Annual Report
For the year ended 30 June 2016
ABN 93 141 175 493
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
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
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Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Bankers
National Australia Bank
West Perth Business Banking Centre
Level 1, 1238 Hay Street
West Perth WA 6005
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
Securities Exchange
Australian Securities Exchange Limited (ASX)
Home Exchange - Perth
ASX Code - MNB (Ordinary Shares)
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
Ms Dganit Baldar - 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
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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 2016.
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
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 MMJ Phytotech Ltd (formerly Phytotech Medical Limited) (current),
Non-Executive Chairman of Activistic Limited (current),
Non-Executive Chairman of MyFiziq Limited (current),
Non-Executive Chairman of Zyber Holdings Limited (formerly Dourado Resources Limited, current);
Non-Executive Chairman of Sky and Space Global Ltd (current);
Non-Executive Chairman of Transcendence Technologies Limited (formerly GRP Corporation Ltd) (current);
Non-Executive Director of Ookami Limited (current),
Non-Executive Chairman of Global Metals Exploration NL (resigned 22 July 2016),
Non-Executive Chairman of TV2U International Limited (formerly Galicia Energy Corporation Ltd) (resigned
9 February 2016),
Non-Executive Chairman of Aziana Limited (resigned 3 August 2015), and
Non-Executive Chairman of Discovery Resources Ltd (resigned 8 November 2013).
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).
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Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
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), and
Non-Executive Director of Celsius Coal Limited (current).
Ms Dganit Baldar
Non-Executive Director (appointed 18 March 2016)
Ms Dganit Baldar is a qualified Israeli corporate lawyer with approximately 20 years experience in the legal
profession. Until recently, she was the General Counsel for Mitrelli Group, a multinational organization which
initiates, executes and manages large turn-key projects in developing countries.
Ms Baldar graduated from Brunel University in London and also completed an MBA through Tel Aviv University.
She has a wide range of experience in all forms of corporate and commercial law with specific expertise in
complex joint ventures, mergers and acquisitions. In addition, she has expertise in dealing with Angolan law and
companies.
During the past three years, Ms Baldar has not held directorships in any other ASX listed companies.
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Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
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 Acacia Mining Plc
(previously 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.
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.
GROUP OVERVIEW
REVIEW OF OPERATIONS
4.
(a)
Minbos is an exploration and development company focused on phosphate deposits within the Cabinda
Province of Angola. 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.
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Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
(a) HIGHLIGHTS & SIGNIFICANT CHANGES IN STATE OF AFFAIRS
The highlights and significant changes in state of affairs during and subsequent to the end of the financial year
include:
Capital Placement - On 19 February 2016 the company entered into a binding subscription agreement
(‘Subscription Agreement’) with Green Services Innovations Ltd (‘Green’), a company incorporated in the British
Virgin Island, to place 680,363,703 shares at $0.005 per share to raise $3.4 million. The proceeds from the
placement will fund the Bankable Feasibility Study (‘BFS’) on the Cabinda phosphate project and working capital.
The placement was conducted in two tranches:
Tranche 1 consisted of the issue of 268,000,000 shares at $0.005 per share to raise $1.3 million. These
shares were issued on 23 February 2016.
Tranche 2 consisted of the issue of 412,363,703 shares at $0.005 per share to raise $2.1 million and the
issue of 384,958,009 options at an exercise price of $0.01 per option and an expiry date of 30 December
2016. These shares and options were issued on 17 May 2016.
The issue of Tranche 1 shares and the Tranche 2 shares and options (if exercised) will raise $7.2 million.
The Company appointed Ms Dganit Baldar to the Minbos Board effective 18 March 2016. This follows Green
exercising its right to nominate a director to the Minbos Board.
Cabinda Project Joint Venture - Minbos and its joint venture partner Petril Phosphates Ltd (‘Petril’) commenced
work on the Cabinda project BFS. The bulk sampling on the Cacata deposit was completed in June. Samples
consisting of areas representing direct shipping grade and “scrub and screen” material has been sent to
Equipment Suppliers and Mintek respectively for testing.
A contract to deliver the BFS has been awarded to Ausenco Limited (‘Ausenco’). The BFS scope has been divided
into two stages. Stage 1 will see the completion of a Trade-Off study to select the beneficiation route that will
optimise the whole of resource outcome for the Cacata deposit. The Trade-Off study will compare the following
800,000tpa production scenarios:
5 years of drying and sizing followed by 10 years of scrub screen and flotation; and
10 years of scrub and screen followed by 5 years of scrub screen and flotation.
The timing and cost to complete the BFS will be determined upon the completion of Stage 1, when the preferred
production scenario has been selected. Stage 2 of the BFS will provide a +/- 15% estimate for capital and
operating costs for the Cabinda project based on the process routes selected by the JV partners at the end of
Trade-Off study. The scope of work will include geology, mining, beneficiation, infrastructure and services,
product transportation and storage and port handling and ship loading.
On 5 August 2016, Minbos appointed Prime Resources (Pty) Limited (‘Prime Resources’) for the Environmental
and Social Impact Assessment (‘ESIA’). The ESIA forms part of the Bankable Feasibility Study for the Company’s
Cabinda Rock Phosphate Project in Angola.
Issue of New Licences for Cabinda Project - The Angolan Ministry of Mines and Geology (‘MGM’) has issued two
new licences for the Cabinda project. The first licence (014/04/09/T.P/ANG.MGM.2015) is for the Cacata deposit
and the second licence (015/01/10/T.P/ANG.MGM.2015) for the Chivovo, Chibuete, Ueca, Cambota and Mongo
Tando Deposits.
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Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
Port access in Angola - In July 2015 the Company entered into a non-binding Letter of Intent 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.
Disposal of Kanzi Project - On 11 September 2015 Minbos entered into a binding Agreement with African
Phosphate Pty Ltd (‘AFP’) to dispose of its rights in the Kanzi project for a total consideration of US$200,000. In
late February 2016 Minbos terminated the agreement with AFP due to their failure to pay the US$200,000.
PROJECTS
(b)
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.
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 2016 and 30 June 2015
(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
Kanzi, DRC
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
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
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 financial year MGM issued two new licences for the Cabinda
project. The first licence (014/04/09/T.P/ANG.MGM.2015) is for the Cacata deposit and the second licence
(015/01/10/T.P/ANG.MGM.2015) for the Chivovo, Chibuete, Ueca, Cambota and Mongo Tando Deposits.
Both licences have been issued for a five year period respectively expiring on 25 September 2020 and 14
October 2020 and are renewable for a further two years. The new licences replace the previous exploration
permit (006/06/01/L.P./GOV.ANG.MGM.2010).
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Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
The issue of the licences were preceded by Minbos and Petril signing 2 Mining Investment Agreements in
December 2014 with the MGM. A presidential decree was issued on 8 June 2015 confirming that the Cabinda
project has been approved and instructing Angolan Ministries to provide all the infrastructure and support that
the JV partners required for the project.
The signed contracts with MGM also covers the mining phase of the Cabinda project. On completion of the
Environmental Impact and Economic Viability Study the issue of a mining licence can be requested. The mining
licence will be valid for thirty five years, renewable for successive periods of ten years.
The Cabinda project licences are shown in figure 1 below.
Figure 1: Map of Cabinda Project Licences
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Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
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.
Construction has started on the Caio Port and the first stage will be operational in late 2017. The first stage will
be limited to container mode.
Cacata deposit (‘Cacata’)
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.
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.
Trade Off Studies
In the first stage of the BFS a number of trade off studies will be completed to best determine how the
development of Cacata can be accelerated utilising the Port of Caio the existence of which had not been
contemplated at the time of the scoping study. The tradeoff studies will specifically investigate accelerating the
development schedule, accommodating the stage 1 port facilities while maximising the resource potential at
Cacata.
The Cacata BFS has commenced and is committed to completing pilot plant testwork to determine the
appropriate flow sheets for the both the high silica and low silica components of the orebody.
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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 2016
DISPOSAL OF KANZI PROJECT
On 11 September 2015 the Company announced that it has entered into a binding Agreement with AFP to
dispose of its rights in the Kanzi project in the DRC. Under the terms of the Agreement AFP would also have also
acquired all the historical technical data and study reports for total consideration of US$200,000. In late
February 2016 Minbos terminated the agreement with AFP given their failure to pay the US$200,000.
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Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
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 6 June 2012, 16 October 2013 and
5 December 2013 respectively entitled “Cacata Project – Scoping Study Produces Positive Results” “Minbos announces
resource upgrade for the Cabinda licenses in Angola” and ”Cabinda Resource Additional Information” and the Minbos
Annual Report for the years ended 30 June 2014 and 30 June 2015 and Half Year Reports for the periods ended 31
December 2014 and 31 December 2015 which are available to view on the Company’s website at www.minbos.com.
The information in this report has been reviewed and approved for release by Ms Kathleen Body, Pr.Sci.Nat, who has
over 20 years’ experience in mineral exploration and mineral resource estimation. Ms Body is a Principal Consultant
and Director of Red Bush Geoservices (Pty) Ltd and contracted to Minbos. Ms Body is registered with the South African
Council for Natural Scientific Professions (SACNASP) as a Professional Natural Scientist. 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 2016 Annual Report b) all material assumptions and technical
parameters underpinning the Phosphate Resource included in the ASX announcements and 30 June 2016 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 2016 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)
Ms Dganit Baldar
Total
Fully Paid
Ordinary Shares
87,245,096
88,326,166
17,640,000
9,228,000
-
202,439,262
Unlisted
Share Options
50,000,000
63,500,000
-
5,000,000
-
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, 25,000,000 were acquired on conversion of the convertible note facility pursuant
to the convertible note trust deed dated 27 August 2013, 10,000,000 were acquired on market and 5,940,000 were acquired
in satisfaction of outstanding Director fees. 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, 102,000
were acquired pursuant to the pro-rata renounceable entitlements offer and 9,075,000 were acquired in satisfaction of
outstanding Director fees. The 5,000,000 unlisted options were acquired as remuneration, to provide a performance linked
incentive component to Mr Oliver’s remuneration.
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Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
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
Ms Dganit Baldar
Number Eligible
to Attend
4
4
4
4
1
Number
Attended
4
4
1
4
1
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.
