S H R E E M I N E R A L S L I M I T E D
ACN 130 618 683
2015 ANNUAL REPORT
For personal use only
S H R E E M I N E R A L S L T D
TABLE OF CONTENTS
Corporate Directory
Directors’ Report
Auditors’ Independence Confirmation
Statement of Profit or Loss & other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Governance Statement
1
2
18
19
20
21
22
23
49
50
53
55
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C O R P O R A T E D I R E C T O R Y
DIRECTORS
Sanjay Loyalka
Rajesh Bothra
Andy Lau
Amu Shah
COMPANY SECRETARY
Sanjay Loyalka
REGISTERED OFFICE
Unit 2
The Pines Business Centre
88 Forrest Street
Cottesloe
WA 6011
Ph:
Fax:
info@shreeminerals.com
www.shreeminerals.com
(08) 92861509
(08) 93855194
SOLICITORS
Steinepreis Paganin
Level 4
16 Milligan St
Perth WA 6000
AUDITORS
Grant Thornton Audit Pty Ltd
Level 1, 10 Kings Park Road
West Perth WA 6005
BANKERS
Commonwealth Bank of Australia
St Georges Tce
Perth WA 6000
SHARE REGISTRY
Boardroom Pty Limited
Level 12
225 George Street
Sydney NSW 2000
Ph: +61 (02) 9290 9600
Fax: +61 (02) 9279 0664
.
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D I R E C T O R S ’ R E P O R T
The Directors present this report together with the financial report of Shree Minerals Ltd (‘the Company’) for
the year ended 30th June 2015 and the auditors' report thereon.
DIRECTORS
The names of the Directors in office during the financial year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Mr Sanjay Loyalka
Mr Rajesh Bothra
Mr Andy Lau
Mr Amu Shah
COMPANY SECRETARY
Mr Sanjay Loyalka
PRINCIPAL ACTIVITIES
The principal activities of the Company during the financial year consisted of mineral exploration &
development and mining of Iron Ore.
OPERATING RESULTS
Operating EBITDA before extra ordinary items for the year was -$1,832,956 (2014: $715,416). The net loss of
the Company after providing for income tax amounted to $10,693,932 (2014: - $1,391,141) as following:
Operating EBITDA ( before non-cash and other
items below)
Impairment of Exploration Tenements ( due to
relinquishment)
Impairment ( diminution) of Inventory carrying
value ( at net realisable value due to Iron Ore
price movements)
2015
2014
-1,832,956
715,416
0
-900,615
-749,316
-608,726
Provision for impairment of mine development
-7,342,313
Provision for impairment of deferred mine waste
-1,077,831
0
0
0
0
-214,687
-238,302
-36,308
-1,244,502
-280,815
212,014
1,078,596
435,272
-10,693,932
-1,391,141
Provision for impairment of plant & equipment
Provision for doubtful debt
Depreciation & Amortisation
Foreign exchange Gain/Loss
Income Tax benefit/expense
Loss after Tax
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D I R E C T O R S ’ R E P O R T
DIVIDENDS PAID OR RECOMMENDED
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way
of a dividend to the date of this report.
REVIEW OF OPERATIONS AND ACTIVITIES
Highlights:
• NBR project under care & maintenance.
•
Steps taken to conserve resources.
•
The estimated C1 costs (US$ per DMT CFR North China) have been reduced from appx US$ 88 to US$
63 for company’s Iron Ore products (Fines & Lump).
• Non Renounceable Rights issue completed to raise $1.6 mn.
• Geological mapping and rock chip sampling at Mt.Sorell returned a highly significant 15.5g/t Au.
Nelson Bay River Iron Ore Project
This has been a very difficult year for your company as the Iron Ore prices witnessed an unprecedented
continuous steep fall as per the chart below for “62%Fe” Iron Ore Fines CFR China per dry tonne.
Due to delays in the Environmental Approval process the mine was delayed by some 2 years and as such did
not start until late 2013 which pushed the Project out to the bottom of commodity price cycle. Unfortunately,
the start up coincided with a marked decline in iron ore prices. This rendered the project uneconomic and it
was placed on care and maintenance in June 2014.
As the NBR project has been planned for a phased development, a normal approval timeframe would have had
the project well placed to execute the DSO phase of the project at the right point in the cycle. This would have
underwritten the capital for the magnetite phase to produce Dense Media Magnetite (DMM) for use in the
coal washery industry, which enjoys a stable price cycle and is economically viable even in the current
downturn.
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D I R E C T O R S ’ R E P O R T
As it has been a very difficult & challenging year to be a mineral commodity producer & explorer, the company
has placed emphasis on steps to contain costs & preserve value by:
•
•
•
•
Cost reduction initiatives in preparedness to respond to improving price cycle when it occurs and
operations are able to recommence. In this regard, the company is reviewing all aspects including
engineering solutions, logistics chain etc. The estimated C1 costs (US$ per DMT CFR North China) have
been reduced from approximately US$ 88 to US$ 63. The majority of these costs (over 2/3rds) are
offsite costs for transportation of ore to port, port Charges & ocean freight. Initiatives are being
explored to lower the costs further.
The Directors have voluntarily elected to take reduced drawings of their remuneration during the
period of suspension of operations.
Suspension cost containment steps via appropriate discussions with various service providers &
vendors include contracts suspensions, renegotiation of suspension costs, contracts terminated, hired
equipment released etc.
The majority of the staff (both at Corporate Office & at site) have been released and / or placed in
part time roles while suspension of operations continue with care & maintenance activities,
environment monitoring as per approved plans and all statutory compliances being attended to.
Exploration activities have been curtailed.
•
• Business Development opportunities are being examined including new areas as well as examining
options to bring forward the magnetite phase of the project as well as upgrading the quality of the
DSO Iron Ore Product, which attract higher selling prices to improve project economics.
Project Development
The development of Nelson Bay River (NBR) Iron Ore project involves three stages. The first stage is to develop
a relatively shallow open cut mine to produce direct shipping grade ore. This direct shipping ore (DSO) only
requires crushing and screening to produce the DSO products. During the financial year 2013-14, DSO stage 1
was commenced.
Stage two involves the continuation of mining of the DSO to the north. Here the DSO is composed of lower
grade material, which is considered to have the potential to produce a commercial product by beneficiation
(BFO).
Stage three of the project involves the open cut mining of the deep magnetite orebody beneath the DSO
resource cap. This magnetite ore will require processing to produce saleable magnetite products. Earlier
studies demonstrated that the magnetite ore could produce two products, a dense media magnetite (DMM)
product, suitable for coal washery applications, or a blast furnace pellet (BFP) magnetite product. Suppliers are
few in number for the higher value DMM product and mining generally occurs on a small scale. This would suit
the Nelson Bay Iron Project as studies to-date have reflected a stable market and pricing for the DMM as an
industrial mineral for the eastern seaboard of Australia where domestic production is not adequate to meet
demand forcing coal mining companies to resort to imports , thereby confirming the long-term value potential
of the NBR project.
Resource & Reserves
Mineral Resources & Reserves Estimates, summarised by JORC classification are as follows:
The in situ DSO Mineral Resource Estimates, September 2015
Category
Tonnes
Measured
Indicated
Inferred
Total
300,000
190,000
150,000
640,000
Fe %
57.6
57.5
57.3
57.5
Al2O3 %
P ppm
S ppm
SiO2 %
LOI %
1.3
1.4
1.2
1.3
947
919
945
938
362
377
421
380
9.2
9.3
10.0
9.4
6.4
6.3
6.2
6.4
(Nominal 54% Fe cut off; average density 3t/m3; minor rounding errors)
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D I R E C T O R S ’ R E P O R T
BFO Resource Estimates 2012
Category
Inferred
Total
Tonnes
730,000
730,000
(30% Fe cut off; average density 3t/m3; minor rounding errors)
“This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to
comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last
reported.”
Al2O3 %
2.7
2.7
SiO2 %
23.7
23.7
P ppm
180
180
S ppm
680
680
LOI %
4.7
4.7
Fe %
46.8
46.8
Skarn Dyke Global Iron Resource Estimates
(Includes Magnetite Resource)
Category
Indicated
Inferred
Total
M Tonnes
1.8
9.5
11.3
Iron %
38.6
35.9
36.3
(30% Fe cut off; fresh rock material; minor rounding errors)
“This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to
comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last
reported.”
Skarn Dyke Recoverable Magnetite Resource Estimates
Category
Indicated
Inferred
Total
M Tonnes
1.7
6.1
7.8
DTR Mag % Magnetite Kt
38.5
38.2
38.3
667
2,324
2,991
(20% DTR cut off; average density 3.71t/m3; fresh rock material; minor rounding errors)
“This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to
comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last
reported.”
Magnetite Resource Estimate Concentrate Grades
Category
Indicated
Inferred
Fe %
66.4
64.3
Al2O3 %
0.16
0.31
S %
0.21
0.42
SiO2 %
4.6
6.0
Total
0.22
“This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to
comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last
reported.”
0.30
65.5
5.2
The in situ DSO Ore Reserve Estimates for the Southern DSO pit, September 2015
Category
M tonnes
Fe %
Al2O3 %
P %
S %
SiO2 %
LOI %
Proved
Probable
Total
0.27
0.19
0.46
56.5
56.5
56.5
1.4
1.5
1.4
0.091
0.035
0.092
0.036
0.091
0.035
8.7
8.8
8.7
6.5
6.5
6.5
(Minor rounding errors; cut off based on a nominal 54% Fe; default density of 3t/m3)
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D I R E C T O R S ’ R E P O R T
The information in this report that relates to Mineral Resources is based on information evaluated by Mr Simon
Tear, who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM). And who has
sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (“the JORC
Code”). Mr Tear is a Director of H&S Consultants Pty Ltd and he consents to the inclusion in the report of the
Mineral Resources in the form and context in which they appear.
