4,963,819)-(133,302)Ownershipinterest30-Jun-1530-Jun-14$$Carrying amount of exploration and evaluation expenditure33,629 49,575 Movement reconciliationBalance at the beginning of the financial year49,575 - Acquisition (i)- 33,628 Additions50,313 142,275 Impairment of exploration and evaluation expenditure (ii)(66,259)(126,328)Balance at the end of the financial year33,629 49,575 Notes to the Consolidated Financial Statements 15. OTHER FINANCIAL ASSETS Minbos Resources Limited – Financial Report For the year ended 30 June 2015 The loans to Mongo Tando Limited (the ‘Associate’) are unsecured interest-free loans for the purpose of obtaining the required working capital for the establishment and ongoing operation of the Project in Angola. LR Group, the ultimate 50% holder in the Associate, along with Minbos’ ultimate 50% holding in the Associate, each contribute in equal portions loans receivable. As referred to in Note 13, in the unlikely case that new licences are not issued for the Cabinda project there is a material uncertainty in relation to the recoverability of the Investment in and Loans to Associate. 16. TRADE AND OTHER PAYABLES Trade and other payables are non-interest bearing liabilities stated at cost and settled within 30 days. Information about the Group's exposure to foreign currency risk is provided in Note 4: Financial Risk Management. (i) Of this outstanding balance, $46,200 relates to Director Fees (2014: $106,425 relates to Director Fees). (ii) Of this outstanding balance, $19,510 relates to the Angolan Services Agreement with Sofosa a Company which Mr Catulichi (Non-Executive Director) is a shareholder and Director. For the previous financial year, $103,000 relates to the former Managing Director’s salary, $3,000 relates to Non-Executive Director Fees and $8,096 relates to interest on Convertible Notes owed to Key Management Personnel. For trade and other payables the fair value is approximate to their carrying value amount, due to their short term nature. 17. PROVISIONS 68 | P a g e 30-Jun-1530-Jun-14$$Loan to Mongo Tando Limited4,579,299 4,436,645 4,579,299 4,436,645 30-Jun-1530-Jun-14$$Trade creditors (i)208,397 389,679 Accruals (ii)91,149 197,284 Superannuation payable12,857 - 312,403 586,963 30-Jun-1530-Jun-14$$Provision for annual leave21,884 28,602 21,884 28,602 Notes to the Consolidated Financial Statements 18. BORROWINGS Minbos Resources Limited – Financial Report For the year ended 30 June 2015 This note provides information about the contractual items of the Group’s interest-bearing borrowings. For more information about the Group’s exposure to interest rate and foreign currency risk, see note 4. (a) Convertible notes - Lind Facility On 7 March 2013, the Company entered into a funding agreement with Lind Partners, LLC, the manager of the Australian Special Opportunity Fund, LP (together ‘Lind’). The key terms of the agreement can be found in the Company’s 2014 Financial Report. On 18 March 2014, the Principal Agreement was assigned to a group of sophisticated investors who agreed to accept repayment of the $200,000 convertible security, subject to future capital raising of at least $1.5 million. The sophisticated investors received consideration of $20,000 in lieu of interest and 10 million unlisted options exercisable at 1 cent, expiring 30 December 2016. On 6 October 2014, the Company issued 33,333,333 shares at $0.003 per share on conversion of $100,000 of the $200,000 convertible security. The remaining $100,000 of the convertible security was repaid in cash in October 2014. The company also issued 10,000,000 unlisted options exercisable at 1 cent, expiring 30 December 2016, pursuant to the Deed of Assignment and Assumption for Convertible Security dated 18 March 2014. The Company has internally measured the fair value of the options granted by adopting a Black-Scholes option pricing model at $18,520. The model inputs are shown in table 1 (below). (b) Convertible note - Management On 2 April 2013 Minbos signed convertible note deeds with David Reeves (former Non-Executive Director) and James Carter (former Chief Financial Officer and joint Company Secretary) who provided the Company with funding of $250,000 each. The key terms of the agreement can be found in the Company’s 2014 Financial Report. During the current financial year, James Carter’s initial investment of $250,000 and interest of $9,452 was repaid by the Company in cash. On 9 October 2014, David Reeves initial investment of $250,000 and interest of $10,110 was converted into 86,703,200 ordinary shares at $0.003 per share. (c) Convertible note - Sophisticated investors On 4 July 2013 the Company signed a capital raising/corporate mandate with CPS and a convertible note trust deed dated 27 August 2013 (together the Convertible Note Facility). On 10 December 2013 the Company amended its capital raising/corporate mandate with CPS, whereby the issue of the convertible notes will raise a total of up to $800,000 (before costs) in three tranches. 69 | P a g e 30-Jun-1530-Jun-14$$Convertible note - Lind facility (held at amortised cost) (a)- 200,000 Convertible note - Management (held at amortised cost) (b)- 500,000 Convertible note - Sophisticated investors (held at fair value) (c)- 550,000 - 1,250,000 Notes to the Consolidated Financial Statements Tranche 1: Tranche 1 was repaid in the 2014 financial year, refer 30 June 2014 annual report for further detail. Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Tranche 2: In 2014 financial year the Company received $250,000 from CPS, being Tranche 2 of the funds advanced. On 25 August 2014 the Company converted $75,000 of the Tranche 2 funds into 25,000,000 shares at $0.003 per share and 25,000,000 free attaching options which have an exercise price of 1 cent and expiry of 30 December 2016. The 25,000,000 free attaching options, plus the 75,000,000 free attaching options from tranche 3 (below) vest immediately and were internally valued during the period using the Black-Scholes Option Pricing Model at $192,050. The model inputs are shown in table 2 (below). On 6 October 2014 the Company converted the remaining $175,000 of the Tranche 2 funds into 58,333,332 shares at $0.003 per share and 58,333,332 free attaching options which have an exercise price of 1 cent and expiry of 30 December 2016. The 58,333,332 free attaching options, plus the 25,000,000 free attaching options from tranche 3 (below) vest immediately and were internally valued during the period using the Black-Scholes Option Pricing Model at $154,334. The model inputs are shown in table 3 (below). Tranche 3: In 2014 financial year the Company received $300,000 from CPS, being Tranche 3 of the funds advanced. On 25 August 2014 the Company converted $225,000 of the Tranche 3 funds into 75,000,000 shares at $0.003 per share and 75,000,000 free attaching options which have an exercise price of 1 cent and expiry of 30 December 2016. The 75,000,000 free attaching options, plus the 25,000,000 free attaching options from tranche 2 (above) vest immediately and were internally valued during the period using the Black-Scholes Option Pricing Model at $192,050. The model inputs are shown in table 2 (below). On 6 October 2014 the Company converted the remaining $75,000 of the Tranche 3 funds into 25,000,000 shares at $0.003 per share and 25,000,000 free attaching options which have an exercise price of 1 cent and expiry of 30 December 2016. The 25,000,000 free attaching options, plus the 58,333,332 free attaching options from tranche 2 (above) vest immediately and were internally valued during the period using the Black-Scholes Option Pricing Model at $154,334. The model inputs are shown in table 3 (below). Black & Scholes Option Pricing Model Date of Grant Date of Expiry Strike (Exercise) Price Underlying Share Price (at date of issue) Risk Free Interest Rate (at date of issue) Volatility (up to date of issue) Years to Expiry Number of options granted Dividend Yield Black & Scholes Valuation Total Fair Value of Options Table 1 6/10/2014 30/12/2016 $0.01 $0.004 2.60% 120% 2.24 10,000,000 0% $0.0019 $18,520 Table 2 25/08/2014 30/12/2016 $0.01 $0.004 2.60% 120% 2.35 100,000,000 0% $0.0019 $192,050 Table 3 6/10/2014 30/12/2016 $0.01 $0.004 2.60% 120% 2.24 83,333,332 0% $0.0019 $154,334 The options above vest immediately and the conversion of the note to shares and options (per above) resulted in a fair value loss of $364,904 recognised in the profit or loss in relation to finance costs, refer Note 21. 70 | P a g e Notes to the Consolidated Financial Statements 19. SHARE PLACEMENT LIABILITY Minbos Resources Limited – Financial Report For the year ended 30 June 2015 During the 2014 financial year the Company received funds in advance in relation to its pro rata renounceable entitlement offer, which closed on 23 July 2014. The funds received were a liability at 30 June 2014 as the shares were issued during the 2015 financial year. CONTRIBUTED EQUITY 20. (a) Issued and fully paid Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proposed winding up of the company in proportion to the number and amount paid on the share hold. (b) Movement Reconciliation 71 | P a g e 30-Jun-1530-Jun-14$$Share placement liability- 80,000 - 80,000 $No.$No.Ordinary shares29,733,200 1,367,149,881 26,172,620 292,148,938 29,733,200 1,367,149,881 26,172,620 292,148,938 30-Jun-1430-Jun-15ORDINARY SHARESDateQuantityIssue price$Balance 30 June 2013154,315,60525,440,555Consideration for tenement acquisition (i)10/09/20132,000,0000.01428,000 Conversion of Lind convertible security (ii)02/10/20135,000,0000.01050,000 Conversion of Lind convertible security (ii)13/12/201312,500,0000.00450,000 Conversion of CPS convertible security (iii)17/01/201483,333,333 0.0058483,333 Issue of shares in satisfaction of interest (iii)15/04/201412,500,000 0.003341,250 Consideration pursuant to settlement Deed (ii)15/04/201410,000,000 0.003333,000 Issue of shares in satisfaction of interest (iii)07/05/201412,500,000 0.00562,500 Cost of placements- - - (16,018)Balance 30 June 2014292,148,93826,172,620Rights Issue (iv)28/07/2014104,786,468 0.003314,359 Conversion of CPS Convertible Note (v)25/08/2014100,000,000 0.004400,000 Rights Issue - Shortfall (vi)03/09/2014447,119,610 0.0031,341,359 Conversion of CPS Convertible Note (vii)06/10/201483,333,332 0.004333,333 Conversion of Convertible Security (vii)06/10/201433,333,333 0.004133,334 Reeves Debt Conversion (viii)09/10/201486,703,200 0.003260,110 Reeves Debt Conversion (viii)09/10/201410,725,000 0.00332,175 Employee share plan (ix)12/11/201431,000,000 0.005- Placement (x)08/04/2015178,000,000 0.005890,000 Cost of placements- - - (144,090)Balance 30 June 20151,367,149,88129,733,200 Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (i) On 10 September 2013 the Company issued 2,000,000 shares as consideration for the acquisition of phosphate tenements in Western Australia. (ii) On 14 March 2013, the company received $375,000 from Lind, being $300,000 for the Convertible Security and $75,000 being Tranche 1 of funds advanced under the Tranche Shares. - - In October 2013, the Company converted $50,000 of the $300,000 convertible security into 5,000,000 shares at $0.01 per share. In December 2013, the Company converted an additional $50,000 of the remaining $250,000 convertible security into 12,500,000 shares at $0.004 per share. On 15 April 2014 the Company issued 10,000,000 shares at nil consideration, as consideration pursuant to the Settlement Deed dated 11 March 2014 with Lind. These shares have been valued using the market price of the Company’s shares at the date of issue. (iii) On 27 August 2013 the Company signed a convertible note trust deed with CPS Capital Group Pty Ltd. On 10 December 2013 the Company amended its capital raising / corporate mandate with CPS, whereby the issue of the convertible notes will raise a total of up to $800,000 (before costs) in three tranches. In August and September 2013, the Company received $250,000 from CPS, being Tranche 1 of the funds advanced. On 17 January 2014 the Company converted Tranche 1 funds into 83,333,333 shares and 83,333,333 options. The free attaching options have been valued using the Black and Scholes Option Pricing Model, refer Note 3 (n) and at $436,298 refer Note 4 (d). On 15 April 2014 the Company issued 12,500,000 shares at $0.003 per share, in satisfaction of interest payable on Tranche 1 Convertible Notes in the amount of $41,250. These shares have been valued using the