7.
CORPORATE GOVERNANCE
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.
During the financial year the Company commenced work on the Cabinda project BFS with joint venture partner
Petril. The bulk sampling on the Cacata deposit was completed in June. Samples consisting of areas representing
direct shipping grade and “scrub and screen” material has been sent to Equipment Suppliers and Mintek
respectively for testing.
A contract to deliver the BFS has been awarded to Ausenco. The BFS scope has been divided into two stages.
Stage 1 will see the completion of a Trade-Off study to select the beneficiation route that will optimise the
whole of resource outcome for the Cacata deposit. The Trade-Off study will compare the following 800,000tpa
production scenarios:
5 years of drying and sizing followed by 10 years of scrub screen and flotation; and
10 years of scrub and screen followed by 5 years of scrub screen and flotation.
The timing and cost to complete the BFS will be determined upon the completion of Stage 1, when the preferred
production scenario has been selected. Stage 2 of the BFS will provide a +/- 15% estimate for capital and
operating costs for the Cabinda project based on the process routes selected by the JV partners at the end of
Trade-Off study. The scope of work will include geology, mining, beneficiation, infrastructure and services,
product transportation and storage and port handling and ship loading.
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Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
Minbos paid for all of the BFS funding required during the financial year, totalling cash calls of US$500,000. The
Company provided joint venture partner Petril with a short term loan for their 50% share of the cash calls. Petril
repaid this loan of US$250,000 and interest on 14 July 2016. Following the award of the contract to Ausenco
another cash call was issued for the September quarter to the amount of US$800,000 (Minbos 50% share
US$400,000).
B Financial Performance & Financial Position
The financial results of the Group for the year ended 30 June 2016 are:
Financial Performance
The financial result for the year ended 30 June 2016 is a net loss after tax of $1,654,054 (2015: $2,196,652).
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 has increased from the prior year as a result of the increase in cash and cash equivalents from the
capital placement completed during the year. Administration expenses decreased by 7%, largely due to reducing
consultant costs. Additionally the Company incurred non-cash costs of $40,457 (2015: $66,259) 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 $343,934 (2015: $435,218). This exploration
expenditure is in addition to what was accounted for through the Joint Venture with Petril as a financial asset
(refer note 15 in the financial statements).
Financial Position
The Group’s main focus during the year was the Cabinda Phosphate project in Angola. The Group’s net assets
increased by 19%, largely due to the capital placements completed through two tranches on 23 February 2016
and 17 May 2016, and due to the strengthening USD which resulted in an increase in the Company’s investment
in associate, from $17,781,195 in the prior year to $18,538,704 at 30 June 2016.
13 | P a g e
30-Jun-1630-Jun-15Change$$% Cash and cash equivalents1,606,934192,872733%Net assets16,467,98813,789,20919%Revenue9,9573,052226%Net loss after tax(1,654,054)(2,196,652)25%Loss per share(0.001)(0.002)44%
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
C
Business Strategies and Prospects for future financial years
The Group actively evaluates the prospects of the Cabinda project as the BFS progresses. These updates on the
BFS are announced via the ASX platform for shareholders information. The Group then assesses the continued
strategy and further asset development.
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.
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. In addition, difficulties in commissioning and operating plant and
equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect
extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and
unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.
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 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.
14 | P a g e
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
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 development 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.
DIVIDENDS
9.
No dividend has been paid during the financial year and no dividend is recommended for the financial year.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
10.
On 27 July 2016 the Company appointed Ausenco to deliver the BFS for the Cabinda project. Ausenco was
selected due to its relevant and recent experience in rock phosphate processing in West Africa. Ausenco will
complete the work in conjunction with G Mining Services Inc., who will provide the geological and mining
studies, and Golder Associates who is responsible for the geotechnical and hydrogeological studies.
On 5 August 2016 the Company appointed Prime Resources for the ESIA. The ESIA forms part of the BFS for the
Company’s Cabinda Rock Phosphate Project in Angola.
On 19 September 2016 the Company appointed Rebecca Morgan as Manager Geology and Business
Development with immediate effect. Ms Morgan is a qualified geologist and mining engineer with 15 years’
experience in the mining industry. She has extensive knowledge in dealing in West Africa across several
commodities and can speak Portuguese.
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.
15 | P a g e
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
CORPORATE STRUCTURE
11.
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:
16 | P a g e
KEY:DRCIncorporated in the Democratic Republic of Congo.BVIIncorporated in the British Virgin Isles.SAIncorporated in South Africa and in the process of being deregistered.Refers to the Project area and its licences. There are no farm in commitments.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 Ltd) and 50% by SOFOSA (Minbos Non-Executive Director Mr Catulichi is a Director and shareholder of SOFOSA). Minbos and Petril is in the process of obtaining National Private Investment of Angola(ANIP) approval to transfer the shares to Mongo Tando Limited BVI.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)
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
REMUNERATION REPORT (Audited)
12.
This report for the year ended 30 June 2016 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 KMP 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
Dganit Baldar
Other KMP
Lindsay Reed
Stef Weber
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Position
Chief Executive Officer
Chief Financial Officer & Company Secretary
Appointment
21/02/2014
21/02/2014
20/07/2010
2/09/2013
18/03/2016
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:
Remuneration Philosophy
Remuneration Governance, Structure and Approvals
Remuneration and Performance
Contractual Arrangements
Share-based Compensation
Equity Instruments Issued on Exercise of Remuneration Options
A
B
C
D Details of Remuneration
E
F
G
H Value of Shares to KMP
I
J Loans to KMP
K Loans from KMP
L Other transactions with KMP
Voting and comments made at the Company’s 2015 Annual General Meeting
17 | P a g e
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
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 CEO and the CFO.
The performance of the Group depends upon the quality of its KMP. 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 2016 AGM.
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”.
18 | P a g e
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
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.
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.
19 | P a g e
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
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:
Relationship between Remuneration and Company Performance
Given the current phase of the Company’s development the Board does not consider earnings during the
current and previous financial years when determining, and in relation to, the nature and amount of
remuneration of KMP.
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) have vested. The
remaining units (18,500,000) are expected to vest in the next 12 months and is therefore regarded as short term
incentive for the 2016 financial year. 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 (2015: nil).
Long Term Incentive Package
On 26 September 2014 the Company approved remuneration of 37,000,000 units to Mr Reed in the EST valued
at $0.0035 per unit (Tranche B). Half of these units (18,500,000) vest over 24 months and at point of issue were
considered a long term incentive. Refer to section F in the Remuneration Report for further detail.
Options:
The Board considers that for each KMP who receive options, their experience in the Mining industry will greatly
assist the Company in achieving its strategy and objectives.
The Board is of the opinion that the expiry date and exercise price of the options currently on issue to the
Directors, other KMP 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, 696,624,674 options are on issue, of which 118,500,000 have been issued to KMP.
During the 2016 and 2015 financial year there were no options exercised, nor did any options lapse.
20 | P a g e
30-Jun-1630-Jun-1530-Jun-1430-Jun-1330-Jun-12Revenue ($)9,9573,0522,33319,41393,572Net loss after tax ($)(1,654,054)(2,196,652)(2,680,271)(6,026,830)(7,919,244)Share Price ($)0.0040.0050.0020.020.18
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
Details of Remuneration
D
During the financial year ended 30 June 2016 and 30 June 2015, KMP received short-term employee benefits,
post-employment benefits, share-based payments and employee benefits expenses.
Table 1a: Remuneration of KMP of the Group for the year ended 30 June 2016 is set out below:
There were no outstanding payments to KMP at 30 June 2016.
Table 1b: Remuneration of KMP 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-16$$$$$$$DirectorsPeter Wall 36,000 - - - - - 36,000 Damian Black 36,000 - - - - - 36,000 Domingos Catulichi - - - - - - - William Oliver 36,000 - - - - - 36,000 Dganit Baldar 10,355 - - - - - 10,355 Sub-total 118,355 - - - - - 118,355 Other Key ManagementLindsay Reed 200,000 - - 19,000 - 43,741 262,741 Stef Weber 128,000 - - 12,160 - - 140,160 Sub-total 328,000 - - 31,160 - 43,741 402,901 Total 446,355 - - 31,160 - 43,741 521,256 Short-term employee benefitsPost-employment benefitsSalary & feesNon-monetaryOther Super-annuationOptions &rightsSharesTotalEmployee benefits expenseShare-based payments30-Jun-15$$$$$$$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 Salary & feesNon-monetaryOtherShort-term employee benefitsTotalSuper-annuationOptions & rightsSharesEmployee benefits expenseShare-based paymentsPost-employment benefits
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 2016
Table 2: Shareholdings of KMP (Direct and Indirect Holdings)
Table 3: Option holdings of KMP (Direct and Indirect Holdings)
22 | P a g e
201620152016201520162015DirectorsPeter Wall 100%100% - - - - Damian Black100%100% - - - - Domingos Catulichi - - - - - - William Oliver 100%100% - - - - Dganit Baldar100%- - - - - Other Key ManagementLindsay Reed83%77% - - 17%23%Stef Weber100%100% - - - - NameAt risk - STI (%)At risk - LTI (%)Fixed remuneration30-Jun-16Balance at 1/07/2015Granted as remunerationOn exerciseof optionsNet change otherBalance at 30/06/2016DirectorsPeter Wall71,305,0965,940,000-10,000,00087,245,096Damian Black88,326,166---88,326,166Domingos Catulichi17,640,000---17,640,000William Oliver153,0009,075,000--9,228,000Dganit Baldar-----Sub-total 177,424,26215,015,000-10,000,000202,439,262Other Key ManagementLindsay Reed120,333,3336,666,667--127,000,000Stef Weber-2,352,400--2,352,400Sub-total 120,333,3339,019,067--129,352,400Total297,757,59524,034,067-10,000,000331,791,66230-Jun-16Balance at 1/07/2015Granted as remunerationExercisedBalance at 30/06/2016Vested & exercisableDirectorsPeter Wall50,000,000--50,000,00050,000,000Damian Black63,500,000--63,500,00063,500,000Domingos Catulichi-----William Oliver5,000,000--5,000,0005,000,000Dganit Baldar-----Sub-total 118,500,000--118,500,000118,500,000Other Key ManagementLindsay Reed-----Stef Weber-----Sub-total -----Total118,500,000--118,500,000118,500,000
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
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.
