Zeus Resources Limited
Annual Report 2020

Plain-text annual report

m l y n o e s u l a n o s r e p r o F Annual Report For the year ended 30 June 2020 The information contained in this report is to be read in conjunction with Zeus Resources Limited's 2020 half year report and announcements to the market Zeus Resources released during the period WWW.ZEUSRESOURCES.COM ABN 70 139 183 190 1 CORPORATE DIRECTORY Directors Mr Dongfeng Zhang – Chairperson (appointed 25 Sept 2019) Mr Jiangang Zhao - Acting CEO and Director Mr Gregory Clifton Hall - Non-executive Director Mr Yong Zhang - Non-executive Director Mr Shouyin Wang – Chairperson (resigned 25 Sept 2019) Company Secretary Anthony Harris Principal registered office Suite 105 Level 1, 25-27 Berry Street North Sydney Telephone: +61 2 8488 3270 Email: info@zeusresources.com Auditor William Buck 29/66 Goulburn St Sydney NSW 2000 Share Registry Link Market Services Level 4, 152 St George’s Terrace Perth WA 6000 Australian Securities Exchange ASX Code – ZEU Website: www.zeusresources.com l y n o e s u l a n o s r e p r o F 2 l y n o e s u l a n o s r e p r o F CONTENTS CORPORATE DIRECTORY CHAIRPERSON’S REPORT REVIEW OF OPERATIONS REPORT DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION STATEMENT OF PROFIT OR LOSS AND 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 REVIEW REPORT TENEMENT SCHEDULE GOVERNANCE STATEMENT SHAREHOLDER INFORMATION 2 4 6 9 21 22 23 24 25 26 44 45 50 51 66 3 l y n o e s u l a n o s r e p r o F CHAIRPERSON’S REPORT Dear Shareholder, It is with great pleasure that I write to you and present the Zeus Resources Ltd (Zeus or the Company) Annual Report for the year ended 30 June 2020. During the past year, uranium exploration and mining companies have experienced some growth in demand for uranium ores and milled ore product and growth in the spot price. Miners and suppliers in Canada and Kazakhstan’s state-owned Kazatomprom are slowly bringing production back on line with newly-listed investment house Yellow Cake placing contracts for long term supply of uranium oxide. Uranium price still remains low, around US$31 per lb up from US$24 per lb last year, but a long way off from prices in the previous decade of $140 per lb. Source: Market Insider: https://markets.businessinsider.com/commodities/uranium-price 4 l y n o e s u l a n o s r e p r o F CHAIRPERSON’S REPORT Tenements Exploration Exploration efforts during the year have remained focused on the planning of follow up exploration programs for proposed drilling at the Company’s remaining Narnoo and Wiluna Projects and at the Gascoyne tenement extension Mortimer Hills E09/2147. Exploration efforts in WA have been delayed due to restrictions on travel and due to our JV partner changing management structure and deciding not to continue with exploration efforts in the Gascoyne region. Exploration conducted by farm-in partner Arrow Minerals Ltd Limited (ASX: AMD) (“Arrow”) had not progressed during the year and unfortunately the new CEO decided not to continue with the joint venture project, E09/1618 in the Gascoyne area. Zeus Resources agreed to end the Joint Venture agreement and Arrow, as the managing partner, fully relinquished the tenement in May 2020. Efforts to find joint venture partners for tenements in the Lake Way area were severely impacted by the restrictions on travel. The Company was not able to negotiate with JV partners for tenements E53/1601 and E53/1604. These two tenements were subsequently fully relinquished. The Company has followed up on forming a venture with potential operators in Laos. These relationships were expected to be expanded upon in the financial year, due to the Covid19 pandemic restrictions, negotiations have been temporarily halted. We hope to send in another exploration team some time in 2021. Financial Position The company still has sufficient funds to support further operations with $1.14 million of cash as at 30th June 2020 and no debt. Cash outflows have been substantially reduced by relinquishing two tenements and partially relinquishing a futher 2 tenements. Projected cash outflow was reduced from a commitment of over $400,000 to $150,000. The substantial reduction in the projected costs of tenements will enable the Company to carry out further exploration and explore acquisitions and joint venture possibilities in the next financial year. Yours Sincerely, Mr. Dongfeng Zhang Chairperson Dated this 29th day of September 2020 5 REVIEW OF OPERATIONS The Company held six active licences during the year in three project areas within Western Australia, at Lake Way, Narnoo South and Mortimer Hills. In April 2020 Zeus Resources relinquished three licences and two licences partially surrendered. Arrow Minerals Ltd relinquished the Joint Venture tenement E09/1618 in Mortimer Hills. l y n o Tenements are shown in Figure 1 and detailed in Table 1. e s u l a n o s r e p r o F Figure 1. Zeus Resources Tenement Location Map. 6 REVIEW OF OPERATIONS Region Project Tenement Status Holder Operator Comments l y n o Wiluna Narnoo Gascoyne E 53/1601 Relinquished - - 100% surrendered Lake Way E 53/1603 Granted Zeus Resources Ltd Zeus Resources Ltd Partial Surrender 3/8 blocks. 5 held Narnoo South Mortimer Hills E 53/1604 Relinquished - - 100% surrendered E 28/2097 Granted Zeus Resources Ltd Zeus Resources Ltd Partial Surrender 2/7 blocks. 5 held E 09/1618 Relinquished - - 100% surrender E 09/2147 Granted Zeus Resources Ltd Zeus Resources Ltd No changes Table 1. Zeus Resources Tenement Details e s u l a n o s r e p r o F Exploration Program Resources Ltd. Wiluna Project the Board. Narnoo Project Gascoyne Project No fieldwork was completed during the year ended 30th June 2020 on the tenements managed by Zeus During the year ended 30th June 2020 Zeus completed a strategic review of the Wiluna project and relinquished two licences, E53/1601 and E53/1604. Exploration licence E53/1603 was reduced in area by 3 sub-blocks. There are no immediate plans or a drilling program at the Wiluna Project, but this is subject to an ongoing review by During the year ended 30th June 2020 Zeus completed a strategic review of the Narnoo project and reduced the area of Exploration Licence E28/2097 by 2 sub-blocks. There are no immediate plans for follow up drilling of the Narnoo South (E28/2097) uranium prospect, but this is subject to ongoing review by the Board. In May 2020 Arrow Minerals Ltd withdrew from involvement with E09/1618 and the licence was relinquished. No field exploration activities were undertaken by Zeus within E09/2147 during the year ended 30th June 2020. 7 REVIEW OF OPERATIONS Competent Person Statement: l y n o Information in this release that relates to Exploration Results is based on information compiled by Mr Andrew Rust, who is a Member of the Australian Institute of Mining and Metallurgy (AusIMM). Mr Rust is a full time employee of Shearwater Australia Proprietary Limited. Mr Rust is engaged by Zeus Resources Limited as an independent consultant. Mr Rust has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Rust consents to the inclusion in this release of the matters based on his information in the form and context in which it appears. e s u l a n o s r e p r o F 8 DIRECTORS’ REPORT Your Directors present their report together with the financial statements of the Company for the financial year ended 30th June 2020. Review of operations During the past financial year, the Company focused on both geological exploration of current tenements and new project acquisitions. Exploration efforts in WA have been delayed due to restrictions on travel and due to our JV partner changing management structure and deciding not to continue with exploration efforts in the Gascoyne region. The Company will continue to investigate potential other joint venture partners for current tenement exploration licences and hopes to develop partnerships with similar terms and conditions of the Arrow joint venture. The Company has also formed some new relationships with potential operators in Laos. These relationships were expected to be expanded upon in the financial year, however our staff have not been able to travel outside of Australia or China in order to follow up on opportunities in Laos. The discussions in Laos have been put on hold until the COVID19 situation in SE Asia improves and travel restrictions have been relaxed. Results of Operations For the year ended 30th June 2020 the Company recorded a loss of $834,620 (2019: Loss $261,510). Impairment of relinquished or partially surrendered tenements accounted for $574,090 of the loss. (Loss before impairment was $265,530) Total exploration expenditure for the year was $144,882 (2019: $154,475) of which $139,849 was capitalised to exploration assets (2019: $149,316). For the year ended 30th June 2020 the share price of the Company did not change from opening at $0.008 per share to close at $0.008 per share – a change in value of 0%. Shares Registry For the year ended 30th June 2020 the Company did not issue any additional shares or cancel any shares. (2019: Nil). The Company did not make any payments for shares in the Company at a discount or premium to the traded price. (2019: Nil) l y n o e s u l a n o s r e p r o F 9 l y n o e s u l a n o s r e p r o F DIRECTORS’ REPORT Significant changes in state of affairs During the financial year ended 30th June 2020, the Chairperson, Mr Shouyin Wang, resigned on 25th September 2019. Mr Dongfeng Zhang was subsequently appointed to the position of Chairperson on 25th September 2019. No other significant changes were made to the structure and composition of board and management to 30th June 2020. Principal activities The principal activity of the Company during the year was the exploration for uranium and other metal resources and the assessment of options for investment in multi-commodity mining assets. The Company operates as a for profit entity. No change in the principal activity occurred during this period. Likely developments and expected results of operations The Company intends to continue its exploration activities on its existing projects and to acquire further suitable projects for exploration as opportunities arise. Directors The Directors in office during the year and as at the date of this report are: Mr. Jiangang Zhao Mr. Gregory Clifton Hall Mr. Yong Zhang Mr. Dongfeng Zhang (appointed 25 Sept 2019) Mr. Shouyin Wang (resigned 25 Sept 2019) Directors have been in office since the start of the financial year (1 July 2019) to the date of this report unless otherwise stated. DIRECTORS’ PROFILES Mr Shouyin Wang – Chairperson (Resigned 25 September 2019) BA Geology Institute of Hebei EMBA Xi'an University of Technology From 1987-1997, Mr Wang worked at the Shandong Office of the China Metallurgical Geological Bureau and from 1997- 2012, he worked for Xinjiang Geological Prospecting Institute as Dean and President. He also acted as a Director, Deputy Manager and as CFO of ZIMC during this period. From 2012 to current, Mr Wang is acting as the director of Mining Development Department of the China Metallurgical Geological Bureau and has been the General Manager of ZIMC since May 2015. Mr Dongfeng Zhang – Chairperson (Appointed 25 September 2019) PhD Zhongnan University Mr Zhang is currently the Chairperson of Zhengyuan International Mining Company Ltd (ZIMC). Prior to joining ZIMC, Mr Zhang worked for many years as a Director and as an engineer including at the Institute of Geology of the Third Bureau (1993-1997); at the Shanxi Office of the China Metallurgical Geological 10 DIRECTORS’ REPORT DIRECTORS’ PROFILES continued l y n o e s u l a n o s r e p r o F Bureau (1997-1998); as Vice President at the Geological Exploration Institute (1998-2002); as Deputy Manager at the Shanxi Metallurgical Geotechnical Corporation (2006-2010). Mr Zhang then went on to complete a PhD at Zhongnan University. Mr Zhang then return to serve as the Dean of the Third Geological Exploration Institute of China Metallurgical Geology Bureau (2014-2017) and then as the current Dean of Kunning Institute of China Metallurgical Geology Bureau. Mr Yong Zhang - Non-Executive Director B. Engineering (Shandong Construction College) Mr Yong Zhang has had an extensive career in property development, real estate sales and investment. Mr Zhang has extensive property interests in China with over 1,600 employees. Mr Zhang was instrumental in securing the cornerstone investment in Zeus by China Metallurgical Geological Bureau, via its subsidiary Zhengyuan International Mining Company Limited. Mr Gregory Clifton Hall - Non-Executive Director B. App Sc. (University of New South Wales) Mr Greg Hall is a seasoned geologist with over 35 years of international experience. From 1988-2005, he was employed by the Placer Dome group of companies, serving as Chief Geologist -World Wide during the last five years he was there. Placer Dome was acquired by Barrick Gold Corporation in early 2006. Over the course of his illustrious career, Mr Hall had a senior role in the discoveries of both Barrick Gold's Granny Smith mine and Rio Tinto's Yandi iron ore mine. In addition, he took part in the discoveries of Keringal and Wallaby in Australia's Eastern Goldfields, as well as the definition of AngloGold Ashanti's Sunrise gold mine. Other current appointments: Great Boulder Resources Ltd (ASX:GBR) – Non-Executive Chairman Dateline Resources Ltd (ASX:DTR) – Non-Executive Director Mr Jiangang Zhao – Acting CEO and Director BA Northwest A&F University MA Research Institute for Fiscal Science Mr Jiangang Zhao holds a Bachelor of Accounting, a Master of Finance and a Master of Accounting. Presently, Mr Zhao is the Deputy Chief Financial Officer in the Department of Finance of Zhengyuan International Mining Company Limited. Mr Anthony Harris - Company Secretary Mr Harris has almost 35 years’ experience in accounting and finance. He is a member of CAANZ and an Associate of the Financial Services Institute of Australia. Mr Harris has extensive experience generated from his diverse roles including a partnership role in public practice, having co-founded a boutique investment bank with a focus to SME corporate finance advisory services and in recent years a combination of CEO, COO and CFO roles across a number of sectors. 