RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
ANNUAL REPORT
30 JUNE 2017
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CONTENTS
CORPORATE DIRECTORY............................................................................................................................... 1
DIRECTORS’ REPORT ...................................................................................................................................... 2
AUDITOR’S INDEPENDENCE DECLARATION ..............................................................................................27
DIRECTORS’ DECLARATION .........................................................................................................................28
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ..........29
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ..........................................................................30
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ..........................................................................31
CONSOLIDATED STATEMENT OF CASH FLOWS .......................................................................................32
NOTES TO AND FORMING PART OF THE ACCOUNTS ..............................................................................33
INDEPENDENT AUDITOR’S REPORT ...........................................................................................................60
SHAREHOLDER INFORMATION………………………………………… ..........................................................65
SCHEDULE OF MINING TENEMENTS……………………………………………………………………………..67
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE DIRECTORY
DIRECTORS
Jeffrey Moore
Alexander Sutherland
Scott Cuomo
COMPANY SECRETARIES
Henko Vos
Abby Siew
REGISTERED & PRINCIPAL OFFICE
Suite 1
6 Richardson Street
WEST PERTH WA 6005
Telephone: (08) 9226 0866
Facsimile: (08) 9486 7375
AUDITORS
PKF Mack
Level 5
35 Havelock Street
WEST PERTH WA 6005
SHARE REGISTRY
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
PERTH WA 6000
SECURITIES EXCHANGE LISTING
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Code: RIE
1
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT
Your directors present the following report on Riedel Resources Limited (the Company) and
the entities it controlled during or at the end of the financial year (the Group) for the financial
year ended 30 June 2017.
DIRECTORS
The Directors of the Company at any time during or since the end of financial year are:
Jeffrey Moore
Qualifications
Executive Chairman (Appointed on 30 September 2010)
B.Sc, MAusIMM, MGSA
Experience
Mr Moore is a geologist with extensive technical, managerial and
project finance experience in exploration and mining for publicly listed
companies. During his career, he has generated and managed
projects for commodities including precious metals, base metals,
diamonds, nickel and industrial minerals throughout Australia, Central
and South America, Africa and Asia.
Mr Moore has held previous directorships with Allied Gold
Limited from 2004 to 2008, Great Australian Resources Limited from
2005 to 2007, Abra Mining Limited from 2006 to 2011, Alchemy
Resources Limited from 2010 to 2011 and Cougar Metals NL from
2008 to 2012.
Mr Moore is also a Corporate Member of the Australasian Institute of
Mining and Metallurgy and a Member of the Geological Society of
Australia. He was appointed as a non-executive Director of Wild Acre
Metals Limited on 8 September 2014.
Directorships of other
listed companies
Nil
Interest in Shares
Interest in Options
14,499,999
5,000,000
Alexander Sutherland Non-executive Director (Appointed 26 July 2017)
Qualifications
B.Com UWA
Experience
Mr Sutherland has extensive experience in international commercial
operations, including 15 years in Europe, 8 in the Asia Pacific region
and two years in the United States. He is currently based in
Switzerland and is Vice President of Finance (Extrusion Europe) for
Sapa AB, a subsidiary of Norsk Hydro. Prior to this, he held the
position of Strategy Director (Extrusion Europe) for Sapa AB.
Mr Sutherland was previously Global Projects Manager for Alcoa
Europe and has held senior management positions in multinational
firms, including KPMG. Mr Sutherland brings his significant knowledge
of international finance and the resources sector to provide depth to
the Company‘s management team as it pursues exploration and
development opportunities outside of Australia.
2
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Directorships of other
listed companies
Nil
Interest in Shares
Interest in Options
959,596
Nil
Scott Cuomo
Non-executive Director (Appointed 26 July 2017)
Experience
Mr Cuomo is a highly experienced and successful entrepreneur in the
mobile telecommunications sector. His career spans over 25 years
and includes establishing Vodafone’s largest Australian retail partner.
Prior to that he was the National Business Development Manager of
Optus reseller, B Digital Limited, an ASX listed company that was
subject to take-over in 2007.
He offers valuable experience in strategic planning, risk management
and has vast networks in the mobile telecommunications industry.
Directorships of other
listed companies
Interest in Shares
Interest in Options
Nil
Nil
Nil
Luke Matthews
Qualifications
Experience
Former Non-executive Director (Appointed 19 January 2016;
Resigned 26 July 2017)
B.Com (Hons) ADA (ASX)
Mr Matthews graduated from the University of Western Australia with
a B.Com. in 1996 and commenced his career in the financial
services industry at Hartley Poynton in 1997.
Since that time, Mr Matthews has been engaged as a Senior
Equities & Derivatives Advisor, providing advice on a wide range of
trading,
financial
exchange traded option strategies, superannuation and corporate
finance.
instruments and structures
including share
Directorships of other
listed companies
Nil
Interest in Shares*
Interest in Options*
1,120,105
Nil
3
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Mark Skiffington
Qualifications
Experience
Former Non-executive Director (Appointed 19 January 2016;
Resigned 26 July 2017)
B.Ec (UWA) BPE (UWA)
Since graduating from the University of Western Australia with a
B.Ec. in 1993, Mr Skiffington has been engaged as a financial
investment adviser in the stockbroking industry, having worked at
three large brokerage houses before co-founding Oracle Securities
Pty Ltd with Luke Matthews in 2010.
Directorships of other
listed companies
Nil
Interest in Shares*
Interest in Options*
23,319,371
2,966,025
Andrew Childs
Qualifications
Experience
Former Non-executive Director (Appointed on 9 April 2010; Resigned
30 March 2017)
B.Sc, Geology and Zoology
Mr Childs is currently Chairman of Australian Oil Company Limited
and non-executive Director of ADX Energy Limited. He also sits on
the Boards of a number of unlisted private and public companies
including AIM listed Stratic Energy Corporation. Mr Childs graduated
from the University of Otago, New Zealand in 1980 with a Bachelor
of Science in Geology and Zoology.
Having started his professional career as an Exploration Geologist in
the Eastern Goldfields of Western Australia, he moved to petroleum
geology and geophysics with Perth-based Ranger Oil Australia (later
renamed Petroz NL). He gained technical experience with Petroz as
a Geoscientist and later commercial experience as the Commercial
Assistant to the Managing Director. Mr Childs is a member of the
Petroleum Exploration Society of Australia and the American
Association of Petroleum Geologists.
Directorships of
other listed companies
ADX Energy Limited
Australian Oil Company Limited
Sacgasco Limited
Interest in Shares*
Interest in Options*
3,237,305
5,000,000
* Shares/options held at the time of resignation.
4
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Henko Vos
Joint Company Secretary (Appointed 28 December 2016)
Mr Vos is a member of the Governance Institute of Australia and
Certified Practicing Accountants Australia with more than 15 years’
experience working within public practice, specifically within the area
of audit and assurance both in Australia and South Africa. He holds
similar secretarial roles in various other listed public companies in
both industrial and resources sectors. He is currently an Associate
Director with Nexia Perth, a mid-tier corporate advisory and
accounting practice.
Abby Siew
Joint Company Secretary (Appointed 28 December 2016)
Ms Siew graduated from Curtin University with a Bachelor of
Commerce majoring in Accounting and Finance. She is a member of
Certified Practicing Accountants Australia. She is currently employed
by Nexia Perth, a mid-tier corporate advisory and accounting
practice.
Leonard Math
Former Company Secretary (Appointed 28 August 2015; Resigned
28 December 2016)
Mr Math graduated from Edith Cowan University in 2003 with a
Bachelor of Business majoring in Accounting and Information
Systems. He is a member of the Institute of Chartered Accountants.
He is experienced with public company responsibilities including
ASX and ASIC compliance, control and implementation of corporate
governance, statutory financial reporting and shareholder relations.
The Directors and Company Secretaries have been in office to the date of this report unless
otherwise stated.
PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was mineral exploration.
OPERATING RESULTS
The net profit of the Group for the financial period after provision for income tax was $142,568
2016: net profit $704,101)
5
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REVIEW OF OPERATIONS
CÁRMENES PROJECT
Location
Subsequent to the end of the reporting period Riedel Resources Limited (“Riedel” or “the
Company”) signed a Joint Venture Agreement whereby Riedel can earn-in an interest of up
to 90% in the Cármenes Project located in Northern Spain (“the Project”) by way of funding
staged exploration and development expenditure, with provision to acquire the remaining
10%.
The Cármenes Project is located in the north-west of Spain in the Autonomous Community
of Castille and León, approximately 410km north of the capital city of Madrid, 250km from
the city of Valladolid (capital of regional administration) and 54km from the city of León
(capital of local administration) (see Figure 1).
Figure 1 Cármenes Project Location
6
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Tenement Details
The Project is held by SIEMCALSA (Sociedad De Investigación Y Exploración Minera De
Castilla Y León S.A.). SIEMCALSA is a parastatal corporation established in 1988 by
initiative of the Regional Government of Castille and León (Junta de Castilla y León).
SIEMCALSA is devoted to the promotion and stimulation of the mining sector in Castille and
León and strongly encourages the exploration, development and exploitation of mineral
resources in the region.
The Project is covered by two mining investigation permits (“Permits” or “Tenements”) held
by SIEMCALSA. The two investigation permits are Cármenes (n°15,107) and Valverdin
(n°15,106). Cármenes is 5.1 square kilometres in area and Valverdin is 37.2 square
kilometres in area (see Figure 2). The duration of an investigation permit is three (3) years,
with 3 year extensions of term available upon request. Both tenements were granted 3 year
extensions on 12 May 2017.
Figure 2 Location of Cármenes and Valverdin investigation permits
7
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Cármenes Project
Investigation Permits
Permit
Coverage Area
Permit
Expiry Date
(see Figure 2)
Cármenes (n°15,107)
5.1km2
12 May 2020
Valverdin (n° 15,106)
37.2km2
12 May 2020
Eligible to apply
for
3 Year Extension1
Yes
Yes
Access and Infrastructure
The Project area is strategically located near well established local infrastructure. Access to
the Project area is via modern motorways, good local roads and rail network. The local
availability of power and other essential services is also well developed and conducive to
project development (see Figure 3).
Figure 3 Carmenes Project area in background with historic Villamanin concentrator building and local rail and
electricity grid in foreground
1 Application for an extraordinary extension may be granted subject to additional conditions or may be rejected.
8
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Historical Mining and Exploration
The region has been subject to historical mining activity over many years and the La
Profunda Mine (Cu-Co-Ni ±Au-U) located within the Cármenes (n°15,107) tenement has
been mined by artisanal methods since Prehistoric times. Underground mining began in
1870 with high grade ore being discovered at -100 metres in 1883. Mining continued
underground at La Profunda until 1890. Complex cobalt/copper/nickel ore was treated at the
nearby Villamanin plant and approximately 100,000 tonnes of ore produced 38,000 tonnes of
concentrates2, with concentrate streams averaging the following exceptional grades:
Single concentrate stream (18,000 tonnes)
4% cobalt and 20% copper.