Ms Dganit Baldar – Non-Executive Director
- Contract: Commenced on 18 March 2016.
- Director’s Fee: $3,000 per month. 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 2016 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.
23 | P a g e
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
Other KMP 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).
- 1 November 2015 to 31 January 2016 Mr Reed agreed to reduce his hours of employment to one day per
week. This was amended back to full time employment when the capital placement was completed in
February and the BFS commenced.
- 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 shares to Mr Reed in the 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: From 1 July 2015 Mr Weber was paid $192,000 per annum (plus statutory superannuation
entitlements). From 15 October 2015 Mr Weber agreed to reduce his hours of employment to two days
per week which resulted in a decrease in salary to $96,000 per annum. From 1 June 2016 Mr Weber’s
salary increased to $144,000 per annum following the commencement of the BFS.
- 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 KMP during the
current financial year.
During the prior 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.
24 | P a g e
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
Shares
Short and Long-term incentives
In the 2015 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 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 vested during the financial year after satisfying the following vesting conditions;
(a) one year from the Commencement Date (being 1 September 2015); and
(b) once the announcement was made to the market that the Company had renewed 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 after satisfying the following vesting conditions;
(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 (refer to Note H in the Remuneration Report).
For details on the valuation of the option over shares, including models and assumptions used, please refer to
Note 23 in the consolidated financial statements.
Issue of shares in lieu of services to KMP
On 18 December 2015 the Company issued 9,075,000 fully paid ordinary shares at $0.004 per share to Bill Oliver
(Non-Executive Director) in lieu of his outstanding Director fees of $36,300.
On 17 May 2016 the Company issued 5,940,000 fully paid ordinary shares at $0.005 per share to Peter Wall
(Non-Executive Chairman) in lieu of his outstanding Director fees of $29,700.
On 17 May 2016 the Company issued 6,666,667 fully paid ordinary shares at $0.005 per share to Lindsay Reed
(Chief Executive Officer) in lieu of his outstanding fees of $33,333.
On 17 May 2016 the Company issued 2,352,400 fully paid ordinary shares at $0.005 per share to Stef Weber
(Chief Financial Officer & Company Secretary) in lieu of his outstanding fees of $11,762.
There were no other shares issued as compensation to KMP during the financial year nor as at the date of
signing this report.
25 | P a g e
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
Equity Instruments Issued on Exercise of Remuneration Options
G
No remuneration options were exercised during the financial year.
H
Value of Shares to KMP
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 2015 AGM
I
The adoption of the Remuneration Report for the financial year ended 30 June 2015 was put to the shareholders
of the Company at the AGM held 20 November 2015. 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 KMP
There were no loans made to any KMP during the year ended 30 June 2016 (2015: nil).
K Loans from KMP
There were no loans from any KMP during the year ended 30 June 2016.
L Other transactions with KMP
Agreements with strategic Angolan partner
During the 2015 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 237,829,976 fully paid ordinary shares in Minbos.
The first class of performance rights can convert to a total of 178,372,482 fully paid ordinary shares (75% of
237,829,976 shares) subject to Sofosa satisfying performance milestones within 24 months from the date of the
agreement. The second class of performance rights can convert to a total of 59,457,494 fully paid ordinary
shares (25% of 237,829,976 shares) subject to Minbos receiving a licence to Mine on the Cabinda project within
36 months from the date the agreements were executed and pursuant to Sofosa’s assistance. The performance
rights were approved on 20 November 2015 at the Company’s Annual General Meeting and accordingly a
$216,493 expense has been recognised for the year ended 30 June 2016. Refer to Note 22 Share based
payments for further detail on the valuation of the performance rights.
During the year the Company incurred fees from Sofosa of $249,223 (US$180,000) of which $20,154
(US$15,000) was outstanding at 30 June 2016.
There are no other transactions with KMP during the financial year ended 30 June 2016.
End of Audited Remuneration Report
26 | P a g e
Lindsay Reed18,500,000 1/09/2014$0.003$0.00291/09/2015$54,171$10,037- 18,500,000 100 Lindsay Reed18,500,000 1/09/2014$0.003$0.00351/09/2016$65,013$33,704$5,803- - $119,184$43,741$5,803Issue 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 2016
Directors’ Report
13. OPTIONS
At the date of this report, the unissued ordinary shares of Minbos under option are as follows:
Class
Director Options
Consultancy Options
Conversion of Convertible note
Conversion of Convertible note
Conversion of Convertible security
Unlisted Options issued on 17 May 2016
Date of
Expiry
30-Dec-16
30-Dec-16
30-Dec-16
30-Dec-16
30-Dec-16
30-Dec-16
Exercise
Price
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
Number
Under Option
88,333,333
30,000,000
100,000,000
83,333,332
10,000,000
384,958,009
696,624,674
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.
14.
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.
15.
INDEMNIFYING OFFICERS
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.
16.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
As disclosed in the Quarterly Activities Report for the three months ended 30 June 2016, the likely
developments of the Company are anticipated to be as follows:
Progress the testing of the bulk samples - The outcome of the bulk sample testing is expected to be
finalized in the December quarter and will optimise the flowsheets for the production scenarios on the
Cabinda project.
Port logistics evaluation - These studies will determine the optimal route to take product from the
Cabinda project to the Port.
Trade Off Studies - Based on the bulk sample test Ausenco will review the process engineering, geotech
and hydrogeological options for each alternative as well as preliminary mining studies and product
transportation studies.
Award the Environmental and Social Impact Assessment (ESIA) contract - The EISA contract for the BFS
of the Cabinda project was awarded in early August.
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.
27 | P a g e
Minbos Resources Limited – Annual Report
For the year ended 30 June 2016
Directors’ Report
17.
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.
18. 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 Finance (WA) Pty Ltd - Other professional services
Total Non-Audit Services
30-Jun-16
$
30-Jun-15
$
24,696
24,696
-
-
19.
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 2016.
Signed in accordance with a resolution of the Board of Directors.
Mr Peter Wall
Non-Executive Chairman
26 September 2016
28 | 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 JARRAD PRUE TO THE DIRECTORS OF MINBOS RESOURCES
LIMITED
As lead auditor of Minbos Resources Limited for the year ended 30 June 2016, 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.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth, 26 September 2016
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) in each State or Territory other than Tasmania.
29
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Corporate Governance Statement
CORPORATE GOVERNANCE
The Board of Directors of 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
(Principles and
Governance Council’s Corporate Governance Principles and Recommendations
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, half yearly 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.
30 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Corporate Governance Statement
1.
Lay solid foundations for management and oversight
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
recommendations on acquisitions and divestment of assets; and
insurance and prepare Board
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 executives. 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.
31 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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 trough the
Chairman and that each Director is able to communicate directly with the Company Secretary.
1.5
1.6
The Company Secretary is responsible for:
advising the Board on Corporate Governance matters;
managing the Company Secretarial function;
ensuring compliance with regulatory requirements;
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.
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 has a diversity policy in place which forms part of Minbos’ 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 one female director and four male directors. The current management is comprised
of Mr Lindsay Reed as Chief Executive Officer, Mr Stef Weber as Chief Financial Officer and Company
Secretary and with a female Geologist and Business Development Manager who commenced
employment on 19 September 2016. The Company intends to appoint more female directors and
executives should a vacancy arise and an appropriately qualified and experienced individual is available.
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.
1.7
The performance of the Board has been reviewed and evaluated internally during the period.
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, excluding Directors, were the CEO and
the 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.
32 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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.
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, for the time being the Company maintains 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
existing 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.
2.2
The Board has a skills matrix that gets 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:
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
5
5
3
5
3
4
5
4
4
3
33 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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 5 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 5 directors Mr
Bill Oliver is regarded as an independent director.
The Company currently 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 were both substantial security holders until May 2016. 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).
The Company concluded an agreement with Sofosa in the prior financial year in terms of which Sofosa
was issued with performance rights that can be converted up to 237.8 million fully paid ordinary
shares. In addition, Sofosa receives a payment of USD 15,000 per month for services that they provide
on the Cabinda phosphate project in Angola.
Ms Dganit Baldar was appointed as a director following substantial security holder Green Services
Innovations Ltd exercising their right to appoint a director to the Board.
The chair of the Board should be an independent director and should not be the same person as the
CEO.
2.5
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.
34 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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.
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
4.
4.1
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:
a) comply with the law;
b) act in the best interests of the Company;
c) be responsible and accountable for their actions;
d) observe the ethical principles of honesty and fairness, including prompt disclosure of potential
conflicts; and
e) respect the rights of employees and create a safe and non-discriminatory workplace.
Safeguard integrity in corporate reporting
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.
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, for the time being the Company maintains a mix of Directors from different
backgrounds with complementary skills and experience.
35 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Corporate Governance Statement
4.2
4.3
5.
5.1
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.
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.
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 charter is included in the
the Company’s website
Company’s corporate governance plan which
www.minbos.com.
is available on
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’s financial position.
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.
36 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Corporate Governance Statement
6.
6.1
Respect the rights of security holders
Companies should design a communications policy for promoting effective communication with
security holders and encouraging their participation at general meetings and disclose their policy
or a summary of that policy...
The Company has a shareholder communication strategy that is included in the Company’s
corporate governance plan which is available on the Company’s website www.minbos.com.
Pursuant to Principle 6, the Company’s objective is to ensure effective communication with its
security holders at all time and that security holders are informed of all major developments
affecting the Company’s website. The Company’s website has a dedicated Investors & Media section
which publishes all important Company information and relevant announcements made to the
market.
Security holders are encouraged to attend and participate at general meetings and are given the
opportunity to ask questions at the meetings.
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
timely
communication. The Board actively engages with security holders at general meetings and annual
general meetings.
through efficient, effective and
the Company
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 their 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
6.4
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.
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.
37 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Corporate Governance Statement
7.
Recognise and manage risk
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 4.1 as the majority of the Board is not independent
and the Board performs the role of the committee. Though 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, for the time being 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.