11 DIRECTORS’ REPORT Environmental Regulations The Company is subject to significant environmental regulations under legislation of the Commonwealth of Australia. The Company aims to ensure that it complies with the identified regulatory requirements in each jurisdiction in which it operates. The Company is aware of its responsibility to impact as little as possible on the environment and, if and when there, is any disturbance, to rehabilitate sites. During the period under review, there was no field and exploration work carried out in Western Australia. When the Company does complete field and exploration work, the work follows procedures and pursues objectives in line with guidelines published by the WA State Government and granting of exploration license application conditions. These guidelines are quite detailed and encompass the impact on owners and land users, heritage, health and safety and proper restoration practices. The Company supports this approach and is confident that it properly monitors and adheres to these objectives and any local conditions applicable. During the period ended 30th June 2020 there have been no known material breaches of the environmental obligations of the Company’s contracts or licenses. (2019: None). Dividends No dividends have been declared in respect of the year ended 30th June 2020 (2019: Nil) Events subsequent to the end of the reporting period Exploration and evaluation of potential tenements in Laos continue to be halted due to the COVID19 pandemic and subsequent the travel restrictions out of China and Australia. The Directors are not aware of any other matter or circumstance not otherwise dealt with in the report or in the financial statements that has significantly or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial years. l y n o e s u l a n o s r e p r o F 12 l y n o e s u l a n o s r e p r o F DIRECTORS’ REPORT Directors' interest The Directors' beneficial interest in shares and options as at the date of this report are: Mr Dongfeng Zhang 1 Mr Jiangang Zhao2 Mr Yong Zhang 3 Mr Gregory Clifton Hall4 Total Shares Direct - - - 10,000 10,000 Options Indirect 57,650,000 57,650,000 57,534,500 10,000 172,844,500 Total 57,650,000 57,650,000 57,534,500 20,000 172,854,500 Nil - - - - 1. Mr Dongfeng Zhang is a director of Zhengyuan International Mining Company Ltd, which holds the relevant interest in Zeus Resources. Shares held as a nominee director by Mr Wang subsequently transferred to Mr Zhang upon his appointment on 25th September 2019. 2. exercise or control the exercise of the voting rights attached to the securities in Zeus Resources. 3. Resources. 4. Mr Gregory Clifton Hall controls Omaroo Pty Ltd ATF Hall Family Trust that owns shares in Zeus. Mr Jiangang Zhao is a nominee director appointed to Zhengyuan International Mining Company Ltd and has power to Mr Yong Zhang is a director of and controls Vast Honour Global Limited, which holds a direct relevant interest in Zeus REMUNERATION REPORT (AUDITED) This report details the nature and amount of remuneration for each key management personnel (KMP) of the Company which includes directors and senior executives. KMP are those individuals that have the authority and responsibility for planning, directing and controlling the activities of the Company. Remuneration Policy The board’s policy for determining the nature and amount of remuneration for board members and senior executives of the Company is as follows: The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed and approved by the board. All executives receive remuneration based on factors such as length of service and experience. The board reviews executive packages annually by reference to the Company’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. The objective of this policy is to secure and retain the services of suitable individuals capable of contributing to the entity’s strategic objectives. The remuneration framework the board established has three components: - - - Fixed remuneration consisting of base pay and benefits, including superannuation, Short-term performance incentives and bonuses, Long-term incentives through issuances of share options. The combination of these comprises the executive's total remuneration. Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the board, based on individual and business unit performance, the overall performance of the entity and comparable market remunerations. Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any additional costs to the entity and provides additional value to the executive. 13 DIRECTORS’ REPORT Remuneration Policy continued The short-term incentives ('STI') program is designed to align the targets of the business units with the targets of those executives responsible for meeting those targets. STI payments are granted to executives based on specific annual targets and key performance indicators ('KPI's') being achieved. KPI's include profit contribution, customer satisfaction, leadership contribution and product management. The long-term incentives ('LTI') program comprises of share-based payments. Shares are awarded to executives over a period of three years based on long-term incentive measures. These include increase in shareholders’ value relative to the entire market and the increase compared to the entity's direct competitors. At issue date of this report there are no Key Management personnel have received “STI” or “LTI” benefits. The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. The Board does not currently link KMP or director’s remuneration to specific market-based goals or targets due to stage of development of the Company’s projects or overall Company performance. Individual performance-based goals are set by the Company to ensure that exploration, project evaluation and administration tasks are performed efficiently and to the benefit of stakeholders. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. The maximum aggregate amount for the financial year ending 30th June 2020 was $15,000 to be paid to Mr Greg Hall. The other members of the Board have adopted a policy decision made by the Board not to receive remuneration during the financial year ended 30th June 2020. Voting and comments made at the company's 2019 Annual General Meeting ('AGM') At the 2019 AGM, adoption of the remuneration report for the year ended 30 June 2019 was approved by the shareholders. Additional Benefits There are no additional benefits provided to Key Management Personnel as at the date of issue of this report. l y n o e s u l a n o s r e p r o F 14 l y n o e s u l a n o s r e p r o F DIRECTORS’ REPORT Key Management Personnel (KMP) Payments & Benefits Your directors, company secretary and key management personnel received the following payments/ benefits for services for the year ended 30 June 2020 as indicated below: Senior Officers Short-term benefits Post-Employment Benefits Long-term benefits ($) Total Share option benefits Cash Salary and Fees Bonuses Super- annuation Termination payments Long service leave $ $ $ $ $ $ $ Anthony Harris (Company Secretary) 2019 2020 Shelley Peters (Company Secretary) 2019 2020 Andrew Rust (Exploration Manager) 2019 2020 Total 2019 Total 2020 10,000 24,000 18,000 - 3,560 4,250 31,560 28,250 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 10,000 24,000 18,000 - 3,560 4,520 31,560 28,250 Non-Executive Directors and Directors Short-term benefits Post-Employment Benefits Long-term benefits ($) Share option benefits Total Cash Salary and Fees Bonuses Superannuation Termination payments Long service leave $ $ $ $ $ $ $ Gregory Clifton Hall1 (Non- Executive Director) 2019 2020 Mr Dongfeng Zhang (Chairperson) 2019 2020 Mr Jiangang Zhao (Acting CEO & Director) 2019 2020 Mr Yong Zhang (Non – Executive Director) 2019 2020 Total 2019 Total 2020 15,000 15,000 - - - - - - 15,000 15,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1Relates to payments of invoices to Golden Phoenix International Pty Ltd ATF Golden Phoenix International Unit Trust 15,000 15,000 - - - - - - 15,000 15,000 - - - - - - - - - - 15 l y n o e s u l a n o s r e p r o F DIRECTORS’ REPORT The total of remuneration paid to the KMP of the Company during the year are as follows: Short-term employee benefits/Fees Total KMP compensations Remuneration and Earnings additional information Year Ended 30-Jun-2020 $ Year Ended 30-Jun-2019 $ 43,250 43,250 46,250 46,250 The Board does not currently link KMP or director’s remuneration to specific market-based goals or targets due to stage of development of the Company’s projects or overall Company performance. However, to conserve cash the Company has reduced payments to Key Management Personnel (KMP) over the preceding five-year period. The Company has not awarded any short-term or long-term incentives to KMP as of the date of this report or over the preceding five-year period. The reduction of fixed remuneration payments made to KMP, instigated by the Board, is indicated in the table below: Key Management Payments & Benefits and Company Results KMP 30-Jun-2020 30-Jun-2019 30-June-2018 30-June2017 30-Jun-2016 $ $ $ $ $ Mr Chuanxi Ding -Non-Executive Director and Chairperson Mr Shouyin Wang -Non-Executive Director and Chairperson Mr Dongfeng Zhang - Non-Executive Director and Chairperson Mr Jiangang Zhao -Executive Director and Acting CEO Mr Yong Zhang -Non-Executive Director - - - - - - - - - - - - - 50,000 50,000 62,500 - - - 30,000 57,000 74,333 30,000 30,000 38,334 Gregory Clifton Hall - Non-Executive Director 15,000 15,000 30,000 30,000 38,333 Mr John Higgins-Exploration Manager Mr Warrick Client - Exploration Manager - - -- - - - - 144,597 26,983 18,840 Mr Andrew Rust - Exploration Manager 4,250 3,560 10,360 Mr Andrew Whitten - Company Secretary Ms Shelley Peters - Company Secretary - - - - - 30,172 18,000 26,000 26,500 9,655 Mr Anthony Harris - Company Secretary 24,000 10,000 - - - Total 43,250 46,560 176,360 220,483 511,765 16 DIRECTORS’ REPORT Additional Information The earnings of the Company for the five years to 30 June 2020 are as follows Earnings of the company 30-Jun-2020 30-Jun-2019 30-June-2018 30-June-2017 30-Jun-2016 $ $ $ $ $ Interest Income 15,866 36,572 44,012 81,209 108,851 EBITDA EBIT (812,720) (257,214) (523,233) (1,329,120) (2,186,565) (833,161) (257,214) (523,233) (1,329,120) (2,186,565) Loss after income tax (834,620) (261,510) (528,593) (1,336,688) (2,206,987) The factors that are considered to affect total shareholders return are as follows: Factor Share Price at financial year end (cents) Total Dividends Declared (cents) Basic Earnings per share (cents) 30-Jun-2020 30-Jun-2019 30-June-2018 30-June2017 30-Jun-2016 $ 0.8 - $ 0.8 - $ 1.4 - $ 1.3 - $ 2.1 - (0.46) (0.15) (0.29) (0.74) (1.23) l y n o e s u l a n o s r e p r o F 17 l y n o e s u l a n o s r e p r o F DIRECTORS’ REPORT Key Management Personnel Interests as at 30 June 2020: The number of ordinary shares held by each KMP of the Company at the end of the reporting period is as follows: Name Shares held Direct Indirect Balance at start of Year Received as part of Remuneration Additions Disposals Balance at end of Year - - - - 57,650,000 57,650,000 57,650,000 57,650,000 Mr Dongfeng Zhang1 Mr Shouyin Wang 2 Mr Jiangang Zhao 3 Mr Yong Zhang 4 Gregory Clifton Hall 5 Total 1. Mr Zhang holds shares as a nominee director appointed by Zhangyuan Internantional Mining Company and has power to exercise or control the voting rights attached to the securities in Zeus (previously held by Mr Wang and transferred to Mr Zhang upon his appointment on 25th September 2019). 