MarmotaLimited
ABN38119270816
ConsolidatedEntity
ConsolidatedFinancialStatementsfortheyearended30June2017
CORPORATEDIRECTORY
MarmotaLimited
ABN38119270816IncorporatedinSA
RegisteredOfficeUnit6,79-81BrightonRoadGlenelgSA5045Telephone:(08)82940899Facsimile:(08)83768633
Email:[email protected]
ShareRegistrar
LinkMarketServicesLimitedLockedBagA14SydneySouthNSW1235Telephone:+611300554474Facsimile:+61292870303Email: [email protected]:www.linkmarketservices.com.au
Auditor
GrantThorntonCharteredAccountantsLevel3,170FromeStreetAdelaideSA5000Australia
MarmotaLimitedandControlledEntities
Directors’Report
2
TheDirectorspresenttheirreportonMarmotaLimited–consolidatedentity(‘Group’)forthefinancialyearended30June2017andtheauditor’sreportthereon.
DirectorsTheDirectorsofMarmotaLimited(‘theCompany’)atanytimeduringorsincetheendofthefinancialyearareassetoutbelow.DetailsofDirectors’qualifications,experienceandspecialresponsibilitiesareasfollows:
DrColinRose ExecutiveChairman PhD(Economics)ExperienceandexpertiseDrRosehasbeennon-executiveChairmanofMarmotasince1May2015andExecutiveChairmansince5June2017.DrRoseholdsaPhDinEconomicsfromtheUniversityofSydney.Heisalong-termfundamentalsinvestorintheminingandexplorationsector,withparticularexposuretogoldandcopper.Hehasextensivebusinessexperienceasthefounderanddirectorofatechnologycompanywhosesoftwareisusedinover55countries.HehasbeeninvitedtospeaktotheReserveBankofAustralia,theBankofEngland,theNationalBureauofEconomicResearch(USA),andtheLondonSchoolofEconomics(FinancialMarketsGroup).
Responsibilities
SpecialresponsibilitiesincludemembershipoftheAudit,GovernanceandRemunerationCommittee.
InterestsinSharesandOptions(asat25September2017): •65,873,242ordinaryshares
MrPeterThompsonNon-ExecutiveDirector BScHons(Geology),MSc(MineralExplorationandMiningGeology)
ExperienceandexpertiseMrThompsonhasbeenaBoardmembersince26May2015.HeisaGeologistwithsignificantindustryexperienceinbothExplorationandMiningroles.EducatedatTrinityCollegeDublin(BScHons–Geology)andLeicesterUniversity(MSc–MineralExplorationandMiningGeology),hehasworkedinexplorationforgold,copper,nickelandplatinoids,andinopenpitandundergroundgoldmines.Overacareerof27years,MrThompsonhasworkedforBCDResourcesNLasCEO,atStBarbaraMinesLimitedasGeneralManagerExploration,aswellasholdingseniorexplorationandprojectdevelopmentroleswithJubileeMinesNL,AnacondaNickelLtdandWesternMiningCorporation.AtStBarbaraMines,MrThompson’sresponsibilityincludedmanagingateamof22geoscientists.Inadditiontobeingresponsibleforthediscoveryofseveralnickelandgolddeposits,hehasextensiveminingandcorporatedevelopmentexperience.
Responsibilities
SpecialresponsibilitiesincludedChairoftheAudit,GovernanceandRemunerationCommittee.
Currentandformerdirectorshipsinthelast3years
MrThompsonwasCEOandManagingDirectorofCentralAsiaResourcesNL(ASX:CVR)from4July2014to8February2016andaNonExecutiveDirectorfromthattimeuntil5September2016.PeterwasCEOandManagingDirectorofCapricornMetalsLtd(ASX:CMM)from3February2016until14March2017.InterestsinSharesandOptions(asat25September2017) •2,948,334ordinaryshares •3,000,000unlisted3centOptions(expiring9November2021)issuedundertheDirector&Employee ShareOptionPlan(DESOP)
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DrKevinWillsExecutiveDirector–Exploration BSc,PhD,ARSM,FAusIMM
Experienceandexpertise
DrWillswasactingManagingDirectorfortheperiod14November2016to30January2017,andExecutiveDirector(Exploration)since5June2017.Heisageologistwithsignificantexperienceinmulti-commoditymineralexplorationincludingfeasibilitystudies,mineoperationsandcorporateactivitiesinAustralasia.Hehasbeencloselyinvolvedinthediscoveryandevaluationofeconomicmineraldepositsof:diamonds(Argyle,WA),basemetals(Thalanga&WaterlooQLD),gold(MurchisonWAandChallengerSA),mineralsands(Burekup,WA)andironore(BlacksmithWA).DrWillswasManagingDirectorofFlindersMinesLimitedforovertenyears.HeisanAssociateoftheRoyalSchoolofMines,pastChairmanoftheAdelaideBranchandaFellowoftheAustralianInstituteofMiningandMetallurgy.Between2010and2015,hewasanAdjunctAssociateProfessorattheUniversityofAdelaideengaginginteachingeconomicgeologyandmineralexploration.HefoundedtheSAExplorationandMiningConferencein2004andhassincebeenChairmanoftheorganisingcommittee.In2016,hewasawardedtheGSA’sJoeHarmsMedalforexcellenceinmineralexploration,andin2017,theAusIMM’sInstituteServiceAward.
ResponsibilitiesDrWillsalsoactsasChiefGeologistandasacompetentpersononJORCresourcereportingmatters.
Currentandformerdirectorshipsinthelast3years
DrWillsisalsoaDirectorofTycheanResourcesLimited. InterestsinSharesandOptions(asat25September2017): •930,061fullypaidordinaryShares •2,000,000unlisted3centOptionsexpiring9November2021issuedundertheDirector&Employee ShareOptionPlan(DESOP).
MrLindsayDavidWilliams ManagingDirector (ceased13November2016) LLB,BComm,MAICDExperienceandexpertise
MrWilliamswasManagingDirectorfrom9September2014to13November2016.MrWilliamshasheldthepositionofManagingDirectorofanumberofASXlistedandunlistedcompaniesinvarioussectorsandbrings20yearsofexperienceintheenergyandresourceindustry.Thishasincludedmineralscompaniesinexploration,production,developingnewminesandreviewingcommercialityofexistingoperations.Energysectorexperiencehasrangedfromoperationandexpansionofgastransportinfrastructure,buyingandsellinggas,explorationandproductionofoilandgas.Hehasdemonstratedabilitytodevelopandimplementmajorstrategicdirectionalchangesincludingcapitalraisings,acquisitionsandmergers,costandlabourreductions.MrWilliamswaspreviouslyChairmanofLithexResourcesLimited(ASX:LTX),agraphiteandnickelexplorer,andPresidentofHeathgateResourcesPtyLtd,theownerandoperatoroftheBeverleyuraniummineinSouthAustralia.ResponsibilitiesMrWilliamswasalsoCompanySecretaryfrom1July2015to13November2016.Currentandformerdirectorshipsinthelast3years
MrWilliamsiscurrentlyaDirectorofEndeavourDiscoveriesLimitedandWilgenaResourcesLimited.InterestsinSharesandOptions:nil
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MrIanWarland ManagingDirector(30Januaryto2June2017) BASc(Hons)Experienceandexpertise
ManagingDirectorfrom30January2017andceasedon2June2017.IanWarlandisaGeologistwithover25years domestic and international experience in exploration and mining. He has worked in open pit andunderground basemetalsmining, aswell as exploration for a range of commodities including copper, gold,uranium,basemetalsandindustrialmineralsinAustraliaandoverseas.MrWarlandhasheldarangeofrolesfor Pancontinental Mining, RGC Exploration, Iluka Resources and Musgrave Minerals. He has a first classhonoursdegreeingeology(universitymedal)fromtheUniversityofTechnologyinSydney.
InterestsinSharesandOptions:nil
Directors’meetingsThenumberofDirectors’meetingsandnumberofmeetingsattendedbyeachoftheDirectorsoftheCompany(includingcommitteesofDirectors)duringthefinancialyearwereasfollows:
Directors’Meetings
Audit,GovernanceandRemuneration
CommitteeMeetings
NumberEligibletoattend
Numberattended
NumberEligibletoattend
Numberattended
Director
DrColinRose 10 10 2 2
PeterThompson 10 10 2 2
DrKevinWills 2 2 - -
DavidWilliams 4 4 1 1IanWarland 4 3 1 1
CompanySecretary VictoriaAllinson(FCCA,AGAI)wasappointedCompanySecretary,effective14November2016.MsAllinsonisaFellowoftheAssociationofCertifiedCharteredAccountantsandamemberoftheGovernanceInstituteofAustralia.Shehasover25yearsofaccountingandauditingexperience,includingsenioraccountingpositionsinanumberoflistedcompaniesandauditmanagerforDeloitteToucheTohmatsu.
MsAllinsoniscurrentChiefFinancialOfficer(CFO)forafurthertwolistedcompanies:AssetResolutionLimited(NSX:ASS)andKangarooIslandPlantationTimberLtd(ASX:KPT).HerpreviousexperiencehasincludedbeingCompanySecretaryandCFOforanumberofASXlistedcompaniesincluding:SafetyMedicalProductsLtd,CentrexMetalsLtd,AdelaideEnergyLtd,EnterpriseEnergyNL,andIslandSkyAustraliaLtdaswellasunlistedcompanies.Inherroleascompanysecretary,MsAllinsonhasalsoassistedanumberofcompaniestolistontheASX.
From1July2015to13November2016,MrWilliamsheldthepositionofCompanySecretaryinadditiontohisroleasManagingDirector.
PrincipalactivitiesTheGroup’sprincipalactivityismineralsexploration.
ReviewandresultsofoperationsDuringtheFinancialYear,MarmotafocuseditsexplorationeffortsonitshighlyprospectivegoldtenementsintheGawlerCratonwhicharealreadyyieldingexcellentresults.
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CorporateThecompanycontinuestobenefitsignificantlyfromthemajorcostsavingmeasuresimplementedoverthelast2years,whichhaveledtoannualsavingsestimatedtobearound$700,000perannumwhencomparedtotheyeartoJune2015.Thosesamefundssavedarenowtargetedintoactiveexploration,andthatexplorationisalreadyyieldingnewdiscoveries,includingoutstandinggoldgradesatAuroraTank(ASX:MEU4Sept2017).Overthefinancialyear,over$1.8millionincapitalwasraised(beforecosts)throughacombinationofaSharePurchasePlan(inAugust2016at1.5cwhichwassignificantlyoversubscribed),andaplacementat2cpersharetosophisticatedinvestorsinFebruary2017(supportedbybothofMarmota’scornerstoneinvestors,namelyYandalInvestments,theinvestmentvehicleofMrMarkCreasy,andSouthernCrossCapital).TheCompanyisverygratefulfortheirsupport.
InJune2017,MarmotaannouncedanewmanagementandBoardstructurewhichfurthersimplifytheCompany’sstructureandtakethecostsavingmeasurestoanewlevel,effectivelysplittingtheMDroleintotwopre-existingpositions:DrRosemovedfromnon-executiveChairtoExecutiveChairman(lookingafterthecorporateside)andDrWillsjoinedtheBoardasExecutiveDirector–Exploration(lookingaftertheexplorationside).ThesechangesprovideasimpleandelegantBoardstructurethatareanticipatedtofurthersavethecompanyaroundanother$100,000perannum:fundsthatagainwillbetargetedintoactiveexploration.
MarmotaisalsoverypleasedtohaveagainsuccessfullyparticipatedintheAustralianGovernment’sExplorationDevelopmentIncentive(EDI)schemeunderwhichMarmotadistributed$220,000ofTaxationCreditsbacktoourshareholders.MarmotaexpectstoparticipateintheEDIschemeagainintheforthcomingfinancialyear,forthebenefitofourshareholders.TheEDItaxationcreditsareverypopular,especiallywiththecompany’slargershareholders.
GoldDiscoveryatAuroraTankInJuly2016,MarmotaassumedfullcontroloftheAuroraTanktenementbycashacquisition,increasingitsstaketo100%ownership(seeASX:MEU4July2016).InSeptember2016,MarmotacommenceditsfirstevergolddrillingprogramatAuroraTank,attheGoshawkgoldprospect.Theprogramhasbeenenormouslysuccessful,withfollow-updrillinginDecember2016andJune/July2017.TheresultshavealreadyexceededtheCompany’sbestexpectationswithoutstandingintersectionsincluding4m@40g/t,multipleintersectionsgreaterthan10g/t,andover117intersectionsover1g/t,withmostdrillingwithin50mofsurface.Subsequenttotheendofthefinancialyear,MarmotahascommissionedaJORCcompliantestimateofgoldresourceswithinthefirst50mfromsurface,overthe500mlongmineralisedzone(seeASX:MEU2Aug2017and
4Sept2017):thisisexpectedtobeMarmota’smaidengoldJORCresource,andprovideabasefromwhichtogrow.
MeltonCopperProject(CopperCoast–YorkePeninsula)InDecember2016,pursuanttoanapplicationbytheCompanyunders9AAoftheMiningAct1971,MarmotawasgrantedawaivertocarryoutitsdesignatedexplorationprogramonitsChampioncopperprospect,atWestMeltonontheCopperCoast(YorkePeninsula).Ata0.3%Cucutoff,the2017drillingresultsdefinedanextensivelow-gradezoneofsecondaryCumineralisationwithelevatedAu,approximately1kminstrikelength.TheCompanyismonitoringtherisingcopperprice,andboththepotentialforaprimarysourceatdepthandtheunexploredpotentialofthetenement.