Dual concentrate streams (20,000 tonnes):
Cobalt concentrate - 14% cobalt plus 4% nickel and 5-6% copper.
Copper concentrate - 33% copper plus 1% nickel.
Mining resumed between 1924 to 1931, including the treatment of dump material and
tailings, with average ore grades recorded of 2.2% Cu, 1.5% Ni, 0.9% Co, 0.1% Se, and up
to 100 g/t Au.
Other deposits within the investigation permit areas, including Valverdin (gold) and Fontun
(lead-copper-zinc-silver) were mined by artisanal miners in the 1960’s and 1940-1950’s
respectively (see Figure 4).
Figure 4 Historic mine locations within investigation permit areas
2 Source SIEMCALSA presentation (Cármenes project Cu-Co-Ni ± Au Deposit – September 2016)
9
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Recent Project Exploration
It was only in 2009 that SIEMCALSA commenced modern exploration work in the Cármenes
and Valverdin investigation permits. Since that time SIEMCALSA has carried out numerous
geological tests designed to independently identify anomalies that, when overlaid, provide a
significant number of highly prospective priority targets. Testwork included:
Stream sediment geochemical sampling
Radiometric surveys
Geological mapping
Lithogeochemical sampling
Magnetic surveys
Induced polarisation geophysical surveys
Soil geochemical sampling
Trenching
SIEMCALSA estimate that only about 5% of the permit area has been explored with
modern exploration methods (see Figure 7). Encouragingly, even within this very limited
area under exploration, SIEMCALSA have identified 9 high priority exploration targets
around the La Profunda former cobalt mine and 2 high priority exploration targets near the
Valverdin mine.
Each of the targets hold excellent potential for the discovery of mineral deposits similar to
those mined at La Profunda and Providencia, highlighting the significant potential which
exists within the investigation permits.
Figure 5 Location of La Profunda Mine
Figure 6 La Profunda Mine Stope
10
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Figure 7 Investigation permit areas showing areas explored by SIEMCALSA since 2009
95% of area with no modern exploration
CÁRMENES PROJECT JOINT VENTURE AGREEMENT
On 21 July 2017, Riedel signed a Joint Venture Agreement with SIEMCALSA whereby
Riedel can earn-in an interest of up to 90% in the Cármenes Project, with provision for
Riedel to acquire the remaining 10% interest from SIEMCALSA.
Key Terms of the Agreement
INTERESTS EARNED FROM PROJECT EXPENDITURE
Riedel has the exclusive right to acquire interests of up to 90% in the Project by staged
expenditure on exploration activities within the Tenements (i.e. by ‘earn-in’). Further, it can
acquire the remaining 10% interest in the Tenements, as per the key terms outlined
below.
No other payments (cash or shares) are required to be paid to SIEMCALSA.
11
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Riedel has the right (but not the obligation) to fund the following Project expenditure to earn
the associated Project interest:
Year 1 – Stage 1 Project Expenditure
Riedel may spend a minimum of €300,000 on exploration programmes at the
Cármenes Project.
Year 2 – Stage 2 Project Expenditure
Riedel may spend a minimum of €700,000 on exploration programmes at the
Cármenes Project.
50% Interest Earned After Stage 1 and 2
If Riedel successfully completes the Stage 1 and 2 Project Expenditure by the end
of Year 2 (or earlier or later if force majeure determines or the parties agree to a
longer timeframe), Riedel will have earned a 50% interest in the Project
(Tenements).
Year 3 – Stage 3 Project Expenditure
Riedel may spend a minimum of €1,000,000 on exploration programmes at the
Cármenes Project.
90% Interest Earned After Stage 1, 2 and 3
If Riedel successfully completes the Stage 1, 2 and 3 Project Expenditure by the
end of Year 3 (or earlier or later if force majeure determines or the parties agree to a
longer timeframe), Riedel will have earned a 90% interest in the Project
(Tenements).
Remaining 10% interest in the Tenements
Subsequent to Riedel earning its 90% interest in the Tenements, it may choose to
acquire the remaining 10% interest held by SIEMCALSA in the Project in one of two
ways:
Call option: Exercising its exclusive call option and acquiring the remaining
10% before its decision to commence a Bankable Feasibility Study (BFS), by
cash payment at agreed price or a net smelter return (“NSR”) royalty or;
Undertaking: If Riedel makes a formal decision to mine (DTM), it undertakes to
acquire the remaining 10% by cash payment at agreed price or NSR royalty
which must occur before the end of year 6.
12
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
50% PROJECT
INTEREST
90% PROJECT
INTEREST
100% PROJECT
INTEREST
Stage 1 Project
Expenditure
€300,000
Stage 2 Project
Expenditure
€700,000
Stage 3 Project
Expenditure
€1,000,000
Exercise exclusive call option to
acquire remaining 10% prior to BFS
or Undertake to acquire remaining
10% at time Riedel makes formal
DTM before end of year 6
Year 1
Year 2
Year 3
Future Development
EXTRAORDINARY EXTENSION PROVISION
The Agreement makes provision for Riedel to request SIEMCALSA to apply for a further
three year extraordinary extension of the duration of the Tenements subject to certain
conditions and minimum expenditure commitments being satisfied.
PROJECT MANAGEMENT
Riedel will be the operator and manager of the Project for the term of the Agreement.
Riedel may choose to engage SIEMCALSA as a subcontractor to advise on exploration
planning, perform technical services, execute work programmes on agreed budgets and
prepare documentation of exploration and deliverables, thereby minimising overhead costs
to Riedel associated with mobilising an onsite geological team.
MARYMIA PROJECT
Australian Mines Limited (“Australian Mines”) Earning Up to 80%
(E52/2394 and E52/2395)
During the reporting period, Australian Mines reviewed numerous geological analogues to the
Dixon prospect area in order to best plan follow-up drilling over the larger prospect area. The
area of interest includes untested magnetic anomalies along strike from significant gold
intersections already recorded at Dixon and in parallel anomalies. It should be noted that due
to the presence of transported overburden, this geological setting is not amenable to
geochemical soil sampling and therefore needs to be tested with aircore or RAB drilling that
will penetrate the regolith and reach the underlying fresh rock.
Australian Mines has designed its next stage of exploration to test magnetic anomalies along
strike from the Dixon prospect and over a similar magnetic anomaly to the east of Dixon with
drilling. Exploration will focus on a three-phase air core drilling programme, consisting of 120
holes for 7,185 metres of drilling (see Figure 8).
13
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Figure 8: Plan view of the Dixon prospect displaying the maximum gold downhole intercept with the planned air
core drilling (by phase) on aeromagnetic image background
Phase 1 of this proposed aircore drilling programme will test the north-eastern extension of the
known mineralisation at Dixon. Phase 2 is designed to test a distinctive magnetic anomaly,
further along strike to the north and Phase 3 will drill-test a magnetic high to the east of Dixon,
interpreted as separate dolerite unit.
14
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
The drill holes have been planned on 123o orientated grid lines, which are perpendicular to the
strike of the stratigraphy. Although there is a slight change in orientation of the magnetic
anomaly noted in modelling further to the north, Australian Mines has elected to maintain the
drill orientations to test the stratigraphy.
At Dixon, the mineralised zone appears to dip at 55o to the northwest and the designed aircore
holes will be drilled at -60o to the southeast to most effectively intersect the stratigraphy and
mineralisation.
The drilling programme is spaced at 400 metre line intervals, with drill holes mostly spaced at
100 metre intervals along the line. These specifications were chosen to maximise the chance
of intersecting oxide mineralisation and therefore, to vector into primary mineralisation.
Each hole will be drilled to refusal, which ensures that every hole terminates at the weathered
rock-fresh bedrock interface. Historic rotary air blast (RAB) drilling suggests the average hole
depth for this programme will be 60 metres.
A heritage survey has been completed over the drill sites and DMP approvals have been
granted to enable the drilling to be completed in the coming year.
CHARTERIS CREEK PROJECT
There were no exploration programmes completed during the reporting period.
TENEMENT SCHEDULE
Following is the schedule of Riedel Resources mining tenements as at 30 June 2017.
Area of Interest
Western Australia
Tenement
Reference
Charteris Creek
E45/2763
Marymia
Marymia
Porphyry
West Yandal
E52/2394
E52/2395
M31/157
M36/615
Nature of interest
Interest
Direct
Direct
Direct
Royalty
Royalty
100%
49%
49%
0%
0%
COMPETENT PERSON’S STATEMENT
The information in this report that relates to Exploration Results and Mineral Resources is based on, and fairly
represents, information compiled by Mr Jeffrey Moore, who is a Member of The Australian Institute of Mining and
Metallurgy. Mr Moore is an employee of Riedel Resources Limited. Mr Moore has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activities undertaken to
qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Mr Moore consents to the inclusion in this report of
the matters based on his information in the form and context in which it appears.
15
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On 26 July 2017, Riedel announced on ASX that it has executed a Joint Venture Agreement
whereby Riedel can earn-in an interest of up to 90% in the Cármenes Project located in
Northern Spain by way of funding staged exploration and development expenditure, with
provision to acquire the remaining 10%.
On the same day, the Company announced the appointment of Mr Alexander Sutherland and
Mr Scott Cuomo as Non-Executive Directors of the Company as it drives its new direction of
securing and developing cobalt and tech-energy metals opportunities in key European lithium-
ion battery markets. To facilitate these new appointments, Mr Mark Skiffington and Mr Luke
Matthews stepped down from their roles as Non-Executive Directors after more than 18
months with the Company.
In August 2017, the Company raised $549,223.98 (before costs) by the issue of 36,614,932
fully paid ordinary shares at an issue price of $0.015 (1.5 cents).
In September 2017, Riedel completed a fully underwritten pro-rata non-renounceable rights
issue and successfully raised $1,403,572.52 (before costs) by the issue of 93,571,495 shares.
Riedel incorporated a wholly owned Australian subsidiary, Riedel Resources (Spain) Pty Ltd
on 14 September 2017.
There are no other matters or circumstances that have arisen since the end of the financial
year that have significantly affected or may significantly affect the operations of the Group, the
results of those operations or the state of affairs of the Group, in future years.
DIVIDENDS PAID OR RECOMMENDED
No dividend has been paid or declared since the start of the financial year.
LIKELY DEVELOPMENT AND RESULTS
Likely developments in the operations of the Group and the expected results of those
operations in future financial years have not been included in this report, as inclusion of such
information is likely to result in unreasonable prejudice to the Group.
ENVIRONMENTAL REGULATION
The Group’s operations are not regulated by any significant environmental regulation under a
law of the Commonwealth or of a State or Territory.