market price of the Company’s shares at the date of issue. On 7 May 2014 the Company issued 12,500,000 shares at $0.005 per share, in satisfaction of interest payable on Tranche 2 Convertible Notes in the amount of $62,500. These shares have been valued using the market price of the Company’s shares at the date of issue. (iv) On 28 July 2014, the Company closed its entitlement offer and issued 104,786,468 shares at $0.003 per share to raise $314,359. (v) On 25 August 2014, the Company issued 100,000,000 shares at $0.003 per share (valued at $0.004 per share) and 100,000,000 free attaching options exercisable at $0.01 per share, expiry 30 December 2016, on conversion of $300,000 of an $800,000 convertible note facility pursuant to the convertible note trust deed dated 27 August 2013. (vi) On 3 September 2014, the Company successfully completed the placement of the rights issue shortfall of 447,119,610 fully paid ordinary shares issued at $0.003 per share to raise $1,341,359. (vii) On 6 October 2014, the Company issued 83,333,332 shares at $0.003 per share (valued at $0.004 per share) and 83,333,332 free attaching options exercisable at $0.01 per share, expiry 30 December 2016, on conversion of the remaining $250,000 of an $800,000 convertible note facility pursuant to the convertible note trust deed dated 27 August 2013. On 6 October 2014, the Company also issued 33,333,333 shares at $0.003 per share (valued at $0.004 per share) on conversion of $100,000 of the $200,000 convertible security. The remaining $100,000 of the convertible security was repaid in cash during the period. The company also issued 10,000,000 unlisted options exercisable at 1 cent, expiring 30 December 2016, pursuant to the Deed of Assignment and Assumption for Convertible Security dated 18 March 2014. 72 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (viii) On 9 October 2014, the Company issued 86,703,200 shares at $0.003 per share on conversion of David Reeves convertible note of $250,000 and interest of $10,110. On 9 October 2014, the Company also issued 10,725,000 shares at $0.003 per share to David Reeve’s in lieu of his outstanding Director fees of $32,175. (ix) On 26 September 2014, the Company approved a remuneration of 37,000,000 units to Lindsay Reed in the Employee Share Trust valued at $0.005 per unit. The Company allocated 6,000,000 shares from the EST to Mr Reed and issued the remaining 31,000,000 shares on the 12 November 2014, refer to Note 25. (x) On 8 April 2015, the Company issued 178,000,000 shares at $0.005 per share to raise $890,000 to allow the Company to progress the Cabinda phosphate project and for working capital purposes. (c) Options on issue as at 30 June 2015 Class Placement Options Director Options Consultancy Options Conversion of Convertible note (i) Conversion of Convertible note (i) Conversion of Convertible security (i) Date of Expiry 08-Mar-16 30-Dec-16 30-Dec-16 30-Dec-16 30-Dec-16 30-Dec-16 Exercise Price $0.0937 $0.01 $0.01 $0.01 $0.01 $0.01 Number Under Option 1,150,000 88,333,333 30,000,000 100,000,000 83,333,332 10,000,000 312,816,665 Information relating to options issued as share-based payments are set out in Note 24 and options issued to Key Management Personnel are set out in the remuneration report. (i) These options were issued during the year to settle convertible note liabilities and valued at $364,904, refer Note 21. (d) Capital risk management The Group's objectives when managing capital are to  safeguard their ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and  maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Given the stage of the Company’s development there are no formal targets set for return on capital. There were no changes to the Company’s approach to capital management during the year. The Company is not subject to externally imposed capital requirements. The net equity of the Company is equivalent to capital. Net capital is obtained through capital raisings on the Australian Securities Exchange. The Group monitors capital on the basis of the following gearing ratio: Net debt (as per note 18) / Total equity (as shown in the Consolidated Statement of Financial Position). 73 | P a g e Notes to the Consolidated Financial Statements The gearing ratios at 30 June 2015 and 30 June 2014 were as follows: Minbos Resources Limited – Financial Report For the year ended 30 June 2015 21. RESERVES Nature and purpose of reserves Share-based payments and option reserve The reserve represents the value of options issued as a result of conversion of convertible notes which amounted to $364,904 (see note 4 and 18) that the Consolidated Entity is required to include in the consolidated financial statements. In the previous financial years the reserve also included compensation arrangements. No gain or loss is recognised in the profit or loss on the purchase, sale, issue or cancellation of the Consolidated Entity’s own equity instruments. 74 | P a g e 30-Jun-1530-Jun-14$$Net debt- 1,250,000Total equity13,789,2099,339,092Net debt to equity ratio- 13%$No.$No.Share-based payment and option reserve2,185,435 312,816,665 1,820,531 122,483,333 Employee share plan reserve409,640 - 340,000 - Foreign currency translation reserve3,494,461 - 842,816- 6,089,536 312,816,665 3,003,347 122,483,333 30-Jun-1530-Jun-1430-Jun-1530-Jun-14Movement reconciliation$$Share-based payment and option reserveBalance at the beginning of the year1,820,531 1,269,657 364,904 550,874Balance at the end of the year2,185,435 1,820,531 Employee share plan reserveBalance at the beginning of the year340,000 197,889 Equity settled share-based payment transactions (refer Note 25(b))69,640 142,111 Balance at the end of the year409,640 340,000 Foreign currency translation reserveBalance at the beginning of the year842,8161,214,9542,651,645(372,138)Balance at the end of the year3,494,461842,816Effect of translation of foreign currency operations to group presentation Equity settled finance costs Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements Employee share plan reserve The reserve represents the value of shares issued under the Group’s Employee Share Plan that the Consolidated Entity is required to include in the consolidated financial statements. No gain or loss is recognised in the profit or loss on the purchase, sale, issue or cancellation of the Consolidated Entity’s own equity instruments. Foreign currency translation reserve The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations where their functional currency is different to the presentation currency of the reporting entity. 