Welookforwardtotheyearahead!CompetentpersonstatementTheinformationinthisreportthatrelatestoExplorationResultsandMineralResourcesisbasedoninformationcompiledbyDrKevin
WillswhoisaFellowoftheAustralasianInstituteofMiningandMetallurgy.Hehassufficientexperiencewhichisrelevanttothestylesof
mineralisationandtypesofdepositsunderconsiderationandtotheactivitiesbeingundertakentoqualifyasaCompetentPersonas
definedinthe2012Editionofthe“AustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves”.DrWills
consentstotheinclusioninthereportofthemattersbasedonhisinformationintheformandcontextinwhichtheyappear.
Whereresultsfrompreviousannouncementsarequoted,Marmotaconfirmsthatitisnotawareofanynewinformationordatathat
materiallyaffectstheinformationincludedintherelevantmarketannouncementand,inthecaseofestimatesofMineralResources,that
allmaterialassumptionsandtechnicalparametersunderpinningtheestimatesintherelevantmarketannouncementcontinuetoapplyand
havenotmateriallychanged.
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ResultsDuringtheyear,theGroupcontinuedexplorationactivitiesatitstenements.Totalcashexpenditureonexplorationandevaluationactivitiestotalled$1,509,106.
ThenetlossoftheGroupafterincometaxwas$389,655(2016:loss$445,750).
ThenetassetsoftheGrouphaveincreasedby$1,473,757duringthefinancialyearfrom$4,321,702at30June2016to$5,795,459at30June2017.
DividendsNodividendshavebeenpaidorprovidedbytheGroupsincetheendofthepreviousfinancialyear(2016:nil).
ExplorationDevelopmentIncentive(EDI)CreditsMarmotadistributed$220,000ofEDITaxationCreditsbacktoourshareholdersinJune2017(2016:$170,000).
StateofaffairsTherehavebeennosignificantchangesinthestateofaffairsoftheGroupduringtheyear.
EventssubsequenttoreportingdateOn8September2017,Marmotaissued29,411,765fullypaidordinaryshares,at1.7centspershare,bywayofplacementtosophisticatedandprofessionalinvestors,raising$500,000.
On2August2017,Marmotaannouncedexcellenthighgradegoldintersections,including4mat40g/tfrom32minhole17AT021(seeASX:MEU2Aug2017and4Sept2017).
Otherthantheabove,therehasnotarisenanymattersorcircumstances,sincetheendofthefinancialyear,whichsignificantlyaffectedorcouldsignificantlyaffecttheoperationsoftheGroup,theresultsofthoseoperations,orthestateoftheGroupinfutureyears.
LikelydevelopmentsTheGroup’sstrategyistoexploreforgold,highgradebasemetalsanduraniumwithintheCompany’shighlyprospectiveportfolioofprojects.TheBoardofMarmotaLimitedispursuingabalanceofdirectself-fundedexplorationandexplorationviastrategicpartnershipsandfundingarrangements.TheprimaryfocusofexplorationisdirectedatprogressingtheCompany’sGawlerCratongoldprojectwhichisalreadyyieldingexcellentresults.
EnvironmentalregulationandperformancestatementTheGroup’soperationsaresubjecttosignificantenvironmentalregulationsunderbothCommonwealthandSouthAustralianlegislationinrelationtodischargeofhazardouswasteandmaterialsarisingfromanyminingactivitiesanddevelopmentconductedbytheGrouponanyofitstenements.TodatetheGrouphasonlycarriedoutexplorationactivitiesandtherehavebeennoknownbreachesofanyenvironmentalobligations.
Indemnificationandinsuranceofofficers
Indemnification
TheCompanyisrequiredtoindemnifytheDirectorsandotherOfficersoftheCompanyagainstanyliabilitiesincurredbytheDirectorsandOfficersthatmayarisefromtheirpositionasDirectorsandOfficersoftheCompany.Nocostswereincurredduringtheyearpursuanttothisindemnity.
TheCompanyhasenteredintodeedsofindemnitywitheachDirectorwhereby,totheextentpermittedbytheCorporationsAct2001,theCompanyagreedtoindemnifyeachDirectoragainstalllossandliabilityincurredasanofficeroftheCompany,includingallliabilityindefendinganyrelevantproceedings.
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Insurancepremiums
Sincetheendofthepreviousyear,theCompanyhaspaidinsurancepremiumsinrespectofDirectors’andOfficers’liabilityandlegalexpenses’insurancecontracts.
Thetermsofthepoliciesprohibitdisclosureofdetailsoftheamountoftheinsurancecover,thenaturethereofandthepremiumpaid.
OptionsAtthedateofthisreport,unissuedordinarysharesofMarmotaLimitedunderoptionare:
Expirydate* Exerciseprice NumberofOptions Vested Unvested Amountpaid/payable
byrecipient($)
16/12/2019 $0.018 550,000 550,000 - -06/10/2021 $0.03 1,000,000 1,000,000 - -09/11/2021 $0.03 5,000,000 5,000,000 - -
*Alloptionsmaybeexercisedatanytimebeforeexpirysubjecttoescrowrestrictions.OptionholderswillreceiveoneordinaryshareinthecapitaloftheCompanyforeachoptionexercised.
TheseoptionsdonotentitletheholdertoparticipateinanyshareissueoftheCompanyoranyotherbodycorporate.Duringthefinancialyear,noordinaryshareswereissuedbytheCompanyasaresultoftheexerciseofoptions(2016:9,360,817).Therewerenoamountsunpaidonsharesissued.
ProceedingsonbehalfoftheCompanyNopersonhasappliedtotheCourtforleavetobringproceedingsonbehalfoftheCompanyortointerveneinanyproceedingstowhichtheCompanyisapartyforthepurposeoftakingresponsibilityonbehalfoftheCompanyforallorpartofthoseproceedings.TheCompanywasnotapartytoanysuchproceedingsduringtheyear.
CorporateGovernanceStatementTheCompany’sCorporateGovernanceStatementfortheyearended30June2017maybeaccessedfromtheCompany’swebsiteat:www.marmota.com.au/site/corporate/policies
Non-auditservicesTherewerenonon-auditservicesprovidedbytheexternalauditorsoftheParentoritsrelatedentitiesduringtheyearended30June2017.
AuditoroftheCompanyTheauditoroftheCompanyforthefinancialyearwasGrantThorntonAuditPtyLtd.
Auditor’sindependencedeclarationTheauditor’sindependencedeclarationasrequiredbysection307CoftheCorporationsAct2001fortheyearended30June2017issetoutimmediatelyfollowingtheendoftheDirectors’report.
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RemunerationReport–Audited
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RemunerationReport
RemunerationpolicyTheremunerationpolicyofMarmotaLimitedhasbeendesignedtoalignkeymanagementpersonnelobjectiveswithshareholderandbusinessobjectivesbyprovidingafixedremunerationcomponentandofferingotherincentivesbasedonperformanceinachievingkeyobjectivesasapprovedbytheBoard.TheBoardofMarmotaLimitedbelievestheremunerationpolicytobeappropriateandeffectiveinitsabilitytoattractandretainthebestkeymanagementpersonneltorunandmanagetheCompany,aswellascreategoalcongruencebetweendirectors,executivesandshareholders.
TheCompany’spolicyfordeterminingthenatureandamountsofemolumentsofBoardmembersandotherkeymanagementpersonneloftheCompanyisasfollows.
RemunerationandNomination
TheAudit,GovernanceandRemunerationCommitteeoverseesremunerationmattersandmakesrecommendationstotheBoardonremunerationpolicy,feesandremunerationpackagesfornon-executivedirectorsandseniorexecutives.Detailsofthecommittee’smembersanditsresponsibilitiesaresetoutintheCorporateGovernanceStatement.
Non-executiveRemunerationPolicies
TheCompany’sConstitutionspecifiesthatthetotalamountofremunerationofNon-executiveDirectorsshallbefixedfromtimetotimebyageneralmeeting.ThecurrentmaximumaggregateremunerationofNon-executiveDirectorshasbeensetat$400,000perannum.DirectorsmayapportionanyamountuptothismaximumamountamongsttheNon-executiveDirectorsastheydetermine.Directorsarealsoentitledtobepaidreasonabletravelling,accommodationandotherexpensesincurredinperformingtheirdutiesasDirectors.ThefeespaidtoNon-executiveDirectorsarenotincentiveorperformancebasedbutarefixedamountsthataredeterminedbyreferencetothenatureoftherole,responsibilityandtimecommitmentrequiredfortheperformanceoftheroleincludingmembershipofboardcommittees.ThefeesaresetbytheAudit,GovernanceandRemunerationCommitteewhichconsultsindependentadvicefromtimetotime.
Non-executiveDirectorsdonotreceivebonuspaymentsandarenotprovidedwithretirementbenefitsotherthansalarysacrificeandstatutorysuperannuation.
ExecutiveRemunerationPolicies
TheremunerationoftheManagingDirectorisdeterminedbytheNon-executiveDirectorsontheAudit,GovernanceandRemunerationCommitteeandapprovedbytheBoardaspartofthetermsandconditionsofhisemploymentwhicharesubjecttoreviewfromtimetotime.TheremunerationofotherexecutiveofficersandemployeesisdeterminedbytheManagingDirectorsubjecttotheapprovaloftheBoard.
TheCompany’sremunerationstructureisbasedonanumberoffactorsincludingtheparticularexperienceandperformanceoftheindividualinmeetingkeyobjectivesoftheCompany.TheAudit,GovernanceandRemunerationCommitteeisresponsibleforassessingrelevantemploymentmarketconditionsandachievingtheoverall,longtermobjectiveofmaximisingshareholderbenefits,throughtheretentionofhighqualitypersonnel.
Theremunerationstructureandpackagesofferedtoexecutivesaresummarisedbelow:
- Short-termincentive-TheCompanydoesnotpresentlyemphasisepaymentforresultsthroughtheprovisionofcashbonusschemesorotherincentivepaymentsbasedonkeyperformanceindicatorsofMarmotaLimitedgiventhenatureoftheCompany’sbusinessasamineralexplorationentityandthecurrentstatusofitsactivities.However,theBoardmayapprovethepaymentofcashbonusesfromtimetotimeinordertorewardindividualexecutiveperformanceinachievingkeyobjectivesasconsideredappropriatebytheBoard.
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RemunerationReport–Audited
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- Long-termincentive–equitygrants,whichmaybegrantedannuallyatthediscretionoftheBoard.Fromtimetotime,theCompanymaygrantretentionrightsasconsideredappropriatebytheAudit,GovernanceandRemunerationCommitteeandtheBoard,asalong-termincentiveforkeymanagementpersonnel.TheserightsaresubjecttoshareholderapprovalattheAnnualGeneralMeetingintheyearofgrant.Theintentionofthisremunerationistofacilitatetheretentionofkeymanagementpersonnelinorderthatthegoalsofthebusinessandshareholderscanbemet.Underthetermsoftheissueoftheretentionrights,therightswillvestoveraperiodoftime,withaproportionoftherightsvestingeachyear.
TheCompanyalsohasaDirector&EmployeeShareOptionPlanapprovedbyshareholdersthatwillenabletheBoardtooffereligibleemployeesoptionstoacquireordinaryfullypaidsharesintheCompany.UnderthetermsofthePlan,optionsforordinaryfullypaidsharesmaybeofferedtotheCompany’seligibleemployeesatnocostunlessotherwisedeterminedbytheBoardinaccordancewiththetermsandconditionsofthePlan.TheobjectiveofthePlanistoaligntheinterestsofemployeesandshareholdersbyprovidingemployeesoftheCompanywiththeopportunitytoparticipateintheequityoftheCompanyasanincentivetoachievegreatersuccessandprofitabilityfortheCompanyandtomaximisethelong-termperformanceoftheCompany.
Atthistime,thereisnorelationshipbetweenremunerationofKeyManagementPersonnelandtheCompany’sperformanceoverthelastfiveyears.
RemunerationConsultants
Thecompanydidnotuseanyremunerationconsultantsduringtheyear.
Sharesissuedonexerciseofremunerationoptions
NoshareswereissuedtoDirectorsasaresultoftheexerciseofremunerationoptionsduringthefinancialyear.
RemunerationofDirectorsandkeymanagementpersonnel
Thisreportdetailsthenatureandamountofremunerationforeachkeymanagementpersonneloftheconsolidatedentityandfortheexecutivesreceivingthehighestremuneration.
(a)Directorsandkeymanagementpersonnel
ThenamesandpositionsheldbyDirectorsandkeymanagementpersonneloftheconsolidatedentityduringthewholeofthefinancialyearare:
Directors Position
DrCRose Chairman Non-executive from1May2015to4June2017
ExecutiveChairmanExecutive from5June2017
MrPThompson Director Non-executive from26May2015
DrKWills ChiefGeologist from8March2016ExecutiveDirectorActingMD from14November2016to30January2017
ExecutiveDirector from5June2017
MrLDWilliams ManagingDirector Executive from9September2014to13November2016
MrIWarland ManagingDirectorExecutive from30January2017to2June2017
KeyManagementPersonnel
MsVAllinson CompanySecretary from14November2016
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(b)Directors’remuneration
ShortTermEmployee
Benefits
Post-Employee
Benefits
LongTerm
Employee
Benefits
Share-based
payments
2017primarybenefits
Directors’
fees
$
Fixed
Remuneration
$
Non-
Monetary
Benefits
$
Super
contributions
$
Changein
LSL
Provision
$
Option
based
benefits
$
Share
based
payments
$
Total
$
Directors
DrCRose 1 5,207 - 847 - - - 6,055
MrPThompson* 17,000 - - - - 9,687 17,000 43,687
DrKWills** - 29,417 - - - - - 29,417
MrLWilliams - 74,753 5,100 5,907 - - - 85,579
MrIWarland - 54,541 - 5,181 - - - 59,722
17,001 163,918 5,100 11,935 - 9,687 17,000 224,641
2016primarybenefits
Directors’
fees
$
Fixed
Remuneration
$
Non-
Monetary
Benefits
$
Relatesto
2015FY
$
Super
contributions
$
Changein
LSL
Provision
$
Shares
$
Total
$
Directors
DrCRose 1 - - - - - 1
MrPThompson* 17,000 - - - - 17,000 34,000
MrLWilliams - 164,523 23,526 16,118 1,237 - 205,404
Relatingto2015FY
MrGSDavis*** - ***16,000 - - - 16,000 17,001 164,523 23,526 16,000 16,118 1,237 17,000 255,405
Therewerenocashbonusespaidin2017or2016.
