PLATINA RESOURCES LIMITED ABN 25 119 007 939 ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2016 Contents Corporate Information Chairman’s Letter to Shareholders Review of Operations Directors' Report Auditor’s Independence Declaration Shareholder Information Interests in Tenements Corporate Governance Statement Consolidated Statement of Comprehensive Income for the year ended 30 June 2016 Consolidated Statement of Financial Position as at 30 June 2016 Consolidated Statement of Changes in Equity for the year ended 30 June 2016 Consolidated Statement of Cash Flows for the year ended 30 June 2016 Notes to the Financial Statements for the year ended 30 June 2016 Declaration by Directors Independent Audit Report to the Members of Platina Resources Limited 1 2 3 10 18 19 22 23 31 32 33 34 35 58 59 The information in this Annual Report that relates to the Owendale Measured, Indicated and Inferred Mineral Resource is extracted from the report entitled ASX Release “Platina Delivers New Mineral Resource Classification and Increase at Owendale Scandium Project” lodged on 12 July 2016 and is available to view on www.platinaresources.com.au. The report was issued in accordance with the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements. The information in this Annual Report that relates to the Skaergaard Indicated and Inferred Mineral Resource is extracted from the report entitled ASX Release “New Resource Estimate for Skaergaard Gold and PGM Project, East Greenland” lodged on 23 July 2013 and is available to view on www.platinaresources.com.au. The report was issued in accordance with the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. The information in this Annual Report that relates to the Munni Munni Mineral Resource is based on information compiled by Mr R W Mosig who is a full time employee of Platina Resources Limited and who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Mosig has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“2004 JORC Code”). Mr Mosig consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. The information in this Annual Report that relates to Exploration Results is based on information compiled by Mr Mark Dugmore who is a contractor to Platina Resources Limited and who is a Chartered Professional Member of The Australasian Institute of Mining and Metallurgy. Mr Dugmore has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Dugmore consents to the inclusion in the report of the matters based on this information in the form and context in which it appears Corporate Information DIRECTORS Robert Mosig Reginald Gillard Brian Moller COMPANY SECRETARY Paul Jurman PRINCIPAL PLACE OF BUSINESS Level 2, Suite 9, 389 Oxford Street Mount Hawthorn, WA, 6016 Phone: +61 7 5580 9094 +61 8 9380 6761 Fax: admin@platinaresources.com.au Email: COUNTRY OF INCORPORATION Australia REGISTERED OFFICE c/- Corporate Consultants Pty Ltd Level 2, Suite 9, 389 Oxford Street Mount Hawthorn, WA, 6016 Phone: +61 8 9380 6789 SOLICITORS HopgoodGanim Lawyers Level 8, Waterfront Place 1 Eagle Street Brisbane QLD 4000 Phone: +61 7 3024 0000 SHARE REGISTRY Link Market Services Central Park Level 4, 152 St Georges Terrace, Perth WA 6000 Phone: 1300 554 474 AUDITORS Bentleys Level 9, 123 Albert Street Brisbane QLD 4000 Phone: +61 7 3222 9777 STOCK EXCHANGE LISTING Australian Securities Exchange Ltd ASX Codes: PGM INTERNET ADDRESS www.platinaresources.com.au AUSTRALIAN BUSINESS NUMBER ABN 25 119 007 939 2 | PLATINA RESOURCES LIMITED Annual Report 2016 Chairman’s Letter to Shareholders Chairman’s Letter to Shareholders Dear Fellow Shareholder, I am delighted to welcome you to Platina Resources’ Annual Report for the year ending 30 June 2016. The past year has seen the Company’s profile rise considerably as interest in scandium and other rare metals continues to grow. This was reflected in a vast improvement in our share price, particularly during the last few months of the financial year when the price moved from a low of 3 cents in February to be around 12 cents currently. This was incredibly pleasing to see, and a trend we hope will continue into the 2016 / 2017 financial year. Platina’s Owendale Scandium Project in New South Wales has great potential to become a dominant producer of scandium due to its favourable characteristics such as its shallow depth allowing open pit mining and appreciable platinum, cobalt and nickel credits. In fact, the Owendale Project is one of the world’s highest grade scandium deposits, and has potential to be Australia’s first scandium producer with platinum, cobalt and nickel credits. Growing interest in Platina and the Owendale project was demonstrated best in the Placement undertaken just prior to the end of the Financial Year, which was strongly oversubscribed and raised more than $2.3 million, giving the Company a healthy cash reserve of over $3.3 million heading into 2016. These funds will be important in enabling the completion of Feasibility Studies needed to progress our Owendale project. A significant part of the Feasibility Studies has already been completed, with a Mineral Resource upgrade for Owendale announced on 12 July. This saw the total Owendale Mineral Resource increased by 2.2 million tonnes, or 9 per cent, to 25.9 million tonnes at a grade of 380 ppm (parts per million) scandium, and the total in-situ content of 15,100 tonnes of scandium oxide, a 9 per cent increase. Previous drilling improved confidence in the resource over the previous estimate, with a maiden Measured Mineral Resource of 4.3 million tonnes at a grade 405 parts per million scandium. The size and consistency of the Mineral Resource indicates potential for high grade mining with 220,000 tonnes at 665 ppm Sc included in the Measured and Indicated estimate, with the highest grade areas at Owendale North remaining open. Scandium is rarely discovered in high concentrations, however, Owendale is fortunate to be one of the highest grade scandium projects in the world. Owendale exhibits a similar resource scale and scandium, nickel and cobalt grade profile as Clean TeQ Holdings Limited’s (ASX: CLQ) Syerston project, which is just 7km away. CLQ is our closest peer, although with a much larger market capitalisation, and Platina is benefitting from the strong re-rating it has enjoyed in recent months. The market is gaining an appreciation for the growth potential for scandium, in particular to supply the significant growth expected in the transportation, aviation and solid oxide fuel cell industries. I take this opportunity to thank our Management and Staff for their efforts throughout the year, as well as our Shareholders for your continued support. We appreciate the belief that our Shareholders have in Platina to develop the Owendale project as fast as possible. We look forward to now concluding our Feasibility Study in the next 12 months, and working towards securing project partnerships and offtake partners to de-risk development of the mine, with negotiations ongoing with multiple parties throughout the world. The year ahead will be an exciting one in Platina’s development. Yours Sincerely, Reg Gillard Reg Gillard Chairman Review of Operations PLATINA RESOURCES LIMITED Annual Report 2016 | 3 Review of Operations OWENDALE, NSW – SCANDIUM AND PLATINUM PROJECT Platina Resources Ltd 100% - EL7644 Project Summary World’s highest-grade laterite-hosted scandium deposit Laterite-hosted and alluvial platinum Advanced scandium development opportunity The Owendale Project is located in central New South Wales, approximately 80km northwest of Parkes and 350km west of Sydney (Figure 1). Owendale is one of the world’s highest grade scandium deposits, and has potential to be Australia’s first scandium producer with platinum, cobalt and nickel credits. Mineralisation is associated with the Owendale Intrusive Complex, the majority of which is within the Company’s 100%-owned Exploration Licence. Owendale is located only 7km north east of Clean TeQ Energy’s Syerston Scandium Project, which is the most analogous project given its similar size and grade. Figure 1: Owendale Project location An independent scoping study, released in March 2015, confirmed Owendale is an outstanding project. The base case for the project is a simple, open-pit mining operation which will mine approximately 50,000 tonnes of ore per annum for treatment and concentration on site to produce 30 tonnes of scandium oxide at 99.9% purity. 4 | PLATINA RESOURCES LIMITED Annual Report 2016 Review of Operations Highlights of the Study included: Annual production of 30 tonnes 99.9% purity scandium oxide with optional platinum, nickel and cobalt credits for a mine life approaching 70 years Life of mine all-in-cash-costs estimated at USD $466 (AUD$598) per kilo scandium oxide Capital cost estimate of USD $57 million (AUD$73.5 million) Simple open pit mining operation of just 50,000 tonnes processed each year. Mining is expected to take place two to three times per year in small campaigns from shallow open pits. The Measured, Indicated and Inferred Mineral Resource Estimation for the Owendale Scandium and Platinum Project is reported in accordance with the JORC Code (2012). Platina completed a new Mineral Resource estimate for Owendale subsequent to year end. The estimate incorporated new drilling completed in late 2013 and 2014 and a classification targeting a scandium-dominated project development. Resource Table – Owendale Project Table 1. Owendale Mineral Resource statement Classification Measured Indicated Subtotal (Meas + Ind) Inferred Total Mt 4.3 5.9 10.3 15.6 25.9 Sc ppm 404 373 386 378 381 Pt g/t 0.53 0.35 0.42 0.29 0.34 Ni % 0.12 0.11 0.11 0.12 0.12 Co % 0.07 0.07 0.07 0.06 0.06 Pd ppb 42 45 44 41 42 Fe2O3 % 53 51 52 51 51 MgO % 1.1 1.1 1.1 1.1 1.1 There are several higher grade zones at Owendale North which display continuity at 500 to 600 ppm Sc cut-offs. Table 2 provides an indication of the Mineral Resource potential at a higher cut-off grade of 600 ppm Sc. Since this is based on block estimates within the laterite horizon smoothing of the estimates can potentially affect reporting at high grade cut-offs with smoothing and dilution resulting in both lower grade and less tonnage above the cut-off. A manual interpretation of the main high grade scandium zones was undertaken to confirm that the estimates in Table 2 provide a suitable indication of quantum and grade of high grade material currently defined by drilling. This interpretation at 500 ppm Sc and a minimum thickness of 2 m and targeting the main 600 pm scandium zones demonstrates several thick zones with good lateral continuity of a thinner high grade horizon. More work is required with short spaced drilling to fully understand the continuity of the thick high grade zones as well as step out drilling to extend the zones that are currently open to the south and the east. Table 2: Owendale Mineral Resource estimate at a 600 ppm Sc cut-off Classification Area Measured Indicated Subtotal (Meas + Ind) Inferred Total Mt 0.12 0.10 0.22 0.39 0.61 Sc ppm 664 668 666 652 657 Pt g/t 0.52 0.56 0.54 0.39 0.44 Ni % 0.17 0.20 0.18 0.21 0.20 Co % 0.17 0.18 0.17 0.12 0.14 Pd ppb 55 47 51 48 49 Fe2O3 % 55 54 54 54 54 MgO % 0.7 0.9 0.8 0.9 0.9 The Mineral Resource includes significant components of platinum, nickel and cobalt that offer valuable potential by- products from any scandium processing development. ResEval Pty Ltd prepared the updated resource estimate with an emphasis on scandium as part of Platina’s planning process for its upcoming Feasibility Study. This will include a drilling program at Owendale that will concentrate on development aspects such as plant site and bulk metallurgical sampling. Drilling will also include some regional exploration and targeted infill and extension drilling around the higher grade scandium pods at Owendale North. Review of Operations PLATINA RESOURCES LIMITED Annual Report 2016 | 5 The updated resource estimate is consistent with the methodology adopted for the previous resource estimate and public announcement in 2013. Changes to the estimate area are as a result of: Addition of the late 2013 drilling results (announced 11 Nov 2013) that include 21 RC drill holes for 1170 m. This was largely in extension areas east of Owendale North and Cincinnati at mostly 200 m and 100 m spacing, respectively. Addition of 3 diamond drill holes in 2014 near existing drilling at Owendale North and completed for the purposes of metallurgical sampling. To accommodate development studies there has been a change in classification and Mineral Resource statement process to concentrate on scandium and exclude reporting on the basis of platinum that has a higher variability. The resource estimate is essentially based on the scandium results from Platina drilling completed between 2010 and 2014 (mostly RC and some diamond core) and some reassayed older diamond core, for a total of 338 drill holes and 16 288 samples. Other older drilling with limited geochemistry has only been used to help inform Inferred Mineral Resource areas. Previous resource estimates incorporated both scandium and platinum into the classification. Exclusion of the more variable platinum from the classification allowed the classification to be reconsidered based on the greater continuity displayed by scandium. A comparison of the previous statement by Golder Associates Pty Ltd (Golder) and current Mineral Resource statement at the 300 ppm Sc cut-off indicated a small global change but a significant upgrade in classification based on the continuity of scandium. The changes incorporated some small boundary changes after exclusion of the platinum for classification as well as some extensions from the last phase of RC drilling in late 2013. Project Development In the September quarter, the Company completed a Preliminary Review of Environmental Factors for Owendale which confirmed the pathways to an Environmental Impact Statement and Mining Lease application. Platina has continued to work on progressing the development and Feasibility Study for Owendale, and is seeking a relevant major aluminium alloy specialist company as a potential joint venture partner for the project. Capital raising activities during the June quarter, detailed in the Corporate section of this report, raised approximately $3 million in total, and this positioned the Company to complete its Feasibility Study into the development of Owendale. The Company is simultaneously seeking to secure binding offtake agreements for the supply of scandium oxide and scandium metals from Owendale. Negotiations remain ongoing with multiple parties throughout the world. Platina’s Owendale Scandium Project has great potential to become a dominant producer of scandium due to a number of favourable characteristics of the project including its shallow depth allowing open pit mining and In fact, the Owendale Project is one of the world’s highest grade appreciable Platinum, Cobalt and Nickel credits. scandium deposits, and has potential to be Australia’s first scandium producer with platinum, cobalt and nickel credits. 