22. ACCUMULATED LOSSES DIVIDENDS 23. No dividend has been paid during the financial year and no dividend is recommended for the financial year. SHARE-BASED PAYMENTS 24. (a) Fair value of options granted during the year In the 2014 financial year, the Company issued the following options: Director Options On 23 November 2013, the Company issued 5,000,000 unlisted options to William Oliver (Non-Executive Director) to provide a performance incentive component in the remuneration package to motive, reward and further align the Director’s interest with that of the shareholders. The Company has internally measured the fair value of the options granted by adopting a Black-Scholes option pricing model. The model inputs are shown in the table below: Black & Scholes Option Pricing Model Date of Grant Date of Expiry Strike (Exercise) Price Underlying Share Price (at date of issue) Risk Free Interest Rate (at date of issue) Volatility (up to date of issue) Years to Expiry Number of options granted Dividend Yield Black & Scholes Valuation Total Fair Value of Options 25/11/2013 30/12/2016 $0.010 $0.009 2.84% 110% 3.1 5,000,000 0% $0.006 $29,886 The options vested immediately therefore the share based payment recognised in the prior year is $29,886. 75 | P a g e 30-Jun-1530-Jun-14$$Movement in accumulated lossesBalance at the beginning of the financial year(19,836,875)(17,156,604)Net loss in current year(2,196,652)(2,680,271)Balance at the end of the financial year(22,033,527)(19,836,875) Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements Consideration for Corporate Services On 8 May 2014, the Company issued 30,000,000 unlisted options as consideration for corporate advisory services. The Company has internally measured the fair value of the options granted by adopting a Black-Scholes option pricing model. The model inputs are shown in the table below: Black & Scholes Option Pricing Model Date of Grant Date of Expiry Strike (Exercise) Price Underlying Share Price (at date of issue) Risk Free Interest Rate (at date of issue) Volatility (up to date of issue) Years to Expiry Number of options granted Dividend Yield Black & Scholes Valuation Total Fair Value of Options 8/05/2014 30/12/2016 $0.01 $0.005 3.04% 120% 2.65 30,000,000 0% $0.0028 $84,690 The options vested immediately therefore the share based payment recognised in the prior year is $84,690. (b) Recognised share-based payment expense The total share-based payment expense for the 2015 and 2014 financial years are as follows: (c) Shares issued as consideration during the year In the 2015 financial year the Company did not issue any shares as consideration. In the 2014 financial year the Company issued the following shares as consideration: On 10 September 2013 the Company issued 2,000,000 shares as consideration for the acquisition of phosphate tenements in Western Australia. The shares were issued at $0.14 per share for total consideration of $28,000. 76 | P a g e 30-Jun-1530-Jun-14($)($)Director Options- 29,886 Consideration for corporate services- 84,690 - 114,576 Value recognised during year Notes to the Consolidated Financial Statements (d) Summary of options granted during the year Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Total options at 30 June 2015 are 312,816,665, of which 276,666,665 options were not included in the table above as they related to convertible notes and securities. Total options at 30 June 2014 are 122,483,333, of which 83,333,333 options were not included in the table above as they related to convertible notes. 77 | P a g e As at 30 June 2015Consultant Options21-May-1230-Dec-14$0.253,000,000 - - (3,000,000)- - Placement Options07-Mar-1308-Mar-16$0.09371,150,000 - - - 1,150,000 1,150,000 Director Options25-Nov-1330-Dec-16$0.015,000,000 - - - 5,000,000 5,000,000 Consideration for corporate services08-May-1430-Dec-16$0.0130,000,000 - - - 30,000,000 30,000,000 39,150,000 - - 3,000,000- 36,150,000 36,150,000 Weighted average exercise price$0.03- - - $0.01- Vested &exercisable at the end of the yearClassIssue DateDate of ExpiryExercise PriceBalance at start of the year Granted during the yearExercised during the yearExpired during the yearBalance at end of the yearAs at 30 June 2014Class A Options13-Oct-1013-Oct-13$0.204,000,000 - - (4,000,000)- - Class B Options13-Oct-1013-Oct-13$0.302,000,000 - - (2,000,000)- - Class C Options13-Oct-1013-Oct-13$0.502,000,000 - - (2,000,000)- - Broker Options13-Oct-1013-Oct-13$0.206,000,000 - - (6,000,000)- - Employee Options18-Apr-1118-Apr-14$0.20500,000 - - (500,000)- - Consultant Options18-Apr-1118-Apr-14$0.50100,000 - - (100,000)- - Consultant Options21-May-1230-Dec-14$0.253,000,000 - - - 3,000,000 3,000,000 Placement Options07-Mar-1308-Mar-16$0.09371,150,000 - - - 1,150,000 1,150,000 Director Options25-Nov-1330-Dec-16$0.01- 5,000,000 - - 5,000,000 5,000,000 Consideration for corporate services08-May-1430-Dec-16$0.01- 30,000,000 - - 30,000,000 30,000,000 18,750,000 35,000,000 - 14,600,000- 39,150,000 39,150,000 Weighted average exercise price$0.25- - - $0.03- ClassIssue DateDate of ExpiryExercise PriceBalance at start of the year Granted during the yearExercised during the yearExpired during the yearBalance at end of the yearVested &exercisable at the end of the year Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements EMPLOYEE SHARE PLAN RESERVE 25. (a) Fair value of employee shares granted during the year In the 2013 financial year the Board implemented an employee share plan to deliver remuneration in the form of equity in Minbos Resources Limited which, under the Minbos Board’s discretion, may be awarded from time to time. The employee share plan was approved at the Company’s general meeting on 14 March 2013 and the purpose is to:  Support employee retention;  Enhance employee involvement and focus; and  Increase wealth distribution among the employees. Employee Share Plan – Lindsay Reed Shareholders