*DirectorsfeesforMrThompsonarepaidtoarelatedentityoftheDirector.**DrWillswasappointedActingManagingDirectorintheperiodfrom14November2016to30January2017andas
ExecutiveDirector–Explorationfrom5June2017.See(c)belowforDrWills’remunerationasChiefGeologist.HisremunerationispaidtoarelatedentityoftheDirector.
***DirectorFeesforMrDaviswerepaidtoarelatedentityoftheDirector.Theamountshownabovein2016relatesto
feesforthemonthsofFebruarytoJune2015.MrDavisceasedtobeaDirectoron23June2015.
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(c)Keymanagementpersonnelremuneration
Shorttermemployee
benefits Longtermemployeebenefits
2017primarybenefits
Invoiced
$
Optionbased
benefits
$
Sharebased
Payments
$
Total
$
Proportionof
remunerationrelated
toperformance
KeymanagementpersonnelexcludingDirectors -
DrKWills* 51,276 6,458 12,248 69,982
VAllinson** 20,430 - 0 20,430 -
71,706 6,458 12,248 90,412 -
2016primarybenefits
Invoiced
$
Optionbased
benefits
$
Sharebased
Payments
$
Total
$
Proportionof
remunerationrelated
toperformance
KeymanagementpersonnelexcludingDirectors
N/A - - - - -
Therewerenocashbonusespaidin2017or2016.* DrWillswasChiefGeologistfrom1July2016to12November2016(thenActingMDintheperiod13November2016
to30January2017,see(b)above)andthenresumedasChiefGeologistfrom1February2017to4June2017(andthenExecutiveDirectorfrom5June2017).Hisremunerationispaidtoarelatedentity.
**MsAllinsonwasappointedasCompanySecretaryon14November2016andChiefFinancialOfficeron14January2017.MsAllinsonandherteamprovidedoutsourcedaccountingservicesviaacompanyshecontrols,AllinsonAccountingSolutionsPtyLtd,since14January2017.
(d)Securitybasedpayments Share-basedpaymentsareinlinewiththeMarmotaLimitedDirector&EmployeeShareOptionPlan.Listedbelowaresummariesofoptionsgranted:
(i) Optionsissuedtodirectorsandkeymanagementpersonnel
2017 2016
Numberof
options
Weighted
average
exerciseprice
Numberof
options
Weighted
average
exercise
price
Granted–9November2016 5,000,000 $0.03 - -
KeymanagementpersonnelOptionbasedpaymentsinthecurrentyear:
• On9November2016,5,000,000shareoptionsweregrantedtodirectorsandemployeesundertheMarmotaLimitedDirector&EmployeeShareOptionPlantotakeupordinarysharesatanexercisepriceof$0.03each.Theseoptionsareexercisableonorbefore9November2021,withBlackScholesvaluation:
o MrPThompson$9,686
o DrKWills $6,458
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RemunerationReport–Audited
12
Theoptionsarenon-transferableexceptasallowedundertheDirector&EmployeeShareOptionPlanandarenotquotedsecurities.Atreportingdate,otherthanasdisclosedinthetableabove,noshareoptionshadbeenexercised.AlloptionsgrantedtokeymanagementpersonnelareoverordinarysharesinMarmotaLimited,whichconferarightofoneordinaryshareforeveryoptionheld.
ThefairvalueoftheoptionsgrantedwascalculatedbyusingtheBlack-Scholesoptionpricingmodelapplyingthefollowinginputs:
Nov2016issue
Weightedaveragefairvalue $0.003 Weightedaverageexerciseprice $0.03Weightedaveragelifeoftheoption 1,825Underlyingshareprice $0.016Expectedsharepricevolatility 41.8%Riskfreeinterestrate 1.8%
Thelifeoftheoptionisbasedonthedaysremaininguntilexpiry.Volatilityisbasedonhistoricalshareprices.
Theoptionsholdnovotingordividendsrightsandareunlisted.Theoptionslapse6monthssubsequenttothecessationofemploymentwiththeGroup.Therearenovestingconditionsattachedtotheoptions.(i) Sharebasedpaymentstokeymanagementpersonnel
Duringtheyear,930,061ShareswereissuedtoDrKWillsinlieuofChiefGeologistfeesamountingto$12,248.DrWillswasnotakeymanagementpersonnelintheprioryear.(e)Serviceagreements
MrWilliamswasappointedManagingDirectoron9September2014andresignedon13November2016.Thesalaryunderthetermsofhisemploymentwassetat$250,000perannuminclusiveofsuperannuationguaranteecontributionsandincludedathree-monthnoticeperiod.HewasalsoappointedasCompanySecretaryon1July2015.Effective1August2015,MrWilliamsagreedtochangehistermsofemploymentsuchthatremunerationwasreducedto$200,000perannumandthenoticeperiodreducedtoonemonth.
MrWarlandwasappointedManagingDirectoron30January2017andresignedon2June2017.Thesalaryunderthetermsofhisemploymentwassetat$175,000perannuminclusiveofsuperannuationguaranteecontributionsandincludedaone-monthnoticeperiod.Inaddition,MrWarlandwasentitledtoupto3millionPerformanceRightssubjecttoobtainingshareholderapproval:nosuchshareholderapprovalwaseithersoughtnorgrantedpriortohisdeparture,andaccordinglynoPerformanceRightswereissuedorgranted.
DrRosemovedfromtheroleofnon-executiveChairmantoExecutiveChairmanon5June2017.Thesalaryunderthetermsofhisemploymentwassetat$85,000perannuminclusiveofsuperannuationguaranteecontributionsandincludedaone-monthnoticeperiod.DrWillswasappointedChiefGeologiston8March2016foraninitial6monthsterm,whichcontinuesaftertheinitialperiodunlessterminatedbyeitherpartybygivingonemonthsnotice.Inaccordancewithhisserviceagreement,DrWillswasremuneratedasfollows:• intheperiodfrom8March2016to19September2016,remunerationamountedtotheequivalentof
$24,000perannumexcludingGSTasChiefGeologist;• intheperiodfrom20September201613November2016,remunerationamountedtotheequivalent
of$59,000perannumexcludingGSTasChiefGeologist,ofwhich25%waspaidinshares;• intheperiodfrom14November2016to30January2017,remunerationamountedtotheequivalent
of$66,000perannumexcludingGSTasActingMD;
MarmotaLimitedandControlledEntities
Directors’Report(continued)
RemunerationReport–Audited
13
• intheperiodfrom1February2017to3June2017,remunerationamountedtotheequivalentof$59,000perannumexcludingGSTasChiefGeologist,ofwhich25%waspaidinshares;
Inaddition,2millionunlisted3centOptionsexpiring9November2021wereissuedtoDrWillsundertheDirector&EmployeeShareOptionPlan(DESOP)on9November2016.
On2June2017,anewserviceagreementwassignedasaresultofDrWills’appointmentasExecutiveDirectoron5June2017.Inaccordancewiththisagreement,DrWillsisremuneratedasfollows:• From5June2017,DrWills’remunerationamountsto$7,335permonth(excludingGST)asExecutive
Director.TheamountmayvaryifDrWillsisrequiredtoworkadditionaldays.
Therewerenopost-employment,retirementorterminationbenefitspreviouslyapprovedbymembersoftheCompanyinageneralmeeting,noranysuchbenefitspaidtoDirectorsoftheCompany.(f)Directorrelatedentities
InformationofamountspaidtodirectorrelatedentitiesissetoutinNote23tothefinancialstatements.
(g)Post-employment/retirementandterminationbenefitsOtherthansuperannuationcontributions,therewerenopost-employmentretirementandterminationbenefitspaidorpayabletodirectorsandkeymanagementpersonnel.(h)Directorsandkeymanagementpersonnelequityremuneration,holdingsandtransactions(i) ShareholdingsThenumberofsharesinthecompanyheldduringthefinancialyearbyeachdirectorofMarmotaLimitedandotherkeymanagementpersonnelofthegroup,includingtheirpersonalrelatedparties,aresetoutbelow.Therewerenosharesgrantedtodirectorsorkeymanagementpersonnelduringthefinancialyear.
(1) Netchangesrepresentsecuritiespurchasedduringthefinancialyear.
(2) DrWillsreceived930,061sharesasperpaymentforhisfeesasChiefGeologist.
(ii) OptionholdingsThenumberofoptionsoverordinarysharesinthecompanyheldduringthefinancialyearbyeachdirectorofMarmotaLimitedandanyotherkeymanagementpersonnelofthegroup,includingtheirpersonalrelatedparties,aresetoutbelow.
Shares
Balance
1/07/16
Received
as
remuneration
Options
exercised
Netchange
Other(1)
Balance
30/06/17
Totalheldin
escrow
30/06/17
HeldbyDirectorsinownname
DrCRose 53,912,844 - - 8,479,138 62,391,982 -MrPThompson - - - - - -DrKWills - - - - - -MrLWilliams - - - - - -MrIWarland - - - - - -
HeldbyDirectors’personallyrelatedentities
DrCRose 851,316 - - - 851,316 -MrPThompson 1,700,000 915,000 - 333,334 2,948,334 -DrKWills(2) - 930,061 - - 930,061 -MrLWilliams - - - - - -MrIWarland - - - - - -
TotalheldbyDirectors 56,464,160 1,845,061 - 8,812,472 67,121,693 -
MarmotaLimitedandControlledEntities
Directors’Report(continued)
RemunerationReport–Audited
14
Options
Balance
1/07/16
Received
as
remuneration
Options
exercised
Netchange
other1
Balance
30/06/17
Totalvested
30/06/17
Total
exercisable
30/06/17
HeldbyDirectorsinown
name
DrCRose - - - - - - -MrPThompson - - - - - - -DrKWills - - - - - - -MrLWilliams - - - - - - -MrIWarland - - - - - - -
- - - - - - -
Directors’personallyrelatedentities
DrCRose - - - - - - -MrPThompson(1) - 3,000,000 - - - - 3,000,000DrKWills(1)(2) - 2,000,000 - - - - 2,000,000MrLWilliams - - - - - - -MrIWarland - - - - - - -
TotalheldbyDirectors - 5,000,000 - - - - 5,000,000
(1) 3millionunlisted3centOptionsexpiring9November2021wereissuedtoMrThompsonundertheDirector&
EmployeeShareOptionPlan(DESOP)on9November2016,and2millionofthesameoptionstoDrWills.
(2) ReceivedaspartofChiefGeologistremuneration.
(iii) SharerightsholdingsNorightsoverordinarysharesinthecompanywereheldduringthefinancialyearbyanydirectorofMarmotaLimitedorbyanyotherkeymanagementpersonnelofthegroup,includingtheirpersonalrelatedparties.Nosharerightsweregrantedtodirectorsorkeymanagementpersonnelduringthefinancialyear.
NooptionspreviouslygrantedtoDirectorsorDirectorrelatedentitieswereexercisedduringtheyear.
EndofRemunerationReport
TheReportofDirectors,incorporatingtheRemunerationReport,issignedinaccordancewitharesolutionoftheBoardofDirectors:
DrColinRoseChairmanDatedatSydneythis25thdayofSeptember2017.
Grant Thornton House Level 3 170 Frome Street Adelaide, SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E [email protected] W www.grantthornton.com.au
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration To the Directors of Marmota Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Marmota Limited for the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD Chartered Accountants
S K Edwards Partner - Audit & Assurance Adelaide, 25 September 2017
MarmotaLimitedandControlledEntities
ConsolidatedStatementofProfitandLossandOtherComprehensiveIncome
Fortheyearended30June2017
16
Consolidated Note 2017
$2016$
Otherrevenues 2 49,915 56,834Totalrevenue 49,915 56,834 Administrationexpenses 3 129,950 132,643Consultingexpenses 3 20,930 13,398Depreciationexpense 3 4,090 17,485Employmentexpenses 3 218,371 301,697Occupancyexpenses 3 5,435 6,537Impairmentofassets 3 39,684 21,400(Loss)/profitbeforeincometaxexpense (368,545) (436,326)Incometax(expense)/benefit 4 (21,110) (9,424)(Loss)/profitfortheyear (389,655) (445,750) Lossattributabletomembersoftheparententity (389,655) (445,750)
Othercomprehensiveincome - - Totalcomprehensiveincomefortheyear (389,655) (445,750)
Basicearningspershare(cents) 6 (0.084) (0.12)
Dilutedearningspershare(cents) 6 (0.084) (0.12)
Theaccompanyingnotesformpartofthesefinancialstatements.
MarmotaLimitedandControlledEntities
ConsolidatedStatementofFinancialPosition
Asat30June2017
17
Consolidated
Note 2017$
2016$
Currentassets Cashandcashequivalents 7 530,706 635,121Tradeandotherreceivables 8 95,956 32,741Otherassets 9 11,649 11,538Totalcurrentassets 638,311 679,400 Non-currentassets Plantandequipment 10 66,008 90,087Investmentsinassociates 11 1 1Availableforsalefinancialassets 12 8,000 8,000Explorationandevaluationassets 15 5,289,305 3,661,339Totalnon-currentassets 5,363,315 3,759,427 Totalassets 6,001,626 4,438,827 Currentliabilities Tradeandotherpayables 16 201,297 99,744Provisions 17 4,747 16,144Totalcurrentliabilities 206,044 115,888 Non-currentliabilities Provisions 17 123 1,237Totalnon-currentliabilities 123 1,237 Totalliabilities 206,167 117,125 Netassets 5,795,459 4,321,702 Equity Issuedcapital 18 34,909,527 33,064,883Reserves 26 22,140 50,802Retainedlosses (29,136,208) (28,793,983) Totalequity 5,795,459 4,321,702
Theaccompanyingnotesformpartofthesefinancialstatements.