The Company has a risk management framework in place that is reviewed on an annual basis by the
Board. The Company also has adequate policies in relation to risk management, compliance and
internal control systems. The Company’s policies has a risk matrix 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.
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.
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Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Corporate Governance Statement
8.
Remunerate fairly and responsibly
8.1
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 and
disclose the charter of the committee
the members of the committee
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 with the level of activity of the
Company 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 12 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:
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 12 of the
audited Remuneration Report contained within the Directors’ Report.
8.3 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.
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Consolidated Statement of Profit or Loss & Other Comprehensive Income
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
The Consolidated Statement of Profit or Loss & Other Comprehensive Income is to be read in
conjunction with the accompanying notes.
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Notes30-Jun-1630-Jun-15$$Revenue from continuing operations6 9,957 3,052 Administration expenses7(366,595)(393,409)Depreciation expense12(5,261)(25,852)Exploration expenditure Cabinda project(343,934)(435,218)Finance costs7 - (608,119)Foreign exchange loss(11,210)(4,365)Impairment of exploration and evaluation expenditure14(40,457)(66,259)Loss from sale of plant and equipment(1,228)(3,410)Personnel expenses and director fees7(541,418)(587,553)Share-based payments22(b)(216,494) - Share of net loss from associate13(137,414)(75,519)Loss from continuing operations before income tax(1,654,054)(2,196,652)Income tax expense8(a) - - Loss from continuing operations after income tax(1,654,054)(2,196,652)Other comprehensive incomeItems that may be reclassified to profit or lossExchange differences on translation of foreign operations565,2542,651,645Other comprehensive income for the year, net of tax565,2542,651,645Total comprehensive income / (loss) for the year(1,088,800)454,993Loss for the year is attributable to the owners of Minbos Resources Limited(1,654,054)(2,196,652)Total comprehensive income / (loss) for the year is attributable to the owners of Minbos Resources Limited(1,088,800)454,993Loss per share attributable to ordinary equity holders - Basic loss per share 9(0.001)(0.002)- Diluted loss per share 9(0.001)(0.002)
Consolidated Statement of Financial Position
Minbos Resources Limited – Financial Report
As at 30 June 2016
The Consolidated Statement of Financial Position is to be read in
conjunction with the accompanying notes.
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Notes30-Jun-1630-Jun-15$$ASSETSCurrent assetsCash and cash equivalents101,606,934192,872Trade and other receivables1129,26933,102Other financial assets15335,981 - Total current assets1,972,184225,974Non-current assetsPlant and equipment122,465 18,335 Net investment in associate13 18,538,704 17,781,195 Exploration and evaluation expenditure1434,229 33,629 Total non-current assets18,575,398 17,833,159 Total assets20,547,58218,059,133LIABILITIESCurrent liabilitiesTrade and other payables 16104,281312,403Provisions17 39,676 21,884 Total current liabilities143,957334,287Non-current liabilitiesDeferred tax liabilities8(b) 3,935,637 3,935,637 Total non-current liabilities 3,935,637 3,935,637 Total liabilities4,079,5944,269,924Net assets16,467,98813,789,209EQUITYIssued capital1833,240,54429,733,200Reserves19 6,915,025 6,089,536 Accumulated losses20(23,687,581)(22,033,527)Total equity16,467,98813,789,209
Consolidated Statement of Changes in Equity
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
The Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
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IssuedCapitalShare-basedPayment& OptionReserveEmployee Share Plan ReserveForeign Currency Translation ReserveAccumulated LossesTotal Equity$$$$$$At 1 July 201529,733,200 2,185,435 409,640 3,494,461 (22,033,527)13,789,209 Comprehensive income:Loss for the year- - - - (1,654,054)(1,654,054)Other comprehensive income- - - 565,254- 565,254Total comprehensive income /(loss) for the year- - - 565,254(1,654,054)(1,088,800)Transactions with ownersin their capacity as owners:Issue of share capital3,522,914 - - - - 3,522,914 Capital raising costs(15,570)- - - - (15,570)Share-based payments- 216,494 - - - 216,494 Employee benefits expense- - 43,741 - - 43,741 At 30 June 201633,240,544 2,401,929 453,381 4,059,715 (23,687,581)16,467,988 IssuedCapitalShare-basedPayment& OptionReserveEmployee Share Plan ReserveForeign Currency Translation ReserveAccumulated LossesTotal Equity$$$$$$At 1 July 201426,172,620 1,820,531 340,000 842,816 (19,836,875)9,339,092 Comprehensive income:Loss for the year- - - - (2,196,652)(2,196,652)Other comprehensive income- - - 2,651,645 - 2,651,645 Total comprehensive income /(loss) for the year- - - 2,651,645 (2,196,652)454,993 Transactions with ownersin their capacity as owners:Issue of share capital3,704,670 - - - - 3,704,670 Capital raising costs(144,090)- - - - (144,090)Options issued on repayment of borrowings- 364,904 - - - 364,904 Employee benefits expense- - 69,640 - - 69,640 At 30 June 201529,733,200 2,185,435 409,640 3,494,461 (22,033,527)13,789,209
Consolidated Statement of Cash Flows
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
The Consolidated Statement of Cash Flows is to be read in
conjunction with the accompanying notes.
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30-Jun-1630-Jun-15$$Cash flows from operating activitiesPayment to suppliers and employees(855,747)(1,117,298)Payment for exploration and evaluation expenditure(463,109)(389,946)Interest received4,3223,052Interest paid- (57,917)Net cash outflow from operating activities10(c)(1,314,534)(1,562,109)Cash flows from investing activitiesProceeds from the sale of plant and equipment8,7348,324Payment for plant and equipment(851)(4,053)Net cash inflow from investing activities7,8834,271Cash flows from financing activitiesProceeds from the issue of shares, net of costs3,386,2492,222,215Loan to associate(329,555)(152,232)Loan to Joint Venture Partner Petril Projects Ltd15(335,981)- Repayment of convertible note facility- (350,000)Net cash inflow from financing activities2,720,7131,719,983Net increase in cash and cash equivalents1,414,062162,145Cash and cash equivalents at the beginning of the year192,87230,727Effect of exchange rate fluctuations on cash held- - Cash and cash equivalents at the end of the year10(a)1,606,934192,872
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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 2016 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 26 September 2016.
(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) Basis of measurement
The consolidated financial statements have been prepared on a going concern basis in accordance with the
historical cost convention, unless otherwise stated.
(c) New, revised or amending Accounting Standards and Interpretations 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.
None of the new standards and amendments to standards that are mandatory for the first time for the
financial year beginning 1 July 2015 affected any of the amounts recognised in the current period or any
prior period and are not likely to affect future periods.
(d) New standards and interpretations not yet mandatory or early adopted
The Group has not elected to apply any pronouncements before their operative date in the annual
reporting period beginning 1 July 2015.
(e) Going Concern
For the year ended 30 June 2016 the group recorded a loss of $1,654,054 and had net cash outflows from
operating activities of $1,314,534 and net working capital of $1,828,227. Furthermore the directors have
prepared a cash flow forecast which indicates that the entity would be required to raise funds to provide
additional working capital and to continue to further develop its Cabinda project through its associate
entity.
The ability of the group to continue as a going concern is dependent on securing additional funding through
capital raising to fund its ongoing exploration commitments and working capital.
These conditions indicate a material uncertainty that may cast a significant doubt about the group’s ability
to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its
liabilities in the normal course of business.
44 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
Management believe there are sufficient funds to meet the group’s working capital requirements and as at
the date of this report. Subsequent to year end the entity expects to receive additional funds via capital
raising (including exercise of options by shareholders).
The financial statements have been prepared on the basis that the group is a going concern, which
contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities in
the normal course of business for the following reasons:
the directors are confident in the company’s ability to raise the capital mentioned above with the recent
success in a capital raising of $3.4 million that completed in May 2016;
the directors are also confident they are able to manage discretionary spending to ensure that cash is
available to meet debts as and when they fall due.
Should the group not be able to continue as a going concern, it may be required to realise its assets and
discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those
stated in the financial statements and that the financial report does not include any adjustments relating to
the recoverability and classification of recorded asset amounts or liabilities that might be necessary should
the group not continue as a going concern.
(f) Critical accounting estimates and judgments
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 2016 (2015: nil) for the Group.
(ii) Note 13: Investment in Associate - No impairment indicators exist under AASB 6 on the Cabinda
project and a full impairment assessment under AASB 136 is therefore not required.
Reclassification of loans to associate
The group has reclassified the long term loan to associate to investment in associate as the loans
advanced are interest free, there is no set term of repayment and is not likely to occur in the
foreseeable future, which in substance forms part of the group’s net investment in associate.
45 | P a g e
Notes to the Consolidated Financial Statements
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Carrying value of investment in associate
The group assesses whether there is objective evidence that the investment in associate is impaired by
reference to one or more events that occurred during a reporting period that would have an impact
on the estimated future cashflow of the investment. This includes the assessment of whether facts
and circumstances (as detailed in note 3(k)) suggest that the Cabinda project held in the associate
could be impaired together with other factors such as resource estimate. Phosphate consensus prices
are considered in determining whether conditions exist to suggest that the recoverable amount of the
investment is lower than its carrying value. When there are indicators of impairment under AASB 6,
the investment will be tested for impairment under AASB 136 Impairment of non-financial assets as
disclosed in note 3(f). As at 30 June 2016 there were no internal and external indicators to suggest
that the investment is impaired.
(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 or Loss and Other
Comprehensive Income.
At 30 June 2016, Allamanda continued to hold the Kanzi Joint Venture licences, accordingly the Group
has impaired the exploration expenditure in relation to the Kanzi Joint Venture, incurred during the
financial year.
The Company also incurred exploration expenditure on the Cabinda project of $343,934 (2015:
$435,218), which was reclassified through the profit or loss due to tenure being held by the associate
and not Minbos directly. This exploration expenditure is in addition to what was accounted for
through the Joint Venture with Petril as a financial asset (refer note 15 in the financial statements).
(iv) Note 22: 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.
During the financial year, the Company issued performance rights to KMP which were approved on 20
November 2015 at the Company’s AGM and accordingly a $216,494 share based payment expense has
been recognised in the Statement of Profit or Loss and Other Comprehensive Income. The
issued are non-market performance rights, with no consideration upon
performance rights
achievement. Accordingly, the fair value of the performance rights is by direct reference to the share
price on grant date.