approved the establishment of the Minbos Resources Limited Employee Share Plan via an Employee Share Trust (‘EST’) at a general meeting on 14 March 2013. The company believes that the employee share plan provides eligible key employees and Directors effective incentive for their work and ongoing commitment and contribution to the Company. Eligible key employees and Directors offered shares under the plan are provided an interest free, non- recourse loan from the EST. Under this plan, on 26 September 2014 the company approved a remuneration of 37,000,000 share units to Lindsay Reed in the EST. These shares were issued at an exercise price of $0.003 per share. These shares were subject to the following vesting conditions:  18,500,000 share units shall vest; (a) one year from the Commencement Date (being 1 September 2015); and (b) if an announcement is made to the market by the Company of the renewal of the exploration licence 0006/06/01/L.P/GOV.ANG.MGM.2010 granted to Mongo Tando Ltda, which expired in January 2013.  18,500,000 share units shall vest; (a) two years from the Commencement Date (being 1 September 2016); and (b) upon presentation of a definitive feasibility study by the Company’s joint venture partner in relation to the Cabinda Project. In the event of a change of control event, the share units will vest automatically. Summary of the key loan terms: Aggregate loan amount: $111,000 Interest rate: 0% Subject to the conditions of the Employee Share Plan as approved by shareholder on 14 March 2013. There were no other shares issued as compensation to Key Management Personnel during the financial year nor as at the date of signing this report. 78 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (b) Recognised employee benefits expense The total expense recognised as an employee benefits expense is $119,184, prorated over 12 months and 24 months, per the vesting conditions mentioned above. Management believe that the performance milestones associated with each Class/tranche will be achieved, and accordingly an expense recognised over the expected vesting period. The total employee benefits expense for the year ended 30 June 2015 and future years is as follows: The employee share units issued to Lindsay Reed have been valued using the black-scholes model. The model inputs and assumptions are shown below. The model inputs are shown in the table below: Black & Scholes Option Pricing Model Grant Date Vesting Date Strike (Exercise) Price Underlying Share Price (at date of issue) Risk Free Interest Rate (at date of issue) Volatility (up to date of issue) Number of shares issued Dividend Yield Black & Scholes Valuation Total Fair Value of Options Class/Tranche A Class/Tranche B 26/09/2014 01/09/2016 $0.003 $0.005 2.63% 120% 18,500,000 0% $0.0035 $65,013 26/09/2014 01/09/2015 $0.003 $0.005 2.63% 120% 18,500,000 0% $0.0029 $54,171 The weighted average remaining contractual life of the share options outstanding as at 30 June 2015 is 0.67 years (2014: nil). 79 | P a g e $$$$Key Management PersonnelEmployee share plan - Mr Reed69,640 49,544 - - Employee share plan - Mr Sullivan- - 122,891 - Employee share plan - Mr Carter- - 19,220 - 69,640 49,544 142,111 - Value recognised during year30-Jun-15Value to berecognised in future yearsValue to berecognised in future years30-Jun-14Value recognised during year Notes to the Consolidated Financial Statements (c) Summary of shares granted during the financial year The following table illustrates the number and weighted average exercise price (‘WAEP’) of, and movements in, shares issued during the financial year ended 30 June 2015 and 30 June 2014: Minbos Resources Limited – Financial Report For the year ended 30 June 2015 (i) Mr Sullivan resigned as Managing Director on 21 February 2014. (ii) Mr Carter resigned as Chief Financial Officer and Joint Company Secretary on 30 August 2013. 80 | P a g e As at 30 June 2015Employee share plan - Lindsay Reed01-Sep-14$0.003- 37,000,000 - 37,000,000 - - Employee share plan - Mr Sullivan (i)14-Mar-1301-Nov-22$0.046,000,000 - (6,000,000)- - - 6,000,000 37,000,000 (6,000,000)37,000,000 - - As at 30 June 2014Employee share plan - Mr Sullivan (i)14-Mar-1301-Nov-22$0.046,000,000 - - 6,000,000 - 6,000,000 Employee share plan - Mr Carter (ii)15-Apr-1301-Nov-22$0.042,000,000 - - 2,000,000 - 2,000,000 8,000,000 - - 8,000,000 - 8,000,000 Vested but not yet exercisable at end of the yearClassIssue DateDate of ExpiryIssue PriceBalance at start of the year Granted during the yearForfeited during the yearBalance at end of the yearVested &exercisable at the end of the year Notes to the Consolidated Financial Statements 26. PARENT ENTITY Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Parent Entity Commitments There are no capital or leasing commitments of the parent entity for the year ended 30 June 2015. COMMITMENTS 27. In the current and prior financial years, there is no minimum commitment in relation to the Cabinda project and or the DRC project. CONTINGENT LIABILITIES AND CONTINGENT ASSETS 28. There are no contingent liabilities or contingent assets in the current financial year (2014: nil). 81 | P a g e 30-Jun-1530-Jun-14$$Current Assets218,97133,732Non-Current Assets22,083,22322,155,493Total Assets22,302,194 22,189,225 Current Liabilities326,3921,932,353Non-Current Liabilities- - Total Liabilities326,3921,932,353Net Assets21,975,80220,256,872Contributed equity29,733,20026,172,620Share-based payments and option reserve2,185,4351,820,531Employee share plan reserve409,640340,000Accumulated losses(10,352,473)(8,076,279)Total Equity21,975,802 20,256,872 Loss for the year(2,275,615)(2,238,370)Other comprehensive loss for the year - - Total comprehensive loss for the year(2,275,615)(2,238,370)Details of any guarantees entered into by the parent entity in relation to the debts of its subsidiaries- - Details of any contingent liabilities of the parent entity- - Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR 29. In July 2015 the Company entered into a non-binding Letter of Intent (‘LOI’) with Port of Caio to secure port access for the Cabinda project. The LOI provides Minbos with initial port capacity to export no less than 800,000 tons of rock phosphate per annum. The parties have agreed to enter into a formal binding port services agreement which will include the following:  Term – Minimum of 10 years with an option to extend for a further 10 years.  