MarmotaLimitedandControlledEntities
ConsolidatedStatementofChangesinEquity
Fortheyearended30June2017
18
Consolidated
Issuedcapital Reserves Retained Total
(Note18) (Note26) Earnings$ $ $ $
Balanceat1July2015 31,577,896 2,719,810 (31,060,144) 3,237,562
Lossattributabletothemembersoftheparententity
- - (445,750) (445,750)
Othercomprehensiveincome - - - -
Totalcomprehensiveincome - - (445,750) (445,750)
Transactionswithownersintheircapacityasowners: Sharesissuedduringtheyear 1,505,025 - - 1,505,025
Optionsissuedduringtheyear - 42,902 - 42,902
Optionsexpiredorexercised - (2,711,910) 2,711,910 -
Transactioncostsassociatedwiththeissueofsharesnetoftax
(18,037) - - (18,037)
1,486,988 (2,669,008) 2,711,910 1,529,890
Balanceat30June2016 33,064,884 50,802 (28,793,984) 4,321,702
Balanceat1July2016 33,064,884 50,802 (28,793,984) 4,321,702
Lossattributabletothemembersoftheparententity
- - (389,655) (389,655)
Othercomprehensiveincome - - - -
Totalcomprehensiveincome - - (389,655) (389,655)
Transactionswithownersintheircapacityasowners: Sharesissuedduringtheyear 1,900,921 - - 1,900,917
Optionsissuedduringtheyear - 18,769 - (18,769)
Optionsexpiredorexercised - (47,431) 47,431 - Transactioncostsassociatedwiththeissueofsharesnetoftax
(56,278) - - (56,274)
1,844,643 (28,662) 47,431 1,863,411
Balanceat30June2017 34,909,527 22,140 (29,136,208) 5,795,459
Theaccompanyingnotesformpartofthesefinancialstatements.
MarmotaLimitedandControlledEntities
ConsolidatedStatementofCashFlows
Fortheyearended30June2017
19
Consolidated Note 2017
$2016$
Cashflowsfromoperatingactivities Cashreceiptsinthecourseofoperations 30,000 -Cashpaymentsinthecourseofoperations (420,218) (425,242)Interestreceived 10,915 9,393Netcash(usedin)operatingactivities 22(b) (379,303) (415,849) Cashflowsfrominvestingactivities Proceedsfromsaleofforplantandequipment 14,000 17,656Paymentsforplantandequipment (3,497) (7,489)Paymentsforexplorationandevaluationassets (1,509,106) (632,310)Loansfromrelatedentities - (628)Loansrepaidtorelatedentities - -Netcash(usedin)investingactivities (1,498,603) (622,771) Cashflowsfromfinancingactivities Proceedsfromissueofshares 1,850,867 1,463,916Paymentoftransactioncostsassociatedwithcapitalraisings (77,376) (51,375)Netcashprovidedbyfinancingactivities 1,773,491 1,412,541 Net(decrease)/increaseincashheld (104,415) 373,921 Cashatthebeginningofthefinancialyear 635,121 261,200 Cashattheendofthefinancialyear 22(a) 530,706 635,121
Theaccompanyingnotesformpartofthesefinancialstatements.
MarmotaLimitedandControlledEntities
Notestothefinancialstatements
Fortheyearended30June2017
20
1 Statementofsignificantaccountingpolicies
ThefinancialreportincludestheconsolidatedfinancialstatementsandnotesofMarmotaLimitedandcontrolledentities(‘consolidatedgroup’or‘Group’).
(a) BasisofpreparationThisgeneralpurposefinancialreporthasbeenpreparedinaccordancewithAustralianAccountingStandards,AustralianAccountingInterpretations,otherauthoritativepronouncementsoftheAustralianAccountingStandardsBoard(AASB)andtheCorporationAct2001.CompliancewithAustralianAccountingStandardsresultsinfullcompliancewiththeInternationalFinancialReportingStandards(IFRS)asissuedbytheInternationalAccountingStandardsBoard(IASB).TheCompanyisafor-profitentityforthepurposesofpreparingfinancialstatements.
Thefollowingreportcoverstheconsolidatedentity,MarmotaLimited,alistedpubliccompany,incorporatedanddomiciledinAustralia.
AustralianAccountingStandardssetoutaccountingpoliciesthattheAASBhasconcludedwouldresultinafinancialreportcontainingrelevantandreliableinformationabouttransactions,eventsandconditions.CompliancewithAustralianAccountingStandardsensuresthatthefinancialstatementsandnotesalsocomplywithInternationalFinancialReportingStandards.Materialaccountingpoliciesadoptedinthepreparationofthisfinancialreportarepresentedbelowandhavebeenconsistentlyappliedunlessotherwisestated.
Thefinancialreporthasbeenpreparedonanaccrualsbasisandisbasedonhistoricalcosts,modifiedwhereapplicable,bythemeasurementatfairvalueofselectednon-currentassets,financialassetsandfinancialliabilities.
(b) CompliancewithIFRSThefinancialreportcomplieswithAustralianAccountingStandardsasissuedbytheAustralianAccountingStandards Board and International Financial Reporting Standards (“IFRS”) as issued by the InternationalAccountingStandardsBoard.Thereisnoimpactofnewaccountingstandardsandinterpretationsappliedduringtheyear.
(c) NewaccountingstandardsandinterpretationsAnumberofnewandrevisedstandardsbecameeffectiveforthefirsttimeforannualperiodsbeginningonorafter1July2016.Informationonthemoresignificantstandardsispresentedbelow.AASB2014-4AmendmentstoAustralianAccountingStandards–ClarificationofAcceptableMethodsofDepreciationandAmortisation
TheamendmentstoAASB116prohibittheuseofarevenue-baseddepreciationmethodforproperty,plantand equipment. Additionally, the amendments provide guidance in the application of the diminishingbalancemethodforproperty,plantandequipment.
The amendments to AASB 138 present a rebuttable presumption that a revenue-based amortisationmethodforintangibleassetsisinappropriate.Thisrebuttablepresumptioncanbeovercome(i.e.arevenue-basedamortisationmethodmightbeappropriate)onlyintwo(2)limitedcircumstances:
• the intangible asset is expressed as a measure of revenue, for example when the predominantlimitingfactorinherentinanintangibleassetistheachievementofarevenuethreshold(forinstance,therighttooperateatollroadcouldbebasedonafixedtotalamountofrevenuetobegeneratedfromcumulativetollscharged);or
MarmotaLimitedandControlledEntities
Notestothefinancialstatements
Fortheyearended30June2017
21
• when it can be demonstrated that revenue and the consumption of the economic benefits of theintangibleassetarehighlycorrelated.
AASB2014-4isapplicabletoannualreportingperiodsbeginningonorafter1January2016.
AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments toAASB101
TheStandardmakesamendmentstoAASB101PresentationofFinancialStatementsarisingfromtheIASB’sDisclosureInitiativeproject.Theamendments:
• clarify themateriality requirements in AASB 101, including an emphasis on the potentiallydetrimentaleffectofobscuringusefulinformationwithimmaterialinformation
• clarify that AASB 101’s specified line items in the statement(s) of profit or loss and othercomprehensiveincomeandthestatementoffinancialpositioncanbedisaggregated
• addrequirementsforhowanentityshouldpresentsubtotalsinthestatement(s)ofprofitandlossandothercomprehensiveincomeandthestatementoffinancialposition
• clarify thatentitieshaveflexibilityas totheorder inwhichtheypresentthenotes,butalsoemphasisethatunderstandabilityandcomparabilityshouldbeconsideredbyanentitywhendecidingthatorder
• remove potentially unhelpful guidance in AASB 101 for identifying a significant accountingpolicy
AASB2015-2isapplicabletoannualreportingperiodsbeginningonorafter1January2016.
AccountingstandardsissuedbutnotyeteffectiveandnotbeenadoptedearlybytheCompany
New/revised
pronouncement
Superseded
pronouncement
Natureofchange Likely impact on
initialapplication
AASB9FinancialInstruments(December2014)
AASB139FinancialInstruments:RecognitionandMeasurement
AASB 9 introduces new requirements for theclassification and measurement of financialassets and liabilities and includes a forward-looking ‘expected loss’ impairmentmodelandasubstantially-changed approach to hedgeaccounting.
These requirements improve and simplify theapproach for classification andmeasurement offinancialassetscomparedwiththerequirementsofAASB139.Themainchangesare:
a Financialassetsthataredebtinstrumentswillbeclassifiedbasedon:(i)theobjectiveoftheentity’s business model for managing thefinancialassets;and (ii) thecharacteristicsofthecontractualcashflows.Allows an irrevocable election on initialrecognition to present gains and losses oninvestments in equity instruments that arenot held for trading in other comprehensiveincome (instead of in profit or loss).Dividends in respect of these investmentsthat are a return on investment can berecognised in profit or loss and there is noimpairment or recycling on disposal of theinstrument.
The entity has yetto undertake adetailedassessmentof the impact ofAASB 9. However,based on theentity’s preliminaryassessment, theStandard is notexpected to have amaterial impact onthe transactionsand balancesrecognised in thefinancialstatementswhen it is firstadopted for theyearending30June2019.
New/revised
pronouncement
Superseded
pronouncement
Natureofchange Likely impact on
initialapplication
MarmotaLimitedandControlledEntities
Notestothefinancialstatements
Fortheyearended30June2017
22
New/revised
pronouncement
Superseded
pronouncement
Natureofchange Likely impact on
initialapplication
AASB9FinancialInstruments(December2014)continued
AASB139FinancialInstruments:RecognitionandMeasurement
b Introduces a ‘fair value through othercomprehensive income’ measurementcategory for particular simple debtinstruments.
c Financial assets can be designated andmeasured at fair value throughprofit or lossat initial recognition ifdoingsoeliminatesorsignificantly reduces a measurement orrecognition inconsistency that would arisefrom measuring assets or liabilities, orrecognisingthegainsand lossesonthem,ondifferentbases.
d Where the fair value option is used forfinancial liabilities the change in fair value istobeaccountedforasfollows:− the change attributable to changes in
credit risk are presented in OtherComprehensiveIncome(OCI)
− theremainingchangeispresentedinprofitorloss
If this approach creates or enlarges anaccountingmismatchintheprofitorloss,theeffect of the changes in credit risk are alsopresentedinprofitorloss.
Otherwise, the following requirements havegenerally been carried forward unchangedfromAASB139intoAASB9:
− classification and measurement offinancialliabilities;and
− derecognition requirements for financialassetsandliabilities.
AASB 9 requirements regarding hedgeaccounting represent a substantial overhaul ofhedge accounting that enable entities to betterreflect their risk management activities in thefinancialstatements.
Furthermore, AASB 9 introduces a newimpairment model based on expected creditlosses. Thismodelmakesuseofmore forward-looking information and applies to all financialinstruments that are subject to impairmentaccounting.
AASB15RevenuefromContractswithCustomers
AASB15Revenue
AASB118RevenueAASB111ConstructionContracts
Int.13CustomerLoyaltyProgrammes
Int.15AgreementsfortheConstructionofRealEstate
Int.18Transferof
AASB15:• replaces AASB 118 Revenue, AASB 111
Construction Contracts and some revenue-relatedInterpretations:- establishes a new revenue recognition
model- changes the basis for deciding whether
revenueistoberecognisedovertimeoratapointintime
- providesnewandmoredetailedguidanceon specific topics (e.g. multiple elementarrangements, variable pricing, rights ofreturn,warrantiesandlicensing)
- expands and improves disclosures about
The entity has yetto undertake adetailedassessmentof the impact ofAASB 15 as thecompany currentlyhas no contractswith customers.However, based onthe entity’spreliminaryassessment, theStandard is notexpected to have a
MarmotaLimitedandControlledEntities
Notestothefinancialstatements
Fortheyearended30June2017
23
New/revised
pronouncement
Superseded
pronouncement
Natureofchange Likely impact on
initialapplication
fromContractswithCustomers
AssetsfromCustomers
Int.131Revenue–BarterTransactionsInvolvingAdvertisingServices
Int.1042SubscriberAcquisitionCostsintheTelecommunicationsIndustry
revenue
InMay2015,theAASBissuedED260IncomeofNot-for-Profit Entities, proposing to replace theincome recognition requirements of AASB 1004Contributionsandprovideguidancetoassistnot-for-profitentitiestoapplytheprinciplesofAASB15. The ED was open for comment until 14August 2015 and the AASB is currently in theprocess of redeliberating its proposals with theaim of releasing the final amendments in late2016.
material impact onthe transactionsand balancesrecognised in thefinancialstatementswhen it is firstadopted for theyearending30June2019.
AASB16Leases AASB117Leases
Int.4DeterminingwhetheranArrangementcontainsaLease
Int.115OperatingLeases—LeaseIncentives
Int.127EvaluatingtheSubstanceofTransactionsInvolvingtheLegalFormofaLease
AASB16:
• replaces AASB 117 Leases and some lease-relatedInterpretations
• requires all leases to be accounted for ‘on-balance sheet’ by lessees, other than short-termandlowvalueassetleases
• provides new guidance on the application ofthedefinitionof lease andon sale and leasebackaccounting
• largely retains the existing lessor accountingrequirementsinAASB117
• requiresnewanddifferentdisclosures aboutleases
Theentity currentlyhasnoleasesandisnot expected tohave any materialimpact on thetransactions andbalancesrecognisedin the financialstatements when itis first adopted forthe year ending 30June2020.