16
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
INDEMNITIES
The Group has not, during or since the financial year, in respect of any person who is or has
been an officer of the Company:
Indemnified or made any relevant agreement for the indemnifying against a liability,
including costs and expenses in successfully defending legal proceedings; or
Paid or agreed to pay a premium in respect of a contract insuring against a liability for
the costs or expenses to defend legal proceedings.
During the financial year the Company paid a premium of $5,800 (excluding GST) in respect
of a contract insuring against a liability for the costs or expenses to defend legal proceedings
that may be brought against the directors and secretaries of the Company.
Indemnity and insurance of auditors
The Company has not, during or since the end of financial year, indemnified or agreed to
indemnify the auditor of the Company or any related entity against a liability incurred by the
auditor.
During the financial year, the Company has not paid a premium in respect of the contract to
insure the auditor of the Company or any related entity.
MEETINGS OF DIRECTORS
During the financial year, 11 meetings of directors were held. The number of meetings
attended by each director during the period is stated below:
Jeffrey Moore
Andrew Childs
Luke Matthews
Mark Skiffington
Alexander Sutherland¹
Scott Cuomo¹
¹ Appointed 26 July 2017.
OPTIONS
Number of eligible to
attend
11
8
11
11
-
-
Number attended
11
8
11
11
-
-
Unissued shares under options
At the date of this report, the unissued ordinary shares of Riedel Resources Limited under
option are as follows:
Expiry date
31/12/2017
31/01/2018
11/03/2019
Exercise price
(cents)
1.1
15.0
1.8
Quantity
23,728,195
1,250,000
18,000,000
42,978,195
17
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Each option entitles the holder to one fully paid ordinary share in the Company at any time up
to expiry date. To the date of this report no shares had been issued as a result of the exercise
of options.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or to
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.
The Company was not a party to any such proceedings during the period.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2017 has been received
and is included in the financial report on page 27.
18
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT - AUDITED
This report outlines the remuneration arrangements in place for the key management
personnel of Riedel Resources Limited (the “Company”) for the financial year ended 30 June
2017. The information provided in this remuneration report has been audited as required by
Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for key management
personnel (“KMP”) who are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the Company and the Group, directly
or indirectly, including any director (whether executive or otherwise) of the parent Company.
Key Management Personnel
Directors
Jeffrey Moore (Executive Chairman) (Appointed 30 September 2010)
Alexander Sutherland (Non-executive Director) (Appointed 26 July 2017)
Scott Cuomo (Non-executive Director) (Appointed 26 July 2017)
Luke Matthews (Non-executive Director) (Appointed 19 January 2016, Resigned 26 July
2017)
Mark Skiffington (Non-executive Director) (Appointed 19 January 2016, Resigned 26 July
2017)
Andrew Childs (Non-executive Director) (Appointed 9 April 2010; Resigned 30 March 2017)
Remuneration Philosophy
The performance of the Company depends upon the quality of the directors and executives.
The philosophy of the Company in determining remuneration levels is to:
- set competitive remuneration packages to attract and retain high calibre employees;
-
link executive rewards to shareholder value creation; and
- establish appropriate, demanding performance hurdles
for variable executive
remuneration.
Remuneration Committee
The Remuneration Committee, the role and duties of which are undertaken by the Board,
establishes human resources and compensation policies and practices for the Directors
(executive and non-executive) and senior executives, including retirement termination policies
and practices, Company share schemes and other
incentive schemes, Company
superannuation arrangements and remuneration arrangements.
Remuneration Policy
The remuneration policy of the Company has been designed to align director and executive
objectives with shareholder and business objectives by providing a fixed remuneration
component which is assessed on an annual basis in line with market rates and offering
specific long-term incentives based on key performance areas affecting the Group’s financial
results. The Board of the Company believes the remuneration policy to be appropriate and
effective in its ability to attract and retain the best directors and executives to run and manage
the Group.
19
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
The Board’s policy for determining the nature and amount of remuneration for Board
members and senior executives of the Group is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and
other senior executives (if any), was developed by the Board. All executives are to receive a
base salary (which is based on factors such as length of service and experience) and
superannuation. The Board reviews executive packages annually by reference to the
Group’s performance, executive performance and comparable information from industry
sectors and other listed companies in similar industries.
The Board may exercise discretion in relation to approving incentives, bonuses and options.
The policy is to attract the highest calibre of executives and reward them for performance
that results in long-term growth in shareholder wealth.
Directors and executives are also entitled to participate in the Employee Incentive Option
Scheme and Performance Rights Plan. The executive directors and executives receive a
superannuation guarantee contribution required by the government, which was 9.5% for the
year ended 30 June 2017, and do not receive any other retirement benefits. All
remuneration paid to directors and executives is valued at the cost to the Company and
expensed. Options are valued using the Black-Scholes or Binomial Option Pricing models.
The Board policy is to remunerate non-executive directors at market rates for comparable
companies for time, commitment and responsibilities. The Board determines payments to
the non-executive directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required.
The maximum aggregate fees that can be paid to non-executive directors is $250,000 per
annum as detailed in the Company’s prospectus dated 12 November 2010. Amendments to
this amount are subject to approval by shareholders at the Annual General Meeting. Fees for
non-executive directors will not be linked to the performance of the Group. However, to align
directors’ interests with shareholder interests, the directors are encouraged to hold shares in
the Company and are able to participate in the Employee Incentive Option Scheme.
The objective of the Company’s executive reward framework is set to attract and retain the
most qualified and experienced directors and senior executives.
The Board ensures that executive reward satisfies the following key criteria for good reward
governance practices:
Competitiveness
Acceptability to shareholders
Performance linkage
Capital management
Directors’ fees
A director may be paid fees or other amounts as the directors determine where a director
performs special duties or otherwise performs services outside the scope of the ordinary
duties of a director. A director may also be reimbursed for out of pocket expenses incurred as
a result of their directorship or any special duties.
20
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
Bonuses
No bonuses were given to key management personnel during the 2016 and 2017 years.
Performance based remuneration
The Company currently offers eligible Directors and Key Executives participation in the
Company Performance Rights Plan and/or Incentive Option Scheme. This is in addition to
cash remuneration.
Company performance, shareholder wealth and director’s and executive’s
remuneration
The remuneration policy has been tailored to increase goal congruence between
shareholders and directors and executives. Currently, this is facilitated through the issue of
options or Performance Rights to eligible directors and executives to encourage the
alignment of personal and shareholder interests. The Company believes the policy will be
effective in increasing shareholder wealth. For details of directors and executives interests in
options and performance rights at year end, refer below for details.
All directors are entitled to participate in the Performance Rights Plan and/or Incentive
Option Scheme.
21
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
Remuneration of directors and key management personnel
For the year ended 30 June 2017
Post-
Employment
Benefits
Equity-
Settled
Share-
Based
Payments
Value of
equity as
proportion of
remuneration
Short-Term
Benefits
Directors
Fees
$
Salary and
Consulting
Fees
$
Superannuation
$
$
Total
$
Directors
Jeffrey Moore
Andrew Childs¹
Luke Matthews²
Mark Skiffington²
100,000
-
-
-
-
-
-
-
9,500
-
-
-
21,433
-
-
-
130,933
-
-
-
Total
100,000
-
9,500
21,433
130,933
%
16.4%
0.0%
0.0%
0.0%
¹ Resigned 30 March 2017.
² Resigned 26 July 2017.
For the year ended 30 June 2016
Short-Term
Benefits
Directors
Fees
$
Salary and
Consulting
Fees
$
Post-
Employment
Benefits
Equity-
Settled
Share-
Based
Payments
Value of
equity as
proportion of
remuneration
Superannuation
$
$
Total
$
Directors
Jeffrey Moore
Andrew Childs
Luke Matthews¹
Mark Skiffington¹
Ed Turner²
Ian Tchacos³
78,246
-
-
-
25,000
8,333
-
-
-
-
-
-
7,433
-
-
-
2,375
792
147,767
59,500
-
-
59,500
35,700
233,446
59,500
-
-
86,875
44,825
Total
111,579
-
10,600
302,467
424,646
%
63.3%
100.0%
-
-
68.5%
79.6%
¹ Appointed 18 January 2016.
² Resigned 27 November 2015.
³ Resigned 18 January 2016. The Board resolved to pay Mr Tchacos a severance package of 2 months’ worth of
annual fee of $50,000 plus superannuation.
22
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
The overall level of key management personnel remuneration takes into account the
performance of the Company since the Company’s incorporation on 9 April 2010.
Options and rights over equity instruments granted as compensation
The following options were granted to key management personnel as compensation in the
prior period.
Performance rights
On 11 March 2016, 10,000,000 performance rights were issued under the Company
Performance Rights Plan to Jeffrey Moore (Executive Chairman) as incentive to align the
directors’ interests with Company objectives. The following issues of securities to related
parties were approved by shareholders as follows:
Holder
Jeffrey Moore
Number of
Performance Rights
4,000,000
3,000,000
3,000,000
Vesting Conditions
the market capitalisation of
Vest 12 months from the date of approval
the
Vest when
Company reaches $4 million for 20 consecutive
trading days
Vest when
the
Company reaches $5 million for 20 consecutive
trading days
the market capitalisation of
The terms and conditions relating to these performance rights including the parameters used
to value them are as follows:
Underlying security spot price
Exercise price
Volatility
Risk free rate
Grant date
Expiration date
Expiration period (years)
Number of options
Valuation per option/performance rights
Total performance rights valuation
Performance
Rights
$0.015
$0.015 - $0.0176
137%
2.02% - 2.23%
11 March 2016
11 March 2021
5 yrs
10,000,000
$0.0077 - $0.0132
$109,700
The total value of the performance rights of $109,700 have been proportionately expensed
in full until 11 March 2017, being the vesting date. The total amount being expensed for the
year ended 30 June 2017 is $21,433.
On 30 May 2017, Jeffrey Moore exercised the 10,000,000 performance rights following
vesting. 10,000,000 fully paid ordinary shares were issued to him as a result.
23
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
Shares issued as compensation during the year
No shares were issued as compensation during the year.
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:
Term of agreement:
Details:
Jeffrey Moore
Executive Chairman
18 January 2016
3 years (Subject to re-election every 3 years from 18 January
2016)
Director’s fees of $100,000 plus superannuation (effective 1
September 2017 increased to $150,000 plus superannuation).
The Executive is entitled to Performance Rights.
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Alexander Sutherland (Appointed 26 July 2017)
Non-executive Director
26 July 2017
3 years (Subject to re-election every 3 years from 26 July 2017)
Director’s fees of $30,000 exclusive of superannuation (if
applicable).
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Scott Cuomo
Non-executive Director
26 July 2017
3 years (Subject to re-election every 3 years from 26 July 2017)
Director’s fees of $30,000 plus superannuation.
