A.C.N. 006 639 514
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2015
Chairman’s letter
29 September 2015
Dear Shareholders,
Financial Year 2015 was a year of frustration for Reedy Lagoon.
The departure of Cliffs from the Bullamine Joint venture in April 2014 left RLC with 100% ownership of the Bullamine
tenements with an indicative resource at Chitterberrin and very promising grades of magnetite at Burracoppin.
During the report year the iron ore price continued its fall to a level making it likely that the project would not be progressed
unless a buyer could be found who valued the metallurgical qualities of the magnetite (low impurities, coarse grind size for
separation)
The Company raised funds ($341,288) to confirm the metallurgical properties of the magnetite at Burracoppin, which
results were excellent (see detail in this report). However RLC has not yet found a buyer of magnetite to progress the
project.
In 2015 the Company began negotiations with Cassilis Mining in relation to a gold project in Victoria and in June 2015
secured the right to purchase Cassilis Mining. The exercise of that right is dependent upon RLC satisfying itself of various
matters, including establishing the volume and grade of gold in mullock dumps.
For the purpose of making these investigations RLC made an entitlement offer to shareholders which as at the date of this
report has raised $278,718 and expects to place the shortfall ($300,276) prior to its close on 2 October 2015.
RLC has not yet exercised its right to acquire Cassilis Mining. In particular, there have been delays in Cassilis Mining
obtaining a transfer of the mining lease, which delays continue as at the date of this report.
A failure to obtain a transfer of the mining lease into Cassilis would not end RLC's interest in the Cassilis gold project -
Cassilis has applications for exploration licences over prospective areas surrounding the mining tenement - but not getting
a transfer would end the possibility of achieving early cash flows through treatment of mulloch using the equipment and
permits associated with the current mining lease.
In the meantime RLC has sought to reduce its overheads and exploration expenditure while continuing to review other
potential projects.
These are extremely difficult times for the mining industry in general, and for exploration companies in particular, and the
directors thank shareholders for their continued support.
Yours sincerely
Jonathan Hamer
Chairman
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
ANNUAL REVIEW
Overview
Iron Exploration
Uranium Exploration
Gold Exploration
TENEMENT SCHEDULE
CORPORATE GOVERNANCE STATEMENT
DIRECTORS’ REPORT (incorporating Remuneration Report)
AUDITOR’S INDEPENDENCE DECLARATION
DIRECTORS’ DECLARATION
INDEPENDENT AUDIT REPORT
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF FINANCIAL POSITION
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
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1
2
7
8
10
11
16
24
25
26
28
29
30
31
32
56
CORPORATE DIRECTORY
Back Cover
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
Mineralisation styles targeted during the period included:
Iron-ore (Bullamine Magnetite project)
Uranium (Tanami, and Edward Creek projects)
Gold (Cassilis, Tanami and KEL 1 projects)
Overview
The Company focussed on advancing its Bullamine magnetite project as outlined in the Entitlement Offer dated 23 June
2014 which raised $341,288 in August 2014.
Bullamine Magnetite is the Company’s most advanced project. It comprises a JORC compliant resource at the
Chitterberrin Prospect and additional tonnes identified by diamond drilling at the Burracoppin Prospect. Located about
250 kilometres east from Perth and near rail linked to ports handling bulk cargo the prospects are likely to be more
easily developed than similar projects located in more remote areas. Metallurgical test work conducted during the report
period on Burracoppin mineralisation generated results which show the mineralization is readily beneficiated into a high
iron low impurity concentrate by conventional processing. The results also show there is minimal loss of iron by
conventional processing at all grind sizes tested including very coarse crush sizes. This finding opens the possibility of
marketing a partly processed product to a third party for incorporation into its own processing facilities.
The next stage of work to further develop the Bullamine Project is to conduct sufficient drilling at the Burracoppin
Prospect to better understand the quantity and grade of the mineralisation present.
The depressed market for uranium discouraged committing resources to explore for this commodity. Planned work to
investigate the anomalous uranium mineralisation at the Victory prospect on the Edward Creek project was postponed
pending a market recovery for uranium and the company securing funding or a joint venture partner.
The Tanami and KEL 1 projects were surrendered. While ongoing interpretation of the Company’s geophysical data at
each project encouraged continued investigations it was decided to terminate these projects in view of the Company’s
limited resources available to pursue them and the likely lack of support from investors to fund such early stage
exploration work in the current market.
In June 2015 the Company entered an agreement to purchase 100% of Cassilis Mining Pty Ltd. If sufficient resources
can be identified within tenements held by Cassilis Mining Pty Ltd then the purchase of Cassilis Mining Pty Ltd may
provide Reedy Lagoon with an opportunity to develop a profitable mining operation and a base from which to explore
the Cassilis Goldfield for additional resources.
1
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
Exploration
Iron Ore Exploration
Bullamine Project
IRON ORE ‐ MAGNETITE Western Australia
RLC 100%
The project is investigating opportunities for developing iron mining (magnetite) operations in the south west part of
Western Australia, east from Perth. A feature of the project is its location not far from Perth. Road and rail service the
area and provide links to bulk cargo ports at Fremantle and Esperance. Proximity to labour and infrastructure provide
the Bullamine project with capital and operating cost advantages over similar projects in more isolated locations.
The Bullamine project was explored by the Bullamine Joint Venture under the management of Cliffs Natural Resources
Inc from February 2010 to 17 April 2014. The joint venture spent more than $8.8 million on greenfields exploration and
established the Chitterberin resource and the Burracoppin prospect.
During 2014/15 Reedy Lagoon has conducted metallurgical test work in order to investigate processing options for the
magnetite mineralisation identified in diamond drilling core and indicated by interpretation of detailed magnetic data.
Figure 1: Bullamine JV (Magnetite) project tenements are shown together with local infrastructure. The Chitterberin Deposit comprises an
Inferred Resource described in RLC’s ASX Release 22 Oct 2012.
Burracoppin Prospect
part of the Bullamine Project (iron‐ore, WA)
Magnetite mineralisation in multiple bands with variable continuity was intersected by drilling in late 2012. Additional
drilling is required to better understand the extent of the mineralisation at Burracoppin. However, the limited drilling
completed indicates the mineralised bands have combined horizontal widths of between 150 metres and 200 metres.
Detailed magnetic data indicate a strike length of 3,000 metres and a potential tonnage of magnetite bearing rock of
between 140 and 220 million tonnes (refer to ASX release 31 January 2013).
2
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
Figure 2. Burracoppin prospect. The target magnetic anomaly in detailed magnetic survey (airborne at 50 metre line spacing) showing location of
drill sites completed during September quarter 2012.
During 2014/15 Reedy Lagoon investigated potential processing options for the Burracoppin prospect mineralisation.
Metallurgical test work conducted on core samples previously acquired from the Burracoppin prospect show the
mineralization is readily beneficiated into a high iron low impurity concentrate by conventional processing.
The samples tested weighed in aggregate 795 kilograms and comprised 6 composite samples over three separate
mineralised intervals from two diamond holes into the Burracoppin deposit. The testing was designed to investigate the
composition of concentrates that can be produced using dry and wet LIMS (low intensity magnetic separation) for a
range of particle sizes from 6 millimetre to 125 micron (0.125 mm). In addition to showing the mineralisation is readily
beneficiated into a high-iron low-impurity concentrate by conventional processing, the tests also show minimal loss of
iron to the waste at all size fractions. This finding indicates the project product can be sold at a stage of processing
convenient for transport and handling with the confidence that it can be upgraded at a buyer’s convenience with
minimal loss of iron units.
A partner for the Burracoppin iron-ore magnetite prospect, by farming-in or otherwise gaining potential off-take
arrangements, was sought but to date has not been identified.
3
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
Figure 3. Burracoppin Prospect sections
for
diamond drilling completed during the 2012/13 year.
Results are for composite samples over the intervals
stated. The metallurgical data has been reported by
BV Amdel, an independent laboratory in Perth
(September Quarter 2012 report).
Metallurgical studies conducted in 2012/13, based on Davis Tube Recoveries, on core samples produced concentrate
with high iron levels (67% to 70% Fe) and low levels of impurities at a relatively coarse grind size (P80 -150 micron)
(ASX 18/01/2013). Results from these earlier studies enable comparisons with other Australian magnetite deposits as
shown in the two graphs that follow. The Burracoppin results compare well to other projects at a coarser grind size than
is typically achievable in Australian magnetite deposits. Coarser grind size means lower production costs and potentially
better product prices. Graphs below (figure 4 A & B) show Davis Tube Recovery (DTR) concentrates of several
Australian magnetite projects plotted against grind size. Graph A shows iron grades and Graph B shows silica. Typical
cut-off grades for commercial grade products are shown by the horizontal dotted lines - minimum 65 % iron and
maximum 5 % silica.
4
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
Figure 4. Davis Tube Recovery (DTR) iron concentrate grades of several Australian Magnetite Projects are plotted against grind size. The
Burracopin DTR results can be compared with results at other magnetite deposits in Australia (the coarser the grind size to achieve high Fe
content and low SiO2 content, the better).
The graph has been prepared for RLC by Mineral Engineering Technical Services Pty Ltd, an independent consultant, using information sourced
from public documents at the time and was included in ASX release 18/01/2013.
5
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
Chitterberrin Deposit
part of the Bullamine Project (iron‐ore, WA)
The Company’s first JORC compliant resource was determined at Chitterberrin in October 2012 (ASX 22/10/2012). The
resource comprises an expected surface mineable Inferred Resource of 53.6 Mt magnetite ore grading 29.3% Fe. The
deposit remains open at depth. Full details of the resource estimate are provided in table 2 below.
Table 2. Chitterberin Deposit expected surface mineable resources as of October 2012.
Class
Tonnes
DT
WR%
Inferred
53,546,000
25.32
DTC
Fe %
65.22
DTC
SiO2 %
5.24
DTC
S %
0.59
DTC
Al2O3 %
1.87
DTC
P %
0.006
Fe
Head %
29.31
Figures in table 2 are based on ordinary kriging at a 15% threshold for Davis Tube Fe recovery and grind size of 80% passing -45 micron. The
resource estimate is JORC compliant and has been calculated by ProMet Engineers Pty Ltd and Tetra Tech Australia Pty Ltd which are
independent of the Bullamine joint venture. (ASX 22/10/2012).
No field work was conducted by RLC on the
Chitterberrin Prospect during the 2015 financial year.
Figure 5. Chitterberin prospect. Diamond holes along section
6470000mN.
Wongamine Prospect
part of the Bullamine Project (iron‐ore, WA)
The Wongamine prospect was located near Northam. No field work was conducted on the prospect during the 2015
financial year and the tenement (E70-3462) was surrendered on 31/01/2015.
6
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
Uranium Exploration
Edward Creek Project
RLC 100%
All diamond interest farmed out to DiamondCo Limited which conducts diamond exploration independently from RLC.
South Australia
URANIUM
RLC retains nil interest in diamond.