Volume – No less than 800,000 tons per annum of rock phosphate being exported.  Berth capacity for approximately 26 vessels per year.  Wharf area to accommodate all of Minbos’ storage and equipment requirements.  Minbos being allocated 5 hectares of working area in the Port of Caio Industrial area. In September 2015 the Company advised that merger discussions with JV partner Petril have been discontinued as the parties could not come to a mutually satisfactory outcome on certain key terms. The principal terms requiring agreement were the escrow conditions for existing and incoming shareholders (with Petril proposing that MNB’s major shareholders should be escrowed until completion of BFS). The negotiations on the merger were complicated by the difficulties of combining a public listed and private company and the different cultures, both in terms of the needs of the various stakeholders but also the different business culture and approach. Minbos and Petril are developing the Cabinda project under an existing and current JV agreement and will now proceed to move the project towards production on that basis, with Minbos continuing to hold a 50% interest in a project that is without peer in the Atlantic basin. On 11 September 2015 the Company announced that it has entered into a binding Deed of Offer and Release (‘Agreement’) with African Phosphate Ltd (AFP) to dispose of its rights in the Kanzi project in the DRC. Under the terms of the Agreement AFP have also acquired all the historical technical data and study reports for total consideration of US$200,000. The only Condition Precedent on the Agreement is the receipt by Minbos of the consideration that is due within 30 days. The Directors are not aware of any other matters or circumstances at the date of the report, other than those referred to in this report or the financial statements or notes thereto, that have significantly affected or may significantly affect the operations, the results of operations or the state of affairs of the Company in subsequent financial years. 82 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements RELATED PARTIES 30. (a) Ultimate parent The ultimate Australian parent entity within the Group is Minbos Resources Limited. Minbos is limited by shares and is incorporated and domiciled in Australia. In the 2011 financial year the Company acquired 100% of Tunan Mining Limited and its subsidiaries. Through Tunan Mining Limited, Minbos holds the Cabinda Phosphate Project and the DRC Phosphate Project licences. (b) Subsidiary companies Interests in subsidiaries are set out in Note 31: Subsidiaries and Transactions with Non-controlling Interests. (c) Key management personnel compensation Information regarding individual Directors and Executive compensation and some equity instruments disclosures as required by Corporations Regulation 2M.3.03 is provided in the remuneration report section of the Directors’ report. (d) Loans to Associate The loans to Mongo Tando Limited (the ‘Associate’) are unsecured interest-free loans for the purpose of obtaining the required working capital for the establishment and ongoing operation of the Project in Angola. LR Group, the ultimate 50% holder in the Associate, along with Minbos’ ultimate 50% holding in the Associate, each contribute in equal portions loans receivable. There is no allowance account for impaired receivables in relation to any outstanding balances, and no expense has been recognised in respect of impaired receivables due from related parties. 83 | P a g e 30-Jun-1530-Jun-14$$Short-term employee benefits408,333 370,477 Post-employment benefits28,532 18,500 Equity compensation benefits69,640 171,997 506,505 560,974 30-Jun-1530-Jun-14$$Balance at the beginning of the financial year4,436,6454,213,808Loans advances142,654222,837Loan repayments made--Interest charged--Interest paid--Balance at the end of the financial year4,579,2994,436,645 Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (e) Transactions with other related parties The following transactions occurred with related parties: (i) During the financial year, Minbos concluded agreements with Sofosa to advance and progress the Cabinda project, a Company which Mr Catulichi (Non-Executive Director) is a shareholder and Director. Sofosa will provide support and services on the Cabinda project for a payment of US$15,000 per month retrospective from 1 July 2014. In addition, the agreements outline that Sofosa will be issued with two separate classes of performance rights that can convert up to a total of 237.8 million fully paid ordinary shares in Minbos. The first class of performance rights can convert to a total of 178.3 million fully paid ordinary shares (75% of 237.8 million shares) subject to Sofosa satisfying performance milestones within 12 months from the date of the agreement. The second class of performance rights can convert to a total of 59.5 million fully paid ordinary shares (25% of 237.8 million shares) subject to Minbos receiving a licence to Mine on the Cabinda project within 24 months from the date the agreements were executed and pursuant to Sofosa’s assistance. The performance rights are subject to the Company obtaining shareholder approval as required by the Corporations Act 2001 and accordingly no expense has been recognised for the financial year ended 30 June 2015. During the year the Company incurred fees from Sofosa of $229,471 (US$180,000) of which $19,510 (US$15,000) was outstanding at 30 June 2015. SUBSIDIARIES AND TRANSACTIONS WITH NON-CONTROLLING INTERESTS 31. Minbos Resources Limited owns the following subsidiaries: 100% of Tunan Mining Limited, a company incorporated in the British Virgin Islands. Through Tunan Mining Limited, the Company has the following ownership as at 30 June 2015: Name of entity Parent entity Country of incorporation Minbos Resources Ltd (i) Australia Subsidiary (direct) Class of shares Ownership interest 30/06/2015 Ownership interest 30/06/2014 Ordinary and Preference Tunan Mining Limited (ii) Bristish Virgin Isles (BVI) Ordinary 100% 100% Subsidiaries (indirect – direct subsidiaries of Tunan Mining Limited) Mongo Tando Limited Tunan Mining Pty Ltd (iii) Agrim SPRL DRC (iv) Phosphalax SPRL (v) Bristish Virgin Isles (BVI) South Africa Democratic Republic of Congo Democratic Republic of Congo Ordinary Ordinary Ordinary Ordinary 50% 100% 100% 49% 50% 100% 100% 49% (i) Minbos is an Australian registered public listed Company on the ASX which undertakes the corporate activities for the Group. 