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Luke Matthews (Appointed 18 January 2016; Resigned 26 July
2017)
Former Non-executive Director
18 January 2016
Subject to re-election every 3 years.
Not entitled to director’s fees due to previous position of the
Company.
Mark Skiffington (Appointed 19 January 2016; Resigned 26 July
2017)
Former Non-executive Director
18 January 2016
Subject to re-election every 3 years.
Not entitled to director’s fees due to previous position of the
Company.
24
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Andrew Childs (Resigned 30 March 2017)
Former Non-executive Director
22 October 2010
Subject to re-election every 3 years.
Base salary for the year ended 30 June 2013 of $30,000 plus
superannuation, to be reviewed annually by the Board.
Note: Salary foregone from 1 May 2013.
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 Group, including their personally
related parties, is set out below:
Ordinary shares held in Riedel Resources Limited (number)
Balance at
beginning
of period
2,661,305
2,987,305
23,319,371
1,120,105
30,088,086
Granted as
remuneration
-
-
-
-
-
Exercise
of options/
performance
rights
10,000,000
-
-
-
10,000,000
2017
Jeffrey Moore
Andrew Childs¹
Mark Skiffington²
Luke Matthews²
Total
Net change
other
-
(2,987,305)
-
-
10,250,000
Balance at
end of period
12,661,305
-
23,319,371
1,120,105
37,100,781
¹ Resigned 30 March 2017, therefore not key management personnel at 30 June 2017.
² Resigned 26 July 2017.
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 Group, including
their personally related parties, is set out below:
2017
Jeffrey Moore
Andrew Childs¹
Mark Skiffington²
Luke Matthews²
Total
Balance at
beginning
of period
5,000,000
5,000,000
4,216,025
-
14,216,025
Granted as
remuneration
-
-
-
-
-
Exercised
Net change
other
-
(5,000,000)
(1,250,000)
-
(6,250,000)
Balance at
end of period
5,000,000
-
2,966,025
-
7,966,025
-
-
-
-
-
¹ Resigned 30 March 2017, therefore not key management personnel at 30 June 2017.
² Resigned 26 July 2017.
25
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
Performance Rights of Key Management Personnel
The number of performance rights in the Company held during the financial year by each
director and other key management personnel of the Group, including their personally
related parties, is set out below:
2017
Jeffrey Moore
Total
Balance at
beginning
of period
10,000,000
10,000,000
Granted as
remuneration
-
-
Exercised
(10,000,000)
(10,000,000)
Net
change
other
-
-
Balance at
end of period
-
-
All equity transactions with key management personnel other than those arising from the
exercise of remuneration options have been entered into under terms and conditions no more
favourable than those the Group would have adopted if dealing at arm's length.
The fair value of the equity-settled share options granted is estimated as at the date of grant
using a Black Scholes or Binomial Option Pricing Models taking into account the terms and
conditions upon which the options were granted.
This concludes the remuneration report, which has been audited.
Signed in accordance with a resolution of the Board of Directors.
Jeffrey Moore
Executive Chairman
Date: 26 September 2017
26
AUDITORS INDEPENDENCE DECLARATION
TO THE DIRECTORS OF RIEDEL RESOURCES LIMITED
In relation to our audit of the financial report of Riedel Resources Limited for the year ended 30 June 2017,
to the best of my knowledge and belief, there have been no contraventions of the auditor independence
requirements of the Corporations Act 2001 or any applicable code of professional conduct.
PKF MACK
SHANE CROSS
PARTNER
26 SEPTEMBER 2017
WEST PERTH,
WESTERN AUSTRALIA
27
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ DECLARATION
The directors of the Company declare that:
1.
The attached financial statements and notes are in accordance with the Corporations Act
2001:
(a)
comply with Australian Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements; and
(b) give a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date.
(c)
comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in note 1 to the financial statements.
2.
3.
In the directors’ opinion there are reasonable grounds to believe that the Company will be able
to pay its debts as and when they become due and payable.
The director’s have been given the declaration required by section 295A of the Corporations
Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
Jeffrey Moore
Director
Date: 26 September 2017
28
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
NOTES
2017
$
2016
$
Interest revenue
Other revenue
Gain on deregistration
Total revenue
Administration expenses
Depreciation
Employee benefits expense
Impairment of exploration expenditure
Exploration and evaluation expenditure
incurred
Finance costs
Extinguishment of liability
2(a)
21,935
10,591
652,518
685,044
(195,618)
(5,618)
(62,849)
(87,414)
(190,900)
(77)
-
8,476
1,643,895
-
1,652,371
(244,180)
(13,209)
(365,093)
(191,363)
(109,676)
(10,749)
(14,000)
Profit/(Loss) before income tax expense
2(b)
142,568
704,101
Income tax expense
3
-
-
Profit/(Loss) for the year
142,568
704,101
Other comprehensive loss
Items that may be reclassified subsequently
to profit or loss
Exchange difference on translation of foreign
operation
Foreign currency translation reserve on
deregistration of foreign subsidiaries
Total comprehensive profit/(loss) for the
year
-
(652,096)
(421)
-
(509,528)
703,680
Basic and diluted earnings per share (cents)
15
0.06
0.34
The accompanying notes form part of these financial statements.
29
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Plant and equipment
Exploration and evaluation expenditure
NOTES
2017
$
2016
$
5
6
7
8
899,219
34,068
1,499,804
27,922
933,287
1,527,726
1,592
1,638,167
7,210
1,635,520
TOTAL NON CURRENT ASSETS
1,639,759
1,642,730
TOTAL ASSETS
2,573,046
3,170,456
CURRENT LIABILITIES
Trade and other payables
9
34,219
143,535
TOTAL CURRENT LIABILITIES
34,219
143,535
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Option reserve
Share based payment reserve
Foreign currency translation reserve
Accumulated losses
34,219
143,535
2,538,827
3,026,921
10
11
11
12
13
16,091,432
-
597,158
-
(14,149,763)
15,981,731
290,941
827,612
652,096
(14,725,459)
TOTAL EQUITY
2,538,827
3,026,921
The accompanying notes form part of these financial statements.
30
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Issued
Capital
Option
Reserve
$
$
Foreign
Currency
Translation
Reserve
$
Share
Based
Payments
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 July 2016
15,981,731
290,941
652,096
827,612
(14,725,459)
3,026,921
Profit/(Loss) for the period
Other comprehensive loss
Total comprehensive loss for the
period
Transactions with owners, recorded
directly in equity
Issue of share capital
Issue of rights
Expiry of options
-
-
-
-
-
-
-
(652,096)
(652,096)
-
-
-
142,568
-
142,568
(652,096)
142,568
(509,528)
109,701
-
-
109,701
-
-
(290,941)
(290,941)
-
-
-
-
(109,701)
21,434
(142,187)
(230,454)
-
-
433,128
433,128
-
21,434
-
21,434
Balance at 30 June 2017
16,091,432
-
-
597,158
(14,149,763)
2,538,827
Balance at 1 July 2015
Profit/(Loss) for the period
Other comprehensive loss
Total comprehensive loss for the
period
Transactions with owners, recorded
directly in equity
Issue of share capital
Less: share issue costs
Issue of rights
15,452,891
-
-
290,941
-
-
652,517
-
(421)
525,145
-
-
(15,429,560) 1,491,934
704,101
-
704,101
(421)
-
533,466
(4,626)
-
528,840
-
-
-
-
-
(421)
-
704,101
703,680
-
-
-
-
-
-
302,467
302,467
-
-
-
-
533,466
(4,626)
302,467
831,307
Balance at 30 June 2016
15,981,731
290,941
652,096
827,612
(14,725,459)
3,026,921
The accompanying notes form part of their financial statements.
31
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Cash Flows from Operating Activities
Interest received
Finance costs
Other revenue
Payments to suppliers and employees
NOTES
2017
$
21,935
(77)
8,780
(350,428)
2016
$
8,476
(4,676)
9,440
(175,146)
Net cash used in operating activities
14
(319,790)
(161,906)
Cash Flows from Investing Activities
Payment for exploration and evaluation
Proceeds from sale of tenements
(280,795)
-
(216,711)
1,650,000
Net cash used in investing activities
(280,795)
1,433,289
Cash Flows from Financing Activities
Payments for share issue costs
Proceeds from issue of convertible note
Net cash provided in financing activities
-
-
-
(4,626)
90,417
85,791
Net increase/(decrease) in cash and cash
equivalents held
(600,585)
1,357,174
Cash and cash equivalents at 1 July
1,499,804
142,630
Cash and cash equivalents at 30 June
5
899,219
1,499,804
The accompanying notes form part of these financial statements
32
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
NOTES TO AND FORMING PART OF THE ACCOUNTS
Riedel Resources Limited (the "Company") is a listed public company limited by shares,
incorporated and domiciled in Australia.
The consolidated financial statements of the Company as at and for the year ended 30 June 2017
comprise the Company and its subsidiaries (together referred to as the "Group" and individually as
"Group entities").
The Group primarily is involved in mining and exploration activity.
New, revised or amending Accounting Standards and Interpretations adopted
The Group 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 Group.
Basis of Preparation
The accounting policies set out below have been consistently applied to all years presented.
Statement of Compliance
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 financial statements were authorised for issue by the Board of Directors on 26
September 2017. The Directors have the power to amend and revise the financial statements.
Historical cost convention
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.
Critical accounting estimates
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
Group'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 17.
33
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
Group only. Supplementary information about the parent entity is disclosed in note 25.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Riedel Resources Limited ('Company' or 'parent entity') as at 30 June 2017 and the results of all
subsidiaries for the year then ended. Riedel Resources Limited and its subsidiaries together are
referred to in these financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the
Group are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. 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 Group 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 Group 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.
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 directors. The directors are
responsible for the allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Riedel Resources Limited's
functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at financial year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
34
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the
exchange rates at the reporting date. The revenues and expenses of foreign operations are
translated into Australian dollars using the average exchange rates, which approximate the rate at
the date of the transaction, for the period. All resulting foreign exchange differences are recognised
in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net
investment is disposed of.
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
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
by an independent external valuation using Black-Scholes or Binomial Option Pricing models,
using the assumptions detailed in Note 11.
Exploration and Evaluation Costs
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area
of interest. These costs are carried forward in respect of an area that has not at reporting date
reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves, and active and significant operations in, or relating to, the area
of interest are continuing.
Impairment of Exploration and Evaluation Assets and Investments in and Loans to Subsidiaries
The ultimate recoupment of the value of exploration and evaluation assets, the Company’s
investment in subsidiaries, and loans to subsidiaries is dependent on the successful development
and commercial exploitation, or alternatively, sale, of the exploration and evaluation assets.
Impairment tests are carried out on a regular basis to identify whether the asset carrying values
exceed their recoverable amounts. There is significant estimation and judgement in determining
the inputs and assumptions used in determining the recoverable amounts.