Exploration for uranium was postponed because of the low uranium
price. DiamondCo’s maintaining of minimum exploration expenditure on
the tenement enabled RLC to postpone its planned exploration for
uranium without penalty.
RLC’s past exploration at Edward Creek has identified uranium on the
north eastern margin of the Gawler Craton in South Australia. The
project area comprises EL 5580 (343 square kilometres).
Figure 6. Regional location of Edward Creek project.
Victory prospect
Part of the Edward Creek Project
The Victory prospect was
identified by greenfields exploration
conducted in 2010. Ground spectrometer survey investigating an
airborne radiometric anomaly identified anomalous uranium in an area measuring about 6.5 hectares. Within this area a
strongly anomalous linear zone measuring approximately 20 metres by 100 metres has been identified.
Surface cover and deep weathering obscure
most of the area. In the limited exposed areas
elevated radiometric responses and assay
results are wide spread, as is evidence of
hydrothermal veining (figure 7).
An unconformity with younger rocks including
conglomerates and volcanics,
lies a
few
hundred metres east of the anomalous area
shown
in
figure 7, but
is obscured by
transported cover. The surface mineralisation
identified at Victory may be marginal
to
prospective zones under cover at or near the
unconformity.
Figure 7. Victory prospect showing planned future drill
sites at 1-A, 1-B, 1-C, 1-D and 1-E.
(For sample details refer ASX release 12/10/2010 and
September 2010 Quarterly Report).
No field work was conducted by RLC on the Victory prospect during the report period.
Work planned, in the event the uranium market improves, includes drilling to investigate the surface uranium anomalism
and along strike where the concealed unconformity is interpreted.
7
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
Gold Exploration
Cassilis Project GOLD
Victoria RLC option to purchase 100%
Reedy Lagoon entered an agreement to purchase 100% of Cassilis Mining Pty Ltd.
Cassilis Mining has an agreement to acquire mining licence (MIN 5335) and an application for the transfer of MIN 5335
to Cassilis Pty Ltd has been lodged with the Victorian department of Economic Development, Jobs, Transport and
Resources.
MIN 5335 covers most of the Cassilis Gold Mine located near Omeo in Eastern Victoria and on that tenement Cassilis
Mining has ore processing equipment including a tailings and two water storage dams, together with crushing and
milling equipment capable of processing ore at a rate of about 7 tonnes per hour. Mining operations are currently being
undertaken at MIN5335: rock has been recovered from one of the adits of the Cassilis mine and is stockpiled in
preparation for processing through the plant. There are also various mullock dumps left from past mining activities on
MIN 5335.
In addition, Cassilis Mining has applications for exploration licences covering part of the Cassilis goldfield.
Under the agreement :
RLC has issued 1 million shares in RLC to the 2 shareholders of Cassilis Mining on signing
RLC will investigate the assets of Cassilis Mining including conducting geochemical sampling to confirm
reported gold grades and mullock tonnages held by Cassilis Mining (“Preliminary Works”)
If RLC decides to proceed with the acquisition RLC will issue a further 3 million shares in RLC to the 2
shareholders in Cassilis Mining and Cassilis Mining will grant each of those shareholders a 1% gold royalty.
If sufficient resources can be identified in the mullock dumps, the purchase of Cassilis Mining Pty Ltd provides RLC with
an opportunity to develop a profitable mining operation and a base from which to explore the Cassilis Goldfield for
additional resources.
Tanami Project GOLD, REE, PHOSPHATE & URANIUM Northern Territory (RLC 100%) Surrendered
Project review, in light of the costs for access and elevated exploration costs resulting from the remote location, resulted
in termination of the project with surrender of
EL 24885 on 9/03/2015.
The Tanami project was within the Tanami
region located on the Western Australian
border, west from Tennant Creek. The project
was explored for gold, REE, phosphate and
uranium. The Tanami region is the largest
gold producing
region
in
the Northern
Territory. The three main goldfields in the
region are: Dead Bullock Soak Goldfield,
which hosts the Callie Gold Mine (7.6 Moz
gold), The Granites Goldfield (1.3 Moz gold)
and The Tanami Goldfield (1.6 Moz gold).
8
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
KEL 1 Project
COPPER ‐ GOLD
Western Australia
(RLC 100%) Surrendered
A review of the KEL 1 project resulted in a decision to cease further work and the tenement was surrendered at its
expiry date on 18 April 2015. No other work was conducted on the project during the report period.
KEL 1 was located 60 kilometres
north of the town of Northam.
Prior to the termination of the
project
exploration exploited
remote sensing techniques, such
as geophysical methods since
more than half of the tenement
area was concealed beneath
recent alluvium, lateritic soil and
sandy plains. Detailed magnetic
and radiometric data acquired in
2012 was
reinterpreted with
emphasis on identifying targets
prospective
for
copper,
molybdenum
and
silver
mineralisation.
Geof Fethers
Managing Director
The information in this report that relates to Exploration Results is based on information compiled by Geof Fethers, who is a member of
the Australian Institute of Mining and Metallurgy (AusIMM). Geof Fethers is a director of the Company and has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as
a Competent Person as defined in the 2012 Edition of the “Australasian Code for the Reporting of Exploration Results, Mineral
Resources and Ore Reserves (the JORC Code). Geof Fethers consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears. Where Exploration Results have been reported in earlier RLC ASX Releases
referenced in this report, those releases are available to view on the NEWS page of reedylagoon.com.au. The company confirms that
it is not aware of any new information or data that materially affects the information included in those earlier releases and, in the case
of the estimate of the Mineral Resource, all material assumptions and technical parameters underpinning the estimate 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.
9
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
TENEMENT SCHEDULE
Tenements owned directly by the Company and tenements in which the Company has an interest at the date of this report :
Tenement
Area
(km2)
Status
Minimum Annual
Expenditure
Commitment
$
Company
Interest
(direct or indirect)
Western Australian Tenements
E70/3769
Bullamine
E70/3770
Bullamine
South Australian Tenements
EL 5580 (formerly EL 4377)
Edward Creek project
14.2
Current
8.7
Current
30,000
30,000
100%1
100%1
343
Current
130,000
100% 2 & 3
$190,000
Refer to following notes that relate to the tenement schedule (for both the table above detailing current tenements and the
table below which details changes in tenement holdings during the period).
Notes to the tenement schedule.
1.
The Bullamine project tenements are registered in the name of Bullamine Magnetite Pty Ltd a wholly owned subsidiary of RLC.
2.
3.
Tenements which pre-date and carry through to EL 5580 were subject to a joint venture agreement, the Edward Creek Base Metals Joint
Venture (“ECBMJV”) which Joint Venture was terminated and all interests in the ECBMJV were forfeited to RLC on 9 June 2009. The
termination of the joint venture was disputed by the other parties (Wallaby Resources Pty Ltd and World Oil Resources Limited) but RLC
considers the dispute to be baseless. Prior to the termination of the joint venture RLC held a 62% interest in the tenements.
EL 5580 is subject to a joint venture agreement, the Diamond Farm Out Agreement, which transfers all RLC’s interest in diamonds in the
tenement to DiamondCo Limited. The minimum expenditure on EL 5580 for the 24 months ending 11 November 2016 is $260,000. At the
date of this report DiamondCo Limited had expended $109,000 on exploration on EL 5580 during the current term.
Tenement expenditure is dependent upon exploration results and available cash resources. Expenditure commitments are also
affected, and may be reduced, where access to areas has been restricted by the existence of Native Title claims. At the date of
this report Native Title has been determined for the land covered by EL 5580 and a native title mining agreement provides
protocols for obtaining clearances to enable exploration to continue. The Statutory expenditure requirement is subject to
negotiation with the relevant state department, and expenditure commitments may be varied between tenements, or reduced
subject to reduction of exploration area and/or relinquishment of non-prospective tenements.
Tenements granted, acquired and surrendered during the year and to the date of this report were:
Tenement
Western Australian Tenements
E70/3462
Bullamine
E70/3766
KEL 1
E70/3769
Bullamine
E70/3770
Bullamine
Area
(km2)
184
44.1
14.2
8.7
Status
Date
Surrendered
31/01/2015
Surrendered
18/04/2015
Part surrendered (area
reduced from 503 km2)
Part surrendered (area
reduced from 49 km2)
26/03/2015
26/03/2015
Northern Territory Tenements
EL 24885
Tanami
136
Surrendered
9/03/2015
10
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
CORPORATE GOVERNANCE STATEMENT
In July 2014, the Australian Securities Exchange (ASX) Corporate Governance Council (Council) published revised
Corporate Governance Principles and Recommendations (ASX Recommendations). The Listing Rules of ASX require
Australian-listed companies to report on the extent to which they have complied with the ASX Recommendations
during the reporting period. Where a company has not followed all of the ASX Recommendations, it must identify the
ASX Recommendations that have not been followed and give reasons for not adhering to them. If a recommendation
has been followed for only part of the period, the company must state the period during which it has been followed.
This Statement outlines the main corporate governance practices of the Company.
As recognised by the Council, corporate governance is “the framework of rules, relationships, systems and processes
within and by which authority is exercised and controlled in corporations.” It encompasses the mechanisms by which
companies, and those in control, are held to account. Corporate governance influences how the objectives of the
Company are set and achieved, how risk is monitored and assessed and how performance is optimised. There is no
single model of good corporate governance. Corporate governance practices will evolve in the light of the changing
circumstances of a company and must be tailored to meet those circumstances.
ROLE OF THE BOARD AND MANAGEMENT
The board is responsible to shareholders for the overall corporate governance of the Company. This responsibility
includes:
-
-
-
-
determining and periodically reviewing the Company’s strategic direction and operational policies;
establishing goals for management and tracking the roll-out and achievements of these goals;
reviewing and approving the Company’s Business Plan and complementary annual/revised budgets prepared by
management;
approving all significant business transactions including any acquisitions, divestments, resource development and
significant capital expenditure;
-
approving capital raisings in any form;
- monitoring business risk exposures and risk management systems;
-
-
considering and approving financial and other obligatory reporting, including continuous disclosure reporting;
timely reporting to shareholders and other stakeholders.
A strategic balance is maintained between the responsibilities of the Chairman (in his non-executive capacity), the
Managing Director and the other Director.
As Non-Executive Chairman, the specific executive responsibilities of Mr J M Hamer are:
- ensuring the efficient organisation and conduct of the Board’s function,
- oversee the Company’s strategy in relation to exploration,
- evaluate, in conjunction with the Managing Director, opportunities that may arise in the minerals industry from time
to time,
- consider exploration and development orientated capital expenditure and recommend appropriate courses of
action; and
- overseeing that membership of the Board is skilled and appropriate for the Company’s needs.
The Managing Director, (being Mr G Fethers during the whole financial period), is accountable to the Board for the
management of the Company within the policy and authority levels prescribed by the Board from time to time. He is
responsible for the day-to-day management of the Company’s principal business operations and elsewhere and has
11
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
CORPORATE GOVERNANCE STATEMENT
the authority to approve non-planned capital expenditure, business transactions and personnel appointments within
predetermined limits set by the Board.