6 | PLATINA RESOURCES LIMITED Annual Report 2016 Review of Operations SKAERGAARD, GREENLAND – GOLD AND PGM PROJECT Platina Resources Ltd 100% - EL2007/01 Project Summary One of the World’s largest undeveloped gold deposits One of the largest palladium resources outside South Africa and Russia No work was carried out at Skaergaard during the year. The Skaergaard Gold & PGM Project is located on the East Coast of Greenland, approximately 400km west of Iceland (Figure 2). It is one of the world’s largest undeveloped gold and palladium resources, and has an Indicated and Inferred Mineral Resource estimate reported in accordance with the JORC Code (2012) of 203Mt @ 0.88g/t gold & 1.33g/t palladium (refer to Table 3 and Figure 3) at a 1 g/t gold equivalent (AuEq) cut-off grade and minimum mining thickness of 1.0m. Mineralisation at Skaergaard is hosted in a layered intrusion, geologically akin to South Africa’s Bushveld Complex, which hosts the majority of the world’s platinum group metals. More than 80% of the world’s palladium supply is currently mined in South Africa and in Russia. However, the resource estimate completed for Skaergaard in 2013 confirmed the project, and Greenland, have one of the world’s largest palladium resources outside of these latter regions. The Mineral Resource at Skaergaard includes both the Indicated and Inferred categories which have a combined total of 5.7 million ounces of gold and 8.7 million ounces of palladium and 0.79 million ounces of platinum confined within three reefs (H0, H3 and H5) of the Triple Group, which is the major location for all the gold and platinum group metals (pgm) mineralisation within the Skaergaard Intrusion. Mineralisation outcrops at surface, and extends to at least 1.1km vertical depth and more than 35,000m of diamond drilling has been completed. Additional infill drilling is likely to increase the quantity of contained metal at Skaergaard. In particular, the northern extent of the Skaergaard Intrusion shows excellent exploration potential. Metallurgical test work identified that the unique properties of Skaergaard ore are amenable to gravity and flotation leach circuit, it is processes, achieving excellent recoveries from both techniques. With the addition of a small conceptually possible to produce gold ore on site. The implications of this are significant as it could allow for year- round exports via light aircraft, rather than shipping a concentrate during the relatively short ice-free window that occurs on the east coast of Greenland. Preliminary results are also encouraging in terms of titanomagnetite and ilmenite recovery, demonstrating that those minerals are upgradable by a combination of magnetic separation and flotation. The Company maintains its own 20-person exploration camp at Skaergaard which also includes an airstrip, and messing facilities. The camp is utilized for both Skaergaard and the Qialivarteerpik exploration licences. Figure 2: Location Map showing Skaergaard project Review of Operations PLATINA RESOURCES LIMITED Annual Report 2016 | 7 Figure 3: Plan of Skaergaard showing location and extent of Mineral Resource 8 | PLATINA RESOURCES LIMITED Annual Report 2016 Review of Operations Table 3: Skaergaard Mineral Resource Evaluation Summary. Reef Resource Classification Tonnes (kt) Au (g/t) Pd (g/t) Pt (g/t) Combined Reefs H0 + H3 + H5 Indicated 5,080 Inferred 197,140 Ind & Inf 202,220 1.25 0.87 0.88 0.88 1.35 1.33 0.06 0.11 0.11 AUEQ (g/t) 1.66 1.51 1.52 Au (Moz) Pd (Moz) Pt (Moz) 0.20 5.49 5.69 0.14 0.01 8.53 0.68 8.67 0.69 Estimation carried out by Wardell Armstong, UK. July, 2013. Further details contained within the Company’s ASX announcement dated 23 July, 2013. Notes: Mineral Resources are not Mineral Reserves until they have demonstrated economic viability based on a Feasibility Study or Pre-Feasibility Study. The contained Au represents estimated contained metal metallurgical recovery. in the ground and has not been adjusted for AuEq = Au + Pt + (Pdx0.4); where the gold price is US$1,400/oz and the platinum price is US$1,400/oz and the palladium price is US$560/oz. The metal equivalent calculation assumes 100% metallurgical recovery. Cut-off grade = 1g/t AuEq; Minimum thickness = 1m; parts below 1m thickness have been diluted to 1m. 10% reduction globally applied, to reflect dyke intersections; Resource split is approximately 44:26:30% between reefs H0:H3:H5; Check list of assessment and reporting criteria as per JORC 2012 is on the Company website. QIALIVARTEERPIK, GREENLAND – MULTI-ELEMENT PROJECT Platina Resources Ltd 100% - EL2012/25. Project Summary Abuts Skaergaard Exploration Licence 2007/01 Licence covers 207km² of highly prospective exploration ground Exploration Licence 2012/25 is referred to as Qialivarteerpik and is located on the East Coast of Greenland and comprises the potential northeast extension of the Company’s Skaergaard Project. Qialivarteerpik contains two significant prospecting regions, the Miki Fjord Dyke and the Sortekap Greenstone Belt. No work was carried out during the year but the area remains prospective for base and precious metals. MUNNI MUNNI, WA - PGM AND GOLD PROJECT Platina Resources Ltd 100% - M47/123-126 Artemis Resources earning 70%. Project Summary Measured, Indicated and Inferred Mineral Resource Located close to town and port infrastructure Situated in the Pilbara region of Western Australia, the Munni Munni Complex is one of Australia’s most significant PGM occurrences. Munni Munni has a Measured, Indicated and Inferred Mineral Resource of 23.6Mt @ 1.1 g/t Au and 1.5 g.t Pt. Review of Operations PLATINA RESOURCES LIMITED Annual Report 2016 | 9 During the year, Platina entered into a binding agreement with Artemis Resources providing for Artemis’ subsidiary Karratha Metals Pty Ltd to earn a 70% interest in the Mining Leases held by Platina by expending $750,000 in exploration over a three-year period, and must keep the tenements in good standing during that time. Table 4: Munni Munni undiluted Resource Estimate using a cut-off of 1.9g/t PGM +Au (SRK, 2002 subsequently confirmed by Snowden, 2003) Resource Classification Million Tonnes Measured Indicated Inferred Total CORPORATE 12.4 9.8 1.4 23.6 Pt (g/t) 1.1 1.1 1.1 1.1 Pd (g/t) 1.4 1.6 1.6 1.5 Au (g/t) 0.2 0.3 0.3 0.2 Rh (g/t) 0.1 0.1 0.1 0.1 Cu (%) 0.09 0.22 0.15 0.15 Ni (%) 0.07 0.11 0.09 0.09 Placements In May 2016, Platina completed a private placement of 6 million PGM shares at 6.5 cents per share to raise $390,000 to Dr Peter Woodford, the principal of Cairnglen Investments Pty Ltd. Dr Woodford has been a top 20 shareholder of the Company since its listing on the Australian Securities Exchange (ASX) in 2006. A further placement of 6 million shares to two Hong Kong-based shareholders was completed in early June. The placement was completed at 6.5 cents per share to raise $390,000. Platina then completed a substantially oversubscribed placement of 29 million shares at 8 cents per share to raise $2.32 million. The placement was made to a number of professional and sophisticated investors, and some institutional investors from Australia and overseas, and introduced a number of additional high quality investors to the Company’s share register. These placements positioned the Company to complete its Feasibility Study into the development of Owendale. Options A total of 8,888,052 Platina listed options, which were due to expire on 30 September 2015, were exercised into Platina Chairman Reg Gillard and ordinary shares by shareholders, raising $533,283 of additional working capital. Managing Director Robert Mosig exercised a total of 2,380,001 options being their full entitlement. Appointment of Company Secretary / Change of Registered Office Platina appointed Mr Paul Jurman to the position of Company Secretary, replacing Mr Duncan Cornish, effective from 1 June 2016. Mr Jurman is a CPA with more than 15 years' experience and has been involved with a diverse range of Australian public listed companies in company secretarial and financial roles. The Company's registered office and principal place of business changed to: Level 2, Suite 9, 389 Oxford Street Mt Hawthorn WA 6016 PO Box 281, Mt Hawthorn WA 6915 10 | PLATINA RESOURCES LIMITED Annual Report 2016 Director’s Report Directors' Report Your Directors present their report for the year ended 30 June 2016 for Platina Resources Limited (“the Company”) and its controlled entity (“the Group”). The following persons were Directors of Platina Resources Limited during the financial year and up the date of this report, unless otherwise stated: Reginald Gillard Non-Executive Chairman Mr Gillard was appointed Non-Executive Chairman on 2 July 2009. Mr Gillard holds a Bachelor of Arts degree, is a Justice of the Peace, a Fellow of the Certified Practising Accountants of Australia and a Fellow of the Australian Institute of Company Directors. After practising as an accountant for over 30 years, during which time he formed and developed a number of service related businesses, Mr Gillard now focuses on corporate management, corporate governance and the evaluation and acquisition of business opportunities. He has developed close working arrangements with a number of substantial Australian and International Investment funds and has been responsible for and involved with the funding of several public companies. Mr Gillard is a member of the Audit and Risk Management and Remuneration Committees. During the past three years, Mr Gillard has also served as a director of the following ASX listed companies: Perseus Mining Ltd* (since 24 October 2003) Mount Magnet South NL (from 18 April 2011 to 2 August 2013) *denotes current directorship Robert Mosig, MSc; FAusIMM; FAICD Managing Director Mr Mosig is a founding director of Platina Resources Limited. He held the position of Chairman of Platina Resources Limited from 28 March 2006 until his appointment as Managing Director on 2 July 2009. Mr Mosig is a geologist with over 30 years’ experience in platinum group metals, gold and diamond exploration. His experience includes exploration using geology, geochemistry, geophysics and drilling; ore resource drilling and calculation; metallurgical and engineering evaluation and environmental and economic evaluations; mining and processing. Mr Mosig holds no other (ASX listed) directorships. Brian Moller, LL.B (Hons) Non-Executive Director Mr Moller was appointed as a Non-Executive Director on 30 January 2007. Mr Moller is a partner with HopgoodGanim Lawyers and practices almost exclusively in the corporate area with an emphasis on capital raising, mergers and acquisitions and corporate restructuring. Mr Moller acts for many publicly listed resource and industrial companies in Australia, and regularly advises boards of directors on corporate governance and related issues. Mr Moller is Chair of the Audit and Risk Management and Remuneration Committees. During the past three years, Mr Moller has also served as a director of the following ASX listed companies: DGR Global Ltd* (since 2 October 2002) Aus Tin Mining Limited* (since 1 December 2006) Navaho Gold Limited* (since 22 January 2003) Aguia Resources Limited* (since 18 December 2013) Buccaneer Energy Ltd (from 2 July 2013 to 29 November 2013) *denotes current directorship Mr Moller is also chairman of AIM listed SolGold plc. Director’s Report PLATINA RESOURCES LIMITED Annual Report 2016 | 11 Paul Jurman BCom, CPA Company Secretary Mr Jurman was appointed company secretary of on 1 June 2016. Mr Jurman is a Certified Practising Accountant with over 15 years’ experience and has been involved with a diverse range of Australian public listed companies in company secretarial and financial roles. He is also company secretary of ASX listed Nemex Resources Limited, Carnavale Resources Limited and Kangaroo Resources Limited. Mr Duncan Cornish was appointed company secretary on 8 May 2007 and resigned as company secretary on 1 June 2016. INTERESTS IN SECURITIES As at the date of this report, the interests of the Directors in the shares, options and performance rights of Platina Resources Limited are shown in the table below: Ordinary Shares Unlisted Options Performance Rights ($0.10 @ 26-Nov-16) Reginald Gillard Robert Mosig Brian Moller 2,293,334 4,481,335 - 500,000 - 500,000 - 1,500,000 - PRINCIPAL ACTIVITIES The principal activities of the Group during the financial year were the acquisition of mining tenements for mineral exploration with a focus on platinum group metals. OPERATING RESULTS The net loss of the Group for the year, after provision for income tax, amounted to $373,648 (2015: $1,081,803). DIVIDENDS PAID OR RECOMMENDED There were no dividends paid or recommended during the financial year. REVIEW OF OPERATIONS Information on the operations of the Group during the financial year and up to the date of this report is set out separately in the Annual Report under Review of Operations. REVIEW OF FINANCIAL CONDITION Capital structure During the year, 8,888,052 options were exercised to purchase 8,888,052 ordinary shares at a price of $0.06 per share for gross proceeds of $533,283. On 8 December 2015, 250,000 ordinary shares and 250,000 performance rights which had various vesting conditions, performance hurdles and expiry dates were issued to a consultant. On 24 June 2016, 250,000 ordinary shares were issued to the consultant following the exercise of those performance rights. On 13 January 2016, 750,000 ordinary shares were issued following the exercise of 750,000 performance rights by two consultants. On 26 February 2016 and 24 June 2016, 250,000 ordinary shares (125,000 at each date) were issued following the exercise of 250,000 performance rights by company secretary, Duncan Cornish. 