S H R E E M I N E R A L S L I M I T E D
ACN 130 618 683
2011 ANNUAL REPORT
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S H R E E M I N E R A L S L T D
TABLE OF CONTENTS
Corporate Directory
Directors’ Report
Corporate Governance Statement
Auditors’ Independence Confirmation
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditors’ Report
Shareholder Information
1
2
19
24
25
26
27
28
29
48
49
52
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S H R E E M I N E R A L S L T D
CORPORATE DIRECTORY
DIRECTORS
Sanjay Loyalka
Mahendra Pal
Arun Kumar Jagatramka
Andy Lau
Amu Shah
COMPANY SECRETARY
Stephen Ledger (resigned 20 July 2011)
Sanjay Loyalka ( appointed 20 July 2011)
REGISTERED OFFICE
Unit 4
The Pines Business Centre
86 -88 Forrest Street
Cottesloe
WA 6011
Ph:
Fax:
(08) 61612068
(08) 93855194
SOLICITORS
Steinepreis Paganin
Level 4
16 Milligan St
Perth WA 6000
AUDITORS
Grant Thornton Audit Pty Ltd
Lv 1, 10 Kings Park Road
West Perth WA 6005
BANKERS
Commonwealth Bank of Australia
St Georges Tce
Perth WA 6000
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
The Directors present this report together with the financial report of Shree Minerals Ltd (‘the Company’) for
the year ended 30th June 2011 and the auditors' report thereon.
DIRECTORS
The names of the Directors in office at any time during or since the end of the year are:
Mr Sanjay Loyalka (Appointed 14 April 2008)
Mr Mahendra Pal (Appointed 26 August 2008)
Mr Arun Jagatramka (Appointed 30 June 2009)
Mr Andy Lau (Appointed 18 November 2009)
Mr Amu Shah (Appointed 4 March 2011)
COMPANY SECRETARY
Mr Stephen Ledger (Resigned 20 July 2011)
Mr Sanjay Loyalka (Appointed 20 July 2011)
PRINCIPAL ACTIVITIES
The principal activities of the Company during the financial year consisted of mineral exploration and
development.
There have been no significant changes in these activities during the financial year.
OPERATING RESULTS
The net loss of the Company after providing for income tax amounted to $335,033 (2010: $308,743).
DIVIDENDS PAID OR RECOMMENDED
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way
of a dividend to the date of this report.
REVIEW OF OPERATIONS AND ACTIVITIES
Shree Minerals Ltd’s (the Company or Shree) exploration activities are confined to the State of Tasmania
where it has 5 Exploration Licenses. The Company was formed in April 2008 and listed on the Australian
Securities Exchange in February 2010. Since inception, the Company has actively explored for iron and gold at
its Nelson Bay River and Sulphide Creek tenements respectively and has been examining the remaining
tenement lands for their mineral potential.
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
The Company’s exploration activities over the past year have included:
Exploration at Nelson Bay River Iron Project (NBR)
The exploration activities included data review, geological reconnaissance, estimation of iron ore resources
(based on earlier drilling) for the Nelson Bay River Project, metallurgical studies, drilling, field visits of
tenements, statutory reporting, etc.
Drilling
During the year FY 2010-2011 , drilling of 1568 m (1259 m RC along 23 holes for resource delineation, 236 m
RC along 6 holes for ground water studies and 73 m PQ diamond drilling for metallurgical studies) along 32
holes (Table 1 and Figure 2). From the resource, delineation drilling 280 samples were collected and analysed.
Additionally, surveying, logging of drill cuttings, magnetic susceptibility reading, weighing a series of samples
for density determinations, some geological mapping, significant upgrading of access tracks and preparation of
drill sites was under taken.
Table 1: NBR 2011 drilling summary
Hole_ID
East
MGA94
North
MGA94
RL
(m)
Azimuth
Dip
Depth
(m)
Sectio
n
Date
Commenced
Date
Completed
RC Resource drilling
NRC01
310573
5442036
81.0
NRC02
310556
5442023
85.4
NRC03
310541
5442010
88.3
NRC04
310577
5441980
87.7
NRC05
310562
5441968
90.6
NRC06
310612
5441956
85.0
NRC07
310597
5441944
88.8
NRC08
310580
5441931
91.2
NRC09
310620
5441917
90.1
NRC10
310595
5441888
92.8
NRC11
310679
5441815
95.3
NRC12
310661
5441801
95.9
NRC13
310644
5441792
96.1
NRC14
310682
5441708
99.1
NRC15
310712
5441731
99.2
NRC16
310743
5441599
100.4
NRC17
310756
5441612
100.3
NRC18
310771
5441624
100.2
NRC19
310875
5441462
100.2
NRC20
310861
5441451
100.2
NRC21
310993
5441305
99.9
NRC22
310976
5441288
100.0
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
9650
9/03/2011
10/03/2011
9650
10/03/2011
10/03/2011
9650
10/03/2011
11/03/2011
9600
15/03/2011
16/03/2011
9600
16/03/2011
17/03/2011
9550
17/03/2011
17/03/2011
9550
17/03/2011
18/03/2011
9550
18/03/2011
22/03/2011
9500
22/03/2011
22/03/2011
9500
22/03/2011
24/03/2011
9400
24/03/2011
24/03/2011
9400
24/03/2011
25/03/2011
9400
28/03/2011
28/03/2011
9300
29/03/2011
31/03/2011
9300
31/03/2011
31/03/2011
9200
31/03/2011
31/03/2011
9200
9200
9000
9000
8800
8800
0/01/1900
0/01/1900
4/04/2011
4/04/2011
4/04/2011
5/04/2011
5/04/2011
5/04/2011
5/04/2011
6/04/2011
6/04/2011
6/04/2011
27
48
69
55
74
33
55
74
40
74
27
52
64
79
34
82
62
30
41
74
46
67
-45
-45
-45
-55
-55
-55
-55
-55
-55
-55
-55
-55
-55
-55
-55
-55
-55
-55
-55
-55
-55
-55
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
NRC23
311416
5440759
101.0
50
-55
52
8100
6/04/2011
7/04/2011
Sub Total
1259
RC Hydrological drilling
GW1
GW3
GW4
GW5
GW6
311703
5440331
110.3
309894
5441462
80.6
309716
5442199
73.4
309788
5442458
63.0
310487
5441962
89.0
GW6A
310459
5441935
89.3
GW7
311249
5441240
101.4
0
0
0
0
0
0
0
-90
-90
-90
-90
-90
-90
-90
Sub Total
35
35
35
28
35
33
35
236
PQ diamond drilling (metallurgical drilling)
11/04/2011
11/04/2011
14/04/2011
14/04/2011
14/04/2011
14/04/2011
13/04/2011
13/04/2011
9600
14/04/2011
15/04/2011
9600
14/04/2011
14/04/2011
8600
12/04/2011
13/04/2011
NBR12A
310513
5442192
81.2
NBR13A
310462
5442292
82.3
NBR14A
310425
5442389
81.4
50
50
50
-50
-50
-50
Sub Total
Total
9800
28/04/2011
29/04/2011
9900
18/04/2011
21/04/2011
10000
26/04/2011
27/04/2011
22.7
28.9
21.3
72.9
1567.9
Figure 1: Nelson Bay River Iron Project drillhole location plan
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
Resource Estimation
A Resource estimation based on information from 24 diamond holes drilled for 2,512.96 metres was made by
the independent geological consultants Hellman & Schofield Pty Ltd according to the JORC Guidelines. The
Resource modelling included the generation of mineral wireframes based on geological logging and nominal
iron or magnetite cut off grades. Ordinary Kriging was used on 1m composites from within the wireframes to
generate block models. The Resource estimation was carried out prior to drilling in FY2010-11 .The resource
estimates for the different ore types are tabulated below (Tables 2 to 4):
Table 2: Iron Resource Estimates at Nelson Bay River Iron Project
Resource Category
Indicated
Inferred
Total
Note: The resource estimate includes the magnetite resource material and is estimated using
a 30% Fe cut off and with an average density of 3.5 t/m3;
Mass (Mt)
1.8
10.8
12.6
Fe %
38.6
35.6
36.1
Table 3: Magnetite Resources at Nelson Bay River Iron Project
Resource Category
Mass (Mt)
Mag% (DTR)
Contained
(Mt)
Magnetite
Indicated
Inferred
Total
Note: The resource estimate is based on 20% magnetite (DTR) cut off and with an average density of
3.71 t/m3. DTR = Davis Tube Recovery
38.5
38.2
38.3
1.7
6.1
7.8
0.7
2.3
3.0
Table 4: Goethite-Hematite Resources at Nelson Bay River Iron Project
Area
Mass
(Mt)
NBR South
NBR North
0.5
0.7
Grade (%)
Remarks
Fe
57.8
46.8
SiO2
8.8
23.7
Al2O3
1.4
2.7
P
0.06
0.02
S
0.03
0.07
LOI
6.3
4.7
Fe (Cal)
61.7
49.1
DSO
Beneficiable
material
1.2
Total
0.04
Note: The resource estimate is estimated at 30% Fe cut off and with an average density of 3 t/m3; The Fe (Cal) grade
is the calcined iron grade with the loss on ignition material removed from the block grade value [Fe_Cal = Fe/ (100-
LOI)]. The resources are of Inferred Category.
51.0
0.05
53.9
18.0
2.2
5.3
Metallurgical Studies
A total of 3 PQ diamond drill holes , namely NBR 12A, 13A, and 14A, for 72.9 m were drilled in the BFO zone
defined earlier by 2009 diamond drilling program above the proposed deep magnetite pit (Figures 3 and 5). .
From this drilling, based on material characteristics, two composite samples for metallurgical testing were
prepared. Composite one consists of cores from drill holes 13A and 14A, while the second composite was
made from core of drill hole 12A. The significant results of the tests include that the composite of hole 13A &
14A was upgradeable to 56.1 % Fe by a dry low intensity magnetic separation (LIMS) with recovery of 83.6%
(Table 5).