The Managing Director’s specific responsibilities include:
-
-
-
-
preparing the Company’s strategic and quarterly operating plan and, following its adoption by the Board, ensuring
that business development is in accordance with that plan,
evaluating mining projects and formulating strategies to acquire, farm-in or obtain interests in suitable projects and
divest non essential projects in which the Company has an interest,
engaging appropriately qualified contractors to undertake exploration programmes approved by the Board.
interfacing with analysts, brokers, investors and the Company’s appointed advisers regarding the Company’s
performance, a role shared with the Non-Executive Chairman,
-
responding to written or telephonic shareholder enquiries, and
- maintain overall management of the Company’s reporting, statutory accounting, auditing, treasury, taxation and
insurance covers with his specific responsibilities including:
preparing program and other expenditure budgets for the approval of the Board and monitoring the financial
performance of the Company against approved budgets,
ensuring that appropriate financial reports are provided to the Board at each of its meetings and, on a
quarterly, biannual and annual basis, to the Board and, in conjunction with the Company Secretary, also to the
ASX, and
monitoring the Company’s risk management framework to ensure that established policies, guidelines,
procedures and controls are implemented.
In the capacity of Company Secretary Mr G Fethers is responsible for ensuring that the Board also receives relevant
information and reports (notably on auditing, taxation and legal matters) at its regular meetings and otherwise as
appropriate. The Company Secretary is responsible for the lodgement of statutory financial statements and ASX/ASIC
reporting, including any correspondence in relation to ASX reporting and of a non-routine nature from ASIC.
The Board has responsibility for protecting, guiding and monitoring the business affairs of the Company in the interests
and for the benefit of stakeholders.
To fulfil this role, the Board is responsible for the strategic direction of the business, establishing goals for management
and monitoring the achievement of goals. Responsibility for day-to-day activities of the entity is delegated to the
Managing Director. The Company’s Board and management jointly strive to achieve best practice in meeting their
responsibilities for the business and affairs of the Company.
The Board Charter is available on the Company’s website (www.reedylagoon.com.au). The Charter outlines details of:
the role and responsibilities of the Board of directors;
the role and responsibilities of the Chairman and the Company Secretary;
delegations of authority;
membership; and
Board processes
COMPOSITION OF THE BOARD
During the financial year under review the Board comprised of two non-executive Directors (Mr J Hamer and Mr A
Griffin) who were considered by the Board to be independent in terms of Council’s definition of an independent director,
and one director (Mr G Fethers) who was not considered by the Board to be independent in terms of Council’s
definition of an independent director. The names, qualifications and periods of office of the current directors of the
Company as at the date of this statement are set out in the Directors Report on page 17.
12
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
CORPORATE GOVERNANCE STATEMENT
The independent Chairman has a casting vote and the Board has adopted and implemented a number of other
measures to ensure that independent judgement is achieved and maintained in respect of its decision-making
processes, which include the following:
-
directors are entitled to seek independent professional advice at the Company’s expense, subject to the prior
approval of the non-executive Chairman; and
directors having a conflict of interest in relation to a particular item of business must absent themselves from the
board meeting before commencement of discussion and the taking of a vote on the matter.
-
The Board believes three directors are adequate given the size, nature and scope of the Company’s current operations
but intends to appoint a fourth and independent director when activities increase. There is no formal program for
inducting new directors due to the size of the Company which does not comply with recommendation 2.6 of the ASX
Recommendations.
The Company does not have a nomination committee and consequently does not comply with recommendations 2.1 of
the ASX Recommendations. The Board is of a size and composition which is conducive to making the relevant
decisions itself efficiently and expeditiously.
The Board does not intend to establish an audit committee and consequently does not comply with Recommendation
4.1 of the ASX Recommendations. The Board does not intend to establish a risk committee and consequently does
not comply with Recommendation 7.1 of the ASX Recommendations. The Board does not intend to establish a
remuneration committee and consequently does not comply with Recommendation 8.1 of the ASX Recommendations.
Instead the Board will discharge its responsibilities in respect of audit, risk management and remuneration of directors
and senior executives. The Board is of a size, composition and physical location which is conducive to making the
relevant decisions itself efficiently and expeditiously.
The Board is of the view that it is adequately structured to meet the needs and governance of the Company having an
independent non-executive Chairman with a casting vote and with each current director bringing a range of different
and complementary skills and experience to the Company as indicated in the Directors’ Report on page 17.
The Board is responsible for the appointment of the Managing Director and conducts an ongoing review of his
performance. The Chairman is responsible for collating the views of the other directors for the purposes of reviewing
the performance of the Board.
A formal performance evaluation of the board and its members has not taken place since the end of the last financial
period.
ETHICAL AND RESPONSIBLE DECISION MAKING
It continues to be the policy of the Company for directors, officers and employees to observe high standards of conduct
and ethical behaviour in all of the Company’s activities. This includes dealings with suppliers, business partners,
regulatory authorities and the general communities in which it operates. Officers and employees of the Company are
expected to:
-
-
-
-
-
comply with the law,
act honestly and with integrity and objectivity,
not place themselves in situations which result in divided loyalties,
use the Company’s assets responsibly and in the interests of the Company and,
be responsible and accountable for their actions.
The Company established a trading policy in 2007 which all directors, officers and employees are required to observe
and is available on the Company’s website (www.reedylagoon.com.au). A copy will be provided to any shareholder on
request to the Company Secretary.
The Company actively supports diversity within the organisation including, but not limited to, gender, age, ethnicity and
cultural background. However, the Company does not have a specific policy for gender diversity and consequently
does not comply with recommendation 1.5 of the ASX Recommendations. Directors consider the number of people
within the Company to be too small to benefit from such a policy.
13
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
CORPORATE GOVERNANCE STATEMENT
INTEGRITY OF FINANCIAL REPORTING
The Company’s Managing Director declares in writing to the board (in accordance with section 295A of the
Corporations Act 2001 that, in his opinion, the consolidated financial statements of RLC and its controlled entities for
each half and full financial year have been properly maintained and that the financial statements comply with the
appropriate accounting standards and give a true and fair view of the Company’s financial position and performance
and that the opinion has been formed on the basis of a sound system of risk management and internal control which is
operating effectively.
The objectives of the Board are to:
-
-
ensure the integrity of external financial reporting,
ensure that controls are established, maintained and adhered to in order to safeguard the Company’s financial and
physical resources,
ensure that systems or procedures are in place and operational so that the Company complies with relevant
statutory and regulatory requirements,
assess financial risks arising from the Company’s operations, and consider the adequacy of measures taken to
moderate those risks, and
liaise with external auditors periodically.
-
-
-
The appointment of an external auditor is subject to ratification by shareholders at an Annual General Meeting. The
Board:
reviews the performance of the external auditor on an ongoing basis;
ensures the external auditor has arrangements in place for the rotation of the audit engagement partner. The
audit engagement partner must rotate every five years; and
ensures any non-audit services provided by the external auditor do not compromise the independence of the
external audit function.
CONTINUOUS DISCLOSURE TO ASX
The Board is responsible for monitoring compliance with ASX Listing Rule disclosure requirements and approves each
proposed announcement to ASX before it is released. The Company Secretary is responsible, under the ASX Listing
Rules, for all communications with ASX. The Non-Executive Chairman, Managing Director and Company Secretary
periodically discuss issues relating to the Company’s continuous disclosure obligations. The Company’s Disclosure
and Communications Policy is available on the Company’s website (www.reedylagoon.com.au) and will be provided to
any shareholder on request to the Company Secretary.
COMMUNICATION WITH SHAREHOLDERS
It is the policy of the Company to ensure that shareholders have equal and timely access to material information
concerning the Company.
All documents which are released publicly are made available on the Company’s website (www.reedylagoon.com.au).
The website provides information on the Company’s mineral projects as well as ASX releases and audited financial
statements.
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of
accountability and identification with the Company’s strategy and goals.
RLC’s external auditor is required by law to attend the AGM to answer questions relevant to, inter alia, the conduct of
the audit and the preparation and content of the auditor’s report, and does attend.
RISK MANAGEMENT
The Board is responsible for the oversight of the Company’s risk management and control framework. The Company
has implemented a policy framework designed to ensure that the Company’s risks are identified and that controls are
adequate, in place and functioning effectively. Responsibility for aspects of control and risk management is delegated
to the pertinent individual within the Company with the Managing Director having ultimate responsibility to the board for
the risk management and control framework.
Areas of significant business risk are highlighted to the Board by the Managing Director.
14
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
CORPORATE GOVERNANCE STATEMENT
The Company does not have an internal audit function. The Company evaluates and continually improves the
effectiveness of its risk management and internal control processes through arrangements put in place by the Board to
monitor risk management which include reporting to each board meeting in respect of operations and the financial
position of the Company.
The Company’s Managing Director has provided reports in writing to the Board that:
-
the declaration given in accordance with section 295A of the Corporations Act 2001 is founded on a sound system
of risk management and internal compliance and control which implements the policies adopted by the Board; and
the Company’s risk management and internal compliance and control framework is operating efficiently and
effectively in all material respects.
-
The Company has considered its economic, environmental and social sustainability risks by way of internal review and
has concluded that it is not subject to material economic, environmental and social sustainability risks.
REMUNERATION
Details of the remuneration of the directors are disclosed in the Remuneration Report set out on pages 19 to 22.
The Company does not have a policy prohibiting the entering into transactions in associated products which limit the
economic risk of participating in uninvested entitlements under relevant equity based remuneration schemes and
consequently does not comply with recommendation 8.3 of the ASX Recommendations. This is because the only
equity based remuneration scheme offered to directors takes the form of options over unissued shares with an exercise
price in excess of the current market price.
There is no scheme for retirement benefits, other than superannuation, for non-executive directors.
15
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
DIRECTORS REPORT
The directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'consolidated entity') consisting of Reedy Lagoon Corporation Ltd (referred to hereafter as the
'company' or 'parent entity') and the entities it controlled for the year ended 30 June 2015.
Directors
The following persons were directors of Reedy Lagoon Corporation Ltd during the whole of the financial year and up to
the date of this report, unless otherwise stated
Jonathan M Hamer
Geof H Fethers
Adrian C Griffin
Principal Activity
The principal activity of the Company during the course of the financial year was the exploration for minerals in
Australia.
There were no significant changes in the nature of the activities of the Company during the year.
Review of Operations
The net loss for the consolidated entity after income tax for the year was $528,189 (2014: loss $560,085). Further
commentary on the operations of the Company during the year is included in the Annual Review on pages 1 to 9 of the
Annual Report.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Significant Changes in the State of Affairs
During the year, the Company issued 19,830,804 fully paid shares raising $400,448 before costs.
Environmental Regulation
The Company's operations are subject to environmental regulations under State legislation in relation to its exploration
activities.
The directors are not aware of any breaches of regulations during the period covered by this report.