12 | PLATINA RESOURCES LIMITED Annual Report 2016 Director’s Report On 31 May 2016 and 6 June 2016, 12,000,000 ordinary shares were issued at a price of $0.065 per share, raising $780,000 in capital pursuant to a private placement. On 24 June 2016, 29,000,000 ordinary shares were issued at a price of $0.08 per share, raising $2,320,000 in capital pursuant to a private placement. At the test date of 30 June 2015, 1,500,000 performance rights did not vest and were cancelled. At 30 June 2016, the Company had 208,201,235 ordinary shares, 1,000,000 unlisted options and 4,250,000 performance rights on issue. Financial position The net assets of the Group have increased by $3,253,466 from $20,046,188 at 30 June 2015 to $23,299,654 at 30 June 2016. This increase has largely resulted from the following factors: Increase in cash from capital raisings and exercise of options; and Capitalised exploration expenditure; partly offset by Operating losses (corporate and administration costs) The consolidated entity’s working capital, being current assets less current liabilities has increased from $666,994 in 2015 to $3,129,092 in 2016. Treasury policy The consolidated entity does not have a formally established treasury function. The Board is responsible for managing the consolidated entity’s finance facilities. The Group does not currently undertake hedging of any kind and is not directly exposed to currency risks. Liquidity and funding The consolidated entity has sufficient funds to finance its operations and exploration activities, and to allow the consolidated entity to take advantage of favourable business opportunities, not specifically budgeted for, or to fund unforeseen expenditure. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There were no significant changes in the state of affairs of the Group in the financial year. AFTER BALANCE DATE EVENTS No matter or circumstance has arisen since the end of the financial year, to the date of this report, that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES Likely developments in the operations of the Group and the expected results of those operations in subsequent financial years have been discussed where appropriate in the Annual Report under Review of Operations. There are no further developments of which the Directors are aware which could be expected to affect the results of the Group’s operations in subsequent financial years. Director’s Report Business Results PLATINA RESOURCES LIMITED Annual Report 2016 | 13 The prospects of the Group in progressing their exploration projects in Australia and Greenland may be affected by a number of factors. These factors are similar to most exploration companies moving through exploration phase and attempting to get projects into development. Some of these factors include: Exploration - the results of the exploration activities may be such that the estimated resources are insufficient to justify the financial viability of the projects. Platina Resources undertakes extensive exploration and product quality testing prior to establishing JORC compliant resource estimates and to (ultimately) support mining feasibility studies. The Group engages external experts to assist with the evaluation of exploration Economic results and relies on third party competent persons to prepare JORC resource statements. feasibility modelling of projects will be conducted in conjunction with third party experts and the results of which will usually be subject to independent third party peer review Regulatory and Sovereign - the Group operates in Australia and Greenland and deals with local regulatory authorities in relation to the exploration of its properties. The Group may not achieve the required local regulatory approvals to continue exploration or properly assess development prospects. The Group takes appropriate legal and technical advice to ensure it manages its compliance obligations appropriately. Social Licence to Operate – the ability of the Group to secure and undertake exploration and development activities within prospective areas is also reliant upon satisfactory resolution of native title and (potentially) overlapping tenure. To address this risk, the Group develops strong, long term effective relationships with The Group takes landholders with a focus on developing mutually acceptable access arrangements. appropriate legal and technical advice to ensure it manages its compliance obligations appropriately. Environmental - All phases of mining and exploration present environmental risks and hazards. Platina’s operations in Australia and Greenland are subject to environmental regulation pursuant to a variety of state and municipal laws and regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in association with mining operations. Compliance with such legislation can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The Group assesses each of its projects very carefully with respect to potential environmental issues, in conjunction with specific environmental regulations applicable to each project, prior to commencing field exploration. Periodic reviews are undertaken once field exploration commences. Safety - Safety is of critical importance in the planning, organisation and execution of Platina Resources exploration activities. Platina Resources is committed to providing and maintaining a working environment in which its employees are not exposed to hazards that will jeopardise an employee’s health, safety or the health and safety of others associated with our business. Platina Resources recognise that safety is both an individual and shared responsibility of all employees, contractors and other persons involved with the operation of the organisation. The Group has a comprehensive Safety and Health Management system which is designed to minimise the risk of an uncontrolled safety and health event and to continuously improving safety culture within the organisation. Funding - the Group will require additional funding to continue exploration and potentially move from the exploration phase to the development phases of its projects. There is no certainty that the Group will have access to available financial resources sufficient to fund its exploration, feasibility or development costs at those times. The Group has no material financial commitments. Market - there are numerous factors involved with exploration and early stage development of its projects, including variance in commodity price and labour costs which can result in projects being uneconomical. 14 | PLATINA RESOURCES LIMITED Annual Report 2016 Director’s Report ENVIRONMENTAL ISSUES The Group’s operations are subject to significant environmental regulation under the law of the Australian Commonwealth and State and of Greenland. The Group has a policy of complying with its environmental obligations and at the date of this report, is not aware of any breach of such regulations. NATIVE TITLE Mining tenements that the Group currently holds, or has applied for, are subject to Native Title claims. The Group has a policy that is respectful of the Native Title rights and is continuing to negotiate with relevant indigenous bodies. REMUNERATION REPORT (AUDITED) This report details the nature and amount of remuneration for each director of Platina Resources Limited, and for the executives. Remuneration policy The remuneration policy of Platina Resources Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long- term incentives. The Board of Platina Resources Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Group, as well as to create goal congruence between directors, executives and shareholders, that the Board believes will ultimately have a positive effect on shareholder wealth. The policy complies with the four key principles of IFSA Guidance Note 02-16. Executives are also entitled to participate in the employee share, option and performance rights arrangements. All remuneration paid to directors and executives is valued at the cost to the Group and expensed. Shares given to directors and executives are valued as the difference between the market price of those shares and the amount paid by the director or executive. Options and performance rights are valued using the Black-Scholes methodology. There are no schemes for retirement benefits other than statutory superannuation for executive directors. Directors The appointment conditions of the non-executive Chairman, Reginald Gillard and non-executive Director Brian Moller are formalised in service agreements. Both non- executive Directors have contracts for service. Under the Constitution of the Group, these appointments, if not terminated sooner, end on the date of retirement by rotation. The Constitution requires one third of Directors retire each year at a general meeting of shareholders. If re-elected at future general meetings of shareholders, the appointments continue for further terms. The appointment of the Managing Director, Robert Mosig is for a 3 year term although may continue after expiry of this term. Six months’ notice is required if Mr Mosig terminates his employment with the Group. The Group is required to give Mr Mosig twelve months’ notice in the event of termination. The level of remuneration is not dependent on the satisfaction of any specific condition. Key Management Personnel The Board determines the proportion of fixed and variable compensation for each key management personnel. Directors and Key management personnel or closely related parties of key management personnel are prohibited from entering into hedge arrangements that would have the effect of limiting the risk exposure relating to their remuneration. Director’s Report PLATINA RESOURCES LIMITED Annual Report 2016 | 15 REMUNERATION REPORT (AUDITED) (continued) Details of Key Management Personnel (i) Directors Reginald Gillard Robert Mosig Brian Moller (ii) Senior Management Non-Executive Chairman Managing Director Non-Executive Director Duncan Cornish Mark Dugmore Company Secretary and CFO – resigned 1 June 2016 Exploration Manager (to 30 June 2015) Remuneration details The following tables detail, in respect to the financial years ended 30 June 2016 and 2015, the components of remuneration for each key management person of the Group. 2016 Key Management Personnel Directors Reginald Gillard Robert Mosig Brian Moller Senior Management Duncan Cornish – resigned 1 June 2016 2015 Key Management Personnel Directors Reginald Gillard Robert Mosig Brian Moller Senior Management Duncan Cornish Mark Dugmore Benefits Post- employment Benefits Cash and salary Cash bonus Non-cash benefit Other Super- annuation Share based payment $ $ $ $ $ $ 52,906 327,124 51,000 100,833 - - - - - - - - - - - - 4,894 - 22,793 100,000 - - - 6,748 107,581 Total $ 57,800 449,917 51,000 Benefits Post- employment Benefits Cash and salary Cash bonus Non-cash benefit Other Super- annuation Share based payment $ $ $ $ $ $ 52,906 299,833 51,000 110,000 67,232 - - - - - - - - - - - - - - - 4,894 - 23,169 (14,387) - - - - 4,858 - Total $ 57,800 308,615 51,000 114,858 67,232 As a result of austerity measures implemented by the Board during the previous financial year, whereby directors and management agreed to defer portions of their fees until further capital was raised (or fees may be converted to equity) as at 30 June 2015, $77,281 of 2015 director and management fees were unpaid and were paid during this financial year. 16 | PLATINA RESOURCES LIMITED Annual Report 2016 Director’s Report REMUNERATION REPORT (AUDITED) (continued) In the case of share based payments above, the shares in question were issued under the terms of the Group’s performance rights scheme. As such, the shares issued represent grants to the recipients involved which are reflective of; (a) reward and recognition for/of services; or (b) incentive to secure and/or retain appropriately experienced and skilled personnel Key Management Personnel Share and Option Holdings Key Management Personnel interests in ordinary shares, options and performance rights at the date of the Director’s Report are set out below: Ordinary Shares Unquoted Options ($0.10 @ 26-Nov-16) Performance Rights Reg Gillard Robert Mosig Brian Moller 2,293,334 4,481,335 - 500,000 - 500,000 - 1,500,000 - End of Remuneration Report DIRECTORS’ MEETINGS The number of meetings of Directors (including meetings of committees of directors) held during the year and the number of meetings attended by each Director was as follows: Board Audit & Risk Management Committee Remuneration Committee Number of meetings held while in office Reg Gillard Robert Mosig 6 6 Meetings attended 6 6 Number of meetings held while in office 2 2* Meetings attended 2 1* Number of meetings held while in office 1 n/a Brian Moller * Note: Although not a member of the Audit & Risk Management Committee, Mr Mosig attended the meeting by invitation 6 6 2 1 2 Meetings attended 1 n/a 1 INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITOR Each of the Directors and the previous CFO/Company Secretary of Platina Resources Limited have entered into a Deed with Platina Resources Limited whereby Platina Resources Limited has provided certain contractual rights of access to books and records of Platina Resources Limited to those Directors and Secretary. Platina Resources Limited has insured all of the Directors of Platina Resources Limited. The contract of insurance prohibits the disclosure of the nature of the liabilities covered and amount of the premium paid. The Corporations Act does not require disclosure of the information in these circumstances. Platina Resources Limited has not indemnified or insured its auditor. Director’s Report PLATINA RESOURCES LIMITED Annual Report 2016 | 17 PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. Moreover, the Group was not a party to any such proceedings during the year. NON-AUDIT SERVICES The board of directors is satisfied that the provision of non-audit services during the period is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons: all non-audit services are reviewed and approved by the board prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. During the period ended 30 June 2016, no fees for non-audit services were paid to the external auditors (2015: Nil). AUDITOR’S INDEPENDENCE DECLARATION The lead auditor’s independence declaration for the year ended 30 June 2016 has been received and can be found on the following page. CORPORATE GOVERNANCE In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Platina Resources Limited support and have adhered to the principles of corporate governance. Platina Resources Limited’s Corporate Governance Statement can be found on page 23. This report is signed in accordance with a resolution of the directors. Robert Mosig Managing Director Brisbane Date: 15 September 2016 Shareholder Information PLATINA RESOURCES LIMITED Annual Report 2016 | 19 Shareholder Information Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 7 September 2016. (a) Distribution of equity securities The number of holders, by size of holding, in each class of security are: 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total Ordinary Shares No. Holders No. Shares 74 205 250 654 217 18,300 681,590 2,103,409 26,212,050 181,185,886 1,400 210,201,235 Unlisted Options ($0.10 @ 26-Nov-16) Performance Rights No. Holders No. Options No. Holders No. Rights - - - - 2 2 - - - - 1,000,000 1,000,000 - - - - 3 3 - - - - 2,250,000 2,250,000 The number of shareholders holding less than a marketable parcel of 4,166 shares is 206 and they hold a total of 342,092 shares. 