2. Mr Wang shares held as a nominee director appointed by Zhengyuan International Mining Company Ltd and has power to exercise or control the voting rights attached to the securities in Zeus until his resignation on 25th September 2019 (previously held by Mr Ding and transferred to Mr Wang upon his appointment on 30th July 2015). 10,000 172,844,500 20,000 172,854,500 10,000 10,000 57,534,500 57,650,000 57,534,500 - - - - - - - - - - - - - - - 20,000 172,854,500 57,650,000 57,534,500 57,650,000 - 3. Mr Jiangang Zhao as a nominee director appointed by Zhengyuan International Mining Company Ltd and has power to exercise or control the voting rights attached to the securities in Zeus. 4. Mr Zhang Yong is a director of and controls Vast Honour Global Limited, which holds a direct relevant interest in Zeus. 5. Mr Gregory Clifton Hall controls Omaroo Pty Ltd ATF Hall Family Trust that owns shares in Zeus. Other transactions with key management personnel and their related parties: During the financial year, no payments (2019: nil) were made to ZIMC in relation of fees appointed nominee directors, acting CEO and Chairperson. As at 30th June 2020 there was nil payable and due to ZIMC for the aforementioned fees (2019: nil). During the financial year, payments amounting to $16,500 (2019: $12,375) were made to Golden Phoenix International Unit Trust in relation to the director’s fees of Mr Greg Hall. As at 30th June 2020 there was $5,750 payable and due to Golden Phoenix International Unit Trust for the afore mentioned fees (2019: $4,125). During the financial year, no payments (2019: nil) were made to Heng Ji Pty Ltd in relation to director’s fees of Mr Yong Zhang. As at 30th June 2020 there was nil was payable to Heng Ji Pty Ltd for the aforementioned fees (2019: nil). (This is the end of the audited remuneration report). 18 DIRECTORS’ REPORT Directors’ meetings The number of directors’ meetings of Zeus Resources Limited (including by way of circular resolution) held during the year ended the 30th June 2020 and the numbers of meetings attended by each director are as follows: Director Mr Gregory Clifton Hall Mr Jiangang Zhao Mr Yong Zhang Mr Shouyin Wang Mr Dongfeng Zhang Directors' Meetings Eligible to attend Attended 2 2 2 0 2 2 2 2 0 2 Indemnity and insurance of officers During the financial period the Company did not accept the proposal from their underwriters to insure all directors and officers of the Company due to the cost of the policy. Indemnity and insurance of auditors The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. Non-audit services Our appointed auditors, William Buck, did not provide any non-audit services during the year ended 30th June 2020 (2019: Nil). Proceedings on behalf of The Company No person has applied to the Court for leave to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of The Company for all or any of those proceedings. The Company was not a party to any such proceedings during the year. l y n o e s u l a n o s r e p r o F 19 DIRECTORS’ REPORT Auditor independence declaration The lead auditor’s independence declaration as required under section 307C of the Corporations Act 2001 for the year ended 30th June 2020 has been received and can be found on page 21 of this annual report. Signed in accordance with a resolution of the Board of Directors. Mr. Jiangang Zhao Director and Acting CEO Dated this 29th day of September 2020 l y n o e s u l a n o s r e p r o F 20 Zeus Resources Limited Auditor’s independence declaration under section 307c of the Corporations Act 2001 I declare that, to the best of my knowledge and belief during the year ended 30 June 2020 there have been: — no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and — no contraventions of any applicable code of professional conduct in relation to the audit. William Buck Accountants & Advisors ABN 16 021 300 521 Rainer Ahrens Director Dated this 29th day of September, 2020 l y n o e s u l a n o s r e p r o F 21 ACCOUNTANTS & ADVISORSSydney Office Level 29, 66 Goulburn Street Sydney NSW 2000Parramatta Office Level 7, 3 Horwood Place Parramatta NSW 2150Telephone: +61 2 8263 4000williambuck.comWilliam Buck is an association of firms, each trading under the name of William Buck across Australia and New Zealand with affiliated offices worldwide. Liability limited by a scheme approved under Professional Standards Legislation. (WB013_2007) l y n o e s u l a n o s r e p r o F STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020 Notes Year ended 30-Jun-20 Year ended 30-Jun-19 $ $ 15,866 36,572 Interest Income Less expenses: Corporate and administration costs Accounting and audit fees Company secretarial and compliance Computers and communications Directors' fees and expenses Employee salaries and benefits Insurance Legal and consultants' fees Rent and utilities Share registry maintenance and listing fees Exploration and evaluation costs Project expenditure (net of capitalised expenditure) Impairment Business development Travel and accommodation Other expenses from ordinary activities Depreciation Finance costs Other expenses Total Expenses Loss before income tax Income tax expense Loss for the year attributable to the Company 5 4a, 4b 2 64,671 29,240 7,684 49,839 22,501 2,935 4,000 25,771 33,345 5,032 574,090 67,435 29,224 7,875 35,787 9,718 19,421 6,000 47,016 35,730 5,158 - 4,941 28,615 20,442 1,458 4,537 850,486 (834,620) - (834,620) 4,296 - 1,807 298,082 (261,510) - (261,510) Other comprehensive income - - Total comprehensive loss for the year attributable to the Company (834,620) (261,510) Loss per share Basic - per share Diluted - per share (0.0046) (0.0046) (0.0015) (0.0015) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. 22 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020 CURRENT ASSETS Cash and cash equivalents Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Exploration and evaluation assets Property, plant and equipment TOTAL NON-CURRENT ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Accumulated losses TOTAL EQUITY Notes 3 4a, 4b 5 6 7a, 7b As at 30-Jun-20 $ 1,138,805 71,863 1,210,668 As at 30-Jun-19 $ 1,512,684 11,878 1,524,562 323,246 11,757 335,003 757,487 16,145 773,632 1,545,671 2,298,194 146,772 146,772 146,772 64,675 64,675 64,675 1,398,899 2,233,519 9 10 17,398,334 (15,999,435) 1,398,899 17,398,334 (15,164,815) 2,233,519 The above statement of financial position should be read in conjunction with the accompanying notes. l y n o e s u l a n o s r e p r o F 23 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020 l y n o e s u Balance at 1 July 2018 Comprehensive loss for the year Balance at 30 June 2019 Balance at 1 July 2019 Comprehensive loss for the year Balance at 30 June 2020 Contributed Equity $ Accumulated Losses $ Total $ 17,398,334 (14,903,305) 2,495,029 - (261,510) (261,510) 17,398,334 (15,164,815) 2,233,519 17,398,334 (15,164,815) 2,233,519 - (834,620) (834,620) 17,398,334 (15,999,435) 1,398,899 The above statement of changes in equity should be read in conjunction with the accompanying notes. l a n o s r e p r o F 24 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020 Notes Year ended 30-Jun-2020 $ Year ended 30-Jun-2019 $ CASH FLOW FROM OPERATING ACTIVITIES Payments to suppliers and employees Payments for taxes Interest received Interest paid Net cash used in Operating Activities CASH FLOW FROM INVESTING ACTIVITIES Payments for exploration and evaluation Payments for plant and equipment Net cash used in Investing Activities CASH FLOW FROM FINANCING ACTIVITIES Payments for lease Net cash provided by financing activities 10 Net decrease in cash and cash equivalents held Cash at beginning of financial year Cash and Cash Equivalents at end of financial year 10 (231,812) 459 18,414 (1,458) (214,397) (144,880) - (144,880) (14,602) (14,602) (373,879) 1,512,684 1,138,805 (339,760) (2,224) 36,572 - (305,412) (154,475) (2,563) (157,038) - - (462,450) 1,975,134 (1,512,684 The above statement of cash flow should be read in conjunction with the accompanying notes. l y n o e s u l a n o s r e p r o F 25 NOTES TO THE FINANCIAL STATEMENTS NOTE 1: SIGNIFICANT ACCOUNTING POLICIES l y n o e s u l a n o s r e p r o F The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements have been approved by the board on the date of signing. The principal activity of the Company during the year was the exploration for uranium and other base metals. The Company operates as a for profit entity. A. Basis of accounting This general-purpose financial report has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards and Interpretations issued by the Accounting Standards board. (i) Compliance with IFRS: The financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), (ii) Historical Cost Convention: These financial reports are prepared under the historical cost convention. (iii) Critical Accounting Estimates: The presentation of financial statements requires the use certain critical accounting estimates. The Company also requires management to exercise its judgement in the process of applying the accounting policies. The areas involving a high degree or judgement or complexity or areas where assumptions and estimates are significant to the financial statements is disclosed later. See part G. (iv) Foreign currency transactions and balances: Items included in the financial statements are measured using Australian Dollars (functional currency of Zeus Resources Ltd). Changes in Accounting Policies The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to their operations and effective for the current year. The Company adopted AASB 16 during the financial year ended 30 June 2020. The adoption and implementation of AASB16 did not significantly impact the financial statements due to low value nature of the leases and short term (less than 2 years). B. Income tax The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted at the end of the reporting period. Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of statement of profit or loss and other comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. 26 NOTES TO THE FINANCIAL STATEMENTS Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. C. Financial instruments Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. Payables Payables represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and are generally settled between 7 days and 90 days terms. D. Provisions Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount. If the effect of time value of money is material, provisions are discounted at a rate that reflects the risks specific to the liability. E. Goods and Services Tax (GST) Income, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. Cash flows are presented in the statement of cash flows on a gross basis. l y n o e s u l a n o s r e p r o F 27 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS F. Exploration and evaluation expenditure policy Exploration and evaluation expenditure comprise of costs that are directly attributable to: • researching and analysing existing exploration data; • conducting geological studies, exploratory drilling and sampling; • construction of access roads where necessary for exploration drilling; • examining and testing extraction and treatment methods; and • compiling pre-feasibility and feasibility studies. Exploration and evaluation expenditure also include the costs incurred in acquiring mineral rights, the entry premiums paid to gain access to areas of interest and amounts payable to third parties to acquire interests in existing projects. Capitalisation of exploration expenditure commences when there is a reasonable level of confidence in the project’s viability and hence it is probable that future economic benefits will flow to the Company. Capitalised exploration expenditure is reviewed for impairment at the end of the reporting period. Subsequent recovery of the resulting carrying value depends on successful development of the area of interest or sale of the project. If a project does not prove viable, all unrecoverable costs associated with the project and the related impairment provisions are written off. Undeveloped properties are mineral concessions where the intention is to develop and go into production in due course. The carrying values of assets are reviewed annually by management and the results of these reviews are reported to the Board and is assessed based on a status report regarding Zeus Resources intentions for development of the undeveloped property. Reviews are performed using the fair value less cost to sell method. G. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, income and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences only if the Company considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Exploration and evaluation costs Exploration and evaluation costs have been capitalised on the basis that the Company will commence commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which this determination is made. 28 NOTES TO THE FINANCIAL STATEMENTS l y n o e s u l a n o s r e p r o F H. Income Recognition (i) Interest earned Income from interest earned on investments is recognised on a time proportion using the effective interest rate method. (ii) Net gains on disposal of assets, which is recognised as at the date the control of the asset passes from the company. I. Contributed equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in the equity division of the statement of financial position as a deduction net of any tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of acquisition as part of the purchase consideration and are expensed as incurred. J. Property, plant and equipment (i) Acquisition Items of property, plant and equipment are recorded at historical cost and, are depreciated as outlined below. Historical cost includes expenditure that is directly attributable to the acquisition of the items. 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 Company and the cost of the item can be measured reliably. Repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the period in which they are incurred. (ii) Depreciation and amortisation The following indicates the depreciation method for plant and equipment on which the depreciation charges are based: - straight-line basis over their useful operating life - Plant and equipment other than computers – five years - Plant and equipment - computers – three years - Furniture & fittings – ten years - Leasehold Improvements – term of lease. K. Earnings per share (i) Basic earnings per share Basic earnings per share is determined by dividing net loss after income tax attributable to members of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. (ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. 29 NOTES TO THE FINANCIAL STATEMENTS L. Impairment of Non-Financial Assets At the end of each reporting period, the Company 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 uses, is 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 risk specific to the asset for which the estimates of future cash flows have not been adjusted. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of profit and loss and other comprehensive income. Impairment testing is performed annually for goodwill and other intangible assets not yet available for use. Where it is not possible to estimate the recoverable amount of an individual asset the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. M. Employee Benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave and long service leave not expected to be settled wholly within 12 months of the reporting date, when it arises, will be recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability is measured as the present value of expected future payments to be made in respect of services provided by employees. N. Farm-out arrangements The Company does not record any expenditure made by the farmee on its account. It also does not recognise any gain or loss on its exploration and evaluation farm-out arrangements but designates any costs previously capitalised in relation to the whole interest as relating to the partial interest retained. Any cash consideration received from a farmee is credited directly against previously capitalised purchase values in relation to the whole interest previously and with any excess account for by the farmor as a gain on disposal. l y n o e s u l a n o s r e p r o F 30 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS O. Right-of-use Assets Initial Measurement - A right-of-use asset is initially measured at cost comprising the initial measurement of the lease liability adjusted for any lease payments made before the commencement date (reduced by lease incentives received), plus initial direct costs incurred in obtaining the lease and an estimate of costs to be incurred in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. . Subsequent Measurement - A right-of-use asset is subsequently measured at cost less any accumulated depreciation and adjusted for any remeasurement of the corresponding lease liability. Depreciation: Right-of-use assets are depreciated over the shorter of the lease term and the useful life of the asset. The estimated useful lives are as follows: - - Equipment Leases: Term of Lease Premises Leases: Term of Lease P. Lease Liabilities Initial Measurement - A lease liability is initially recognised at the commencement day and measured at an amount equal to the present value of the lease payments during the lease term that are not yet paid. The provision for any restoration costs or make good is recognised as a separate liability. Subsequent Measurement – A Lease liability is subsequently measured at initial measurement less any subsequent lease payments and adjusted for any remeasurement of the corresponding right-of-use asset. Payments: - lease payments are classified consistently with payments on other financial liabilities: - The part of the lease payment that represents cash payments for the principal portion of the lease liability is presented as a cash flow resulting from financing activities. The part of the lease payment that represents interest portion of the lease liability is presented as an operating cash flow. - The duration of the lease liability shall be equivalent to the term of the lease at initial recognition. Q. Accounting Standards and Interpretations for application in future periods Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Company for the annual reporting period ended 30 June 2020. The Company's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Company, are set out below. AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The amendments clarify that a full gain or loss is recognised when a transfer to an associate or joint venture involves a business as defined in AASB 3 Business Combinations. Any gain or loss resulting from the sale or contribution of assets that does not constitute a business, however, is recognised only to the extent of unrelated investors’ interests in the associate or joint venture. Application date 1 January 2022. Other amendments but not yet effective: AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a business. AASB 2017-7 Amendments to Australian Accounting Standards – Definition of material. AASB 2019-1 Amendments to Australian Accounting Standards – Revisions to the conceptual framework. AASB2019-5 Amendments to Australian Accounting Standards – Disclosure of the effect of new IFRS Standards not yet issued in Australia. (Above are effective for annual reporting periods beginning on or after 1 January 2020) The Company has reviewed the proposed amendments and does not expect the abovementioned amendment to significantly impact future or past financial statements. 31 NOTES TO THE FINANCIAL STATEMENTS Q. Going Concern For the financial year ended 30th June 2020 the Company recorded a loss of $834,620 (2019: $261,510). Net cash outflows from operating activities amounted to $214,397 (2019: $305,412) and maintained net assets of $1,398,899 (2019:2,233,519) which was mainly representative of cash and tenement assets. The Since listing the Company has not yet reported profitable operations. The board is closely monitoring the remaining tenements and controlling cash outflows on these tenements and operational activities. The current position of the Company points towards material uncertainty and, if not addressed, may cast doubt about the Company’s ability to continue as a going concern. The financial statements have been prepared on the basis that the Company is a going concern which predicates ongoing normal business activity, realisation of assets and settlements of liabilities in the normal course of business over the next 12 months’ period for the following reasons: - - - The Board performs continuous assessment on the recoverability of tenements held at each reporting period; and The Board has prepared a detail cash flow for the next 24 months which reflects the Company’s ability to pay debts as and when the fall due; and The Board is continuing to pursue the opportunity to establish a profitable gold exploration base in Laos. If the Company is unsuccessful I these endeavours, it may not be able to continue as a going concern and it would be required to realised it assets and discharge its liabilities other than in the course of ordinary business and the amounts realised may differ from those stated in these financial statements. This financial report does not include any adjustments relating to the recoverability and the classification of recorder asset amounts or liabilities that might be necessary should the Company not continue as a going concern. l y n o e s u l a n o s r e p r o F 32 NOTES TO THE FINANCIAL STATEMENTS NOTE 2: INCOME TAX EXPENSE (a) Income Tax Benefit/(Expense) Current Income Tax Current Income tax benefit/(expense) (b) Deferred income tax Deferred tax assets not brought to account (gross) Tax losses Temporary differences Total deferred tax assets not brought to account (c) Amounts Charged or Credited Directly to Equity Share Issue Costs Share based payments expense Total deferred tax assets Charged or Credited Directly to Equity (d) Numerical Reconciliation of Income Tax Benefit to Prima Facie Tax Payable Loss Before Income Tax Prima facie income tax credit on loss at 27.5% Tax effect of: - - Current year tax losses not brought to account Non-allowable expenditure for tax purposes Provisions and prepayments brought to account 30-Jun-20 $ 30-Jun-19 $ - - - - (4,695,273) (58,576) - (4,753,849) (4,625,547) (69,726) - (4,695,273) - - - - (834,620) (261,510) (229,520) (69,726) 163,496 7,449 (58,576) 1,181 1,008 (69,726) The tax losses and deferred tax assets do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not yet probable that future taxable profit will be available against which the Company can utilise the benefits. The benefit of these tax losses will only be obtained if: - - The company continues to comply with the conditions for deductibility imposed by tax legislation; and The Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised. - No changes in tax legislation adversely affects the Company realising the benefit from the deductions for the losses. l y n o e s u l a n o s r e p r o F 33 NOTES TO THE FINANCIAL STATEMENTS NOTE 3: CASH AND CASH EQUIVALENTS Cash Transaction Account Cash Management Account Term deposits 30-180 days Cash on hand Total See also Note 10: Cash Flow NOTE 4a: OTHER ASSETS Current Bond paid for lease Interest receivable GST receivable Total Other assets NOTE 4b: RIGHT OF USE Current Right of use asset Accumulated depreciation Total Right of use assets 30-Jun-2020 $ 30-Jun-2019 $ 91,686 277,079 770,040 - 1,138,805 45,322 50,326 1,416,476 560 1,512,684 30-Jun-2020 30-Jun-2019 $ $ 8,970 359 1,753 11,023 8,970 2,908 - 11,878 30-Jun-2020 30-Jun-2019 $ $ 76,776 (15,995) 60,781 - - - Lease of office premises in North Sydney executed February 2020 for a term of 1 year plus an option to extend for 1 year. l y n o e s u l a n o s r e p r o F 34 NOTES TO THE FINANCIAL STATEMENTS NOTE 5: EXPLORATION AND EVALUATION ASSETS – NON-CURRENT 30-Jun-2020 $ 30-Jun-2019 $ Area of Interest: Wiluna (Lakes Way) Opening Balance Capitalised Costs Impairment Closing Balance Gascoyne (Red Rock and Mortimer Hills) Opening Balance Capitalised Costs Impairment Closing Balance Narnoo (North and South) Opening Balance Capitalised Costs Impairment Closing Balance 481,765 41,571 (435,408) 87,928 172,941 23,911 (88,354) 108,498 102,781 74,367 (50,328) 126,820 349,168 132,597 - 481,765 161,573 11,368 - 172,941 97,430 5,351 - 102,781 Total Exploration and Evaluation Assets 323,246 757,487 Valuation The value of the Company interest in exploration expenditure is dependent upon: the continuance of the Company’s 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 by their sale. - - - The Company’s exploration properties may be subjected to claim(s) under Native Title (or jurisdictional equivalent) or contain