84 | P a g e 30-Jun-1530-Jun-14$$Office rent - Sub-leased from Worldwide Mining which is owned 100% by Geopacific (a Company in which James Carter owns approximately 5.5%)-11,150Agreements with strategic Angolan partner - Sofosa (i)(a Company in which Domingos Catulichi is a shareholder and Director)229,471- Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Notes to the Consolidated Financial Statements (ii) Tunan Mining Limited is a holding Company, incorporated in the British Virgin Isles and was the vendor of the Cabinda project. (iii) Tunan Mining Pty Ltd is a South African Company that managed the operations of the Company’s African projects in the past. (iv) Agrim SPRL is a Company incorporated in the Democratic Republic of Congo which holds a 49% interest in Phosphalux SPRL, a special purpose DRC registered company, which undertakes the exploration activities across the Kanzi mining permit and several exploration licences, held by Allamanda. (v) Phosphalax SPRL is an entity incorporated in the Democratic Republic of Congo to hold the groups interest in the Kanzi joint venture which is intended to be the holder of the licences in relation to the Kanzi project. 32. AUDITOR’S REMUNERATION 85 | P a g e 30-Jun-1530-Jun-14$$Amounts received or due and receivable by BDO Audit (WA) Pty Ltd for:(i) An audit or review of the financial report of the entity33,260 41,517 Total auditor remuneration33,260 41,517 (i) An audit or review of the financial report of the entity2,659 2,002 Total auditor remuneration2,659 2,002 (i) Taxation services- 980 (ii) Other professional services- 3,060 Total auditor remuneration- 4,040 30-Jun-1530-Jun-14Non-Audit Services $$Remuneration for other services BDO Corporate Tax (WA) Pty Ltd - Taxation services- 980 BDO Corporate Finance (WA) Pty Ltd - Other professional services- 3,060 Total Non-Audit Services- 4,040 Amounts received or due and receivable by related BDO Audit (WA) Pty Ltd entities for:Amounts received or due and receivable by related network practices ofBDO (WA) Pty Ltd for: Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Directors’ Declaration The Directors of the company declare that: 1 The financial statements, comprising the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001; and (a) comply with Accounting Standards, Corporations Regulations 2001 and other mandatory professional reporting requirements; and (b) give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2015 and of its performance for the year ended on that date. 2 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. 3 The Consolidated Entity has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards. 4 The Directors have been given the declarations by the Managing Director, acting in the capacity of Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Board of Directors and is signed on behalf of the Directors by: Mr Peter Wall Non-Executive Chairman 24 September 2015 86 | P a g e Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au 38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia INDEPENDENT AUDITOR’S REPORT To the members of Minbos Resources Limited Report on the Financial Report We have audited the accompanying financial report of Minbos Resources Limited, which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial 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 gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2(a), 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. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s 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 company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees has been given to the directors of Minbos Resources 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 Minbos Resources Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 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 2(a). Emphasis of matter Without modifying our opinion, we draw attention to Note 2(d) in the financial report, which indicates that the ability of the consolidated entity to continue as a going concern is dependent upon the ability of the consolidated entity being able to renew its Cabinda exploration permit and the future successful raising of necessary funding. These conditions, along with other matters as set out in Note 2(d), indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business. Emphasis of matter We draw attention to Notes 13 and 15 in the financial report which describe an uncertainty relating to the recoverability of the consolidated entity’s investment in and loans to Associate. Our opinion is not modified in respect of this matter. Report on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2015. The directors of the company are responsible for the preparation and 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 Minbos Resources Limited for the year ended 30 June 2015 complies with section 300A of the Corporations Act 2001. BDO Audit (WA) Pty Ltd Phillip Murdoch Director Perth, 24 September 2015 Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Shareholder Information The following additional information was applicable as at 16 September 2015. 1. Fully paid ordinary shares • There are a total of 1,367,149,881 ordinary fully paid shares on issue which are listed on the ASX. • The number of holders of fully paid ordinary shares is 592. • Holders of fully paid ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Company. • There are no preference shares on issue. 2. Distribution of fully paid ordinary shareholders is as follows: Spread of Holdings Holders Securities 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and above TOTAL ON REGISTER 28 35 39 209 281 592 2,593 98,403 305,258 9,506,662 1,357,236,965 1,367,149,881 % of Issued Capital 0.00 0.01 0.02 0.70 99.27 100.00 3. Holders of non-marketable parcels Holders of non-marketable parcels are deemed to be those who shareholding is valued at less than $500. • There are 26 shareholders who hold less than a marketable parcel of shares. • The number of fully paid ordinary shareholdings held in less than marketable parcels is 619. 