46 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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 2016 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. Cost includes equity contribution and loan advances (interest free with no
set term of repayment). 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.
47 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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 (AUD). 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.
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Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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.
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Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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.
50 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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:
Vehicles:
Office equipment:
3 years
5 years
6 to 10 years
The residual value, the useful life and the depreciation method applied to an asset are reviewed at each
financial year end and if appropriate, adjusted.
(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.
51 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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) 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.
52 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
(o) 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.
(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.
(p) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds. 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.
(q) 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.
53 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
(r) 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.
(s) 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 has decided against early adoption of these standards and, has not yet determined the potential
impact on the financial statements from the adoption of these standards and interpretations.
Standard/
Interpretation Nature of Change
AASB 9
‘Financial
Instruments’,
and the relevant
amending
standards
Classification and measurement
AASB 9 amendments the classification and measurement of
financial assets:
Financial assets will either be measured at amortised cost,
fair value through other comprehensive income (FVTOCI)
or fair value through profit or loss (FVTPL).
Effective for
annual reporting
periods beginning
on or after
1 January 2018
Expected to be
initially applied
in the financial
year ending
30 June 2019
Financial assets are measured at amortised cost or FVTOCI
if certain restrictive conditions are met. All other financial
assets are measured at FVTPL.
All investments in equity instruments will be measured at
fair value. For those investments in equity instruments
that are not held for trading, there is an irrevocable
election to present gains and losses in OCI. Dividends will
be recognised in profit or loss.
The following requirements have generally been carried
forward unchanged from AASB 139 Financial Instruments:
Recognition and Measurement into AASB 9:
Classification and measurement of financial liabilities, &
Derecognition requirements for financial assets and
liabilities.
However, AASB 9 requires that gains or losses on financial
liabilities measured at fair value are recognised in profit or
loss, except that the effects of changes in the liability’s credit
risk are recognised in other comprehensive income.
54 | P a g e
Notes to the Consolidated Financial Statements
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Impairment
The new impairment model in AASB 9 is now based on an
‘expected loss’ model rather than an ‘incurred loss’ model.
A complex three stage model applies to debt instruments at
amortised cost or at fair value through other comprehensive
income for recognising impairment losses.
A simplified impairment model applies to trade receivables
and lease receivables with maturities that are less than 12
months.
For trade receivables and lease receivables with maturity
longer than 12 months, entities have a choice of applying the
complex three stage model or the simplified model.
An entity will recognise revenue to depict the transfer of
promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services. This means
that revenue will be recognised when control of goods or
services is transferred, rather than on transfer of risks and
rewards as is currently the case under IAS 18 Revenue.
AASB 16 eliminates the operating and
lease
finance
classifications for lessees currently accounted for under AASB
117 Leases. It instead requires an entity to bring most leases
onto its balance sheet in a similar way to how existing finance
leases are treated under AASB 117. An entity will be required
to recognise a lease liability and a right of use asset in its
balance sheet for most leases.
There are some optional exemptions for leases with a period
of 12 months or less and for low value leases.
Lessor accounting remains largely unchanged from AASB 117.
AASB 15
‘Revenue from
Contracts with
Customers’
AASB 16
‘Leases’
1 January 2018
30 June 2019
1 January 2019
30 June 2020
4.
FINANCIAL RISK MANAGEMENT
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.
55 | P a g e
Notes to the Consolidated Financial Statements
The carrying values of the Group’s financial instruments are as follows:
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
(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 2016, 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.
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30-Jun-1630-Jun-15$$Financial assetsCash and cash equivalents1,606,934 192,872 Trade and other receivables29,269 33,102 Other financial assets335,981 - 1,972,184 225,974 Financial liabilitiesTrade and other payables104,281 312,403 104,281 312,403 Net exposure1,867,903 (86,429) BalanceBalance$$Cash and cash equivalents2.49%1,606,934 1.42%192,872 30-Jun-1630-Jun-15Weighted average interest rateWeighted average interest rate30-Jun-1630-Jun-1530-Jun-1630-Jun-15$$$$+ 1.0% (100 basis points)11,249 1,350 - - - 1.0% (100 basis points)(11,249) (1,350) - - Post tax profitOther comprehensive higher/(lower)higher/(lower)Judgements of reasonably possible movements:
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
(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.
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 $4,908,854 at 30 June 2016, and
Cash held with National Australia Bank, Bankwest and Standard Bank of South Africa.
(i) Cash
The Group’s primary bankers are National Australia Bank, Bankwest and Standard Bank of South Africa. The
Board considers the use of these financial institutions, which have a rating of AA-, 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 paid 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 2016.
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30-Jun-1630-Jun-15$$Standard & Poor's ratingAA-1,600,720 185,983 BBB-6,214 6,889 1,606,934 192,872
Notes to the Consolidated Financial Statements
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
The table below reflects the respective undiscounted cash flows for financial assets existing at 30 June 2016.
(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 2016 and 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 Group does not have any level 2 or 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.
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$$$$$30-Jun-16Trade and other payables104,281 - - 104,281 104,281 104,281 - - 104,281 104,281 30-Jun-15Trade and other payables312,403 - - 312,403 312,403 312,403 - - 312,403 312,403 Carrying amountTotal contractual cash flowsContractual maturitiesof financial liabilities<6 months>6-12 months>12 months$$$$$30-Jun-16Other financial assets335,981 - - 335,981 335,981 335,981 - - 335,981 335,981 Carrying amountContractual maturitiesof financial assets<6 months>6-12 months>12 monthsTotal contractual cash flows
Notes to the Consolidated Financial Statements
6.
REVENUE FROM CONTINUING OPERATIONS
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
7.
EXPENSES
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30-Jun-1630-Jun-15$$Other revenueInterest revenue9,957 3,052 9,957 3,052 30-Jun-1630-Jun-15$$Administration expensesAdvertising and marketing expenses18,502 27,310 Compliance and regulatory expenses158,599 124,363 Computer expenses6,306 17,222 Consulting and corporate expenses63,108 143,983 Provision for doubtful debts1,500 (4,500) Rent expense70,951 56,299 Travel and accommodation expenses17,893 604 Other administration expenses29,736 28,128 366,595 393,409 Finance costsFair value movement on convertible notes at fair value through profit or loss- 581,571 Interest expense on convertible notes- 22,300 Other- 4,248 - 608,119 Personnel expenses and director feesWages and salaries, including superannuation376,952 376,983 Director fees and other benefits118,355 108,000 Employee share plan expense (Refer Note 19)43,741 69,640 Other employee expenses2,370 32,930 541,418 587,553
Notes to the Consolidated Financial Statements
8.
INCOME TAX EXPENSE
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
The Group has Australian carried forward tax losses of $7,320,877 (tax effected at 30%, $2,196,263) as at 30
June 2016 (2015: $7,005,667 (tax effected at 30%, $2,101,700)). In view of the Group's trading position, the
Directors have not included this tax benefit in the Group's Consolidated Statement of Financial Position. A tax
benefit will only be recognised to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered.
The tax benefits of the above deferred tax assets will only be obtained if:
(a) The Consolidated Entity derives future assessable income of a nature and of an amount sufficient to
enable the benefits to be utilised;
(b) The Consolidated Entity continues to comply with the conditions for deductibility imposed by law; and
(c) No changes in income tax legislation adversely affect the Consolidated Entity from utilising the benefits.
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(a) Numerical reconciliation of accounting losses to income tax expense30-Jun-1630-Jun-15$$Accounting loss before income tax(1,654,054) (2,196,652) At the entity's Australian statutory income tax rate of 30% (2015: 30%)(478,681) (707,825) At the entity's DRC statutory income tax rate of 30% (2015: 30%)(3,847) (11,050) At the entity's South African statutory income tax rate of 28% (2015: 28%)(3,520) (24,581) Adjusted for tax effect of the following amounts:Non-deductible / taxable items136,544 348,266 Non-taxable / deductible items(39,533) (69,701) Prior year adjustment146,960 - Income tax benefits not brought to account 242,077 464,891 Income tax expense / (benefit)- - (b) Recognised deferred tax assets and liabilities30-Jun-1630-Jun-15Deferred tax liabilities$$Investment in associateOpening balance3,935,637 3,935,637 Charges / (credited) to income- - Closing balance3,935,637 3,935,637 Total deferred tax liability recognised3,935,637 3,935,637 (c) Deferred tax assets and liabilities not brought to account30-Jun-1630-Jun-15$$On income tax account:Carried forward tax losses2,196,263 2,101,700 Deductible temporary differences40,849 45,992 Unrecognised deferred tax assets2,237,112 2,147,692 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: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:
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
EARNINGS PER SHARE
9.
(a) Basic loss per share
The calculation of basic loss per share at 30 June 2016 was based on the loss attributable to ordinary
shareholders of $1,654,054 (2015: $2,196,652) and a weighted average number of ordinary shares outstanding
during the financial year ended 30 June 2016 of 1,517,735,708 (2015: 1,061,926,322) calculated as follows:
(b) Diluted loss per share
Potential ordinary shares are not considered dilutive, thus diluted loss per share is the same as basic loss per
share.
10.
CASH AND CASH EQUIVALENTS
(a) Reconciliation to cash at the end of the year
(b) Interest rate risk exposure
The Group’s exposure to interest rate risk is discussed in Note 4: Financial Risk Management.