AASB2014-5AmendmentstoAustralianAccountingStandardsarisingfromAASB15
None AASB 2014-5 incorporates the consequentialamendments arising from the issuance of AASB15.
RefertothesectiononAASB15above.
AASB2014-7AmendmentstoAustralianAccountingStandardsarisingfromAASB9(December2014)
None AASB 2014-7 incorporates the consequentialamendments arising from the issuance of AASB9.
RefertothesectiononAASB9above.
AASB2014-10AmendmentstoAustralianAccountingStandards–SaleorContributionofAssetsbetweenanInvestoranditsAssociateorJointVenture
AASB2014-10Amendmentsto
None The amendments address a currentinconsistency between AASB 10 ConsolidatedFinancial StatementsandAASB128 InvestmentsinAssociatesandJointVentures.
The amendments clarify that, on a sale orcontribution of assets to a joint venture orassociate or on a loss of control when jointcontrol or significant influence is retained in atransaction involving an associate or a jointventure,anygainor lossrecognisedwilldependonwhethertheassetsorsubsidiaryconstituteabusiness, as defined in AASB 3 BusinessCombinations. Full gain or loss is recognised
When theseamendments arefirstadoptedfortheyearending30June2019, there will beno material impacton the financialstatements.
MarmotaLimitedandControlledEntities
Notestothefinancialstatements
Fortheyearended30June2017
24
New/revised
pronouncement
Superseded
pronouncement
Natureofchange Likely impact on
initialapplication
AustralianAccountingStandards–SaleorContributionofAssetsbetweenanInvestoranditsAssociateorJointVenture(continued)
when the assets or subsidiary constitute abusiness, whereas gain or loss attributable tootherinvestors’interestsisrecognisedwhentheassetsorsubsidiarydonotconstituteabusiness.
This amendment effectively introduces anexceptiontothegeneralrequirementinAASB10to recognise full gain or loss on the loss ofcontrol over a subsidiary. The exception onlyapplies to the loss of control over a subsidiarythat does not contain a business, if the loss ofcontrolistheresultofatransactioninvolvinganassociateorajointventurethatisaccountedforusing the equity method. CorrespondingamendmentshavealsobeenmadetoAASB128.
AASB2015-8AmendmentstoAustralianAccountingStandards–EffectiveDateofAASB15
None AASB2015-8amendsthemandatoryapplicationdate of AASB15 Revenue from Contracts withCustomers so that AASB15 is required to beapplied for annual reporting periods beginningonorafter1 January2018 insteadof1 January2017. It also defers the consequentialamendmentsthatwereoriginallysetoutinAASB2014-5 Amendments to Australian AccountingStandardsarisingfromAASB15.
RefertothesectiononAASB15above.
AASB2016-3AmendmentstoAustralianAccountingStandards–ClarificationstoAASB15
None TheamendmentsclarifytheapplicationofAASB15inthreespecificareastoreducetheextentofdiversity in practice thatmight otherwise resultfrom differing views on how to implement therequirements of the new standard. They willhelpcompanies:
1 Identifyperformanceobligations(byclarifyinghowtoapplytheconceptof‘distinct’);
2 Determinewhether a company is a principaloranagentinatransaction(byclarifyinghowtoapplythecontrolprinciple);
3 Determine whether a licence transfers to acustomerat apoint in timeorover time (byclarifying when a company’s activitiessignificantlyaffecttheintellectualpropertytowhichthecustomerhasrights).
The amendments also create two additionalpractical expedients available for use whenimplementingAASB15:
1 Forcontractsthathavebeenmodifiedbeforethe beginning of the earliest periodpresented,theamendmentsallowcompaniesto use hindsight when identifying theperformance obligations, determining thetransaction price, and allocating thetransaction price to the satisfied andunsatisfiedperformanceobligations.
2 Companies applying the full retrospectivemethod are permitted to ignore contractsalready complete at the beginning of theearliestperiodpresented.
RefertothesectiononAASB15above.
TheGrouphasnotelectedtoearlyadoptanynewstandardsoramendmentsthatareissuedbutnotyeteffectiveandhasnotyetassessedtheimpactofthesestandards.
MarmotaLimitedandControlledEntities
Notestothefinancialstatements
Fortheyearended30June2017
25
(d) PrinciplesofconsolidationTheGroupfinancialstatementsconsolidatethoseoftheParentandallofitssubsidiariesasof30June2017.TheParentcontrolsasubsidiaryifitisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththesubsidiaryandhastheabilitytoaffectthosereturnsthroughitspoweroverthesubsidiary.AlltransactionsandbalancesbetweenGroupcompaniesareeliminatedonconsolidation,includingunrealisedgainsandlossesontransactionsbetweenGroupcompanies.Whereunrealisedlossesonintra-groupassetsalesarereversedonconsolidation,theunderlyingassetisalsotestedforimpairmentfromagroupperspective.AmountsreportedinthefinancialstatementsofsubsidiarieshavebeenadjustedwherenecessarytoensureconsistencywiththeaccountingpoliciesadoptedbytheGroup.
Profitorlossandothercomprehensiveincomeofsubsidiariesacquiredordisposedofduringtheyeararerecognisedfromtheeffectivedateofacquisition,oruptotheeffectivedateofdisposal,asapplicable.
(e) IncometaxTheincometaxexpense/(benefit)fortheyearcomprisescurrentincometaxexpense/(income)anddeferredincometaxexpense/(income).
Currentincometaxexpensechargedtotheprofitorlossisthetaxpayableontaxableincomecalculatedusingapplicableincometaxratesenactedatreportingdate.
Deferredincometaxexpensereflectsmovementsindeferredtaxassetanddeferredtaxliabilitybalancesduringtheyearaswellasunusedtaxlosses.
Currentanddeferredincometax(expense)/benefitischargedorcrediteddirectlytoequityinsteadoftheprofitorlosswhenthetaxrelatestoitemsthatarecreditedorchargeddirectlytoequity.
Deferredtaxassetsandliabilitiesareascertainedbasedontemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsinthefinancialstatements.Deferredtaxassetsalsoresultwhereamountshavebeenfullyexpensedbutfuturetaxdeductionsareavailable.Nodeferredincometaxwillberecognisedfromtheinitialrecognitionofanassetorliability,excludingabusinesscombination,wherethereisnoeffectonaccountingortaxableprofitorloss.
Deferredtaxiscalculatedatthetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealisedorliabilityissettled.DeferredtaxiscreditedintheStatementofProfitorLossandOtherComprehensiveIncomeexceptwhereitrelatestoitemsthatmaybecrediteddirectlytoequity,inwhichcasethedeferredtaxisadjusteddirectlyagainstequity.
Deferredincometaxassetsarerecognisedtotheextentthatitisprobablethatfuturetaxprofitswillbeavailableagainstwhichdeductibletemporarydifferencescanbeutilised.
TheamountofbenefitsbroughttoaccountorwhichmayberealisedinthefutureisbasedontheassumptionthatnoadversechangewilloccurinincometaxationlegislationandtheanticipationthattheCompanywillderivesufficientfutureassessableincometoenablethebenefittoberealisedandcomplywiththeconditionsofdeductibilityimposedbythelaw.
(f) PlantandequipmentEachclassofplantandequipmentiscarriedatcostorfairvalueless,whereapplicable,anyaccumulateddepreciationandimpairmentlosses.
PlantandequipmentPlantandequipmentaremeasuredonthecostbasislessdepreciationandimpairmentlosses.
ThecarryingamountofplantandequipmentisreviewedannuallybyDirectorstoensureitisnotinexcessoftherecoverableamountfromtheseassets.Therecoverableamountisassessedonthebasisoftheexpectednetcashflowsthatwillbereceivedfromtheasset’semploymentandsubsequentdisposal.Theexpectednetcashflowshavebeendiscountedtotheirpresentvaluesindeterminingrecoverableamounts.
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DepreciationAllfixedassetsaredepreciatedonastraight-linebasisovertheirusefullivestotheGroupcommencingfromthetimetheassetisheldreadyforuse.
Thedepreciationratesusedforeachclassofdepreciableassetsare:
Classoffixedasset
Depreciationrate
Plantandequipment 5%–33%
Theasset’sresidualvaluesandusefullivesarereviewed,andadjustedifappropriate,ateachreportingdate.
Anasset’scarryingamountiswrittendownimmediatelytoitsrecoverableamountiftheasset’scarryingamountisgreaterthanitsestimatedrecoverableamount.
Gainsandlossesondisposalsaredeterminedbycomparingproceedswiththecarryingamount.ThesegainsandlossesareincludedintheStatementofProfitorLossandOtherComprehensiveIncome.
(g) Explorationandevaluationexpenditure
Explorationandevaluationexpenditureincurredisaccumulatedinrespectofeachidentifiableareaofinterest.Thesecostsareonlycarriedforwardtotheextentthattheyareexpectedtoberecoupedthroughthesuccessfuldevelopmentoftheareaorwhereactivitiesintheareahavenotyetreachedastagethatpermitsreasonableassessmentoftheexistenceofeconomicallyrecoverablereserves.
Accumulatedcostsinrelationtoanabandonedareaarewrittenoffinfullagainstprofitintheyearinwhichthedecisiontoabandontheareaismade.
Whenproductioncommences,theaccumulatedcostsfortherelevantareaofinterestareamortisedoverthelifeoftheareaaccordingtotherateofdepletionoftheeconomicallyrecoverablereserves.
Aregularreviewisundertakenofeachareaofinteresttodeterminetheappropriatenessofcontinuingtocarryforwardcostsinrelationtothatareaofinterest.
Costsofsiterestorationareprovidedoverthelifeofthefacilityfromwhenexplorationcommencesandareincludedinthecostsofthatstage.Siterestorationcostsincludethedismantlingandremovalofminingplant,equipmentandbuildingstructures,wasteremovalandrehabilitationofthesiteinaccordancewithclausesoftheminingpermits.Suchcostsaredeterminedusingestimatesoffuturecosts,currentlegalrequirementsandtechnologyonanundiscountedbasis.
Anychangesintheestimatesforthecostsareaccountedonaprospectivebasis.Indeterminingthecostsofsiterestoration,thereisuncertaintyregardingthenatureandextentoftherestorationduetocommunityexpectationsandfuturelegislation.Accordingly,thecostsaredeterminedonthebasisthattherestorationwillbecompletedwithinoneyearofabandoningthesite.
(h) LeasesLeasepaymentsforoperatingleases,wheresubstantiallyalltherisksandbenefitsremainwiththelessor,arechargedasexpensesintheperiodsinwhichtheyareincurred.
(i) FinancialinstrumentsInitialrecognitionandmeasurementFinancialassetsandfinancialliabilitiesarerecognisedwhentheentitybecomesapartytotheprovisionstotheinstrument.Forfinancialassets,thisisequivalenttothedatethattheGroupcommitsitselftoeitherthepurchaseorsaleoftheasset.
Financialinstrumentsareinitiallymeasuredatfairvalueplustransactioncosts,exceptwheretheinstrumentisclassified‘atfairvaluethroughtheprofitorloss’,inwhichcasethecostsareexpensedtotheStatementofProfitorLossandOtherComprehensiveIncomeimmediately.
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ClassificationandsubsequentmeasurementFinancialinstrumentsaresubsequentlymeasuredateitheroffairvalue,amortisedcostusingtheinterestratemethodorcost.Whereavailable,quotedpricesinanactivemarketareusedtodeterminefairvalue.
TheGroupdoesnotdesignateanyinterestsinsubsidiaries,associatesorjointventureentitiesasbeingsubjecttotherequirementsofaccountingstandardsspecificallyapplicabletofinancialinstruments:
(i) LoansandreceivablesLoansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketandaresubsequentlymeasuredatamortisedcost.Loansandreceivablesareincludedincurrentassetsexceptforthosenotexpectedtomaturewithin12monthsaftertheendofthereportingperiod.
(ii) FinancialliabilitiesNon-derivativefinancialliabilitiesaresubsequentlymeasuredatamortisedcost.
(iii) AvailableforsalefinancialassetsAvailableforsalefinancialassetsarenon-derivativefinancialassetsthatareeithernotsuitabletobeclassifiedintoothercategoriesoffinancialassetsduetotheirnature,ortheyaredesignatedassuchbymanagement.Theycompromisetheinvestmentsintheequityofotherentitieswherethereisneitherafixedmaturitynordeterminablepayments.
ImpairmentAteachreportingdate,theGroupassesseswhetherthereisobjectiveevidencethatafinancialinstrumenthasbeenimpaired.
(j) Impairmentofnon-financialassetsAteachreportingdate,theGroupreviewsthecarryingvaluesofitstangibleandintangibleassetstodeterminewhetherthereisanyindicationthatthoseassetshavebeenimpaired.Ifsuchanindicationexists,therecoverableamountoftheasset,beingthehigheroftheasset’sfairvaluelesscoststosellandvalueinuse,iscomparedtotheasset’scarryingvalue.Anyexcessoftheasset’scarryingvalueoveritsrecoverableamountisexpensedtotheStatementofProfitorLossandOtherComprehensiveIncome.
(k) EmployeebenefitsProvisionismadefortheGroup’sliabilityforemployeebenefitsarisingfromservicesrenderedbyemployeestoreportingdate.Employeebenefitsthatareexpectedtobewhollysettledwithinoneyeararemeasuredattheamountsexpectedtobepaidwhentheliabilityissettled,plusrelatedon-costs.Employeebenefitspayablelaterthanoneyeararemeasuredatthepresentvalueoftheestimatedfuturecashoutflowstobemadeforthosebenefits.Indeterminingtheliability,considerationisgiventoemployeewageincreasesandtheprobabilitythattheemployeemaysatisfyvestingrequirements.Thosecashflowsarediscountedusingmarketyieldsonnationalgovernmentbondswithtermstomaturitythatmatchtheexpectedtimingofcashflows.EquitysettledcompensationTheGroupoperatesequitysettledshare-basedpaymentemployeeshareoptionschemes.ThefairvalueofoptionsisascertainedusingtheBlack-Scholespricingmodelwhichincorporatesallmarketvestingconditions.Thefairvalueofretentionrightsisascertainedusingthebinomialvaluationmodel.