The key areas of judgement and estimation include:
Recent exploration and evaluation results and resource estimates;
Environmental issues that may impact on the underlying tenements;
Fundamental economic factors that have an impact on the operations and carrying values
of assets and liabilities.
35
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Income tax expenses
Judgement is required in assessing whether deferred tax assets and liabilities are recognised on
the statement of financial position. Deferred tax assets, including those arising from temporary
differences, are recognised only when it is considered more likely than not that they will be
recovered, which is dependent on the generation of future assessable income of a nature and of
an amount sufficient to enable the benefits to be utilised.
Income Tax
The charge for current income tax expense is based on the loss for the year adjusted for any non-
assessable or disallowed items. It is calculated using the tax rates that have been enacted or are
substantially enacted by the reporting date.
Deferred tax is accounted for using the 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 statement of profit or loss and other
comprehensive income 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 consolidated entity will derive sufficient future assessable income to enable the benefit to be
realised and comply with the conditions of deductibility imposed by the law.
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area
of interest. These costs are carried forward only if they relate to an area of interest for which rights
of tenure are current and in respect of which:
such costs are expected to be recouped through successful development and exploitation
or from sale of the area; or
exploration and evaluation activities in the area have not, at reporting date, reached a stage
which permit a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active operations in, or relating to, the area are continuing.
Accumulated costs in respect of areas of interest which are abandoned are written off in full
against loss in the year in which the decision to abandon the area is made.
A regular review is undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest.
The recoverability of the carrying amount of the exploration and development assets is dependent
on the successful development and commercial exploitation or alternatively sale of the respective
areas of interest.
36
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Financial Instruments
The Company classifies its investments in the following categories: financial assets at fair value
through profit or loss, loans and receivables, and available-for-sale financial assets. The
classification depends on the purpose for which the investments were acquired. Management
determines the classification of its investments at initial recognition and re-evaluates this
designation at each reporting date.
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs,
when the related contractual rights or obligations exist. Subsequent to initial recognition these
instruments are measured as set out below.
(i) Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for
trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when
they are designated as such to avoid an accounting mismatch or to enable performance evaluation
where a Group of financial assets is managed by key management personnel on a fair value basis
in accordance with a documented risk management or investment strategy. Such assets are
subsequently measured at fair value with changes in carrying value being included in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They arise when the Company provides money, goods or
services directly to a debtor with no intention of selling the receivable. They are included in current
assets, except for those with maturities greater than 12 months after the reporting date which are
classified as non-current assets. Loans and receivables are included in receivables in the statement
of financial position.
(iii) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to
be classified into other categories of financial assets due to their nature, or they are designated as
such by management. They comprise investments in the equity of other entities where there is
neither a fixed maturity nor fixed or determinable payments.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less
principal payments and amortisation.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or
disclosure purposes, the fair value is based on the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement
date; and assumes that the transaction will take place either: in the principle market; or in the
absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair
value measurement is based on its highest and best use. Valuation techniques that are appropriate
in the circumstances and for which sufficient data are available to measure fair value, are used,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
37
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Assets and liabilities measured at fair value are classified, into three levels, using a fair value
hierarchy that reflects the significance of the inputs used in making the measurements.
Classifications are reviewed each reporting date and transfers between levels are determined based
on a reassessment of the lowest level input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when
internal expertise is either not available or when the valuation is deemed to be significant. External
valuers are selected based on market knowledge and reputation. Where there is a significant
change in fair value of an asset or liability from one period to another, an analysis is undertaken,
which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-
current classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within twelve months after the reporting period; or the asset is cash or cash equivalent unless
restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting period. All other assets are classified as non-current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily
for the purpose of trading; it is due to be settled within twelve months after the reporting period; or
there is no unconditional right to defer the settlement of the liability for at least twelve months after
the reporting period. All other liabilities are classified as non-current.
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, 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.
Revenue
Revenue is recognised when it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured.
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets. All revenue is stated net of the amount of goods and services tax
(GST).
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances
the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the
expense. Receivables and payables in the statement of financial position are shown inclusive of
GST.
Cash flows are presented in the statement of cash flow on a gross basis, except for the GST
component of investing and financing activities, which are disclosed as operating cash flows.
38
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Impairment
(i) Financial Assets
A financial asset is assessed at each reporting date to determine whether there is any objective
evidence that it is impaired. A financial asset is considered to be impaired if objective evidence
indicates that one or more events have had a negative effect on the estimated future cash flows of
that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the
difference between its carrying amount, and the present value of the estimated future cash flows
discounted at the effective interest rate. An impairment loss in respect of an available-for-sale
financial asset is calculated by reference to its fair value. Individually significant financial assets
are tested for impairment on an individual basis. The remaining financial assets are assessed
collectively in Groups that share similar credit risk characteristics. All impairment losses are
recognised either in the income statement or revaluation reserves in the period in which the
impairment arises.
(ii) Exploration and Evaluation Assets
Exploration and evaluation assets are assessed for impairment when facts and circumstances
suggest that the carrying amount of the asset may exceed its recoverable amount at the reporting
date.
Exploration and evaluation assets are tested for impairment in respect of cash generating units,
which are no larger than the area of interest to which the assets relate.
(iii) Non-Financial Assets Other Than Exploration and Evaluation Assets
The carrying amounts of the Group’s non-financial assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists then the
asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite
lives or that are not yet available for use, the recoverable amount is estimated at each reporting
date.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and
its fair value less costs to sell. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the
carrying amount of any goodwill allocated to the units, then to reduce the carrying amount of the
other assets in the unit on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment
losses recognised in prior periods are assessed at each reporting date for any indications that the
loss has decreased or no longer exits. An impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable amount. An impairment loss is reversed only
to the extent that the asset’s carrying amount does not exceed the carrying amount that would
have been determined, net of depreciation or amortisation, if no impairment loss has been
recognised.
39
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the
arrangement. The consolidated entity has recognised its share of jointly held assets, liabilities,
revenues and expenses of joint operations. These have been incorporated in the financial
statements under the appropriate classifications.
Investments
All investments are initially recognised at cost, being the fair value of the consideration given and
including acquisition charges associated with the investment.
After initial recognition, investments, which are classified as held for trading and available-for-sale,
are measured at fair value. Gains or losses on investments held for trading are recognised in the
profit or loss in the statement of profit or loss and other comprehensive income.
Gains or losses on available-for-sale investments are recognised as a separate component of
equity until the investment is sold, collected or otherwise disposed of, or until the investment is
determined to be impaired, at which time the cumulative gain or loss previously reported in equity
is included in the profit or loss in the statement of profit or loss and other comprehensive income.
For investments that are actively traded in organised financial markets, fair value is determined by
reference to Stock Exchange quoted market bid prices at the close of business on the reporting
date.
Trade and other payables
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of
consideration to be paid in the future for goods and services received, whether or not billed to the
Group. 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 30 days of recognition.
Share-based payment transactions
The Group provides benefits to employees (including Directors) of the Group in the form of share-
based payment transactions, whereby employees render services in exchange for shares or rights
over shares (“equity-settled transaction”).
The cost of these equity-settled transactions with employees is measured by reference to the fair
value at the date at which they are granted. The fair value is determined by an independent
external valuation using a Black-Scholes and Binomial Option Pricing models 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 Group receives services that entitle the employees to receive payment.
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, over the period in which the performance conditions are fulfilled, ending on the date on
which the relevant employees become fully entitled to the award (“vesting date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of
awards that, in the opinion of the Directors of the Company, will ultimately vest. This opinion is
formed based on the best available information at reporting date. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is included
in the determination of fair value at grant date.
40
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
No expense is recognised for awards that do not ultimately vest, except for awards where vesting
is conditional upon a market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised
as if the terms had not been modified. In addition, an expense is recognised for any increase in
the value of the transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognised for the award is recognised immediately.
However, if a new award is substituted for the cancelled award, and designated as a replacement
award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method, less any provision for impairment. Trade receivables are
generally due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectable are written off by reducing the carrying amount directly. A provision for impairment of
trade receivables is raised when there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation
and default or delinquency in payments (more than 60 days overdue) are considered indicators
that the trade receivable may be impaired. The amount of the impairment allowance is the
difference between the asset's carrying amount and the present value of estimated future cash
flows, discounted at the original effective interest rate. Cash flows relating to short-term
receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as
a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of
new shares or options, or for the acquisition of a business, are included in the cost of the
acquisition as part of the purchase consideration.
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 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:
Office equipment
Exploration equipment
2 years
5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the Group. Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss.
41
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service
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.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of
the reporting date are recognised in non-current liabilities, provided there is an unconditional right to
defer settlement of the liability. 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 expect 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 corporate bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they
are incurred.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit/loss attributable to the owners of Riedel
Resources Limited, excluding any costs of servicing equity other than ordinary shares, by the
weighted average number of ordinary shares outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share
to take into account the after income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average number of shares assumed to have
been issued for no consideration in relation to dilutive potential ordinary shares.
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
42
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
New standards and interpretations not yet mandatory or early adopted
The AASB has issued the following new and amended accounting standards and interpretations
that have mandatory application dates for future reporting periods. The Group has decided against
early adoption of these standards. Whilst the Group has not quantified the effect of application on
future periods, it is not expected to be material. Other than the below, the Group has determined
that there is no material impact of the Standards and Interpretations in issue not yet adopted on
the Group and, therefore, no material change is necessary to Group accounting policies.
AASB NO.
TITLE
APPLICATION DATE
ISSUE DATE
AASB 9
AASB
2010-7
AASB
2014-1
AASB
2014-5
AASB
2014-7
AASB
2014-10
AASB
2015-8
AASB
2015-10
AASB
2016-1
AASB
2016-2
Financial Instruments
Amendments arising from Accounting
Standards arising from AASB 9
(December 2010)
Amendments to Australian Accounting
Standards
Part E - Financial Instruments
Amendments to Australian Accounting
Standard Arising From AASB 15
Amendments to Australian Accounting
Standard Arising From AASB 9
(December 2014)
Amendments to Australian Accounting
Standard - Sale of Contribution of
Assets Between Investors and its
Associates or Joint Venture
Amendments to Australian Accounting
Standards – Effective Date of AASB 15
Amendments to Australian Accounting
Standards – Effective Date of
Amendments to AASB 10 and AASB
128.