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30-Jun-1630-Jun-15Net loss attributable to the ordinary equity holders of the Group ($)(1,654,054)(2,196,652)Weighted average number of ordinary shares for basis per share (No) 1,517,735,708 1,061,926,322 Continuing operations- Basic loss per share ($)(0.001)(0.002)30-Jun-1630-Jun-15$$Cash at bank and in hand855,742 191,680 Short-term deposit751,192 1,192 1,606,934 192,872
Notes to the Consolidated Financial Statements
(c) Reconciliation of net cash flows from operating activities
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
(d) Non-cash financing and investing activities
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30-Jun-1630-Jun-15$$Loss for the financial year(1,654,054) (2,196,652) Adjustments for:Depreciation expense5,261 25,852 Employee benefits expense43,741 69,640 Finance costs- 608,119 Foreign currency translation11,210 4,365 Loss from sale of plant and equipment1,228 3,410 Share-based payments216,494 - Fees and wages settled in shares121,095 - Share of net loss from associate137,414 75,519 Change in assets and liabilities Decrease / (increase) in trade and other receivables9,450 (19,449) Decrease in trade and other payables(224,165) (126,195) Increase / (decrease) in provisions17,792 (6,718) Net cash (used in) operating activities(1,314,534) (1,562,109) 30-Jun-1630-Jun-15$$Conversion of convertible notes (refer note 18)- 910,110 Conversion of Director fees- 83,325 Conversion of corporate advisory fees- 48,263
Notes to the Consolidated Financial Statements
11.
TRADE AND OTHER RECEIVABLES
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
(a) Other receivables
On 5 December 2012 Minbos signed a binding loan agreement with Robert McCrae (former Chief Executive
Officer) to repay his outstanding loan by 31 May 2013 and provide Minbos with security over 1,500,000 of
the Company’s shares for the outstanding loan. At 30 June 2016 the loan had not been repaid, the
Company therefore made a provision against the unrecoverable portion of the loan. The outstanding
balance at 30 June 2016 was $6,000 (2015: $7,500) being the value of the 1,500,000 Minbos shares held as
security at 30 June 2016.
(b) Risk exposure
Information about the Group's exposure to credit risk, foreign exchange and interest rate risk is provided in
Note 4: Financial Risk Management.
The Group has no impairments to other receivables or have receivables that are past due but not impaired.
12.
PLANT AND EQUIPMENT
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30-Jun-1630-Jun-15$$Trade and other receivables191 - Other receivables (a)6,000 7,500 Indirect taxes receivable11,415 16,440 Prepayments5,969 9,093 Deposits59 69 Accrued interest5,635 - 29,269 33,102 $$$$$Year ended 30 June 2016Opening net book amount4,668 3,208 54 10,405 18,335 Additions- 851 - - 851 Disposals(1,044) (220) (48) (10,993) (12,305) Foreign exchange translation263 - (6) 588 845 Depreciation charge(3,887) (1,374) - - (5,261) Closing net book amount- 2,465 - - 2,465 At 30 June 2016Cost- 4,423 - - 4,423 Accumulated depreciation- (1,958) - - (1,958) Net book amount- 2,465 - - 2,465 Motor VehicleComputer EquipmentFurniture & FittingsTotalOther Fixed Assets
Notes to the Consolidated Financial Statements
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
NET INVESTMENT IN ASSOCIATE
13.
As part of the acquisition of Tunan Mining Limited in the 2011 financial year, Minbos acquired a 50% interest in
Mongo Tando Limited, a company incorporated in the British Virgin Isles. By virtue of holding less than 50% of
the voting rights the entity has been accounted for as an investment in an associate.
(a) Movements in carrying amounts
During the year Minbos announced that the Angolan MGM had issued two new licence for the Cabinda project.
The first
licence
(015/01/10/T.P/ANG.MGM.2015) for the Chivovo, Chibuete, Ueca, Cambota and Mongo Tando Deposits.
is for the Cacata deposit and the second
licence (014/04/09/T.P/ANG.MGM.2015)
Both licences have been issued for a five year period respectively expiring on 25 September 2020 and 14
October 2020 and are renewable for a further two years. The new licences replace the previous exploration
permit (006/06/01/L.P./GOV.ANG.MGM.2010).
64 | P a g e
$$$$$Year ended 30 June 2015Opening net book amount23,835 900 852 18,869 44,456 Additions- 4,053 - - 4,053 Disposals(10,297) (385) (522) - (11,204) Foreign exchange translation3,504 56 42 3,280 6,882 Depreciation charge(12,374) (1,416) (318) (11,744) (25,852) Closing net book amount4,668 3,208 54 10,405 18,335 At 30 June 2015Cost44,157 4,785 808 36,418 86,168 Accumulated depreciation(39,489) (1,577) (754) (26,013) (67,833) Net book amount4,668 3,208 54 10,405 18,335 Motor VehicleComputer EquipmentFurniture & FittingsTotalOther Fixed Assets30-Jun-1630-Jun-15$$Equity contributed13,629,850 13,201,896 Loan advanced4,908,854 4,579,299 Carrying amount of the investment in associate18,538,704 17,781,195 Movement reconciliationBalance at the beginning of the financial year17,781,195 15,081,883 Exchange differences565,368 2,632,177 Share of net loss in associate(137,414)(75,519)Loan to associate (refer note 28(d))329,555 142,654 Balance at the end of the financial year18,538,704 17,781,195
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
The issue of the licences were preceded by Minbos and Petril (JV partners) signing 2 Mining Investment
Agreements in December 2014 with the MGM (refer Minbos announcement on 12 December 2014). A
presidential decree was issued on 8 June 2015 confirming that the Cabinda project has been approved and
instructing Angolan Ministries to provide all the infrastructure and support that the JV partners requires for the
project. Minbos and Petril are in the process of obtaining National Private Investment of Angola (ANIP) approval
to transfer the shares to Mongo Tando Limited BVI. Per the shareholders agreement, the Company has the right
to explore the Cabinda Project.
The signed contracts with MGM also covers the mining phase of the Cabinda project. On completion of the
Environmental Impact and Economic Viability Study the issue of a mining licence can be requested. The mining
licence will be valid for thirty five years, renewable for successive periods of ten years.
(b) Statement of Financial Position of the associate
(c) Statement of Profit or Loss & Other Comprehensive Income
65 | P a g e
30-Jun-1630-Jun-15ASSETS$$Current assetsCash and cash equivalents 308,340 221 Other receivables 377,868 298,474 Total current assets 686,208 298,695 Non-current assets 9,882,756 9,118,488 Total non-current assets 9,882,756 9,118,488 Total assets 10,568,964 9,417,183 LIABILITIESCurrent liabilitiesTrade and other payables 509,612 492,068 Borrowings 13,382,901 12,063,506 Total current liabilities 13,892,513 12,555,574 Total liabilities 13,892,513 12,555,574 Net liabilities(3,323,549) (3,138,391) Minbos share of total equity (50%)(1,661,775) (1,569,196) Fair value of exploration and evaluation on acquisition15,291,625 14,771,092 Loan advanced4,908,854 4,579,299 Carrying amount of the investment in associate18,538,704 17,781,195 Exploration and evaluation expenditure30-Jun-1630-Jun-15$$Revenue from continuing operations- - Administration expenses(273,861) (146,314) Finance costs(968) (4,724) Loss from continuing operations before income tax(274,829) (151,038) Income tax expense- - Loss from continuing operations after income tax(274,829) (151,038)
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
(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) At 30 June 2016, Allamanda continued to hold the Kanzi Joint Venture licences, accordingly the Group has
impaired the exploration expenditure incurred during the year until the licences are transferred to the Joint
Venture entity, Phosphalux SPRL.
15.
OTHER FINANCIAL ASSETS
(i) During the June quarter, the Company provided a short term loan of US$250,000 to Petril for their share of the
cash call. Petril repaid this loan with 10% interest on 14 July 2016.
66 | P a g e
AssetsLiabilitiesRevenueProfit/(Loss)%$$$$Mongo Tando Limited30-Jun-1650%5,284,482(6,946,258)-(137,414)Mongo Tando Limited30-Jun-1550%4,708,591(6,277,787)-(75,519)Ownershipinterest30-Jun-1630-Jun-15$$Carrying amount of exploration and evaluation expenditure34,229 33,629 Movement reconciliationBalance at the beginning of the financial year33,629 49,575 Additions - Kanzi project and Australian tenements41,057 50,313 Impairment - Kanzi project (i)(40,457)(66,259)Balance at the end of the financial year34,229 33,629 30-Jun-1630-Jun-15$$CURRENTLoan to Mongo Tando Limited (i)335,981 - 335,981 -
Notes to the Consolidated Financial Statements
16.
TRADE AND OTHER PAYABLES
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Trade and other payables are non-interest bearing liabilities stated at cost and settled within 30 days. Information
about the Group's exposure to foreign currency risk is provided in Note 4: Financial Risk Management.
There were no outstanding Director fees owed at 30 June 2016 (2015: $46,200 relates to Director Fees).
(i)
(ii) Of this outstanding balance, $20,154 relates to the Angolan Services Agreement with Sofosa a Company which
Mr Catulichi (Non-Executive Director) is a shareholder and Director (2015: $19,510 relates to the Angolan
Services Agreement).
For trade and other payables the fair value is approximate to their carrying value amount, due to their short term
nature.
17.
PROVISIONS
CONTRIBUTED EQUITY
18.
(a) Issued and fully paid
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proposed winding up of the company in
proportion to the number and amount paid on the share hold.
67 | P a g e
30-Jun-1630-Jun-15$$Trade creditors (i)23,562 208,397 Accruals (ii)41,892 91,149 Superannuation payable27,439 12,857 PAYG payable11,388 - 104,281 312,403 30-Jun-1630-Jun-15$$Provision for annual leave39,676 21,884 39,676 21,884 $No.$No.Ordinary shares33,240,544 2,073,547,651 29,733,200 1,367,149,881 33,240,544 2,073,547,651 29,733,200 1,367,149,881 30-Jun-1530-Jun-16
Notes to the Consolidated Financial Statements
(b) Movement Reconciliation
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
(i) 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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 23.
68 | P a g e
ORDINARY SHARESDateQuantityIssue price$Balance 30 June 2014292,148,93826,172,620Rights Issue (i)28/07/2014104,786,4680.003314,359 Conversion of CPS Convertible Note (ii)25/08/2014100,000,0000.004400,000 Rights Issue - Shortfall (iii)03/09/2014447,119,6100.0031,341,359 Conversion of CPS Convertible Note (iv)06/10/201483,333,332 0.004333,333 Conversion of Convertible Security (iv)06/10/201433,333,333 0.004133,334 Reeves Debt Conversion (v)09/10/201486,703,200 0.003260,110 Reeves Debt Conversion (v)09/10/201410,725,000 0.00332,175 Employee share plan (vi)12/11/201431,000,000 0.005- Placement (vii)08/04/2015178,000,000 0.005890,000Cost of placements- - - (144,090)Balance 30 June 20151,367,149,88129,733,200Shares issued in lieu of director fees (viii)18/12/20159,075,000 0.00436,300 Placement (ix)23/02/2016268,000,000 0.0051,340,000 Placement (ix)17/05/2016412,363,703 0.0052,061,819 Shares issued in lieu of outstanding fees (x)17/05/201616,959,067 0.00584,795 Cost of placements- - - (15,570)Balance 30 June 20162,073,547,65133,240,544
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
(vii) 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.