20 | PLATINA RESOURCES LIMITED Annual Report 2016 Shareholder Information Twenty largest holders The names of the twenty largest holders, in each class of quoted security are: i. Ordinary shares: Registered Name J P MORGAN NOMINEES AUSTRALIA LIMITED CAIRNGLEN INVESTMENTS PTY LTD* Number of shares % of total shares 29,756,844 14.16% 29,584,235 14.07% HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED* 12,630,389 # 1 2 3 4 5 6 7 NERO RESOURCE FUND PTY LTD YANDAL INVESTMENTS PTY LTD SINO PORTFOLIO INTERNATIONAL LIMITED ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD 8 MR ROBERT MOSIG 9 OPEKA DALE PTY LTD 10 AMALGAMATION SALE AND TAKEOVER CONSULTANTS PTY LTD 11 MR KEITH LEONG & MRS ELIZABETH LEONG 12 TECHNICA PTY LTD 13 NOVASC PTY LTD* 14 MR MICHAEL WONG 15 MR MARK RESNIK 16 MR VINCENT MASCOLO 9,375,000 8,000,000 7,900,000 5,678,165 3,413,334 2,900,000 2,293,334 1,600,000 1,550,200 1,467,382 1,377,957 1,336,000 1,300,000 6.01% 4.46% 3.81% 3.76% 2.70% 1.62% 1.38% 1.09% 0.76% 0.74% 0.70% 0.66% 0.64% 0.62% 0.59% 0.57% 0.56% 0.53% 17 MR JOHN JACOB GUNTHER & MRS MARJORIE GUNTHER & MR KEVIN CHARLES RAE 1,244,749 18 MRS SUSANNE ELIZABETH MORROW 19 CITICORP NOMINEES PTY LTD 20 MR JOHN COLIN LOOSEMORE & MRS SUSAN MARJORY LOOSEMORE 1,203,333 1,178,866 1,110,000 Top 20 Total * Merged holding Substantial Shareholders 124,899,788 59.43% 210,201,235 100.00% Substantial shareholders as shown in substantial shareholder notices received by Platina Resources Limited are: Name of Shareholder: Electrum Global Holdings (and associated entities) Cairnglen Investments Pty Ltd Ordinary Shares: 20,797,199 29,901,818 (b) Voting rights All ordinary shares carry one vote per share without restriction. Options and performance rights do not carry voting rights. Shareholder Information PLATINA RESOURCES LIMITED Annual Report 2016 | 21 (c) Restricted securities The Group currently has no restricted securities on issue. (d) On-market buy back There is not a current on-market buy-back in place. (e) Business objectives The Group has used its cash and assets that are readily convertible to cash in a way consistent with its business objectives. 22 | PLATINA RESOURCES LIMITED Annual Report 2016 Interests in Tenements Interests in Tenements Platina Resource Limited held the following interests in tenements as at 7 September 2016: Tenement M47/123 M47/124 M47/125 M47/126 EL7644 EL2007/01 EL2012/25 Area Location Ownership % Ownership Munni Munni Munni Munni Munni Munni Munni Munni Owendale Skaergaard Qialivarteerpik WA, Australia WA, Australia WA, Australia WA, Australia NSW, Australia Greenland Greenland PGM PGM PGM PGM PGM PGM PGM 100 100 100 100 100 100 100 In August 2015, Platina entered into an agreement with Artemis Resources Limited to earn a 70% interest in the Munni Munni Platinum Group Elements Project, comprising M47/123, 124, 125, 126 (the “Munni Munni Project”) by expending $750,000 over a 3-year period. The Company is not party to any other farm-in or farm-out agreements. Abbreviations and Definitions: EPM Exploration License EL M PL Exploration License Mining Lease Prospecting License PGE PGM AU Platinum Group Elements Platina Resources Ltd Gold Corporate Governance Statement PLATINA RESOURCES LIMITED Annual Report 2016 | 23 Corporate Governance Statement The board of directors of Platina Resources Limited is responsible for the corporate governance of the Group. The Board guides and monitors the business and affairs of Platina Resources Limited on behalf of the shareholders by whom they are elected and to whom they are accountable. Platina Resources Limited’s Corporate Governance Statement (which can be found on the Company’s website www.platinaresources.com.au) is structured with reference to the Australian Securities Exchange (“ASX”) Corporate Governance Council’s (the “Council”) “Corporate Governance Principles and Recommendations, 3rd Edition”, which are as follows: Principle 1 Principle 2 Principle 3 Principle 4 Principle 5 Principle 6 Principle 7 Principle 8 Lay solid foundations for management and oversight Structure the board to add value Act ethically and responsibly Safeguard integrity in corporate reporting Make timely and balanced disclosure Respect the rights of security holders Recognise and manage risk Remunerate fairly and responsibly A copy of the eight Corporate Governance Principles and Recommendations can be found on the ASX’s website. The Board is of the view that, during the reporting period, with the exception of the departures from the ASX Guidelines as set out below, it otherwise complies with all of the ASX Guidelines. Roles and Responsibilities of the Board and Management ASX CGC Principle 1 Lay solid foundations for management and oversight. Role of the Board The Board of Directors is pivotal responsibilities of the Board underpin corporate governance. in the relationship between shareholders and management and the role and The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Group’s needs. Generally, the powers and obligations of the Board are governed by the Corporations Act and the general law. Without limiting those matters, the Board expressly considers itself responsible for the following: Ensuring compliance with the Corporations Act, ASX Listing Rules (where appropriate) and all relevant laws; Oversight of the Group including its framework of control and accountability systems to enable risk to be assessed and managed; Appointing and removing the chief executive officer; Ratifying the appointment and, where appropriate, removal of senior executives including the chief financial officer and the Group secretary; Input into and final approval of management’s development of corporate strategy and performance objectives; Monitoring senior executive’s performance and implementation of strategy; Ensuring appropriate resources are available to senior executives; Approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures; Approving and overseeing Committees where appropriate to assist in the Board’s function and powers. The Functions, Powers and Responsibilities of the Board are set out in the Company’s Corporate Governance Charter which is available from the corporate governance section of the Group’s website. 24 | PLATINA RESOURCES LIMITED Annual Report 2016 Corporate Governance Statement The board meets on a regular basis to review the performance of the Company against its goals both financial and non-financial. In normal circumstances, prior to the scheduled board meetings, each board member is provided with a formal board package containing appropriate management and financial reports. Appropriate background checks are conducted on proposed new directors and material information about a director being re-elected is provided to security holders. Written agreements are entered in to with directors and senior management clearly setting out their roles and responsibilities. The company secretary works directly with the chair and the managing director on the functioning of all board and committee procedures. Diversity The Group is committed to workplace diversity and ensuring a diverse mix of skills amongst its directors, officers and employees. Recommendation 1.5 requires that listed entities should establish a policy concerning diversity. Whilst the Group does not currently have a Diversity policy due to its size and nature of its operations, it strives to attract the best person for the position regardless of gender, age, ethnicity or cultural background. As at 30 June 2016, the proportion of women in the whole organisation is a follows: Male 100% 100% 100% Female 0% 0% 0% Board Members Officers Other Performance Evaluation The Remuneration Committee and the Board (in carrying out the functions of the Nomination Committee) considers remuneration and nomination issues annually and otherwise as required in conjunction with the regular meetings of the Board. A performance evaluation was undertaken for the managing director and senior executives with reference to their performance generally and also pre-determined key performance indicators (as incorporated with performance rights on issue to each of them). No formal performance evaluation of the non-executive directors was undertaken during the year ended 30 June 2016. Corporate Governance Statement PLATINA RESOURCES LIMITED Annual Report 2016 | 25 Board Composition ASX CGC Principle 2 Structure of the Board to add value Nomination Committee Recommendation 2.1 requires the Board to establish a nomination committee. Although the Board has adopted a Nominations Committee Charter, the Board has not formally established a Nominations Committee as the Directors consider that the Company is currently not of a size nor are its affairs of such complexity as to justify the formation of this Committee. The Board as a whole is able to address these issues and is guided by the Nominations Committee Charter. The Company will review this position annually and determine whether a Nominations Committee needs to be established. The Nomination Committee Charter is set out in the Company’s Corporate Governance Charter which is available from the corporate governance section of the Group’s website. The Company is developing an appropriate board skills matrix. The skills, experience and expertise relevant to the position of each director who is in office at the date of the Annual Report is detailed in the director’s report. Corporate Governance Council Recommendation 2.4 requires a majority of the Board to be independent Directors. The Corporate Governance Council defines independence as being free from any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material capacity to bring independent judgement to bear on issues before the board and to act in the best interests of the entity and its security holders generally. In the context of Director independence, “materiality” is considered from both the Group and the individual Director perspective. The determination of materiality requires consideration of both quantitative and qualitative elements. An item is presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to or greater than 10% of the appropriate base amount. Qualitative factors considered included whether a relationship is strategically important, the competitive landscape, the nature of the relationship and the contractual or other arrangements governing it and other factors which point to the actual ability of the Director in question to shape the direction of the Group. In accordance with the Council’s definition of independence above and the materiality thresholds set, the Directors listed below are not considered to be independent and therefore the Group does not currently comply with Recommendation 2.4: Name Position Reason for non-compliance Robert Mosig Managing Director Brian Moller Non-Executive Director Mr Mosig is employed by the Group in an executive capacity. Mr Moller is a principal of a material professional advisor to the Group. The Group’s Non-Executive Chairman, Reginald Gillard, is considered independent. Platina Resources Limited considers industry experience and specific expertise, as well as general corporate experience, to be important attributes of its Board members. The Directors noted above have been appointed to the Board of Platina Resources Limited due to their considerable industry and corporate experience. 26 | PLATINA RESOURCES LIMITED Annual Report 2016 Corporate Governance Statement The term in office held by each Director in office at the date of this report is as follows: Name Term in Office Reginald Gillard 8 years 2 months Robert Mosig Brian Moller 11 years 5 months 10 years 7 months Directors have the right to seek independent professional advice in the furtherance of their duties as directors at the Group’s expense. Written approval must be obtained from the chair prior to incurring any expense on behalf of the Group. Informal induction is provided to any new directors. Act Ethically and Responsibly ASX CGC Principle 3 Code of Conduct The Directors are subject to certain stringent legal requirements regulating the conduct both in terms of their internal conduct as directors and in their external dealings with third parties both on their own and on behalf of the Group. To assist directors in discharging their duty to the Group and in compliance with relevant laws to which they are subject, the Group has adopted a Corporate Ethics Policy and Corporate Code of Conduct within its Corporate Governance Charter. The Corporate Ethics Policy sets out rules binding Directors in respect of: a Director’s legal duties as an officer of the Company; a Director’s obligations to make disclosures to the ASX and the market generally; and dealings by Directors in shares in the Company. The Corporate Ethics Policy, as set out in the Company’s Corporate Governance Charter is available from the corporate governance section of the Group’s website. Safeguard Integrity in Corporate Reporting ASX CGC Principle 4 Audit Committee The Board has established an Audit and Risk Management Committee which operates under a charter approved by the Board. Recommendation 4.1 states that an audit committee should be structured so that it: i. ii. consists only non-executive directors; consists of a majority of independent directors; iii. is chaired by an independent chair, who is not the chair of the Board; and iv. has at least three members. The members of the Audit & Risk Management Committee are Brian Moller (Chair) and Reginald Gillard, both of whom are non-executive directors. However as the Company’s Audit and Risk Management Committee only has two members and Mr Moller is not considered independent (based on the Council’s definition), the Committee does not contain a majority of independent directors and is not chaired by an independent director. Therefore the Company does not presently comply