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
Table 5: Significant Metallurgical Test Results
Other tenements' status
During the year, the company agreed with Mineral Resources Tasmania (MRT) to not apply for renewal of
Exploration Licence at Adamsfield (11/2006) which expired in June 2011 as the tenement now falls within
World Heritage area and the Australian Government has decided to compensate the Company with an
exgratia payment of $76,000 (incl GST) for past exploration expenditure on the tenement.
Additionally, several field trips to tenements were made and after detail examination of prospect geological
setting and logistics, the Catamaran Coal (EL32/2005) tenement was relinquished.
All other Licences continue to remain in good standing.
Results
The work performed to date, strengthen the Company’s belief that the Nelson Bay River Project has the
potential to produce the following:
Iron Ore product (Fines & Lump) from Beneficiable goethitic-hematite iron resource.
1. Direct Shipping iron Ore (DSO), with very low deleterious elements
2.
3. Magnetite concentrates suitable for Dense Media separation in coal washery and high-grade Blast
Furnace pellets. Recent Davis tube recovery results carried of drilling in 2010 show improved
magnetite concentrate grades over previous results. The following is an average of 2010 results
Drilling during FY2010-11 has extended presence of goethitic-hematite mineralisation (DSO) across the
strike, width and in depth to greater than 60 m at the NBR Project (Figure 2).
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FeSiO2Al2O3CaOMnOPSMgONa2OZnTiO2K2OLOI-1000DRY LIMSFRACTIONWt.FeSiO2Al2O3CaOMnOPSMgONa2OZnTiO2K2OLOI-1000@ 1100 GAUSSWEIGHTDISTn.GradeGradeGradeGradeGradeGradeGradeGradeGradeGradeGradeGradeGrade(Kg)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)(%)Mags14.1783.656.1011.901.720.011.390.0100.0390.400.0190.0070.0510.0482.90COARSE COBBING - DRY LIMS TEST @ P100 1.0mm FeSiO2Al2O3S%%%%70.01.90.20.1For personal use only
S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
Figure 2: Cross section showing extent of iron mineralisation
Exploration at Sulphide Creek Project (S C)
Following encouraging drilling results in 2010, (Table 6) added with the equally encouraging historical
information, the Company commissioned consultants Hellman & Schofield Pty Ltd to undertake a data
compilation and review of all available information on the Sulphide Creek tenement (EL43/2004) and environs
for area’s potential for gold mineralisation.
Structurally controlled gold mineralisation within the licence area is intersected at the Coupon and Davie
prospects. The mineralisation target for the Sulphide Creek licence is large scale, structurally controlled gold
mineralisation associated with major lithological contacts juxtaposed with the Harvey Creek Fault (Figure 3).
Figure 3: Geology of Sulphide Creek tenemenet
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
Table 6: Significant gold intersection along drillhole (2010 drilling)
Location m (AGD 66)
Northing
Easting
375689.5
375689.5
375689.4
375689.4
Hole ID
SCDDH4
Includes
SCDDH5
Includes
Location (m)
To
From
37.5
19
34.5
31.5
51
37
51
39
168
159
167
164
183
181
Intersection (m)
Grade g/t
18.5
3
14
12
9
3
2
0.5
1.26
0.53
0.55
0.88
1.29
0.6
Study findings
The study involved an exhaustive examination of all available historical information, assessment of Mineral
Resources Tasmania (MRT) geophysical data and 3D interpretation of tenement drilling (Figures 4 & 5).
Subsequently, drill targets for the Sulphide Creek tenement (Figures 6 -8) were defined.
Figure 4: Davie Prospect 3D Interpretation Figure 5: Coupon Prospect 3 D Interpretation Plan
Source: H & S
Area potential
The assumptions from the work done to date are that there is a large zone of diffuse mineralisation including
pervasive silica alteration associated with a complex fault pattern (NW, NE and N-S structural interaction)
immediately proximal to the Harvey Creek Fault within the Rinadeena Formation and Lower Silurian clastic
sediments (Figure 3).
The lack of tightly controlled high-grade gold mineralisation and the broad low-grade consistent mineralisation
intersected in the historical drilling at Coupon and Shree drilling at Davie prospects suggest that there is
exploration potential for a series of low-grade gold deposits within the Sulphide Creek area. Similarities in
geological age, setting, and styles of gold mineralisation occurring at the Sulphide Creek and environs can be
made with the South Carolina Slate Belt deposits of the Haile and Ridgeway mines. Thus the gross exploration
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
potential for the Sulphide Creek area could be of the order of 30-50Mt @ 0.75-1g/t gold for approximately
between 0.72 to 1 million ounces. (Note: The potential quantity and grade is conceptual in nature, and that
there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further
exploration will result in the determination of a Mineral Resource.)
The suggested exploration strategy is to continue drilling on the Coupon and Davie prospects, generally
following up either significant previous drill intercepts or untested surface geochemical anomalies. The
suggested drill targets are aimed to intersect higher-grade gold mineralisation of substantial widths. Target
coordinates and their plan positions are given in Figures 5-7 respectively.
Figure 6: Prospect 24-28 Target Map Figure 7: Coupon Prospect Target Map
Source: H & S
Figure 8: Davie Prospect Target Map
Source: H & S
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
Outlook 2011/2012
Based on the encouraging exploration results, further to normal ongoing exploration activities, in the coming
year following activities will be undertaken:
Nelson Bay River Iron Ore Project (EL41/2004 and EL54/2008)
Upgrading resource estimates for goethitic-hematite and magnetite within the Nelson Bay River tenement
(EL41/2004) using 2010/2011 drilling results
Pursuing Approvals to commence the project.
Sulphide Creek and Mt Sorell
Following Geological Study by Hellman & Schofield of Sulphide Creek, a Geophysical study has been
commissioned in FY2011-2012 by Cowan Geodata Services to help plan exploration activities.
Mt Bertha
In field checking of known geophysical targets, which will include, access, geological mapping, examination of
target and tenement regolith, designing of geochemical sampling program.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
In the opinion of the Directors there were no other significant changes in the state of affairs of the Company
that occurred during the financial year under review.
FINANCIAL POSITION
The net assets of the Company are $7,723,202 (2010: $7,721,270)
The Directors believe the Company is in a financial position to pursue its current operations.
AFTER BALANCE DATE EVENTS
On 15th July 2011 two partial underwriting agreements over options expiring on 30 June 2011 were completed
and shares were issued. The total proceeds net of underwriting fees raised was $1,092,500 for 5,750,000
shares. In additional 1,437,500 options expiring 30 June 2011 were exercised and issued on 15th July 2011,
raising additional capital of $287,500.
There has not arisen in the interval between the end of the financial year and the date of this report any other
item, transaction or event of a material or unusual nature likely, in the opinion of the Directors of the
Company to affect substantially the operations of the Company, the results of those operations or the state of
affairs of the Company in subsequent financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The Company intends to continue to pursue its goals to acquire and explore mineral deposits and explore
prospective tenements.
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
ENVIRONMENTAL REGULATIONS
The Company holds various exploration licences to regulate its exploration activities in the State of Tasmania,
Australia. These licences include conditions and regulations with respect to the rehabilitation of areas
disturbed during the course of its exploration activities. So far as the Directors are aware there has been no
known breach of the Company’s licence conditions and all exploration activities comply with relevant
environmental regulations.
DIRECTORS’ INTERESTS
Mr S Loyalka
Mr A Jagatramka
Mr M Pal
Mr A Lau
Mr A Shah
ORDINARY SHARES
FULLY PAID
25,415,000
15,000,000
300,000
-
7,500,000
INFORMATION ON DIRECTORS
Mr Sanjay Loyalka, Executive Director BCom (Hon), CA (Appointed 14 April 2008)
Mr Sanjay Loyalka has experience in various functional roles including CEO, General Management and
Corporate finance experience in mining and metals, manufacturing and logistics based industries in a
multinational environment.
Mr Loyalka is the founder of Investment advisory firm IACG Pty Ltd in Australia which has been engaged in
cross border M&A, strategic consulting as well as a mineral commodity trading business.
As the founding CEO and Managing Director, he was instrumental in the development of the Aditya Birla
Group’s operations within Australia. He led the acquisition of Nifty and Mount Gordon Copper mines,
successful development of the Nifty Sulphide project (a remote site, 2.5 million tpa underground mine,
concentrator plant and associated infrastructure) and operational restructure of Mont Gordon Copper
Operations. These led to a successful listing of the Company on the Australian Securities Exchange under an
IPO raising $300 million and inclusion in the ASX S&P 300 index.
Mr Loyalka has been a member of the Executive Council of Chamber of Minerals & Energy (Western Australia)
in 2005 and 2006.
Mr Arun Jagatramka, Non Executive Director BCom (Hons), FCA, AIMM (Appointed 30 June 2009)
Mr. Arun Kumar Jagatramka is a qualified Chartered Accountant with an all India 1st rank and gold medal. He
has an industrial experience of more than 11 years in the production of coal and coke, besides a prior
experience of more than 15 years in management consultancy and merchant banking. Widely regarded for his
foresight and knowledge, he is an acknowledged expert in matter of coal and coke and has presented papers
on the subject at number of International Conferences.
Mr. Arun Kumar Jagatramka is the Chairman and Managing Director of Gujarat NRE Coke Limited (India).
Under his able guidance, Gujarat NRE Coke Limited has become the largest independent non captive producer
of Met Coke in India – the only Indian entity to have moved backward into coal mine ownership in Australia
and forward into steel making, coupled with wind energy and upcoming waste heat power generation. The
Annual Compounded Growth of the company since inception is to the tune of 42% approx. with present
market capitalisation of USD 0.5 Billion.