Matters subsequent to the end of the financial year
On 9 July 2015 the Company issued 27,706,115 shares under the Entitlement Offer dated 9 June 2015 raising
$221,649. On 17 July 2015 the Company issued 7,133,657 shares under the Entitlement Offer dated 9 June 2015
raising $57,069.
No other matter or circumstance has arisen since 30 June 2015 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs
in future financial years.
Likely Developments and expected results of operations
Information on likely developments in the operations of the consolidated entity and the expected results of operations
have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice
to the consolidated entity.
At the date of this report, there are no future developments of the Company which warrant disclosure.
16
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
DIRECTORS REPORT
Information on directors
The names and particulars of Directors of the Company at any time during or since the end of the financial year and the
date of this report were as follows:
Director
Particulars
Jonathan M. Hamer
BA, LLB.
Chairman – Non Executive
Aged 60, Appointed 9 May 2007
Period in office: 7 years
A former partner of King & Wood Mallesons where he practiced in the areas of
corporate and finance law. Jonathan has been advising RLC since 1988 on a range
of legal and commercial issues, including in its various joint venture agreements and
capital raisings.
Other current directorships:
Former directorships (last 3 years):
Interests in shares:
Interests in options:
Nil
Nil
6,241,207 fully paid ordinary shares
900,000 options
Geof H. Fethers
B.Sc.(Hons)
M. AusIMM
Managing Director
Aged 58, Founding Director
Period in office: 18 years
Manages the operations of RLC. He is a geologist with over 25 years
exploration experience. He was employed by De Beers Australia Exploration
Limited (formerly Stockdale Prospecting Limited) from 1980 to 1985. He
founded RLC in 1986. He is a Member of the Geological Society of Australia
and the Australian Institute of Mining and Metallurgy.
Other current directorships:
Former directorships (last 3 years):
Interests in shares:
Interests in options:
Nil
Nil
13,427,178 fully paid ordinary shares
1,500,000 options
Adrian C. Griffin
B.Sc.(Hons)
M. AusIMM
Other current directorships:
Former directorships (last 3 years):
Interests in shares:
Interests in options:
Director
Aged 62, Appointed 30 June 2014.
Adrian has accumulated extensive experience in the resource sector over the
past 35 years. During that time he has held directorships in a number of private
and listed resource companies and overseen the operation of large, integrated
mining and processing facilities, including the Bulong nickel-cobalt operation in
the late 1990s to his current position as Managing Director of Lithium Australia
NL, a company developing lithium extraction and recovery technologies. Mr
Griffin was a director of Reedy Lagoon from 9 May 2007 until resigning on 27
November 2009 to act as technical director of Ferrum Crescent, an iron-ore
developer in South Africa. He re-joined RLC as a director on 30 June 2014.
Lithium Australia NL (formerly Cobre Montana NL), Northern Minerals Ltd and
Potash West NL.
Nil
2,125,000 fully paid ordinary shares
100,000
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of
all other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
‘Interests in shares and options’ quoted above are as at the date of this report.
17
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
DIRECTORS REPORT
Company Secretary
The name and particulars of the Secretary of the Company at any time during or since the end of the financial year and
the date of this report was as follows:
Name
Particulars:
Appointed
Mr Geof H Fethers
Aged 58
1 April 2009
Directors’ Meetings
The following table sets out the numbers of meetings of the Company’s Board of Directors (“the Board”) held during the
year ended 30 June 2015, and the number of meetings attended by each director were:
Jonathan M. Hamer
Geof H. Fethers
Adrian C. Griffin
Full Board
Attended Held
10
11
10
11
11
11
Held represents the number of meetings held during the time the director held office during the year.
Shares under option
At the date of this report the following options over unissued shares in the Company remain unexercised:
Grant date
Expiry date
15 November 2012
30 October 2013
13 November 2014
31 December 2015
31 December 2016
31 December 2017
Exercise
price
$0.20
$0.20
$0.20
Number
under option
900,000
900,000
900,000
2,700,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue
of the company or of any other body corporate.
Shares issued on the exercise of options
There were no shares of Reedy Lagoon Corporation Ltd issued on the exercise of options during the year ended 30
June 2015 and up to the date of this report.
Indemnification and Insurance of Officers
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company
(as named above) and all executive officers of the Company and of any related body corporate against a liability
incurred in such capacity of director, secretary or executive officer to the extent permitted by the Corporations Act
2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has not otherwise, during or since the financial year, except to the extent permitted by law, indemnified
or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred
as such an officer.
18
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
DIRECTORS REPORT
REMUNERATION REPORT (AUDITED)
This remuneration report outlines the Director and Executive remuneration arrangements of the Company in
accordance with the Corporations Act 2001 and its Regulations. It also provides the remuneration disclosures required
by paragraphs AUS25.4 and AUS 25.7.2 of AASB 124 Related Party Disclosures which have been transferred to the
Remuneration Report in accordance with the Corporations Regulation 2M 6.04
This report outlines the remuneration arrangements in place for the Directors (both Executive and Non Executive) and
Executives of the Company.
This report is audited as the entity has transferred the disclosures from the financial statements.
For the purposes of this report the term ‘Senior Executive‘ encompasses the Managing Director, Executive Directors
and Secretary of the Company.
Principles used to determine the nature and amount of remuneration
The remuneration report is set out under the following main headings:
A
B Details of remuneration
Service agreements
C
Share based compensation
D
E
Additional disclosures relating to key management personnel
A Principles used to determine the nature and amount of remuneration
Currently, the Company does not have a separate remuneration committee. Because of the size of the Board and the
operations of the Company, the Directors are of the view that there is no need for a separate remuneration committee.
The Board as a whole reviews the remuneration packages and policies applicable to the Chairman, Senior Executives
and Non-Executive Directors on an annual basis. Remuneration levels are set to attract or retain, as appropriate,
qualified and experienced Directors and Senior Executives. From time to time and as required, the Board will seek
independent professional advice on the appropriateness of remuneration packages.
The current nature and amount of remuneration payable to Chairman, Executives and Non-Executive Directors is not
dependent upon the satisfaction of a performance condition. Instead part of the remuneration takes the form of options
which will have value if the Company’s share price increases.
Use of remuneration consultants
The Company did not make use of remuneration consultants during the 2015 financial year
Voting and comments made at the company's 2014 Annual General Meeting ('AGM')
At the 31 October 2014 AGM, 93.86% of the votes received supported the adoption of the remuneration report for the
year ended 30 June 2014. The company did not receive any specific feedback at the AGM regarding its remuneration
practices.
19
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
DIRECTORS REPORT
B Details of remuneration
Amounts of Remuneration
Details of the remuneration of the key management personnel of the consolidated entity are set out in the following
tables.
The key management personnel of the consolidated entity consisted of the following directors of Reedy Lagoon
Corporation Limited:
●
●
●
J Hamer
G Fethers
A Griffin
Short-term employee benefits
Salary
& fees
$
Non-
monetary
$
Other
$
Post-
employment
benefits
Super-
annuation
$
Other long-
term
employee
benefits
$
Share-
based
payment
Options
& rights
$
Total
$
2015
Non-Executive Directors
J M Hamer
A Griffin
Executive Directors
G Fethers *
2014
Non-Executive Directors
J M Hamer
H Rutter **
Executive Directors
G Fethers *
40,000
40,000
122,060
202,060
36,612
20,000
118,920
175,532
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22,480
22,480
2,316
2,316
322
108
540
970
40,322
40,108
147,396
227,826
3,388
-
24,960
28,348
-
-
4,211
1,404
44,211
21,404
2,315
2,315
7,020
12,635
153,215
218,830
* Mr Fethers was the sole executive employee of the company for the years ended 30 June 2015 and 2014.
** Fees were paid during 2014 to Geophysical Exploration Consultants Pty Ltd a company associated with Mr Rutter.
In June 2015 the directors resolved that no payment was to be made of directors’ fees or managing director’s salary unless the
proposed capital raising by the Company was successful. Following the issue of shares to shareholders under the entitlement offer on
9th and 15th July 2015 the following amounts were paid:
J M Hamer : $10,000 fees
G H Fethers: $15,389 salary $5,000 superannuation
A C Griffin : $10,000 fees ($4,000 of which was paid in shares)
The amounts described in the table above for remuneration received in the 2014/15 year include the amounts which were paid on 9th
and 15th July 2015 notwithstanding they were not payable at 30 June 2015.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
J Hamer
H Rutter
A Griffin
Executive Directors:
G Fethers
Fixed
remuneration
At risk - STI
At risk - LTI
2015 2014
2015
2014
2015
2014
99% 90%
-% 87%
100%
-%
99% 91%
20
- % - %
- % - %
-% -%
- % - %
1% 10%
-% 13%
-% -%
1% 9%
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
DIRECTORS REPORT
C
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Details:
G Fethers
Managing Director
1 May 2007
Mr G Fethers is the Company’s Executive Managing Director under a contract of
employment which commenced on 1 May 2007. Under the contract Mr Fethers is
entitled to $132,000 per annum plus statutory superannuation. The contract does not
have any fixed term and may be terminated by the Company or Mr Fethers on
reasonable notice. No payments or retirement benefits are payable on termination.
Name:
J Hamer
Title:
Agreement commenced:
Details:
Chairman - Non Executive
1 May 2007
Mr J Hamer is employed as the Company’s Non- executive Chairman. His appointment
as a Director commenced on 9 May 2007 with agreed director fees payable at an annual
rate of $40,000 plus options under the terms of the Directors Options Scheme. There is
no fixed term and no set retirement benefits are payable on termination.
Name:
Title:
A Griffin
Director (appointed 30 June 2014)
Agreement commenced:
30 June 2014
Details:
Mr Griffin is employed as a Non-executive Director. His appointment as a Director
commenced on 30 June 2014 with agreed director fees payable at an annual rate of
$40,000 plus options under the terms of the Directors Options Scheme. There is no
fixed term and no set retirement benefits are payable on termination
Key management personnel have no entitlement to termination payments, other than accrued leave balances, in
the event of removal for misconduct.
D Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the
year ended 30 June 2015. Shares were issued to each director in lieu of cash payable for fees/salary/super.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other
key management personnel in this financial year or future reporting years are as follows:
Grant Date
Vesting and
exercisable date
Expiry date
Exercise price
Fair Value per option at
grant date
13 November 2014
13 November 2014
31 December 2017
$0.20
$0.001
Options granted carry no dividend or voting rights.
21
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
DIRECTORS REPORT
The number of options over ordinary shares granted to and vested by directors and other key management personnel as
part of compensation during the year ended 30 June 2015 are set out below:
Number of options granted
Number of options vested
during the year
during the year
30 June 2015
30 June 2014
30 June 2015
30 June 2014
300,000
500,000
-
100,000
300,000
500,000
100,000
-
300,000
500,000
-
100,000
300,000
500,000
100,000
-
ceased to be a director on 27 June 2014.