with Recommendation 4.1. Messrs Moller and Gillard are both considered financially literate in the context of the Company’s affairs. The Company believes that given the size and nature of its operations, non-compliance by the Company with Recommendation 4.1 will not be detrimental to the Company. Corporate Governance Statement PLATINA RESOURCES LIMITED Annual Report 2016 | 27 The number of meetings of the Audit & Risk Management Committee held during the year and the number of meetings attended by each Director was as follows: Audit & Risk Management Committee Number of meetings held while in office Reg Gillard Robert Mosig 2 2* Meetings attended 2 1* Brian Moller * Note: Although not a member of the Audit & Risk Management Committee, Mr Mosig attended the meeting by invitation 2 2 The Audit Committee Charter is set out in the Company’s Corporate Governance Charter which is available from the corporate governance section of the Group’s website. Certification of financial reports The Managing Director has made the following certifications to the Board: That the Group’s financial reports are complete and present a true and fair view, in all material respects, of the financial position and performance of the Group and are in accordance with relevant accounting standards; The integrity of the reports is founded on a sound system of financial risk management and internal compliance and control. The Company Secretary has made the following certifications to the Board: That the Group’s financial reports are complete and present a true and fair view, in all material respects, of the financial position and performance of the Group and are in accordance with relevant accounting standards; The integrity of the reports is founded on sound system of financial risk management and internal compliance and control. The Group ensures that its external auditors are present at the AGM to answer any questions with regard to the efficacy of the financial statement audit and the associated independent audit report. Continuance Disclosure ASX CGC Principle 5 Make timely and balanced disclosure The Group duly complies with ASX and ASIC requirements for the timely and accurate reporting of the Group’s impact on financial activities, thus ensuring that the Group has disclosed all shareholders. This includes the Annual Financial Report, Interim Financial Report, quarterly cash flows, new and relinquished tenements and changes in directors and shareholder interests and other events which are identified to be material. All ASX announcements are available on the Group’s website. information which has a material The Company Secretary is responsible for communication with the ASX, including responsibility for ensuring compliance with the continuous disclosure requirements of the ASX Listing Rules and oversight of information distributed to the ASX. 28 | PLATINA RESOURCES LIMITED Annual Report 2016 Corporate Governance Statement Respect The Rights of Security Holders ASX CGC Principle 6 The Board of directors undertakes to ensure that shareholders are informed of all major developments affecting the Group. interim financial report, announcements made to the ASX, notices of Annual General and Extraordinary General Meetings, the AGM and Extraordinary General Meetings. Information is communicated to shareholders through the annual report, The Board encourages full participation of shareholders at Annual and Extraordinary General Meetings to ensure a high level of accountability and identification with the Group’s direction, strategy and goals. In particular, shareholders are responsible for voting on the re-election of directors. The Group also offers shareholders the option to receive ASX announcements and other notices from the Company electronically. Risk Management ASX CGC Principle 7 Recognise and manage risk The Board has established an Audit and Risk Management Committee which operates under a charter approved by the Board. Recommendation 7.1 states that an audit committee should be structured so that it: i. ii. consists only non-executive directors; consists of a majority of independent directors; iii. is chaired by an independent chair, who is not the chair of the Board; and iv. has at least three members. The members of the Audit & Risk Management Committee are Brian Moller (Chair) and Reginald Gillard, both of whom are non-executive directors. However as the Company’s Audit and Risk Management Committee only has two members and Mr Moller is not considered independent (based on the Council’s definition), the Committee does not contain a majority of independent directors and is not chaired by an independent director. Therefore the Company does not presently comply with Recommendation 7.1. Messrs Moller and Gillard are both considered to have sufficient technical, legal and industry experience in the context of the Company’s affairs to properly assess the risks facing the Group. The Company believes that given the size and nature of its operations, non-compliance by the Company with Recommendation 7.1 will not be detrimental to the Company. The number of meetings of the Audit & Risk Management Committee held during the year and the number of meetings attended by each Director was as follows: Audit & Risk Management Committee Number of meetings held while in office Reg Gillard Robert Mosig 2 2* Meetings attended 2 1* Brian Moller * Note: Although not a member of the Audit & Risk Management Committee, Mr Mosig attended the meeting by invitation 2 2 The Company has developed a basic framework for risk management and internal compliance and control systems which cover organisational, financial and operational aspects of the Company’s affairs. Further detail of the Company’s risk management policies can be found within the Audit and Risk Management Committee Charter. Recommendation 7.2 requires that the Board review the Company’s risk management framework and disclose whether such a review has taken place. Business risks are considered regularly by the Board and management at Corporate Governance Statement PLATINA RESOURCES LIMITED Annual Report 2016 | 29 management and Board meetings. A formal report to the Board as to the effectiveness of the management of the Company’s material business risks has not been formally undertaken. The Audit and Risk Management Committee Charter is set out in the Company’s Corporate Governance Charter which is available from the corporate governance section of the Group’s website. The Company does not have a separate internal audit function. The board considers that the Company is not currently of the size or complexity to justify a separate internal audit function, and that appropriate internal financial controls are in place. Such controls are monitored by senior financial management and the Audit and Risk Committee. The Director’s Report sets out some of the key risks relevant to the Company and its operations. Although not specifically defined as such, the risks include economic, environmental and social sustainability risks. As noted above, the Company regularly reviews risks facing the Company and adopts appropriate mitigation strategies where possible. Remuneration ASX CGC Principle 8 Remunerate fairly and responsibly Remuneration Committee The Board has established a Remuneration Committee which operates under a charter approved by the Board. Recommendation 8.1 states that a remuneration committee should be structured so that it: i. ii. consists of a majority of independent directors; is chaired by an independent chair; and iii. has at least three members. The members of the Remuneration Committee are Brian Moller and Reginald Gillard (Chair), both of whom are non- executive directors. However as the Company’s Remuneration Committee only has two members and Mr Moller is not considered independent (based on the Council’s definition), the Committee does not contain a majority of independent directors and is chaired by an independent director. Therefore the Company does not presently comply with Recommendation 8.1. Messrs Moller and Gillard are both considered to have sufficient legal, corporate, commercial and industry experience in the context of the Company’s affairs to properly assess the remuneration issues required by the Group. The Company believes that given the size and nature of its operations, non-compliance by the Company with Recommendation 8.1 will not be detrimental to the Company. The number of meetings of the Remuneration Committee held during the year and the number of meetings attended by each Director was as follows: Remuneration Committee Number of meetings held while in office 1 n/a 1 Meetings attended 1 n/a 1 Reg Gillard Robert Mosig Brian Moller It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and Executive team by remunerating directors and key executives fairly and appropriately with reference to relevant employment market conditions. To assist in achieving this objective, the Remuneration Committee and the Board links the nature and amount of executive director’s and officer’s remuneration to the Group’s financial and operations performance. The expected outcomes of the remuneration structure are: retention and motivation of key Executives attraction of quality management to the Group 30 | PLATINA RESOURCES LIMITED Annual Report 2016 Corporate Governance Statement performance incentives which allow executives, management and staff to share the rewards of the success of Platina Resources Limited. For details on the amount of remuneration and all monetary and non-monetary components for Key Management Personnel during the period, please refer to the Remuneration Report within the Directors’ Report. In relation to the payment of bonuses, options and other incentive payments, discretion is exercised by the Remuneration Committee and the Board, having regard to the overall performance of Platina Resources Limited and the performance of the individual during the period. There is no scheme to provide retirement benefits to directors other than statutory superannuation. The Remuneration Committee Charter is set out in the Company’s Corporate Governance Charter which is available from the corporate governance section of the Group’s website. Remuneration Policy The Group’s remuneration policy is also further detailed in the Remuneration Report in the Directors Report. Non-Executive Director Remuneration Non-executive directors are remunerated at market rates for time, commitment and responsibilities. Non-executive directors are remunerated by fees as determined by the Board with the aggregate directors’ fee pool limit of $250,000, as listed on 29 May 2006. The maximum aggregate amount of fees that can be paid to non-executive Independent consultancy sources directors is subject to approval by shareholders at the Annual General Meeting. provide advice, as required; ensuring remuneration is in accordance with market practice. Fees for non-executive Directors are not linked to the performance of the Group. However, to align Directors’ interests with shareholders interests, the Directors are encouraged to hold shares in the Company and are, subject to approval by shareholders, periodically offered options and/or performance rights. The Company has adopted a Trading Policy that includes a prohibition on hedging, aimed at ensuring participants do not enter in to arrangements which would have the effect of limited their exposure to rick relating to an element of their remuneration. Other Information Further information relating to the Group’s corporate governance practices and policies has been made publicly available on the Group’s web site. Consolidated Statement of Comprehensive Income PLATINA RESOURCES LIMITED Annual Report 2016 | 31 Consolidated Statement of Comprehensive Income For the year ended 30 June 2016 Note 2 3 11 3 4 Revenue and other income Administration expenses Depreciation and amortisation expense Employee benefits expense Exploration costs expensed Impairment of exploration costs Marketing expenses Occupancy expenses Other expenses Professional services Share based payments Operating Loss Loss before income tax Income tax benefit/(expense) Net profit/(loss) for the year Other comprehensive income Other comprehensive income net of tax Total comprehensive loss for the year 2016 $ 2015 $ 331,364 17,385 (241,850) (3,573) (108,588) (27,087) - (11,328) - - (413,447) (164,072) (638,581) (638,581) 264,933 (373,648) - - (241,977) (15,117) (186,243) (125,685) (353,264) (1,857) (16,266) (1,713) (368,527) (47,780) (1,341,044) (1,341,044) 259,241 (1,081,803) - - (373,648) (1,081,803) Earnings per share Cents Cents Basic/diluted loss per share (cents per share) 7 (0.23) (0.78) The accompanying notes form part of these financial statements 32 | PLATINA RESOURCES LIMITED Annual Report 2016 Consolidated Statement of Financial Position Consolidated Statement of Financial Position As at 30 June 2016 Note 2016 $ 2015 $ 2014* $ Current Assets Cash and cash equivalents Trade and other receivables Other current assets Total Current Assets Non-Current Assets Property, plant and equipment Exploration and evaluation expenditure Other non-current assets Total Non-Current Assets TOTAL ASSETS Current Liabilities Trade and other payables Total Current Liabilities Non-Current Liabilities Other provisions Deferred tax liabilities Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Issued capital Share Issue Costs Options reserve Accumulated losses TOTAL EQUITY 8 9 12 10 11 12 13 13 13 14 15 * Refer Note 1 – Prior period Adjustment The accompanying notes form part of these financial statements. 3,331,595 72,438 10,623 3,414,656 895,946 8,915 11,310 916,171 752,179 25,636 11,572 789,387 2,802 3,450 33,312 22,085,162 21,525,644 21,208,474 100,422 22,188,386 422 10,422 21,529,516 21,252,208 25,603,042 22,445,687 22,041,595 285,564 285,564 249,176 249,176 283,262 283,262 - 2,017,824 2,017,824 49,819 2,100,504 2,150,323 38,680 2,100,504 2,139,184 2,303,388 2,399,499 2,422,446 23,299,654 20,046,188 19,619,149 43,394,589 39,591,301 37,996,395 (2,291,404) (2,121,158) (2,021,064) 41,103,185 37,470,143 35,975,331 55,883 61,811 47,781 (17,859,414) (17,485,766) (16,403,963) 23,299,654 20,046,188 19,619,149 Consolidated Statement of Changes in Equity PLATINA RESOURCES LIMITED Annual Report 2016 | 33 Consolidated Statement of Changes in Equity For the year ended 30 June 2016 Balance at 30 June 2014 35,975,331 47,781 (16,403,963) 19,619,149 Share Capital Ordinary $ Options Reserve $ Accumulated Losses $ Total $ Share issue costs Issue of shares Options issued Performance rights issued Sub total Total Comprehensive loss Balance at 30 June 2015 Share issue costs Issue of shares Performance rights issued Performance rights converted Sub total Total Comprehensive loss Balance at 30 June 2016 (100,093) 1,331,804 263,101 - 37,470,143 - - - 14,030 61,811 - - - - (100,093) 1,331,804 263,101 14,030 (16,403,963) 21,127,991 - - (1,081,803) (1,081,803) 37,470,143 61,811 (17,485,766) 20,046,188 (170,247) 3,645,789 - 157,500 - - 151,572 (157,500) - - - - (170,247) 3,645,789 151,572 - 41,103,185 55,883 (17,485,766) 23,673,302 - - (373,648) (373,648) 41,103,185 55,883 (17,859,414) 23,299,654 The accompanying notes form part of these financial statements. 