Mr. Arun Kumar Jagatramka is a member of a number of boards, Gujarat NRE Coking Coal Limited (Australia),
Pike River Coal Limited (New Zealand), where Gujarat NRE group holds cornerstone stakes. He is also on the
Board of Directors of Port Kembla Coal Terminal, Australian Coal Research Ltd, Wollongong Hawks as well as
Executive Committee Member of NSW Minerals Council.
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DIRECTORS’ REPORT
He has been appointed as an honorary NSW ‘Sydney Ambassador’ to India. He is associated with the
Confederation of Indian Industry (Western Region), an apex representative of Indian Industry, by way of
heading sub-committees on ‘Integrity India’, ‘International Affairs’ besides being a member of ’Energy Panel’,
and ‘Environment and Conservation’ Sub-Committee.
Mr Mahendra Pal, Non Executive Director MSc, MSGAT (India) and FAusIMM (Australia) (Appointed 26
August 2008)
Mr Pal has an extensive management experience in the mining and exploration industry, both within Australia
and overseas. He has worked across many commodities, including base metals, gold, uranium, iron, coal, oil
shale, oil, and gas, among others.
In Australia, he started his career with the exploration and mining of uranium with Queensland Mines, a
subsidiary of Kathleen Investment, Australia.
Mr Pal spent two periods working with Rio Tinto (erstwhile CRA), commencing in 1970. During this time he was
Principal Geologist for Hamersley Iron Pty Limited, where he made several iron ore discoveries including,
concealed iron ore bodies at the Mount Tom Price and Paraburdoo mines, and also worked in other senior
management positions up until 1999. From 1980 to 1984, he worked for ESSO Australia as a Sr. Professional
Geologist and Exploration Geologist for the Rundle Oil Shale Project feasibility study.
Besides company directorship, Mr Pal runs his own Geological Consultancy business. From 2000 to April 2007,
he provided consulting services to several exploration/mining companies including Auiron Energy, Centrex
Metals, Rio Tinto Exploration, Hamersley Iron, Consolidated Minerals, Sinosteel Australia, Sinosteel Midwest
Corporation, Sumitomo Corporation, Golden West Resources Ltd, Fairstar Resources Ltd, and NEX Metals
Exploration Ltd in Australia. Overseas, in India he worked as a Technical Adviser for Rio Tinto Orissa Mining
Limited (a Rio Tinto Joint Venture with Orissa Mining Corporation, India) and as a consultant to Tata Iron &
Steel, and Mid-West Granite, in Iran as a Consultant to International Minerals Consulting Company, and as a
consultant to Oswal Brasil Refinaria de Petróleo, in Brazil.
From May 2007 to October 2008 Mr Pal worked for Fairstar Resources Ltd (FAS; an ASX listed company) as an
Exploration Adviser/Technical and Executive Director – Exploration/Technical. While with Fairstar, he made
two iron discoveries (Mahendra’s Find & Elaine’s Pride), 110 km southeast of Kalgoorlie. These discoveries are
the first of this kind in the area previously known for its gold prospectivity.
At Shree Minerals, he has identified the Direct Shipping Iron Ore (DSO) at the Company's Nelson Bay River
Prospect.
Mr Andy Lau, Non Executive Director MBA
Mr Andy Lau is a professional engineer and held senior management responsibilities for over 10 years in
computer information and financing industry.
Mr Lau holds a MBA and graduate majoring in Computer Technology and also held the certificates of MCSE,
MCDBA, MCP and CCNA. He worked for a number of large international companies in securities, venture
capital and high-tech industries. Mr Lau has been the vice president of China Alliance International Holdings
Group Limited since 2005.
Mr Amu Shah, Non Executive Director
Mr Amu Shah is a director and shareholder in various businesses ranging from retail trade, distribution of
office and stationery products, services to the mining industry, manufacturing, and property development and
ownership.
Mr Amu Shah is currently appointed Honorary Consul for Kenya in Perth.
Mr Amu Shah has extensive international and local business experience.
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DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The full Board fulfils the roles of remuneration committee and is governed by the Company’s adopted
remuneration policy.
The information provided in this remuneration report has been audited as required by Section 308 (3c) of the
Corporations Act 2001.
Remuneration Policy
This policy governs the operations of the Remuneration Committee. The Committee shall review and reassess
the policy at least annually and obtain the approval of the Board.
General director remuneration
Shareholder approval must be obtained in relation to the overall limit set for non-executive directors’ fees. The
Directors shall set individual Board fees within the limit approved by shareholders.
Shareholders must also approve the framework for any broad based equity based compensation schemes and
if a recommendation is made for a director to participate in an equity scheme, that participation must be
approved by the shareholders.
Executive remuneration
The Company’s remuneration policy for executive directors and senior management is designed to promote
superior performance and long term commitment to the Company. Executives receive a base remuneration
which is market related, and may be entitled to performance based remuneration at the ultimate discretion of
the Board.
Overall remuneration policies are subject to the discretion of the Board and can be changed to reflect
competitive market and business conditions where it is in the interests of the Company and shareholders to do
so.
Executive remuneration and other terms of employment are reviewed annually by the Remuneration
Committee having regard to performance, relevant comparative information and expert advice.
The Committee’s reward policy reflects its obligation to align executive’s remuneration with shareholders’
interests and to retain appropriately qualified executive talent for the benefit of the Company. The main
principles of the policy are:
a.
b.
reward reflects the competitive market in which the Company operates;
individual reward should be linked to performance criteria; and
c. executives should be rewarded for both financial and non-financial performance.
The total remuneration of executives and other senior managers consists of the following:
a.
salary - executives director and senior manager receive a fixed sum payable monthly in cash;
b. bonus - executive directors and nominated senior managers are eligible to participate in a profit
participation plan if deemed appropriate;
c.
long term incentives - executive directors and nominated senior managers may also participate in
employee share option schemes, with any option issues generally being made in accordance with
thresholds set in plans approved by shareholders. The Board however, considers it appropriate to retain
the flexibility to issue options to executives outside of approved employee option plans in exceptional
circumstances; and
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
d. other benefits - executive directors and senior managers are eligible to participate in superannuation
schemes and other appropriate additional benefits.
Remuneration of other executives consists of the following:
a.
salary - senior executive receives a fixed sum payable monthly in cash;
b. bonus - each executive is eligible to participate in a profit participation plan if deemed appropriate;
c.
long term incentives - each senior executive may, where appropriate, participate in share option schemes
which have been approved by shareholders; and
d. other benefits – senior executive are eligible to participate in superannuation schemes and other
appropriate additional benefits.
Non-executive remuneration
Shareholders approve the maximum aggregate remuneration for non-executive directors. The Remuneration
Committee recommends the actual payments to directors and the Board is responsible for ratifying any
recommendations, if appropriate. The maximum aggregate remuneration approved for directors is currently
$200,000.
It is recognised that non-executive directors’ remuneration is ideally structured to exclude equity based
remuneration. However, whilst the Company remains small and the full Board, including the non-executive
directors, are included in the operations of the Company more intimately than may be the case with larger
companies the non-executive directors are entitled to participate in equity based remuneration schemes.
All directors are entitled to have their indemnity insurance paid by the Company.
Profit participation plan
Performance incentives may be offered to executive directors and senior management of the Company
through the operation of a profit participation plan at the ultimate discretion of the Board.
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
Details of remuneration
The remuneration for each Director and the senior Executive of the Company during the year and the previous year was as
follows:
2011
Short-term Employee Benefits
Post-
employment
Benefits
Cash,
salary,
Directors
Fees
Cash
profit
share,
bonuses
Non-
cash
benefits
Allowances
Super-
annuation
Other
Long-
term
Benefits
Termination
Benefits
Share
Based
Payments
Total
Mr S Loyalka
Executive Director
183,486
Mr A Jagatramka
Non Executive
Director
Mr M Pal3
Non Executive
Director
Mr Andy Lau
Non Executive
Director
Mr Amu Shah
Non Executive
Director
Mr S Ledger
Company
Secretary
7,500
70,000
7,500
2,500
24,996
295,982
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2010
Short-term Employee Benefits
-
16,514
-
-
-
-
-
675
-
-
-
-
-
17,189
Post-
employment
Benefits
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200,000
8,175
43,500
113,500
-
-
7,500
2,500
-
24,996
43,500
356,671
Cash,
salary,
Directors
Fees
Cash
profit
share,
bonuses
Non-
cash
benefits
Allowances
Super-
annuation
Other
Long-
term
Benefits
Termination
Benefits
Share
Based
Payments
Total
Mr S Loyalka
Executive Director
111,162
Mr A Jagatramka
Non Executive
Director
Mr M Pal
Non Executive
Director
Mr Andy Lau
Non Executive
Director
3,750
47,465
4,375
-
-
-
-
-
-
-
-
-
10,005
-
-
-
338
-
-
-
-
-
-
-
-
-
-
-
-
121,167
4,088
-
47,465
-
4,375
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
Mr W Harder1
Chief Geological
Officer
Mr S Ledger2
Company
Secretary
7,057
24,677
198,486
-
-
-
-
-
-
1 M r Ha r de r re s ig ne d e f f e c t iv e 3 1 A u g us t 2 0 0 9 .
-
-
635
-
-
10,978
-
-
-
-
-
-
-
-
-
7,692
24,677
209,464
2 M r Le d ge r is a D i re c to r o f Le d g e r C o r po ra te P t y L t d. I n a dd i t io n to t he a bo v e re m un e r a t io n , Le d g e r C o r po ra te P t y L t d wa s
pa i d$ 2 , 0 2 4. 0 9( 2 0 10: $ 6 ,5 6 0. 2 4 ) i n re la t io n to e xp e ns e re i m b urs e m e n t a n d o f f ic e s e r vic e s .
3 M r P a l wa s pa i d $4 , 3 8 5. 5 5 ( 20 1 0: ni l) i n re la tio n t o e x pe ns e re i m b ur s e me n t i n a d d it io n to th e a bo ve re m u ne ra tio n.