(viii) On 18 December 2015, the Company issued 9,075,000 shares at $0.004 per share to Bill Oliver in lieu of
his outstanding Director Fees of $36,300.
(ix) On 23 February 2016, the Company completed Tranche 1 of a capital placement and issued 268,000,000
shares at $0.005 per share. The final tranche was completed on 17 May 2016 and 412,363,703 shares
were issued at $0.005 per share.
(x) On 17 May 2016, the company issued an additional 16,959,067 shares at $0.005 per share. Of which
14,959,067 shares were issued to KMP and 2,000,000 shares were issued to a consultant in lieu of
outstanding fees.
(c) Options on issue as at 30 June 2016
Class
Director Options
Consultancy Options
Conversion of Convertible note (i)
Conversion of Convertible note (i)
Conversion of Convertible security (i)
Unlisted Options issued on 17 May 2016
Date of
Expiry
30-Dec-16
30-Dec-16
30-Dec-16
30-Dec-16
30-Dec-16
30-Dec-16
Exercise
Price
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
Number
Under Option
88,333,333
30,000,000
100,000,000
83,333,332
10,000,000
384,958,009
696,624,674
Information relating to options issued as share-based payments are set out in Note 22 and options issued to
KMP are set out in the remuneration report.
(i) These options were issued in the 2015 financial year to settle convertible note liabilities and was valued at
$364,904, refer Note 19.
(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.
69 | P a g e
Notes to the Consolidated Financial Statements
19.
RESERVES
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
(i) This consist of 696,624,674 options (refer Note 18 (c)) and 237,829,976 performance rights (refer note 22).
Nature and purpose of reserves
Share-based payments and option reserve
The reserve represents the value of performance rights issued to Sofosa, a Company which Mr Catulichi (Non-
Executive Director) is a shareholder and Director, that can convert up to a total of 237.8 million fully paid
ordinary shares in Minbos, which amounted to $216,494 (see note 22). In the previous financial years the
reserve included options issued as a result of conversion of convertible notes and also 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.
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.
70 | P a g e
$No.$No.Share-based payment & option reserve (i)2,401,929 934,454,650 2,185,435 312,816,665 Employee share plan reserve453,381 - 409,640 - Foreign currency translation reserve4,059,715 - 3,494,461- 6,915,025 934,454,650 6,089,536 312,816,665 30-Jun-1630-Jun-1530-Jun-1630-Jun-15Movement reconciliation$$Share-based payment and option reserveBalance at the beginning of the year2,185,435 1,820,531 - 364,904Accounting for performance rights216,494 - Balance at the end of the year2,401,929 2,185,435 Employee share plan reserveBalance at the beginning of the year409,640 340,000 Equity settled share-based payment transactions (refer Note 23(b))43,741 69,640 Balance at the end of the year453,381 409,640 Foreign currency translation reserveBalance at the beginning of the year3,494,461842,816565,2542,651,645Balance at the end of the year4,059,7153,494,461Effect of translation of foreign currency operations to group presentation Equity settled finance costs
Notes to the Consolidated Financial Statements
20.
ACCUMULATED LOSSES
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
DIVIDENDS
21.
No dividend has been paid during the financial year and no dividend is recommended for the financial year.
SHARE-BASED PAYMENTS
22.
(a) Fair value of performance rights granted during the year
During the financial year, the Company issued performance rights to Sofosa, a related party consultant that
can convert up to a total of 237.8 million fully paid ordinary shares in Minbos. These performance rights were
issued in two tranches, with each Tranche having different performance milestones.
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 24 months from the date of
the agreement. Tranche 1 performance rights have the following performance conditions (all conditions must
be satisfied):
Grant of the new exploration permits for the Cabinda project (Completed),
Sofosa transferring all of the shares it holds in Mongo Tando Ltda to Minbos or its nominee (Minbos and
Petril are in the process of obtaining ANIP approval to transfer the shares to Mongo Tando Limited BVI),
Strategically supporting Minbos and its corporate initiatives.
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 36 months
from the date the agreements and pursuant to Sofosa’s assistance.
The performance rights were approved on 20 November 2015 at the Company’s Annual General Meeting and
accordingly a $216,494 share based payment expense has been recognised for the financial year ended 30
June 2016 in the Statement of Profit or Loss and Other Comprehensive Income.
The performance rights issued are straight forward non-market performance rights, with no consideration upon
achievement. Accordingly, the fair value of the performance rights is by direct reference to the share price on
grant date. The valuation model inputs are shown in the table below:
The total share based payment of the performance rights is $475,660, expensed over the vesting period of the
performance rights. The total expense recognised in the current financial year is $216,494, refer table below.
71 | P a g e
30-Jun-1630-Jun-15$$Movement in accumulated lossesBalance at the beginning of the financial year(22,033,527)(19,836,875)Net loss in current year(1,654,054)(2,196,652)Balance at the end of the financial year(23,687,581)(22,033,527)Tranche 1 (75%)Tranche 2(25%)Date of Grant20/11/201520/11/2015Date of Expiry27/01/201727/01/2018Underlying Share Price (at date of issue)0.0020.002Number of rights granted178,372,48259,457,494Total Fair Value of Rights356,745118,915
Notes to the Consolidated Financial Statements
(b) Recognised share-based payment expense
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
(c) Summary of options granted during the year
Total options at 30 June 2016 are 696,624,674, of which 276,666,665 options were not included in the table above as they
related to convertible notes and securities.
Total options at 30 June 2015 are 312,816,665, of which 276,666,665 options were not included in the table
above as they related to convertible notes and securities.
72 | P a g e
Value recognised during yearValue to be recognised in future years$$Performance rights issued to Sofosa216,494259,166216,494259,166As at 30 June 2016Placement Options07-Mar-1308-Mar-16$0.09371,150,000 - (1,150,000)- Director Options25-Nov-1330-Dec-16$0.015,000,000 - - 5,000,000 Consideration for services08-May-1430-Dec-16$0.0130,000,000 - - 30,000,000 Unlisted Options17-May-1630-Dec-16$0.01- 384,958,009 - 384,958,009 36,150,000 384,958,009 (1,150,000)419,958,009 $0.01- - $0.01Weighted average exercise priceClassIssue DateDate of ExpiryExercise PriceBalance at start of the year Granted during the yearExpired during the yearBalance at end of the yearAs 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 Director Options25-Nov-1330-Dec-16$0.015,000,000 - - 5,000,000 Consideration for services08-May-1430-Dec-16$0.0130,000,000 - - 30,000,000 39,150,000 - (3,000,000)36,150,000 $0.03- - $0.01Weighted average exercise priceClassIssue DateBalance at end of the yearBalance at start of the yearDate of ExpiryExercise Price Granted during the yearExpired during the year
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
EMPLOYEE SHARE PLAN RESERVE
23.
(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 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 vested after satisfying the following vesting conditions;
(a) one year from the Commencement Date (being 1 September 2015); and
(b) once the announcement was made to the market that the Company had renewed 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 KMP during the financial year nor as at the date of
signing this report.
73 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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 2016 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 minimum weighted average vesting period of the share options outstanding as at 30 June 2016 is 0.167
years (2015: 0.67).
(c) Summary of shares granted during the financial year
During the 2016 financial year no shares were issued to employees under the employee share plan.
The table below illustrates the number and weighted average exercise price (‘WAEP’) of, and movements in,
shares issued under the employee share plan during the 2015 financial year.
(i) Mr Sullivan resigned as Managing Director on 21 February 2014.
74 | P a g e
$$$$Key Management PersonnelEmployee share plan - Mr Reed43,741 5,803 69,640 49,544 43,741 5,803 69,640 49,544 Value recognised during year30-Jun-16Value to berecognised in future yearsValue to berecognised in future years30-Jun-15Value recognised during yearLindsay Reed01-Sep-1401-Sep-16$0.003- 37,000,000 - 37,000,000 18,500,000 Mr Sullivan (i)14-Mar-1301-Nov-22$0.046,000,000 - (6,000,000)- - 6,000,000 37,000,000 (6,000,000)37,000,000 18,500,000 As at 30 June 2015ClassDate of ExpiryIssue PriceBalance at start of the yearIssue DateVestedandexercisableForfeited during the yearBalance at end of the year Granted during the year
Notes to the Consolidated Financial Statements
24.
PARENT ENTITY
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Parent Entity Commitments
There are no capital or leasing commitments of the parent entity for the year ended 30 June 2016.
COMMITMENTS
25.
Cabinda Project:
During the financial year the BFS for the Cabinda project commenced and subsequent to year end the Company
entered into contractual arrangements with Ausenco and Prime Resources. The expenditure commitment for
these two contracts and other BFS cost is dependent on results of Phase 1 of the BFS (Trade-Off studies) which
will determine the best treatment routes to develop the Cacata deposit that forms part of the Cabinda project.
The commitment for the year ending 30 June 2017 on Phase 1 of the BFS studies is USD 1.2m (100% basis)
(Minbos 50% share USD 0.6m).
There was no minimum commitment for the year ended 30 June 2015.
Kanzi Project:
In the current and prior financial years, there is no minimum commitments in relation to the Kanzi project in the
DRC.
75 | P a g e
30-Jun-1630-Jun-15$$Current Assets1,965,727218,971Non-Current Assets22,459,05022,083,223Total Assets24,424,777 22,302,194 Current Liabilities139,586326,392Total Liabilities139,586326,392Net Assets24,285,19121,975,802Contributed equity33,240,54429,733,200Share-based payments and option reserve2,401,9292,185,435Employee share plan reserve453,381409,640Accumulated losses(11,810,663)(10,352,473)Total Equity24,285,191 21,975,802 Loss for the year(1,458,189)(2,275,615)Other comprehensive loss for the year - - Total comprehensive loss for the year(1,458,189)(2,275,615)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 2016
Notes to the Consolidated Financial Statements
CONTINGENT LIABILITIES AND CONTINGENT ASSETS
26.