Amendments to Australian Accounting
Standards – Recognition of Deferred Tax
Assets for Unrealised Losses [AASB
112]
Amendments to Australian Accounting
Standards – Disclosure Initiative:
Amendments to AASB 107
1 January 2018
1 January 2018
December 2014
September 2012
Part E - 1 January
2018
June 2014
1 January 2018
December 2014
1 January 2018
December 2014
1 January 2018
December 2014
1 January 2018
October 2015
1 January 2018
December 2015
1 January 2017
February 2016
1 January 2017
March 2016
AASB
2016-3
AASB 15
AASB 16
Amendments to Australian Accounting
Standards – Clarifications to AASB 15
Revenues from Contracts with
Customers
Leases
1 January 2018
May 2016
1 January 2018
October 2015
1 January 2019
February 2016
43
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 2: GAIN FROM ORDINARY ACTIVITIES
2017
$
2016
$
(a) Revenue
Bank interest
Gain on deregistration
Revenue from office sublease
Revenue from sale of tenement
Other revenue
(b) Expenses
Loss for the year includes the following expenses:
Depreciation
Exploration expenditure incurred
Equity-settled share based payments expense
Superannuation - defined contribution
Impairment of exploration expenditure
Rental expense – operating lease
NOTE 3: INCOME TAX EXPENSE
Income tax expense/(benefit):
Current tax
Prior year under provision
Deferred tax
The prima facie income tax expense/(benefit) on
pre-tax accounting loss from operations
reconciles to the income tax expense/ (benefit) in
the financial statements as follows:
21,935
652,518
9,165
-
1,426
685,044
5,618
190,900
21,434
15,200
87,414
38,898
2017
$
-
-
-
-
8,476
-
9,313
1,632,881
1,701
1,652,371
13,209
109,676
302,467
10,600
191,363
34,950
2016
$
-
-
-
-
Prima facie income tax benefit on profit/(loss) at 27.5%
(2016: 28.5%)
39,206
200,669
Add:
Tax effect of:
Other non-allowable items
Share based payment
Impairment of exploration expenditure
Write off exploration expenditure
Revenue losses not recognised
Accrued income
Extinguishment of liability
Superannuation payable
Derecognition of foreign subsidiary
266
5,894
24,039
-
-
-
-
-
(179,210)
(149,011)
375
86,203
54,538
3,142
-
-
3,990
1,083
-
149,331
44
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 3: INCOME TAX EXPENSE (con’t)
Less:
Tax effect of:
Exploration and evaluation expenditure
Impairment on sale
Capital raising costs
Revenue losses not recognised
Provisions and accruals
Tax losses deducted
Income tax expense/(benefit)
The applicable average weighted tax rates are as
follows:
-
-
10,613
(120,280)
(138)
-
(109,805)
-
0%
24,377
107,915
14,543
-
855
202,310
350,000
-
0%
The corporate tax rate in Australia was changed from 28.5% to 27.5% with effect from 1 July 2016.
This revised rate has not impacted the current tax asset for the current year but will do so in future
periods. However, the impact of the change in tax rate has been taken into account in the
measurement of deferred taxes at the end of the reporting period. The effect of this change in tax
rate on deferred taxes has been disclosed in the reconciliation of deferred taxes below.
The following deferred tax balances have not
been recognised:
Deferred Tax Assets:
At 27.5%: (2016:28.5%)
Carry forward revenue losses
Capital raising cost
Website costs
Provisions and accruals
1,462,977
7,773
-
3,108
1,473,858
1,391,523
19,055
-
3,078
1,413,656
The tax benefits of the above Deferred Tax Assets will only be obtained if:
(a) the Company derives future assessable income of a nature and of an amount sufficient to
enable the benefits to be utilised;
(b) the Company continues to comply with the conditions for deductibility imposed by law; and
(c) no changes in income tax legislation adversely affect the Company in utilising the benefits.
Deferred Tax Liabilities:
At 27.5%: (2016:28.5%)
Exploration and evaluation expenditure
450,496
466,123
The above Deferred Tax Liabilities have not been recognised as they have given rise to the carry
forward revenue losses for which the Deferred Tax Asset has not been recognised.
45
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 4: AUDITORS’ REMUNERATION
Remuneration of the auditor of the parent entity for:
- Auditing or reviewing the financial report
Remuneration of firms other than the auditor
- Tax compliance and tax advice
- Other non-audit services
NOTE 5: CASH AND CASH EQUIVALENTS
Cash on hand
Cash at bank
Refer to note 17 for further information on financial instruments.
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Sublease income
Term deposit
Prepayments
GST
Refer to note 17 for further information on financial instruments.
NOTE 7: PLANT & EQUIPMENT
Office Equipment
At cost
Accumulated amortisation
Total office equipment
Exploration Equipment
At cost
Accumulated amortisation
Total exploration equipment
2017
$
23,325
23,325
4,350
60,000
64,350
2016
$
19,820
19,820
1,650
60,000
61,650
1,981
897,238
899,219
3,171
1,496,633
1,499,804
1,812
20,000
6,584
5,672
34,068
2017
$
36,141
(34,549)
1,592
55,304
(55,304)
-
1,573
20,000
6,349
-
27,922
2016
$
36,141
(33,310)
2,831
55,304
(50,925)
4,379
Total plant and equipment
1,592
7,210
46
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 7: PLANT & EQUIPMENT (con’t)
Reconciliations
Reconciliations of the carrying amounts of each class of plant & equipment at the beginning and end
of the current and previous financial year are set out below:
Office Equipment
Carrying amount at beginning of period
Additions/(disposals)
Depreciation
Carrying amount at end of period
Exploration Equipment
Carrying amount at beginning of period
Additions/(disposals)
Depreciation
Carrying amount at end of period
NOTE 8: EXPLORATION AND EVALUATION
EXPENDITURE
2017
$
2,831
-
(1,239)
1,592
4,379
-
(4,379)
-
2016
$
4,918
-
(2,087)
2,831
15,500
-
(11,121)
4,379
Exploration and evaluation expenditure
Gross capitalised exploration and evaluation expenditure
Less provision for impairment
Net amount
7,572,734
(5,934,567)
1,638,167
7,482,673
(5,847,153)
1,635,520
Exploration and evaluation expenditure reconciliation
Opening balance
Exploration written off
Impairment
Exploration and development expenditure incurred
Closing balance
NOTE 9: TRADE AND OTHER PAYABLES
Trade creditors
Accruals
Payroll liabilities
GST payable
Other
1,635,520
-
(87,414)
90,061
1,638,167
2017
$
20,696
7,500
6,023
-
-
34,219
1,737,558
-
(191,363)
89,325
1,635,520
2016
$
36,749
8,040
6,049
90,076
2,621
143,535
Refer to note 17 for further information on financial instruments.
NOTE 10: ISSUED CAPITAL
(a) Share capital
2016
Shares
2016
$
Ordinary shares
Issued and paid up capital – consisting of ordinary
shares
Less: cost of issue
Closing balance at 30 June 2016
234,099,553
-
234,099,553
16,745,023
(763,292)
15,981,731
47
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 10: ISSUED CAPITAL (con’t)
Ordinary Shares
2017
Shares
2017
$
Issued and paid up capital – consisting of ordinary
shares
Less: cost of issue
Closing balance at 30 June 2017
244,099,553
-
244,099,553
16,845,724
(763,292)
16,091,432
(b) Movement in ordinary shares capital
Date
Details
No of Shares
$
1 July 2015
9 July 2015
20 August 2015
27 October 2015
30 October 2015
31 May 2016
30 June 2016
1 July 2016
30 May 2017
30 June 2017
Opening balance
Convertible note interest
Issue of shares
Convertible note interest
Redemption of convertible notes
Issue of shares
Costs of issue
Closing balance
151,020,586
997,260
18,083,477
1,344,293
61,653,937
1,000,000
-
234,099,553
15,452,891
5,984
90,417
8,066
400,000
29,000
(4,627)
15,981,731
Opening balance
Exercise of performance rights
following vesting
Closing balance
234,099,553
15,981,731
10,000,000
244,099,553
109,701
16,091,432
Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the
Company, to participate in proceeds from the sale of all surplus assets in proportion to the number
of and amounts paid up on shares held. The fully paid ordinary shares have no par value.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the
Company.
(c) Capital management
Management controls the capital of the Group by monitoring performance against budget to provide
the shareholders with adequate returns and ensure that the Group can fund its operations and
continue as a going concern.
The Group’s liabilities and capital includes ordinary share capital, options and financial liabilities,
supported by financial assets.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and
adjusting its capital structure in response to changes in these risks and in the market. These
responses include the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy by management to control the capital of the Group
since the prior year.
48
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 11: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE
Options reserve (a)
Share based payments reserve (b)
2017
$
-
597,158
597,158
2016
$
290,941
827,612
1,118,553
(a) Refers to money received in consideration for issued 29,094,050 options.
(b) Refers to fair value of options issued in accordance with AASB 2 Share Based Payment.
Options reserve
Movements in options reserve:
Opening balance at 1 July 2015
Options issued
Closing balance at 30 June 2016
Opening balance at 1 July 2016
Options expired
Closing balance at 30 June 2017
Share based payment reserve
Options
Performance rights
Total share based payments reserve
Options
Performance rights*
Total share based payments reserve
2016
Options
2017
Options
-
-
-
-
-
-
2016
Quantity
52,978,195
10,000,000
62,978,195
2017
Quantity
42,978,195
-
42,978,195
2016
$
290,941
-
290,941
2017
$
290,941
(290,941)
-
2016
$
739,345
88,267
827,612
2017
$
597,158
-
597,158
*Performance rights exercised following vesting on 30 May 2017.
49
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 11: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE (con’t)
Movements in options (share based payments reserve):
Weighted
Average
Exercise
Price
0.053
0.150
0.018
0.016
2016
2016
Options
$
44,311,524
(9,333,329)
525,145
-
18,000,000
214,200
10,000,000
88,267
0.023
62,978,195
827,612
Weighted
Average
Exercise
Price
0.023
0.300
0.052
0.016
0.016
2017
Options
62,978,195
-
(10,000,000)
-
(10,000,000)
0.018
42,978,195
2017
$
827,612
(68,500)
(73,687)
21,434
(109,701)
597,158
Opening balance at 1 July 2015
Options lapsed on 31 January 2016
Options issued pursuant to resolution
approved by shareholders at General
Meeting on 11 March 2016 (i)
Performance rights issued pursuant to
resolution approved by shareholders at
General Meeting on 11 March 2016
Closing balance at 30 June 2016
Opening balance at 1 July 2016
Options lapsed 30 June 2014
(reclassified between reserves)
Options lapsed on 31 December 2016
Performance rights vesting expense
charge for the year
Performance rights exercised following
vesting on 30 May 2017
Closing balance at 30 June 2017
The weighted average remaining contractual life of options outstanding at the end of the financial
year was 1.01 years (2016: 1.94 years).