Options issued as part of remuneration for the period ended 30 June 20 11
No options were granted as remuneration during the period ended 30 June 2011.
Please refer to Note 19 for further information.
Options issued as part of remuneration fo r the period ended 30 June 2010
There were 1,000,000 options issued to Mr Mahendra Pal and 500,000 options issued to Mr Steve Ledger as
part of remuneration for the year ending 30 June 2010.
Shares Issued on Exercise of Compensation Options
No options granted as compensation in prior periods were exercised through the period or the previous
period.
Employment contracts of directors and senior executives
The employment conditions of the Executive Director, Sanjay Loyalka, are formalised in a contract of
employment.
The contract specifies for an amount of $200,000 including superannuation per annum to be paid to Mr
Loyalka and may be reduced at Mr Loyalka’s discretion. The agreement commenced on 10 May 2008 and has
a term of five years.
Mr.Mahendra Pal is an independent Non Executive Director of the company. He has additionally agreed to
support the Geological & Technical functions of the company effective March 2010. Accordingly he is paid a
total of $75,000 per annum.
Meetings of Directors
During the financial year, 8 formal meetings of Directors (including committees of directors) were held.
Attendances by each Director during the year were as follows:
Director
Sanjay Loyalka
Arun Jagatramka
Mahendra Pal
Andy Lau
Amu Shah
Board Meetings
Meetings
attended
8
5
7
7
1
Meetings held
whilst in office
8
8
8
8
3
The full Board fulfils the role of remuneration, nomination and audit committees.
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
Indemnifying Officers or Auditor
The company maintains director and officer liability insurance.
Options
At the date of this report, the unissued ordinary shares of Shree Minerals Limited under option are as follows:
Date of Expiry
Exercise Price
Number under Option
31/10/2012
31/10/2012(in escrow)
12/02/2013( in escrow)
$0.20
$0.20
$0.20
500,000
9,000,000
250,000
9,750,000
During the year ended 30 June 2011, nil shares were issued on the exercise of options. There were 8,703,500
options expiring on 30 June 2011, of which the company received applications for 1,437,500 shares which
were subsequently issued on 15 July 2011. In addition, partial underwriting agreements were also finalised on
15 July 2011 with the issuance of a further 5,750,000 shares.
No person entitled to exercise the option had or has any right by virtue of the option to participate in any
share issue of any other body corporate.
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of these proceedings.
The Company was not a party to any such proceedings during the year.
Non-audit Services
The Board of Directors, in accordance with advice from the audit committee, is satisfied that the provision of
non-audit services during the year is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not
compromise the external auditor’s independence for the following reasons:
all non-audit services are reviewed and approved by the audit committee prior to commencement to
ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the
Accounting Professional and Ethical Standards Board.
The were no fees (2010: nil) for non-audit services were paid/payable to the external auditors during the year.
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S H R E E M I N E R A L S L T D
DIRECTORS’ REPORT
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2011 has been received and can be
found on page 24 of annual report.
Signed in accordance with a resolution of the Board of Directors.
Sanjay Loyalka
Chairman
Signed in Perth the 26th day of September 2011.
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S H R E E M I N E R A L S L T D
CORPORATE GOVERNANCE STATEMENT
This statement outlines the main corporate governance practices in place during the financial year.
The Directors monitor the business affairs of the Company on behalf of Shareholders and have formally
adopted a Corporate Governance Charter, which is designed to encourage Directors and other Shree
personnel to focus their attention on accountability, risk management and ethical conduct. The Company has
adopted the following policies, protocols and corporate governance structures:
Structure of Board and Committees
Nominations and Remuneration Committee Charter
Audit and Risk Management Committee Charter
Board Members’ Code of Conduct
Conflict of Interest Protocol
Group Code of Conduct/Values
Risk Management Policy
Policy on the Trading of Company’s Shares
Release of Price Sensitive Information
Board Calendar (Strategic Governance Issues)
Board and Management Performance Enhancement Policy
The Corporate Governance Charter was prepared with regard to the Principles of Good Corporate Governance
and Best Practice Recommendations released by the ASX Corporate Governance Council in March 2003 (as
amended) so as to ensure that its practices are largely consistent with those Recommendations from time to
time. The Corporate Governance Charter will be reviewed and adjusted, as required, on an on-going basis
including in line with the ASX Corporate Governance Council amendments to the Recommendations.
The Company is committed to implementing high standards of corporate governance. In determining what
those high standards should involve the Company has turned to the ASX Corporate Governance Council’s
Principles of Good Corporate Governance and Best Practice Recommendations. The Company is pleased to
advise that the Company’s practices are largely consistent with those ASX guidelines.
Unless disclosed below, all the best practice recommendations of the ASX Corporate Governance Council have
been applied for the entire financial year ended 30 June 2011.
Board Composition
The skills, experience and expertise relevant to the position of each director who is in office at the date of the
annual report and their term of office are detailed in the director’s report.
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S H R E E M I N E R A L S L T D
CORPORATE GOVERNANCE STATEMENT
The Board sets out below its “if not why not” report in relation to those matters of corporate governance
where the Company’s practices depart from the Recommendations
RECOMMENDATION
SHREE MINERALS LIMITED CURRENT PRACTICE
1.1
1.2
1.3
Companies should establish the functions reserved for
the board and those delegated to senior executives
and disclose those functions.
Companies should disclose the process for evaluating
the performance of senior executives.
Companies should provide the information indicated in
the Guide for reporting on Principle 1
Board
Satisfied.
at
Charter
www.shreeminerals.com in the Corporate Governance
Statement.
available
is
Satisfied. Board Performance Evaluation Policy is available
at www.shreeminerals.com in the Corporate Governance
Statement.
The
Board
Satisfied.
at
www.shreeminerals.com in the Corporate Governance
Statement.
available
Charter
is
Whilst the performance of management is appraised on
an ongoing basis. During the year no formal appraisal of
management was conducted.
2.1
A majority of the board should be
directors.
independent
Satisfied. The incumbent are independent directors.
2.2
The chair should be an independent director.
Not Satisfied. Due to the size of the company and its
operations Mr Sanjay Loyalka
is both an Executive
Director and Chairman.
2.3
The roles of chair and Chief Executive Officer should
not be exercised by the same individual.
Not Satisfied. Due to the size of the company and its
operations Mr Sanjay Loyalka is both Executive Director
and the Chairman.
2.4
The board should establish a nomination committee.
Not satisfied. The Board consider that given the current
size of the board (5), this function is efficiently achieved
with full board participation. Accordingly, the Board has
not established a nomination committee.
2.5
2.6
Companies should disclose the process for evaluating
the performance of the board, its committees and
individual directors.
Satisfied. Board Performance Evaluation Policy is available
at www.shreeminerals.com in the Corporate Governance
Statement.
Companies should provide the information indicated in
the guide to reporting on Principle 2
Satisfied.
Whilst the performance of the Board is appraised on an
ongoing basis, during the year no formal appraisal was
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S H R E E M I N E R A L S L T D
CORPORATE GOVERNANCE STATEMENT
RECOMMENDATION
SHREE MINERALS LIMITED CURRENT PRACTICE
conducted.
Satisfied. The Code of conduct is available at
www.shreeminerals.com in the Corporate Governance
Statement.
3.1
Companies should disclose a code of conduct and
disclose the code or a summary of the code as to:
The practices necessary to maintain confidence in the
company’s integrity
The practices necessary to take into account their legal
obligations and the reasonable expectations of their
stakeholders
The responsibility and accountability of individuals for
reporting and
investigating reports of unethical
practices.
3.2
Companies should establish a policy concerning trading
in company securities by directors, senior executives
and employees, and disclose the policy or a summary
of that policy.
The Trading Policy
Satisfied.
is available at
www.shreeminerals.com in the Corporate Governance
statement.
3.3
Companies should provide the information indicated in
the Guide to reporting on Principle 3
Satisfied
4.1
The board should establish an audit committee.
4.2
The board committee should be structured so that it:
Consists only of non-executive directors
Consists of a majority of independent directors
Is chaired by an independent chair, who is not chair of
the board
Has at least three members
4.3
The audit committee should have a formal charter.
Not satisfied. The Board consider that given the current
size of the board (4), this function is efficiently achieved
with full board participation. Accordingly, the Board has
not established an audit committee.
Not satisfied. The company has adopted a policy which
includes Executive Directors as audit
committee
members.
Audit Committee charter
Satisfied.
is available at
www.shreeminerals.com in the Corporate Governance
statement.
4.4
5.1
Companies should provide the information indicated in
the Guide to reporting on Principle 4
Satisfied.
Companies should establish written policies designed
to ensure compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at senior
executive level for that compliance and disclose those
Satisfied. Continuous disclosure policy is available at
www.shreeminerals.com in the Corporate Governance
statement.
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S H R E E M I N E R A L S L T D
CORPORATE GOVERNANCE STATEMENT
RECOMMENDATION
SHREE MINERALS LIMITED CURRENT PRACTICE
5.2
6.1
6.2
7.1
7.2
7.3
policies or a summary of those policies.
Companies should provide the information indicated in
the Guide to reporting on Principle 5
Satisfied
Companies should design a communications policy for
promoting effective communication with shareholders
and encouraging
their participation at general
meetings and disclose their policy or a summary of
their policy.
Shareholders communication strategy
Satisfied.
is
available at www.shreeminerals.com in the Corporate
Governance statement.
Companies should provide the information indicated in
the Guide to reporting on Principle 6
Satisfied
Companies should establish policies for the oversight
and management of material business risks and
disclose a summary of those policies.
Satisfied. Risk management program is available at
www.shreeminerals.comin the Corporate Governance
statement.
Satisfied. The Board, including the Managing Director,
routinely consider risk management matters.