The information in this report that relates to Ore Reserve Estimates for the Nelson Bay deposit is based on
information evaluated by Mr Richard Beazley who is a Member of The Australasian Institute of Mining and
Metallurgy and a Chartered Professional (MAusIMM CP(Min)) and who has sufficient experience relevant to the
style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Richard Beazley is the Principal
of Altair Mining Consultancy Pty Ltd and consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
Development & Production
As the project was under care & maintenance during the year there was no production or mine
development activities. The mining & production figures are as per Table 1.
Table 1
Waste Stripping
BCM
Ore Mining
Tonnes
Ore Crushing & screening
Tonnes
Sales
Tonnes
Year ending
30/06/2015
0
Year ending
30/06/2014
636,347
0
0
0
224,571
153,332
130,899
Approvals
EPA Tasmania has notified the company during the year that that the variation of the Environment permit in
Nov’13 to allow a temporary PAF rock dump for DSO south pit has been rendered invalid in a judicial review by
the Court in Dec’14. The original permit remains valid, and without variation. As a consequence, the current
PAF storage temporary dump is not compliant. During the year, the Company has conducted relevant studies
& work to resolve the issue.
All government approvals (other than variation pertaining to temporary PAF rock permit for DSO south pit) for
the project remain valid. These include the Mining Lease, Federal Government Environmental Approval and
Tasmanian Government’s Environment & Development permits (etc).
Share Placement
During the financial year, Non Renounceable Rights issue was completed to raise $ 1.623 mn.
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D I R E C T O R S ’ R E P O R T
Tenements
The mining tenements held at the end of the reporting period and their locations are as following :
Mine Lease/
Exploration License
3M/2011
EL41/2004
EL42/2008
Locality
Remarks
Nelson Bay
River
Nelson Bay
River
Mt.Sorell
100% Shree Minerals Ltd
100% Shree Minerals Ltd
100% Shree Minerals Ltd
•
•
•
The mining tenements acquired and disposed of during the period and their location.
NIL
The beneficial percentage interests held in farm-in or farm-out agreements at the end of the period.
NIL
The beneficial percentage interests in farm-in or farm-out agreements acquired or disposed of during
the period.
NIL
EXPLORATION
Exploration work on EL42/2008 (Mt Sorell) was
carried out during the year 2014-15. Data from an
historical (1978) Induced Polarisation geophysical
survey was digitised, georeferenced and re-
interpreted. Chargeability anomalies were
commonly found to lie immediately in the
footwall to the Clark Grid inferred VHMS position.
A strong chargeability anomaly and resistivity low
is located immediately north of a 0.6g/t Au rock
chip sample in Shree’s Clark Grid area. This
anomaly was historically described as “a most
significant anomaly...where chargeabilities reach
over 50 millivolts/volt ... and resistivities are
significantly reduced” (Howland-Rose, 1978). This
zone was recommended for high priority follow
up at that time.
Clark Valley Gradient Array IP – Chargeability
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D I R E C T O R S ’ R E P O R T
Significantly enhanced VHMS (Volcanic Hosted Massive Sulphide) prospectivity has resulted from recent field
work and GIS interpretation. Geological mapping and rock chip sampling (42 samples) focused in the vicinity of
the large IP (Induced Polarisation) chargeability anomaly and previously sampled 0.6g/t Au in rock chip.
Composite re-sampling has returned a highly significant gold value of 15.5g/t, accompanied by 8ppm silver and
minor zinc (0.1%). This sample comes from the northern end of a zone of silica – sericite – iron oxide altered
felsic volcanics extending ~150m along strike to the SSE towards the vicinity of an anomalous base metal zone,
bearing Zn to 0.15% in rock chip and soil samples. Notably, two float boulders with significant alteration were
located near the 15.5g/t Au rock chip sample. These rocks contain moderate intensity pervasive silica, with
irregular iron oxide halos to relict pyrite stringer veining in a weakly foliated sericitic matrix.
A coherent zone of anomalous base metals (Cu, Pb, Zn, Ag & Au) in rock chip and soils is now better defined
through the anomalous gold in rock chip area. VHMS prospectivity is further upgraded with the presence of
anomalous key pathfinder elements (Ti, Sb and As). Potential to find a VHMS-style deposit akin to Rosebery or
Que-Hellyer in the grid area is considered high.
Re-evaluation of a 1970’s gradient array Induced Polarisation survey in conjunction with Airborne EM has
provided further interpretive vectors to a relatively focused VHMS prospective zone coincident with
anomalous geochemistry. The black shales were found to commonly correspond with high chargeability and
low resistivity. The investigated chargeability anomaly and black shale are not un-expectantly also coincident
with significant WTRMP airborne EM cx980k and cx7k EM anomalies. A black shale horizon is identified in the
Rosebery ore sequence
The black shales mapped extent thins considerably at the chargeability anomalies southern end, whilst
chargeability remains high. This suggests that some component of the chargeability footwall to the Au in rock
chip anomaly maybe mineralisation-related. Immediately south of the shales termination and Au in rock chip
anomaly is a relatively strong EM anomaly reflected in all channels. This is a VHMS target. Further evidence
supporting a VHMS focus in this area is a broad elevated chargeability zone coincident with Au and Zn in soils
within the footwall to the EM anomaly and 15.5g/t Au rock chip. This feature is not evident in the footwall to
other chargeability anomalies in the area. A significant high resistivity zone coincident with strong albite –
silica alteration in the footwall to the Au in rock chip anomaly also supports potential VHMS fluid focus in this
area.
An earlier WSW to WNW orientated cleavage disrupted and overprinted by the dominant NW aligned foliation
was identified at several localities in the northern footwall. This may reflect earlier Cambrian deformation,
possibly reactivating Cambrian rift faults active during VHMS formation.
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D I R E C T O R S ’ R E P O R T
VHMS prospectivity map for the northern half of the Clark River Grid showing Zn in rock chip and soil thematic
and recommended drill holes over IP Chargeability grid (left) and Au in soils grid (right).
OTHER TENEMENTS
Shree Minerals’ exploration activities for the year in review were confined to those referred to in this report.
However, the Company can report that all other tenements remain in good standing and meet statutory
requirements.
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D I R E C T O R S ’ R E P O R T
OUTLOOK
The NBR project is being developed in a phased philosophy with the initial plan to mine the DSO resource to
export iron ore over the first couple of years at low capital expenditure to be followed by the magnetite
resource to produce dense media magnetite (DMM) used for the coal washery industry. Studies to-date have
reflected a stable market and pricing for DMM as an industrial mineral in Eastern Seaboard of Australia with
domestic production not being adequate to meet demand resorting to imports, thereby confirming the long-
term value potential of the NBR project.
Steps have been taken to conserve the resources as well as reduce cash costs while having the necessary
preparedness to respond to improving price cycle when it emanates. The company believes the long term
demand for the commodity remains robust due to growing urbanisation of the global population particularly in
China.
Exploration activities are also planned at Mt. Sorell exploration license involving geological mapping, soil
sampling, geophysical surveys to define potential drilling targets.
The company is actively looking for suitable business development opportunities.
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 other than those disclosed in this report.
FINANCIAL POSITION
The net assets of the Company are $1,513,910 (2014: $10,705,421)
AFTER BALANCE DATE EVENTS
The Company received notification on 23rd September 2015 that the mining contractor at Nelson Bay River
Iron Ore Project, being “Collins Contracting” has gone into administration. Consequently, a provision for
doubtful debts has been made in the company’s books for $238,302 being the prepayments to “Collins
Contracting”.
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.
ENVIRONMENTAL REGULATIONS
The Company holds various exploration & mining licences to regulate its 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 activities. As far as the Directors are aware, there has been no known breach
of the Company’s licence conditions other than those disclosed in this report. The implementation of best
practice social and environmental practices, well beyond simple compliance, has been an integral part of
Company's philosophy. The company in discussions with the regulatory authorities is also looking at innovative
work towards implementing / developing best environment management practices. The company has also
voluntarily committed to research to enhance the understanding of orchid biology in north-western Tasmania,
as a best practice environmental management contribution to orchid science. The research will assist with the
ongoing management and protection of threatened orchid species in north-western Tasmania. Shree Minerals
also recognises the opportunities that the presence of our project creates to support Devil Facial Tumour
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D I R E C T O R S ’ R E P O R T
research. Hence, Devil numbers around the mine site are monitored as part of the mine’s operational
monitoring of the effectiveness of its devil (and quoll) impact mitigation measures, and these observations will
be valuable data for the Save the Tasmanian Devil Program (STDP).
DIRECTORS’ INTERESTS
Mr S Loyalka
Mr A Lau
Mr A Shah
Mr R Bothra
Total
ORDINARY SHARES
FULLY PAID
26,474,078
0
4,884,230
30,437,500
61,795,808
OPTIONS
0
0
0
0
0
INFORMATION ON DIRECTORS
Mr Sanjay Loyalka, Chief Executive Officer and Executive Chairman, FAIM, MAICD, ACA, B Com (Hons)
Director of Shree Minerals Ltd since 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 Mount 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 Andy Lau, Independent Non Executive Director, MBA
Director of Shree Minerals Ltd since Nov 2009
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 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 Amu Shah, Non Executive Director
Director of Shree Minerals Ltd since March 2011
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 the Honorary Consul for Kenya in Perth.
Mr Amu Shah has extensive international and local business experience.
Mr Rajesh Bothra, Non Executive Director
Director of Shree Minerals Ltd since June 2014
Mr Rajesh Bothra is based in Singapore & is a share-holder and Managing Director of major electronic and
consumer electronic company with revenue of US$1 Billion. He has rich experience of management and
leadership skills. He also has interests in real estate, hospitality, natural resources and media Industry. Mr
Rajesh Bothra brings with him a wealth of international experience & networks.