(l) ProvisionsProvisionsarerecognisedwhentheGrouphasalegalorconstructiveobligation,asaresultofpastevents,forwhichitisprobablethatanoutflowofeconomicbenefitswillresultandthatoutflowcanbereliablymeasured.
(m) CashandcashequivalentsCashandcashequivalentsincludescashonhand,depositsheldatcallwithbanks,othershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorless.
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(n) RevenueInterestrevenueisrecognisedusingtheeffectiveinterestratemethod,which,forfloatingratefinancialassets,istherateinherentintheinstrument.Allrevenueisstatednetofgoodsandservicestax(GST).
(o) GoodsandservicestaxRevenues,expensesandassetsarerecognisednetoftheamountofgoodsandservicestax(GST),exceptwheretheamountofGSTincurredisnotrecoverablefromtheAustralianTaxOffice(ATO).Inthesecircumstances,theGSTisrecognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpense.
ReceivablesandpayablesarestatedintheStatementofFinancialPositioninclusiveofGST.
ThenetamountofGSTrecoverablefrom,orpayableto,theATOisincludedasacurrentassetorliabilityintheStatementofFinancialPosition.
CashflowsareincludedintheStatementofCashFlowsonagrossbasis.TheGSTcomponentsofcashflowsarisingfrominvestingandfinancingactivitieswhicharerecoverablefrom,orpayableto,theATOareclassifiedasoperatingcashflows.
(p) InterestsinjointoperationsAjointventureisanarrangementthattheGroupcontrolsjointlywithoneormoreotherinvestors,andoverwhichtheGrouphasrightstoashareofthearrangement’snetassetsratherthandirectrightstounderlyingassetsandobligationsforunderlyingliabilities.AjointarrangementinwhichtheGrouphasdirectrightstounderlyingassetsandobligationsforunderlyingliabilitiesisclassifiedasajointoperation.DetailsoftheGroup’sinterestsareshownatNote13.
(q) InvestmentsinassociatesAssociatecompaniesarecompaniesinwhichthegrouphassignificantinfluencethroughholding,directlyorindirectly,20%ormoreofthevotingpowerofthecompany.Investmentsinassociatecompaniesarerecognisedinthefinancialstatementsbyapplyingtheequitymethodofaccounting.TheequitymethodofaccountingrecognisestheinitialinvestmentatcostandadjustedthereafterfortheGroup’sshareofpost-acquisitionreservesandprofits/(losses)ofitsassociates.DetailsoftheGroup’sinterestsinassociatesisshownatNote11.
(r) TradeandotherpayablesTradeandotherpayablesrepresenttheliabilityoutstandingattheendofthereportingperiodforgoodsandservicesreceivedbythegroupduringtheperiodwhichremainsunpaid.Thebalanceisrecognisedasacurrentliabilitywiththeamountbeingnormallypaidwithin30daysofrecognitionoftheliability.
(s) Earningspershare(i) BasicearningspershareBasicearningspershareiscalculatedbydividingtheprofit/(loss)attributabletoequityholdersoftheGroup,excludinganycostsofservicingequityotherthanordinaryshares,bytheweightedaveragenumberofordinarysharesoutstandingduringthefinancialyear,adjustedforbonuselementsinordinarysharesissuedduringtheyear.(ii) DilutedearningspershareDilutedearningspershareadjuststhefiguresusedinthedeterminationofbasicearningspersharetotakeintoaccounttheafter-incometaxeffectandotherfinancingcostsassociatedwithdilutivepotentialordinarysharesandtheweightedaveragenumberofadditionalordinarysharesthatwouldhavebeenoutstandingassumingtheconversionofalldilutivepotentialordinaryshares.
(t) ComparativeFiguresWhenrequiredbyAccountingStandards,comparativefigureshavebeenadjustedtoconformtochangesinpresentationforthecurrentfinancialyear.
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(u) CriticalaccountingestimatesandjudgementsTheDirectorsevaluateestimatesandjudgementsincorporatedintothefinancialreportbasedonhistoricalknowledgeandbestavailablecurrentinformation.Estimatesassumeareasonableexpectationoffutureeventsandarebasedoncurrenttrendsofeconomicdata,obtainedbothexternallyandwithintheGroup.Keyestimates–impairmentTheGroupassessesimpairmentateachreportingdatebyevaluatingconditionsspecifictotheGroupthatmayleadtoimpairmentofassets.Whereanimpairmenttriggerexists,therecoverableamountoftheassetisdetermined.Keyjudgements-explorationandevaluationexpenditureThegroupcapitalisesexpenditurerelatingtoexplorationandevaluationwhereitisconsideredlikelytoberecoverableorwheretheactivitieshavenotreachedastagewhichpermitsareasonableassessmentoftheexistenceofreserves.Whiletherearecertainareasofinterestfromwhichnoreserveshavebeenextracted,thedirectorsareofthecontinuedbeliefthatsuchexpenditureshouldnotbewrittenoffsincefeasibilitystudiesinsuchareashavenotyetconcluded.
(v) ParententityfinancialinformationThefinancialinformationfortheparententity,MarmotaLimited,disclosedinNote27hasbeenpreparedonthesamebasisastheconsolidatedfinancialstatements.
(w) Foreigncurrencytranslation Functionalandpresentationalcurrency
ItemsincludedinthefinancialstatementsofeachoftheGroup’sentitiesaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(functionalcurrency).TheconsolidatedfinancialstatementsarepresentedinAustraliandollars,whichisMarmotaLimited’sfunctionalandpresentationalcurrency.
(x) GoingConcernThefinancialreporthasbeenpreparedonthebasisofgoingconcern.
ThecashflowprojectionsoftheGroupindicatethatitwillrequirepositivecashflowsfromadditionalcapitalforcontinuedoperations.TheGroupincurredalossof$389,655(2016:loss$445,750)andcashoutflowfromoperatingandinvestingactivitiesof$1,877,906.
TheGroup’sabilitytocontinueasagoingconcerniscontingentonobtainingadditionalcapital.Sincetheyearend,$500,000ofcapitalhasbeenraised.Ifadditionalcapitalisnotobtained,thegoingconcernbasismaynotbeappropriate,withtheresultsthattheconsolidatedentitymayhavetorealiseitsassetsandextinguishitsliabilities,otherthanintheordinarycourseofbusinessandatamountsdifferentfromthosestatedinthefinancialreport.Noallowanceforsuchcircumstanceshasbeenmadeinthefinancialreport.
(y) AuthorisationforissueoffinancialstatementsThefinancialstatementswereauthorisedforissuebytheBoardofDirectorson25September2017.
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Consolidated 2017
$2016$
2 Revenue
Otherrevenues: Fromoperatingactivities
Interestreceivedfromotherparties 10,915 9,529Governmentgrants 25,000 47,305ProfitonSaleofAssets 14,000 -
Totalrevenues 49,915 56,834
3 (Loss)/profitbeforeincometaxexpensehasbeendeterminedafter
Expenses Administrationexpenses
ASXfees 30,354 12,989Shareregistryfees 28,813 34,620Insurance 14,042 23,327Auditandotherservices 27,000 26,837Travel 5,828 5,117Marketing 2,727 963SoftwarelicencesandITservices 2,351 11,298Other 18,835 17,492
129,950 132,643Consultingexpenses
Legalfees 1,200 2,431Corporateconsulting - 175Accountingandsecretarialservices 19,730 10,792
20,930 13,398Depreciationexpense
Plantandequipment 27,575 56,178Reallocationtoexplorationcosts (23,485) (38,693)Plantandequipment 4,090 17,485
Employmentexpenses Salariesandwages 320,512 444,574Directorsfees 17,000 *33,000Superannuation 26,825 39,268Provisions (12,548) (32,184)Share-basedpayments-directors 26,687 17,000Share-basedpayments-other 18,975 42,902Other 18,188 33,631Reallocationtoexplorationcosts (197,268) (276,494) 218,371 301,697
*includes$16,000feesrelatingtotheprevious2015year,butpaidinthe2016year
Occupancyexpenses 5,435 6,537
Impairmentexpenses Impairmentofexplorationassets 39,684 21,400
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4 Incometax(expense)
Consolidated 2017
$2016$
Thecomponentsoftaxexpensecomprise: Currentincometax -Deferredtax -Taxportionofcapitalraisingcosts (21,110) (9,424)
Incometax(expense)reportedintheStatementofProfitorLossandOtherComprehensiveIncome (21,110) (9,424) Theprimafacietaxonprofitbeforeincometaxisreconciledtotheincometaxasfollows:
Primafacieincometax(expense)calculatedat27.50%onloss(2016:30%) (110,350) (130,897)
Taxeffectof:
Deferredtaxassetinrespectoftaxlossesnotbroughttoaccount 640,361 418,512Explorationexpenditures40-730 (500,295) (215,261)Taxeffectinamountsnotdeductable (41,621) (78,842)Impairmentexpensepreviouslybroughttoaccount 11,905 6,420Taxportionofcapitalraisingcosts 21,110 9,424
Incometax(expense)attributabletoloss (21,110) (9,424) Incometaxlosses Deferredtaxassetarisingfromcarriedforwardtaxlossesnotrecognisedatreportingdateastheassetisnotregardedasmeetingtheprobablecriteria
-taxlossesat27.5% 8,024,445 7,914,307
-taxlossesdistributedasEDIcredits (220,000) (170,000)Totaldeferredtaxasset 7,804,445 7,744,307 Temporarydifferences 6,017 9,655
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Consolidated 2017
$2016$
5 Auditors’remuneration
Auditservices: AuditorsoftheGroup–GrantThornton
Auditandreviewofthefinancialreports 27,000 27,250 27,000 27,250
6 Earningspershare (a)Classificationofsecurities
Allordinaryshareshavebeenincludedinbasicearningspershare.
(b)Classificationofsecuritiesaspotentialordinaryshares
• nilunlistedoptions exercisableat$0.073 by29/07/2016 (2016:225,000)• nilunlistedoptions exercisableat$0.036 by24/07/2017 (2016:25,000)• 550,000unlistedoptions exercisableat$0.018 by16/12/2019 (2016:550,000)• nilunlistedoptions exercisableat$0.05 by12/01/2021 (2016:2,300,000)• 1,000,000unlistedoptions exercisableat$0.03 by6/10/2021 (2016:nil)• 5,000,000unlistedoptions exercisableat$0.03 by9/11/2021 (2016:nil)
OptionsgrantedtoemployeesundertheMarmotaLimitedDirector&EmployeeShareOptionPlanareconsideredtobepotentialordinarysharesandhavebeenincludedinthedeterminationofdilutedearningspersharetotheextenttowhichtheyaredilutive.
Consolidated 2017
$2016$
(c)Earningsusedinthecalculationofearningspershare (Loss)afterincometaxexpense (389,655) (445,750)
Weightedaveragenumberofsharesoutstandingduringtheyearincalculatingearningspershare
Numberforbasicanddilutedearningspershare
Ordinaryshares 464,433,208 412,798,354
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Consolidated 2017
$2016$
7 Cashandcashequivalents
Cashatbank 493,206 619,621Depositsatcall 37,500 15,500 530,706 635,121
8 Tradeandotherreceivables
Current Otherreceivables 95,956 32,741 95,956 32,741
OtherreceivablesrepresentaccruedinterestreceivableandGSTrefunds.Receivablesarenotconsideredpastdue
and/orimpaired(2016:nil).
9 Othercurrentassets
Prepayments 11,649 11,538
10 Plantandequipment
Plantandequipment Atcost 732,398 758,905Accumulateddepreciation (666,389) (668,818) Netbookvalue 66,008 90,087
Reconciliations
Reconciliationsofthecarryingamountsforeachclassofplantandequipmentaresetoutbelow:Plantandequipment
Carryingamountatbeginningofyear 90,087 156,778Additions 3,497 7,489Disposals - (18,002)Depreciation (27,576) (56,178) Carryingamountatendofyear 66,008 90,087
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11 Investmentsinassociates Interestsareheldinthefollowingassociatedcompanies:
Name Principalactivities Countryofincorporation
Shares Ownershipinterest
Carryingamountofinvestment
Unlisted 2017 2016 2017$
2016$
GroundhogServicesPtyLtd Administrationservices Australia Ord 50% 50% 1 1
(a) Movementsduringtheyearinequityaccountedinvestmentsinassociatedentities
Therehavebeennomovementsofequityaccountedinvestmentsinassociatedentitiesduringtheyear.
(b) Equityaccountedprofitsofassociatesarebrokendownasfollows:
Consolidated 2017
$2016$
Shareofassociate’sprofitbeforeincometax - -Shareofassociate’sincometaxexpense - -Shareofassociate’sprofitafterincometaxexpense - -
(c) Summarisedpresentationofaggregateassets,liabilitiesandperformanceassociates
TheGroup’sshareoftheresultsofitsprincipleassociatesanditsaggregatedassetsandliabilitiesareasfollows:
Currentassets 2 2Non-currentassets - -Totalassets 2 2Currentliabilities - -Non-currentliabilities - -Totalliabilities - - Netassets 2 2
12 Availableforsaleinvestments
Consolidated
2017$
2016$
Availableforsaleinvestments 8,000 8,000
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13 Interestsinunincorporatedjointoperations MarmotaLimitedhasadirectinterestinanumberofunincorporatedjointoperationsasfollows:
No State Agreementname Parties Summary 1 SA JunctionDam
UraniumAgreement
TeckAustraliaPtyLtd,PlatSearchNLandEaglehawkGeologicalConsultingPtyLtd(TPE)andMarmotaLimited(MEU)
MEUhastherighttoexploreforuraniumintheareacoveredbyExplorationLicenceEL 5682 (formerly EL 45098). MEU hasachievedits100%earn-inandholds100%of the uranium rights under the terms oftheAgreement.TPEretainsaNSRof5%.