The board should require management to design and
implement the risk management and internal control
system to manage the company’s material business
risks and report to it on whether those risks are being
managed effectively. The board should disclose that
management has reported to it as to the effectiveness
of the company’s management of its material business
risks.
Satisfied.
declaration pursuant to the 2010 financial period.
The Board has received a section 295A
the chief executive officer
financial officer
the chief
the declaration provided
The board should disclose whether it has received
(or
assurance
from
(or
equivalent) and
equivalent)
in
that
accordance with section 295A of the corporations Act
is founded on a sound system of risk management and
internal control and that the system is operating
effectively
in relation to
financial reporting risks.
in all material respects
7.4
Companies should provide the information indicated in
the Guide to reporting on Principle 7
Satisfied
8.1
The board should establish a remuneration committee. Not Satisfied. The Board consider that given the current
size of the board (4), this function is efficiently achieved
with full board participation. Accordingly, the Board has
not established a remuneration committee.
8.2
Companies should clearly distinguish the structure of
non-executive directors’ remuneration from that of
The structure of directors’ remuneration is disclosed in
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S H R E E M I N E R A L S L T D
CORPORATE GOVERNANCE STATEMENT
RECOMMENDATION
SHREE MINERALS LIMITED CURRENT PRACTICE
executive directors and senior executives.
the remuneration report of the annual report.
8.3
Companies should provide the information indicated in
the Guide to reporting on Principle 8
committee
Remuneration
is available at
www.shreeminerals.comin the Corporate Governance
statement.
charter
Other Information
Further information relating to the company’s corporate governance practices and policies has been made
publicly available on the company’s web site at www.shreeminerals.com
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S H R E E M I N E R A L S L T D
A U D I T O R S ’ I N D E P E N D E N C E C O N F I R M A T I O N
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S H R E E M I N E R A L S L T D
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDING 30 JUNE 2011
Note
30 June 2011
$
30 June 2010
$
Revenue from continuing operations
Interest
Research and development tax concession
Other
Expenses from continuing operations
Finance charges
Employee and consulting fees
Regulatory costs
Occupancy and communication
Foreign exchange loss
Accounting and Legal Fees
Impairment of exploration tenements
Other Expenses
Loss before income tax
Income tax expense
Loss for the period
Other comprehensive income
Comprehensive Loss for the year
176,959
202,125
69,091
(1,727)
(316,218)
(14,888)
(37,882)
-
(70,482)
(281,169)
(60,842)
(335,033)
-
(335,033)
-
(335,033)
4
76,015
-
-
(2,689)
(203,366)
(45,479)
(38,501)
(16,922)
(15,866)
-
(61,935)
(308,743)
-
(308,743)
-
(308,743)
Earnings per share for (loss) attributable to
ordinary equity holders of the company:
Basic (loss) cents per share
5
(0.38)
(0.44)
The accompanying notes form part of these financial statements.
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S H R E E M I N E R A L S L T D
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2011
Note
30 June 2011
$
30 June 2010
$
6
7
9
8
10
10
11
12
12
2,557,162
192,428
2,749,590
5,209,739
1,708
5,211,447
3,113,238
105,939
3,219,177
4,556,445
1,036
4,557,481
7,961,037
7,776,658
233,996
3,839
237,835
51,062
4,326
55,388
237,835
55,388
7,723,202
7,721,270
8,500,310
129,145
(906,253)
8,163,345
-
(442,075)
7,723,202
7,721,270
Assets
Current Assets
Cash and cash equivalents
Receivables
Total Current Assets
Non-Current Assets
Exploration and evaluation
Plant and equipment
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Reserves
Accumulated losses
Total Equity
The accompanying notes form part of these financial statements.
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S H R E E M I N E R A L S L T D
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2011
Issued
Capital
Note
$
Accumulated
Losses
$
Share based
option reserve
BALANCE AT 1 July 2009
2,581,848
(133,332)
Total comprehensive income for the
period
-
(308,743)
Shares issued or applied for during the
year
11
5,964,500
Capital raising costs
(383,003)
-
-
SUB-TOTAL
8,163,345
(442,075)
Dividends paid or provided for
-
-
BALANCE AT 30 JUNE 2010
8,163,345
(442,075)
BALANCE AT 1 July 2010
8,163,345
(442,075)
-
-
-
-
-
-
-
Total
$
2,448,516
(308,743)
5,964,500
(383,003)
7,721,270
-
7,721,270
7,721,270
Prior period adjustment
12
(129,145)
129,145
-
Total comprehensive income for the
period
-
(335,033)
Shares issued or applied for during the
year
11
354,000
Capital raising costs
(17,035)
-
-
-
-
-
(335,033)
354,000
(17,035)
SUB-TOTAL
8,500,310
(906,253)
129,145
7,723,202
Dividends paid or provided for
-
-
-
-
BALANCE AT 30 JUNE 2011
8,500,310
(906,253)
129,145
7,723,202
The accompanying notes form part of these financial statements.
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S H R E E M I N E R A L S L T D
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2011
Note
30 June 2011
$
Cash flows from operating activities
Payments to suppliers and employees (inclusive of GST)
Interest received
Research and Development tax concession
Finance and borrowing costs paid
Net cash inflow from operating activities
15(b)
Cash flows from investing activities
Payment for plant and equipment
Payments for tenement acquisition
Net cash outflow from financing activities
Cash flows from financing activities
Proceeds from issues of shares and other equity securities
Payments for share issue costs
Repayment of borrowings
Net cash outflow from financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial
period
(1,220,398)
175,672
202,125
-
(842,601)
(975)
-
(975)
287,500
-
-
287,500
(556,076)
3,113,238
30 June 2010
$
(1,031,437)
30,915
-
(2,689)
(1,003,211)
(1,045)
(550,000)
(551,045)
4,764,500
(333,003)
-
4,431,497
2,877,241
235,997
Cash and cash equivalents at the end of the financial
period
6
2,557,162
3,113,238
The accompanying notes form part of these financial statements.
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
This financial report includes the financial statements and notes of Shree Minerals Limited, a Company
domiciled and incorporated in Australia.
Statement of Compliance
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001.
The financial report includes the separate financial statements of the Company.
Accounting standards include Australian equivalents to International Financial Reporting Standards (“AIFRS”).
Compliance with AIFRS ensures that the financial statements and notes thereto comply with International
Financial Reporting Standards (“IFRS”).
The financial report is presented in Australian currency.
Basis of Preparation
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
The significant accounting policies set out below have been applied in the preparation and presentation of the
financial report for the year ending 30 June 2011 and comparative information.
a.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred
tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities
(assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation
authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the
profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also
result where amounts have been fully expensed but future tax deductions are available. No deferred income
tax will be recognised from the initial recognition of an asset or liability, excluding a business combination,
where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting
date. Their measurement also reflects the manner in which management expects to recover or settle the
carrying amount of the related asset or liability.
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax
asset can be utilised.
b. Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any
accumulated depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of
the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected
net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net
cash flows have been discounted to their present values in determining recoverable amounts.
The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour,
borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the group and the
cost of the item can be measured reliably. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation
reserve in equity. Decreases that offset previous increases of the same asset are charged against fair value
reserves directly in equity; all other decreases are charged to the income statement. Each year the difference
between depreciation based on the revalued carrying amount of the asset charged to the income statement
and depreciation based on the asset’s original cost is transferred from the revaluation reserve to retained
earnings.
Depreciation
The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding
freehold land, is depreciated on a straight-line basis over their useful lives to the consolidated group
commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the
shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment
Office equipment
Depreciation Rate
33%
20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet
date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in the income statement. When revalued assets are sold, amounts included in the
revaluation reserve relating to that asset are transferred to retained earnings.
c. Exploration, evaluation and development expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through successful development on the area or where activities in the area have not yet reached a stage which
permits reasonable assessment of the existence of economically recoverable reserve.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which
the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest area amortised over the
life of the area according to the rate of depletion of the economically recoverable reserves.
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.
d. Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset,
but not the legal ownership that is transferred to entities in the economic entity, are classified as finance
leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair
value of the leased property or the present value of the minimum lease payments, including any guaranteed
residual values. Lease payments are allocated between the reduction of the lease liability and the lease
interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the
lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over
the life of the lease term.
e. Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity
becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial
assets that are delivered within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not
classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair
value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and
measured as set out below.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity is no longer has any significant continuing involvement in the
risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations
Page 31
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
are either discharged, cancelled or expire. The difference between the carrying value of the financial liability
extinguished or transferred to another party and the fair value of consideration paid, including the transfer of
non-cash assets or liabilities assumed, is recognised in profit or loss.
Classification and Subsequent Measurement
(i) Financial assets at fair value through profit or loss
Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose
of short term profit taking, where they are derivatives not held for hedging purposes, or 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. Realised and unrealised gains and losses arising from changes in fair
value are included in profit or loss in the period in which they arise.
(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 and are subsequently measured at amortised cost using the effective interest rate
method.
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the group’s intention to hold these investments to maturity. They are
subsequently measured at amortised cost using the effective interest rate method.
(iv) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that
are not classified in any of the other categories. They comprise investments in the equity of other entities
where there is neither a fixed maturity nor fixed or determinable payments.
(v) Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised
cost using the effective interest rate method.
Derivative instruments
Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are taken
to the income statement unless they are designated as hedges.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
Impairment
At each reporting date, the group assess whether there is objective evidence that a financial instrument has
been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the
Page 32
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the
income statement.
Impairment of Non Financial Assets
f.
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is
compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is
expensed to the income statement.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Interests in Joint Ventures
g.
The Company’s share of the assets, liabilities, revenue and expenses of joint venture operations are included in
the appropriate items of the financial statements.
h. Employee Benefits
Provision is made for the company’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits that are expected to be settled within one year have been
measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later
than one year have been measured at the present value of the estimated future cash outflows to be made for
those benefits. Those cash flows are discounted using market yields on national government bonds with terms
to maturity that match the expected timing of cash flows.