Name
J Hamer
G Fethers
H Rutter *
A Griffin
*
E Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Name
J Hamer
G Fethers
A Griffin
Balance at start of
the year
Received in lieu
of cash for
remuneration
Additions
(excluding
received in lieu
of cash for fees)
Held on
appointment
Balance at the
end of the year
1,599,724
8,635,778
100,000
10,335,502
450,000
666,400
650,000
1,766,400
1,066,483
1,000,000
-
2,066,483
-
-
-
-
3,116,207
10,302,178
750,000
14,168,385
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out
below:
Name
J Hamer
G Fethers
A Griffin
Balance at start of
the year
Granted
Exercised
Expired/Forfeited
Balance at the
end of the year
900,000
1,500,000
-
2,400,000
300,000
500,000
100,000
900,000
-
-
-
-
(300,000)
(500,000)
-
(800,000)
900,000
1,500,000
100,000
2,500,000
This concludes the remuneration report, which has been audited
22
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
DIRECTORS REPORT
Non Audit Services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 20 to the financial statements
The directors are satisfied that the provision of non-audit services by the auditor (or by another person or firm associated
with or on behalf of the auditor) is compatible with the general standard of auditors independence imposed by the
Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external
auditor’s independence.
The directors are of the opinion that the services as disclosed in note 20 to the financial statements do not compromise
the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the
Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
Officers of the Company who are former audit partners of Nexia Melbourne
There are no officers of the Company who are former audit partners of Nexia Melbourne.
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out
on the following page.
Auditor
Nexia Melbourne continues in office in accordance with section 327 of the Corporations Act 2001.
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings
to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of
those proceedings.
Signed in accordance with a resolution of directors made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the directors
G.H. FETHERS
DIRECTOR
29 September 2015
23
AUDITOR’S INDEPENDENCE DECLARATION
UNDER S 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF REEDY LAGOON CORPORATION LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2015, there
have been:
i.
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
NEXIA MELBOURNE
ABN 16 847 721 257
ANDREW JOHNSON
Partner
Audit & Assurance Services
Melbourne
29 September 2015
24
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
DIRECTORS DECLARATION
The directors of the company declare that:
1.
in the directors’ opinion, the financial statements and accompanying notes set out on pages 28 to 55 are in
accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001; and
(b) give a true and fair view of the company’s financial position as at 30 June 2015 and of its
performance for the year ended on that date;
2. note 2 confirms that the financial statements also comply with International Financial Reporting Standards
(IFRSs) as issued by the International Accounting Standards Board (IASB);
3.
4.
in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts
as and when they become due and payable; and
the directors have been given the declarations by the chief executive officer and chief financial officer required
by section 295A.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
directors by:
G. H. FETHERS
MANAGING DIRECTOR
29 September 2015
25
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF REEDY LAGOON CORPORATION LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Reedy Lagoon Corporation Limited, which
comprises the consolidated statement of financial position as at 30 June 2015, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes
in equity and the consolidated statement of cash flows for the year then ended, notes comprising a
summary of significant accounting policies and other explanatory information and the directors’
declaration of the consolidated entity comprising the company and the entities it controlled at the
year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that is free from material misstatement, whether due to fraud or error. In Note
2, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of
Financial Statements that the financial statements comply with International Financial Reporting
Standards (IFRS).
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
company’s preparation of the financial report in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
An audit also includes evaluating the appropriateness of accounting policies
entity’s internal control.
used and the reasonableness of accounting estimates made by the directors, as well as evaluating
the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of Reedy Lagoon Corporation Limited, would be in the same
terms if provided to the directors as at the date of this auditor’s report.
26
Independent Auditor’s Report
to the Members of Reedy Lagoon Corporation Limited
Auditor’s Opinion
In our opinion:
a.
the financial report of Reedy Lagoon Corporation Limited is in accordance with the
Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the consolidated entity’s financial position as at 30 June
2015 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001; and
b.
the financial report also complies with International Financial Reporting Standards as disclosed
in Note 2.
Emphasis of Matter – Going Concern
Without modifying our opinion, we draw to Note 2 “Significant Accounting Policies – Going Concern”
which indicates the company incurred a loss for the year ended 30 June 2015 of $528,189 and that
the company’s ability to continue the exploration and development of its mining tenements, continue
to assess new projects and meet operational expenditure at current levels is dependent upon future
capital raising. These conditions, along with other matters as set forth in Note 2, indicate the
existence of a material uncertainty that may cast significant doubt about the company’s ability to
continue as a going concern and therefore, the company may be unable to realise it assets and
discharge its liabilities in the normal course of business.
Report on the Remuneration Report
We have audited the remuneration report included in pages 19 to 22 of the directors’ report for the
year ended 30 June 2015. The directors of the company are responsible for the preparation and
presentation of the remuneration report in accordance with s 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the remuneration report, based on our audit conducted in
accordance with Australian Auditing Standards.
Auditor’s Opinion
In our opinion the remuneration report of Reedy Lagoon Corporation Limited for the year ended 30
June 2015 complies with s 300A of the Corporations Act 2001.
NEXIA MELBOURNE
ABN 16 847 721 257
ANDREW JOHNSON
Partner
Audit & Assurance Services
Melbourne
29 September 2015
27
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Revenue
Expenses
Corporate and administration expenses
Employee and director benefits expense
Exploration expenditure
Depreciation and amortisation expense
Share based payments expense
Equity settled option fee
Other expenses
Loss before income tax expense
Income tax expense
Consolidated
Note
2015
$
2014
$
5
6
6
7
55,414
61,382
(98,732)
(205,284)
(187,892)
(3,210)
(970)
(20,000)
(67,515)
(104,622)
(173,772)
(259,142)
(3,579)
(12,635)
-
(67,717)
(528,189)
(560,085)
-
-
Loss after income tax expense for the year attributable to the owners of
Reedy Lagoon Corporation Ltd
(528,189)
(560,085)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year attributable to the owners of
Reedy Lagoon Corporation Ltd
(528,189)
(560,085)
Basic earnings per share
Diluted earnings per share
Cents
Cents
29
29
(0.76)
(0.76)
(1.05)
(1.05)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
28
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee benefits
Total current liabilities
Non-current liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2015
$
2014
$
8
9
10
11
12
13
14
15
16
6,852
1,715
13,224
21,791
1,611
1,611
100,398
4,645
-
105,043
4,821
4,821
23,402
109,864
55,920
44,468
100,388
14,314
14,314
22,945
31,460
54,405
11,998
11,998
114,702
66,403
(91,300)
43,461
14,489,839
40,605
(14,621,744)
14,097,381
132,635
(14,186,555)
(91,300)
43,461
The above statement of financial position should be read in conjunction with the accompanying notes
29
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Consolidated
Issued
capital
$
Accumulated
Losses
$
Reserves
$
Total
equity
$
Balance at 1 July 2013
14,097,381
(13,732,470)
226,000
590,911
Loss after income tax expense for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Share-based payments (note 30)
Lapse of options
-
-
-
-
-
(560,085)
-
(560,085)
-
-
-
(560,085)
-
(560,085)
-
106,000
12,635
(106,000)
12,635
-
Balance at 30 June 2014
14,097,381
(14,186,555)
132,635
43,461
Consolidated
Issued
capital
$
Accumulated
losses
$
Reserves
Total
deficiency
$
$
Balance at 1 July 2014
14,097,381
(14,186,555)
132,635
43,461
Loss after income tax expense for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction
costs (note 15)
Share-based payments (note 30)
Lapse of options
-
-
-
(528,189)
-
(528,189)
-
-
-
(528,189)
-
(528,189)
392,458
-
-
-
-
93,000
-
970
(93,000)
392,458
970
-
Balance at 30 June 2015
14,489,839
(14,621,744)
40,605
(91,300)
The above statement of changes in equity should be read in conjunction with the accompanying notes
30
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 30 JUNE 2015
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Payments for exploration activities
Consolidated
Note
2015
$
2014
$
52,847
(332,212)
2,567
(189,206)
50,685
(306,671)
10,697
(257,939)
Net cash used in operating activities
28
(466,004)
(503,228)
Cash flows from investing activities
Net cash used in investing activities
-
-
Cash flows from financing activities
Proceeds from issue of shares
Capital raiding costs
Net cash from /(used in) financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
15
380,448
(7,990)
-
(3,496)
372,458
(3,496)
(93,546)
100,398
(506,724)
607,122
Cash and cash equivalents at the end of the financial year
8
6,852
100,398
The above statement of cash flows should be read in conjunction with the accompanying notes.
31
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
1. General information
The financial report, consisting of the financial statements, notes to the financial statements and the directors' declaration,
covers Reedy Lagoon Corporation Limited (“the Company” or “RLC”) as a consolidated entity consisting of the Company
and the entities it controlled. The financial report is presented in Australian dollars, which is RLC functional and
presentation currency.
RLC is a listed public company, incorporated in Australia with mineral projects in the Northern Territory, West Australia and
South Australia. Its registered office and its principal place of business is:
Suite 2, 337A Lennox Street, Richmond, Vic, 3121
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial report.
The financial report was authorised for issue, in accordance with a resolution of directors, on 29 September 2015. The
directors have the power to amend and reissue the financial report.
Statement of compliance and New, revised or amending Accounting Standards and Interpretations adopted
2. Significant accounting policies
Basis of preparation
(I)
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new,
revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Historical Cost Convention
(II)
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
investment properties, certain classes of property, plant and equipment and derivative financial instruments.
Going Concern
(III)
For the year ended 30 June 2015 the Group made a loss of $528,189 (2014: loss of $560,085). Notwithstanding this the
financial report has been prepared on a going concern basis. The directors have identified following a capital raising in July
2015 they have enough cash to meet non-discretionary spending for the twelve months from the date of this report. The
group will require further funds and will need to raise further capital to enable it to continue to explore and develop its
prospects, continue to assess new projects and continue to meet its non-discretionary spending in the future. Should these
funds not become available the directors have resolved to reduce or waive fees and wages received in cash if the group
has insufficient funds available to it to make such payments and remain solvent. In the event that the group is not able to
raise additional funding it may not be able to continue its operations as a going concern and therefore may not be able to
realise its assets and extinguish its liabilities in the ordinary course of operations and at the amounts stated in the financial
report.
Critical accounting judgements
(IV)
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 3.
32
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
(V) Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity
only. Supplementary information about the parent entity is disclosed in note 24.
(VI) Operating Segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
Specific Policies
The following accounting policies have been consistently applied and, except where there is a change in accounting policy,
are consistent with those of the previous year.
(a) Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Reedy Lagoon Corporation
Ltd ('company' or 'parent entity') as at 30 June 2015 and the results of all subsidiaries for the year then ended. Reedy
Lagoon Corporation Ltd and its subsidiaries together are referred to in these financial statements as the 'consolidated
entity” or “the Group”).
Subsidiaries are all those entities over which the consolidated entity has the power to govern the financial and operating
policies, generally accompanying a shareholding of more than one-half of the voting rights. The effects of potential
exercisable voting rights are considered when assessing whether control exists. Subsidiaries are fully consolidated from
the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. Refer to the 'business
combinations' accounting policy for further details. A change in ownership interest, without the loss of control, is accounted
for as an equity transaction, where the difference between the consideration transferred and the book value of the share of
the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
(b) Exploration, Evaluation and Development Expenditure
Expenditure incurred on the acquisition of exploration properties and exploration, evaluation and development costs are
written off as incurred where the activities in the areas of interest have not yet reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves. Once it is determined that the costs can be recouped
through sale or successful development and exploitation of the area of interest then the on-going costs are accumulated
and carried forward for each area of interest.
Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until
production commences. When production commences, carried forward exploration, evaluation and development costs are
amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to
abandon the area is made. Each area of interest is also reviewed annually and accumulated costs written off to the extent
that they will not be recoverable in the future.
33
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
Restoration costs are provided for at the time of the activities that give rise to the need for restoration. If this occurs prior to
commencement of production, the costs are included in deferred exploration and development expenditure. If it occurs after
commencement of production, restoration costs are provided for and charged to the statement of financial performance as
an expense.
(c) Income tax
The change for current income tax expense is based on the profit for the year adjusted for any non-assessable or
disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the reporting date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. 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 is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is
settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to
equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against
which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income taxation legislation and the anticipation that the Company will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
(d) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the Australian Tax Office (ATO). 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
are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included
as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from
investing and financing activities, which are recoverable from, or payable to the ATO, are classified as operating cash
flows.
(e) Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
(f) Other receivables
Other receivables are stated at cost less allowance for doubtful receivables.
(g) Revenue Recognition
Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the revenue
can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Rendering of services
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers or in accordance
with contractual rights.
Interest revenue
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
34
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
(h) Trade & Other Payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 60 days of recognition.
(i) Employee Benefit Provisions
Wages and Salaries, Annual Leave and Sick Leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to
be settled within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up to
the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Non-accumulating
sick leave is expensed to profit or loss when incurred.
The liability for long service leave is recognised in current and non-current liabilities, depending on the unconditional right to
defer settlement of the liability for at least 12 months after the reporting date. The liability is measured as the present value
of expected future payments to be made in respect of services provided by employees up to the reporting date using the
projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the reporting date on
national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future
cash outflows.
(j) Contributed Equity
Ordinary shares are classified as equity.
Costs directly attributable to the issue of new shares or options are shown as a deduction from the equity proceeds, net of
any income tax benefit. Costs directly attributable to the issue of new shares or options associated with the acquisition of a
business are included as part of the purchase consideration.
(k) Share-Based Payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees, including directors.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for
the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of
cash is determined by reference to the share price.
The cost of equity-settled transactions are:
(i)
initially on grant date, and at each reporting date until vested measured at fair value. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with
non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the
employees to receive payment. No account is taken of any other vesting conditions. Refer to Note 30 for details of
the assumptions used in determining the fair value of options granted and/or vested during the reporting period,
recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge
to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of
awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss
for the period is the cumulative amount calculated at each reporting date less amounts already recognised in
previous periods.
(ii)
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
35
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award is treated as if they were a modification
If vested equity-settled awards, in the form of options over unissued shares, are not exercised by the expiry date the
cumulative amount previously recognised as an expense is transferred as a direct credit from the share based payment
reserve to retained earnings.
(l) Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to members of Reedy Lagoon Corporation Limited,
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares during the year.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings by the after-tax effect
of dividends and interest associated with dilutive potential ordinary shares. The weighted average number of shares used
is adjusted for the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares.
(m) Interests in Joint Ventures
The Company’s shares of the assets, liabilities, revenue and expenses of jointly controlled operations have been included
in the appropriate line items of the financial statements. Details of the Company’s interests are provided in Note 26.
(n) Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
(o) Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the
financial instrument. For financial assets, this is equivalent to the date that the company commits itself to either purchase or
sell the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified “at
fair value through profit or loss” in which case transaction costs are expensed to profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method or cost.
Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation
techniques are adopted.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition
less repayments made and any reduction for impairment, and adjusted for any cumulative amortisation of the difference
between that initial amount and the maturity amount calculated using the effective interest method.
36
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs
and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term)
of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future
net cash flows will necessitate an adjustment to the carrying amount with a consequential recognition of an income or
expense item in profit or loss.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to
determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar
instruments and option pricing models.
For the purpose of financial statements, the Company does not designate any interests in subsidiaries, associates or jointly
controlled entities as being subject to the requirements of Accounting Standards specifically applicable to financial
instruments.
For the purpose of the parent entity’s separate financial statements, investments in subsidiaries, jointly controlled entities
and associates are accounted for at cost.
(i)
(ii)
(iii)
(iv)
Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for trading for the purpose
of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to
avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed
by key management personnel on a fair value basis in accordance with a documented risk management or
investment strategy. Such assets are subsequently measured at fair value with changes in carrying amount being
included in profit or loss.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are subsequently measured at amortised cost. Gains or losses are recognised in profit or
loss through the amortisation process and when the financial asset is derecognised.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Company’s intention to hold these investments to maturity. They are
subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the
amortisation process and when the financial asset is derecognised.
Available-for-sale investments
Available-for-sale investments are non-derivative financial assets that are either not capable of being classified
into other categories of financial assets due to their nature or they are designated as such by management. They
comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or
determinable payments.
They are subsequently measured at fair value with changes in such fair value (with any re-measurements other
than impairment losses and foreign exchange gains and losses) recognised in other comprehensive income.
When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously
recognised in other comprehensive income is reclassified into profit or loss.
Available-for-sale financial assets are classified as non-current assets when they are expected to be sold after 12
months from the end of the reporting period. All other available-for-sale financial assets are classified as current
assets.
37
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
(v)
Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is
derecognised.
Impairment of financial assets
At the end of each reporting period, the Company assesses whether there is objective evidence that a financial asset has
been impaired. A financial asset (or a group of financial assets) is deemed to be impaired if, and only if, there is objective
evidence of impairment as a result of one or more events (a “loss event”) having occurred, which has an impact on the
estimated future cash flows of the financial asset(s).
In the case of available-for-sale financial assets, a significant or prolonged decline in the market value of the instrument is
considered to constitute a loss event. Impairment losses are recognised in profit or loss immediately. Also, any cumulative
decline in fair value previously recognised in other comprehensive income is reclassified to profit or loss at this point.
In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a group of
debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments; indications
that they will enter bankruptcy or other financial reorganisation; and changes in arrears or economic conditions that
correlate with defaults.
For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to
reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures of
recovery, if the directors establish that the carrying amount cannot be recovered by any means, at that point the
anticipated loss is charged to the allowance account or the carrying amount of impaired financial assets is reduced directly
if no impairment amount was previously recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the
Company recognises the impairment for such financial assets by taking into account the original terms as if the terms have
not been renegotiated so that the loss event that has occurred is duly considered.
Financial guarantees
Where material, financial guarantees issued that require the issuer to make specified payments to reimburse the holder for
a loss it incurs because a specified debtor fails to make payment when due are recognised as financial liabilities at fair
value on initial recognition.
The fair value of financial guarantee contracts is assessed using the probability-weighted discounted cash flow approach.
The probability has been based on:
-
-
-
the likelihood of the guaranteed party defaulting during the next reporting period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and
the maximum loss exposure if the guaranteed party were to default.
Guarantees are subsequently measured at the higher of the best estimate of the obligation in accordance with AASB 137:
Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less, when appropriate,
cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee,
revenue is recognised under AASB 118.
De-recognition of financial instruments
Financial assets are derecognised when the contractual rights to receipt of cash flows expire or the asset is transferred to
another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated
with the asset. Financial liabilities are derecognised when the related obligations are discharged, cancelled or have
expired. The difference between the carrying amount of the financial liability extinguished or transferred to another party
38
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in
profit or loss.
(p) Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows.
Class of Fixed Asset
Plant & equipment
Computer and Office Equipment
Scientific Equipment
Expected Useful life
5-10 years
3-7 years
3-4 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
(q) New, revised or amending Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the consolidated entity.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
● AASB 2012-3 Amendments to Australian Accounting Standards - Offsetting Financial Assets and Financial Liabilities
● AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial Assets
● AASB 2013-4 Amendments to Australian Accounting Standards - Novation of Derivatives and Continuation of Hedge
Accounting
● AASB 2013-5 Amendments to Australian Accounting Standards - Investment Entities
● AASB 2014-1 Amendments to Australian Accounting Standards (Parts A to C)
39
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
(r) New Accounting Standards for Application in Future Periods
Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the consolidated
entity, together with an assessment of the potential impact of such pronouncements on the consolidated entity when
adopted in future periods, are discussed below:
–
AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods
beginning on or after 1 January 2018).
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below)
and includes revised requirements for the classification and measurement of financial instruments, revised
recognition and derecognition requirements for financial instruments and simplified requirements for hedge
accounting.
The key changes that may affect the consolidated entity on initial application include certain simplifications to the
classification of financial assets, simplifications to the accounting of embedded derivatives, upfront accounting for
expected credit loss, and the irrevocable election to recognise gains and losses on investments in equity
instruments that are not held for trading in other comprehensive income. AASB 9 also introduces a new model
for hedge accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to
hedges of non-financial items. Should the entity elect to change its hedge policies in line with the new hedge
accounting requirements of the Standard, the application of such accounting would be largely prospective.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the consolidated entity’s
financial instruments, including hedging activity, it is impracticable at this stage to provide a reasonable estimate
of such impact.
–
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or
after 1 January 2018).
When effective, this Standard will replace the current accounting requirements applicable to revenue with a
single, principles-based model. Except for a limited number of exceptions, including leases, the new revenue
model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between entities
in the same line of business to facilitate sales to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for the goods or services. To achieve this objective, AASB 15 provides the following five-step process:
-
-
-
-
-
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
determine the transaction price;
allocate the transaction price to the performance obligations in the contract(s); and
recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the consolidated entity’s
financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
40
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
Share- based payment transactions
Equity-settled share-based payments are measured at fair value of the equity instrument at the grant date. Fair value is
measured by the use of either a Binomial or Black-Scholes model as described at Note 30 taking into account the terms
and conditions upon which the instruments were granted. The expected life used in the model has been adjusted, based
on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the
carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
Employee benefits provision - Long service leave
As discussed in note 2, the liability for long service leave is recognised and measured at the present value of the estimated
future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the
liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account.
Exploration expenditures
The Group expenses expenditures relating to exploration as they are incurred as they are not considered likely to be
recoverable. The Group has not extracted any reserves and therefore all of the exploration expenses should be expensed.
Management assessed such judgement in light of no mineral reserves being founded as of yet.
Unrecognized deferred tax asset
Management has determined not to recognise the deferred tax asset that is disclosed at Note 7. This is due to
management taking an appropriate and conservative approach and not recognising any deferred tax asset given the fact
that the Group has experienced losses, on an historical basis, and also due to no mineral reserves being discovered.
4. Operating segments
Identification of reportable operating segments
The Group is organised into one operating segments: mineral exploration in Australia. This operating segment is based on
the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating
Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.