sacred sites, or sites of significance to the indigenous people of Australia. As a result, exploration properties or areas within the tenements may be subject to exploration restrictions, mining restrictions and/or claims for compensation. As of the date of this Annual Report it was not possible to quantify whether such claims exist, or the quantum of such claims. Impairment Losses Impairment losses of $574,090 were recognised for the year against tenements that the Company holds (2019: nil). The list of tenements in which the Company has an interest is disclosed on page 50. l y n o e s u l a n o s r e p r o F 35 NOTES TO THE FINANCIAL STATEMENTS NOTE 6: PLANT, EQUIPMENT, FURNITURE & FITTINGS Plant & Equipment – at cost Accumulated depreciation Total Plant and Equipment Movements during the year: Opening Balance Additions during the year Disposals during the year Closing Balance Depreciation Opening balance Charge during the year Charge Back during the year Closing depreciation Net book value Furniture & Fittings – at cost Accumulated depreciation Total Furniture and Fittings Movements during the year: Opening Balance Disposals during the year Closing Balance Depreciation Opening balance Charge during the year Closing depreciation Net Book Value Total Net Book Value l y n o e s u l a n o s r e p r o F 30-Jun-2020 30-Jun-2019 $ $ 55,100 (46,929) 8,171 55,110 - - 55,100 55,100 (44,068) 11,032 54,627 2,563 (2,090) 55,100 (44,069) (43,505) (2,860) - (46,929) 8,171 15,821 (12,235) 3,586 (2,654) 2,090 (44,069) 11,031 15,821 (10,707) 5,114 15,821 15,821 - - 15,821 15,821 (10,707) (1,528) (9,065) (1,642) (12,235) (10,707) 3,586 5,114 11,757 16,145 36 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS NOTE 7a: TRADE AND OTHER PAYABLES Trade creditors Other payables - Audit expenses - Salaries, employee benefits and PAYG payable - Annual and long service leave accruals Total trade and other payables 30-Jun-2020 30-Jun-2019 $ $ 18,412 26,159 3,004 37,132 84,707 27,679 18,000 791 18,205 64,675 NOTE 7b: OTHER CURRENT LIABILTIES 30-Jun-2020 30-Jun-2019 Lease Liability Total other current liabilities 62,065 62,065 - - NOTE 8: CONTRIBUTED EQUITY 2020 (a) Ordinary Shares Number Balance at the beginning of the year Shares issued during the year Balance at the end of the financial year (b) Ordinary Shares Value Balance at the beginning of the year Shares issued during the year Balance at the end of the financial year 2019 (a) Ordinary Shares Number Balance at the beginning of the year Shares issued during the year Balance at the end of the financial year (b) Ordinary Shares Value Balance at the beginning of the year Shares issued during the year Number on Issue 180,150,000 - 180,150,000 Value ($) 17,398,334 - 17,398,334 Number on Issue 180,150,000 - 180,150,000 Value ($) 17,398,334 - Ordinary Shares entitle the holder to participate in dividends and to share in the proceeds of winding up the Company in proportion to the number of and amounts paid on the shares held. Ordinary shares have no par value and the Company does not have a limited amount of authorized Capital. 37 NOTES TO THE FINANCIAL STATEMENTS NOTE 9: ACCUMULATED LOSSES 30-Jun-2020 30-Jun-2019 $ $ Accumulated losses at the beginning of the financial year (15,164,815) (14,903,305) Net loss attributable to members of the entity Accumulated losses at the end of the financial year (834,620) (261,510) (15,999,435) (15,164,815) NOTE 10: STATEMENT OF CASH FLOW INFORMATION Cash at bank Term deposit Cash Total 30-Jun-2020 $ 368,765 770,040 - 30-Jun-2019 $ 95,648 1,416,476 560 1,138,805 1,512,684 Loss from ordinary activities after income tax (834,620) (261,510) Add: Adjustment for non-cash items - depreciation - leave entitlement accrual - investment expenses and provisions - impairment and losses on disposed assets Add: Changes in working capital (Increase)/decrease in trade and other receivables (Increase)/decrease in other assets (Decrease) /Increase in trade payables (Decrease) /Increase in other liabilities (Decrease) /Increase in other payables 20,442 18,927 25,186 574,090 638,644 2,548 (75,982) (9,265) 62,065 2,213 (18,421) 4,296 4,166 4,658 - 13,120 2,514 - (58,104) (2,224) 792 (57,022) Cash outflow from operations (214,397) (305,412) l y n o e s u l a n o s r e p NOTE 11: AUDITORS REMUNERATION r o F Auditing or reviewing the financial reports by William Buck NSW Total Auditors Remuneration 30-Jun-2020 $ 30-Jun-2019 $ 25,250 25,250 25,250 25,250 NOTE 12: SEGMENT INFORMATION The Company’s operations are in one reportable business segment being the exploration of uranium and minerals. The Company operates in one geographical segment being Australia. 38 NOTES TO THE FINANCIAL STATEMENTS NOTE 13: RELATED PARTY TRANSACTIONS 30-Jun-2020 30-Jun-2019 Key Management Personnel Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or payable to each member of the Company’s key management personnel (KMP) for the year ended 30 June 2020. The totals of remuneration paid to the KMP of the company during the year are as follows: Short-term employee benefits/Fees Total KMP compensations $ 43,250 43,250 $ 46,560 46,560 Other transactions with related parties During the financial year, no payments (2019: nil) were made to ZIMC in relation of fees appointed nominee directors, acting CEO and Chairperson. As at 30th June 2020 there was nil payable and due to ZIMC for the aforementioned fees (2019: nil). During the financial year, payments amounting to $16,500 (2019: $12,375) were made to Golden Phoenix International Unit Trust in relation to the director’s fees of Mr Greg Hall. As at 30th June 2020 there was $5,750 payable and due to Golden Phoenix International Unit Trust for the afore mentioned fees (2019: $4,125). During the financial year, no payments (2019: nil) were made to Heng Ji Pty Ltd in relation to director’s fees of Mr Yong Zhang. As at 30th June 2020 there was nil was payable to Heng Ji Pty Ltd for the aforementioned fees (2019: nil). l y n o e s u l a n o s r e p r o F 39 NOTES TO THE FINANCIAL STATEMENTS NOTE 14: COMMITMENTS AND CONTINGENCIES a) Commitments 30-Jun-2020 30-Jun-2019 $ $ The Company is required to meet minimum committed expenditure requirements to maintain current rights of tenure to exploration licences. The minimum commitment of expenditure on each tenement is determined by the Department of Mining and Petroleum. These obligations may be subject to re- negotiation, may be farmed-out or may be relinquished and have not been provided for in the statement of financial position. A summary of aggregate commitments is as follows: Exploration Projects in Western Australia Within 1 year More than 1 year but not later than five years More than five years Total 152,489 825,836 - 246,000 1,859,000 - 978,325 2,105,000 b) Contingent assets and liabilities Contingent liabilities There are no contingent liabilities as at end of reporting period 30th June 2020 (2019: Nil). Contingent assets There are no contingent assets as at end of reporting period 30th June 2020 (2019: Nil). l y n o e s u l a n o s r e p r o F 40 NOTES TO THE FINANCIAL STATEMENTS NOTE 15: FINANCIAL RISK MANAGEMENT The below table summarises interest rate receivable or payable for the Company: l y n o e s u l a n o s r e p r o F Effective Interest Rate Floating interest rate amount $ Non- Interest Bearing $ Total $ 2.0% 0.0% 2.0% 0.0% 1,138,805 - 1,138,805 - (146,772) (146,772) $ $ $ 1,512,124 560 1,512,684 - (64,675) (64,675) 2020 Financial assets Cash and cash equivalents Financial liabilities Trade and other payables 2019 Financial assets Cash and cash equivalents Financial liabilities Trade and other payables a) Credit risk The Company has no significant concentrations of credit risk with debtors as the Company has not issued any sales for services or products during the period ending 30th June 2020, hence the Company does not insure any outstanding debts. (b) Interest rate risk Potential impact on post-tax loss: Effective Interest rate -1% Effective Interest rate +1% 30-Jun-2020 $ 30-Jun-2019 $ (11,388) 11,388 (15,121) 15,121 The Company places surplus cash with the bank in term deposit of up 180 days. This rate can vary from rollover period to rollover period. Exposure to variances in interest rates is not controlled by the Company and returns are subject to current interest rates on offer by the banks at the time of rollover of the term deposit(s). (c) Liquidity risk The Company’s principal financial assets are cash and short-term deposits. The Company has taken steps to reduce risk of significant exposure to its cash holdings. Excess cash funds have been invested in low risk Term Deposits with Bank of China (Australia) Ltd (account located in Australia and funds in Australian dollars). The Company at the end of the financial year held 1 Term Deposits with Bank of China for a total of $770,040. These funds are accessible without penalty with 30 days’ notice. The Company’s principal financial liabilities comprise of accounts payable. The maximum risk for the period ending 30th June 2020 extended to Trade creditors, other expenses and employee related expenses amounting to $53,658 due to be paid within the next 90 days at a maximum. The Company has sufficient funds to meet this requirement. 41 NOTES TO THE FINANCIAL STATEMENTS NOTE 15: FINANCIAL RISK MANAGEMENT continued (d) Management of Capital The Company’s main objective when managing capital is to safeguard the Company’s ability to continue as a going concern with the ultimate goal of providing returns for shareholders. The Company’s capital consists of issued ordinary shares. The Company currently has no loans or other borrowings that forms part of the capital structure and therefore is not exposed to any financial covenants. No changes are expected to be made to the capital structure in the near future, however it would be expected that further development of tenements, future acquisitions or cash requirements to fund operations will be funded by future capital raisings. (e) Fair values The financial assets and liabilities of the Company are recognised in the statement of financial position at their carrying amount, which is a reasonable approximation of fair value in accordance with the accounting policies in note 1. (f) Risk Exposures and responses The Company manages its exposure to financial risks in accordance with its management policies. The Policy aims to protect the financial assets of the Company by ensuring that control of funds is not compromised. Senior management is responsible for reducing risk-taking activities by introducing and maintaining policies and risk management. The Company seeks to have minimum exposure to market forces by maintaining low risk investment strategies of cash reserves. The Company currently has no foreign exchange exposure and does not foresee having any in the new future and therefore does not have a policy currently to address foreign exchange risk. l y n o e s u l a n o s r e p r o F 42 l y n o e s u l a n o s r e p r o F NOTES TO THE FINANCIAL STATEMENTS NOTE 16: FARM-OUT ARRANGEMENTS Farm-out arrangement The Company, (farmor) entered into an agreement with Arrow Minerals Ltd (formerly Segue Resources Ltd -farmee), in April 2016. The tenement in the agreement is known as E09/1618 – Mortimer Hills. Under the agreement associated costs of exploration activities to meet with minimum commitment criterion set by the Department of Mining and Petroleum (WA) will be met in return for 35% to 50% interest in the tenement, dependent on the terms of the agreement being achieved. Arrow Minerals Ltd (“Arrow”) have been appointed manager of the project. As of the 15th May 2020 the manager of the project, Arrow Minerals Ltd, submitted an outright surrender application to the DMP. Zeus Resources Ltd did not wish to retain any further ownership of this tenement and therefore did not oppose the surrender. The Joint Venture agreement ceased to exist as of the date of surrender. NOTE 17: EARNINGS PER SHARE Total comprehensive (loss) for the year Number of shares on issue Earnings per share Basic – per share Diluted – per share 30-Jun-2020 $ (834,620) 180,150,000 30-Jun-2019 $ (261,560) 180,150,000 (0.0046) (0.0046) (0.0015) (0.0015) NOTE 18: EVENTS AFTER THE END OF THE REPORTING PERIOD Exploration and evaluation of potential tenements in Laos continue to be halted due to the COVID19 pandemic and subsequent the travel restrictions out of China and Australia. The Directors are not aware of any other matter or circumstance not otherwise dealt with in the report or in the financial statements that has significantly or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial years. NOTE 19: COMPANY DETAILS The registered office of the Company is: Level 10, 171 Clarence Street Sydney NSW 2000 The principal place of business of the Company is: Level 1, Suite 105 25-27 Berry Street North Sydney NSW 2060 43 DIRECTORS’ DECLARATION In the Directors Opinion: • • • • the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in Note 1 the financial statements; the attached financial statements and notes give a true and fair view of the Company’s financial position as at 30 June 2020 and of its performance for the financial year ended on that date; there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. The Directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001. Mr. Jiangang Zhao Acting CEO and Director Dated this 29th Day of September 2020 l y n o e s u l a n o s r e p r o F 44 l y n o e s u l a n o s r e p r o F Zeus Resources Limited Independent auditor’s report to members Report on the Audit of the Financial Report Opinion We have audited the financial report of Zeus Resources Limited (the Company), which comprises the statement of financial position as at 30 June 2020, the statement of profit and loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and the directors’ declaration. In our opinion, the accompanying financial report of the Company, 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 2020 and of its financial performance for the year then ended; and complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) [the Code] that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material Uncertainty Related to Going Concern We draw attention to Note 1 in the financial report, which indicates that the Company incurred a net loss of $834,620 (2019: $261,510) and incurred net cash outflows from operating activities of $214,397 (2019: outflows $305,412) during the year ended 30 June 2020. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. 45 ACCOUNTANTS & ADVISORSSydney Office Level 29, 66 Goulburn Street Sydney NSW 2000Parramatta Office Level 7, 3 Horwood Place Parramatta NSW 2150Telephone: +61 2 8263 4000williambuck.comWilliam Buck is an association of firms, each trading under the name of William Buck across Australia and New Zealand with affiliated offices worldwide. Liability limited by a scheme approved under Professional Standards Legislation. (WB013_2007) l y n o e s u l a n o s r e p r o F Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. CARRYING VALUE OF EXPLORATION AND EVALUATION ASSETS How our audit addressed it Our audit procedures included: — A review of the directors’ assessment of the criteria for the capitalisation of exploration expenditure and evaluation of whether there are any indicators of impairment to capitalised costs; and — Challenging and testing the inputs into the impairment calculations, including tenement surrender rates and capitalised expenditures on tenements; and — Assessing the costs capitalised in the year to test if they meet the requirements for capitalisation in accordance with Australian Accounting Standards; and — A review of the integrity of the tenement title status and total commitment value through the Department of Mines and Petroleum of the Government of Western Australia. We assessed the adequacy of the Company’s disclosures in respect of the carrying value of exploration and evaluation assets. Area of focus The Company has incurred exploration and evaluation costs under its Uranium tenements in Western Australia over a number of years. During the 2020 financial year, the Company has continued to capitalise exploration and evaluation expenditure in relation to the current tenements its holds. There is a risk that accounting criteria associated with the capitalisation of exploration and evaluation expenditure may no longer be appropriate to the remaining tenements and that capitalised costs exceed the fair value less selling cost. An impairment review is only required if an impairment trigger is identified. Due to the nature of the Uranium industry, indicators of impairment could include: — Significant decrease seen in global Uranium prices; — Changes to exploration plans; — Loss of rights to tenements; — Changes in rights to tenements; — Changes to reserve estimates; — Costs of extraction and production; and — Changing market forces in relation to Uranium as a resource. Other Information The directors are responsible for the other information. The other information comprises the information included in the Company’s annual report for the year ended 30 June 2020 but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly, we do not express any form of assurance conclusion thereon. 46 In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of these financial statements is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf This description forms part of our independent auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report l y n o e s u l a n o s r e p r o F We have audited the Remuneration Report included in pages 13 to 18 of the directors’ report for the year ended 30 June 2020. In our opinion, the Remuneration Report of Zeus Resources Ltd, for the year ended 30 June 2020, complies with section 300A of the Corporations Act 2001. 47 Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. l y n o e s u William Buck Accountants & Advisors ABN: 16 021 300 521 Rainer Ahrens Director Dated this 29th day of September, 2020 l a n o s r e p r o F 48 l y n o e s u l a n o s r e p r o F 49 TENEMENT SCHEDULE Project Sub Project Licence Number Stat e Area (blocks) Licence Expires Comments Wiluna Lakes Way E 53/1603 WA Narnoo Narnoo South E 28/2097 WA 5 5 14 Feb 23 08 May 21 Gascoyne Mortimer Hills extension E 09/2147 WA 15 09 Sep 22 l y n o e s u l a n o s r e p r o F 50 CORPORATE GOVERNANCE STATEMENT Annexure B ASX Corporate Governance Council Principles and Recommendations l y n o e s u l a n o s r e p r o F Verification Worksheet Name of entity ZEUS RESOURCES LIMITED Recommendation Financial year ended 30 JUNE 2020 The entity complied for the full period PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT Yes  Yes  Yes  Yes  Yes  1.1 The Company has established and disclosed the functions reserved to the board and those delegated to senior executives. 1.2 The Company undertakes appropriate checks before appointing a person for election as a director and provides securityholders with all material information relevant to a decision on electing a director. 1.3 The Company has a written agreement with each director and senior executive setting out the terms of their appointment. 1.4 The Company secretary of the listed Company is accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board. 1.5 A listed entity should: a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them; b) disclose that policy or a summary of it; and disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them. No  No  No  No  No  1.6 The Company should: a) have and disclose a process for periodically Yes  No  51 CORPORATE GOVERNANCE STATEMENT evaluating the performance of the board, its committees and individual directors; and b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. 1.7 The Company should: a) have and disclose a process for periodically evaluating the performance of its senior executives; and b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE 2.1 2.1 The board should establish a nomination committee which: • has at least three members, a majority of whom are independent directors; and is chaired by an independent director • and disclose • • • the charter of the committee; the members of the committee; and the number of times the committee meet throughout the reporting period. If a listed entity does not have a nomination committee, it should disclose the fact and processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively. 2.2 A listed entity should disclose a board skills matrix setting out the mix of skills and diversity that the Board currently has or is looking to achieve its membership. 2.3 The Company has disclosed the names of the directors considered to be independent, interests, positions and associations that might cause doubts as to the l y n o e s u l a n o s r e p r o F Yes  Yes  Yes  Yes  No  No  No  No  52 l y n o e s u l a n o s r e p r o F CORPORATE GOVERNANCE STATEMENT independence of a director and the length of service of each director. 2.4 The majority of the board are independent Directors. 2.5 The chair is an independent director and is not exercising the role of chief executive officer. 2.6 The Company has a program for inducting new directors. PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY 3.1 A listed entity should have a code of conduct for its directors, senior executives and employees and disclose that code or a summary of the code. PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING 4.1 The board has established an audit committee which is structured so that it: • has at least three members; • consists only of non-executive directors, a majority of whom are independent directors; is chaired by an independent director who is not the Chairman • And has disclosed: • • • the charter of the committee; the qualifications of the committee; the number of times the committee meets throughout the reporting period If no committee satisfying the above exists, it should disclose that fact and the processes it uses to safeguard the integrity of its reporting. 4.2 The Board has received from its CEO and CFO a declaration that in their opinion, the financial records have been properly maintained and comply with proper standards. 4.3 An AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit. PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE 5.1 The Company has established written policies designed Yes  Yes  Yes  Yes  Yes  Yes  Yes  Yes No  No  No  No  No  No  No  No 53 CORPORATE GOVERNANCE STATEMENT to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at senior executive level for that compliance and disclosed those policies or a summary of those policies. PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS 6.1 The listed Company has provided information about itself and its governance to investors via a website. 6.2 The listed Company has designed and implemented an investor relations program to facilitate effective two-way communication with investors. 6.3 The Company has designed a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and has disclosed their policy or a summary of that policy. 6.4 The listed Company has provided the security holders the option to receive communications from, and send communications to, the entity and its security registry electronically. PRINCIPLE 7 – RECOGNISE AND MANAGE RISK 7.1 The board has established a risk committee, structured so that it: • has at least three members • consists only of non-executive directors, a majority of whom are independent directors; is chaired by an independent director who is not the Chairman. • And has disclosed: the charter of the committee; • • members of the committee; • the number of times the committee meet throughout the reporting period. If no committee satisfying the above exists, it should disclose the fact and the processes it uses to safeguard the integrity of its reporting. 7.2 The board has reviewed the Company’s risk management framework at least annually and disclose whether such review has taken place. 7.3 A listed entity should disclose if they have an internal audit function, how the function is structured and what role it performs. If the Company does not have an l y n o e s u l a n o s r e p r o F   Yes  Yes  Yes  Yes  Yes  Yes  Yes  No  No  No  No  No  No  No  54 l y n o e s u l a n o s r e p r o F CORPORATE GOVERNANCE STATEMENT internal audit function, the Company should disclose the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes. 7.4 The Company has disclosed whether they have any material exposure to economic, environmental and social sustainability risks and, if they do, how they manage or intend to manage those risks. PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY 8.1 The Board has established a remuneration committee, structured so that it: • has at least three members, a majority of whom • are independent directors; and is chaired by an independent director who is not the Chairman And should disclose: • • • the charter of the committee; the members of the committee; the number of times the committee meet throughout the reporting period. If no committee satisfying the above exists, it should disclose that fact and the processes it uses to safeguard the integrity of its reporting. 8.2 The Company has disclosed their policies and practices regarding the remuneration of executive directors and other senior executives. 