Equity-settled compensation
The group operates equity-settled share-based payment employee share and option schemes. The fair value of
the equity to which employees become entitled is measured at grant date and recognised as an expense over
the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained
as the market bid price. The fair value of options is ascertained using a Black–Scholes pricing model which
incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and
adjusted at each reporting date such that the amount recognised for services received as consideration for the
equity instruments granted shall be based on the number of equity instruments that eventually vest.
i. Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Page 33
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
j. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of 12 months or less, and bank overdrafts. Bank overdrafts are shown
within short-term borrowings in current liabilities on the balance sheet
k. Revenue
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).
l. 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 (“ATO”). In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and
payables in the statement of financial position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the
statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows
arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified
as operating cash flows.
m. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
n. Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the group.
Key Judgements – Deferred exploration and evaluation expenditure
Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current.
These costs are carried forward in respect of an area that has not at balance sheet date reached a stage that
permits reasonable assessment of the existence of economically recoverable reserves, refer to the accounting
policy stated in note 1(c).
Key Judgement s Share based payment transactions
The Company 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 internal
valuation using a Black-Scholes option pricing model, using the assumptions detailed in note 20.
Page 34
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
o. Operating segments
Identification and measurement of segments – AASB 8 requires the ‘management approach’ to the
identification measurement and disclosure of operating segments. The ‘management approach’ requires that
operating segments be identified on the basis of internal reports that are regularly reviewed by the entity’s
chief operating decision maker, for the purpose of allocating resources and assessing performance. This could
also include the identification of operating segments which sell primarily or exclusively to other internal
operating segments.
NOTE 2: KEY MANAGEMENT PERSONNEL COMPENSATION
Names and positions held of economic and parent entity key management personnel in office at any time
during the financial year are:
Sanjay Loyalka
Mahendra Pal
Arun Kumar Jagatramka
Andy Lau
Amu Shah
Steve Ledger
Chairman
Director
Director
Director
Director (appointed 4 March 2011)
Company Secretary (resigned 20 July 2011)
Key management personnel remuneration has been included in the Remuneration Report section of the
Directors Report.
Number of Shares Held by Key Management Personnel
30 June 2011
Key Management Person
Balance
1 July 2010
Received as
Compensation
Options
Exercised
Net Change
Other
Balance on
Resignation
Balance
30 June 2011
Mr Sanjay Loyalka3
Mr Mahendra Pal
25,415,000
-
-
300,000
Mr Arun Jagatramka
15,000,000
Mr Andy Lau
Mr Amu Shah
Mr Steve Ledger
-
7,500,000
20,000
-
-
-
-
47,935,000
300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,415,000
-
-
-
-
-
-
300,000
15,000,000
-
7,500,000
20,000
48,235,000
Balance
1 July 2009
Received as
Compensation
Options
Exercised
30 June 2010
Key Management
Person
Mr Sanjay Loyalka3
Mr Mahendra Pal
32,500,000
-
Mr Arun Jagatramka
10,000,000
Mr Andy Lau
Mr Steve Ledger
-
-
42,500,000
Net Change
Other
(7,085,000)
-
5,000,000
-
20,000
(2,065,000)
-
-
-
-
-
-
Balance on
Resignation
-
-
-
-
-
-
Balance
30 June 2010
25,415,000
-
15,000,000
-
20,000
40,435,000
-
-
-
-
-
-
Page 35
For personal use only
S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
Number of Options Held by Key Management Personnel
30 June 2011
Key Management
Person
Mr Sanjay3
Loyalka
Mr Mahendra
Pal1
Mr Arun
Jagatramka
Balance
30 June
2010
50,000
1,000,000
-
Mr Amu Shah
1,250,000
Mr Andy Lau
Mr Steve Ledger2
-
510,000
Granted as
compensation
Options
Exercised
Net
Change
Other
Balance
30 June 2011
Total
Vested
30 June
2011
Total
Exercisable
30 June
2011
Total
Unexercisable
30 June 2011
-
-
-
-
-
-
-
-
-
-
-
-
(50,000)
-
1,000,000
-
-
-
-
-
-
1,250,000 1,250,000
1,250,000
-
-
-
(10,000)
500,000
500,000
500,000
-
-
-
-
-
1,000,000
-
-
-
-
1,000,000
-
1,750,000
Please refer to Note 19 for further information regarding the fair value of share options and assumptions.
2,750,000 1,750,000
2,810,000
(60,000)
-
30 June 2010
Key Management
Person
Balance
30 June
2009
Mr Sanjay3
Loyalka
Mr Mahendra
Pal1
Mr Arun
Jagatramka
Mr Andy Lau
Mr Steve Ledger2
Granted as
compensation
Options
Exercised
Net
Change
Other
Balance
30 June 2010
Total
Vested
30 June
2010
Total
Exercisable
30 June
2010
Total
Unexercisable
30 June 2010
-
-
-
-
-
-
-
1,000,000
-
-
500,000
1,500,000
-
-
-
-
-
-
50,000
50,000
50,000
50,000
-
-
-
-
1,000,000
-
-
-
-
-
-
-
-
10,000
510,000
510,000
510,000
1,000,000
-
-
-
60,000
1,560,000
560,000
560,000
1,000,000
1. M r P a l w a s gr a nt e d 1 ,0 0 0 , 00 0 o p tio ns p urs ua n t to t h e 2 0 09 a n n ua l ge ne ra l me e t i n g d ur i n g t he y e a r e n d i n g 3 0 J u ne 2 0 1 0.
2. M r Le dg e r w a s gra n te d 5 0 0 , 00 0 o p tio ns p u rs ua n t to t he 2 00 9 a n n ua l g e ne r a l m e e ti n g. M r L e dg e r is a d ire c to r o f Le d ge r
C o r po r a t e P t y L t d. T he c o m p a n y a n d i ts a s s o c i a t e d e n t it ie s a c q ui re d 1 0 ,0 0 0 o p t io ns d ur i n g t he ye a r e n d i ng 30 J un e 2 0 10
w hic h s u bs e q ue n tl y e x p ir e d o n 3 0 J u ne 20 1 1.
3. T he di s c lo s u re s f o r t he pe r io d e n di n g 3 0 J u ne 2 0 1 0 h a ve be e n re v is e d to i nc lu d e ho l di n gs o f M r s R a s h mi Lo y a l ka w ho is
re la t e d to M r Lo ya lk a a s t he c o m pa n y be li e v e s M r Lo ya l ka ha s a c o n tro l li n g i nf l u e nc e o ve r t he s e s ha re s . M rs R a s h mi Lo ya l ka
a c q u ire d 10 0 , 0 00 o rd i n a ry s ha re s a n d 5 0 , 0 00 o pt io ns d u r in g t h e ye a r e n d i ng 30 J u ne 2 0 1 0.
Please refer to Note 19 for further information regarding the fair value of share options and assumptions.
Page 36
For personal use only
S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
NOTE 3: AUDITORS’ REMUNERATION
Remuneration paid or payable of the auditor for:
– Auditing or reviewing the financial report
– Taxation services and corporate services
NOTE 4: INCOME TAX
a. Income tax expense
Current tax
Deferred tax
Deferred income tax expense included in income tax expense
comprises:
(a) (Increase) in deferred tax assets
(b) Increase in deferred tax liabilities
b. Reconciliation of income tax expense to prima facie tax
payable
The prima facie tax payable on profit from ordinary activities
before income tax is reconciled to the income tax expense as
follows:
Prima facie tax expense/(benefit) on operating profit/(loss) at
30%
Add / (Less)
Tax effect of:
30 June 2011
30 June 2010
$
15,225
-
15,225
$
7,666
-
7,666
30 June 2011
30 June 2010
$
-
-
-
$
-
-
-
(195,988)
195,988
-
(352,625)
352,625
-
30 June 2011
30 June 2010
$
$
(100,510)
(92,623)
Deferred tax asset not brought to account
Income tax attributable to operating loss
100,510
-
92,623
-
The applicable weighted average effective tax rates are as
follows:
Balance of franking account at year end
Nil
Nil
Nil
Nil
Page 37
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
c. Deferred tax assets
Tax Losses
Provisions
Other
Set-off deferred tax liabilities
Net deferred tax assets
d. Deferred tax liabilities
Exploration expenditure
Set-off deferred tax assets
Net deferred tax liabilities
e. Tax losses
-
1,152
194,836
-
1,298
351,327
(195,988)
(352,625)
-
-
195,988
(195,988)
-
352,625
(352,625)
-
Unused tax losses for which no deferred tax asset has been
recognised
1,681,997
1,983,741
Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not been
brought to account at 30 June 2011 because the directors do not believe it is appropriate to regard realisation of
the deferred tax assets as probable at this point in time. These benefits will only be obtained if:
i. the company derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deductions for the loss and exploration expenditure to be realised;
ii. the company continues to comply with conditions for deductibility imposed by law; and
iii.
no changes in tax legislation adversely affect the company in realising the benefit from the
deductions for the loss and exploration expenditure.
During the year the company obtained research and development tax concessions of $202,125.