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D I R E C T O R S ’ R E P O R T
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. Directors & 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 - directors , executives and senior manager receive a fixed sum payable monthly in cash;
b. bonus - directors , executives and nominated senior managers are eligible to participate in a profit
participation plan if deemed appropriate;
c.
Long-term incentives - directors, executives, 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
d. Other benefits - directors, executives and senior managers are eligible to participate in superannuation
schemes and other appropriate additional benefits.
Remuneration of other executives consists of the following:
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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 non-executive
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 directors, executives, and senior management of the Company
through the operation of a profit participation plan at the ultimate discretion of the Board. Currently, there is
no such plan under practice for last 5 years.
Details of remuneration
Key Management Personnel (KMP) comprises the executive and non- executive directors only during FY2015.
The remuneration for Key Management Personnel of the Company during the year and the previous year was
as follows:
2015
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
Share
Based
Payments
Mr S Loyalka
292,906
Mr Andy Lau
30,000
Mr Rajesh Bothra
30,000
Mr Amu Shah
27,460
380,366
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
27,094
0
0
2,540
29,634
0
0
0
0
0
%
Performance
Based
Total
320,000
30,000
30,000
30,000
410,000
0
0
0
0
0
0
0
0
0
0
NB: The remuneration report has been prepared on an accruals basis. To conserve cash resources of the
company during the period the operations are under suspension, have voluntarily elected to take reduced
drawings of their remuneration. Consequently, the total amount payable to directors for remuneration at 30
June 2015 amounted to $187,500, for outstanding director remuneration.
Page 13
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D I R E C T O R S ’ R E P O R T
Short-term Employee Benefits
Post-employment Benefits
2014
Cash,
salary,
Directors
Fees
Cash
profit
share,
bonuses
Non-
cash
benefits
Allowances
Super-
annuation
Other
Long-
term
Benefits
Share
Based
Payments
Total
%
Performance
Based
Mr S Loyalka
292,906
Mr A Jagatramka
2,860
Mr M Pal
27,460
Mr Andy Lau
30,000
Mr Amu Shah
27,460
Mr Rajesh Bothra
0
380,686
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
27,094
264
2,540
0
2,540
0
32,438
0
0
0
0
0
0
0
0
0
0
0
0
0
0
320,000
3,124
30,000
30,000
30,000
0
413,124
0
0
0
0
0
0
0
NB: For financial years ended June 2015 & 2014 the KMPs held the positions and dates of change in
responsibilities as following:
Mr. S Loyalka: Executive Chairman with added responsibility of CEO, CFO & Company Secretary
Mr. A Jagatramka: Non Executive Director, Retired 28/11/2013
Mr. M Pal: Non Executive Director, Retired 27/6/2014
Mr. Andy Lau: Non Executive Director
Mr. Amu Shah: Non Executive Director
Mr. Rajesh Bothra: Non Executive Director, appointed 27/6/2014
Options, Performance shares & Shares issued as part of remuneration for the period ended
30 June 2014
There were no Options, Performance shares & Shares issued as part of remuneration for the period ended 30
June 2015. Please refer to Note 19 for further information.
Shares Issued on Exercise of Compensation Options
No options granted as compensation in prior periods were exercised through the period or the previous
period.
Page 14
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D I R E C T O R S ’ R E P O R T
Number of Shares Held by Key Management Personnel
30 June 2015
Key Management Person
Balance
1 July 2014
Received as
Compensation
Options
Exercised
Net Change
Other
Balance on
Resignation
Balance
30 June 2015
Mr Sanjay Loyalka
25,915,000
Mr Andy Lau
Mr Amu Shah
Mr Rajesh Bothra
0
4,525,000
17,937,500
48,377,500
0
0
0
0
0
0
0
0
0
0
559,078
0
359,230
12,500,000
13,418,308
0
0
0
0
0
26,474,078
0
4,884,230
30,437,500
61,795,808
Number of Options Held by Key Management Personnel
30 June 2015
Key Management
Person
Balance
30 June
2014
Granted as
compensation
Options
Exercised
Net
Change
Other
Balance
30 June 2015
Total
Vested
30 June
2015
Total
Exercisable
30 June
2015
Total
Unexercisable
30 June 2015
Mr Sanjay
Loyalka
Mr Amu Shah
Mr Andy Lau
Mr Rajesh Bothra
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Number of Share Performance Rights (SPR) held by any Key Management Personnel
On 30 June 2015, Mr.Mahendra Pal held 869,111 share performance rights. The Performance Rights vest
in three tranches to Mr Mahendra Pal on 31 October 2013, 31 October 2014 and 31 October 2015
respectively. The number of Performance Rights to be vested on each of those dates is one (1)
Performance Right for every one (1) tonne of DSO Iron Ore sold over the three years ending on 30 June
2013, 30 June 2014 and 30 June 2015 respectively, subject to issue of maximum of 1,000,000 Performance
Rights in aggregate.
•
•
For the year ended 30 June 2013 there was nil tonnes of DSO Iron Ore sold.
For the year ended 30 June 2014 there was 130,889 tonne of DSO Iron Ore sold. Consequently,
130,889 Performance Rights vest on 31 October 2014.
For the year ended 30 June 2015 there was nil tonnes of DSO Iron Ore sold.
•
Consequently, 869,111 Performance Rights will expire on 31 October 2015.
No other Key Management Personnel held any share performance rights on 30 June 2014.
Employment contracts of directors and senior executives
The employment arrangements for Sanjay Loyalka, as the sole executive Director and Chief Executive Officer
and Chairman and Company Secretary, provide for remuneration comprising salary and superannuation
totalling $320,000. Mr. Loyalka’s current employment arrangements cover five-year tenure that commenced
in May 2013.
END OF REMUNERATION REPORT
Page 15
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D I R E C T O R S ’ R E P O R T
Meetings of Directors
During the financial year, 5 formal meetings of Directors (including committees of directors) were held.
Attendances by each Director during the year were as follows:
Director
Sanjay Loyalka
Andy Lau
Amu Shah
Rajesh Bothra
Board Meetings
Meetings
attended
5
5
4
4
Meetings held
whilst in office
5
5
5
5
The full Board fulfils the role of remuneration, nomination, and audit committees.
Indemnifying Officers or Auditor
The Company has paid insurance premiums in respect of directors’ and officers’ liability and legal expenses
insurance contracts for current and former directors, executive officers and secretaires. The directors have not
included details of the premium paid in respect of the directors’ and officers’ liability and legal expenses’
insurance contracts, as such disclosure is prohibited under the terms of the contract.
Options
At the date of this report, the unissued ordinary shares of Shree Minerals Limited under option are NIL.
Proceedings on Behalf of Company
No person has applied for leave of Court to bring any proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for taking responsibility on behalf of the Company for all or
any part of these proceedings.
The Company is not a party to any other proceedings as at date of this report.
Non-audit Services
The Board of Directors 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.
Fees of $6,250 (2014: 10,750) for Taxation services (compliance and consulting) being the non-audit services
that were paid/payable to related practices of the external auditors during the year.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2015 has been received and can be
found on page 18 of annual report.
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D I R E C T O R S ’ R E P O R T
Signed in accordance with a resolution of the Board of Directors.
Sanjay Loyalka
Chairman
Signed in Perth the 30th day of September 2015.