There are no contingent liabilities or contingent assets in the current financial year (2015: nil).
EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
27.
On 27 July 2016 the Company appointed Ausenco to deliver the BFS for the Cabinda project. Ausenco was
selected due to its relevant and recent experience in rock phosphate processing in West Africa. Ausenco will
complete the work in conjunction with G Mining Services Inc., who will provide the geological and mining
studies, and Golder Associates who is responsible for the geotechnical and hydrogeological studies.
On 5 August 2016 the Company appointed Prime Resources for the ESIA. The ESIA forms part of the BFS for the
Company’s Cabinda Rock Phosphate Project in Angola.
On 19 September 2016 the Company appointed Rebecca Morgan as Manager Geology and Business
Development with immediate effect. Ms Morgan is a qualified geologist and mining engineer with 15 years’
experience in the mining industry. She has extensive knowledge in dealing in West Africa across several
commodities and can speak Portuguese.
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.
RELATED PARTIES
28.
(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 29: Subsidiaries and Transactions with Non-controlling Interests.
(c) KMP 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.
76 | P a g e
30-Jun-1630-Jun-15$$Short-term employee benefits446,355 408,333 Post-employment benefits31,160 28,532 Equity compensation benefits43,741 69,640 521,256 506,505
Notes to the Consolidated Financial Statements
(d) Loans to Associate
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
The loans to the Associate are unsecured interest-free loans for the purpose of obtaining the required working capital
for the establishment and ongoing operation of the Project in Angola. LR Group, the ultimate 50% holder in the
Associate, along with Minbos’ ultimate 50% holding in the Associate, each contribute in equal portions loans
receivable.
There is no allowance account for impaired receivables in relation to any outstanding balances, and no expense
has been recognised in respect of impaired receivables due from related parties.
(e) Loans to Joint Venture Partner Petril Projects Ltd
During the June quarter, the Company provided a short term loan of US$250,000 to Petril for their share of the cash
call. Petril repaid this loan with 10% interest on 14 July 2016.
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30-Jun-1630-Jun-15$$Balance at the beginning of the financial year4,579,2994,436,645Loans advances329,555142,654Loan repayments made--Interest charged--Interest paid--Balance at the end of the financial year4,908,8544,579,29930-Jun-1630-Jun-15$$Balance at the beginning of the financial year--Loans advances335,981-Loan repayments made--Interest charged3,130-Interest paid--Balance at the end of the financial year339,111-
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
(f) Transactions with other related parties
The following transactions occurred with related parties:
(i) During the 2015 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 237,829,976 fully paid ordinary
shares in Minbos.
The first class of performance rights can convert to a total of 178,372,482 fully paid ordinary shares (75% of
237,829,976 shares) subject to Sofosa satisfying performance milestones within 24 months from the date
of the agreement. The second class of performance rights can convert to a total of 59,457,494 fully paid
ordinary shares (25% of 237,829,976 shares) subject to Minbos receiving a licence to Mine on the Cabinda
project within 36 months from the date the agreements were executed and pursuant to Sofosa’s
assistance. The performance rights were approved on 20 November 2015 at the Company’s Annual General
Meeting and accordingly a $216,493 expense has been recognised for the year ended 30 June 2016. Refer
to Note 22 Share based payments for further detail on the valuation of the performance rights.
During the year the Company incurred fees from Sofosa of $249,223 (US$180,000) of which $20,154
(US$15,000) was outstanding at 30 June 2016.
(g) Issue of shares in lieu of services of related parties
On 18 December 2015 the Company issued 9,075,000 fully paid ordinary shares at $0.004 per share to Bill
Oliver (Non-Executive Director) in lieu of his outstanding Director fees of $36,300.
On 17 May 2016 the Company issued 5,940,000 fully paid ordinary shares at $0.005 per share to Peter Wall
(Non-Executive Chairman) in lieu of his outstanding Director fees of $29,700.
On 17 May 2016 the Company issued 6,666,667 fully paid ordinary shares at $0.005 per share to Lindsay
Reed (Chief Executive Officer) in lieu of his outstanding fees of $33,333.
On 17 May 2016 the Company issued 2,352,400 fully paid ordinary shares at $0.005 per share to Stef
Weber (Chief Financial Officer & Company Secretary) in lieu of his outstanding fees of $11,762.
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30-Jun-1630-Jun-15$$Agreements with strategic Angolan partner - Sofosa (i)Company in which Domingos Catulichi is a shareholder and Director- Support and services on the Cabinda Project249,223229,471- Performance rights (refer note 19)216,494-
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Notes to the Consolidated Financial Statements
SUBSIDIARIES AND TRANSACTIONS WITH NON-CONTROLLING INTERESTS
29.
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 2016:
Name of entity
Parent entity
Country of incorporation
Class of
shares
Ownership interest
30/06/2016 30/06/2015
Minbos Resources Ltd (i)
Australia
Subsidiary (direct)
Ordinary and
Preference
Tunan Mining Limited (ii)
British 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)
British 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.
(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 Minbos is in the process of deregistering.
(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.
30.
AUDITOR’S REMUNERATION
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30-Jun-1630-Jun-15$$Amounts received or due and receivable by BDO Audit (WA) Pty Ltd for:(i) An audit or review of the financial report of the entity32,220 33,260 Total auditor remuneration32,220 33,260 (i) An audit or review of the financial report of the entity2,089 2,659 Total auditor remuneration2,089 2,659 Non-Audit Services (Remuneration for other services)BDO Corporate Tax (WA) Pty Ltd - Taxation services- - BDO Corporate Finance (WA) Pty Ltd - Other professional services24,696 - Total Non-Audit Services24,696 - 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 2016
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 2016 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
26 September 2016
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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 2016, 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
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.
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.
81
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 2016
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(e) in the financial report which indicates
that the ability of the consolidated entity to continue as a going concern is dependent on securing
additional funding through capital raisings in order to fund its ongoing exploration commitments and
working capital. This condition, along with other matters as set forth in Note 2(e), 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.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 17 to 26 of the directors’ report for the
year ended 30 June 2016. 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 2016
complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 26 September 2016
82
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Shareholder Information
The following additional information was applicable as at 13 September 2016.
1.
Fully paid ordinary shares
• There are a total of 2,073,547,651 ordinary fully paid shares on issue which are listed on the ASX.
• The number of holders of fully paid ordinary shares is 562.
• 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 - 9,999,999,999
Totals
31
34
37
192
268
562
3,430
94,403
289,346
8,959,224
2,064,201,248
2,073,547,651
% of Issued
Capital
0.00%
0.00%
0.01%
0.43%
99.55%
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 269 shareholders who hold less than a marketable parcel of shares.
4.
Substantial shareholders of ordinary fully paid shares
The Substantial Shareholders of the Company are:
Rank
Holder Name
1
2
3
Jorge Marques
David Reeves
Alasdair Campbell Cooke
Securities
741,044,166
133,276,400
112,617,500
% of
Issued
35.74%
6.43%
5.43%
5.
Share buy-backs
There is no current on-market buy-back scheme.
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Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
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 77.78% of the securities in this class and
are listed below:
Rank Holder Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MRS ELEANOR JEAN REEVES
BRIJOHN NOMINEES PTY LTD
JADEKEY NOMINEES PTY LTD
CELTIC CAPITAL PTY LTD
PHEAKES PTY LTD
HARTREE PTY LTD
NATIONAL NOMINEES LIMITED
TRINITY MANAGEMENT PTY LTD
RAEJAN PTY LTD
1
2
3
4
5
6
7
8
9
10
11 MR ALASDAIR CAMPBELL COOKE
12
13
14
15 WILGUS INVESTMENTS PTY LTD
16
17 MR KEVIN BANKS-SMITH
18
19
20
CHIKAPA COMERCIO AND INDUSTRIA LDA
HILLBOI NOMINEES PTY LTD
BRUCE SEVERIN & HELEN SEVERIN
Totals
HELMET NOMINEES PTY LTD
HEQUITY PTY LTD
PROCUREMENT SOLUTIONS LIMITED
ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD
Securities
733,942,521
105,761,533
87,356,166
83,333,333
70,416,666
70,016,666
64,000,000
60,680,463
39,000,000
36,000,000
35,617,500
35,000,000
33,333,333
31,125,387
27,514,867
27,389,344
21,100,000
17,640,000
17,000,000
16,666,667
1,612,894,446
% of
Issued
35.40%
5.10%
4.21%
4.02%
3.40%
3.38%
3.09%
2.93%
1.88%
1.74%
1.72%
1.69%
1.61%
1.50%
1.33%
1.32%
1.02%
0.85%
0.82%
0.80%
77.78%
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Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Shareholder Information
8. Options
The following options over unissued ordinary shares are on issue:
Class
Director Options
Consultancy Options
Conversion of Convertible note
Conversion of Convertible note
Conversion of Convertible security
Unlisted Options issued on 17 May 2016
Date of
Expiry
30-Dec-16
30-Dec-16
30-Dec-16
30-Dec-16
30-Dec-16
30-Dec-16
Exercise
Price
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
Number
Under Option
88,333,333
30,000,000
100,000,000
83,333,332
10,000,000
384,958,009
696,624,674
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
014/04/09/T.P/ANG.MGM.2015
015/01/10/T.P/ANG.MGM.2015
E08/2335
E08/2336
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
49%
49%
49%
50%
50%
100%
100%
Democratic Republic of Congo
Democratic Republic of Congo
Democratic Republic of Congo
Cabinda Province, Angola
Cabinda Province, Angola
Carnarvon, Western Australia
Carnarvon, Western Australia
85 | P a g e
Minbos Resources Limited – Financial Report
For the year ended 30 June 2016
Shareholder Information
10. Mineral Resources Statements
The company’s Mineral Resources estimate as at 30 June 2016 and 30 June 2015 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 2016 and 30 June 2015
(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
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
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.
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