NOTE 5: EARNINGS PER SHARE
a. Earnings used to calculate basic EPS
b. Weighted average number of ordinary shares outstanding
during the year used in calculating basic EPS
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Page 38
30 June 2011
30 June 2010
$
$
(335,033)
(308,743)
Number of
Shares
Number of
Shares
87,620,993
69,824,568
30 June 2011
30 June 2010
$
$
2,557,162
3,113,238
For personal use only
S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
NOTE 7: TRADE AND OTHER RECEIVABLES
Interest receivable
Security deposits
Trade receivables
GST and ABN withholding tax receivables
30 June 2011
30 June 2010
$
$
46,388
19,000
76,000
51,040
192,428
45,101
19,000
-
41,838
105,939
NOTE 8: PROPERTY, PLANT & EQUIPMENT
30 June 2011
30 June 2010
Plant And Equipment
Office Equipment – at cost
Accumulated depreciation
a. Movements in Carrying Amounts
Movement in the carrying amounts for each class of property,
plant and equipment between the beginning and the end of
the current financial year
Opening balance at 1 July 2010
Additions
Depreciation expense
Balance at 30 June 2011
$
2,020
(312)
1,708
Plant and
equipment
Office
Equipment
$
-
-
-
-
$
1,036
975
(303)
1,708
$
1,045
(9)
1,036
Total
$
1,036
975
(303)
1,708
Page 39
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
NOTE 9: EXPLORATION EXPENDITURE
30 June 2011
30 June 2010
Exploration and evaluation phase expenditure capitalised
$
5,209,739
Movements
Opening balance at 1 July 2009
Exploration capitalised
Balance at 30 June 2010
Opening balance at 1 July 2010
Exploration capitalised
Impairment / relinquishment
Balance at 30 June 2011
$
4,556,445
$
3,381,029
1,175,416
4,556,445
4,556,445
934,463
(281,169)
5,209,739
Impairment during the period relates to lapsed and relinquished exploration licenses for Catamaran (EL32/2005)
and Adamsfield (EL11/2006) of $148,634 and $132,535 respectively.
The value of Company interest in exploration expenditure is dependent upon the:
the continuance of the economic entity rights to tenure of the areas of interest;
the results of future exploration; and
the recoupment of costs through successful development and exploitation of the areas of
interest, or alternatively, by their sale.
The exploration properties may be subjected to claim(s) under native title, or contain sacred sites, or sites of
significance to Aboriginal people. As a result, exploration properties or areas within the tenements may be subject
to exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not possible to
quantify whether such claims exist, or the quantum of such claims.
Page 40
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
NOTE 10: TRADE AND OTHER PAYABLES
Current
Trade and other creditors
Provisions
NOTE 11: CONTRIBUTED EQUITY
30 June 2011
30 June 2010
$
233,996
3,839
237,835
$
51,062
4,326
55,388
30 June 2011
30 June 2010
$
$
87,872,500 (2010: 87,422,500) Fully paid ordinary shares
8,500,310
8,163,345
The Company has issued capital amounting to 87,872,500
(2010: 87,422,500) with no par value
Movements
Opening balance
Shares issued
Options exercised and to be allotted
Shares issued or applied for during the year
Capital raising costs
Closing balance
(a) Ordinary Shares
At the beginning of the reporting period
Shares issued during the period
–
–
–
–
–
–
13 July 2008
6 November 2009
16 February 2010
18 February 2010
2 March 2010
21 January 2011
At reporting date
Page 41
8,163,345
66,500
287,500
354,000
(17,035)
8,500,310
2,581,848
5,964,500
-
5,964,500
(383,003)
8,163,345
Number of
Shares
Number of
Shares
87,422,500
56,000,000
-
-
-
-
-
450,000
-
8,000,000
17,417,500
6,000,000
5,000
-
87,872,500
87,422,500
For personal use only
S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
(b)
Options
At the date of this report, the unissued ordinary shares of Shree Minerals Limited under option are as follows:
Date of Expiry
Exercise Price
Number under Option
31/10/2012
31/10/2012(in escrow)
12/02/2013( in escrow)
$0.20
$0.20
$0.20
500,000
9,000,000
250,000
9,750,000
During the year ended 30 June 2011, nil shares were issued on the exercise of options. There were 8,703,500
options expiring on 30 June 2011, of which the company received applications for 1,437,500 shares which were
subsequently issued on 15 July 2011. In addition, partial underwriting agreements were also finalised on 15 July
2011 with the issuance of a further 5,750,000 shares.
No person entitled to exercise the option had or has any right by virtue of the option to participate in any share
issue of any other body corporate.
(c)
Capital risk management
The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so
that they may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the Company’s activities, being mineral exploration, the Company does not have ready access
to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Company’s
capital risk management is the current working capital position against the requirements of the Company to meet
exploration programmes and corporate overheads. The Company’s strategy is to ensure appropriate liquidity is
maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as
required. The working capital position of the Company at 30 June 2011 and 30 June 2010 are as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Working capital position
NOTE 12: RETAINED LOSSES AND RESERVES
a. Retained Losses
At the beginning of the reporting period
Prior period adjustment
Comprehensive loss
At reporting date
Page 42
2,557,162
192,428
(237,835)
2,511,755
3,113,238
105,939
(55,388)
3,163,789
30 June 2011
30 June 2010
$
$
442,075
129,145
335,033
906,253
133,332
-
308,743
442,075
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
b. Option Reserve
The option reserve records items recognised as expenses on valuation of share based payments including employee
options. Please refer note 19 for more information.
There were no share based options issued during the current reporting period. During the period, a prior period
adjustment was made to revalue the share options on issue. This resulted in an adjustment of $129,145 to share
based payment expenditure. A corresponding adjustment was made to the Share based option reserve.
NOTE 13: COMMITMENTS
a. The Company has tenements rental and expenditure
commitments of:
Payable:
– not later than 12 months
– between 12 months and 5 years
– greater than 5 years
30 June 2011
30 June 2010
$
$
203,367
253,584
-
-
-
-
b. The Company has other rental and expenditure commitments of $9,792 within the next 12 months.
NOTE 14: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
On 21st April 2008, the Company entered into a tenement sale agreement with Gujurat NRE Resources NL for the
purchase of the right and title to various exploration licenses. Mr Arun Jagatramka is a director of both the
company and Gujurat NRE Resources NL. He was appointed to the Board subsequent to this agreement. The
company paid consideration in cash and script, however is required to issue a further 10,000,000 shares in the
company to Gujurat NRE Resources NL within 30 days of successful completion of;
The company completing a bankable feasibility study to be solely funded by the company;
i)
ii) The company obtaining funding approval for the development and operation of a mine as contemplated
by the bankable feasibility; and
iii) The Board approving a decision to mine, on the Nelson Bay River tenement.
The company has currently met all the expenditure commitments relating to tenement exploration activities as
required under the exploration licenses granted by Mineral Resources Tasmania.
Other than the above, the Directors are not aware of any other contingent liabilities or contingent assets.
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
NOTE 15: CASH FLOW INFORMATION
(a) Reconciliation of Cash
Cash at the end of the financial year as shown in the statement
of cash flows is reconciled to the related items in the statement
of financial position as follows:
30 June 2011
30 June 2010
$
$
Cash
2,557,162
3,113,238
(b) Reconciliation of Cash Flow from Operations with
Operating Profit after Income Tax
Operating loss after income tax
(335,033)
(308,743)
Non-cash flows:
Share based payments
Capital raising costs
Tenement impairment/relinquishment
Depreciation and amortisation
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other assets
Increase/(decrease) in trade and other payables
Net Cash Flow from/(used in) Operating Activities
NOTE 16: RELATED PARTY TRANSACTIONS
Key Management Personnel
66,500
(17,035)
281,169
302
(86,490)
(934,462)
182,448
(842,601)
-
-
-
9
(96,852)
(625,417)
27,792
(1,003,211)
Disclosures relating to key management personnel compensation are set out in Note 2 to the financial
statements, and in the Remuneration Report contained within the Directors Report.
Other transactions
During the reporting period, Mrs Rashmi Loyalka provided accounts payable services to the company to a
value of $20,000. Mrs Loyalka is related to the Chairman, Mr Sanjay Loyalka.
NOTE 17: FINANCIAL INSTRUMENTS
a. Financial Risk Management
The Company’s financial instruments consist mainly of deposits with banks and accounts receivable and
payable.
The main purpose of non-derivative financial instruments is to raise finance for the Company’s operations.
Derivatives are not currently used by the Company for hedging purposes. The Company does not speculate in
the trading of derivative instruments.
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
i. Treasury Risk Management
The senior executives of the Company meet on a regular basis to analyse currency and interest rate exposure
and to evaluate treasury management strategies in the context of the most recent economic conditions and
forecasts.
ii. Financial Risks
The main risks the Company is exposed to through its financial instruments are interest rate risk, liquidity risk
and credit risk.
Interest rate risk
The Company does not have any debt that may be affected by interest rate risk.
Sensitivity analysis
At 30 June 2011, if interest rates had changed by -/+ 75 basis points from the weighted average rate for the
year with all other variables held constant, post-tax loss for the Company would have been $19,179
lower/higher (2010 - $23,349 lower/higher) as a result of lower/higher interest income from cash and cash
equivalents.
Liquidity risk
The Company manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised
borrowing facilities are maintained.
Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to
recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the balance sheet and notes to the financial statements.
The Company does not have any material credit risk exposure to any single receivable or group of receivables
under financial instruments entered into by the economic entity.
b. Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or
for disclosure purposes. All financial assets and financial liabilities of the Company and the parent entity at the
balance date are recorded at amounts approximating their carrying amount.
The fair value of financial instruments traded in active markets is based on quoted market prices at the
reporting date. The quoted market price used for financial assets held by the Company is the current bid price.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate
their fair values due to their short-term nature.
c. Interest Rate Risk
The Company’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate
as a result of changes in market interest rates and the effective weighted average interest rate for each class of
financial assets and financial liabilities comprises:
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
Floating Interest
Rate
Fixed Interest Rate
1 Year or Less
1 to 5 Years
Non Interest
Bearing
Total
Weight Effective
Interest Rate
2011
$
2010
$
2011
$
2010
$
2011
$
2010
$
2011
$
2010
$
2011
$
2010
$
2011
%
2010
%
Cash
Trade and other
receivables
1,930,103
61,371
627,059 3,051,867
-
-
Total Financial Assets
1,930,103
61,371
627,059 3,051,867
Financial Liabilities
Trade and other payables
Total Financial Liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,557,162
3,113,238
6.59
-
192,428 105,939
192,428
105,939
N/A
N/A
192,428 105,939
2,749,590
3,219,177
(237,835)
(55,388)
(237,835)
(55,388)
N/A
N/A
(237,835)
(55,388)
(237,835)
(55,388)
NOTE 18: OPERATING SEGMENTS
The company operates predominately in one segment involved in the mineral exploration. Geographically, the
consolidated entity is domiciled and operates in one segment being Australia. In accordance with AASB 8
Operating Segments, a management approach to reporting has been applied. The information presented in the
Statement of Comprehensive Income and the Statement of Financial Position reflects the sole operating
segment.