(i)
The value of 18,000,000 options was calculated using the Black-Scholes Option Pricing
Model and totalled $214,200. The values and inputs are as follows;
Options issued
Underlying share value
Exercise price
Risk free interest rate
Share price volatility
Expiration period
Valuation per option
50
Options
18,000,000
$0.015
$0.018
2.045%
150%
11/03/2019
$0.0119
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 11: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE (con’t)
Movements in performance rights:
Opening balance at 1 July 2015
Vesting expense charge for the year
Closing balance at 30 June 2016
Opening balance at 1 July 2016
Vesting expense charge for the year
Performance rights exercised following vesting on
30 May 2017
Closing balance at 30 June 2017
2016
Options
-
10,000,000
10,000,000
2017
Options
10,000,000
-
2016
$
-
88,267
88,267
2017
$
88,267
21,434
(10,000,000)
(109,701)
-
-
NOTE 12: FOREIGN CURRENCY TRANSLATION RESERVE
Opening balance
Foreign currency translation of deregistration of foreign
subsidiaries
2017
$
652,096
(652,096)
-
2016
$
652,517
(421)
652,096
The foreign currency translation reserve is used to record exchange differences arising from the
translation of the financial statements of foreign subsidiaries.
NOTE 13: ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Net (profit)/loss for the year
Expired options
Accumulated losses at the end of the year
2017
$
(14,725,459)
142,568
(433,128)
(14,149,763)
2016
$
(15,429,560)
704,101
-
(14,725,459)
51
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 14: NOTES TO THE STATEMENT OF CASH FLOWS
Reconciliation of cash flow from operating activities to
profit/(loss)
Profit/(loss) from ordinary activities after income tax
Add: non-cash items:
Share based payments
Depreciation
Gain on sale of tenements
Impairment of exploration expenditure
Exploration and evaluation expenditure written off
Convertible note costs amortised
Extinguishment of liability
Gain on deconsolidation
Changes in assets and liabilities:
Decrease/(increase) in receivables
Increase/(decrease) in payables
Increase/(decrease) in provisions
2017
$
2016
$
142,568
704,101
21,434
5,618
-
87,414
190,900
-
-
(652,518)
(6,146)
(109,060)
(319,790)
317,467
13,209
(1,632,881)
191,363
-
6,073
14,000
-
4,222
121,890
-
(260,556)
Non-cash investing and financing activities.
(a)
There were no other non-cash investing and financing activities, except the shares and options
issued detailed in notes 10 and 11.
NOTE 15: EARNINGS PER SHARE
Basic earnings per share
Profit/(Loss) from operations attributable to ordinary equity
holders of Riedel Resources Limited used to calculate basic
loss per share
2017
$
Cents
0.06
2016
$
Cents
0.34
142,568
704,101
2017
Number
2016
Number
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
234,948,868
205,937,889
The Company has not disclosed diluted earnings per share as the effect of potential ordinary shares
is to increase/(decrease) the profit/(loss) per share.
52
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 16: SEGMENT REPORTING
The Company has identified its operating segments based on the internal reports that are reviewed
and used by the chief operating decision maker to make decisions about resources to be allocated
to the segments and assess their performance.
Operating segments are identified by Management based on the mineral resource and exploration
activities in Australia and Burkina Faso. Discrete financial information about each project is reported
to the chief operating decision maker on a regular basis.
The reportable segments are based on aggregated operating segments determined by the similarity
of the economic characteristics, the nature of the activities and the regulatory environment in which
those segments operate.
Operating segments are identified by management based on exploration activities in Australia and
Burkina Faso.
Australia
$
Burkina Faso Unallocated
$
$
Total
$
2017
Revenue
Net profit/(loss) before tax
685,044
597,129
Reportable segment assets
1,638,834
Reportable segment liabilities
-
2016
Revenue
1,632,881
Net profit/(loss) before tax
1,436,409
Reportable segment assets
2,620,231
-
-
-
-
-
-
-
-
685,044
(454,561)
142,568
934,212
2,573,046
34,219
34,219
19,490
1,652,371
(732,308)
704,101
550,225
3,170,456
Reportable segment liabilities
94,693
421
48,422
143,535
53
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 17: FINANCIAL INSTRUMENTS
The Group’s principal financial instruments comprise cash and short term deposits. The main
purpose of the financial instruments is to earn the maximum amount of interest at a low risk to the
Group. The Group also has other financial instruments such as trade debtors, creditors and
convertible notes which arise directly from its operations. For the period under review, it has been
the Group’s policy not to trade in financial instruments
The main risks arising from the Group’s financial instruments are interest rate risk, foreign exchange
risk and credit risk. The board reviews and agrees policies for managing each of these risks and
they are summarised below:
(a)
Interest Rate Risk
The Group is exposed to movements in market interest rates on short term deposits.
The policy is to monitor the interest rate yield curve out to 180 days to ensure a balance
is maintained between the liquidity of cash assets and the interest rate return. The Group
does not have any other short or long term debt, and therefore this risk is minimal.
(b) Foreign exchange risk
The Group undertakes certain transactions in foreign currencies, hence exposure to
exchange rate fluctuations arise. Payments made by the Group are made at the
prevailing exchange rate at the time of payment. Loans advanced from the ultimate
holding Company to subsidiary companies are denominated in Australian dollars. The
Group does not utilise derivative instruments to hedge the exchange rate risk.
(c) Credit Risk
Credit risk refers to the risk that counterparty will default on its contractual obligations
resulting in financial loss to the Group. The Group has adopted the policy of only dealing
with credit worthy counterparties and obtaining sufficient collateral or other security
where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Group does not have any significant credit risk exposure to any single counterparty or any
Group of counterparties having similar characteristics. The carrying amount of financial assets
recorded in the financial statements, net of any provisions for losses, represents the Group’s
maximum exposure to credit risk.
(a) Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The
Group’s maximum exposure to credit risk at the reporting date was:
Financial assets
Cash and cash equivalents
Other receivables
Carrying
Amount
2017
$
899,219
34,068
933,287
Carrying
Amount
2016
$
1,499,804
27,922
1,527,726
(b) Impairment losses
None of the Group’s other receivables are past due hence no impairment were provided for.
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall
due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
54
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 17: FINANCIAL INSTRUMENTS (con’t)
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring
forecast and actual cash flows. The Group does not have any external borrowings.
The Company does anticipate a need to raise additional capital in the next 12 months to meet
forecasted operational and exploration activities.
The contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements are shown at (e) below.
(d) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest
rates and equity prices will affect the Group’s income or the value of its holdings of financial
instruments.
The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
(e) Interest rate risk
The Group is exposed to interest rate risk (primarily on its cash and cash equivalents), which is
the risk that a financial instrument's value will fluctuate as a result of changes in the market
interest rates on interest-bearing financial instruments. The Group does not use derivatives to
mitigate these exposures.
The Group adopts a policy of ensuring that as far as possible it maintains excess cash and cash
equivalents in short terms deposit at interest rates maturing over 30-180 day rolling periods.
Interest Rate Risk Exposure Analysis
Weighted
Average
Effective
Interest Rate
Floating
Interest
Rate
Fixed Interest Rate
Maturing
Within 1
year
Over 1
year
Non
Interest
Bearing
Total
%
$
$
$
$
$
2.35
73,416
823,822
1,981
899,219
2.00
73,416
20,000
843,822
-
-
-
-
-
14,068
34,068
34,068
933,287
34,219
34,219
34,219
34,219
-
-
-
2017
FINANCIAL ASSETS
Cash and cash
equivalents
Trade and other
receivables
Total Financial Assets
FINANCIAL
LIABILITIES
Trade and other
payables
Total Financial
Liabilities
55
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 17: FINANCIAL INSTRUMENTS (con’t)
2016
FINANCIAL ASSETS
Cash and cash
equivalents
Trade and other
receivables
Total Financial Assets
FINANCIAL
LIABILITIES
Trade and other
payables
Convertible note
Total Financial
Liabilities
2.80
492,789 1,003,844
2.20
-
20,000
492,789 1,023,844
-
-
-
-
-
-
-
-
-
-
3,171 1,499,804
7,922
27,922
11,093 1,527,726
143,535
143,535
143,535
143,535
Cash flow sensitivity analysis for variable rate instruments
(f)
A change of 100 basis points in interest rates at the reporting date would have increased
(decreased) profit or loss by the amounts shown below. The analysis is performed on the same
basis for 2016.
Change in profit
Increase in interest rate by 1%
(100 basis points)
Decrease in interest rate by 1%
(100 basis points)
Change in equity
Increase in interest rate by 1%
(100 basis points)
Decrease in interest rate by 1%
(100 basis points)
2017
$
8,438
2016
$
10,238
(8,438)
(10,238)
8,438
10,238
(8,438)
(10,238)
NOTE 18: COMMITMENTS AND CONTINGENCIES
Operating lease commitments
Future minimum rentals payable under non-cancellable operating leases as at 30 June are as
follows:
Within one year
After one year but not more than five years
More than five years
2017
$
7,500
-
-
7,500
2016
$
-
-
-
-
The lease of Company offices at Suite 1, 6 Richardson Street, West Perth is settled on a monthly
basis from March 2015.
56
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 18: COMMITMENTS AND CONTINGENCIES (con’t)
Exploration commitments
Future minimum commitments in relation to exploration and mining tenements as at 30 June are as
follows:
Within one year
After one year but not more than five years
More than five years
2017
$
453,930
2,673,887
-
3,127,817
2016
$
42,624
-
-
42,624
NOTE 19: INTERESTS IN CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of Riedel Resources Limited
and the subsidiaries listed in the following table.
Name
Country of
Equity Interest %
Incorporation
2017
2016
AuDAX Minerals Pty Ltd
Australia
100
Riedel (Burkina Faso) Limited
Mauritius
BF Exploration SARL
Burkina Faso
-
-
100
100
100
Riedel Resources Limited is the ultimate Australian parent entity and ultimate parent of the Group.
Riedel (Burkina Faso) Limited and BF Exploration SARL were deregistered during the year. As a
result of the deregistration a gain on deregistration of $652,518 has been recognised in the
Statement of Profit or Loss and Other Comprehensive Income.
Riedel Resources Limited incorporated a wholly owned Australian subsidiary, Riedel Resources
(Spain) Pty Ltd on 14 September 2017.
NOTE 20: RELATED PARTY DISCLOSURE
Terms and conditions of transactions with related parties
Sales to and purchases from related parties are made in arm's length transactions both at normal
market prices and on normal commercial terms.
The Company subleases its office at Suite 1, 6 Richardson Street, WEST PERTH WA 6005 to
Virtual Curtain Limited, a related entity of Mr Jeffrey Moore. Virtual Curtain Limited pays 25% of
Riedel’s monthly rental and outgoings.
Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash. The
following balances were outstanding at the reporting date in relation to transactions with related
parties:
Loans to related parties:
Audax Minerals Pty Ltd
2017
$
1,239,544
1,239,544
2016
$
2,038,622
2,038,622
Key management personnel compensation
Detailed remuneration disclosures are provided in the Remuneration Report on pages 19 to 26.