41
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
5. Revenue
Interest
Labour and office cost recoveries
Total Revenue
-
-
6. Expenses
Loss before income tax includes the following
specific expenses:
Depreciation
Plant and equipment
Computer and office equipment
Scientific equipment
Total depreciation
Exploration
Tenement applications fees and rents
Other exploration expenditure
Total exploration
-
-
-
-
Consolidated
2015
$
2,567
52,847
55,414
1,849
928
433
3,210
25,834
162,058
187,892
2014
$
10,697
50,685
61,382
723
1,719
1,137
3,579
74,262
184,880
259,142
42
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
7. Income tax expense
Numerical reconciliation of income tax expense and
tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not
deductible/(taxable) in calculating taxable income:
Capital allowances share issue costs
Non deductible equity settled benefits expense
Deferred tax asset (on account of losses) not
brought to account
Income tax expense
Deferred tax assets not recognised
Deferred tax assets not recognised comprises
temporary differences attributable to:
Tax losses carried forward
Temporary differences
Unamortised balance of capital allowances
-
-
-
-
Consolidated
2015
$
2014
$
(528,189)
(560,085)
(158,457)
(168,026)
(662)
291
(662)
3,791
(158,828)
(164,897)
158,828
164,897
-
-
1,529,569
4,725
1,985
1,370,741
3,600
1,985
Total deferred tax assets not recognised
-
-
1,536,279
1,376,326
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been
recognised in the statement of financial position as the recovery of this benefit is uncertain.
The potential future income tax benefit will only be obtained if:
a) The Company derives future assessable income of a nature and amount sufficient to enable the benefit to be
realised;
b) The Company continues to comply with the conditions for deductibility imposed by the law; and
c) No changes in tax legislation adversely affect the Company in realising the benefit.
8. Current assets - cash and cash equivalents
Cash at bank
Cash management account
-
-
6,852
-
6,852
18,730
81,668
100,398
Since 30 June 2015 the company has raised $278,718 of capital by the issue of shares on 9 and 17 July 2015 under the
Entitlement Offer dated 9 June 2015.
43
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
9. Current assets - trade and other
receivables
Other receivables
GST receivable
10. Current assets - other
Prepayments
-
-
11. Non-current assets - property, plant and equipment
Plant and equipment - at cost
Less: Accumulated depreciation
Computer equipment - at cost
Less: Accumulated depreciation
Scientific equipment - at cost
Less: Accumulated depreciation
-
-
-
-
-
-
-
-
Consolidated
2015
2014
$
313
1,402
1,715
$
981
3,664
4,645
13,224
-
4,524
(2,993)
1,531
16,419
(16,419)
-
29,338
(29,258)
80
4,524
(1,144)
3,380
16,419
(15,491)
928
29,338
(28,825)
513
1,611
4,821
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Plant &
Computer
Equipment Equipment
$
$
Consolidated
Balance at 1 July 2013
Depreciation expense
Balance at 30 June 2014
Depreciation expense
Balance at 30 June 2015
-
-
-
-
-
-
-
-
-
-
4,103
(723)
2,647
(1,719)
3,380
(1,849)
928
(928)
1,531
-
44
Scientific
Equipment Total
$
$
1,650
(1,137)
513
(433)
80
8,400
(3,579)
4,821
(3,210)
1,611
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
12. Current liabilities - trade
and other payables
Trade payables
Other payables and accruals
Consolidated
2015
$
2014
$
-
55,920
6,004
16,941
-
-
55,920
22,945
Refer to note 18 for further information on financial instruments.
13. Current liabilities - employee benefits
Annual leave
44,468
31,460
14. Non-current liabilities - employee benefits
Long service leave
14,314
11,998
15. Equity - issued capital
2015
Shares
2014
Shares
2015
$
2014
$
Ordinary shares - fully paid
73,379,298
53,548,494
14,489,839
14,097,381
Movements in ordinary share capital
Details
Date
No of shares
Issue price
$
Balance
Balance
Entitlement offer
Director issue
Director issue
Option fee
Cost of capital raising
1 July 2013
30 June 2014
8 August 2014
31 December 2014
20 March 2015
4 June 2015
53,548,494
53,548,494
17,064,404
766,400
1,000,000
1,000,000
-
$0.02
$0.025
$0.02
$0.02
Balance
30 June 2015
73,379,298
14,097,381
14,097,381
341,288
19,160
20,000
20,000
(7,990)
14,489,839
45
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
RLC’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern and exploit
the mineral assets under its control in order to provide future returns for shareholders and benefits for other stakeholders.
The Company continuously reviews the capital structure to ensure:-
• sufficient funds are available to implement its exploration expenditure programs in accordance with forecasted needs;
and
• sufficient funds for the other operational needs of the Company is maintained.
The capital risk management policy remains unchanged from the 30 June 2014 annual report
Consolidated
2015
$
2014
$
16. Equity - reserves
Share-based payments reserve
40,605
132,635
Reconciliation - Share-based payments reserve
Balance at beginning of financial year
Share based payments (refer to note 30)
Expiry of options
Balance at end of financial year
132,635
970
(93,000)
226,000
12,635
(106,000)
-
-
-
-
40,605
132,635
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
17. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
46
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
18. Financial instruments
Financial risk management objectives
The consolidated entity’s financial instruments consist of deposits with banks, accounts receivable and payable.
The main purpose of non-derivative financial instruments is to raise finance for consolidated entity’s operations.
The consolidated entity does not have any derivative instruments at 30 June 2015.
The main risks the consolidated entity is exposed to through its financial instruments are interest rate risk, liquidity risk and
credit risk.
Market risk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The consolidated entity is not exposed to significant interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits. The consolidated entity obtains guarantees where appropriate
to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the
carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position
and notes to the financial statements. The consolidated entity does not hold any collateral.
The consolidated entity trade and other receivables consist of GST receivable and interest receivable. For this reason the
consolidated entity is not exposed to significant credit risk.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and
cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk by monitoring forecast cash flows and ensuring that adequate funds are
maintained.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of
financial position.
47
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
18. Financial instruments (continued)
Consolidated
30 June 2015
Non-derivatives
Non-interest bearing
Trade payables
Total non-derivatives
Consolidated
30 June 2014
Non-derivatives
Non-interest bearing
Trade payables
Total non-derivatives
Weighted
average interest
rate
%
1 year or less
$
Between 1 and
2 years
$
Between 2 and 5
years
$
Over 5 years
$
Remaining
contractual
maturities
$
-%
55,920
55,920
-
-
-
-
-
-
55,920
55,920
Weighted
average interest
rate
%
1 year or less
$
Between 1 and
2 years
$
Between 2 and 5
years
$
Over 5 years
$
Remaining
contractual
maturities
$
-%
22,945
22,945
-
-
-
-
-
-
22,945
22,945
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of
trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The fair
value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest
rate that is available for similar financial instruments.
19. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated
entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Consolidated
2015
$
202,060
22,480
2,316
970
2014
$
175,616
28,264
2,315
12,635
-
-
227,826
218,830
48
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
19. Key management personnel disclosures (continued)
Shareholding
The number of shares in the parent entity held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
30 June 2015
Ordinary shares
G Fethers
J Hamer
A Griffin2
30 June 2014
Ordinary shares
G Fethers
H Rutter1
J Hamer
A Griffin2
Balance at
the start of
Received
as part of
the year
remuneration
Additions
Disposals/
other
Balance at
the end of
the year
8,635,778
1,599,724
100,000
666,400
450,000
650,000
10,335,502 1,766,400
1,000,000
1,066,483
-
2,066,483
-
-
-
-
10,302,178
3,116,207
750,000
14,168,385
Balance at
the start of
Received
as part of
the year
remuneration
Additions
Disposals/
other
Balance at
the end of
the year
8,435,778
719,790
1,396,524
-
10,552,092
-
-
-
-
-
200,000
-
203,200
100,000
503,200
-
(719,790)
-
-
-
8,635,778
-
1,599,724
100,000
10,335,502
Option holding
The number of options over ordinary shares in the parent entity held during the financial year by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out
below:
30 June 2015
Options over
ordinary shares
G Fethers
J Hamer
A Griffin2
30 June 2014
Options over
ordinary shares
G Fethers
H Rutter1
J Hamer
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
1,500,000
900,000
-
2,400,000
500,000
300,000
100,000
900,000
Balance at
the start of
the year
Granted
Exercised
1,500,000
1,100,000
900,000
3,500,000
500,000
100,000
300,000
900,000
-
-
-
-
-
-
-
-
(500,000)
(300,000)
-
(800,000)
1,500,000
900,000
100,000
2,500,000
Expired/
forfeited/
other
Balance at
the end of
the year
(500,000)
(1,200,000)
(300,000)
(2,000,000)
1,500,000
-
900,000
2,400,000
(1) H Rutter ceased as a Director on 27 June 2014.
(2) A Griffin appointed as Director on 30 June 2014.
Related party transactions
Related party transactions are set out in note 23.
49
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
20. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Nexia Melbourne, the auditor of
the consolidated entity:
Audit services - Nexia Melbourne
Audit or review of the financial statements
Other services - Nexia Melbourne
Tax and compliance services
Consolidated
30 June 2015
$
30 June 2014
$
15,200
12,000
18,000
18,000
-
-
33,200
30,000
It is the Company’s policy to engage the external auditor to provide services additional to their audit duties where the
external auditor’s experience and expertise with the Company are important and it is logical and efficient for them to
provide those services. The provision of non-audit services during the year by the external auditor is compatible with, and
did not compromise, the auditor independence requirements of the Corporations Act 2001.
21. Contingent liabilities
The consolidated entity had no contingent liabilities at end of the current or previous financial year.
22. Exploration expenditure commitments
Ongoing annual exploration expenditure is required to maintain title to the consolidated entity’s mineral exploration
tenements. No provision has been made in the accounts for these amounts as the amounts are expected to be fulfilled in
the normal course of the operations of the consolidated entity.
Tenement expenditure is dependent upon exploration results and available cash resources. Expenditure commitments are
also impacted upon and may be reduced where access to areas has been restricted by the existence of Aboriginal
freehold, Native Title and Native Title claims.
The statutory minimum expenditure requirement for the current twelve month tenures in relation to each of the tenements,
excluding applications, listed in the Tenement Schedule on page 10 of the Annual report is $190,000 (2014: $631,750). Of
this amount, $109,000 had been spent on EL 5580 by joint venture partner DiamondCo Limited by the date of this report.
The statutory expenditure requirement is subject to negotiation with the relevant state department, and expenditure
commitments may be varied between tenements, or reduced subject to reduction of exploration area and/or relinquishment
of non-prospective tenements.
50
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
23. Related party transactions
Parent entity
Reedy Lagoon Corporation Ltd is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 25.
Joint ventures
Interests in joint ventures are set out in note 26.
Key management personnel
Disclosures relating to key management personnel are set out in note 19 and the remuneration report in the directors'
report.