34 | PLATINA RESOURCES LIMITED Annual Report 2016 Consolidated Statement of Cash Flows Consolidated Statement of Cash Flows For the year ended 30 June 2016 Note 2016 $ 2015 $ Cash Flows from Operating Activities Payments to suppliers and employees Interest received Other receipts Net cash provided by (used in) operating activities 17 Cash Flows from Investing Activities Proceeds from sale of property, plant and equipment Payments for property, plant and equipment Exploration and evaluation expenditure Net cash provided by (used in) investing activities Cash Flows from Financing Activities Proceeds from issue of shares & options Share Issue Costs Net cash provided by (used in) financing activities Net increase/(decrease) in cash held Cash and cash equivalents at beginning of year Cash and cash equivalents at end of financial year 8 The accompanying notes form part of these financial statements. (816,675) (977,369) 7,371 336,933 9,615 286,146 (472,371) (681,608) - 22,332 (2,925) (559,517) (562,442) - (659,252) (636,920) 3,633,288 1,561,156 (162,826) (98,861) 3,470,462 1,462,295 2,435,649 895,946 3,331,595 143,767 752,179 895,946 Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 35 Notes to the Financial Statements for the year ended 30 June 2016 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of Platina Resources Limited for the year ended 30 June 2016 were authorised for issue in accordance with a resolution of the Directors. These consolidated financial statements and notes represent those of Platina Resources Limited and its controlled entity (the “Company” or “Group”). The separate financial statements of the parent entity, Platina Resources Limited, have not been presented within this financial report as permitted by the Corporations Act 2001. The financial statements were authorised for issue on the date the directors’ report was signed by the directors of the Company. Platina Resources Limited is a public company limited by shares, incorporated and domiciled in Australia, whose shares (and one class of options) are publicly traded on the Australian Securities Exchange. Prior period Adjustment - Deferred Tax Liability (DTL) A deferred tax liability exists under “AASB12 Income Taxes” in relation to capitalised exploration assets in Greenland. If assets were realised at their carrying value, this would generate taxable income in that jurisdiction. Historically the DTL has been disclosed in the financial statements net of carried forward tax losses in Greenland, which has resulted in a $nil balance. However, under local taxation laws, the ability to utilise some of the carried forward losses was lost in the prior period (see note below). As such the carrying value of the exploration assets now exceeds the taxation losses by $6.9m (2015: $7.0m), resulting in the recognition of a deferred tax liability of $2.0m (2015: $2.1m), calculated using the corporate tax rate of the local jurisdiction (ie. 30%). The directors do not have any immediate plans to sell the Greenland assets, or to commence production of the sites. As such this deferred taxation liability is not expected to crystallise at any time in the foreseeable future. As noted above, a deferred tax liability has been identified relating to carry forward losses relating to prior periods. In accordance with “AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors”, the recognition of the deferred tax liability is being treated as a prior period adjustment. The comparative information in this Financial Report has been adjusted accordingly. The adjustment has had the following impact on the comparative information presented in the Statement of Financial Position: Deferred tax liability Total Liabilities Net Assets Retained Earnings As Previously stated Adjustment Restated $- $298,995 $22,146,692 ($15,385,262) $2,100,504 $2,100,504 ($2,100,504) ($2,100,504) $2,100,504 $2,399,499 $20,046,188 ($17,485,766) The following lines of the Statement of Changes in Equity have been adjusted as follows: Balance at 1 July 2014 – Accumulated Losses Balance at 1 July 2014 – Equity Total Balance at 30 June 2015 – Accumulated Losses As Previously stated Adjustment Restated ($14,303,459) ($2,100,504) ($16,403,963) $21,719,653 ($2,100,504) $19,619,149 ($15,385,262) ($2,100,504) ($17,485,766) Balance at 30 June 2015 – Total Equity $22,146,692 ($2,100,504) $20,046,188 Earnings per share was not impacted as a result of these adjustments. 36 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements a. Going Concern The financial report for the year ended 30 June 2016 is prepared on a going concern basis. The ability of the Group to continue as a going concern is principally dependent upon the ability of the Group to secure funds by raising capital from equity markets, or sale of projects, and managing cash flow in line with available funds. The Group’s operations require the raising of capital on an on-going basis to fund its planned exploration program and to commercialize its projects. The company recorded a loss after tax of $373,648 for the year ended 30 June 2016 and has accumulated losses of $17,859,414. However, the company has successfully raised capital on several occasions during the year, resulting in a year end cash balance of $3.3m. Management has prepared a detailed cash flow forecast for the next 12 months from the date of this report, and the directors are satisfied that the going concern basis of preparation is appropriate and as a result the directors do not believe there is any material uncertainty in respect of the company's ability to continue as a going concern for the foreseeable future. b. Basis of preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated. Except for cash flow information, the financial report has been prepared on an accruals basis and is based on historical costs. c. Basis of Consolidation Controlled Entities The financial statements of controlled entities are included in the consolidated financial statements from the date control commences until the date control ceases. The acquisition of subsidiaries is accounted for using the purchase method of accounting. The purchase method of accounting involves allocating the cost of the business combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed at date of acquisition. Details of controlled entities at balance date are included in Note 21. Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 37 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) d. New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are effective for future periods reporting, but have not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out below. The Group does not plan to adopt these standards early. (i) New Standard AASB 9 Financial Instruments Replaces AASB 139 for reporting periods beginning on or after 1 January 2018 Revised guidance on classification and measurement of financial instruments New ‘expected credit loss’ model for calculating impairment on financial assets Changes to the conditions required to apply hedge accounting Apart from changing naming conventions, the Group does not expect the Standard to have any impact as the Group does not have any complex financial instruments AASB 15 Revenue from Contract with Customers Replaces AASB 118 Revenue, AASB 111 Construction Contracts and Interpretation 13 Customer Loyalty Programs for reporting periods beginning on or after 1 January 2018. Establishes a comprehensive framework for determining whether, how much and when revenue is recognised. The 5-step process for recognising revenue removes the focus from the transfer of “risk and reward” to identification and completion of “performance obligations.” At this stage the Group has not entered into any contracts with customers and it is therefore difficult to predict what form any future contracts may take. As a result it is impractical to attempt to quantify the potential impact of this standard. AASB 16 Leases Replaces AASB 117 Leases for reporting periods beginning on or after 1 January 2019. Requires substantially all leases to be included in the Statement of Financial Position. Requires all leases to be amortised over the interest component of the lease cost to be expensed, while the principal component offsets the liability in the Statement of Financial Position. At this stage the Group is yet to assess the expected impact of this Standard, but historically has not used extensive Lease facilities. AASB 14 Regulatory Deferral Accounts Sets out accounting principles for entities that undertake rate-regulated activities. To take effect for financial years beginning after 1 January 2016. None of the Group’s operations are subject to a rate regulator, so this standard is not expected to have an impact. e. Changes in Accounting Policies The Group has consistently applied the accounting polices set out in Note 1 to all periods presented in these consolidated financial statements. There have been no changes in accounting policies. 38 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) f. Income Tax The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantially, enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Current tax assets and liabilities are offset where a legally enforceable right to set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. g. Property, Plant and Equipment Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The expected net cash flows have been discounted to their present values in determining recoverable amounts. All repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the Group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Plant and equipment 7.5% -40% Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 39 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) h. Exploration and Evaluation Expenditure Costs in relation to exploration and evaluation expenditure is capitalised to the extent that: i. ii. the rights to tenure of the areas of interest are current and the Group controls the area of interest in which the expenditure has been incurred; such costs are expected to be recouped through successful development and exploitation of the area of interest, or alternatively by its sale; or iii. exploration and evaluation activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. The statement of comprehensive income will recognise expenses arising from the excess of the carrying values of exploration and evaluation assets over the recoverable amounts of these assets. Expenditure capitalised under the above policy is amortised over the life of the area of interest from the date that that commercial production of the related mineral occurs. In the event that an area of interest is abandoned or if the directors consider the expenditure to be of no value, accumulated expenditure carried forward is written off in the year in which that assessment is made. i. Leases Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term. j. Investments Investments are valued at fair value as available-for-sale financial assets, as described below. The fair value is assessed from the shares’ current market value. k. Financial Instruments Recognition Financial instruments are initially measured at fair value on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below. Loans and receivables These financial assets consist of trade and other receivables, which are measured at cost less any accumulated impairment losses. There is a significant concentration of credit risk with the Australia Taxation Office, however management considers credit risk of this entity to be extremely low. Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. Receivables that are not considered to be individually impaired are reviewed for impairment in groups, which are determined by reference to the industry and region of a counterparty and other shared credit risk characteristics. The impairment loss estimate is then based on recent historical counterparty default rates for each identified group. Financial Assets at fair value through profit or loss Financial assets are valued at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss. Held-to-maturity investments These investments have fixed maturities, and it is the Group’s intention to hold these investments to maturity. Any held-to- maturity investments held by the Group are stated at amortised cost. 40 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) k. Financial Instruments (Continued) Available-for-sale financial assets Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity, except where losses are considered to be prolonged and extensive, in which case such losses are recognised in profit or loss. Financial liabilities Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation. Fair Value Fair value is determined based on current bid prices for all quoted investments. Impairment At each reporting date, the Group assesses whether there is objective evidence that a financial impaired. In the case of available-for-sale financial considered to determine whether an impairment has arisen. Impairment losses are recognised in profit and loss. instrument has been instruments, a prolonged decline in the value of the instrument is l. Impairment of Assets At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to profit and loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. m. Employee Benefits Short-term employee benefits, including wages and payments made to defined contribution superannuation funds, are recognised when incurred. Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Other non-current employment benefit obligations are discounted using market yields on corporate bonds. n. Equity settled compensation The Group operates share-based compensation plans for employees. The element over the exercise price of the employee services rendered in exchange for the grant of shares and options is recognised as an expense in the statement of comprehensive income. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted. o. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of twelve months or less, and bank overdrafts. Where applicable, bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. p. Revenue and Other income Interest revenues are recognised on a proportional basis taking into account the interest rates applicable to the financial assets. All revenue is stated net of the amount of goods and services tax (GST). Other income is recognised when the Group obtains a contractual right to obtain the income. Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 41 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) q. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. r. Provisions Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefit will result and that outflow can be reliably measured. No provision has yet been recognised for mine restoration and rehabilitation costs because the definition above has not yet been satisfied in relation to any of the mine sites operated by the Group. s. Trade and Other Payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Group during the reporting period which remains unpaid. The balance recognised as a current liability with the amount being normally within 30 days of reconciliation of the liability. t. Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key Estimates — Impairment The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. The Group performs a regular review of each area of interest to determine the appropriateness of continuing to carry forward expenditure in relation to that area of interest. The review requires a number of estimates to be made. No impairment has been recognised for the year ended 30 June 2016 (2015: $353,264), in respect of capitalised exploration costs for areas of interest that have been surrendered or where the tenements have expired. Key Judgements — Capitalisation of Exploration Costs All expenditure incurred by the Group, including employee benefits, is assessed as to whether it should be capitalized as exploration and evaluation expenditure or expensed through the statement of comprehensive income. This requires some judgement; however expenditure is capitalized to the extent the Group believes it meets the criteria as set out in AASB 6 Exploration Expenditure. 42 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) u. Foreign Currency Transactions and Balances Functional and presentation currency The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars, which is the parent entity’s functional currency. Transactions and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the exchange difference is recognised in profit or loss. Foreign exchange differences relating to qualifying assets are capitalised. Costs incurred in mining exploration are considered to be part of qualifying assets and can be capitalised. v. Government Grants To the extent that grants/contributions/rebates are received from taxation authorities, they are recognised in profit and loss as an Income Tax Benefit. Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 43 NOTE 2 REVENUE Interest revenue - Bank Sale of assets Other income 1 Other Rebate Foreign exchange gain 2016 $ 2015 $ 7,487 - 243,734 - 80,143 331,364 9,615 7,586 - 184 - 17,385 1. During the period, Platina entered an agreement with Artemis Resources Limited for Artemis to earn a 70% interest in the Munni Munni project in WA. Consideration to Platina on completion of the Agreement, recorded in as other income, was $143,734 plus 100 million Artemis shares (valued at $0.001 per share). NOTE 3 LOSS FOR THE YEAR Loss for the year is derived after charging the following significant expenses: Depreciation of property, plant and equipment Share-based payments Operating lease rentals NOTE 4 INCOME TAX EXPENSE (a) The components of tax expense comprise: Current tax Deferred tax (3,573) (164,072) - (15,117) (47,780) (16,266) (264,933) (259,241) - - Income tax expense/(benefit) reported in statement of comprehensive income (264,933) (259,241) (b) The prima facie income tax on the loss is reconciled to the income tax expense/(benefit) as follows: Prima facie tax benefit on loss from ordinary activities before income tax 30% (191,574) (402,313) Add tax effect of: - - non-allowable items share options / performance rights expensed during period Less Tax effect of: Benefit of tax losses and temporary differences not brought to account R&D Tax offset (benefit) Income tax attributable to the Group (c) Unrecognised deferred tax balances: 3,384 49,222 4,996 14,334 (138,968) (382,983) 138,968 (264,933) (264,933) 382,983 (259,241) (259,241) Net unrecognised deferred tax asset /liability losses (3,216,731) (3,221,980) (d) Tax effects relating to each component of other comprehensive income: Other comprehensive income - - 44 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements NOTE 5 KEY MANAGEMENT PERSONNEL (a) Names and positions held of Group key management personnel in office at any time during the financial year are: Director Position Reginald Gillard Non-Executive Chairman Robert Mosig Managing Director Brian Moller Non-Executive Director Senior Management Duncan Cornish Company Secretary and CFO – resigned 1 June 2016 Key management personnel remuneration has been included in the Remuneration Report section of the Directors Report. (b) Options and Rights Holdings Number of listed options held by key management personnel: Balance 1 July 2015 Options Granted as Compensation Options Exercised Options Expired Net Change Other * Balance 30 June 2016 Directors Reg Gillard Robert Mosig Brian Moller Senior Management Duncan Cornish – resigned 1 June 2016 Total 966,667 1,413,334 - 766,667 3,146,668 - - - - - (966,667) (1,413,334) - - - - - (766,667) (2,380,001) (766,667) - - - - - - - - - - * Net Change Other refers to shares purchased or sold during the financial period. Number of unlisted options held by key management personnel: Balance 1 July 2015 Options Granted as Compensation Options Exercised Options Expired Balance 30 June 2016 Directors Reg Gillard Robert Mosig Brian Moller Senior Management Duncan Cornish – resigned 1 June 2016 Total 500,000 - 500,000 - 1,000,000 - - - - - - - - - - - - - - - 500,000 - 500,000 - 1,000,000 Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 45 NOTE 5 KEY MANAGEMENT PERSONNEL (Continued) Number of performance rights held by key management personnel: Balance 1 July 2015 Performance Rights Granted as Compensation Performance Rights Exercised Performance Rights Expired Balance 30 June 2016 - - - 250,000 250,000 - 5,000,000 - - - - - (250,000) - - (1,500,000) 3,500,000 - - - - 5,000,000 (250,000) (1,500,000) 3,500,000 Directors Reg Gillard Robert Mosig Brian Moller Senior Management Duncan Cornish – resigned 1 June 2016 Total (c) Shares Issued on Exercise of Compensation Options There were no shares issued on the exercise of compensation options. (d) Shareholdings Number of shares held by key management personnel: Balance 1 July 2015 Granted as Compensation Options Exercised Net Change Other* Balance 30 June 2016 Directors Reg Gillard Robert Mosig Brian Moller Senior Management Duncan Cornish – resigned 1 June 2016 Total 1,326,667 2,568,001 - 763,866 4,658,534 - - - - - 966,667 - 1,413,334 (1,500,000) 2,293,334 2,481,335 - - - - - N/A 2,380,001 (1,500,000) 4,774,669 * Net Change Other refers to shares purchased or sold during the financial period. NOTE 6 AUDITOR’S REMUNERATION Remuneration of the auditor of the Group for - auditing or reviewing the financial report - non-audit services 2016 $ 2015 $ 62,000 - 62,000 64,000 - 64,000 46 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements NOTE 7 LOSS PER SHARE Reconciliation of earnings to profit or loss: Loss for the period Earnings used to calculate basic EPS Earnings used in the calculation of dilutive EPS 2016 $ 2015 $ (373,648) (373,648) (373,648) (1,081,803) (1,081,803) (1,081,803) 2016 Number 2015 Number Weighted average number of ordinary shares on issue in calculating basic EPS 165,204,015 139,418,753 Weighted average number of options outstanding 1,000,000 84,262,411 Weighted average number of ordinary shares outstanding during the period used in calculating dilutive EPS 165,204,015 139,418,753 Anti-dilutive options on issue not used in dilutive EPS calculation 1,000,000 84,262,411 NOTE 8 CASH AND CASH EQUIVALENTS Cash at bank – deposit account Cash at bank and in hand Short-term bank deposits * Cash and cash equivalents 2016 $ 2015 $ 484,337 2,836,419 10,839 3,331,595 662,312 223,075 10,559 895,946 The average interest rate on the deposit accounts was 1.3% at 30 June 2016 (2015 = 1.5%) The average effective interest rate on short-term bank deposits was 2.65% (2015 = 2.5%). These deposits have an average maturity of 6 months. The cash and cash equivalents balance above reconciles to the statement of cash flows. * This is held as security for the contingent liability disclosed in Note 22. NOTE 9 TRADE AND OTHER RECEIVABLES CURRENT Trade and other receivables Total Receivables 72,438 72,438 8,915 8,915 Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 47 NOTE 10 PROPERTY, PLANT AND EQUIPMENT PLANT AND EQUIPMENT Plant and equipment: At cost Accumulated depreciation Total Plant and Equipment (a) Movements in Carrying Amounts 2016 $ 2015 $ 765,633 (762,831) 2,802 762,708 (759,258) 3,450 Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Balance as at 1 July 2014 Disposals Depreciation expense Balance at 30 June 2015 Additions Depreciation expense Balance at 30 June 2016 Plant and Equipment $ 33,312 (14,745) (15,117) 3,450 2,925 (3,573) 2,802 2015 $ 2016 $ NOTE 11 EXPLORATION AND EVALUATION EXPENDITURE Balance at beginning of financial year Capitalised Impaired 21,525,644 21,208,474 559,518 - 670,434 (353,264) Exploration and evaluation expenditure capitalised – at cost 22,085,162 21,525,644 Recoverability of the carrying amount of exploration assets is dependent on the successful exploration and sale of minerals. Impairment losses were recognised in 2015 on certain areas of interest where management has surrendered the lease or where there is considered to be little or no chance of recovery of expenses through production. NOTE 12 OTHER CURRENT ASSETS CURRENT Prepayments NON CURRENT Available for sale financial assets – investments in listed companies Security deposits 2016 $ 2015 $ 10,623 10,623 100,222 200 100,422 11,310 11,310 222 200 422 48 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements NOTE 13 TRADE, OTHER PAYABLES AND PROVISIONS CURRENT Trade payables Sundry payables and accrued expenses Employee benefits NON-CURRENT Employee benefits Deferred tax liability 2016 $ 2015 $ 77,595 84,936 123,033 285,564 - 2,017,824 2,017,824 57,041 120,450 71,685 249,176 49,819 2,100,504 2,150,323 The Deferred tax liability has arisen on Mining and Exploration assets in Greenland, as described in Note 1. NOTE 14 ISSUED CAPITAL Fully paid ordinary shares Share issue costs These shares have no par value. (a) Ordinary Shares At the beginning of financial year Shares issued during the period - - - October 2015 (1) December 2015 (2) January and February 2016 (3) - May and June 2016 (4) June 2016 (5) - - Balance at end of financial year 43,394,589 (2,291,404) 41,103,185 39,591,301 (2,121,158) 37,470,143 2016 Number 2015 Number 156,813,183 132,608,167 8,888,052 250,000 875,000 12,000,000 29,375,000 - 3,529,396 4,378,376 375,000 855,625 8,333,286 6,733,333 208,201,235 156,813,183 (1) In October 2015, 8,888,052 ordinary shares were issued as a result of exercise of options. (2) On 8 December 2015, 250,000 ordinary shares were issued to a consultant for services provided. (3) On 13 January 2016 and 26 February 2016, 875,000 ordinary shares were issued as a result of exercise of performance rights. (4) On 30 May 2016 and 6 June 2016, 12,000,000 ordinary shares were issued pursuant to a private placement. (5) On 24 June 2016, 29,000,000 ordinary shares were issued pursuant to a private placement and 375,000 ordinary shares were issued as a result of exercise of performance rights. Ordinary shares participate in dividends and the proceeds on the winding up of the Group in proportion to the number of shares held. At Shareholders meetings, on a show of hands, every member present in person or by proxy, or attorney or representative has one vote and upon a Poll every member present in person, or by proxy, attorney or representative shall in respect of each fully paid share held, have one vote for the share, but in respect of partly paid shares, shall have such number of votes being equivalent to the proportion which the amount paid (not credited) is of the total amounts paid and payable in respect of those shares (excluding amounts credited). Shares have no par value. Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 49 NOTE 14 ISSUED CAPITAL (Continued) (b) Quoted Options 2016 Number 2016 $ 2015 Number 2015 $ At the beginning of financial year 81,766,495 817,666 86,151,516 861,516 Options issued during financial year - - - - Options exercised to fully paid shares (8,888,052) (88,881) (4,385,021) (43,850) Options lapsed (72,878,443) (728,785) - - Balance at end of financial year - - 81,766,495 817,666 (c) Unquoted Options For information relating to the Group’s employee option plan, including details of options issued, exercised and lapsed during the financial period and the options outstanding at period-end refer to Note 18 Share-based Payments. For information relating to share options issued to key management personnel during the financial period, refer to Note 18 Share- based Payments. (d) Capital Management Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. There have been no changes in the strategy by management to control the capital of the Group since the prior year. This strategy is to ensure that the Group has no debts. NOTE 15 RESERVES Options Reserve The options reserve records items recognised as expenses on valuation of share options and performance rights. NOTE 16 TENEMENT COMMITMENTS The Group has certain obligations to expend minimum amounts on exploration in tenement areas. These obligations may be varied from time to time and are expected to be fulfilled in the normal course of operations of the Group. Tenement Munni Munni Owendale Greenland Other Less than 12 months Between 12 months and 5 years Greater than 5 years $ $ $ - 18,838 299,629 - 1,010,819 4,037,200 2,523,828 - 2,683,200 - - - To keep tenements in good standing, work programs should meet certain minimum expenditure requirements. The Group has the option to negotiate new terms or relinquish the tenements and also to meet expenditure requirements by joint venture or farm-in arrangements. 