Page 17
For personal use only
Auditor’s Independence Declaration
To the Directors of Shree Minerals Limited
Level 1
10 Kings Park Road
West Perth WA 6005
Correspondence to:
PO Box 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Shree Minerals Limited for the year ended 30 June 2015, I declare
that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the
audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M J Hillgrove
Partner - Audit & Assurance
Perth, 30 September 2015
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
Page 18
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S H R E E M I N E R A L S L T D
STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDING 30 JUNE 2015
Revenue from continuing operations
Sales Income
Interest
Other Income
Expenses from continuing operations
Cost of sales
Impairment of inventory
Finance charges
Employee and consulting fees
Regulatory costs
Occupancy and communication
Foreign exchange loss
Accounting and legal Fees
Impairment of exploration tenements
Provision for impairment of mine development
Provision for impairment of deferred mine waste
Provision for impairment of plant & equipment
Provision for doubtful debt
Other expenses
Loss before income tax
Income tax expense
Loss for the period
Other comprehensive income
Comprehensive loss for the year
Note
30-Jun-15
30-Jun-14
$
$
3
7A
9
20
20
20
22
4
-121,305
53,876
673
-579,111
-749,316
-370,196
-452,359
-28,244
-37,127
-280,815
-229,154
0
-7,342,313
-214,687
-1,077,831
-238,302
-106,318
-11,772,529
1,078,596
-10,693,932
8,625,723
60,659
0
-8,844,243
-608,726
-80,879
-72,713
-26,097
-32,037
212,014
-79,832
-900,615
0
0
0
0
-79,667
-1,826,413
435,272
-1,391,141
0
0
-10,693,932
-1,391,141
Earnings per share for (loss) attributable to ordinary equity
holders of the company:
Basic & diluted (loss) cents per share
5
-7.74
-1.29
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 2015
Assets
Current Assets
Cash and cash equivalents
Receivables
Inventory
Total Current Assets
Non-Current Assets
Exploration and evaluation
Mine Development
Other Assets
Plant and equipment
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Loans
Provisions
Total Current Liabilities
Non-Current Liabilities
Rehabilitation Provision
Loans
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Reserves
Retained profits (losses)
Total Equity
Note
30-Jun-15
$
30-Jun-14
$
6
7
7A
9
9A
6A
8
10
10
10
10A
1,105,998
245,719
1,319,506
2,671,223
296,947
1,583,647
865,590
40,892
2,787,076
5,458,299
-2,418,303
-10,071
-13,174
-2,441,548
-1,499,300
-3,542
-1,502,842
2,183,998
560,270
2,068,822
4,813,090
263,640
10,036,165
943,387
354,880
11,598,072
16,411,162
-4,136,102
-20,480
-26,107
-4,182,689
-1,499,300
-23,752
-1,523,052
-3,944,390
-5,705,741
1,513,909
10,705,421
11
12
12
15,094,311
284,587
-13,864,989
13,591,891
284,587
-3,171,057
1,513,909
10,705,421
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 2015
Issued
Retained
Note
Capital
Losses
$
$
Share
based
option
reserve
$
Total
$
BALANCE AT 1 JULY 2013
9,678,432
-1,779,916
284,587
8,183,103
Total comprehensive income for the
period
Shares issued during the year
Capital raising costs
0
-1,391,141
4,130,000
-216,541
0
0
0
0
0
-1,391,141
4,130,000
-216,541
BALANCE AT 30 JUNE 2014
13,591,891
-3,171,057
284,587
10,705,421
BALANCE AT 1 JULY 2014
13,591,891
-3,171,057
284,587
10,705,421
Total comprehensive income for the
period
0
-10,693,932
0
-10,693,932
Shares issued during the year
11
1,623,467
Capital raising costs
-121,047
0
0
0
0
1,623,467
-121,047
BALANCE AT 30 JUNE 2015
15,094,311
-13,864,989
284,587
1,513,909
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 2015
Note
30-Jun-15
30-Jun-14
$
$
Cash flows from operating activities (including exploration)
Sales receipts
Payments to suppliers and employees (inclusive of GST)
Interest received
Research and Development tax concession
Other Income
-383,971
-2,629,294
43,576
1,078,596
673
Net cash inflow from operating activities (including exploration)
15(b)
-1,890,420
Cash flows from investing activities
Payment for plant and equipment
Proceeds from sale of plant and equipment
Payment for mineral exploration
Deferred Mine Waste
Payment for mine development
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares and other equity securities
Payments for share issue costs
Borrowings
Net cash inflow from financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial period
-877
16,819
-33,307
0
32,374
15,009
1,623,467
-121,047
-782,806
719,614
-1,155,797
3,127,385
8,642,532
-8,722,083
45,194
435,272
0
400,915
-251,024
0
-156,270
-1,077,831
-2,626,978
-4,112,103
4,130,000
-216,541
889,657
4,803,116
1,091,927
2,035,457
Cash and cash equivalents at the end of the financial period
1,971,588
3,127,384
Cash and cash equivalents at the end of the financial period
Cash at bank & in hand
Security deposits
6
6A
1,105,998
865,590
2,183,998
943,387
Cash and cash equivalents at the end of the financial period
1,971,588
3,127,385
The accompanying notes form part of these financial statements.
Page 22
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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 2015
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”). Shree Minerals Limited is a for-profit entity for the purpose of
preparing the financial statements.
The financial report is presented in Australian currency.
Basis of Preparation
Historical cost convention
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.
Going concern
These financial statements have been prepared on a going concern basis and, as a result, the financial report
for the year ended 30 June 2015 does not include any adjustments relating to the recoverability and
classification of the recorded asset amounts or to the amounts and classification of liabilities that might be
necessary should the Group not continue as a going concern.
The economic environment in which the Company operates is both difficult and challenging, and the Company
has recorded a loss after tax of $ 10.7 million for the year. The net loss after tax includes non-cash items of
appx $9.9 million including impairment provision of $8.6 million, inventory impairment of $0.7 million,
provision for doubtful debts of $0.2 million, unrealised foreign exchange loss on off take advance of $0.3
million and depreciation & amortisation of property of plant and equipment and other non-current assets of
$0.07 million.
The company continues maintaining a close watch over Iron Markets for an appropriate window to
recommence shipments of inventory on hand to enable repayment of the off-take finance of A$1.57 million as
per Note 10, though proving challenging due to Iron Ore prices. Meanwhile, the company has made some
payments towards the unadjusted off-take finance and is in regular discussions with its off-take partners in this
regard.
As at 30 June 2015, the Company had Cash reserves of $1.1 million.
Significant efforts have been made to preserve cash and reduce costs and secure additional finance, however
material uncertainties over the future cash flows exist.
Page 23
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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 2015
The Company continues to engage with its stakeholders and continues to monitor opportunities from
interested investors to raise additional equity for the business and restructure its liabilities. In addition, the
Company continues to focus efforts on improving liquidity through:
the implementation of further cost improvement initiatives;
continuation of voluntary payroll reductions ;and
•
•
• Re-commencement of operations as per Iron Ore Price environment .
The Company also carefully manages discretionary expenditure in line with the Company’s cash flow.
The financial report has therefore been prepared on a going concern basis, which assumes continuity of
normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course
of business. Should the Company be unable to continue as a going concern, it may be required to realise assets
and extinguish liabilities other than in the ordinary course of business, and at amounts that differ from those
stated in the financial statements.
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 2015 and comparative information.
New and amended standards adopted by the Company for these financial
statements
A number of new or amended standards became applicable for the current reporting period, however, the
Company did not have to change its accounting policies or make retrospective adjustments as a result of
adopting these standards. Information on these new standards which are relevant to the Company is
presented below.
AASB 2012-3
Financial Liabilities
Amendments to Australian Accounting Standards – Offsetting Financial Assets and
AASB 2012-3 adds application guidance to AASB 132 to address inconsistencies identified in applying some of
the offsetting criteria of AASB 132, including clarifying the meaning of “currently has a legally enforceable right
of set-off” and that some gross settlement systems may be considered equivalent to net settlement.
AASB 2012-3 is applicable to annual reporting periods beginning on or after 1 January 2014 and has been
adopted in this financial report. The adoption of these amendments has not had a material impact on the
Group as the amendments merely clarify the existing requirements in AASB 132.
AASB 2013-3
Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets
These narrow-scope amendments address disclosure of information about the recoverable amount of
impaired assets if that amount is based on fair value less costs of disposal.
When developing IFRS 13 Fair Value Measurement, the IASB decided to amend IAS 36 Impairment of Assets to
require disclosures about the recoverable amount of impaired assets. The IASB noticed however that some of
the amendments made in introducing those requirements resulted in the requirement being more broadly
applicable than the IASB had intended. These amendments to IAS 36 therefore clarify the IASB’s original
intention that the scope of those disclosures is limited to the recoverable amount of impaired assets that is
based on fair value less costs of disposal.
Page 24
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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 2015
AASB 2013-3 makes the equivalent amendments to AASB 136 Impairment of Assets and is applicable to annual
reporting periods beginning on or after 1 January 2014. The adoption of these amendments in this financial
report has not had a material impact on the Group as they are largely of the nature of clarification of existing
requirements.
AASB 2014-1
and 2011-2013 Cycles)
Amendments to Australian Accounting Standards (Part A: Annual Improvements 2010-2012
Part A of AASB 2014-1 makes amendments to various Australian Accounting Standards arising from the
issuance by the IASB of International Financial Reporting Standards Annual Improvements to IFRSs 2010-2012
Cycle and Annual Improvements to IFRSs 2011-2013 Cycle.
Among other improvements, the amendments arising from Annual Improvements to IFRSs 2010-2012 Cycle:
•
•
clarify that the definition of a ‘related party’ includes a management entity that provides key management
personnel services to the reporting entity (either directly or through a group entity); and
amend AASB 8 Operating Segments to explicitly require the disclosure of judgements made by
management in applying the aggregation criteria.
Among other improvements, the amendments arising from Annual Improvements to IFRSs 2011-2013 Cycle
clarify that an entity should assess whether an acquired property is an investment property under AASB 140
Investment Property and perform a separate assessment under AASB 3 Business Combinations to determine
whether the acquisition of the investment property constitutes a business combination.
Part A of AASB 2014-1 is applicable to annual reporting periods beginning on or after 1 July 2014. The adoption
of these amendments has not had a material impact on the Group as they are largely of the nature of
clarification of existing requirements.
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.
Page 25
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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 2015
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.
R&D tax credits are accounted for when received.
b. Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed by directors first when indicators of impairment exist
and thereafter annually 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 company 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 profit or loss
statement during the financial period in which they are incurred.
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.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts
included in the revaluation reserve relating to that asset are transferred to retained earnings.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2015
c. Exploration, Evaluation and Development Expenditure
Exploration and evaluation costs
Exploration and evaluation 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 the
successful development of the area or where activities in the area have not yet reached a stage that permits
reasonable assessment of the existence of economically recoverable resources.
Accumulated costs in relation to an abandoned area are written off in full against profit or loss 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 are transferred to Mine
Properties and amortised over the life of the area according to the rate of depletion of the economically
recoverable resources (refer to Mine Properties below).
A regular review for impairment is undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest.
Costs of site restoration are provided over the life of the facility from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of
the mining permits. Such costs have been determined using estimates of future costs, current legal
requirements and technology on a discounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of
site restoration, there is uncertainty regarding the nature and extent of the restoration due to community
expectations and future legislation. Accordingly the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
d. Mine Development
Mine development represent the accumulation of all exploration, evaluation and development expenditure
incurred in respect of a project in which mining has commenced or in the process of commencing. When
further development expenditure is incurred in respect of mine property after the commencement of
production, such expenditure is carried forward as part of the mine property only when substantial future
economic benefits are thereby established, otherwise such expenditure is classified as part of the cost of
production.
Amortisation is provided on a unit of production basis (other than restoration and rehabilitation expenditure
detailed below) which results in a write off of the cost proportional to the depletion of the proven and
probable mineral reserves.