4. Substantial shareholders of ordinary fully paid shares The Substantial Shareholders of the Company are: Rank Holder Name 1 Mrs Eleanor Jean Reeves 2 Alisdair Cooke 3 Brijohn Nominees Pty Ltd 4 Celtic Capital Pty Ltd 5 6 Pheakes Pty Ltd Jadekey Nominees Pty Ltd 5. Share buy-backs There is no current on-market buy-back scheme. Securities 133,276,400 111,180,000 88,326,166 85,416,666 83,333,333 71,305,096 % of Issued 9.75 8.13 6.46 6.25 6.10 5.22 89 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Shareholder Information 6. Voting Rights Subject to any rights or restrictions for the time being attached to any class or classes (at present there are none) at general meetings of shareholders or classes of shareholders: (a) each shareholder is entitled to vote and may vote in person or by proxy, attorney or representative; (b) on a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a shareholder has one vote; and (c) on a poll, every person present who is a shareholder or a proxy, attorney or representative of a shareholder shall, in respect of each fully paid share held, or in respect of which he/she has appointed a proxy, attorney or representative, is entitled to one vote per share held. 7. Top 20 Shareholders of ordinary fully paid shares The top 20 largest fully paid ordinary shareholders together held 63.21% of the securities in this class and are listed below: Rank Holder Name JADEKEY NOMINEES PTY LTD 1 MRS ELEANOR JEAN REEVES 2 BRIJOHN NOMINEES PTY LTD 3 4 CELTIC CAPITAL PTY LTD 5 PHEAKES PTY LTD 6 HARTREE PTY LTD 7 TRINITY MANAGEMENT PTY LTD 8 RAEJAN PTY LTD 9 MR ALASDAIR CAMPBELL COOKE 10 NATIONAL NOMINEES LIMITED 11 PROCUREMENT SOLUTIONS LIMITED 12 HEQUITY PTY LTD 13 CITICORP NOMINEES PTY LIMITED 14 WILGUS INVESTMENTS PTY LTD 15 HELMET NOMINEES PTY LTD 16 DALE PARK PTY LTD 17 TT NICHOLLS PTY LTD 18 CHIKAPA COMERCIO AND INDUSTRIA LDA 19 ZERO NOMINEES PTY LTD 20 HILLBOI NOMINEES PTY LTD Securities 105,761,533 87,356,166 83,333,333 70,416,666 70,016,666 64,000,000 39,000,000 36,000,000 34,180,000 33,883,056 33,333,333 33,333,333 29,234,756 27,514,867 27,389,344 20,000,000 17,666,667 17,640,000 17,193,083 17,000,000 864,252,803 % of Issued 7.74 6.39 6.10 5.15 5.12 4.68 2.85 2.63 2.50 2.48 2.44 2.44 2.14 2.01 2.00 1.46 1.29 1.29 1.26 1.24 63.21 90 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Shareholder Information 8. Options The following options over unissued ordinary shares are on issue: Class Placement Options Director Options Consultancy Options Conversion of Convertible note Conversion of Convertible note Conversion of Convertible security Date of Expiry 08-Mar-16 30-Dec-16 30-Dec-16 30-Dec-16 30-Dec-16 30-Dec-16 Exercise Price $0.0937 $0.01 $0.01 $0.01 $0.01 $0.01 Number Under Option 1,150,000 88,333,333 30,000,000 100,000,000 83,333,332 10,000,000 312,816,665 The unissued ordinary shares of Minbos under option carry no dividend or voting rights. The grant date equals the vesting date for all options. When exercisable, each option is convertible into one ordinary share of the Company. 9. Interest in Mining Licence The Company is an exploration entity, below is a list of its interest in licences, where the licences are situated and the percentage of interest held. Licence Number Type Interest Location 12908 12910 12911 0006/06/01L.P./ GOV.ANG.MGM/2010 E08/2335 E08/2336 Exploration Exploration Exploration Exploration Exploration Exploration 49% 49% 49% 50% 100% 100% Democratic Republic of Congo Democratic Republic of Congo Democratic Republic of Congo Cabinda Province, Angola Carnarvon, Western Australia Carnarvon, Western Australia 91 | P a g e Minbos Resources Limited – Financial Report For the year ended 30 June 2015 Shareholder Information 10. Mineral Resources Statements The company’s Mineral Resources estimate as at 30 June 2015 and 30 June 2014 for its Phosphate projects reported in accordance with the 2012 Edition of the JORC code are as follows: Mineral Resource Estimate as at 30 June 2015 and 30 June 2014 (There has been no change in the current financial year) Grade Cut-Off (% P2O5) Deposit Category Tonnes (Mt) Cabinda, Angola Cacata Mongo Tando Chivovo Chibuete Total Kanzi, DRC (i) Kanzi Grand Total Measured Indicated Inferred Indicated Inferred Indicated Inferred Indicated 5.0 10.2 11.8 24.8 184.0 6.5 149.0 391.3 58.5 449.8 (% P2O5) 23.0 25.3 8.8 11.5 8.0 20.5 8.3 9.2 14.2 9.9 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 (i) Minbos announced on 11 September 2015 that it has entered into an agreement to sell the Kanzi project in the DRC for US$200,000. The only Condition Precedent on the Agreement is the receipt by Minbos of the consideration that is due within 30 days. 11. Annual Review of Phosphate Resources In October 2013 the Company reported an upgraded Phosphate Resource for the Cabinda Project in Angola (refer ASX announcement dated 16 October 2013). As a result of the annual review of the Company’s Phosphate Resources there has been no change to the Phosphate Resources reported since 16 October 2013. 12. Governance of Phosphate Resources The Company engages external consultants and competent persons (as required by the JORC code) to prepare and calculate estimates of its Phosphate Resources. These estimates and underlying assumptions are reviewed by the Board and Management for reasonableness and accuracy. The results of the Phosphate Resource estimates are then reported in accordance with the JORC codes and other applicable rules. Where material changes occur during the year to a project, including project’s size, title or exploration results or other technical information, then previous estimates and market disclosures are reviewed for completeness. The Company reviews its Phosphate Resources as at 30 June each year. Where a material change has occurred in the assumptions or data in previously reported Phosphate Resources, a revised resource estimate will be prepared as part of the Annual review process. 92 | P a g e