NOTE 19: SHARE-BASED PAYMENTS
During the year nil (2010: 18,453,500) options were issued. During this reporting period, a revaluation of the
share based options issued in 2010 was performed which resulted in an adjustment to the share based option
reserve of $129,145 in the current reporting period (Refer Note 12).
Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one
ordinary share of the Company with full dividend and voting rights.
a. Expenses arising from share-based payment transactions
There were $66,500 (2010: $nil) expenses arising from share-based payment transactions recognised during
the period. These expenses were recognised at the date the share based payments were approved and at the
share price applicable at that date.
NOTE 20: CHANGE IN ACCOUNTING POLICY
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2011 reporting periods. The company’s assessment of the impact of these new standards and interpretations
are set out below.
AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB
9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010)
(effective from 1 January 2013)
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets
and financial liabilities. The standard is not applicable until 1 January 2013 but is available for early adoption.
When adopted the standard could affect the group’s accounting for any financial assets it holds. The company
has not yet decided when to adopt AASB9.
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S H R E E M I N E R A L S L T D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2011
Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting Standards
effective from 1 January 2011)
In December 2009 the AASB issued a revised AASB 124 Related Party Disclosures. It is effective for accounting
periods beginning on or after 1 January 2011 and must be applied retrospectively. The amendment clarifies and
simplifies the definition of a related party and removes the requirement for government-related entities to
disclose details of all transactions with the government and other government-related entities. The company will
apply the amended standard from 1 July 2011. When the amendments are applied, the company will need to
disclose any transactions between any subsidiaries and its associates. However, there will be no impact on any of
the amounts recognised in the financial statements.
AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian
Accounting Standards arising from Reduced Disclosure Requirements (effective from 1 July 2013)
On 30 June 2010 the AASB official introduced a revised differential reporting framework in Australia. Under this
framework, a two-tier differential reporting regime applies to all entities that prepare general purpose financial
statements. The company is not eligible to adopt the new Australian Accounting Standards – Reduced Disclosure
Requirements. The two standards will therefore have no impact on the financial statements of the entity.
AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets
(effective for annual reporting periods beginning on or after 1 July 2011)
Amendments made to AASB 7 Financial Instruments: Disclosures in November 2010 introduce additional
disclosures in respect of risk exposures arising from transferred financial assets. The amendments will affect
particularly entities that sell, factor, securitise, lend or otherwise transfer financial assets to other parties. They
are not expected to have a significant impact on the company’s disclosures. The company intends to apply the
amendment from 1 July 2011.
AASB 2010-8 Amendments to Australian Accounting Standards – Deferred tax: Recovery of Underlying Assets
(effective from 1 January 2012)
In December 2010, the AASB amended AASB 112 Income Taxes to provide a practical approach for measure
deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model.
AASB 112 requires the measurement of deferred tax assets or liabilities to reflect the tax consequences that
would follow from the way management expects to recover or settle the carrying amount of the relevant assets
or liabilities, that is through use or sale. The amendment introduces a rebuttable presumption that investment
property which is measured at fair value is recovered entirely by sale. The company will apply the amendment
from 1 July 2012. It is currently evaluating the impact of the amendment.
No other amendments or interpretations are expected to have an impact on the company or the group.
NOTE 21: COMPANY DETAILS
The registered office and principal place of business of the Company is:
Unit 4
The Pines Business Centre
86 -88 Forrest Street
Cottesloe
WA 6011
Ph:
Fax:
(08) 61612068
(08) 93855194
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S H R E E M I N E R A L S L T D
DIRECTORS’ DECLARATION
1. In the opinion of the directors of Shree Minerals Limited (‘the Company’):
(a) the financial statements and notes as set out on pages 25 to 47, are in accordance with the Corporations
Act 2001, including:
(i) giving a true and fair view of the financial position of the Company as at 30 June 2011 and of
its performance, as represented by the results of their operations and their cash flows, for
the financial year ended on that date; and
(ii) complying with Australian Accounting Standards, the Corporations Regulations 2001, and
other mandatory professional reporting requirements; and
(b) the audited remuneration disclosures included in the Directors’ report For the year ended 30 June 2011,
comply with section 300A of the Corporations Act 2001.
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
(d) the Company has included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
2. There are reasonable grounds to believe that the Company will be able to meet any obligations or liabilities
when they become due and payable.
3. The remuneration disclosures in the audited Remuneration Report on pages 12 to 16 in the Directors’
report for the year ended 30 June 2011 complies with Section 300A of the Corporations Act 2001.
4. The directors have been given the declarations required by Section 295A of the Corporations Act from the
chief executive officer and chief financial officer for the financial year ended 30 June 2011.
Dated at Unit 4,The Pines Business Centre, 86 -88 Forrest Street, Cottesloe, WA 6011 this 26th day of
September 2011.
Signed in accordance with a resolution of the directors:
_______________________
Sanjay Loyalka
Director
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S H R E E M I N E R A L S L T D
INDEPENDENT AUDITORS’ REPORT
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S H R E E M I N E R A L S L T D
INDEPENDENT AUDITORS’ REPORT
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S H R E E M I N E R A L S L T D
INDEPENDENT AUDITORS’ REPORT
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S H R E E M I N E R A L S L T D
SHAREHOLDER INFORMATION
ADDITIONAL INFORMATION
The following additional information not shown elsewhere in the report is required by the Australian Securities
Exchange Ltd in respect of listed public companies only. This information is current as at 5th September 2011.
SUBSTANTIAL SHAREHOLDERS
The company has received substantial shareholder notices from;
– Mr Sanjay Loyalka as trustee for the Loyalka Family Trust (24,500,000 ordinary shares)
– Gujurat NRE Resources NL (15,000,000 ordinary shares)
– Ullapool Investments Pty Ltd (6,000,000 ordinary shares)
– China Alliance International Holdings Group (18,000,000 ordinary shares)
ISSUED SECURITIES
Refer note 11 of the financial statements.
VOTING RIGHTS
The voting rights attached to the Fully Paid Ordinary shares of the Company are:
1. At a meeting of members or classes of members each member entitled to vote may vote in person or by
proxy or by attorney; and
2. On a show of hands every person present who is a member has one vote, and on a poll every person
present in person or by proxy or attorney has one vote for each ordinary share held.
There are no voting rights attached to any Options on issue.
DISTRIBUTION SCHEDULE – OPTIONS AS AT 5th SEPTEMBER 2011
Holdings Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 99,999,999,999
Holders
0
0
0
0
4
4
Total Units
0
0
0
0
9,750,000
9,750,000
%
0.000
0.000
0.000
0.000
100.000
100.000
DISTRIBUTION SCHEDULE – SHAREHOLDINGS AS AT 5th SEPTEMBER 2011
Holdings Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 99,999,999,999
Holders
0
17
207
189
47
460
Total Units
0
62,698
2,046,665
7,200,015
85,750,622
95,060,000
%
0.000
0.066
2.153
7.574
90.207
100.000
UNMARKETABLE PARCELS
There are eight unmarketable parcels as at 5th September 2011 totalling 20,667 ordinary shares.
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S H R E E M I N E R A L S L T D
SHAREHOLDER INFORMATION
20 LARGEST SHAREHOLDERS AS AT 5th SEPTEMBER 2011
Holder Name
MR SANJAY KUMAR LOYALKA
CHINA ALLIANCE INTERNATIONAL HOLDINGS GROUP LIMITED
GUJARAT NRE RESOURCES NL
ULLAPOOL INVESTMENTS PTY LTD
ROSECLIFF HOLDINGS PTY LTD
ME GAWILD ENTERPRISES PTY LTD
CHINA ALLIANCE INTERNATIONAL HOLDINGS GROUP LIMITED
MEGAWILD ENTERPRISES PTY LTD
MR AMRIK SINGH HEER
EXPORT MARKETING (BVI) LTD
DR DEEPAK NARAN
MR ASOK KUMAR & MRS RENU KUMAR
IACG PTY LTD
TANDON SUPERANNUATION SERVICES PTY LTD
MS EMMA HALL
BRIAN EDWARD VON BERGHEIM PTY LTD
MR LINDSAY HAMILTON-SMITH & MRS ANDREA MARTINA HAMILTON-SMITH
RANGEWELL PTY LTD
DEPAK DOLATHRAI NARAN
MR HARDEEP SINGH HEER
MR RAY HISLOP
20 LARGEST OPTION HOLDERS AS AT 5th SEPTEMBER 2011
Holder Name
CHINA ALLIANCE INTERNATIONAL HOLDINGS GROUP LIMITED
MAHENDRA PAL
MR STEVE LEDGER
ZURICH SECURITIES PTY LTD
Balance
24,500,000
16,000,000
15,000,000
6,000,000
4,375,000
2,500,000
2,000,000
1,875,000
1,500,000
1,250,000
1,000,000
820,000
750,000
500,000
500,000
500,000
500,000
475,000
375,000
300,000
300,000
81,020,000
%
25.773
16.831
15.780
6.312
4.602
2.630
2.104
1.972
1.578
1.315
1.052
0.863
0.789
0.526
0.526
0.526
0.526
0.500
0.394
0.316
0.316
85.230
Balance
8,000,000
1,000,000
500,000
250,000
%
82.052
10.256
5.128
2.564
9,750,000 100.000
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