8.3 Companies which have an equity-based remuneration scheme should: • have a policy on whether participants are permitted to enter into transactions (whether use the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and • disclose that policy or summary of it. Yes  Yes  Yes  Yes  No  No  No  No  The role and responsibilities of the Board of Directors is for the overall Corporate Governance of the Company and oversight of management, protecting the rights and interests of the shareholders, by adopting systems of control and managed risk as the basis for the administration. The Board is committed to maintaining high standards of Corporate Governance. Corporate Governance is about having a set of core values and behaviours that underpin the Company's activities and ensure transparency, fair dealing and protection of the interests of stakeholders. 55 CORPORATE GOVERNANCE STATEMENT The Board of Directors support the Principles of Good Corporate Governance and Best Practice Recommendations developed by the ASX Corporate Governance Council (Council). Whilst the Company's practices are partly consistent with the Council's guidelines, the Board considers that the implementation of some recommendations are not appropriate having regard to the nature and scale of the Company's activities and size of the Board. The Board uses its best endeavours to ensure exceptions to the Council's guidelines do not have a negative impact on the Company and the best interests of shareholders as a whole. When Zeus is not able to implement one of the Council’s recommendations the Company applies the “if not, why not” explanation approach by applying practices in accordance with the spirit of the relevant principle. The following discussion outlines the ASX Corporate Governance Council's eight principles and associated recommendations and the extent to which the Company complies with those recommendations. Details of all of the Council's recommendations can be found on the ASX website at http://www.asx.com.au l y n o e s u l a n o s r e p r o F 56 l y n o e s u l a n o s r e p r o F CORPORATE GOVERNANCE STATEMENT Principle 1 – Lay solid foundations for management and oversight The Company has adopted Recommendation 1.1 to disclose the functions reserved to the Board and those delegated to senior executives. This has been disclosed on the Company’s website. BOARD OF DIRECTORS – ROLE AND RESPONSIBILITIES In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company. The Board is also responsible for the overall corporate governance and management oversight of the Company and recognises the need for the highest standards of behaviour and accountability in acting in the best interests of the Company as a whole. The Board also ensures that the Company complies with all of its contractual, statutory and any other legal or regulatory obligations. The Board has the final responsibility for the successful operations of the Company. Where the Board considers that particular expertise or information is required, which is not available from within their members, appropriate external advice may be taken and reviewed prior to a final decision being made by the Board. Without intending to limit the general role of the Board, the principal functions and responsibilities of the Board include the following: • formulation and approval of the strategic direction, objectives and goals of the Company; the prudential control of the Company's finances and operations and the monitoring of the financial performance of the Company; the resourcing, reviewing and monitoring of executive management; ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained; the identification of significant business risks and ensuring that such risks are adequately managed; the timeliness, accuracy and effectiveness of communications and reporting to shareholders and the market; and the establishment and maintenance of appropriate ethical standards. • • • ACCOUNTABILITY The Company has complied with Recommendation 1.2 by undertaking background checks with regard to each director’s character, experience and education prior to their nomination for election. Any material adverse information revealed by these checks is released to securityholders prior to the General Meeting at which they are able to be elected. When an individual is nominated to be a director, their curriculum vitae and their relevant professional history and qualifications is circulated to the securityholders of the Company. The Company has complied with Recommendation 1.3 by giving its Directors letters of appointment and/or service agreements. The Company has complied with Recommendation 1.4 by making the Company Secretary directly accountable to the Board on all matters to do with the proper functioning of the Board. DIVERSITY The Company does not comply with Recommendation 1.5. The Company has not found it necessary to establish a diversity policy or annually report on measurable objectives with respect to achieving gender diversity. The nature of the policy for a Company of this size is inappropriate. As the Company develops, the Board intends to review its practices, and if deemed necessary in the future, the Board may consider adopting a policy. 57 CORPORATE GOVERNANCE STATEMENT PERFORMANCE OF THE BOARD The Company does not comply with recommendation 1.6. The Company has not found it necessary to disclose the process for evaluating the performance of the Board and the Company’s Directors individually. However, it is the policy of the Board to ensure that the Directors of the Company are equipped with the knowledge and information they need to discharge their responsibilities effectively, and that individual and collective performance is regularly and fairly reviewed. Although the Company is not of a size to warrant the development of formal processes for evaluating the performance of its Board, individual Directors and committees, there is on-going monitoring by the Chairman and the members of the Board. The Chairman also speaks to Directors individually regarding their role as a Director. ACCESS TO INFORMATION Each Director has access to Board papers and all relevant documentation. PERFORMANCE OF SENIOR EXECUTIVES The Chief Executive Officer’s key performance indicators are set annually, with performance appraised by the Board, and reviewed in detail by the Board at the annual anniversary of the appointment of the CEO. The Company has adopted Recommendation 1.7 of evaluating the performance of senior executives in accordance with the process described above with the appointment of the CEO. The Board did not conduct a performance evaluation for the Chief Executive Officer in the financial year. The current Chief Executive Officer is an Acting Chief Executive Officer. l y n o e s u l a n o s r e p r o F 58 CORPORATE GOVERNANCE STATEMENT Principle 2 – Structure the Board to add value BOARD OF DIRECTORS - COMPOSITION, STRUCTURE AND PROCESS The Board has been formed so that it has effective composition, size and commitment to adequately discharge its responsibilities and duties given the Company’s current size, scale and nature of its activities. BOARD NOMINATIONS The Board has not followed Recommendation 2.1(a) as it has established a Remuneration and Nomination Committee Charter. The Board has not implemented a Remuneration and Nomination Committee due to the Company’s small size and nature. However, the members of the Board communicated with each other on regular basis to address any issues which arose in this regard. In compliance with Recommendation 2.1(b), the Board considers nominations for the appointment or election of Directors that may arise from time to time having regard to the corporate and governance skills required by the Company and procedures outlined in the Constitution and the Corporations Act 2001 (Cth). TERMS OF APPOINTMENT AS A DIRECTOR The Constitution of the Company provides that a Director, other than the Managing Director, may not retain office for more than three calendar years or beyond the third Annual General Meeting following his or her election, whichever is longer, without submitting himself or herself for re-election. One third of the Directors (excluding the Managing Director) must retire each year and are eligible for re-election. The Directors who retire by rotation at each Annual General Meeting are those with the longest length of time in office since their appointment or last election. During the financial year the Board implemented the functions listed below. Whilst the Company has not adopted Recommendation 2.4, the Board is effectively managing the functions normally expected of such a committee. The responsibilities assumed by the Board include: • Board and senior executive functions; • Board composition; • criteria for nomination of Directors; • selection and appointment of the Chairperson; • selection and appointment of the Secretary; • determine the frequency of meetings of the Committee; • seek professional advice when required; • responsibilities of the Committee; and • overseeing of Board and executive succession plans. INDEPENDENT DIRECTORS Due to the small size of the Company, the Board is made up of four Directors. The Company has not adopted Recommendation 2.2, which states that a board skills matrix should be disclosed, nor has it adopted Recommendation 2.3, which states that the majority of the directors should be independent. Because of the small size and nature of the Company, the Company has appointed 1 independent Director on the Board. It is the Board’s opinion that all Directors bring to the Board their independent judgement, irrespective of whether they are independent or not. PERIOD OF OFFICE HELD BY EACH DIRECTOR • • • • Mr Gregory Clifton Hall since 18 August 2010 Mr Jiangang Zhao since 25 February 2013 Mr Dongfeng Zhang since 25th September 2019 Mr Zhang Yong since 25 February 2013 l y n o e s u l a n o s r e p r o F 59 CORPORATE GOVERNANCE STATEMENT INDEPENDENT DIRECTORS l y n o e s u l a n o s r e p r o F The Company considers that as at 30 June 2018 Mr. Gregory Clifton Hall is classified as an Independent Director. REGULAR ASSESSMENT OF INDEPENDENCE An Independent Director, in the view of the Company, is a Non-executive Director who: • is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company; • within the last three years has not been employed in an executive capacity by the Company, or has been a Director after ceasing to hold any such employment; • within the last three years has not been a principal of a material professional advisor or a material consultant to the Company, or an employee materially associated with a service provider; • has no material contractual relationship with the Company other than as a Director of the Company; • has not served on the Board for a period which could, or could reasonably be perceived to, materially • interfere with the Director's ability to act in the best interests of the Company; and is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director's ability to act in the best interests of the Company. The composition of the Board is reviewed periodically with regards to the optimum number and skills of Directors required for the Board to properly perform its responsibilities and functions. CHAIRPERSON AND MANAGING DIRECTOR The Company does not follow Recommendation 2.5. The office of Chair during the reporting period was held by Mr Shouyin Wang, a nominee of ZIMC, the largest shareholder of Zeus. The Chairperson leads the Board and has responsibility for ensuring the Board receives accurate, timely and clear information to enable Directors to perform their duties as a Board. The CEO is responsible and accountable to the Board for the Company's management. Mr Jiangang Zhao is currently Acting Chief Executive Officer of the Company. Mr Zhao was appointed as Acting CEO of the Company following the departure of Mr Peter Williamson in November 2013. INDUCTION AND EDUCATION The Company complies with Recommendation 2.6. The Company does have a policy to provide each new Director or officer with a copy of the following documents: • • • • • • • • • • Responsibilities of Department Policy; Board procedures, rules and responsibilities Policy; Salary and Performance Policy; Fixed Assets Management Policy; Financial Policy; Travel and Accommodation Policy; Employee Manual; Recruitment Policy; Delegated Authority of Limits Securities Trading Policy; and 60 l y n o e s u l a n o s r e p r o F CORPORATE GOVERNANCE STATEMENT Principle 3 – Act Ethically and Responsibly CODE OF CONDUCT AND ETHICAL STANDARDS The Company has adopted recommendation 3.1 by establishing a formal code of conduct that guides compliance with all levels of legal and other