The company defers waste stripping costs for matching costs with the related economic benefits. Stripping
costs incurred in the period are deferred to the extent that the current period ratio exceeds the life of mine or
pit ratio. Such deferred costs are then charged in subsequent periods, the ratio falls short of the life of mine or
pit ratio. The life of mine or pit ratio is obtained by dividing the volume of waste mined either by the volume of
ore mined. The life of mine or pit waste-to-ore ratio is a function of an individual mine's pit design and
therefore changes to that design will generally result in changes to the ratio. Changes to the life of mine or pit
ratio are accounted for prospectively. Deferred stripping costs are included in Mine development costs.
The net carrying value is reviewed regularly and to the extent to which this value exceeds its recoverable
amount, the excess is either fully provided against or written off in the financial year in which this is
determined.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2015
The Group provides for environmental restoration and rehabilitation at site which includes any costs to
dismantle and remove certain items of plant and equipment. The cost of an item includes the initial estimate
of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation
for which an entity incurs when an item is acquired or as a consequence of having used the item during that
period. This asset is depreciated on the basis of the current estimate of the useful life of the asset.
In accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets an entity is also required
to recognise as a provision the best estimate of the present value of expenditure required to settle the
obligation. The present value of estimated future cash flows is measured using a current market discount rate.
e. 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 the company, 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.
f. 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 no longer has any significant continuing involvement in the
risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations
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
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 30 JUNE 2015
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
instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in
the income statement.
g.
Impairment of Non Financial Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is
Page 29
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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 2015
compared to the asset’s carrying value. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which the estimates of future cash flows have not
been adjusted.
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.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of
the asset is reduced to its recoverable amount.
An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair
value, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset
(cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss
immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss
is treated as a revaluation increase.
Interests in Joint Operations
h.
The Company’s share of the assets, liabilities, revenue and expenses of joint operations are included in the
appropriate items of the financial statements.
i. 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.
j. 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.
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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 2015
k. 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 3 months or less, and bank overdrafts. Bank overdrafts are shown
within short-term borrowings in current liabilities on the balance sheet
l. 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).
The following criteria are also applicable to other specific revenue transactions:
Iron Ore Sales
Contract terms for the Company’s sale of Iron Ore allow for a price adjustment based on final assay results of
the ore for Fe content & other trace elements at the discharge port to determine the final content.
Recognition of sales revenue for these commodities is based on the most recently determined estimate of Fe
content & other trace elements (based on load port assay results) and the spot price at the date of shipment,
with a subsequent adjustment made upon final determination.
The terms of Iron Ore sales contracts contain provisional pricing arrangements whereby the selling price for
Iron Ore is based on prevailing spot prices on a specified period around the date of shipment to the customer
(the “quotation period”). Adjustments to the sales price occur based on movements in quoted market prices
up to the date of final settlement.
m. Inventories
Crushed Ore at site & port and run of mine ore stockpiles are physically measured or estimated and valued at
the lower of cost or net realisable value. Net realisable value is the estimated selling price (in the ordinary
course of business assuming sales are made at the end of the reporting period such that applicable price for
the next month to coincide with time it reaches customer’s discharge port), less estimated costs of completion
and costs of selling final product.
Cost is determined using the weighted average method and comprises direct purchase costs and an
appropriate portion of fixed and variable overhead costs, including depreciation and amortisation, incurred in
converting materials into finished goods.
n. 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.
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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 2015
o. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
p. 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.
The Group’s mining and exploration activities are subject to various laws and regulations governing the
protection of the environment. The Group recognises management’s best estimate for asset retirement
obligations in the period in which they are incurred. Actual costs incurred in the future periods could differ
materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine
estimates and discount rates could affect the carrying amount of this provision.
Key Judgements – Ore reserve and resource estimates
The Group estimates its ore reserves and mineral resources based on information compiled by Competent
Persons (as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Resources (the JORC Code). These are taken into account in the calculation of depreciation,
amortisation, impairment, deferred mining costs, rehabilitation and environmental expenditure.
In estimating the remaining life of the mine for the purposes of amortisation and depreciation calculations,
due regard is given, not only to remaining recoverable ore contained in reserves and resources , but also to
limitations which could arise from the potential for changes in technology, demand, and other issues which are
inherently difficult to estimate over a lengthy time frame.
Where a change in estimated recoverable ore over the remaining life of the mine is made, depreciation and
amortisation is accounted for prospectively.
The determination of ore reserves and remaining mine life affects the carrying value of a number of the
Group’s assets and liabilities including deferred mining costs and the provision for rehabilitation.
Key Judgements – Units-of-production depreciation
Estimated recoverable ore over the remaining life of the mine are used in determining the depreciation and /
or amortisation of mine specific assets. This results in a depreciation / amortisation charge proportional to the
depletion of the anticipated remaining life of mine production. Each item’s life, which is assessed annually, has
regard to both its physical life limitations and to present assessments of economically recoverable ore over the
remaining life of the mine of the mine property at which the asset is located. These calculations require the
use of estimates and assumptions, including the amount of recoverable ore over the remaining life of the mine
and estimates of future capital expenditure.
Key Judgements – Inventories
Costs incurred in or benefits of the productive process are accumulated as Crushed Ore at site & port and run
of mine ore stockpiles. Net realisable value tests are performed at least annually and represent the estimated
future sales price of the product based, less estimated costs to complete production and bring the product to
sale. Stockpiles are measured by estimating the number of tonnes added and removed from the Stockpile.
Stockpile tonnages are verified by periodic surveys.
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
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 2015
permits reasonable assessment of the existence of economically recoverable reserves, refer to the accounting
policy stated in note 1(c). The application of the Group’s accounting policy for exploration and evaluation
expenditure requires judgment in determining whether it is likely that future economic benefits are likely
either from future exploitation or sale or where activities have not reached a stage which permits a reasonable
assessment of the existence of reserves. The determination of a Joint Ore Reserves Committee (JORC)
resource is itself an estimation process that requires varying degrees of uncertainty depending on sub-
classification and these estimates directly impact the point of deferral of exploration and evaluation
expenditure. The deferral policy requires management to make certain estimates and assumptions about
future events or circumstances, in particular whether an economically viable extraction operation can be
established. Estimates and assumptions made may change if new information becomes available.
Key Judgements – Mine Development expenditure
Mine Development expenditure are carried forward in respect of each identifiable area of interest where a
mineable resource has been established & published as per JORC guidelines and has reached a stage that
permits reasonable assessment that necessary steps to commence a mining development for that area have
been commenced. Refer to the accounting policy stated in note 1(d). The net carrying value of each area of
interest is reviewed using long term commodity price forecasts from within the range of forecasts by Industry
analysts as per note 1(d).
Key Judgements 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 or other appropriate methodology.
Key Judgements Impairment of Property, Plant and Equipment
The Company assesses each asset at the end of each reporting period to determine whether any indication of
impairment exists. Where an indicator of impairment exists, an estimate of the recoverable amount is made,
which is considered to be the higher of the fair value less costs to sell and Value In Use (VIU).
Future cash flows
VIU calculation use pre-tax free cash flows based on projections approved by the Company. The key operating
assumptions and their basis of estimation are:
•
•
•
Future production based on latest mine plan available
Commodity price forecast derived from public available information and a range of external global
commodity forecasters; and
Future cost of production and future capital expenditure
Discount rate
The discount rate applied to the cash flow projections has been assessed to reflect the time value of money
and the perceived risk profile of the industry. These estimates and assumptions are subject to risk and
uncertainty. Therefore, there is a possibility that changes in circumstances will impact these projections, which
may impact the recoverable amount of assets.
q. 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.
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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 2015
r. Accounting standards not yet effective
Refer to note 21 for accounting standards not yet effective.
NOTE 2: KEY MANAGEMENT PERSONNEL COMPENSATION
Key management personnel remuneration has been included in the Remuneration Report section of the
Directors Report. Total amount payable including valuation of share based payments was as following:
Short term employee benefits
Salaries including bonuses
Total short term employee benefits
Long service leave
Total other long-term benefits
Defined contribution pension plans
Total post-employment benefits
Total remuneration
2015
$
2014
$
380,366
380,366
380,686
380,686
29,634
29,634
410,000
32,438
32,438
413,124
The remuneration report has been prepared on an accruals basis. To conserve cash resources of the company
during the period the operations are under suspension, have voluntarily elected to take reduced drawings of
their remuneration. Consequently, the total payment made during the year ended 30 June 2015 was $222,500
and the amount payable to directors for remuneration at 30 June 2015 amounted to $187,500, for outstanding
director remuneration.
NOTE 3: SALES INCOME
There were no sales during the financial year ended 30/6/2015. However, there was an adjustment of $
121,305 being the difference due to final invoice agreed for the last shipment made in June 2014 & provisional
sales income recognised in books for the previous year ended 30/6/2014. The negative adjustment was
consequent to sharp fall in Iron Ore price applicable for the agreed quotation period applicable for the
shipment. This is as per the accounting policy & contract terms of Iron Ore Sales outlined in Note 1 l.