Transactions with related parties
DiamondCo Limited, a company of which Mr. Fethers and Mr Hamer are directors and shareholders, holds the rights to
diamonds located on EL 5580 through a joint venture agreement dated 26 March 2007. Opportunities to reduce
mobilisation costs and expand small scale programmes by combining field activities are exploited where possible.
Where services for combined RLC and DiamondCo programmes are contracted RLC normally acts as principal and
invoices DiamondCo on a cost recovery basis. RLC provides the services of Mr Fethers and office services to
DiamondCo at normal commercial rates. Total fees invoiced by RLC during the financial year to DiamondCo amounting
to $33,258 (2014 - $36,209).
Geophysical Exploration Consultants Pty Ltd (“Geophysical”) was a company associated with Mr Rutter. Geophysical
invoiced the Company for services at normal commercial rates and while Mr Rutter was a director he received a retainer
of $5,000 per quarter. Mr Rutter ceased as a director on 27 June 2014. Total fees invoiced by Geophysical during the
financial year to the Company amounted to nil (2014 - $20,000). The amount paid during financial year 2014 has been
included in directors’ remuneration to Mr Rutter where it appears in the Remuneration Report.
Receivable from and payable to related parties
The amount of $nil (2014: $981) was payable by DiamondCo Limited at 30 June 2015 and no trade payables to related
parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
51
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
24. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Statement of profit or loss and other comprehensive
income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2015
$
2014
$
(528,189)
(560,085)
(528,189)
(560,085)
21,791
105,043
23,402
109,864
100,388
54,405
114,702
66,403
14,489,839
40,605
(14,621,744)
(91,300)
14,097,381
132,635
(14,186,555)
43,461
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2015 and 30 June 2014.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2015 and 30 June 2014.
Capital commitments - Property, plant and equipment
All commitments disclosed in Note 22 relate to parent entity.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2,
except for the following:
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
52
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
25. Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in
accordance with the accounting policy described in note 2:
Name of entity
Country of
incorporation
Bullamine Magnetite Pty Ltd
Australia
2015
%
100
2014
%
100
Equity holding
26. Interests in joint ventures
EL 5580 is subject to a joint venture agreement, the Diamond Farm Out Agreement, which transfers all RLC’s
interest in diamonds in this tenement to DiamondCo Limited.
Tenements which pre-date and carry through to EL 5580 were subject to a joint venture agreement, the Edward
Creek Base Metals Joint Venture (“ECBMJV”) which was terminated and all interests in the ECBMJV were forfeited
to RLC on 9 June 2009. The termination of the joint venture was disputed by the other parties, but RLC considers
the dispute to be baseless. Prior to the termination of the joint venture RLC held a 62% interest in the tenements.
27. Events after the reporting period
On 9 July 2015 the Company issued 27,706,115 shares under the Entitlement Offer dated 9 June 2015 raising
$221,649.
On 17 July 2015 the Company issued 7,133,657 shares under the Entitlement Offer dated 9 June 2015 raising
$57,069.
No other matter or circumstance has arisen since 30 June 2015 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs
in future financial years.
28. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
-
-
(528,189)
(560,085)
Consolidated
2015
$
2014
$
Adjustments for:
Depreciation and amortisation
Share-based payments
Payables relating to equity
Equity settled option fee
Change in operating assets and liabilities:
Decrease in trade and other receivables
Decrease/(increase) in prepayments
Decrease in other operating assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in employee benefits
3,210
970
-
20,000
2,932
(13,224)
-
32,974
15,323
3,579
12,635
3,497
-
-
(982)
31,883
(7,565)
13,810
Net cash used in operating activities
(466,004)
(503,228)
53
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
29. Earnings per share Consolidated
Loss after income tax attributable to the owners of
Reedy Lagoon Corporation Ltd
Weighted average number of ordinary shares used in
calculating basic earnings per share
Weighted average number of ordinary shares used in
calculating diluted earnings per share
Basic earnings per share
Diluted earnings per share
2015
$
2014
$
(528,189)
(560,085)
Number
Number
69,512,734
53,548,494
69,512,734
53,548,494
Cents
(0.76)
(0.76)
Cents
(1.05)
(1.05)
The rights to options held by option holders have not been included in the weighted average number of ordinary
shares for the purposes of calculating diluted EPS as they do not meet the requirements for inclusion in AASB 133
‘Earnings per Share’. The rights to options are non-dilutive as the Company has generated a loss for the financial
year.
30. Share-based payments
A share option plan has been established by the Company and approved by shareholders at a general meeting,
whereby the Company may, at the discretion of the board, grant options over ordinary shares in the company to certain
key management personnel.
Remuneration arrangements of key management personnel are disclosed in the annual financial report. In addition,
on 13 November 2014, after approval at the Company's annual general meeting, a total of 900,000 options were
issued to directors as part of their remuneration packages. Each director received the below options:-
Geof H Fethers – 500,000 options, exercise price 20 cents, expiring on 31 December 2017 with a value $540;
Adrian C Griffin – 100,000 options, exercise price 20 cents, expiring on 31 December 2017 with a value $108; and
Jonathan M Hamer – 300,000 options, exercise price 20 cents, expiring on 31 December 2017 with a value $322.
Set out below are summaries of options granted under the plan during the current financial year:
Grant
date
Expiry
Date
Exercise
price
Balance at the
start of the year
Granted Exercised
Expired
2-Dec-11 31-Dec-14
15-Nov-12 31-Dec-15
30-Oct-13 31-Dec-16
31-Dec-17
13-Nov-14
$0.20
$0.20
$0.20
$0.20
1,550,000
900,000
900,000
-
3,350,000
-
-
-
900,000
900,000
-
-
-
-
-
(1,550,000)
-
-
-
(1,550,000)
Balance at the
end of the year
-
900,000
900,000
900,000
2,700,000
* expired unexercised during the current period.
54
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
For the options granted during the current financial half-year, the valuation model inputs used to determine the fair
value at the grant date, are as follows:
Grant
date
Expiry
date
Share price at
grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk free
interest rate
Fair value at
grant date
13-Nov-14
31-Dec-17
$0.017
$0.20
77.00%
0.00%
2.28%
$0.001
An expense of $970 has been recognised in the statement of comprehensive income for the current period in relation
to the above options.
55
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 14 September 2015
Number of holders of equity securities
Ordinary share capital
108,844,066 fully paid ordinary shares were held by 404 individual shareholders.
All issued ordinary shares were quoted on the Australian Stock Exchange.
No ordinary shares on issue were subject to escrow restrictions.
All issued ordinary shares carry one vote per share and carry the equivalent rights to dividends.
In addition to the ordinary shares on issue there were 2,700,000 options issued (not quoted). Details are of these options
are provided in the Directors’ Report (page 18).
Substantial shareholders
Substantial Shareholders
Sked Pty Ltd:
Sked Pty Ltd
Sked Pty Ltd
CityCastle Pty Ltd
Traders Macquarie Pty Ltd
Traders Macquarie Pty Ltd
Pyrope Holdings Pty Ltd:
Pyrope Holdings Pty Ltd
Pyrope Holdings Pty Ltd
Ranview Pty Ltd
G Fethers
Jagen Pty Ltd
Jonathan M Hamer:
Jonathan M Hamer
Trenine Pty Ltd
Total substantial shareholders
Distribution of holders of equity securities:
Number of Fully Paid
Ordinary Shares
% of total on issue
11,191,368
2,514,404
6,212,484
884,234
419,070
21,221,560
10,064,850
2,519,450
617,270
225,608
13,427,178
9,666,667
6,201,855
39,352
6,241,207
50,556,612
10.28
1.85
5.71
0.81
0.39
19.50
9.25
2.31
0.57
0.21
12.34
8.88
5.70
0.03
5.73
46.45
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
No. of
shareholders
19
21
61
213
90
404
%
4.70
5.20
15.10
52.72
22.28
100.00
No. of Ordinary Shares
Percentage of
Issued Shares
3,607
78,949
519,531
7,148,744
101,093,235
108,844,066
0.00
0.07
0.48
6.57
92.88
100.00
There were 294 shareholders who held less than a marketable parcel of shares. On 14 September 2015 those 294
shareholders collectively held 5,902,785 shares. A less than marketable parcel of shares at 14 September 2015 was a
holding of less than 71,429 shares.
56
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
SHAREHOLDER INFORMATION
Twenty largest shareholders
as at 14 September 2015
Sked Pty Ltd
Pyrope Holdings Pty Ltd
Jagen Pty Ltd
Citicastle Pty Ltd
Mr Jonathan Mark Hamer
Park Road SF Pty Ltd
Mr Alan Brien & Mrs Melinda Brien
WIFAM Investments Pty Ltd
M & K Korkidas
Pyrope Holdings Pty Ltd
Sked Pty Ltd
Elstree Holdings Pty Ltd
Adrian Christopher Griffin
Mr Clarke Barnett Dudley
RFCJ Pty Ltd
Tromso Pty Ltd
Janavid Pty Ltd
Mr Robert Reeves & Mrs Mary Reeves
Brodie Cresswell & Walton Pty Ltd
DBR Corporation Pty Ltd
Total top 20
Total Other Investors
TOTAL:
No. of Quoted Ordinary
Shares
% of total quoted
11,191,368
10,064,850
9,666,667
6,212,484
6,201,855
4,000,000
3,557,058
3,000,000
2,630,661
2,519,450
2,514,404
2,500,000
2,125,000
2,041,168
1,999,999
1,800,000
1,439,580
1,420,140
1,360,061
1,257,203
77,501,948
31,342,118
108,844,066
10.28
9.25
8.88
5.71
5.70
3.67
3.27
2.76
2.42
2.31
2.30
2.30
1.95
1.88
1.84
1.65
1.32
1.30
1.25
1.16
71.20
28.80
100.00
57
REEDY LAGOON CORPORATION LIMITED
ACN 006 639 514
CORPORATE DIRECTORY
Reedy Lagoon Corporation Limited
ABN 41 006 639 514
ASX Code : RLC
Directors
Jonathan M. Hamer
Chairman, Non-Executive Director
Geof H. Fethers
Managing Director
Hugh Rutter
Director
Company Secretary
Geof H. Fethers
Registered and Head Office
Suite 2, 337a Lennox Street
Richmond
Victoria 3121
www.reedylagoon.com.au
Ph:
Fax:
Email:
03 8420 6280
03 8420 6299
info@reedylagoon.com.au
Legal Adviser
King & Wood Mallesons
Level 50, 600 Bourke Street
Melbourne
Victoria 3000
Accountants
Nexia Melbourne Pty Ltd
Level 18, 530 Collins Street
Melbourne
Victoria 3000
PH: (03) 9608 0100
www.nexia.com.au
Auditor
Nexia Melbourne
Level 18, 530 Collins Street
Melbourne
Victoria 3000
Share Registry
Link Market Services Limited (ABN 54 083 214 537)
Level 1, 333 Collins Street
Melbourne Vic 3000
Telephone: 1300 554 474
www.linkmarketservices.com.au
Shareholders wishing to receive their Annual Reports
and/or other information from the Company in electronic
form can elect to do so by
visiting www.linkmarketservices.com.au
58