2 SA MeltonJoint
VentureMonaxMiningLimited(MOX)andMarmotaLimited(MEU)
MEU has the right to explore for allminerals in the area covered byExploration Licences EL 5209 andELA2017/00105 (formerly EL5122). MEUandMOXoperatea75:25jointventure.
14 Controlledentities
(a) Controlledentitiesconsolidated
Theconsolidatedfinancialstatementsincorporatetheassets,liabilitiesandresultsofthefollowingcontrolledentityinaccordancewiththeaccountingpolicydescribedinNote1(b):
Countryofincorporation
Percentageowned(%)
2017 2016Parententity: MarmotaLimited Australia SubsidiariesofMarmotaLimited: MarmosaPtyLtd Australia 100 100
15 Explorationandevaluationassets
Consolidated 2017
$2016$
Movement:
Carryingamountatbeginningofyear 3,661,339 2,948,901Additionalcostscapitalisedduringtheyear 1,667,650 733,838Impairment(1) (39,684) (21,400)Carryingamountatendofyear 5,289,305 3,661,339
Consolidated
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2017$
2016$
Closingbalancecomprises:
Explorationandevaluation - 100%owned 3,164,509 1,527,142
Explorationandevaluationphase - JointVenture 2,124,796 2,134,197
5,289,305 3,661,339
(1) Theultimaterecoupmentofcostscarriedforwardforexplorationphaseisdependentonthesuccessfuldevelopmentandcommercialexploitationorsaleoftherespectiveareas.
TheimpairmentoftheexplorationassetrelatestoadjustmentorrelinquishmentoftenementsorpreviouslydroppedlandintheCurnamonaAreaofInterest.
16 Tradeandotherpayables
Tradepayables 58,351 71,263Otherpayablesandaccruals 140,438 26,980AmountspayabletoDirectorrelatedentities* 2,508 1,501 201,297 99,744
*DetailsofamountspayabletoDirectorrelatedentitiesaredetailedinNote23..
17 Provisions
Current Employeebenefits 4,747 16,144 Non-current Employeebenefits 123 1,237
Provisionforlongserviceleave
Aprovisionforlongserviceleavehasbeenrecognisedforemployeebenefits.Incalculatingthepresentvalueoffuturecashflowsinrespectoflongserviceleave,theprobabilityoflongserviceleavebeingtakenisbasedonhistoricaldata.ThemeasurementandrecognitioncriteriarelatingtoemployeebenefitshavebeenincludedinNote1tothisreport.
Provisions
Openingbalanceatbeginningofyear 17,381 49,566(Paymentsfrom)/additionstoprovisions (12,511) (32,185)Balanceatendofyear 4,870 17,381 Consolidated
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2017$
2016$
18 Issuedcapital
Issuedandpaid-upsharecapital
517,257,703(2016:412,798,354)ordinaryshares,fullypaid
34,909,527
33,064,883 (a)Ordinaryshares Balanceatthebeginningofyear 33,064,883 31,577,895
Sharesissuedduringtheyear: 1,000,000shares: tenementacquisitionagreementat$0.018 18,000 -1,280,916shares: placement–non-cashconsiderationat$0.01629 20,866 -35,333,371shares: pursuanttoaSharePurchasePlanat$0.015 530,000 -388,160shares: inlieuofconsultant’sfeesat$0.01655 6,424 -915,000shares: inlieuofDirector’sfeesat$0.01858 17,000 -65,000,000shares: pursuanttoaplacementat$0.02 1,300,000 -541,902shares: inlieuofconsultantsfeesat$0.0159 8,632 Sharesissuedduringtheprioryear: 400,000sharesissuedtoemployeesonvestingofsharerights - 7,2008,960,817sharesissuedonexerciseoflistedoptions - 179,21647,473,750sharesissuedpursuanttoaSharePurchasePlan - 451,00117,250,000sharesissuedaspartofaplacementat$0.015 - 258,75015,750,000sharesissuedaspartofaplacementat$0.017 - 267,750493,197sharesissuedaspartofaplacementat$0.0183 - 9,02613,254,118sharesissuedaspartofaplacementat$0.02 - 265,0821,666,666sharesissuedaspartofaplacementat$0.03 - 50,0001,700,000sharesissuedinlieuofDirector’sFees - 17,000Lesstransactioncostsarisingfromissueofsharesnetoftax (56,278) (18,037)
Balanceatendofyear
34,909,527 33,064,883
Holdersofordinarysharesareentitledtoreceivedividendsasdeclaredfromtimetotimeandareentitledtoonevotepershareatshareholders’meetings.
OrdinaryshareshavenoparvalueandtheGroupdoesnothavealimitedamountofauthorisedcapital.
IntheeventofwindingupoftheGroupordinaryshareholdersrankafterallcreditorsandarefullyentitledtoanyproceedsofliquidation.
(b)Options/rights Therewerenoshareoptions/retentionrightsissuedtoExecutiveDirectorsduringthefinancialyear.ForinformationrelatingtotheMarmotaLimitedDirector&EmployeeShareOptionPlanincludingdetailsofanyoptionsissued,exercisedandlapsedduringthefinancialyear,refertoNote19.At30June2017,therewere6,875,000unissuedsharesforwhichthefollowingoptionswereoutstanding.
• 25,000unlistedoptions exercisableat$0.036 by24/07/2017• 550,000unlistedoptions exercisableat$0.018 by16/12/2019• 300,000unlistedoptions exercisableat$0.05 by12/01/2021• 1,000,000unlistedoptions exercisableat$0.03 by06/10/2021• 5,000,000unlistedoptions exercisableat$0.03 by09/11/2021
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At30June2016,therewere3,100,000unissuedsharesforwhichthefollowingoptionswereoutstanding.
• 225,000unlistedoptions exercisableat$0.073 by29/07/2016• 25,000unlistedoptions exercisableat$0.036 by24/07/2017• 550,000unlistedoptions exercisableat$0.018 by16/12/2019• 2,300,000unlistedoptions exercisableat$0.05 by12/01/2021
(c) CapitalManagement ManagementeffectivelymanagestheGroup’scapitalbyassessingtheGroup’sfinancialrisksandadjustingitscapitalstructureaccordingly.Theseresponsesincludeshareissues.TherehavebeennochangesinthestrategyadoptedbymanagementtocontrolthecapitaloftheGroupsincetheprioryear.TheGroup’scapitalisshownasissuedcapitalintheStatementofFinancialPosition.
19 Share-basedpayments
Share-basedpaymentsareinlinewiththeMarmotaLimitedEmployeeShareOptionPlan,detailsofwhichareoutlinedintheDirectors’Report.Listedbelowaresummariesofoptionsgranted:
(ii) Options
2017 2016
MarmotaLimited Numberofoptions
Weightedaverageexerciseprice
Weightedaverageremainingcontractual
life
Numberofoptions
Weightedaverageexerciseprice
Weightedaverageremainingcontractual
life
Outstandingatthebeginningoftheyear
3,100,000 $0.046 1,595.000 $0.027
Granted - -
–7October2017 1,000,000 $0.03 - -
–9November2017 5,000,000 $0.03
–January2016 - - 2,300,000 $0.050
Forfeited (2,000,000) $0.005 (395,000) $0.021
Exercised - - (400,000) $0.018
Expired (225,000) $0.019 - -
Outstandingatyear-end 6,875,000 $0.021 1,458days 3,100,000 $0.046 1,458days
Exercisableatyear-end 6,875,000 3,100,000
On29July2011,250,000shareoptionsweregrantedtoemployeesundertheMarmotaLimitedEmployeeShareOptionPlantotakeupordinarysharesatanexercisepriceof$0.073each.Theseoptionsareexercisableonorbefore29July2016.Alloftheseoptionshavelapsed.
On24July2012,250,000shareoptionsweregrantedtoemployeesundertheMarmotaLimitedEmployeeShareOptionPlantotakeupordinarysharesatanexercisepriceof$0.036each.Theseoptionsareexercisableonorbefore24July2017.125,000oftheseoptionshavebeenexercisedinprioryearsandtheremainderhavelapsed.
On17December2014,1,270,000shareoptionsweregrantedtoemployeesundertheMarmotaLimitedEmployeeShareOptionPlantotakeupordinarysharesatanexercisepriceof$0.018each.Theseoptionsareexercisableonorbefore16December2019.400,000oftheseoptionshavebeenexercisedand320,000havelapsedintheprioryearleaving550,000at30June2017.
MarmotaLimitedandControlledEntities
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On13January2016,2,300,000shareoptionsweregrantedtoemployeesundertheMarmotaLimitedEmployeeShareOptionPlantotakeupordinarysharesatanexercisepriceof$0.05each.Theseoptionsareexercisableonorbefore12January2021.Alloptionshavelapsedduringtheyear.
On6October2016,1,000,000shareoptionsweregrantedtoemployeesundertheMarmotaLimitedEmployeeShareOptionPlantotakeupordinarysharesatanexercisepriceof$0.03each.Theseoptionsareexercisableonorbefore6October2021:BlackScholesvaluation$2,624.
On9November2016,5,000,000shareoptionsweregrantedtodirectorsandemployeesundertheMarmotaLimitedDirector&EmployeeShareOptionPlantotakeupordinarysharesatanexercisepriceof$0.03each.Theseoptionsareexercisableonorbefore9November2021:BlackScholesvaluation$16,144.50.
Theoptionsarenon-transferableexceptasallowedundertheDirector&EmployeeShareOptionPlanandarenotquotedsecurities.Atreportingdate,otherthanasdisclosedinthetableabove,noshareoptionshadbeenexercised.AlloptionsgrantedtokeymanagementpersonnelareoverordinarysharesinMarmotaLimited,whichconferarightofoneordinaryshareforeveryoptionheld.
ThefairvalueoftheoptionsgrantedwascalculatedbyusingtheBlack-Scholesoptionpricingmodelapplyingthefollowinginputs:
Nov2016
issue
Oct2016
issue
Jan2016
issue
Dec2014
issue
Jul2012
issue
Weightedaveragefairvalue $0.003 $0.003 $0.0187 $0.008 $0.035
Weightedaverageexerciseprice $0.03 $0.03 $0.05 $0.018 $0.036
Weightedaveragelifeoftheoption 1,825days 1,825days 1,827days 1,825days 1,826days
Underlyingshareprice $0.016 $0.016 $0.024 $0.01 $0.039
Expectedsharepricevolatility 41.8% 37.5% 124% 131% 136%
Riskfreeinterestrate 1.8% 1.8% 2.18% 2.50% 2.31%
Thelifeoftheoptionisbasedonthedaysremaininguntilexpiry.Volatilityisbasedonhistoricalshareprices.
Theoptionsholdnovotingordividendsrightsandareunlisted.Theoptionslapse6monthssubsequenttothecessationofemploymentwiththeGroup,otherthanincertainsituations.Therearenovestingconditionsattachedtotheoptions.
Expensearisingfromshare-basedpaymenttransactions
Totalexpensesarisingfromshare-basedpaymenttransactionsrecognisedduringtheperiodaspartofemployeebenefitsexpensewereasfollows: Consolidated 2017
$2016$
OptionsissuedunderEmployeeOptionplan–employees 9,081 42,902OptionsissuedunderEmployeeOptionplan–director 9,687 -SharesissuedtoMrPThompsoninlieuofdirector’sfees 17,000 17,000SharesissuedtoDrKWillsinlieuofChiefGeologistfees 12,248 2,799 48,016 62,701
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20 FinancialriskmanagementTheGroup’sfinancialinstrumentsconsistmainlyofdepositswithbanks,accountsreceivableandpayableandloanstoandfromsubsidiariesandrelatedentities.
Thetotalsforeachcategoryoffinancialinstruments,measuredinaccordancewithAASB139asdetailedintheaccountingpoliciestothesefinancialstatements,areasfollows:
Consolidated 2017
$2016$
Financialassets Cashandcashequivalents 530,706 635,121Loansandreceivables 95,956 32,741Availableforsaleinvestments 8,000 8,000 634,662 675,862 Financialliabilities Tradeandotherpayables 201,297 99,744 201,297 99,744
Financialriskmanagementpolicies
TheBoardofDirectorsareresponsibleformonitoringandmanagingfinancialriskexposuresofthegroup.
Specificfinancialriskexposuresandmanagement
Themainrisksthegroupisexposedtoincludesliquidityrisk,creditriskandinterestraterisk.
(a) LiquidityriskLiquidityriskarisesfromthepossibilitythattheGroupmightencounterdifficultyinsettlingitsdebtsorotherwisemeetingitsobligationsrelatedtofinancialliabilities.
TheGroupmanagesliquidityriskbymonitoringforecastcashflows,onlyinvestingsurpluscashwithmajorfinancialinstitutions;andcomparingthematurityprofileoffinancialliabilitieswiththerealisationprofileoffinancialassets.
TheBoardmeetsonaregularbasistoanalysefinancialriskexposureandevaluatetreasurymanagementstrategiesinthecontextofthemostrecenteconomicconditionsandforecasts.TheBoard’soverallriskmanagementstrategyseekstoassisttheconsolidatedgroupinmanagingitscashflows.
Financialliabilitiesareexpectedtobesettledwithin12months.
(b) CreditriskexposuresCreditriskrepresentsthelossthatwouldberecognisedifcounterpartiesfailedtoperformascontracted.
Themaximumexposuretocreditriskonfinancialassets,excludinginvestments,oftheentitywhichhavebeenrecognisedintheStatementofFinancialPosition,isthecarryingamount,netofanyprovisionfordoubtfuldebts.