NOTE 3A: EXPENSES INCLUDED IN INCOME STATEMENT
30-Jun-15
$
Depreciation of plant and equipment
36,308
30-Jun-14
$
48,024
Amortisation of mine properties
0
1,196,477
Employee benefit expenses
Operating lease rental expenses
77,602
28,800
645,333
25,884
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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 2015
NOTE 3B: AUDITOR’S REMUNERATION
Remuneration paid or payable of the auditor for:
– Auditing or reviewing the financial report
– Taxation services and corporate services
30 June 2015
30 June 2014
$
$
20,000
6,250
26,250
19,399
10,750
30,149
NOTE 4: INCOME TAX
a. Income tax expense
Current tax
Deferred tax
Deferred income tax expense included in income tax expense comprises:
(Increase) / decrease in deferred tax assets
Increase / (decrease) 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:
Non-deductible expenses
Deferred tax asset not brought to account
Research & Development Offset
Income tax attributable to operating loss
The applicable weighted average effective tax rates are as follows:
Balance of franking account at year end
Page 35
2015
2014
-1,078,596
0
-1,078,596
146,216
-146,216
0
-435,272
0
-435,272
-406,744
406,744
0
-3,531,738
-547,924
61
3,531,677
-1,078,596
-1,078,596
Nil
Nil
900
547,024
-435,272
-435,272
Nil
Nil
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 2015
2015
2014
c. Deferred tax assets
Tax Losses
Provisions
Other
Set-off deferred tax liabilities
Net deferred tax assets
d. Deferred tax liabilities
Exploration expenditure
Mine development costs
Set-off deferred tax assets
Net deferred tax liabilities
e. Deferred Tax Assets
Provisions (balance of DTA)
Tax Effect of Tax losses - offset to DTA.
Tax Effect of Unused tax losses for which no deferred tax asset has
been recognised
Total
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 & diluted EPS
0
1,365,508
72,217
-1,437,725
0
89,084
1,348,641
-1,437,725
0
1,070,206
0
2,176,839
3,247,045
1,491,072
30,472
62,397
-1,583,941
0
79,092
1,526,787
-1,583,941
21,938
0
1,491,072
503,876
1,994,948
30 June 2015
30 June 2014
$
$
(10,693,932)
(1,391,141)
Number of
Shares
Number of
Shares
138,214,041
107,881,712
Options totalling NIL (2014: NIL) and Share Performance Rights totalling 869,111 (2014: 1,000,000) are anti –
dilutive and not included in the calculation of diluted earnings per share.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and in hand
NOTE 6A: OTHER ASSETS
Cash deposits supporting Guarantees for Rehabilitation Bonds
Page 36
30 June 2015
30 June 2014
$
$
1,105,998
2,183,998
30 June 2015
30 June 2014
$
865,590
$
943,387
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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 2015
NOTE 7: TRADE AND OTHER RECEIVABLES
30 June 2015
30 June 2014
$
22,379
460,448
-238,302
0
623
571
$
12,080
245,431
0
0
623
302,136
245,719
560,270
30 June 2015
30 June 2014
$
$
2,677,549
- 608,726
-749,316
1,319,506
2,677,549
- 608,726
0
2,068,822
Interest receivable
Prepayments
Provision for Doubtful debts (ref Note 22)
Income Tax offsets
Trade receivables
GST and ABN withholding tax receivables
NOTE 7A: INVENTORIES
Iron ore ( crushed & uncrushed ) at cost
Impairment FY2014(diminution in value at net realisable value )
Impairment FY2015( diminution in value at net realisable value )
Iron ore ( crushed & uncrushed ) at net realisable value
NOTE 8: PROPERTY, PLANT & EQUIPMENT
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 2014
Additions
Disposals
Provision for Impairment(ref
Note20)
Depreciation
Balance at 30 June 2015
Earthwork
Plant &
Equipment
Motor
Vehicles
0
0
0
0
0
0
300,507
877
0
-214,687
-68,485
18,212
54,373
0
-25,692
0
-6,001
22,680
Total
354,880
877
-25,692
-214,687
-74,486
40,892
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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 2015
NOTE 9: exploration expenditure
30 June 2015
30 June 2014
Exploration and evaluation phase expenditure capitalised
$
296,947
Movements
Opening balance at 1 July 2013
Exploration capitalised
Impairment / relinquishment ( due to relinquishment of
Mt.Bertha& Sulphide CreeK)
Transferred to Mine Development
Balance at 30 June 2014
Opening balance at 1 July 2014
Exploration capitalised
Impairment / relinquishment
Balance at 30 June 2015
$
263,640
$
1,031,779
132,476
900,615
0
263,640
263,640
33,307
0
296,947
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.
NOTE 9A: MINE DEVELOPMENT
Opening Balance
Mine Development Costs
Deferred Mine Waste
Amortisation – Mine Development
Provision for Impairment ( ref Note 20)
Transferred from Exploration
30-Jun-15
$
10,036,165
-32,374
0
0
-8,420,144
0
1,583,647
30-Jun-14
$
6,172,939
3,981,872
1,077,831
-1,196,477
0
0
10,036,165
Page 38
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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 2015
NOTE 10: TRADE AND OTHER PAYABLES
Current
Trade creditors
Other creditors
Advance
Loan
Provisions
30-Jun-15
$
175,913
670,929
1,571,461
10,071
13,174
2,441,548
30-Jun-14
$
1,772,096
442,112
1,921,894
20,480
26,107
4,182,689
Note: Trade and other payables include an advance received from Singapore based, Frost Global Pte Ltd
(“Frost Global”). The Company had in May 2013 entered into an Off-take Agreement for its Nelson Bay River
Iron Ore DSO products for 800,000 tonnes with Frost Global. As a part of the agreement, Frost Global will be
providing funding of US$4 million by way of advance towards the supply of Iron Ore to be repaid by deduction
from gross sale proceeds from each of the first 8 shipments (of appx 42,000 tonnes +/- 10%) of Iron Ore to
Frost Global. The off-take contract is at normal market terms linked to prevailing index prices at time of each
shipment. In addition to advance repayment as above, there is a discount allowed over the market based sales
terms as a consideration of off-take finance. The company has received US $3 million in this regard (in total
including US$2 million during the financial year ended 30th June 2014) from Frost Global to-date & has made 3
shipments to Frost Global to-date wherein US $ 1.125 million has been adjusted to-date. Further cash
repayments totalling US$0.45 million have been made during the year ended 30 June 2015. Additionally, there
is an outstanding Debtors balance of US$ 0.165 million due from Frost Global. Consequently, the net
outstanding advance amount from Frost Global of US$ 1.26 million (A $ 1.57 mn) is included under current
liabilities.
NOTE 10A: TRADE AND OTHER PAYABLES
Non-Current
Loan
30 June 2015
30 June 2014
$
3,542
3,542
$
23,752
23,752
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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 2015
NOTE 11: CONTRIBUTED EQUITY
142,184,223 (2014: 121,760,000) Fully paid ordinary shares
15,094,311
13,591,891
The Company has issued capital amounting 142,184,223 (2014:
121,760,000) with no par value on 30/06/2015.
30 June 2015
30 June 2014
$
$
Movements
Opening balance
Shares issued
Options exercised and to be allotted
Capital raising costs
Closing balance
13,591,891
1,623,467
0
-121,047
15,094,311
9,678,432
4,130,000
0
-216,541
13,591,891
(a) Ordinary Shares
At the beginning of the reporting period
Number of
Shares
Number of
Shares
121,760,000
95,947,500
Shares issued during the period
–
–
–
–
9 December 2013
20February 2014
9 September 2014
31 October 2014
At reporting date
(b)
Options
0
0
13,350,000
12,462,500
20,293,334
130,889
0
0
142,184,223
121,760,000
At the date of this report, the unissued ordinary shares of Shree Minerals Limited under option are nil.
Opening balance : 0
Expired during the year : 0
Balance 0
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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 2015
(c)
Share Performance Rights
At the date of this report, the unissued ordinary shares of Shree Minerals Limited under Share Performance Rights
(“SPR”) are 869,111 as follows:
1 SPR for every 1 tonne of DSO Iron Ore sold over the three years ending on 30th June 2013, 30th June 2014 and 30th
June 2015 respectively subject to issue of maximum of 1,000,000 SPR in aggregate.
For the year ending 30 June 2013 there was nil tonnes of DSO Iron Ore sold.
For the year ending 30 June 2014 there was 130,889 tonne of DSO Iron Ore sold. Consequently, 130,889
Performance Rights vested on 31 October 2014.
For the year ending 30 June 2015 there was nil tonnes of DSO Iron Ore sold.
Consequently, 869,111 Performance Rights will expire on 31 October 2015.
No person entitled to exercise the SPR had or has any right by virtue of the option to participate in any share issue
of other body corporate.
(d)
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 2015 and 30 June 2014 are as follows:
Cash and cash equivalents
Trade and other receivables
Inventories
Trade and other payables
Working capital position
30 June 2015
30 June 2014
$
1,971,588
245,720
1,319,506
(2,445,091)
1,091,723
$
3,127,385
560,270
2,068,822
(4,182,689)
1,573,788
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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 2015
NOTE 12: ACCUMULATED LOSSES AND RESERVES
a. Accumulated Losses
At the beginning of the reporting period
Net loss
At reporting date
b. Option Reserve
30 June 2015
30 June 2014
$
$
3,171,057
10,693,932
13,864,989
1,779,916
1,391,141
3,171,057
The option reserve records items recognised as expenses on valuation of share based payments including employee
options. Please refer note 19 for more information.
During the year nil (2014: nil) options and nil (2014: nil) Share Performance Rights were issued.
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 2015
30 June 2014
$
$
10,000
10,000
0
0
0
0
b. The Company has other rental and expenditure commitments of $28,800 within the next 12 months, $ 19,200
between 12 months and 5 years and NIL beyond 5 years. This pertains to office lease. The rental expenditure
incurred during the year was $ 28,800 ( 2014: $ 22,814.41)
NOTE 14: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
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.