57
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 20: RELATED PARTY DISCLOSURE (con’t)
Compensation
The aggregate compensation made to directors and other members of key management personnel
of the Group is set out below:
Short term employee benefits
Post-employment benefits
Share-based payments
Total
2017
$
100,000
9,500
21,433
130,933
2016
$
111,579
10,600
302,467
424,646
NOTE 21: EVENTS AFTER THE REPORTING DATE
On 26 July 2017, Riedel announced on ASX that it has executed a Joint Venture Agreement
whereby Riedel can earn-in an interest of up to 90% in the Cármenes Project located in Northern
Spain by way of funding staged exploration and development expenditure, with provision to acquire
the remaining 10%.
On the same day, the Company announced the appointment of Mr Alexander Sutherland and Mr
Scott Cuomo as Non-Executive Directors of the Company as it drives its new direction of securing
and developing cobalt and tech-energy metals opportunities in key European lithium-ion battery
markets. To facilitate these new appointments, Mr Mark Skiffington and Mr Luke Matthews stepped
down from their roles as Non-Executive Directors after more than 18 months with the Company.
In August 2017, the Company raised $549,223.98 (before costs) by the issue of 36,614,932 fully
paid ordinary shares at an issue price of $0.015 (1.5 cents) (Placement).
In September 2017, Riedel completed a fully underwritten pro-rata non-renounceable rights issue
and successfully raised $1,403,572.52 (before costs) by the issue of 93,571,495 shares.
Riedel incorporated a wholly owned Australian subsidiary, Riedel Resources (Spain) Pty Ltd on 14
September 2017.
There are no other matters or circumstances that have arisen since the end of the financial year that
have significantly affected or may significantly affect the operations of the Group, the results of those
operations or the state of affairs of the Group, in future years.
NOTE 22: CONTINGENT ASSETS AND LIABILITIES
The Company is not aware of any contingent assets or liabilities.
The Company also has a $20,000 (2016: $20,000) term deposit against a credit card facility that
expires 21 November 2017.
NOTE 23: DIVIDENDS
No dividends were paid or declared during the year.
58
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTE 24: COMPANY DETAILS
The registered office and principal place of business of the Company is Suite 1, 6 Richardson
Street, West Perth, WA 6005.
NOTE 25: PARENT ENTITY DISCLOSURES
2017
$
932,619
1,592
934,211
33,930
33,930
2016
$
543,016
61,994
605,010
48,422
48,422
16,091,433
597,138
(17,588,852)
900,281
15,981,732
1,118,553
(16,543,697)
556,588
2017
$
(322,258)
(322,258)
2016
$
(29,565)
(29,970)
Financial Position
Assets
Current Assets
Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Total Liabilities
Equity
Issued Capital
Reserves
Accumulated Losses
Financial Performance
Profit/(Loss) for the year
Total comprehensive profit/(loss)
Commitments
For details see note 18.
Contingent Liabilities/Guarantees
For details see note 22.
NOTE 26: FAIR VALUE MEASUREMENT
The carrying amounts of trade and other receivables and trade and other payables are assumed to
be approximately the fair value due to their short term nature.
59
AUDIT REPORT
TO THE MEMBERS OF RIEDEL RESOURCES LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Riedel Resources Limited (the company), which
comprises the consolidated statement of financial position as at 30 June 2017, 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 company and 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.
In our opinion the financial report of Riedel Resources Limited is in accordance with the Corporations Act
2001, including:
i)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of
its performance for the year ended on that date; and
ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement. Our
responsibilities under those standards are further described in the Auditor’s Responsibility section of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the code) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matter
A key audit matter is a matter that, in our professional judgement, was of most significance in our audit of
the financial report of the current year. This matter was addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this
matter. Our description of how our audit addressed the matter is provided in that context below.
60
1. Carrying value of capitalised exploration expenditure
Why significant
How our audit addressed the key audit matter
As at 30 June 2017 the carrying value of exploration
and evaluation assets was $1,638,167
(2016:
$1,635,520), as disclosed in Note 8. This represents
63.7% of the total assets of the consolidated entity.
The consolidated entity’s accounting policy in respect
of exploration and evaluation expenditure is outlined in
Note 1.
Significant judgement is required:
in determining whether facts and circumstances
indicate that the exploration and evaluation assets
should be tested for impairment in accordance with
Australian Accounting Standard AASB
6
Exploration
for and Evaluation of Mineral
Resources (“AASB 6”); and
in determining the treatment of exploration and
evaluation expenditure in accordance with AASB
6, and the consolidated entity’s accounting policy.
In particular:
o whether the particular areas of interest meet
the recognition conditions for an asset; and
o which elements of exploration and evaluation
expenditures qualify for capitalisation for each
area of interest.
Our work included, but was not limited to, the following
procedures:
Conducting a detailed review of management’s
assessment of impairment trigger events prepared in
accordance with AASB 6 including:
o assessing whether the rights to tenure of the
areas of interest remained current at reporting
date as well as confirming that rights to tenure
are expected to be renewed for tenements that
will expire in the near future;
o holding discussions with
to
the directors and
the status of ongoing
management as
exploration programmes
the areas of
interest, as well as assessing if there was
evidence that a decision had been made to
discontinue activities in any specific areas of
interest; and
for
o obtaining and assessing evidence of
the
consolidated entity’s future intention for the
areas of interest, including reviewing future
budgeted expenditure and
related work
programmes;
considering whether exploration activities for the
areas of interest had reached a stage where a
reasonable assessment of economically recoverable
reserves existed;
testing, on a sample basis, exploration and
evaluation expenditure incurred during the year for
compliance with AASB 6 and the consolidated
entity’s accounting policy; and
assessing
the appropriateness of
the
related
disclosures in Note 1 and 8.
61
Other Information
Other information is financial and non-financial information in the annual report of the consolidated entity
which is provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible
for Other Information in the annual report.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s Report,
Shareholder Information and Schedule of Mining Tenements. The remaining Other Information is expected
to be made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does
not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of
the Remuneration Report.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information in
the Financial Report and based on the work we have performed on the Other Information that we obtained
prior the date of this Auditor’s Report we have nothing to report.
Directors’ Responsibilities for the Financial Report
The Directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1,
the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using a
going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to
obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue and auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individual or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report.
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The procedures selected depend on the auditor’s judgement, including assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial
report.
We conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the consolidated entity to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2017.
In our opinion, the Remuneration Report of Riedel Resources Limited for the year ended 30 June 2017,
complies with section 300A of the Corporations Act 2001.
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Responsibilities
The directors of the company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
PKF MACK
SHANE CROSS
PARTNER
26 SEPTEMBER 2017
WEST PERTH,
WESTERN AUSTRALIA
64
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
SHAREHOLDER INFORMATION
Additional information required by the Australian Securities Exchange Limited Listing Rules and not
disclosed elsewhere in this report is set out below. The information is as at 31 August 2017.
Shareholdings as at 31 August 2017
Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section
671B of the Corporations Act are:
Shareholder Name
SATORI INTERNATIONAL PTY LTD
ADX ENERGY LIMITED
SKIFFINGTON SUPER PTY LTD
JAMES WALLACE HOPE
GARY TATASCIORE
Number of
Shares
49,845,849
35,686,279
31,092,494
26,503,900
20,304,710
Percentage
13.31%
9.53%
8.31%
7.08%
5.42%
Unmarketable parcels
The number of shareholders holding less than a marketable parcel at 31 August 2017 is 98. There is
only one class of share and all ordinary shareholders have equal voting rights.
Voting rights
All ordinary shares carry one vote per share without restriction.
Options over ordinary shares do not carry voting rights.
Unquoted securities
Securities
Number of
Options
Number of
Holders
Holders with
more than 20%
Options exercisable at $0.15 on or before
31 January 2018
Options exercisable at $0.011 on or before
31 December 2017
Options exercisable $0.018 on or before
11 March 2019
1,250,000
23,728,195
18,000,000
1
10
4
Note 1
Note 2
Note 3
Note 1 - The options are all held by Collabrium Capital (Guernsey).
Note 2 - No single option holder has more than a 20% holding of the total options on issue.
Note 3 - JJ Moore (JJ Moore Family A/c), Andrew Ross Childs and Edward James Turner each
holds 5,000,000 options (representing a 27.8% holding each).
On-market buyback
There is no current on-market buy-back.
Statement in relation to Listing Rule 4.10.19
The Directors of Riedel Resources Limited confirm in accordance with ASX Listing Rule 4.10.19 that
during the financial year ended 30 June 2017, the Company has used its cash, and assets that are
readily convertible to cash, in a way consistent with its business objectives.
65
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
SHAREHOLDER INFORMATION (con’t)
Securities Exchange listing
Quotation has been granted for all ordinary shares of the Company on the Australian Securities
Exchange.
Securities subject to escrow
There are no securities that are subject to escrow.
Distribution of security holders
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of Holders
19
9
51
148
157
384
Number of Shares
3,022
29,042
487,420
6,640,953
367,125,543
374,285,980
Twenty largest shareholders – Ordinary Shares
Name
SATORI INTERNATIONAL PTY LTD
ADX ENERGY LIMITED
MR JAMES WALLACE HOPE
SKIFFINGTON SUPER PTY LTD
QUINLYNTON PTY LTD
MERIWA STREET PTY LTD
FLOURISH SUPER PTY LTD
MR JEFFREY MOORE
ALMESH PTY LTD
CAMPEON PTY LTD
PROVISTA HOLDINGS PTY LTD
MR GARY TATASCIORE
ORITOR PTY LTD
BT PORTFOLIO SERVICES LIMITED
MS SONIA LEE SIEMER
ELEVEN O'CLOCK PTY LTD
WILKS SUPER PTY LTD
MR WILLIAM RICHARD BROWN
BOND STREET CUSTODIANS LIMITED
MR PETER CHARLES MOREY + MRS VALMAI ANN MOREY
Number of
ordinary shares
held
Percentage of
capital held
49,845,849
35,686,279
26,503,900
17,759,161
15,219,061
13,333,333
12,981,415
11,000,000
9,341,787
8,579,801
8,374,577
8,374,577
7,536,003
4,576,045
4,500,000
4,444,444
4,444,444
4,266,711
4,151,339
3,747,131
13.32
9.53
7.08
4.74
4.07
3.56
3.47
2.94
2.5
2.29
2.24
2.24
2.01
1.22
1.20
1.19
1.19
1.14
1.11
1.00
TOTAL
254,665,857
68.04
66
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
SCHEDULE OF MINING TENEMENTS AS AT 26 SEPTEMBER 2017
Area of Interest
Western Australia
Marymia
Marymia
Charteris Creek
West Yandal
Porphyry
Tenement
reference
E52/2395
E52/2394
E45/2763
M36/615
M31/157
Nature of interest
Interest
Direct
Direct
Direct
Royalty
Royalty
49%
49%
100%
0%
0%
MINERAL RESOURCE STATEMENT
At 30 June 2017, the Company does not have any mineral resource.
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