50 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements NOTE 17 CASH FLOW INFOMATION Reconciliation of Cash Flow from Operations with Loss after Income Tax Loss after income tax Non-cash flows in loss Depreciation Share-based payment Foreign exchange gain Impairment – exploration assets Gain on disposal of fixed assets Changes in assets and liabilities (Increase)/decrease in prepayments (Increase)/decrease in other current assets (Increase)/decrease in financial assets Increase/(decrease) in trade payables and accruals Increase/(decrease) in provisions Cash flow from operations 2016 $ 2015 $ (373,648) (1,081,803) 3,573 164,072 (80,143) - - 687 (63,523) (100,000) (49,299) 25,910 (472,371) 15,117 47,780 - 353,264 (7,586) 262 26,721 - (91,269) 55,906 (681,608) The Group had no credit standby, overdraft or other financing arrangements with Banks and other financial institutions at the end of the financial period. NOTE 18 SHARE-BASED PAYMENTS The following share-based payment arrangements existed at 30 June 2016: a. Unlisted Options Outstanding at 1 July 2015 Granted Expired Outstanding at period-end Exercisable at period-end b. Performance Rights Outstanding at 1 July 2015 Granted Exercised Cancelled Outstanding at period-end 30 June 2016 Number of Options Weighted Average Exercise Price ($) 1,000,000 - - 1,000,000 1,000,000 0.10 - - 0.10 0.10 30 June 2016 Number of Performance Rights Weighted Average Exercise Price ($) 1,000,000 6,000,000 (1,250,000) (1,500,000) 4,250,000 - - - - - Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 51 NOTE 18 SHARE-BASED PAYMENTS (Continued) On 8 December 2015, 5,000,000 performance rights were granted to Rob Mosig and 250,000 performance rights were granted to a consultant. The performance rights have various vesting conditions, performance hurdles and expiry dates. On 18 February 2016, 750,000 performance rights which have various vesting conditions, performance hurdles and expiry dates were issued to two consultants. During the year ended 30 June 2016, 1,250,000 ordinary shares were issued as a result of exercise of performance rights. At the test date of 30 June 2016, 1,500,000 performance rights did not vest and were cancelled. c. Share-based Payments Included under share based payments expense in the statement of comprehensive income is $164,072 (2015: $47,780), and relates, in full, to equity-settled share-based payment transactions. NOTE 19 OPERATING SEGMENTS The Group operates predominately in mineral exploration with a focus on platinum group metals. Segment Information Identification of reportable segments The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The Group is managed primarily on the basis of geographical locations as these locations have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis. Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are similar with respect to any external regulatory requirements. Basis of accounting for purposes of reporting by operating segments (a) Accounting policies adopted Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group. (b) Segment assets Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location. (c) Segment liabilities Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Segment liabilities include trade and other payables. (d) Unallocated items The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment: Derivatives Net gains on disposal of available-for-sale investments Impairment of assets and other non-recurring items of revenue or expense Income tax expense Deferred tax assets and liabilities Current tax liabilities Other financial liabilities Intangible assets Discontinuing operations 52 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements NOTE 19 OPERATING SEGMENTS (Continued) (d) Unallocated items (Continued) i. Segment Performance Greenland Australia $ $ All Other Segments $ Total $ 30 June 2016 REVENUE Interest revenue Other revenue Total segment revenue Reconciliation of segment revenue to Group revenue Total Group revenue Reconciliation of segment result of Group net loss after tax Segment net loss before tax Income tax benefit Amounts not included in segment result but reviewed by Board - Corporate charges - Depreciation and amortisation Net Loss after tax from continuing operations - - - - - 7,487 243,734 251,221 - 80,143 80,143 (27,087) 264,933 - - 7,487 323,877 331,364 331,364 (27,087) 264,933 (939,285) (939,285) (3,573) (3,573) (373,648) Greenland Australia $ $ All Other Segments $ Total $ 30 June 2015 REVENUE Interest revenue Other revenue Total segment revenue Reconciliation of segment revenue to Group revenue Total Group revenue Reconciliation of segment result of Group net loss after tax Segment net loss before tax Income tax benefit Amounts not included in segment result but reviewed by Board - Corporate charges - Depreciation and amortisation Net Loss after tax from continuing operations - - - - - 9,615 7,770 17,385 - - - 9,615 7,770 17,385 17,385 (478,948) 259,241 (5,581) (484,529) - 259,241 (858,783) (858,783) (15,117) (15,117) (1,081,803) Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 53 NOTE 19 OPERATING SEGMENTS (Continued) (d) Unallocated items (Continued) ii. Segment Assets 30 June 2016 Reconciliation of segment assets to Group assets Segment Assets Unallocated Assets - Corporate Total Group Assets Segment Asset Increases (Decreases) Capitalised expenditure for the period - Exploration and Other - Impairment write-down 30 June 2015 Reconciliation of segment assets to Group assets Segment Assets Unallocated Assets - Corporate Total Group Assets Segment Asset Increases (Decreases) Capitalised expenditure for the period - Exploration and Other - Impairment write-down Greenland Australia $ $ All Other Segments $ Total $ 15,885,340 6,199,822 - 22,085,162 3,517,880 25,603,042 53,432 - 53,432 506,085 - 506,085 - - - 559,517 - 559,517 Greenland Australia $ $ All Other Segments $ Total $ 15,831,908 5,693,736 - 21,525,644 920,043 22,445,687 62,477 - 62,477 607,957 (353,264) 254,693 - - - 670,434 (353,264) 317,170 54 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements NOTE 19 OPERATING SEGMENTS (Continued) (d) Unallocated items (Continued) Greenland Australia $ $ All Other Segments $ Total $ 30 June 2016 Reconciliation of segment liabilities to Group liabilities 8,300 277,264 Unallocated Liabilities - Corporate Total Group Liabilities Greenland Australia $ $ All Other Segments $ 30 June 2015 Reconciliation of segment liabilities to Group liabilities 8,300 290,695 Unallocated Liabilities - Corporate Total Group Liabilities NOTE 20 FINANCIAL RISK MANAGEMENT Financial Risk Management Policies - - - - 285,564 2,017,824 2,303,388 Total $ 298,995 2,100,504 2,399,499 The Group’s financial instruments consist mainly of deposits with banks, short term investments, accounts receivable and accounts payable. The main risks and related risk management policies arising from the Group’s financial instruments are summarised below. Credit Risk The maximum exposure to credit risk at balance date to recognised financial assets, net of any provisions for doubtful debts, is disclosed in the statement of financial position and notes to and forming part of the financial report. The Group does have a material credit risk exposure to a single debtor or group of debtors under financial instruments entered into by the Group, being the counterparty to the other income described in Note 2. Amounts receivable are set out in a contract with that debtor. Interest Rate Risk The Group’s exposure to interest rate risk is the risk that an increase or decrease in market interest rates will result in increased or reduced revenue from interest receipts. The Group’s exposure to interest rate risk is minimal. Liquidity Risk The Group manages liquidity risk by monitoring forecast cash flows. The Group’s operations require the raising of capital on an on- going basis to fund its planned exploration program and to commercialise its tenement assets. The Group’s past success in the raising of capital will ensure it can continue as a going concern and proceed with planned exploration expenditure. Net Fair Values The net fair values of financial assets and financial liabilities approximate their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form except for the investment disclosed in Note 12. The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement of financial position and in the notes to and forming part of the financial report. Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 55 NOTE 20 FINANCIAL RISK MANAGEMENT (Continued) The Group’s exposure to interest rate risk and effective average interest rate for classes of financial assets and financial liabilities is set out below. Weighted Average Effective Interest Rate Floating Interest Rate Less than 1 year Fixed Interest Rate Maturing Non-Interest Bearing Total 2016 Financial Assets Cash and cash equivalent assets 1.3% 484,337 - 2,836,419 3,320,756 Security deposits and deposits at financial institutions 2.65% - - 10,839 - 10,839 - 172,860 172,860 484,337 10,839 3,009,279 3,504,455 Other financial assets Total Financial Assets Financial Liabilities Other financial liabilities Total Financial Liabilities 2015 Financial Assets Cash and cash equivalent assets Security deposits and deposits at financial institutions Other financial assets Total Financial Assets Financial Liabilities Other financial liabilities Total Financial Liabilities Foreign exchange risk - - 1.5% 2.5% 662,312 - - - - - 285,564 285,564 285,564 285,564 223,075 885,387 10,559 - 10,559 - 8,915 8,915 662,312 10,559 231,990 904,861 - - - - 249,176 249,176 249,176 249,176 Exposure to foreign exchange risk may result in fair value or future cash flows of a financial instrument fluctuating due to movement in foreign exchange rates of currencies in which the Group makes purchases or holds financial instruments which are other than the AUD functional currency. Other than the conversion to the spot rate of the Deferred Tax Liability that arose in Greenland, the foreign currency to the Group is considered immaterial and is therefore not discussed further. 56 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements NOTE 21 PLATINA RESOURCES LIMITED PARENT INFORMATION a. Platina Resources Limited ASSETS Current assets Non-current assets TOTAL ASSETS LIABILITIES Current liabilities Non-current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Share issue costs Options reserve Accumulated Losses TOTAL EQUITY FINANCIAL PERFORMANCE Loss for the year b. Subsidiary of Platina Resources Limited 2016 $ 2015 $ 3,414,656 22,188,386 25,603,042 916,171 21,529,516 22,445,687 285,564 2,017,824 2,303,388 249,176 2,150,323 2,399,499 23,299,654 20,046,188 43,394,589 (2,291,404) 41,103,185 55,883 39,591,301 (2,121,158) 37,470,143 61,811 (17,859,414) (17,485,766) 23,299,654 20,046,188 (373,648) (1,081,803) Company Name Country of Incorporation Platina (South America) Pty Ltd Colombia Percentage Owned (%)* 2016 100 2015 100 *Percentage of voting power is in proportion to ownership c. Amounts Outstanding from Related Parties These amounts relate principally to loans from the Parent to its subsidiary. Beginning of the year Loans advanced Loans forgiven End of Year No interest is being charged on loans. 2016 $ - - - - 2015 $ 258,146 5,581 (263,727) - Notes to the Financial Statements PLATINA RESOURCES LIMITED Annual Report 2016 | 57 NOTE 21 PLATINA RESOURCES LIMITED PARENT INFORMATION (Continued) d. Amounts Outstanding to Other Related Parties The amounts outstanding at 30 June 2016 relate to fees owing to a legal firm of which Mr Brian Moller (non-executive director) is a partner. The amounts outstanding at 30 June 2015 relates to an amount accrued and unpaid director fees plus amounts owed to a legal firm of which Mr Brian Moller (non-executive director) is a partner. Beginning of the year Amounts repaid Fees outstanding End of Year No interest is being charged on loans. NOTE 22 CONTINGENT LIABILITIES 2016 $ 72,281 (72,281) 3,788 3,788 2015 $ 31,211 (31,211) 72,281 72,281 The Group has a bank guarantee of $10,000 lodged in favour of the NSW Minister for Primary Industries in respect of the Owendale Project. There are no other known contingent liabilities as at 30 June 2016. NOTE 23 RELATED PARTY TRANSACTIONS Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Key Management Personnel During the year ending 30 June 2016, a legal firm of which Mr Brian Moller is a partner was paid legal fees by the Group of $46,758 (2015: $71,214). For full details refer to the Remuneration Report included in the Director’s Report. NOTE 24 SUBSEQUENT EVENTS No matter or circumstance has arisen since the end of the financial year, to the date of this report, that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. The financial report was authorised for issue on the date the director’s report was signed. The Board has the power to amend and re-issue the financial report. NOTE 25 GROUP DETAILS The registered office of the Group is: Corporate Consultants Pty Ltd Level 2, Suite 9 389 Oxford Street Mount Hawthorn WA 6016 Phone: +61 8 9380 6789 The principal place of business is: Level 2, Suite 9 389 Oxford Street Mount Hawthorn WA 6016 Phone: +61 7 5580 9094 58 | PLATINA RESOURCES LIMITED Annual Report 2016 Notes to the Financial Statements Declaration by Directors The directors of the Group declare that: 1. the financial statements and notes, as set out on pages 31 to 57 are in accordance with the Corporations Act 2001 and: (a) (b) comply with Accounting Standards which, as stated in Note1(b) to the financial statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS) and the Corporations Regulations 2001; and give a true and fair view of the financial position as at 30 June 2016 and of the performance for the year ended on that date of the Group; 2. the Managing Director and Chief Financial Officer have each declared that: (a) (b) (c) the financial records of the Group for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001; the financial statements and notes for the financial year comply with the Accounting Standards; and the financial statements and notes for the financial year give a true and fair view; 3. in the directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors. Robert Mosig Managing Director Brisbane Date: 15 September 2016