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 2015
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:
Cash at Bank & in Hand
Other Assets (Cash Deposits supporting
Rehabilitation Bonds)
Guarantees for
Sub Total
(b) Reconciliation of Cash Flow from Operations with
Operating Loss after Income Tax
Operating loss after income tax
Non-cash flows:
Tenement impairment/relinquishment
Provision for impairment of mine development
Provision for impairment of Plant & equipment
Provision for impairment of deferred mine waste
Provision for doubtful debt
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 Inflow/(outflow) from operations
30 June 2015
30 June 2014
$
$
1,105,998
865,590
2,183,998
943,387
1,971,588
3,127,385
(10, 693,932)
(1,391,141)
0
7,342,313
214,687
1,077,831
238,302
74,486
(65,838)
749,316
(827,587)
(1,890,420)
900,615
0
0
0
0
1,244,502
(296,966)
(2,068,822)
2,012,727
400,915
NOTE 16: RELATED PARTY TRANSACTIONS
There are no related party transactions except for remuneration payments to employees in normal course of
business.
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.
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 2015
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 2015, 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 $4,356
lower/higher (2014 - $7,262 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 2015
NOTE 18: OPERATING SEGMENTS
The company operates predominately in one segment involved in mineral exploration & development.
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
No share based payments were made in either the current financial year or the prior financial year. On 30 June
2015, there were 869,111 share performance rights on issue as per details in the Remuneration report.
NOTE 20: IMPAIRMENT OF MINE DEVELOPMENT AND PLANT & EQUIPMENT
The Company reviewed the carrying value of its assets units due to the following impairment indicators for the
year:
•
•
Significant fall in Iron Ore Prices causing continued suspension of NBR operations under care &
maintenance; and
Significant fall in Market capitalisation of the company consequent to equity market conditions for
small resources sector.
Considering the above events/information, the following impairment amounts have been recognised in the
financial report:
Mine Development costs 1,077,831
7,342,313
Deferred Mine Waste
Total impairment of Mine Development 8,420,144
Plant & Equipment
214,687
Total impairment of non- current assets 8,634,831
The Company has used VIU method for NBR Project and has used the following assumptions:
VIU calculation use pre-tax free cash flows based on financial projections for the approved life of mine (LOM)
plan.
The key operating assumptions as per management best estimates over the life of mine are:
•
•
•
•
•
•
•
•
•
Future production of all 3 phases of the project (DSO iron ore , BFO & Dense Media magnetite) based
on latest mine plan available;
Processing recovery factor of 82% for BFO phase and 38% for DMM phase;
Commodity price forecasts of US$ 55 DMT CFR China for 62% FE for Iron Ore & A$210 FOB per MT for
DMM product for coal washery;
Exchange rate forecast of AUD/USD 0.70;
Future variable cost of Ocean Freight of US$ 15 per ton from Burnie to China for DSO & BFO iron ore;
Future variable cost of transportation from mine site to port & port expenses & charges including
storage, loading etc totalling $26.68 per ton;
Future variable cost of mining (site cost) ranging from $6.79 to $7.09 per BCM of material;
Future variable cost of processing (site cost) ranging from $3 to $9 per ton of ore handled and
processed for DSO to DMM phases; and
Future Capital cost of $14 million for BFO phase & DMM phase.
Discount rates
The discount rates applied to the cash flow projections of 21.9% on a pre-tax nominal basis has been applied to
reflect the time value of money and the perceived risk profile of the industry.
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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 2015
NOTE 21: ACCOUNTING STANDARDS NOT YET EFFECTIVE
New and revised accounting standards and amendments that are currently issued for future reporting periods
that are relevant to the Company include:
AASB 9
Financial Instruments
AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities.
These requirements improve and simplify the approach for classification and measurement of financial assets
compared with the requirements of AASB 139.
The effective date is for annual reporting periods beginning on or after 1 January 2018.
The entity is yet to undertake a detailed assessment of the impact of AASB 9. However, based on the entity’s
preliminary assessment, the Standard is not expected to have a material impact on the transactions and
balances recognised in the financial statements when it is first adopted for the year ending 30 June 2019.
AASB 14
Regulatory Deferral Accounts
AASB 14 permits first-time adopters of Australian Accounting Standards who conduct rate-regulated activities
to continue to account for amounts related to rate regulation in accordance with their previous GAAP.
Accordingly, an entity that applies AASB 14 may continue to apply its previous GAAP accounting policies for
the recognition, measurement, impairment and derecognition of its regulatory deferral account balances. This
exemption is not available to entities who already apply Australian Accounting Standards.
The effective date is for annual reporting periods beginning on or after 1 January 2016.
When AASB 14 becomes effective for the first time for the year ending 30 June 2017, it will not have any impact
on the entity.
AASB 15
Revenue from Contracts with Customers
AASB 15 replaces AASB 118: Revenue, AASB 111 Construction Contracts and some revenue-related
Interpretations. In summary, AASB 15:
• establishes a new revenue recognition model;
• changes the basis for deciding whether revenue is to be recognised over time at a point in time;
• provides a new and more detailed guidance on specific topics (e.g. multiple element arrangements,
variable pricing, rights of return and warranties); and
• expands and improves disclosures about revenue.
When this Standard is first adopted for the year ending 30 June 2018, there will be no material impact on the
transactions and balances recognised in the financial statements.
OR
The entity is yet to undertake a detailed assessment of the impact of AASB 15. However, based on the entity’s
preliminary assessment, the Standard is not expected to have a material impact on the transactions and
balances recognised in the financial statements when it is first adopted for the year ending 30 June 2018.
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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 2015
AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests
in Joint Operations
This amendment impacts on the use of AASB 11 when acquiring an interest in a joint operation.
The effective date is for annual reporting periods beginning on or after 1 January 2016.
When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact
on the transactions and balances recognised in the financial statements.
AASB 2014-4
Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of
Depreciation and Amortisation
The amendments to AASB 116 prohibit the use of a revenue-based depreciation method for property, plant
and equipment. Additionally, the amendments provide guidance in the application of the diminishing balance
method for property, plant and equipment.
The effective date is for annual reporting periods beginning on or after 1 January 2016.
When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact
on the transactions and balances recognised in the financial statements.
AASB 2014-9
Amendments to Australian Accounting Standards – Equity Method in Separate Financial
Statements
The amendments introduce the equity method of accounting as one of the options to account for an entity’s
investments in subsidiaries, joint ventures and associates in the entity’s separate financial statements.
The effective date is for annual reporting periods beginning on or after 1 January 2016.
When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact
on the financial statements.
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between
an Investor and its Associate or Joint Venture
The amendments address a current inconsistency between AASB 10 Consolidated Financial Statements and
AASB 128 Investments in Associates and Joint Ventures (2011). The amendments clarify that, on a sale or
contribution of assets to a joint venture or associate or on a loss of control when joint control or significant
influence is retained in a transaction involving an associate or a joint venture, any gain or loss recognised will
depend on whether the assets or subsidiary constitute a business, as defined in AASB 3 Business Combinations.
Full gain or loss is recognised when the assets or subsidiary constitute a business, whereas gain or loss
attributable to other investors’ interests is recognised when the assets or subsidiary do not constitute a
business.
The effective date is for annual reporting periods beginning on or after 1 January 2016.
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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 2015
When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact
on the financial statements.
22: AFTER BALANCE SHEET DATE EVENTS
The Company received notification on 23rd September 2015 that the mining contractor at Nelson Bay River
Iron Ore Project, being “Collins Contracting” has gone into administration. Consequently, a provision for
doubtful debts has been made in the company’s books for $238,302 being the prepayments to “Collins
Contracting”.
NOTE 23: COMPANY DETAILS
The registered office and principal place of business of the Company is:
Unit 2, the Pines Business Centre
888 Forrest Street
Cottesloe
WA 6011
Ph:
(08) 92861509 Fax: (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 19 to 48 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 2015 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 2015,
comply with section 300A of the Corporations Act 2001.
(c) Having regard to matters as set forth in Note 1, 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. 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 2015.
Dated at Unit 2, The Pines Business Centre, and 88 Forrest Street, Cottesloe, WA 6011 this 30th day of
September 2015.
Signed in accordance with a resolution of the directors:
_______________________
Sanjay Loyalka
Director
Page 49
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Independent Auditor’s Report
To the Members of Shree Minerals Limited
Level 1
10 Kings Park Road
West Perth WA 6005
Correspondence to:
PO Box 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au
Report on the financial report
We have audited the accompanying financial report of Shree Minerals Limited (the
“Company”), which comprises the statement of financial position as at 30 June 2015, the
statement of profit or loss and other comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information and the directors’
declaration of the company.
Directors’ responsibility for the financial report
The Directors of the Company are responsible for the preparation of the financial report
that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error. The Directors also state, in the notes to the financial report, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
statements comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require us to comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
Page 50
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In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation of the financial report that gives a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the
overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
Auditor’s opinion
In our opinion:
a
b
the financial report of Shree Minerals Limited is in accordance with the Corporations
Act 2001, including:
i
ii
giving a true and fair view of the Company’s financial position as at 30 June
2015 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.
Material uncertainty regarding continuation as a going concern
Without qualifying our opinion, we draw attention to Note 1 in the financial report which
indicates that the company incurred a net loss of $10,693,932 during the year ended 30 June
2015 and, as of that date, the company’s cash outflows from operating and investing
activities equates to $1,875,411. These conditions, along with other matters as set forth in
Note 1, indicate the existence of a material uncertainty which may cast significant doubt
about the company’s ability to continue as a going concern and therefore, the company may
be unable to realise its assets and discharge its liabilities in the normal course of business,
and at the amounts stated in the financial report.
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Report on the remuneration report
We have audited the remuneration report included in pages 12 to 15 of the directors’ report
for the year ended 30 June 2015. The Directors of the Company are responsible for the
preparation and presentation of the remuneration report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration
report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Shree Minerals Limited for the year ended 30
June 2015, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M J Hillgrove
Partner - Audit & Assurance
Perth, 30 September 2015
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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 21st September 2015.