obligations to stakeholders, and by disclosing a summary of this code of conduct below. The Company is focused on ensuring that all Directors, executives and employees act with the utmost integrity and objectivity in carrying out their duties and responsibilities, striving at all times to enhance the reputation and performance of the Company. ACCESS TO COMPANY INFORMATION AND CONFIDENTIALITY All Directors have the right of access to all relevant Company books and to the Company's executive management. In accordance with legal requirements and agreed ethical standards, Directors and executives of the Company have agreed to keep confidential information received in the course of exercising their duties and will not disclose non-public information except where disclosure is authorised or legally mandated. SHARE DEALINGS AND DISCLOSURES The Company has adopted a Securities Trading Policy. The Board restricts Directors, executives and employees from acting on material information until it has been released to the market. Executives, employees and Directors are required to consult the Chairperson and the Board respectively, prior to dealing in securities in the Company or other companies in which the Company has a relationship. Share trading by Directors, executives or employees is not permitted at any time whilst in the possession of price sensitive information not already available to the market. In addition, the Corporations Act prohibits the purchase or sale of securities whilst a person is in possession of inside information. CONFLICT OF INTEREST disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to To ensure that Directors are at all times acting in the best interests of the Company, Directors must: • exist between the interests of the Director and the interests of any other parties in carrying out the activities of the Company; and • necessary and reasonable steps to remove any conflict of interest. if requested by the Board, within seven days or such further period as may be permitted, take such If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as required by the Corporations Act, absent himself or herself from the room when Board discussion and/or voting occurs on matters about which the conflict relates. RELATED PARTY TRANSACTIONS Related party transactions include any financial transaction between a Director and the Company as defined in the Corporations Act or the ASX Listing Rules. Unless there is an exemption under the Corporations Act from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction. The Company also discloses related party transactions in its financial statements as required under relevant Accounting Standards. 61 CORPORATE GOVERNANCE STATEMENT Principle 4 – Safeguard integrity in financial reporting AUDIT COMMITTEE The Company has not complied with Recommendation 4.1(a) as it has not established an Audit Committee with a corresponding charter. The Audit compliance is managed by the full board of Zeus Resources. It has complied with Recommendation 4.1(b) by disclosing that the objective of the Board is to make recommendations and implement, among various matters, the adequacy of the external audit and compliance procedures. The Board evaluates from time to time the effectiveness of the financial statements prepared for the Board meetings and to ensure that an independent judgement is always exercised. CEO AND CFO DECLARATIONS The Company has adopted and complied with recommendation 4.2. Due to the size of the management team, the Board has determined that the Chairperson and the Accountant are the appropriate persons to make the CEO and CFO declarations in respect of the year ended 30 June 2016, as required under section 295A of the Corporations Act and recommended by the ASX Corporate Governance Council. The Board is also satisfied that the internal control system is operating effectively in all material respects. AUDITOR PRESENT AT ANNUAL GENERAL MEETING The Company has complied with Recommendation 4.3. A representative of the Company’s external auditor was be present at the Company’s AGM and will be available to answer questions from security holders relevant to the audit. Principle 5 – Make timely and balanced disclosure The Company has not adopted Recommendation 5.1 by putting in place a continuous Disclosure Policy because of the size and nature of the Company. CONTINUOUS DISCLOSURE TO THE ASX The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure of information to the ASX as well as communicating with the ASX. Accordingly, the Company will notify the ASX promptly of information: • concerning the Company, that a reasonable person would expect to have a material effect on the price • • or value of the Company's securities; that would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of the Company's securities; and the announcements are made in a timely manner, are factual and do not omit material information in order to avoid the emergence of a false market in Zeus securities. l y n o e s u l a n o s r e p r o F 62 l y n o e s u l a n o s r e p r o F CORPORATE GOVERNANCE STATEMENT Principle 6 – Respect the rights of shareholders The Company has complied with Recommendation 6.1 by promoting active communication with shareholders through a variety of measures, including the use of the Company's website. The Company's reports and ASX announcements are made available on the Company’s website www.zeusresources.com and on the ASX website www.asx.com.au, under ASX code 'ZEU'. COMMUNICATION TO SHAREHOLDERS The Company does comply with Recommendation 6.2 and 6.3. The Board recognises its duty to ensure that its shareholders are informed of all major developments affecting the Company's state of affairs. The Company provides all relevant and current information to shareholders and the market through: • • the Annual Report which is distributed to shareholders (usually with the Notice of Annual General Meeting); the Annual General Meeting and other general meetings called to obtain shareholder approvals as appropriate; the half-yearly Directors' and financial statements; • • quarterly activities and cash flow reports; • other announcements released to the ASX as required under the continuous disclosure requirements of the ASX Listing; and • Rules and other information that may be mailed to shareholders or made available through the Company’s website. The company has complied with Recommendation 6.4 by encouraging Shareholders to register for receipt of announcements and updates electronically. Principle 7 - Recognise and manage risk RISK COMMITTEE The Company has not complied with Recommendation 7.1(a) as it has not established a Risk Committee with a corresponding charter. The Company complies with Recommendation 7.1(b) by disclosing the processes it employs for overseeing the Company’s risk management, being that the Board is responsible for the identification, monitoring and management of significant business risks and the implementation of appropriate levels of internal control, recognising however that no cost effective internal control system will preclude all errors and irregularities. The Board regularly reviews and monitors areas of significant business risk. INTERNAL CONTROL AND RISK MANAGEMENT The Company has complied with Recommendation 7.2 by conducting an annual risk assessment and discloses to the Company auditors the review of risk management and internal control systems. The primary vehicle for managing corporate risks is regular oversight by the Board. The Board reviews systems of external and internal controls and areas of significant operational, financial and property risk and ensures arrangements are in place to contain such risks to acceptable levels. The Company has systems in place to ensure that appropriate insurance policies are kept current to cover all potential risks and maintaining Directors' and Officers' professional indemnity insurance. 63 CORPORATE GOVERNANCE STATEMENT INTERNAL AUDIT FUNCTION The Company has not complied with Recommendation 7.3(a) but does comply with recommendation 7.3(b). The Company’s internal audit function is carried out by the Board. The Company does not have an internal audit department nor has an internal auditor. The board is of the belief that the size of the Company does not warrant the cost of appointing an internal auditor. ECONOMIC, ENVIRONMENTAL AND SUSTAINABILITY RISKS All material risks are announced to the market in accordance with the requirements of the ASX Listing Rules and otherwise. Principle 8 – Remunerate fairly and responsibly In response to Recommendation 8.1(a), the Board has not established a remuneration committee. The Board is directed by the Chairperson who operates as the Committee, due to the size and nature of the Company. The Board regularly addressed issues that arose during the financial year. REMUNERATION COMMITTEE CHARTER AND RESPONSIBILITIES In accordance with Recommendation 8.1, in the absence of a remuneration committee, the Company discloses the following information concerning its policies and processes it employs for setting remuneration of directors and senior executives. REMUNERATION POLICY In response to Recommendation 8.2, the Company has established a Salary and Performance Policy along with a Recruitment Policy which operates in a similar fashion to a Remuneration and Nomination Committee charter. The role and responsibility of the Board is to review and make recommendations in respect of: • executive remuneration policy; • Executive Director and senior management remuneration; • Non-executive Directors' Remuneration; • performance measurement policies and procedures; • Administration of the Company’s Diversity policy; • Board evaluation and performance of Directors; and • Issue and allotment of options to Directors and Senior Executives. The Directors’ remuneration is approved by shareholders at the Annual General Meeting. The salary and emoluments paid to officers are approved by the Board. Consultants are engaged as required pursuant to service agreements. The Company ensures that fees, salaries and emoluments are in line with general standards for publicly listed companies of the size and type of the Company. All salaries of Directors and statutory officers are disclosed in the Annual Report of the Company each year. The Company has a policy structure to remunerate Directors differently based on a fixed and incentive component salary packages to reflect the short and long-term objectives of the Company. Key aspects of the policy include the following: l y n o e s u l a n o s r e p r o F 64 CORPORATE GOVERNANCE STATEMENT • • • • • • the salary component of the Managing Director/CEO remuneration is made up of fixed remuneration and long-term incentive; the salary component of Non-executive Directors is made up of fixed remuneration. the Company has not adopted Recommendation 8.4 as follows due to its size and nature: the Company discloses the name of Directors in the Remuneration Committee and the attendance of each Director to the Remuneration Committee meetings, within its Directors' Reports; the Company does not provide any schemes for retirement; and the Company has not made publicly available a summary of the Remuneration Committee Charter on the Company’s website. SECURITIES TRADING POLICY In compliance with Recommendation 8.3, the Company has a securities trading policy that prohibits directors, officers and employees from entering into transactions or arrangements which limits the economic risk of participating in unvested entitlements under any equity-based remuneration scheme. The Company’s securities trading policy is publicly available on the ASX website. l y n o e s u l a n o s r e p r o F 65 SHAREHOLDER INFORMATION The shareholder information set out below was applicable as at 30th June 2020: (a) Distribution of Equity Securities Analysis of numbers of equity security holders by size of holding: l y n o e s u l (b) The names of the twenty largest holders of quoted securities are listed below: a n o s r e p r o F 66 SHAREHOLDER INFORMATION (c) Substantial Shareholders Substantial shareholders in the Company are: Name 30 Jun 2020 % Holding 30 Jun 2019 % Holding ZHENGYUAN INTERNATIONAL MINING COMPANY LIMITED 57,650,000 32.00% 57,650,000 32.00% VAST HONOUR GLOBAL LIMITED 57,534,500 31.94% 57,534,500 31.94% MRS ANLAN CHEN 15,145,018 8.41% 15,145,018 8.41% BARBARY COAST INVESTMENTS PTY LTD 13,447,201 7.46% 13,447,201 7.46% l y n o (d) Voting Rights e s u The voting rights attaching to each class of equity security are set out below: Ordinary Shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. l a n o s r e p r o F 67 

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