Noreceivablesareconsideredpastdueorimpairedatreportingdate.
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(c) InterestrateriskExposuretointerestrateriskarisesonfinancialassetsandliabilitiesrecognisedatreportingdatewherebyafuturechangeininterestrateswillaffectfuturecashflowsorthefairvalueoffixedratefinancialinstruments.
TheGrouphasnolongtermfinancialliabilitiesuponwhichitpaysinterest.Cashisheldinaninterestyieldingchequeaccountandonshorttermcalldepositwheretheinterestrateisbothfixedandvariableaccordingtothefinancialasset.
Interestrateriskismanagedwithamixtureoffixedandfloatingratecashdeposits.
(d) SensitivityanalysisInterestrateTheGrouphasperformedasensitivityanalysisrelatingtoitsexposuretointerestrateriskatreportingdate.Thissensitivityanalysisdemonstratestheeffectonthecurrentyearresultsandequitywhichcouldresultfromachangeintheserisks.ItshouldbenotedthattheGroupdoesnothaveborrowingsandanyimpactswouldbeinrelationtodeposityieldsoncashinvestments.
InterestratesensitivityanalysisAtreportingdate,theeffectonprofit/(loss)andequityasaresultofchangesintheinterestrate,withallothervariablesremainingconstantwouldbeasfollows:
Consolidated 2017
$2016$
Changeinloss Increaseininterestratesby2% 10,614 12,678Decreaseininterestratesby2% (10,614) (12,678)
Changeinequity Increaseininterestratesby2% 10,614 12,678Decreaseininterestratesby2% (10,614) (12,678)
21 Commitments&contingentliabilities
(a) Explorationexpenditurecommitments
Inordertomaintaincurrentrightsoftenuretoexplorationtenements,theGroupwillberequiredtooutlayintheyearending30June2018amountsofapproximately$1,385,000(2016:$1,565,000)tomeetminimumexpenditurerequirementspursuanttovariousjointventurerequirementsandthosespecifiedbytheStateGovernmentofSouthAustralia.Theseobligationsaresubjecttorenegotiationwhenapplicationforaminingleaseismadeandatothertimes.Theseobligationsarenotprovidedforinthefinancialreport.(b) Operatingleasesaslessee
TheGroupleasesaslesseeanofficeandwarehousefacilityunderanoperatinglease.Thefutureminimumleasepaymentsareasfollows:
Minimumleasepaymentsdue Within1year 1to5years After5years Total $ $ $ $June2017 35,632 32,166 67,798June2016 32,819 22,773 - 55,592
MarmotaLimitedandControlledEntities
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(c) Guarantees
TheGrouphasnegotiatedanumberofbankguaranteesinfavourofvariousgovernmentauthoritiesandserviceproviders.Thetotalnominalamountoftheseguaranteesatthereportingdateis$37,500(2016:$15,500).Thesebankguaranteesarefullysecuredbycashontermdeposit.
(d) Contingentliabilities
Asat30June2017,therewasacontingentliabilityof$66,434:• $47,915fortheGroundhogServicesPartnership(beingMarmota50%share)assessmentreceived
fromRevenueSAforpayrolltaxrelatingto2010–2015financialyearsinrespectofadisputedchangeingrouping.
• $18,519forMarmotaLtd’sassessmentfromRevenueSAforpayrolltaxrelatingto2012-2015financialyearsinrespectofthedisputedchangeingrouping.
Theseassessmentsarecurrentlybeingdisputed.Formoredetail,refertoNote25(2016:$47,915). Consolidated Note 2017
$2016$
22 Notestothestatementsofcashflows
(a) Cashattheendofthefinancialyearconsistsofthefollowing:
Cashatbankandatcall 7 530,706 635,121 530,706 635,121
(b) Reconciliationof(loss)afterincometaxtonetcashoutflowfromoperatingactivities
(Loss)afterincometax (389,655) (445,750)Add/(less)non-cashitems
Depreciation 27,576 17,485Share-basedpayments (28,663) 42,902Share-basedpayments 17,001
Profitonsaleofassets (14,000) -Impairmentofassets 39,684 21,400Incometaxexpense 21,110 9,424
Changesinoperatingassetsandliabilities (Increase)/decreaseinotherassets - 9,123(Increase)/decreaseintradeandotherreceivables (63,332) 6,412(Decrease)/increaseintradeandotherpayables 23,488 (44,660)(Decrease)/increaseinprovisions (12,512) (32,184)
Netcash(usedin)operatingactivities (379,303) (415,848)
23 Relatedparties
Directors’transactionswiththeCompany
AnumberofDirectorsoftheCompany,ortheirDirectorrelatedentities,heldpositionsinotherentitiesduringthefinancialyearthatresultinthemhavingcontrolorsignificantinfluenceoverthefinancialoroperatingpoliciesofthoseentities.
ThetermsandconditionsofthetransactionswithDirectorsandtheirDirectorrelatedentitieswerenomorefavourabletotheDirectorsandtheirDirectorrelatedentitiesthanthoseavailable,orwhichmightreasonablybeexpectedtobeavailable,onsimilartransactionstoNon-directorrelatedentitiesonanarm’slengthbasis.
MarmotaLimitedandControlledEntities
Notestothefinancialstatements
Fortheyearended30June2017
43
Therearenoamountsrecognisedduringtheyear(excludingremunerationandre-imbursementofexpensesincurredonbehalfoftheCompany)relatingtoDirectorsandtheirDirectorrelatedentities.Intheprioryear,$7,175creditwasreceivedforamountpaidinFY2015toarelatedpartyofGSDavis.
AmountsreceivablefromandpayabletoDirectorsandtheirDirectorrelatedentitiesatreportingdatearisingfromthesetransactionswereasfollows: Consolidated 2017
$ 2016 $
Currentreceivables Loantodirectorrelatedentity - -Loantoassociate - - - -
Currentpayables Amountspayabletodirectorrelatedentities(1) 2,508 1,501Accrueddirectorsfees 9,987 - 12,495 1,501
(1)FY17amountisamountinvoicedforDirector’sfeesbyarelatedentityof:
• MrPThompson$2,508(FY16$1,501);and• DrKWills$9,987(FY16$nil).
RefertotheRemunerationReportcontainedintheDirectors’ReportfordetailsoftheremunerationpaidorpayabletoeachmemberoftheCompany’skeymanagementpersonnelfortheyearended30June2017.
Thetotalsofremunerationpaidtodirectorsandkeymanagementpersonnelduringtheyearareasfollows:
Consolidated 2017
$ 2016 $
Shorttermemployeebenefits 252,625 187,524Postemploymentbenefits 11,935 16,118Otherlongtermbenefits - 1,237Otherbenefits 5,100 23,526Share-basedpayments 45,393 17,000 315,053 255,405
24 Operatingsegments
TheDirectorshaveconsideredtherequirementsofAASB8–OperatingSegmentsandtheinternalreportsthat are reviewed by the chief operating decision maker (the Board) in allocating resources and haveconcludedthatatthistimetherearenoseparatelyidentifiablesegments.
25 Eventssubsequenttoreportingdate
InSeptember2017,Marmotaannounceda$500,000placementtosophisticatedinvestorsat$0.017pershare.
TherehavebeennoothermattersorcircumstancesarisingsincetheendofthefinancialyearwhichsignificantlyaffectedorcouldsignificantlyaffecttheoperationsoftheGroup,theresultsofthoseoperations,orthestateoftheGroupinfutureyears.
MarmotaLimitedandControlledEntities
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26 ReservesShareoptionsreserve
Theshareoptionsreserverecordsitemsrecognisedasexpensesonvaluationofemployeeshareoptionsandretentionrights.
Availableforsalereserve
Theavailableforsalereservecomprisesgainsandlossesrelatingtothesetypesoffinancialinstruments. Consolidated 2017
$2016$
Reserves
Shareoptionreserve Openingbalanceatbeginningofyear 58,302 2,727,310Fairvalueofoptionsissuedtoemployees 18,768 42,902Optionsexercisedorexpired (47,431) (2,711,910)Balanceatendofyear 29,639 58,302
Availableforsalereserve Openingbalanceatbeginningofyear (7,500) (7,500)Revaluationofavailableforsaleasset - -Balanceatendofyear (7,500) (7,500) TotalReserves 22,139 50,802
27 MarmotaLimitedcompanyinformation
2017 2016 $ $Parententity
Assets Currentassets 704,350 775,438Non-currentassets 5,296,510 3,662,623
Totalassets 6,000,860 4,438,061Liabilities
Currentliabilities 206,044 115,888Non-currentliabilities 123 1,237
Totalliabilities 206,167 117,125
Equity
Issuedcapital 34,909,536 33,064,883Retainedlosses (29,136,973) (28,794,749)Shareoptionreserve 29,630 58,302
Availableforsalereserve (7,500) (7,500)Totalequity 5,794,693 4,320,936
Financialperformance
(Loss)fortheyear (389,655) (446,515)Othercomprehensiveincome - -
Totalcomprehensiveincome (389,655) (446,515)
Guaranteesinrelationtothedebtsofsubsidiaries: -Contingentliabilities 66,434 47,915Contractualcommitments 62,578 55,592
MarmotaLimitedandControlledEntities
Notestothefinancialstatements
Fortheyearended30June2017
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28 Fairvaluemeasurementofassetsandliabilities
Fairvaluehierarchy AASB13requiresdisclosureoffairvaluemeasurementsbylevelofthefollowingfairvaluehierarchy:Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities(level1)Inputsotherthanquotedpricesincludedwithinlevel1thatareobservablefortheassetorliability,eitherdirectlyorindirectly(level2),and
Inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs)(level3)Allfinancialinstrumentswerevaluedusinglevel1valuationtechniques.Therewerenochangesinvaluationtechniquesforfinancialinstrumentsintheperiod.
AvailableforsalefinancialassetsaremeasuredatfairvalueusingtheclosingpriceonthereportingdatesaslistedontheAustralianSecuritiesExchangelimited(ASX).Thecarryingvalueoftradereceivablesandpayablesareassumedtoapproximatetheirfairvaluesduetotheirshort-termnature.
29 Companydetails TheregisteredofficeandprincipalplaceofbusinessoftheCompanyis:
MarmotaLimited Unit6,79–81BrightonRoad GlenelgSA5045
MarmotaLimited
Directors’declaration
Fortheyearended30June2017
46
Directors’declaration
TheDirectorsofMarmotaLimiteddeclarethat
(a) thefinancialstatementsandnotesareinaccordancewiththeCorporationsAct2001,and:
(i) giveatrueandfairviewofthefinancialpositionasat30June2017andoftheperformancefortheyearendedonthatdateoftheconsolidatedentity;and
(ii) complywithAccountingStandards;and
(iii) MarmotaLimitedcomplieswithInternationalFinancialReportingStandardsasdisclosedinNote1.
(b) ThepersonholdingtheChiefExecutiveOfficerandtheChiefFinancialOfficerfunctionshasdeclaredthat:
(i) ThefinancialrecordsoftheCompanyforthefinancialyearhavebeenproperlymaintainedinaccordancewiths286oftheCorporationsAct2001;
(ii) Thefinancialstatementsandnotesforthefinancialyearcomplywiththeaccountingstandards;and
(iii) Thefinancialstatementandnotesforthefinancialyeargiveatrueandfairview;
(c) Inthedirectors’opinion,therearereasonablegroundstobelievethattheCompanywillbeabletopayitsdebtsasandwhentheybecomedueandpayable.
ThisdeclarationismadeinaccordancewitharesolutionoftheBoardofDirectors.
DatedatSydneythis25thdayofSeptember2017.
DrColinRoseChairman
Grant Thornton House Level 3 170 Frome Street Adelaide, SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E [email protected] W www.grantthornton.com.au
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Independent Auditor’s Report To the Members of Marmota Limited Report on the audit of the financial report Opinion We have audited the financial report of Marmota Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
b 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 Group in accordance with the 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 (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 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(x) in the financial statements, which indicates that the Group incurred a net loss of $389,655 during the year ended 30 June 2017 and incurred net cash outflows from operating and investing activities totalling $1,877,906. These conditions, along with other matters as set forth in Note 1(x), indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. 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. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter How our audit addressed the key audit matter Exploration and Evaluation Assets – valuation Note 15
At 30 June 2017 the carrying value of Exploration and Evaluation Assets was $5,289,305. In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, the company is required to assess at each reporting date if there are any triggers for impairment which may suggest the carrying value is in excess of the recoverable value. The process undertaken by management to assess whether there are any impairment triggers in each area of interest involves an element of management judgement. This area is a key audit matter due to the valuation of exploration and evaluation assets being a significant risk.
Our procedures included, amongst others: x Obtaining the management reconciliation of
capitalised exploration and evaluation expenditure and agreeing to the general ledger;
x Reviewing management’s area of interest considerations against AASB 6;
x Conducting a detailed review of management’s assessment of trigger events prepared in accordance with AASB 6 including; - Tracing projects to statutory registers,
exploration licenses and third party confirmations to determine whether a right of tenure existed;
- Enquiry of management regarding their intentions to carry out exploration and evaluation activity in the relevant exploration area, including review of managements’ budgeted expenditure;
- Understanding whether any data exists to suggest that the carrying value of these exploration and evaluation assets are unlikely to be recovered through development or sale;
x Assessing the accuracy of impairment recorded for the year as it pertained to exploration interests that were relinquished; and
x Reviewing the appropriateness of the related disclosures within the financial statements.
Information Other than the Financial Report and Auditor’s Report Thereon The Directors are responsible for the other information. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. 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 Group’s ability 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 Group or to cease operations, or have 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 the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included the directors’ report for the year ended 30 June 2017. In our opinion, the Remuneration Report of Marmota Limited, for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001. 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. GRANT THORNTON AUDIT PTY LTD Chartered Accountants S K Edwards Partner - Audit & Assurance Adelaide, 25 September 2017