SUBSTANTIAL SHAREHOLDERS
The company has received substantial shareholder notices from;
– Mr Sanjay Loyalka (26,474,078 ordinary shares)
– Oceania Coal Resources NL (15,000,000 ordinary shares)
– China Alliance International Holdings Group (23,223,632 ordinary shares)
– RB Investments Pte Ltd (30,437,500 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.
DISTRIBUTION SCHEDULE – SHAREHOLDINGS AS AT 19th SEPTEMBER 2015
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-
99,999,999,999
Totals
Holders
4
16
176
171
Total Units
431
59,747
1,727,929
6,455,131
60
427
133,940,985
142,184,223
%
0.000
0.042
1.215
4.540
94.202
100.000
UNMARKETABLE PARCELS
There are 345 unmarketable parcels as at 21st September 2015 totalling 6,291,773 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 18th SEPTEMBER 2015
Holder Name
RB INVESTMENTS PTE LTD
MR SANJAY KUMAR LOYALKA
CHINA ALLIANCE INTERNATIONAL HOLDINGS GROUP LIMITED
OCEANIA COAL RESOURCES NL
MEGAWILD ENTERPRISES PTY LTD
ULLAPOOL INVESTMENTS PTY LTD
ROSECLIFF HOLDINGS PTY LTD
EXPORT MARKETING (BVI) LTD
MR SAHIB INDERJIT SINGH
CLAREMONT HOLDINGS LIMITED
MR MICHAEL LEE ANGHIE & MRS SANDY MICHELLE ANGHIE
MR AMRIK SINGH HEER
MRS RENU KUMAR & DR ASOK KUMAR
IACG PTY LTD
SANJAY NAGNATH MUKHEDKAR & ASHWINI DAVRAY
PRIMO FINANCIAL GROUP INC
DR DEEPAK NARAN
CHETAN KARIA
TANDON SUPERANNUATION SERVICES PTY LTD
MR SANJAY KUMAR LOYALKA
Balance at
18-09-2015
30,437,500
24,500,000
23,223,632
15,000,000
4,525,000
4,400,000
4,375,000
2,500,000
1,915,150
1,687,500
1,600,000
1,500,000
1,458,334
1,309,078
1,284,064
1,250,000
1,000,000
767,032
583,334
565,000
%
21.407
17.231
16.333
10.550
3.182
3.095
3.077
1.758
1.347
1.187
1.125
1.055
1.026
0.921
0.903
0.879
0.703
0.539
0.410
0.397
123,880,624
87.125
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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 on behalf of the shareholders monitor the business affairs of the Company. For this, they
formally have 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
This statement describes Shree Minerals Ltd’s position in relation to each of the recommendations set by the
ASX Corporate Governance Council (“Recommendations”). The Recommendations are set out
in the
ASX Corporate Governance Council’s Corporate Governance Principles and recommendations (3rd Edition) 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 2015.
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
The role of the Board and Management.
1.2
Appointment and re-election of Board members.
1.3 Written agreements.
1.4
Company Secretary
1.5
Diversity
1.6
Board Evaluation
1.7
Performance evaluation of senior executives
2.1
Nomination Committee
2.2
Board and skills matrix
Board
Satisfied.
at
Charter
www.shreeminerals.com in the Corporate Governance
Statement.
available
is
Satisfied. Procedures For Selection And Appointment Of
Directors is available at www.shreeminerals.com in the
Corporate Governance Statement.
Satisfied. All directors and senior executives are provided
with formal letter of appointment which sets out the
terms and conditions of appointment including their
duties , rights , responsibilities and expectations.
Satisfied. The company secretary is accountable directly
to the board, through the chair, on all matters to do with
the proper functioning of the board.
Not satisfied. The company considers that given the
current small size of the company’s operations where
there are very few employees, this objective is not
practical to be achieved till such time that the company’s
operations are increased. Accordingly, the company has
not established a policy concerning diversity.
It is the policy of the Board to conduct annual evaluations
of its effectiveness and that of individual Directors.
Whilst the performance of the Board is appraised on an
ongoing basis, during the year no formal appraisal was
conducted.
Whilst the performance of management is appraised on
an ongoing basis.
During the year no formal appraisal of management was
conducted.
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 nomination committee.
Satisfied. The Board has been formed so that it has
effective
to
adequately discharge its responsibilities and duties given
its current size and scale of operations.
composition,
commitment
size and
Please also refer to the Procedures For Selection And
is available at
Appointment Of Directors which
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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
www.shreeminerals.com in the Corporate Governance
Statement.
2.3
2.4
Size and Composition of the Board
Disclosed in the Directors report.
A majority of the board should be
directors.
independent
Not Satisfied. Due to the size of the company and its
operations the Board has determined increasing the size
of the Board to achieve this would not be efficient.
2.5
The chair should be an independent director.
2.6
Induction Program.
3.1
Companies should have a code of conduct and disclose
the code or a summary of the code
.
4.1
The board should establish an audit committee.
4.2
The board should receive assurance from the chief
executive officer (or equivalent) and the chief financial
officer (or equivalent) that the declaration provided in
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
4.3
External Auditor at AGM
5.1 Make timely and balanced disclosure
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Not Satisfied. Due to the size of the company and its
operations Mr Sanjay Loyalka is both Chief Executive and
Chairman.
Nan informal induction process exists and is facilitated by
the Chairman. The process includes the new Directors
meeting with the other Board members and the senior
management in order to gain an insight into the key
issues and culture of the Company.
Satisfied. The Code of conduct is available at
www.shreeminerals.com in the Corporate Governance
Statement.
Not satisfied. The Board consider that given the current
size of the board, this function is efficiently achieved with
full board participation. Accordingly, the Board has not
established an audit committee.
Satisfied.
declaration pursuant to the 2015 financial period.
The Board has received a section 295A
The Company has ensure that its external auditor attends
its AGM and is available to answer questions from
security holders relevant to the audit.
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
6.1
Information on website
6.2
Investor relations
6.3
Security holders meetings
6.4
Electronic communication
7.1
Companies should establish policies for the oversight
and management of material business risks and
disclose a summary of those policies.
7.2
Implementation of risk management systems and risk
review.
7.3
Internal Audit function
7.4
Sustainability risks.
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SHREE MINERALS LIMITED CURRENT PRACTICE
The company has provided information about itself and
its governance to investors via its website.
Shareholders communication strategy
Satisfied.
is
available at www.shreeminerals.com in the Corporate
Governance statement.
The Company has adopted the ASX Guidelines for Notice
of Meetings.
is available at
Shareholders communication strategy
www.shreeminerals.com in the Corporate Governance
statement.
The Board consider that given the current size of the
board, this function is efficiently achieved with full board
participation. Accordingly, the Board has not established
a Risk committee.
Risk management
at
program
www.shreeminerals.comin the Corporate Governance
statement.
available
is
The Board is responsible for reviewing annually its risk
management system. The review for this year is yet to be
completed.
Given the size of the current operations, currently there is
no internal audit activity undertaken.
The Company manages its exposure to economic risk and
environmental risk while it does not consider that it
currently has any material exposure
social
sustainability risks, however will monitor the exposure.
to
External Risk factors that materially have an impact
include :
1. Fluctuations in commodity prices and impacts of
ongoing global economic volatility may
negatively affect our results, including cash flows
and asset values.
2. Currency exchange rate fluctuations
3. Financial : Liquidity & cash flow risks
4.
5. Unexpected natural and operational
Increased costs
catastrophes
EPA Tasmania has notified the company during the year
that that the variation of the Environment permit in
Nov’13 to allow a temporary PAF rock dump for DSO
south pit has been rendered invalid in a judicial review by
the Court in Dec’14. The original permit remains valid, and
without variation. As a consequence, the current PAF
For personal use only
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
storage temporary dump is not compliant. During the
year, the Company has conducted relevant studies &
work to resolve the issue.
All government approvals (other than variation pertaining
to temporary PAF rock permit for DSO south pit) for the
project remain valid. These include the Mining Lease,
Federal Government Environmental Approval and
Tasmanian Government’s Environment & Development
permits (etc).
licences
its activities
The Company holds various exploration & mining licences
to regulate
in the State of Tasmania,
conditions and
Australia. These
regulations with respect to the rehabilitation of areas
disturbed during the course of its activities. As far as the
Directors are aware, there has been no known breach of
the Company’s
licence conditions other than those
disclosed in the Directors report.
include
implementation of best practice
social and
The
environmental practices, well beyond simple compliance,
has been an integral part of Company's philosophy. The
company in discussions with the regulatory authorities is
also looking at innovative work towards implementing /
developing best environment management practices. The
company has also voluntarily committed to research to
enhance the understanding of orchid biology in north-
western Tasmania, as a best practice environmental
management contribution to orchid science. The research
will assist with the ongoing management and protection
of threatened orchid species in north-western Tasmania.
Shree Minerals also recognises the opportunities that the
presence of our project creates to support Devil Facial
Tumour research. Hence, Devil numbers around the mine
site are monitored as part of the mine’s operational
monitoring of the effectiveness of its devil (and quoll)
impact mitigation measures, and these observations will
be valuable data for the Save the Tasmanian Devil
Program (STDP).
The Company recognises the importance of identifying
and managing risks and ensuring appropriate control
measures are in place.
8.1
The board should establish a remuneration committee. Not Satisfied. The Board consider that given the current
size of the board, this function is efficiently achieved with
full board participation. Accordingly, the Board has not
established a remuneration committee.
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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
8.2
Executive versus non- executive remuneration.
Current Remuneration policies are set out
Company’s Remuneration Report.
in the
8.3
Equity based remuneration.
Securities
The
at
www.shreeminerals.com in the Corporate Governance
statement.
available
Policy
is
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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